Plaintiff former employee sued defendant former employer in connection with his termination, alleging breach of contract, breach of the implied covenant of good faith and fair dealing, and fraud. The trial court granted summary judgment for the employer on the ground that the employee could not establish an agreement that his employment was terminable only for cause. The Court of Appeal of California reversed. The employer sought further review. The parties were counseled by a corporate attorney for the civil litigation.
Overview
The employee signed an employment letter containing an at-will provision and defining "at will" as the right to terminate the employment "at any time." In reversing the decision for the employee, the California Supreme Court disagreed with the argument that the verbal formulation "at any time" in the termination clause of an employment contract was per se ambiguous merely because it did not expressly speak to whether cause was required. Rather, such a formulation ordinarily entailed the notion of "with or without cause." Further, the letter at issue was unambiguous, despite its failure to state whether cause was required. The letter plainly stated that employment "at will," at term that, when used in an employment contract, normally conveyed an intent that employment could be ended by either party at any time without cause. Thus, no triable issues of fact existed as to breach of contract and breach of the implied covenant of good faith and fair dealing. The employer was also entitled to summary judgment as to promissory fraud because the employee produced insufficient evidence of reliance.
Outcome
The court reversed the judgment of the Court of appeal.
Procedural Posture
Appellant borrowers challenged a summary judgment entered by the Superior Court of Los Angeles County, California, for respondent lender. The trial court found that the lender's foreclosure was valid, the borrowers' breach of contract claim was unsupported by consideration, a promise allegedly made by the lender was insufficiently specific to support promissory estoppel, and the borrowers' unfair business practices claim had no basis.
Overview
The court found that the borrowers' actions in procuring a high cost, high interest loan by using other property they owned as security was sufficient to support detrimental reliance, although it provided no particular benefit to the lender. The borrowers were not on notice that the lender would refuse any payment from them. Because the property had been sold at a foreclosure sale, the borrowers' tender of any sum in an attempt to cure the default and reinstate the loan would have been a futile or useless act. Having committed a material breach of its alleged promise by failing to postpone the foreclosure sale, the lender could not be heard to complain that the borrowers' attempted performance a week later was marginally inadequate. The alleged statements of one of the managers of the lender's foreclosure department to a mortgage broker retained by the borrowers, which was that if the borrowers needed additional time in a particular timeframe to close the loan, he would postpone the sale to permit them to do so, constituted a sufficiently specific promise to support the borrowers' promissory estoppel claim.
Outcome
The court reversed the judgment with respect to the claim for promissory estoppel only and remanded the matter for further proceedings. In all other respects, the judgment was affirmed.