Unpublished Disposition, 842 F.2d 335 (9th Cir. 1988)

MEMORANDUM^* 

La Barber appeals the district court's grant of summary judgment in favor of appellee Gould, Inc. La Barber claims the termination of his employment by Compion Corporation (Compion), a wholly-owned subsidiary of Gould, constituted a breach of contract, a breach of the covenant of good faith and fair dealing, wrongful termination, and fraud. Compion terminated La Barber, along with the rest of its sales personnel, when its venture into the software market failed.

STANDARD OF REVIEW

This court reviews de novo a district court's grant of summary judgment, sitting in the same position and applying the same test as the district court. T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors Ass'n, 809 F.2d 626, 629-30 (9th Cir. 1987). In California Architectural Building Prods., Inc. v. Franciscan Ceramics, Inc., 818 F.2d 1466 (9th Cir. 1987), cert. denied, 108 S. Ct. 698 (1988), following Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986), this court held that "if the factual context makes the non-moving party's claim implausible, that party must come forth with more persuasive evidence than would otherwise be necessary to show that there is a genuine issue for trial." 818 F.2d at 1468 (emphasis in original).

DISCUSSION

(1) Breach of Contract

The district court found that La Barber's employment was "at will." [Supp. ER 262] On appeal, La Barber does not directly contest this finding, and there appears to be no evidence that his employment was other than at will. La Barber's hiring letter indicates that his employment was of indefinite duration. [Supp. ER 180] Under California law, employment for an indefinite duration is terminable by either party for any reason at any time. Cal.Labor Code Sec. 2922 (West Supp.1987). It is therefore immaterial whether there was good cause for La Barber's termination, and summary judgment was properly granted on his contract claim.

(2) Breach of the covenant of good faith and fair dealing

Because La Barber does not assert on appeal that he was other than an at-will employee, and because he admitted that he was not a long-term employee and that no employment security policies existed for his benefit [ER 49 at 36, Supp. ER 141-44, 226], he cannot maintain a cause of action for breach of the covenant of good faith and fair dealing. See Cleary v. American Airlines, 111 Cal. App. 3d 443, 455-56, 168 Cal. Rptr. 722, 729 (1980). Nor has appellant produced evidence to support a claim under Khanna v. Microdata, which requires a showing that the employer engaged in " 'bad faith action extraneous to the contract, combined with ... intent to frustrate the [employee's] enjoyment of contract rights,' " 170 Cal. App. 3d 250, 262, 215 Cal. Rptr. 860, 867 (1985) (quoting Shapiro v. Wells Fargo Realty Advisors, 152 Cal. App. 3d 467, 478, 199 Cal. Rptr. 613, 619 (1984)). Summary judgment on this claim was appropriate.

(3) Wrongful termination

Summary judgment was appropriate on this claim for the reasons set out in sections (1) and (2) above.

(4) Fraud

There are five elements of fraud: (1) misrepresentation, (2) knowledge of falsity, (3) intent to defraud, (4) justifiable reliance, and (5) resulting damage. Watts v. Crocker-Citizens Nat'l Bank, 132 Cal. App. 3d 516, 522 n. 2, 183 Cal. Rptr. 304, 307 n. 2 (1982). If La Barber failed to establish at least a genuine issue of material fact as to any of these issues, the summary judgment on the fraud count must be sustained. The circumstances constituting fraud must be stated with particularity. Fed. R. Civ. P. 9(b). La Barber contends the company's representatives fraudulently misrepresented the readiness of their software products for sale, in a direct attempt to induce him to accept employment as a salesman. [Aplt.Br. 9-11]

In his declaration filed in opposition to the summary judgment motion, La Barber generally alleged that he was told all the software was "standard" or ready for sale [Supp. ER 226-228], adding that he did not understand software in general. He admitted that one software program, Access, was indeed ready.

In La Barber's deposition, he testified that he was told that Access was ready for sale. He also testified, however, that he was told that another product was ready only for use in Gould computers; and a third was ready not for sale but for a "beta" or test site. [Id. 149, 153, 157] He was unable to recall what the company representatives told him about one other product, did not understand another and did not know if it was described as a standard product. [Id. 152-53, 156] With regard to all the products except Access, then, La Barber's declaration is in direct conflict with his deposition testimony, and therefore does not create a triable issue of material fact. Radobenko v. Automated Equip. Corp., 520 F.2d 540, 544 (9th Cir. 1975).

Even assuming that representations of readiness for sale were made to La Barber, he failed to produce evidence that they were false and that the company's representatives knew they were false. If company representatives speculated about future events, those predictions are not the required misrepresentations for a fraud cause of action. He admits that "some of the company's representatives may have believed the statements they were making were true," [Supp. ER 225] producing only a memo from one company executive which he claims shows knowledge of falsity. This document, [ER 49, Ex. A] which in assessing the reasons for Compion's failure asked "who knew that ... there was only one saleable, quotable, demonstrable product at the time of acquisition? (ACCESS)," does not support knowledge of falsity. Instead, it suggests that company representatives were unaware that Access was the only product ready for sale. [Supp. ER 264]

Nor can we draw an inference of an intent to deceive from any of the facts presented. La Barber's conclusory allegation that the company intended to deceive him is not enough to create a triable issue of fact. United States v. Ehrlich, 643 F.2d 634, 637 (9th Cir.), cert. denied, 454 U.S. 940 (1981).

La Barber claims his reliance consisted of his taking the job, although he also argues that he did not believe Smith's statements, [ER 49 at 27] and that his reliance was detrimental in that he did not develop a product whose rights he acquired from an earlier employer. [Aplt.Br. 13] He also stated that money and substantial time would be necessary for that development [ER 49 at 25], and does not allege that he has lost the right to the product. La Barber was unemployed when Compion hired him. He earned $90,000 in ten months. [App.Br. 18] He provided no evidence of actual damage.

Summary judgment on the fraud claim was proper.

Compion urges that we should require more persuasive evidence from La Barber than would ordinarily be necessary, because his claim of fraud is "implausible" and there was " [n]o economic incentive [for Compion] to act in that manner." California Architectural, 818 F.2d at 1470. It is implausible that Compion's "intent [was] to have the project fail from the outset," [Aplnt. Reply Br. 2] as La Barber alleges. It is not inconceivable, however, that a company such as Compion might misrepresent the readiness for sale of its products to lure a top salesman onto its staff. Because there is no evidence here creating a genuine issue of material fact on that claim, we affirm without resort to the implausibility standard.