ROMANO v. ROCKWELL INTERNATIONAL INC

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Court of Appeal, Second District, Division 2, California.

William P. ROMANO, Plaintiff and Appellant, v. ROCKWELL INTERNATIONAL, INC., Defendant and Respondent.

No. B079724.

Decided: October 20, 1995

Shaw & Weitz, John R. Shaw and Mark S. Weitz, Los Alamitos, for Plaintiff and Appellant. Paul, Hastings, Janofsky & Walker, Michael A. Hood, Costa Mesa, and Eric C. Sohlgren, Irvine, for Defendant and Respondent.

This appeal presents the question of when the statute of limitations begins to run in a wrongful termination action where the employee is informed of his termination but the actual termination does not occur until over two years later.   Plaintiff and appellant, William P. Romano, filed this lawsuit on December 9, 1991, and claims the statute of limitations did not begin to run until the end of May or beginning of June 1991, when he was forced to sign his retirement papers.   Defendant and respondent, Rockwell International, Inc. (“Rockwell”), appellant's former employer, claims the statute began to run on December 6, 1988, when appellant was told his employment would be terminated.   The trial court agreed with Rockwell, found all causes of action barred by the statute of limitations, and granted summary judgment.   We conclude that using the date of termination as the commencement of the running of the statute of limitations better serves public policy, and we therefore reverse the judgment.

Procedural History and Statement of Facts

Appellant had been an employee of Rockwell for 29 years when he filed this lawsuit.   He joined Rockwell (then North American Aviation) in 1962, and had been employed as the director of human resources for Rockwell's Digital Communications Division (“DCD”) from the late 1970's until December 1989, and was about 57 years old when he was replaced by a 43–year–old man following a year-long search.

Appellant alleged that he repeatedly protested various illegal and unethical personnel decisions proposed during those years by defendant Gilbert F. Amelio 1 and other Rockwell managers and was fired as retaliation for that conduct and because of age discrimination.   It is the sequence of events leading up to appellant's forced “retirement” that form the framework for the statute of limitations issue presented in this appeal.

Appellant concedes that on December 6, 1988, Gary Collins, vice-president of human resources for the Rockwell Communications Systems group (“RCS”), requested to meet with appellant in Dallas.   Collins told appellant that Amelio had received an anonymous letter “in which the writer complained about the attrition within the human resources department [and] went on to say that the letter reminded Dr. Amelio of his desire to remove [appellant] as the director of human resources.”   He was told that Amelio had decided to remove him from the position.   Collins then proposed that appellant agree to a teaching fellowship until he reached 85 points (a combination of age and years of service), thereby making him eligible for full retirement, and then retire.   Although appellant had been informed in January 1987 that Amelio was critical of him,2 and in July 1988 that Amelio wanted to have him removed, he thought that the situation had been put to rest.   Appellant was stunned.   Appellant understood his employment would not terminate until he reached 85 points and would be eligible for early retirement, which would not be until May 31, 1991.3  Collins was called away but asked that appellant contact him as soon as possible.   It was clear to appellant that Rockwell was going to fire him at the end of the teaching fellowship.

Appellant called Collins from the Dallas/Fort Worth Airport and said he was very upset and felt he needed legal counsel.4  Collins replied, “Don't be hasty.   Think about the proposal and give me your response as soon as possible.”   The next day, appellant called Collins and said in substance, “I've considered your proposal, weighed my alternatives, and let me know what your proposal is exactly.”   Shortly thereafter, appellant received an outline of a proposal specifying various details of how they would proceed.   Everything was with the understanding that appellant would be retired at the end of the teaching fellowship period.5  Although the language was “very legalistic,” there was no provision with respect to waiving potential legal claims.

Appellant requested that Collins take into consideration some adverse financial impacts of the original proposal, but agreed to take the teaching fellowship and get to 85 points.   Collins later made a provision for the financial concerns expressed by appellant, folding $20,000 into appellant's monthly salary, to which appellant agreed, and arranging to pay unused vacation pay.   At this point, in January 1989, appellant believed that in fact he was being constructively terminated by agreeing he would be teaching and eventually terminated.   He also analogized the situation to a person on medical leave who was probably never going to return to work.

In a subsequent discussion, Collins indicated Rockwell had initiated a search for appellant's replacement, and he could only speculate as to when the replacement would be hired.   Collins hoped it would be just a matter of a short period of time.   An organization bulletin was circulated at Rockwell announcing appellant's teaching fellowship, his intention to retire thereafter, and a forthcoming announcement of a new human resources director.

Appellant's replacement, Mr. Tipton, who was found within Rockwell, was appointed on December 5, 1989.   At that point, and until the teaching fellowship began, appellant began working as a member of Collins's staff.   A memo sent by Amelio to Rockwell personnel on November 7, 1989, announced Tipton's appointment and stated that in “his new role, Bill Romano will provide senior level human resource support across all RCS businesses.”   The memo continued, “Please join me in ․ wishing Bill Romano success in his new RCS role.”   Appellant knew this arrangement was a bridge to allow him to reach 85 points toward retirement without spending more than a year at a teaching fellowship.   Appellant understood that since December 1988, Rockwell intended he would retire at the conclusion of his teaching fellowship.6  However, it was not appellant's intent to retire at the conclusion of the teaching fellowship.

Between December 1988 and June 1990, appellant complained on numerous occasions to Collins that his career was being destroyed and he did not want to retire.   On two occasions, appellant refused to sign a written agreement agreeing to the teaching fellowship and retirement “saying [he] would never give the corporation any document that stated that this was either [his] idea or that [he] agreed with it.  [¶] And [he] reiterated numerous times to [Collins] that [he] was not retiring, [he] was being retired, and there's a vast difference between the two.”   However, appellant never told Rockwell that he was not retiring and not accepting the teaching fellowship.   Neither did Collins ever suggest there was another option for appellant.

Pursuant to Collins's script, appellant met with each of his peers one on one in early 1989 and advised them he was going on a teaching fellowship and would retire.   Appellant then called his department together and announced he would be leaving the company and a successor would be named as soon as possible.   Thereafter, appellant referred to himself as a “lame duck” and understood he would be leaving the Semiconductor Products Division.

On about January 31, 1991, when appellant discovered Amelio had left Rockwell, appellant wrote to Collins.   In addition to reporting on completing his masters of management, appellant inquired whether Amelio's departure “begs the question of whether or not this turn of events will have any impact on my status with Rockwell.   I would like to talk with you in the near future on this issue.”   Collins never replied.7  A further conversation with Rockwell executives revealed that appellant's only sin was that he “was not a yes-man.”

Appellant signed retirement forms at Rockwell on June 5, 1991.   He was given specific directions to report to Newport Beach and sign the documents.   He was handed his final paycheck, and “that was that.”

Appellant did not want to “walk away from a $120,000 a year job with many outstanding benefits.   However, inasmuch as [he] was being forced to retire, [he] was retiring under duress,” and decided to have his annuity paid immediately so he would have income on which to live.

On December 9, 1991, appellant filed his complaint, naming Rockwell and Amelio as defendants.   The complaint alleged causes of action for wrongful termination in violation of public policy, retaliation under Government Code section 12940(f), age discrimination under Government Code section 12941, breach of implied contract;  breach of the implied covenant of good faith and fair dealing, and intentional interference with contractual relations.8  The complaint alleged that appellant had complained about and/or opposed illegal and unethical behavior of Amelio, his supervisor.   As a result, Rockwell vice-president Gary Collins informed appellant on December 6, 1988, that Amelio had been pressuring Rockwell to fire him and was insisting appellant accept a one-year teaching fellowship to be concluded with retirement.   Because he feared losing his substantial retirement benefits and “in the hope that circumstances would change at the conclusion of his assignment, [appellant] involuntarily accepted the teaching fellowship assignment.”   He refused to sign two letters of agreement to secure his approval of this retirement arrangement, but Rockwell “persisted with its retirement plans.”   After his teaching fellowship concluded, subsequent to Amelio's resignation from Rockwell, appellant asked to remain employed by Rockwell;  his pleas were denied, and he alleges he was terminated “on or about May 31, 1991.”

Rockwell filed its motion for summary judgment or, alternatively, summary adjudication on May 7, 1993.   Its papers in support of summary judgment and/or adjudication were directed at the statute of limitations issue and corresponding tardiness in filing administrative complaints.

Appellant's opposition contested some of Rockwell's allegedly “undisputed” facts, contained declarations by appellant and his attorney, and contested the applicable law.   Appellant's declaration set forth evidence of his outstanding skills and accomplishments at Rockwell.   Moreover, he explained that Rockwell “has a long history of giving employees a second chance” and, after union complaints in 1976, appellant himself had been given a second chance and then promoted the following year.   Appellant believed the same could happen again.   He had been informed Rockwell “was considering firing Dr. Amelio on at least one occasion because of ․ concern about [Amelio's] decision making and personnel selection ability.”   Therefore appellant believed he could “out last Dr. Amelio, and ‘buy time’ by not completely resisting the proposed Teaching Fellowship.”

Appellant also explained his version of various factors Rockwell used to demonstrate he knew he was being terminated in December 1988.   He claims he did not want to offend Collins and therefore followed Collins's script.   He also attempted to explain the “lame duck” comment and claims he retained his security badge through the period of his fellowship.   Moreover, appellant maintains he was not harmed by Rockwell on December 6, 1988, because his job title, salary, and bonuses remained unchanged until June 1, 1991.   Furthermore, “Had I elected to file a complaint on [December 6, 1988,] I believe I would have been terminated immediately because of the past threats I had received.   It would have been suicide․  [I]t was my strategy to buy time and recover my career before the conclusion of the teaching fellowship.”   Before beginning the teaching fellowship, appellant had been advised by Amelio's confidant, Sam Goldstein, to wait about six months and then meet with Amelio and request a second chance, perhaps an assignment in Europe, where appellant had experience.

On July 8, 1993, the trial court heard and granted the summary judgment motion, finding the first, fourth and fifth causes of action are barred by the statute of limitations and that the second and third causes of action are barred by Government Code section 12940, subdivision (f).   The court observed, “Well, it's an interesting question.   At this time, ․ as near as I can figure out, I think the statute ran at the time that the employer said, ‘We're going to fire you.’ ”

On September 2, 1993, appellant filed his notice of appeal from the summary judgment “granted July 8, 1993.” 9

Contentions on Appeal

Appellant contends that all his causes of action are timely given the continuing tort violations alleged against Rockwell;  that he had no effective remedy prior to his forced resignation as only nominal damages were likely recoverable until that point;  the statute of limitations was extended by appellant's choice of an election of remedies;  and there was no enforceable accord and satisfaction in his acceptance of the teaching fellowship.

Respondent contends that the statute of limitations began to run on December 6, 1988, when appellant was informed and knew that he would be terminated on May 31, 1991.

Discussion

1. Standard of review.

 “Summary judgment is properly granted when the evidence in support of the moving party establishes that there is no issue of fact to be tried.  [Citations.]   The trial court must decide if a triable issue of fact exists.   If none does, and the sole remaining issue is one of law, it is the duty of the trial court to determine the issue of law.  [Citation.]  [¶] Appellate review of summary judgment is limited to the facts contained in the documents presented to the trial court.   This court exercises its independent judgment as to the legal effect of the undisputed facts disclosed by the parties' papers.  [Citations.]   In so doing, we apply the same three-step analysis required of the trial court:  We first identify the issues framed by the pleadings, since it is these allegations to which the motion must respond.   Secondly, we determine whether the moving party has established facts which negate the opponents' claim and justify a judgment in the movant's favor.   Finally, if the summary judgment motion prima facie justifies a judgment, we determine whether the opposition demonstrates the existence of a triable, material factual issue.  [Citation.]”  (Torres v. Reardon (1992) 3 Cal.App.4th 831, 836, 5 Cal.Rptr.2d 52;  Code Civ.Proc., § 437c, subd. (o).)

 “Where, as here, the moving party is the defendant, it must either negate an essential element of the plaintiff's case or state a complete defense.  [Citations.]”  (Spann v. Irwin Memorial Blood Centers (1995) 34 Cal.App.4th 644, 649, 40 Cal.Rptr.2d 360.)

 While respondent correctly notes that summary judgment is no longer a disfavored remedy, and the 1992 and 1993 amendments to Code of Civil Procedure section 437c have altered some of the standards for obtaining summary judgments (see Union Bank v. Superior Court (1995) 31 Cal.App.4th 573, 581–592, 37 Cal.Rptr.2d 653), nevertheless in “reviewing a summary judgment, we [still] strictly construe the moving party's declarations and liberally construe those of the responding party.  [Citation.]”  (Spann v. Irwin Memorial Blood Centers, supra, 34 Cal.App.4th at p. 649, 40 Cal.Rptr.2d 360.)   When the relevant facts are not in dispute, the application of the statute of limitations may be decided as a question of law.  (International Engine Parts, Inc. v. Feddersen & Co. (1995) 9 Cal.4th 606, 611–612, 38 Cal.Rptr.2d 150, 888 P.2d 1279 [Feddersen ].)  Doubts as to the propriety of summary judgment are resolved against the granting of the motion.  (Parker v. Twentieth Century–Fox Film Corp. (1970) 3 Cal.3d 176, 181, 89 Cal.Rptr. 737, 474 P.2d 689.)

2. The statute of limitations did not begin to run until 1991, the final day of appellant's employment with respondent, not in December 1988, when appellant was informed of his termination.

 Appellant argues that the statute of limitations did not commence until his termination actually occurred, on or about June 1, 1991.   The trial court held the statute began to run when appellant was told he would be terminated (through the guise of voluntary retirement) in December 1988.   We conclude that public policy compels a determination that the statute does not begin to run until actual termination, not upon notice that one will be terminated sometime in the future.

First, a notice of discharge may never in fact result in actual termination.   In the years between notice in December 1988 and appellant's actual termination in 1991, respondent could well have had a change of position.   If appellant had filed a lawsuit in December 1988, it is extremely doubtful respondent would decide to give him another chance.   Litigation that will exacerbate a situation rather than await a final determination should not be encouraged.

Such a belated termination also presents an opportunity for the employer to bypass the statute of limitations for an unsuspecting employee who, as in appellant's case, may be only nominally damaged until actual termination occurs.10  Unless there is a knowing waiver of a lawsuit for a settlement with an employer, the employee should not be deemed to have waived the statute of limitations by keeping a job with good benefits rather than being forced immediately to file a lawsuit at the mention of possible or probable future termination.

Finally, we believe that an actual discharge date is a better bright-line demarcation.   The date of actual termination is less likely to be a source of disagreement than the date of notification of future termination, particularly when the notice is oral and the termination, as here, may be disguised (for the benefit of both employee and employer) as a voluntary retirement.  (See Ross v. Stouffer Hotel Co. (Hawai‘i) Ltd. (1994) 76 Hawai‘i 454, 879 P.2d 1037, 1045;  dissents in Turner v. IDS Financial Services, Inc. (Minn.1991) 471 N.W.2d 105, 109 and Delaware State College v. Ricks (1980) 449 U.S. 250, 261–267, 101 S.Ct. 498, 505–09, 66 L.Ed.2d 431 [Ricks ].) 11

Our view is supported by analogous recent decisions by the California Supreme Court that have emphasized actual harm and a definite final act before the statute of limitations begins to run in attorney and accountant malpractice cases.  (See Laird v. Blacker (1992) 2 Cal.4th 606, 7 Cal.Rptr.2d 550, 828 P.2d 691, and Feddersen, supra, 9 Cal.4th at pp. 611–612, 38 Cal.Rptr.2d 150, 888 P.2d 1279.)   Respondent's announcement that it expected to terminate appellant in the future is analogous to a tentative adverse opinion in the attorney malpractice context, as opposed to a final order or judgment.   The judge's or employer's decision could be changed in the interim.   Although the principal holding in Laird v. Blacker, supra, is that commencement of the statute of limitations is not tolled by an appeal of the adverse appealable ruling, there is no intimation that a tentative opinion could start the statute running.

The requirement of a final ruling was made even clearer in Feddersen, supra.   In that case, the Supreme Court held that actual injury does not occur and thus the statute does not begin running as to accountant malpractice involving the negligent preparation of tax returns until the tax deficiency is assessed by the Internal Revenue Service, not upon the client's earlier receipt of a preliminary Internal Revenue Service audit report.  (Feddersen, supra, 9 Cal.4th at pp. 608–609, 38 Cal.Rptr.2d 150, 888 P.2d 1279.)  “The foregoing rule both conserves judicial resources and avoids forcing the client to sue the allegedly negligent accountant for malpractice while the audit is pending.”   (Id. at p. 620, 38 Cal.Rptr.2d 150, 888 P.2d 1279.)   The rule we set forth herein similarly conserves judicial resources and allows the employer and the employee to work out their differences and perhaps avoid litigation entirely.

Regents of University of California v. Superior Court (1995) 33 Cal.App.4th 1710, 39 Cal.Rptr.2d 919 (Regents ), upon which respondent relies, declares a rule that notice of termination is sufficient to begin the running of the statute of limitations.   In Regents, a physician was told she would have to leave the school's residency program in little more than a year if she did not repeat her third clinical year of training.   She did not repeat the year and subsequently filed a claim and a lawsuit more than a year after the initial notification.   The Court of Appeal held the suit was barred, stating:  “The statute of limitations began to run on the physician's claims at the time the adverse employment decision was communicated to her, not when it took effect.  [Citation.]   The physician may not prolong the life of her causes of action absent some other discriminatory act taken against her within the limitations period.”  (Id. at p. 1713, 39 Cal.Rptr.2d 919.)

The conclusion in Regents, supra, 33 Cal.App.4th at pp. 1716–1720, 39 Cal.Rptr.2d 919, regarding the statutory causes of action is based on Ricks, supra.   Both Regents and Ricks are distinguishable on their facts from appellant's situation.   The physician in Regents, supra, at pp. 1713–1714, 39 Cal.Rptr.2d 919, was informed in writing in April 1992 that she would have to leave the program by June 1993 if she did not repeat her third clinical year of training.   She did not repeat her third year, and, instead, worked in the laboratory the next academic year, filing her administrative claim and lawsuit in the summer of 1993, after her year in the laboratory was complete.   She knew when she went to work in the lab instead of repeating her third year that termination from the program was inevitable.   Unlike the physician in Regents, appellant was not given and did not fail to comply with a requirement that was imposed as a prerequisite to keep his employment.

The factual situation in Ricks was more similar to that in Regents than to that in the case at bench.   The United States Supreme Court in Ricks held that the statute of limitations for an action brought under title VII and the Civil Rights Act, alleging national origin discrimination, began to run when a state college professor was informed a decision to deny tenure was made, although eventual loss of the teaching position did not occur until over a year later following a one-year “terminal” contract.   It is clear that the denial of tenure was the basis of the lawsuit and that, in the university community, the decision was final and the following year's contract was a customary extension that would in no way reverse the decision to deny tenure.  (See Bouman v. Block (9th Cir.1991) 940 F.2d 1211, 1221, cert. denied 502 U.S. 1005, 112 S.Ct. 640, 116 L.Ed.2d 658.)

Moreover, to the extent Regents and Ricks are contrary to the public policy set forth above, we find them neither persuasive nor binding.

Conclusion

The judgment is reversed.   Appellant shall recover costs on appeal.

FOOTNOTES

1.   Amelio, who was sued as an individual, is not a party to this appeal.   He has apparently agreed to stay proceedings below pending appellant's appeal against Rockwell.

2.   Appellant testified in his deposition that “by 1988 I seriously questioned how much longer I would be employed by Rockwell International before they fired me.”

3.   If appellant's employment terminated in December 1988, there would have been at least a 50 percent reduction in his retirement benefit.   The proposed arrangement, while not as favorable as if he had remained employed with Rockwell to age 62, was far better than terminating in December 1988.

4.   In his declaration in opposition to summary judgment, appellant explained, “This was my way of telling him that I was acting under duress and, if the company actually forced my retirement, I would file a law suit.”

5.   Asked if he responded to Collins on December 6 “as to whether the idea of going on a teaching fellowship was something [he] would consider,” appellant replied, “I was not given any alternative.   I was told to consider the proposal and to advise Mr. Collins of my answer as soon as possible.”

6.   A June 6, 1990, internal letter from Collins to appellant regarding the teaching fellowship at West Coast University, in addition to granting many of appellant's requests, also stated, “It is understood that you intend to retire from Rockwell International upon completion of the Teaching Fellowship,” and “This Teaching Fellowship is contingent upon your written agreement with the provisions detailed in this letter.”   Appellant did not sign the letter.

7.   Appellant wrote to Collins again on April 18, 1991, seeking assistance in distributing his resume.   He concluded, “We also need to discuss my separation from Rockwell.   June 1 is just around the corner, and it sounds to me that the departure of Gil Amelio has not changed my status with Rockwell.”

8.   Rockwell was named in all but the sixth cause of action, which alleged intentional interference with contractual relations.

9.   Judgment was actually not entered until September 30, 1993.   Pursuant to rule 2(c), California Rules of Court, we treat the notice of appeal as if filed immediately after judgment.

10.   Regarding contractual damages, the court in Marketing West, Inc. v. Sanyo Fisher (USA) Corp. (1992) 6 Cal.App.4th 603, 614, 7 Cal.Rptr.2d 859 held that the “limitations period begins to run when the plaintiff possesses a true cause of action, i.e., where events have developed to a point where the plaintiff is entitled to a legal remedy, not merely a symbolic judgment such as an award of nominal damages.  [Citation.]”

11.   Counsel at oral argument conceded that the majority opinions in Turner v. IDS Financial Services, Inc., supra, 471 N.W.2d 105, and Ricks, supra, 449 U.S. 250, 101 S.Ct. 498, 66 L.Ed.2d 431, are not binding on this court.

FUKUTO, Associate Justice.

BOREN, P.J., and NOTT, J., concur.