LaGOE v. DUBER INDUSTRIAL SECURITY INC

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Court of Appeal, First District, Division 1, California.

Ronald LaGOE, Plaintiff and Appellant, v. DUBER INDUSTRIAL SECURITY, INC., Defendant and Respondent.

AO 35295.

Decided: August 24, 1987

Bruce T.H. Burke and Burke & Kessler, Oakland, for plaintiff and appellant. Robert A. Ballard and Boornazian, Jensen & Garthe, Oakland, for defendant and respondent.

This case concerns a summary judgment granted for the defendant employer in a wrongful discharge action.

FACTS

On February 6, 1984, plaintiff Ronald LaGoe was fired from his job as a hospital security guard at the Kaiser Permanente Medical Center in Vallejo.1  Defendant Duber Industrial Security, Inc. had been informed by the sworn statement of LaGoe's former wife, Deborah Montoya, that LaGoe had stolen a digital read-out thermometer from the Kaiser Hospital where he worked. An investigation was conducted by Duber's local manager, Carl Dudley.   The thermometer was returned by Montoya and identified as stolen Kaiser property by a Kaiser employee.   LaGoe was informed of the charges and responded in writing.   Dudley concluded there was good cause to believe LaGoe had in fact stolen the thermometer, and he was dismissed.

LaGoe then filed an action for wrongful discharge, alleging breach of oral employment contract, breach of the covenant of good faith and fair dealing, intentional infliction of emotional distress and breach of an implied-in-fact contract.2  After answering, defendant filed a motion for summary judgment on the grounds that plaintiff was an at-will employee under the provisions of Labor Code section 2922, that any breach of the oral employment contract was barred by the statute of frauds, and that defendant acted in good faith in firing plaintiff.

The trial court agreed that the declarations showed Duber had reasonable grounds to believe LaGoe had stolen the thermometer and acted in good faith in firing him.   The court, finding no material triable issue of fact, granted the motion for summary judgment and entered judgment for defendant Duber.

LaGoe timely appeals from the judgment, claiming that the statute of frauds did not bar his action and that triable issues of fact existed concerning both the promises in his express or implied contract and Duber's good faith in firing him after an inadequate investigation.

DISCUSSION

Standard of Review

The principles governing review of a grant of summary judgment are well established.   The statute directs the trial court that a motion for summary judgment “shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.”  (Code Civ.Proc., § 437c, subd. (c).) “The affidavits of the moving party are strictly construed, while those of the party opposing the motion are liberally construed, and doubts as to the propriety of granting the motion must be resolved in favor of the party opposing the motion. (Stationers Corp. v. Dun & Bradstreet, Inc. (1965) 62 Cal.2d 412, 417 [42 Cal.Rptr. 449, 398 P.2d 785].)”  (Miller v. Bechtel Corp. (1983) 33 Cal.3d 868, 874, 191 Cal.Rptr. 619, 663 P.2d 177.)

An order of summary judgment will not be reversed in the absence of a clear showing of abuse of discretion.  (Leo F. Piazza Paving Co. v. Foundation Constructors, Inc. (1981) 128 Cal.App.3d 583, 589, 177 Cal.Rptr. 268;  Brewer v. Home Owners Auto Finance Co. (1970) 10 Cal.App.3d 337, 341, 89 Cal.Rptr. 231.)   However, our “[r]eview of the trial court's determination involves pure matters of law:  Reassessment of the legal significance of the documents upon which the trial court acted.”  LaRosa v. Superior Court (1981) 122 Cal.App.3d 741, 744, 176 Cal.Rptr. 224;  see also Fanelli, Antuzzi, Bonacorsi Painting, Inc. v. Santa Clara Unified School Dist. (1983) 141 Cal.App.3d 686, 689, 190 Cal.Rptr. 515.)

Summary Judgment

The trial court seemed to base the grant of summary judgment on its finding of no material triable issue of fact that defendant reasonably believed plaintiff had stolen the thermometer and thus dismissed him for good cause.   The evidence presented supports this conclusion and is essentially without controversy.

The declarations submitted by defendant show the following facts:  Defendant's branch manager, Dudley, received information from Deborah Montoya that she had in her possession a thermometer stolen from Kaiser by plaintiff.   Montoya signed a sworn statement to this effect and returned the thermometer.3  A Kaiser nurse recognized the stolen property as one she had marked.   Dudley then informed plaintiff of the charges against him and asked him to respond in writing.   In his written statement, plaintiff denied that he had stolen the thermometer and insisted that Montoya was trying to get back at him because he had threatened to take legal action to get physical custody of their four-year old daughter.

After this investigation, Dudley, on behalf of defendant Duber, made the decision that there was good cause to fire plaintiff.   Defendant's employee handbook specifically states that employees may be terminated for cause, and plaintiff admits that theft would constitute good cause.

The question presented on summary judgment was not whether plaintiff actually stole the thermometer, but whether there were any triable issues of fact as to whether defendant reasonably believed it had good cause to fire plaintiff.   (See Rulon-Miller v. International Business Machines Corp. (1984) 162 Cal.App.3d 241, 208 Cal.Rptr. 524, where this division implicitly approved a jury instruction reflecting an employer's good faith but mistaken belief that a legitimate business interest required an employee's termination.)

Under our law an employer is given considerable autonomy in determining the best interests of its business.   Indeed, except in the most extreme cases, the employer's determination of its own legitimate business interests is final.   Whether a business succeeds in the highly competitive world of today's marketplace is in large part dependent upon its personnel choices.

Because summary judgment addresses only pure issues of law, we must decide whether the adequacy of an investigation of an employee is a question of law or fact.   Plaintiff complains that whether his investigation was adequate must always be a question of fact because it relates to how much time was spent, what was inquired into, and whether the inquiry was made in good faith.   These questions become even more important in view of plaintiff's claim that the person who informed on him bore a grudge.   Yet, for reasons that we set out below, we conclude that wrongful termination as well as the adequacy of an investigation leading to the exercise of an employer's autonomous right to determine its own legitimate business interests renders this a pure question of law.4

 We observe at the outset the difficulty with this kind of case is that under existing law a well pled complaint alleging wrongful termination generally entitles the plaintiff to go to a jury, usually on the basis of whether the stated reason for the firing was a pretext for an unlawful employment termination.  (See Khanna v. Microdata Corp. (1985) 170 Cal.App.3d 250, 215 Cal.Rptr. 860.)   This has led to the widespread belief that one can get to a jury on virtually every termination.   The courts have been at odds on how to place reasonable restraints on this burgeoning area of the law but have as yet found no straightforward method.   The test that we set forth today in our decision is:  1) whether there is a legitimate business interest for the employee's termination;  and 2) whether there was good faith reliance thereon.

Here, Duber Industrial Security, Inc. had more than enough evidence, by any legal standard, to conclude that LaGoe probably stole a digital thermometer from the company's client and had good, if not decisive, reason for terminating him.   It can hardly be argued that a security firm could succeed if it didn't take harsh action toward its security guards who stole from the client.

 It is true, as plaintiff urges, that an employer is not free to rely on rumor or information from suspect sources.   If the information comes from a suspect source, then the employer is duty bound to reasonably satisfy itself that the source is trustworthy.   This does not mean that the employer must be right but only that it must make reasonable efforts to satisfy the legal standard of cause we set forth here.  (See Crosier v. United Parcel Service, Inc. (1983) 150 Cal.App.3d 1132, 1139, 198 Cal.Rptr. 361.)

 Plaintiff is right to urge that the report of a theft by a vindictive ex-wife is a classic example of a grudge informer.   Yet there is no evidence that the defendant relied on the informant alone.   The supervisor undertook an investigation and found that the thermometer was the property of Kaiser Hospital and had been taken from an area that plaintiff had control of in discharging his employment duties.   Plaintiff LaGoe was informed of these charges and responded in writing.   Thereafter, Dudley, the supervisor, concluded that there was good cause to believe that LaGoe had in fact stolen the thermometer.   It is the exercise of this judgment that the jury cannot have the right to review.5  Thus, we hold here that, as a matter of law, LaGoe's dismissal was not wrongful and the investigation was adequate.

Plaintiff argues that his supervisor, Dudley, failed to consider the fact that he was engaged in a custody dispute with his wife and that the wife had good reasons to frame him.   It is undisputed that Dudley tried to ignore the custody matter.   Plaintiff says that Dudley was wrong to ignore this fact and was further wrong (by implication) to ignore his wife's “motive” to obtain his dismissal.

The plaintiff, by asking us to decide whether, as a matter of law, the employer must consider “motive,” engages us in one of the most vexing problems the law has confronted.   Oliver Wendell Holmes, Jr., in rejecting the idea of motive, held that society should punish harmful acts regardless of motive.6  For Holmes, there was no motive that was in itself bad.   If a motive gave rise to an act that could be styled good or bad, that was quite another thing, but to use an example that Holmes would have agreed with, “[t]he most reprehensible motive (hate) could cause a beneficial act (informer betrays his underworld boss);  the most meritorious one (love) could result in a pernicious act (a kidnapper who acts out of love for his family).”  (Pohlman, op. cit. supra, p. 29.)

The former example is very close to our case.   Dudley “ignored” the custody dispute, and let us assume further that he assumed the bad motive of the vindictive wife.   Nevertheless, he did exactly what he should have done under the circumstances, which was to investigate the report of theft to see if it were true or probably true.   The distinct difficulty with the grudge informer is that the reported conduct is invariably true.   It is the motive for uttering the truth that is suspect.   Here we conclude that the employer had no duty to consider the informant's motive so long as it was independently able to verify the truth or probable truth of the report.

The central feature of many wrongful termination cases has been the claim that the stated reason for termination merely was a pretext for firing plaintiff for other, unlawful reasons.  (See, e.g., Crosier v. United Parcel Service, Inc., supra, 150 Cal.App.3d 1132, 198 Cal.Rptr. 361 [suspicions of improper motive based on conjecture and speculation—summary judgment burden of proof not sustained];  Cleary v. American Airlines, Inc. (1980) 111 Cal.App.3d 443, 168 Cal.Rptr. 722 [plaintiff alleged charges of theft were pretext for firing for union activities;  demurrer overruled].)

If, for example, the employer in this case was in league with the vindictive wife, that may well have been evidence sufficient to go to the jury on whether the termination was wrongful.   Yet here there is no evidence whatever that such was the case, nor is there any evidence that plaintiff was fired merely because a culprit had to be found.

Thus, our analysis of whether the trial court is required to try “the case within the case,” that is, to try the claimed misconduct that was the basis for the termination to see if it was true, logically relates to our conclusions as to whether the issue of adequacy of investigation is a factual or a legal matter, and to whether the problem of a grudge informer would in any way alter the employer's autonomous right to determine, without fear of his judgment being reviewed by a jury, the legitimate business interests of his company.   Therefore, the employer's determination of his own legitimate business interests are, as a matter of law, sufficient for the termination of an employee if done in good faith and if the probability of truth favors the stated reason for termination.  (Cf. Simpson v. Western Graphics Corp. (1982) 293 Or. 96, 643 P.2d 1276, where the Supreme Court of Oregon upheld an employer's right to act on the basis of its own determination that facts constituting just cause for discharge existed whether or not the facts actually existed;  see also Cox v. Resilient Flooring Div. of Congoleum Corp. (C.D.Cal.1986) 638 F.Supp. 726, 734.)   Moreover, the employer need not, on fear of a claim of pretext, credit the motive of an informant if a reasonable investigation reveals that the charges are probably true.   For all these reasons, we affirm the grant of the motion for summary judgment.7

FOOTNOTES

FOOTNOTE.  

1.   LaGoe had worked for defendant Duber Industrial Security, Inc. since June 22, 1982.

2.   A cause of action for slander was dismissed by plaintiff prior to the hearing on the motion for summary judgment.

3.   Montoya's present husband also signed a sworn statement relating the same facts.

4.   In passing we note that plaintiff's special claim that he was entitled to a careful investigation because it was conferred upon him by his employee handbook raises no broader issue than would be present in many wrongful termination cases.   In other words, the adequacy of an investigation is not merely a right conferred by contract, but rather a general question as to the law of wrongful termination.

5.   The difference between proof that plaintiff was discharged without probable cause and in bad faith and whether the employer had a good faith belief that good cause existed to discharge plaintiff does not arise here because it is undisputed that the employer had a good faith belief that good cause existed to discharge.  (Cf. Koehrer v. Superior Court (1986) 181 Cal.App.3d 1155, 1171, 226 Cal.Rptr. 820.)

6.   Pohlman, Justice Oliver Wendell Holmes & Utilitarian Jurisprudence (Harv.U. Press 1984) p. 30.

7.   In granting summary judgment, the trial court declined to rule on the other two grounds of defendant's motion:  that plaintiff was an employee at will and that the statute of frauds barred his action.   The court said at the hearing that it felt plaintiff “had some pretty good arguments for getting around the statute of frauds.”   We note that the question of the statute of frauds as it relates to employment contracts is currently before the Supreme Court in Foley v. Interactive Data Corp. and related cases.   As discussion of this issue is unnecessary to our decision, we decline to do so.

RUSHING *, Associate Justice. FN* Assigned by the Chairperson of the Judicial Council.

ELKINGTON, Acting P.J., and NEWSOM, J., concur.