HICKS v. PACIFIC BELL (1997)

In a wrongful discharge action, plaintiff and appellant Jonathan Hicks asserted four causes of action:  race discrimination;  breach of contract;  breach of the covenant of good faith and fair dealing;  and violation of public policy.   Defendant and respondent Pacific Bell prevailed in its motion for summary judgment, based upon its theory that it discharged appellant in a good faith belief that appellant was in the wrong in an incident involving a subordinate.   Appellant contends that there are triable issues of fact regarding the truth of what occurred during the incident with the subordinate and that the court erred in granting summary judgment.   We conclude that appellant failed to raise a triable issue of fact regarding the good faith belief of respondent and we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Briefly stated, this action arose from an incident in which appellant, employed by respondent as a Maintenance Field Supervisor-Special Services, confronted and then suspended employee Kenneth Vigil for insubordination.   Vigil complained to a more senior supervisor, Dan Aguirre, and to his union representative, that appellant had physically assaulted him.   Michael Gutierrez, appellant's immediate supervisor, and of the same racial background as appellant, investigated and formed the opinion that a physical and verbal assault had occurred.   He reported his findings to his superior, advised that appellant be terminated, and his superior agreed.   Respondent discharged appellant on the basis of the results of the investigation.

Appellant's first amended complaint is the operative pleading.   While it is stated in four separate causes of action, it focuses on the incident with Vigil as the precipitating act resulting in violation of his rights.   The first cause of action alleges unlawful employment practices under the Fair Employment and Practices Act, referencing Government Code section 12940, subdivisions (f), (g), and (i).¹  In connection with this charge, appellant alleges respondent created and allowed a work environment wherein he was subjected to racism, harassment, and discrimination, resulting in retaliation against him after he disciplined Vigil, a non-African-American employee.

The second cause of action alleges that during his employment the practices of respondent, referenced by various written and oral agreements, created an implied-in-fact contract that respondent would not terminate him “without just cause and only in good faith.”   He concludes that the company violated this contract by the manner in which it treated him after the incident with Vigil and by terminating him “on a pretext and not for anything he did other than complain about the illegal treatment he received.”

The third cause of action alleges that the implied-in-fact contract referenced in the second cause of action contained a covenant of good faith and fair dealing and that respondent's discharge breached this covenant because he was discharged “without good cause and for pretext.”

The fourth cause of action alleges, without reference to any specific authority, that the discharge violated the state public policy.

The Motion for Summary Judgment

On August 1, 1995, respondent filed a motion for summary judgment, asserting that the discharge of appellant was based upon the good faith belief of Gutierrez that appellant had verbally and physically assaulted Vigil and that his actions during this incident were “gross misconduct violative of the Corporate Principles of [respondent].”  It was argued that this incident gave good cause for termination of appellant and that the termination had nothing to do with appellant's race.

In connection with the motion, the declaration of Gutierrez was submitted delineating the investigation he had undertaken and demonstrating his good faith belief in the charges made against appellant.   In connection with his investigation he declared that he had reviewed the police report filed by Vigil against appellant and the statements of witnesses Deborah Peters, Annette Marquez, and Natalie Ochoa attached to the police report.

The statement of Deborah Peters indicated that she witnessed a confrontation between appellant and Vigil when appellant told Vigil to “clean up and pull off the job, he was to go to another job.”   Vigil told appellant that he was going to take a break and he began to take a break “when [appellant] assaulted him.   He got directly in front of Mr. Vigil and grabbed his left shoulder and shirt and began to shake him violently.  [¶] [Appellant] then reached for [Vigil's] hard hat hitting him in the head and yanking the hat off him.  [Appellant] continued to shake [Vigil], while [Vigil] remained passive and attempted to back away from [appellant].  [Appellant] then lunged at [Vigil], never letting go of him with the right hand on the shoulder, and with the left hand reaching into his pocket and pulling out his belongings.  [¶] [Vigil] continued to ask [appellant] (what's going on) and as [appellant] tried to reach into his pants pocket, but Mr. Vigil put his hand there and gave [appellant] the keys to the van.  [¶] Mr. Vigil asked [appellant] if he can get his coat out of the van, and he said yes.   As [Vigil] reached in to get his jacket that's when [appellant] attacked him again.   He was yanking Mr. Vigil, pulling on his jacket and arm to get him out of the van.  [Vigil] put his jacket on and then [appellant] got up in his face and said something I couldn't hear, and then [appellant] said he would drive him back to the garage.  [Vigil] said no I'll get a ride and he walked away.”   The statements of Natalie Ochoa and Annette Marquez, while differing somewhat from that of Deborah Peters, corroborated much of what Ms. Peters claimed to have seen.

In addition to reviewing the police report, Gutierrez personally spoke with each of these witnesses and corroborated what was contained in their statements attached to the police report.   A separate handwritten statement was obtained from Natalie Ochoa which was consistent with the statement she gave to the police.   Gutierrez spoke with appellant and listened to appellant's version of the facts and obtained a handwritten statement from appellant.   Gutierrez then asked supervisor Enid Bunker to visit the site of the incident to determine what work needed to be completed on the customer's phone system and to interview the witnesses, if possible.   She did so and prepared a report which Gutierrez reviewed.   The report indicates that she met with “Debbie” who reported that she saw appellant “walk up to [Vigil] and pulled [Vigil's] hard hat off his head without requesting it.   She said she was embarrassed for ․ Vigil.   She also said that [appellant] proceeded to reach into ․ Vigil's shirt pocket & pulled [Vigil's] Co. ID from it.   She said [appellant] also appeared to try & take something from [Vigil's] pants pockets, she assumed it was [Vigil's] keys.   Debbie said [Vigil] remained passive while this went on and that [appellant] behaved rude.   Debbie said [appellant] also pushed [Vigil] & pulled on him to get him to go with him.   Debbie said [appellant] was very physical with [Vigil.]”

Paragraph 14 of Gutierrez' declaration states as follows:  “Upon completion of my investigation, I came to believe the third party customer/witnesses Ms. Ochoa, Ms. Marquez and Ms. Peters.   I came to believe that while Mr. Vigil had been insubordinate, [appellant] had engaged in gross misconduct when he assaulted his subordinate, Mr. Vigil, both verbally and physically on or near the premises of a Company customer;  thus seriously violating Corporate Principles.”  (Italics added.)   He further declared that he presented his findings to Regional Manager A. Cruciotti and recommended that appellant be discharged from employment “because he had assaulted his subordinate, Ken Vigil, both verbally and physically at or near the premises of a Company customer on November 11, 1993, and because, in continuing to deny that an altercation had occurred, he had failed to give the Company any evidence of mitigating circumstances, despite having been given ample opportunity to do so.”   The second to last paragraph of his declaration states as follows:  “I have come to understand that [appellant] brings in this case a charge of race discrimination against the Company arising from his discharge.   As an African American, I am sensitive to charges of racial discrimination;  however, the evidence known to me relating to [appellant's] case never even brought up the question of his race.”

The declaration of Regional Manager Augustine Cruciotti was also filed in support of the motion.   He initially joined with Gutierrez in interviewing appellant.   He then reviewed the following written items:  a report prepared by Gutierrez which summarized the findings of Gutierrez;  the report of Enid Bunker;  the police report and the statements attached thereto;  the written statement of appellant;  and a report by Danny Aguirre, a supervisor of respondent who was first alerted to the incident.   He then met with Gutierrez to discuss how to proceed.   Gutierrez “reported he had begun the investigation by giving [appellant] the benefit of the doubt, but, after completing his investigation, he believed the statements of the customer witnesses.”   Gutierrez stated in his opinion appellant had “assaulted [Vigil] both verbally and physically at or near the premises of the Company customer.   Mr. Gutierrez further reported that [appellant] failed to own up to the fact of the altercation, and thus, had failed on at least three occasions to present evidence of mitigating circumstances.   Mr. Gutierrez recommended that the Company discharge [appellant].”  In connection with the independent witnesses, Mr. Cruciotti opined:  “My experience has been that customers often lose interest in the complaints that they initiate except in those rare instances where they truly believe an injustice to have been done.   Also, it was of note that none of the customer witnesses had accused Mr. Vigil of misconduct.”   He concluded:  “In summary, from my review of the Record of Events and discussion of the investigation with Mr. Gutierrez, I came to believe that:  [Appellant] had engaged in gross misconduct when he assaulted his subordinate, Mr. Vigil, both verbally and physically on or near the premises of a Company customer;  thus, seriously violating Corporate Principles.   Therefore, I approved Mr. Gutierrez' recommendation to discharge [appellant] from further employment with [respondent].”

The declaration of Deborah Peters was also submitted in support of the motion.   It basically reiterated what Peters had put in her statement attached to the police report.

The Opposition

On September 5, 1995, appellant filed points and authorities in opposition to the motion.   His introductory paragraph states as follows:  “[Respondent] has filed a motion for summary judgment in which it seeks to summarily adjudicate the issue of race discrimination.  [Appellant's] race discrimination cause of action does allege triable issues of facts which can be resolved only by trial.   In its motion the questions regarding violation of public policy, breach of contract and breach of covenant of good faith and fair dealing are not addressed.”

Appellant's legal position was that his evidence established a prima facie claim of racial discrimination by disparate treatment between himself and Vigil and that respondent had failed to carry its burden of proof to “ ‘articulate’ a legitimate, nondiscriminatory reason for the treatment.  McDonnell Douglas Corp. v. Green (1973) 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668.”   He argued that “[a] triable issue of a material fact exist[s] as to whether [appellant's] conduct occurred as described by him in his declaration submitted herein or as described in statements submitted by [respondent] in support of its motion.”

Appellant submitted his own declaration in opposition setting out his version of the Vigil incident, asserting that the incident with Vigil had not occurred as understood by Gutierrez.   He first set the scene of why he had to confront Vigil, none of which is disputed by respondent.   He declared that he was dispatched to where Vigil was working because Vigil had failed to respond to a “blanket page” which everyone had answered except Vigil.   He advised Vigil that Vigil was required at another location but Vigil refused to go until after he had taken his lunch break and his morning break.   Appellant then advised Vigil that “if he did not leave the customer's residence and go to another location for his break he would be suspended.   Vigil retorted ‘you can't do that’ and I replied that I could if it was necessary.”   It is at this point that the two versions diverge.   Appellant's version is as follows:  “As I began to walk away from Vigil I lost my balance and started to stumble.   To avoid falling I reached out with my right hand to grab something to hold myself up.   I inadvertently grabbed Vigil's arm.   Immediately, Vigil violently pulled away from me with his left arm-pushing me away.   As I regained my balance, Vigil was standing in front of me in a threatening manner.   Words were exchanged.   I then proceeded to the back of the truck.   Vigil followed.  [¶] I instructed Vigil to drive the vehicle back to the garage.   He refused.   I instructed him to get into my vehicle so I could drive us back to the garage.   Again he refused.  [¶] I then asked Mr. Vigil for the keys to his vehicle and his I.D. card which he gave me.   He asked me if I wanted his pager also.   I said I guess so.   He also gave me his helmet.  [¶] I, at no time on November 11, 1993, while talking with Mr. Vigil, punched, choked, slapped, bite [sic ], kicked, attempted to throw him around or touched him other than when I lost my balance, reached out and grabbed his arm to avoid falling.   I deny being angry with Vigil.   In fact, I felt threatened by him because he, a man who outweighs me by at least 30-40 pounds, following my loss of balance, appeared to be angry and upset.   I did not assault Mr. Vigil.  [¶] I then walked to my vehicle which was parked approximately 30 yards away.   I put [Vigil's] possessions in the seat, walked back to [Vigil's] vehicle and [Vigil] was gone.  [¶] Thereafter, I removed his ladder from the customer's house and secured it to his truck.   I apologized to the customer for the situation and returned to the garage.”

Appellant also asserted hearsay objections to the police report of the incident and the statements attached thereto, to the written report of Enid Bunker and the written statement of Natalie Ochoa and various statements related within the declarations of Gutierrez and Cruciotti.

The Hearing on the Motion for Summary Judgment

The motion was originally scheduled for hearing on September 14, 1995, but was continued to October 2, 1995, to allow counsel for appellant to depose Gutierrez and Peters.   The motion was again continued, this time to October 11, 1995.

Unsuccessful attempts were made by counsel for appellant to depose Peters so appellant moved to strike the declaration of Peters filed in support of the motion, and all other written statements of Deborah Peters.

On September 28, 1995, respondent filed a supplement to its motion for summary judgment clarifying certain items to which appellant had objected.   Appellant filed an amended opposition to the motion for summary judgment, basically reiterating his prior arguments and objections.

On October 11, 1995, the motion was heard.   The court granted the motion of appellant to strike the declaration of Peters and then granted summary judgment, stating:  “[Appellant] has not created any triable issue with any admissible evidence.”   A judgment in favor of respondent was entered on October 11, 1995.

Notice of entry of the judgment was given on October 16, 1995.

Subsequent Proceedings

On the same date that judgment was entered, October 11, 1995, appellant filed what purported to be a notice of hearing and motion for new trial, setting it for hearing on November 22, 1995.

On November 13, 1995, respondent filed an objection to appellant's notice of motion and motion for new trial.   It asserted that appellant had failed to file his memorandum of points and authorities in support of the motion, or any evidence to support the motion, within ten days as required by Code of Civil Procedure section 659a and California Rules of Court, rule 203.   Respondent requested that the court “dismiss [appellant's] motion without hearing because it is untimely․”

On November 16, 1995, appellant gave notice that the hearing on the motion for new trial would take place on December 27, 1995, or more than 60 days after entry of the judgment.   On November 22, the court acquiesced in the request and continued the motion to December 27.

The record reflects a document with an original file stamp dated November 28, 1995, which purports to be appellant's points and authorities in connection with his motion for new trial.   The points and authorities indicate a hearing date of December 11, 1995.   In the points and authorities, appellant reiterated his initial arguments and objections to the motion for summary judgment but then expanded his approach, arguing for the first time that Gutierrez' state of mind was in issue and that the manner in which the investigation was carried out and the conclusions reached by respondent “raise at least two triable issues as to several disputed material facts:  mainly, (1) with respect to [appellant's] first and fourth causes of action, for racial discrimination and wrongful termination in violation of public policy, respectively, whether [respondent] proffered a legitimate nondiscriminatory reason, or simply a pretext, for [appellant's] termination;  and (2) with respect to [appellant's] second and third causes of action, for breach of implied-in-fact covenant and breach of the covenant of good faith and fair dealing, respectively, whether [respondent] has conclusively established that it terminated [appellant] for good cause.”   For the first time, appellant cited the case of Wilkerson v. Wells Fargo Bank (1989) 212 Cal.App.3d 1217, 261 Cal.Rptr. 185 and asserted that “the question of whether [appellant] actually engaged in actionable misconduct should have gone to the jury as a triable issue of fact.”

On November 29, 1995, appellant sought an ex parte order shortening time to be allowed to file his points and authorities in support of his motion for new trial.   The application was opposed by respondent, again asserting that appellant had failed to file his supporting documents timely pursuant to Code of Civil Procedure section 659a and California Rules of Court, rule 203.   The court denied appellant's application.

A notice of appeal was filed on December 6, 1995.

On appeal, appellant raises three issues:  (1) whether the discharge was in good faith is a triable issue of material fact because the facts of the underlying incident are contested;  (2) whether the court's decision to strike the statement of Deborah Peters, a purported eyewitness to the incident, left respondent without the required evidentiary support for its motion;  and (3) whether the court erred in denying appellant's hearsay objections to the declarations and statements relied upon by respondent in support of its motion.

DISCUSSION

Scope of the Appeal

The first issue we are faced with is the scope of the appeal.   Judgment was entered on October 11, 1995, the same date that appellant filed his notice of motion for new trial.   Thus, appellant timely filed his motion for new trial.  (Code Civ. Proc., § 659.)   However, appellant failed to file any supporting evidence or memorandum of points and authorities in connection with the motion for new trial in a timely manner.

Code of Civil Procedure, section 659a, in part, states as follows:  “Within 10 days of filing the notice, the moving party shall serve upon all other parties and file any affidavits intended to be used upon such motion.”   The time within which to file affidavits can be extended by the court “for good cause shown by affidavit or written stipulation of the parties ․ for an additional period of not exceeding 20 days.”

California Rules of Court, rule 203 states:  “Within 10 days after filing notice of intention to move for a new trial in a civil case, the moving party shall serve and file a memorandum of points and authorities relied upon․   If the moving party fails to serve and file the prescribed memorandum, the court may deny the motion without a hearing on the merits.”   In other words, it is within the discretion of the court to deny the motion based upon a failure of the moving party to file points and authorities.

 Code of Civil Procedure, section 660 states, as pertinent:  “Except as otherwise provided in Section 12a of this code, the power of the court to rule on a motion for a new trial shall expire 60 days from and after ․ service on the moving party by any party of written notice of the entry of judgment, ․ If such a motion is not determined within said period of 60 days, ․ the effect shall be a denial of the motion without further order of the court.”   The time limit for the court to decide the motion is jurisdictional.  (Siegal v. Superior Court (1968) 68 Cal.2d 97, 65 Cal.Rptr. 311, 436 P.2d 311.)

Here, appellant's motion for new trial was filed on October 11, 1995.   By November 13, 1995, appellant had failed to file any affidavits or points and authorities in support of the motion and respondent objected and requested that the motion be dismissed.   On November 22, at the request of appellant, the hearing date was reset to December 27, 1995, a date beyond the jurisdiction of the trial court to decide the motion.   It was not until November 28 that appellant apparently presented the points and authorities to the clerk for filing.   While it appears that they were stamped “filed,” on November 29 appellant sought an order shortening time to be allowed to file the points and authorities.   We view this as a request by appellant for approval to file late points and authorities, a request which was denied by the court, an act well within its discretion.   We have been presented with no documentation that the court ruled on the motion and we must conclude that the court did not do so.   Therefore, the motion was denied by operation of law.

We conclude that our review must be limited to the record presented to the court up to and including the date of entry of the judgment.   Except for legal issues which can be addressed on the facts presented to the court based on the record of the summary judgment motion, we will not review any new issues which may have been intended to be raised in the motion for new trial.  (Ernst v. Searle (1933) 218 Cal. 233, 240-241, 22 P.2d 715;  North Coast Business Park v. Nielsen Construction Co. (1993) 17 Cal.App.4th 22, 28-29, 21 Cal.Rptr.2d 104.)

The Law of Summary Judgment

“A defendant is entitled to summary judgment if the record establishes as a matter of law that none of the plaintiff's asserted causes of action can prevail.  [Citation.]”  (Molko v. Holy Spirit Assn. (1988) 46 Cal.3d 1092, 1107, 252 Cal.Rptr. 122, 762 P.2d 46.)   A defendant moving for summary judgment has the burden of “negat[ing] a necessary element of the plaintiff's case, and demonstrat[ing] that under no hypothesis is there a material issue of fact that requires the process of trial.  [Citation.]”  (Id. at p. 1107, 252 Cal.Rptr. 122, 762 P.2d 46.)   To do that, the moving defendant may rely either on affirmative evidence or discovery responses of the plaintiff showing the absence of evidence necessary to establish at least one essential element of plaintiff's case.  (Union Bank v. Superior Court (1995) 31 Cal.App.4th 573, 589-590, 37 Cal.Rptr.2d 653.)

On appeal from an order granting a motion for summary judgment, the reviewing court conducts a de novo examination of the record to determine whether the moving party is entitled to summary judgment as a matter of law or whether genuine issues of material fact remain.  (Krieger v. Nick Alexander Imports, Inc. (1991) 234 Cal.App.3d 205, 212, 285 Cal.Rptr. 717.)

The Fourth Cause of Action

 “ ‘A motion by a defendant under section 437c of the Code of Civil Procedure necessarily includes a test of the sufficiency of the complaint․’  [Citation.]  ‘Thus, if the reviewing court finds the complaint fails to state facts sufficient to constitute a cause of action as a matter of law, it need not reach the question whether plaintiff's opposition to the summary judgment motion raises a triable issue of fact.’  [Citation.]”   (Robinson v. Hewlett-Packard Corp. (1986) 183 Cal.App.3d 1108, 1131, 228 Cal.Rptr. 591.)

In Robinson, plaintiff sued for wrongful termination raising a number of different legal theories, including an assertion of retaliatory termination, allegedly a violation of public policy.   The court noted:  “We do not find the issue of ‘retaliatory termination’ anywhere in Robinson's complaint.   Robinson insists that it was buried in the cryptic sentence in his fourth cause of action, which reads:  ‘Additionally, said termination is against the public policy of the state.’   But the mere allegation of a public policy violation does not suffice to state a cause of action, particularly where no clue is given as to which public policy allegedly has been violated.  (Tyco Industries, Inc. v. Superior Court [1985] 164 Cal.App.3d [148] at p. 159 [211 Cal.Rptr. 540].)”  (Id. at p. 1131, 228 Cal.Rptr. 591, italics added.)

 Appellant's fourth cause of action alleges that respondent “wrongfully discharged [appellant] from his employment in violation of the public policy of the State of California against discrimination in employment.”   Except for the term “discrimination” no specific public policy is identified.   The first cause of action also alleges wrongful termination as a result of discrimination against appellant:  “Defendant and each of them conspired to and did engage in a continuous pattern and practice of harassment and discrimination conduct which ultimately resulted in [appellant] being wrongfully terminated from employment.”  (Italics added.)

Appellant's claim of racial discrimination is cognizable in the first cause of action.   To the extent that appellant meant to address a public policy other than racial discrimination in the fourth cause of action, he has failed to state a cause of action by failing to set forth what specific public policy is being addressed.  (Robinson v. Hewlett-Packard Corp., supra, 183 Cal.App.3d at p. 1131, 228 Cal.Rptr. 591.)

The Controlling Legal Issue

 At trial based upon a claim of discriminatory termination, “[f]irst, the plaintiff has the burden of proving by a preponderance of the evidence a prima facie case of discrimination.   Second, if the plaintiff succeeds in proving the prima facie case, the burden shifts to the defendant to articulate some legitimate, nondiscriminatory reason for the employee's [termination].  [Citation.]   Third, should the defendant carry this burden, the plaintiff must then have an opportunity to prove by a preponderance of the evidence that the legitimate reasons offered by the defendant were not its true reasons but a pretext for discrimination.”  (University of Southern California v. Superior Court (1990) 222 Cal.App.3d 1028, 1035, 272 Cal.Rptr. 264, internal quotation marks omitted.)

Where the issue is raised by summary judgment, “the burden rests with the moving party to negate the plaintiff's right to prevail on a particular issue.  [Citation.]   In other words, the burden is reversed in the case of a ․ summary judgment motion.  [Citations.]   In any event, either at the time of trial or a pretrial summary issue adjudication motion, the burden would rest with [the employer] to prove that there was ‘some legitimate nondiscriminatory reason ․’ [citation] [for termination].”  (Id. at p. 1036, 272 Cal.Rptr. 264.)

In this instance, respondent asserted that it had a legitimate nondiscriminatory reason for termination of appellant-appellant's treatment of Vigil which was described by Gutierrez as a “gross misconduct” which “seriously violated Corporate Principles.”   Therefore, it was up to appellant to raise a triable issue of fact that this reason was pretextual in order to defeat summary judgment on the first cause of action.

The second cause of action alleged an implied-in-fact contract not to terminate appellant except for good cause.   Appellant did not argue that the reason given by respondent, assuming the facts as believed by Gutierrez and Cruciotti were true, did not amount to good cause to terminate him.²  Therefore, whether the reason was pretextual also controls the second cause of action.

The third cause of action alleged that the implied contract contained a covenant of good faith and fair dealing.   In response to the motion for summary judgment, appellant did not directly challenge the good faith beliefs of Gutierrez and Cruciotti.   In fact, he admitted that Gutierrez recommended that he be terminated based upon the reports of the three witnesses, and that Cruciotti agreed with Gutierrez' recommendation to discharge appellant.   Instead, he presented his own variation of the facts and asserted that he did not “assault” Vigil, as stated by the witnesses.

We conclude that the single issue resolved by the trial court, the good faith of respondent in terminating appellant, is the key to resolution of this case.   That issue relates directly to whether or not the reason given by respondent to terminate appellant was pretextual.   Therefore, we must determine whether or not appellant presented sufficient evidence to raise a triable issue of fact on the issue of respondent's good faith belief.

The Evidentiary Issues

Before turning to the issue of good faith, we must first address the evidentiary issues raised by appellant.

Appellant successfully moved to strike the declaration of Deborah Peters filed in support of the motion for summary judgment, therefore, we must infer that the court did not consider it.   Appellant argues that without this declaration there is insufficient evidence to support the motion.   We disagree.

 As discussed supra, the issue upon which this case turns is the good faith belief of respondent.   Evidence which would otherwise be objectionable because it is hearsay is admissible where it is being offered to support an assertion of good faith to act in a certain manner:  “Where the good faith or the reasonableness of the conduct of a person are in question, statements of others on which he acted may be shown.  (See Central Heights Imp. Co. v. Memorial Parks (1940) 40 Cal.App.2d 591, 609, 105 P.2d 596;  Gilbert v. Gilbert (1950) 98 Cal.App.2d 444, 446, 220 P.2d 573;  Aitkin [ Aitken ] v. White (1949) 93 Cal.App.2d 134, 145, 208 P.2d 788;  Dussault v. Condon (1959) 170 Cal.App.2d 693, 696, 339 P.2d 896;  Weber v. Leuschner (1966) 240 Cal.App.2d 829, 839, 50 Cal.Rptr. 86, citing the text.)”  (1 Witkin, Cal. Evidence (3d ed.   1986) The Hearsay Rule, § 600, p. 572.)

 Therefore, the statements identified by Gutierrez and Cruciotti upon which they relied were admissible to show not only the evidence upon which they formed their good faith belief but the extent of the investigation that was undertaken.   This includes the statements of Peters, Marquez and Ochoa attached to the police report, the report of Enid Bunker, and the separate statement of Ochoa obtained by Gutierrez' investigator.   The same rule applies to verbal statements identified by Gutierrez and Cruciotti in their declarations upon which they relied.

Good Faith of Respondent

 It is undisputed that respondent mounted an investigation of the alleged incident, obtained a police report and statements from independent witnesses, and obtained a statement from appellant about the incident involving appellant and Vigil.   It is also undisputed that an incident occurred between appellant and Vigil relating to Vigil's insubordination.   Appellant does not dispute that he placed his hand on Vigil during the incident, that he chastised Vigil, took away his keys to the company van, and suspended Vigil from work, all within the sight of customers.   Also, except for his differing version of the incident, appellant does not present any independent evidence to challenge the witnesses' interpretation of what occurred during the incident, that it was unreasonable for Gutierrez or Cruciotti to believe the witnesses, or that the opinions formed by Gutierrez or Cruciotti were not truly held beliefs.   Instead, appellant contends that the trial court erred by not allowing the jury to determine the truth of what actually occurred during the incident, relying on Wilkerson v. Wells Fargo Bank, supra, 212 Cal.App.3d 1217, 261 Cal.Rptr. 185.

In Wilkerson v. Wells Fargo Bank, supra, 212 Cal.App.3d 1217, 261 Cal.Rptr. 185, a former bank employee sued his employer after it discharged him based upon his approval of an overdraft of a bank customer.   The undisputed facts were that a Ms. Turner advised employee Wilkerson she wished to deposit several checks that would cure her existing overdraft and also enable her to pay Wilkerson $300 she owed him in connection with a personal educational loan.   Wilkerson accepted and negotiated two $150 checks.   The following day, Wilkerson approved a $77.23 overdraft, which included bank fees, on Turner's account.   A bank policy prohibited employees from personally benefiting from transactions or making a loan to themselves.   The bank terminated Wilkerson based upon the Turner incident.   Wilkerson brought an action for wrongful discharge.   The bank successfully moved for summary judgment.   In opposition to the motion, Wilkerson declared that at the time he approved the overdraft he had not believed that the checks paid to him had caused the overdraft and had not understood that his approval was, in essence, approval of an unsecured loan to himself.   Wilkerson characterized his act as an unintentional violation of bank policy that did not constitute good cause for discharge.  (Id. at p. 1222, 261 Cal.Rptr. 185.)   He also presented a declaration of an expert who had worked for the bank for thirty seven years who opined that the bank's policies had never been to terminate an employee for an overdraft of this sort.  (Id. at p. 1229, 261 Cal.Rptr. 185.)

On appeal, Division 3 of this district reversed the grant of summary judgment holding that triable issues of fact existed “as to whether (1) there was an implied-in-fact contract to terminate only for good cause and (2) whether Wilkerson's discharge was consistent with Bank policies and supported by good cause.”  (Id. at p. 1221, 261 Cal.Rptr. 185.)   Despite the fact that these were the only two issues to be decided upon remand, the court went on to discuss an additional issue:  whether the defense of good faith belief was a valid defense to an action for breach of contract, as contrasted to a cause of action for beach of the implied covenant of good faith.   Relying on an analogy to a loan transaction, the court concluded that the good faith belief of the employer was not available as a defense to the cause of action for breach of contract:  “The argument fails for the further reason that in contract law the belief of the breaching party does not determine whether a breach of the contract has occurred.   Obviously, a defaulting borrower's good faith belief he or she has repaid the loan is not a defense to a lender's claim for payment.   Similarly, an employer's subjective belief it possessed good cause does not dispose of a wrongfully discharged employee's claim for breach of contract.   Such employee is entitled to recover for breach of contract notwithstanding the employer's state of mind.”  (Id. at p. 1230, 261 Cal.Rptr. 185.) ³

We disagree with the conclusion reached in Wilkerson.   An employer-employee relationship based upon an implied-in-fact contract not to terminate except for good cause is entirely different from that of a debtor to a creditor.   A good faith belief in whether a loan has been repaid does not affect the factual status of the debtor-creditor relationship.   Nor does a determination of whether the loan has been repaid require a review of subjective factors necessary to exercise discretion as in the decision to terminate the employer-employee relationship.

 The proper approach in the employment context is explained in Pugh v. See's Candies, Inc. (1988) 203 Cal.App.3d 743, 250 Cal.Rptr. 195:  “In any free enterprise system, an employer must have wide latitude in making independent, good faith judgments about high-ranking employees without the threat of a jury second-guessing its business judgment.   Measuring the effective performance of such an employee involves the consideration of many intangible attributes such as personality, initiative, ability to function as part of the management team and to motivate subordinates, and the ability to conceptualize and effectuate management styles and goals․   Although the jury must assess the legitimacy of the employer's decision to discharge, it should not be thrust into a managerial role.  [¶] The employer does not, of course, have a right to make an arbitrary or unreasonable decision about terminating an employee when there is a contract to terminate only for good cause.   In deciding whether the employee's termination was for ‘a fair and honest cause or reason regulated by the good faith of the employer,’ the jury does scrutinize the employer's business judgment and determines whether the discharge was justified under all the circumstances.   If the reasons advanced by the employer for the discharge are trivial, capricious, unrelated to business needs or goals, or pretextual, the jury may properly find that the stated reason for termination was not a ‘fair and honest cause or reason’ regulated by good faith.   In this sense, the employer does not have an unfettered right to exercise discretion in the guise of business judgment․  [¶] ․ [¶] The employee has the burden of proving that the employer's action was in bad faith, that is, the employer had a wrongful motive in depriving the employee of the benefits of contract, and the employer's good or bad faith is the only issue, other than the existence of the contract and damages, to be decided by the jury.”  (Id. pp. 769-770, 250 Cal.Rptr. 195, italics added.)

 Based upon the record presented, we cannot conclude that appellant has raised a triable issue of fact that respondent exercised its discretion in a trivial or capricious manner.   Both Gutierrez and Cruciotti presented evidence that the actions of appellant were directly related to the business needs and goals of respondent, issues not challenged by appellant.   Further, appellant does not contest that a confrontation took place, nor does he contest the beliefs formed by Gutierrez and Cruciotti that the witnesses' versions were more credible than his own.   Appellant concedes that he placed his hand upon Vigil, although he asserts that it was because he stumbled.   The three witnesses interpreted what took place differently than appellant.   Other than his own interpretation of what occurred, appellant presents no independent evidence to suggest that any of the three witnesses were lying or were not percipient to the facts presented in the police report, which facts were confirmed by Gutierrez when he spoke with the witnesses.   Gutierrez and Cruciotti also interviewed appellant and each claims to have given him the benefit of the doubt, also not challenged by appellant.   We are not here dealing with a situation wherein the true facts can be determined clearly and without subjective interpretation as in a loan transaction.   Instead, we have a situation as presented in the case of Burton v. Security Pacific Nat. Bank (1988) 197 Cal.App.3d 972, 243 Cal.Rptr. 277.

In Burton, plaintiff, an employee of the bank, was witnessed by plaintiff's supervisor, Chris Riggio, to be reading a confidential personnel book, a restricted item which contained sensitive materials about employees.   This was reported by Riggio to his supervisor who in turn reported the matter to the unit manager, Gerald Stephens.   Later that afternoon Riggio, Stephens and Patricia McKinness, assistant vice-president and personnel officer, met to discuss the incident and ultimately went to the scene to review the book which plaintiff had been reading and the secured file cabinet in which it was kept.   Later that evening McKinness and Stephens determined that plaintiff should be discharged.   He was advised the next morning and he discussed his version of the incident with an employee of the personnel department and asserted that he was reading a nonconfidential time record book in a nonconfidential area.   He was told that he could appeal the decision to Lily Fong, the bank's vice-president in charge of corporate relations.   He did so.   Ms. Fong listened to his story, discussed the matter with other personnel from the bank, and denied the appeal.   Plaintiff filed suit for wrongful discharge alleging that the bank had concocted the story that he was in a confidential area reading confidential material.

The bank moved for summary judgment and presented evidence of the investigation and the good faith belief of the supervisors who determined that plaintiff should be terminated.   In opposition, the only evidence presented was plaintiff's version of what had occurred-that he had not been reading confidential matters in a confidential area.   The trial court granted summary judgment and the court of appeal affirmed.  “Appellant's claim that he was not in fact in the confidential area reading confidential materials raises no issue of bad faith on the part of respondent.   An implied covenant of good faith and fair dealing requires only that the employer acted fairly and in good faith.   (Koehrer v. Superior Court (1986) 181 Cal.App.3d 1155, 1169, 226 Cal.Rptr. 820, disapproved on another point in Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, 688, 698, 254 Cal.Rptr. 211, 765 P.2d 373.)   To be entitled to a trial for breach of the implied covenant of good faith and fair dealing, appellant must bring forth facts to show that respondent acted in ‘bad faith’ and without ‘probable cause.’  [Citations.]   Undisputed facts show that respondent investigated the charge that appellant was in the confidential area reading confidential materials.   Appellant discussed the incident with at least two of respondent's employees, including the vice president of corporate employee relations.   The assistant vice president personnel officer examined the area and documents in question;  and there were at least three conversations among management personnel to discuss the allegations.   Appellant presented no contrary evidence that respondent lacked probable cause to believe that appellant was in a confidential area reading confidential materials or that respondent lacked a good faith belief the charge was true.  [¶] Appellant denied the charge, and respondent chose to believe other witnesses and to reject appellant's version.   This raises no inference of bad faith on respondent's part.   This type of situation is very common;  an employee charged with misconduct denies committing the misconduct.   If the employer makes a determination in good faith that the misconduct occurred, there is no breach of the implied covenant of good faith and fair dealing, even if the employee could subsequently prove that the factual finding of misconduct was a mistake.  [¶] If the law were otherwise, no employment contract could be ‘at will’ as codified in Labor Code section 2922.   If the employee were entitled to jury trial for breach of the implied covenant of good faith and fair dealing merely by asserting that the charged misconduct was not true, the decision to terminate would be at the discretion of a jury, not the employer.   The law of employment contracts would be turned on its head.”  (Id. at pp. 978-979, 243 Cal.Rptr. 277, italics added.)

We conclude that appellant did not present sufficient evidence to challenge the good faith belief of respondent to terminate him for cause and therefore failed to present evidence that respondent's reason for terminating appellant was pretextual.

DISPOSITION

The judgment is affirmed.

FOOTNOTES

1.   As identified, that section provides:  “It shall be an unlawful employment practice, unless based upon a bona fide occupational qualification, or, except where based upon applicable security regulations established by the United States or the State of California:  [¶] ․ [¶] (f) For any employer, labor organization, employment agency, or person to discharge, expel, or otherwise discriminate against any person because the person has opposed any practices forbidden under this part or because the person has filed a complaint, testified, or assisted in any proceeding under this part. [¶] (g) For any person to aid, abet, incite, compel, or coerce the doing of any of the acts forbidden under this part, or to attempt to do so. [¶] ․ [¶] (i) For an employer, labor organization, ․ to fail to take all reasonable steps necessary to prevent discrimination and harassment from occurring.”

2.   At oral argument, counsel for appellant claimed that he objected to the portions of the declarations of Gutierrez and Cruciotti describing appellant's actions as gross misconduct which seriously violated corporate principles on the basis that these claims were conclusory.   We have reviewed the objections filed by appellant.   The record does not support the claim.   In fact, no specific reference was made in the first series of objections to these statements made by Gutierrez and Cruciotti.   The second series of objections referenced hearsay relating to the Peters statement and urged that Gutierrez' beliefs were argumentative.   There is no direct challenge to the statements by Gutierrez and Cruciotti that appellant's actions were a gross violation of company principles.

3.   Respondent counters that Cotran v. Rollins Hudig Hall Internat., Inc. (1996) 49 Cal.App.4th 903, 57 Cal.Rptr.2d 129 is a better reasoned case than Wilkerson and should be controlling on the issue of good faith belief.  Cotran has just been accepted for review by the Supreme Court in Case No. S057098 and is therefore no longer valid precedent.

HASTINGS, Associate Justice.

EPSTEIN, Acting P.J., and ARANDA, J.* concur.