DESUASIDO v. SANWA BANK CALIFORNIA (1991)

Felicito H. Desuasido brought an action for wrongful discharge against Sanwa Bank California after Sanwa fired him for alleged misconduct involving bank customers.   Appellant's original complaint alleged causes of action for breach of employment contract, breach of the implied covenant of good faith and fair dealing, wrongful termination in violation of public policy, fraud, and intentional and negligent infliction of emotional distress.   The trial court sustained demurrers to the causes of action for wrongful termination in violation of public policy and for infliction of emotional distress.   In addition, the court struck appellant's requests for punitive and non-economic general damages.

Following its successful demurrers, Sanwa brought a motion for summary judgment on the remaining causes of action:  breach of employment contract, breach of the covenant of good faith and fair dealing, and fraud.   The trial court granted summary judgment on all remaining causes of action on the ground that Sanwa had good cause to discharge appellant as a matter of law.

Appellant has appealed from the summary judgment and from the orders sustaining the demurrers and striking his request for punitive and non-economic general damages.   We affirm the judgment and orders.

I

FACTSA. Background and Cause for Termination.

Appellant is a native of the Philippines who migrated to this country in 1975.   In 1976, he was hired by Lloyds Bank of California which was acquired by Sanwa in 1986.   He worked continuously for Lloyds and Sanwa until November 7, 1988, when he was terminated.   At the time of his termination, appellant was a vice-president and the consumer sales manager for Sanwa's Northern California operations.

The events leading to appellant's fall began in August 1988 when the FBI served Sanwa with a grand jury subpoena.   The subpoena demanded production of all bank records relating to accounts held in the name of Gregorio Araneta, Chamba Trading Co., Inc. and Helen T. Rivilla.   Sanwa was also ordered not to disclose any information about the subpoena or the pending grand jury investigation to anyone for a period of 90 days.

In connection with its investigation, the FBI told Sanwa's manager of corporate security that the bureau suspected Araneta, Chamba Trading, and Rivilla were involved in a money laundering scheme.   This scheme was allegedly designed to aid a plot by Ferdinand Marcos and his supporters to overthrow the government of Philippines President Corazon Aquino.   The FBI also told Sanwa that an unnamed witness had reported that two Sanwa employees—appellant and South San Francisco branch manager Cristina Tan—were aiding the money laundering scheme through their positions with the bank.

To comply with the grand jury subpoena, Sanwa examined all bank accounts held in the name of Araneta, Chamba Trading and Rivilla.   The bank also traced the source of all deposits into those accounts, as well as all checks which had been drawn on any of the accounts and deposited in other Sanwa accounts during 1986 and 1987.   The search revealed that funds held on deposit in the accounts subpoenaed by the grand jury had been flowing in a one-way direction into a web of 45 other Sanwa accounts which were linked to the targeted accounts, and to each other, by virtue of withdrawal/deposit transactions or common addresses.

Prompted by the FBI reports of employee involvement in the money laundering scheme, Sanwa initiated an internal investigation to determine if appellant or Cristina Tan had engaged in illegal or improper conduct in their capacities as bank employees.   Based on this investigation, Sanwa identified four instances of suspected misconduct or illegal activity by appellant:

1. Appellant's Loan From a Bank Customer.

In the course of the account analysis, Sanwa discovered that in January of 1987, appellant had deposited into his bank account a $25,000 cashier's check purchased by Luis Romualdez, a Sanwa customer and one of the individuals whose Sanwa accounts were linked to Gregorio Araneta.   During that same month, a $25,000 check drawn on appellant's personal account was deposited into an account held by Romualdez.   In an interview with Sanwa's corporate security held on September 30, 1988, appellant stated he had borrowed the $25,000 from his friend Mr. Romualdez as a bridge loan for a home he was buying, and had repaid the loan within 20 days.

Sanwa contended this personal loan violated the bank's current written policy regarding conflicts of interest, which specifically prohibits employees from borrowing money from any customer or prospect.   However, in his counter-affidavit, appellant pointed out that the explicit written prohibition against borrowing from customers had not been adopted until August of 1987, some eight months after the loan had been made.   Appellant contended that at the time he borrowed the money, he was not aware of any bank regulation which prohibited the loan.   In response, Sanwa maintained that the loan also violated Lloyds' pre–1987 written policy prohibiting employees from “entering into transactions or relationships where it may appear that they have a conflict of interests, are improperly benefiting from their affiliation with the bank, or are violating laws governing fiduciary relationships.”  (Emphasis added.)

2. Appellant's Possible Violation of Federal Currency Transaction Reporting Laws.

The FBI informed Sanwa that an “unnamed witness” had described a meeting at Sanwa's South San Francisco branch in which two bank employees had discussed with Helen Rivilla how to avoid the requirements of the currency transaction reporting laws.   The unnamed witness reported that $30,000 had changed hands during this meeting, suggesting that the employees had received payment for their role in helping Rivilla.   Prompted by this report, Sanwa discovered that appellant had brought Rivilla in as a new bank customer at the South San Francisco branch in June of 1987.   At that time, Rivilla had two $100,000 cashiers' checks.   She deposited $130,000 of those funds into five separate accounts in increments of $20,000 and $30,000.   During the following two months, $72,000 was systematically withdrawn from four of the accounts on a rotating basis in increments of exactly $9,000.   The eight withdrawals were made by checks payable to cash;  seven of the checks were cashed by one of Gregorio Araneta's employees.

Because of the circumstances surrounding the opening of the accounts and the fact that the checks were all for $9,000, Sanwa's corporate security concluded that Rivilla had deliberately attempted to evade the reporting requirements of the federal Bank Secrecy Act (31 U.S.C. § 5312 et seq.), which requires that all cash transactions of $10,000 or more be reported to the IRS.   In particular, section 5324 of the Act makes it unlawful to “structure or assist in structuring, ․ any transaction with [a] ․ financial institution[ ]” for the purpose of evading the Act's reporting requirements.  (31 U.S.C. § 5324(3).)

On October 18, 1988, Sanwa interviewed the manager of the South San Francisco branch, Cristina Tan.   Ms. Tan stated that she and appellant had discussed with Rivilla how to withdraw her funds “in different instruments that would not be in violation of the Currency Transaction Reporting Law.”   She stated that they “were well aware of what [they] were doing so as to go undetected.”   Sanwa interpreted these statements as a confession that Tan and appellant had advised Rivilla how to unlawfully evade the currency reporting requirements.   When Sanwa questioned appellant the following day about his involvement in Rivilla's scheme, he admitted he had been present when Rivilla opened her accounts, but said he had not discussed cash transaction reporting requirements with her.   Appellant did say he had heard Cristina Tan tell Rivilla that currency transactions in excess of a certain amount must be reported.

Based on the information gleaned from the FBI and its own investigation, Sanwa concluded there were reasonable grounds to believe appellant had violated section 5324 of the Bank Secrecy Act by assisting Rivilla in structuring her cash withdrawals for the purpose of evading the Act's reporting requirements.

In his counter-affidavit to the motion for summary judgment, appellant categorically denied he had advised Rivilla concerning how to evade the currency reporting requirements.   He explained he had encouraged Rivilla to open multiple accounts because of the benefits different types of accounts might offer, and, most importantly, because he believed that by having her open multiple accounts he would earn more points in an incentive campaign (called “ ‘Together We're Better’ ”) being promoted by the bank.   He stated that he had no knowledge what withdrawals were made from the Rivilla accounts after they were opened.

Finally, appellant presented Ms. Tan's declaration in which she recanted her earlier statements regarding the Rivilla accounts, and stated that neither she nor appellant advised Ms. Rivilla in any manner with respect to currency transaction reporting.   Ms. Tan stated that her written “ ‘confession’ ” had been coerced by the bank and was not an accurate account of what had happened.

3. Plaintiff's Alleged Falsification of the Araneta Loan Application.

In examining Araneta's bank records in response to the grand jury subpoena, Sanwa discovered that appellant had prepared and submitted a $200,000 loan application on behalf of Araneta and had represented that the loan would be secured by Sanwa savings accounts totalling $250,000.   Appellant admitted that at the time he submitted the loan application there were no existing funds in the accounts to secure the $200,000 loan.   Instead, when questioned about the loan, appellant stated that the collateral accounts were to be funded by the loan proceeds plus $50,000 in cash contributed by Mr. Araneta.   However, the bank officer who approved the loan (B.T. Alderson) prepared a declaration in which he stated that he had “assumed” from the information presented in the application that there were sufficient funds in then existing savings accounts to serve as collateral for the Araneta loan.   Based on this information, Sanwa concluded there was reasonable cause to believe appellant had omitted material facts on the Araneta loan application because he failed to disclose the loan proceeds were intended to be the collateral for the loan.

In his counter-affidavit to the motion for summary judgment, appellant claimed that he told Mr. Alderson face-to-face that the loan proceeds were to be used as the collateral.   Moreover, nothing in the loan application indicated the collateral funds were already in existing accounts.   To the contrary, the loan application clearly stated otherwise since the application set forth all of Araneta's accounts with Sanwa, which consisted of a $20,000 car loan and average deposits of $3,000.   The reason for the loan, as appellant understood it, was to permit Araneta to establish an investment relationship with the bank for “immigration purposes.”   According to appellant, nothing in the bank's loan policies prohibited the transaction, and, in fact, the loan was fully secured by the $200,000 plus $50,000 contributed by Mr. Araneta, because those funds were immediately placed in “frozen” deposit accounts with the bank when the loan was made.   Moreover, according to appellant, Mr. Alderson told him that Sanwa had made similar loans to other customers who wished to establish a credit history.   Finally, the bank could not, and did not, lose any money from the transaction because Araneta repaid the loan in one lump sum three months after it was made.

4. Appellant's Alleged Concealment of Bank Files.

In response to the grand jury subpoena, Sanwa's Consumer Loan Processing Center tried to retrieve from the central filing area all loan files for the individuals and entities named in the subpoena and those who were “linked” to the Araneta, Chamba or Rivilla accounts.   Many of the requested loan files were missing from the central file area, where such files are normally stored, and were later discovered in appellant's desk.   None of the files had been checked out to appellant.   In all, there were seven files in appellant's desk which had been subpoenaed by the grand jury, and eight which were linked to the principal targets of the FBI investigation.   Based on these facts, Sanwa concluded appellant was attempting to conceal from bank management information regarding customers whose banking activities were suspect because of their link to the activities being investigated by the grand jury.

In his counter-affidavit, appellant contended the files were not “ ‘discovered’ ” in his desk;  to the contrary, he claimed he brought them to the attention of corporate security when he was suspended from the bank.   Furthermore, appellant claimed that “all of the so called ‘missing’ files should have had out cards ․ which showed that the files had been checked out to [him].”  Appellant explained that during his time with the bank he always had numerous files in his office, and there is nothing in the bank's policy or procedures which prevented this.   He claimed there were many other files in his office which were not connected to the grand jury investigation, and it was “typical for [him] to have files in [his] office which had some problems especially if these involved borrowers whom [he] had solicited or introduced to the bank.”

B. Appellant's Termination.

Based on the evidence of appellant's apparent violations of bank policy and federal law, Sanwa suspended appellant with pay on October 19, 1988, pending resolution of the bank's internal investigation.   After the bank completed its investigation, Sanwa senior management met to review the evidence against appellant.   At this meeting the senior managers concluded there was ample evidence appellant had violated bank policies and federal law.   Moreover, according to Sanwa's director of personnel, the bank necessarily holds itself and its employees, particularly those in management positions, to the highest standards of lawful and ethical conduct.   Sanwa's written code of conduct (adopted August 1, 1987) provides that it is “intended to be supplemented by good judgment and common sense to avoid even the appearance of impropriety.   To the extent there is a conflict or ambiguity between permissive conduct and that which is not permitted, the latter shall have precedence.”   Consequently, the senior managers concluded that even if appellant's conduct was not technically illegal, it breached the “appearance of impropriety” standard and risked jeopardizing Sanwa's reputation for honesty and integrity in the financial community.   Thus, the managers concluded there was good cause to terminate appellant.

Following this decision, Sanwa management instructed appellant's immediate supervisor, B.T. Alderson, to offer appellant the opportunity to resign and to advise him that if he did not resign he would be terminated.   Because of the federal gag order, bank management did not explain the reasons for the decision to Alderson, other than to say appellant had violated bank policy.   Alderson met with appellant on November 4, 1988, and communicated management's ultimatum.   Appellant asked for time to think about his decision, and Alderson gave him until Monday, November 7, to decide.   When Sanwa received no resignation on the 7th, the bank notified appellant by mailgram that his employment had been terminated.

C. Appellant's Version of His Termination.

In his counter-affidavit to the motion for summary judgment, appellant said he was first interviewed by the FBI and Sanwa corporate security on September 30, 1988.   He was told he was being interviewed concerning transactions by friends and relatives of Ferdinand Marcos.   The interviews lasted six or seven hours, and, at their conclusion, Alex Radovich of corporate security dictated a statement which appellant wrote.   Radovich asked appellant to admit he had violated the bank's policy on conflict of interest, but appellant refused to do so, writing instead that he believed he had acted ethically at all times and did not gain anything from any of the questioned transactions.   He did, however, ask for guidance concerning his personal and business relationships with the persons he was being questioned about.

On October 19, 1988, appellant was again questioned by representatives of the FBI, IRS and Sanwa corporate security.   The principal area of interrogation was the Helen Rivilla transaction.   After the interview, the bank suspended appellant.   Before that time, the grand jury had subpoenaed appellant to appear on November 4.

Appellant was granted a continuance for his testimony before the grand jury, and instead met with his supervisor, B.T. Alderson, on November 4 at Sanwa.   Alderson, who had known appellant since his early years with the bank, told appellant they were friends, but Sanwa management had determined appellant was “tainted” and, as far as the bank was concerned, appellant was “history.”   Appellant asked Alderson whether this was an off-the-record observation or whether it was the bank's official position.   Alderson replied, “[I]n less than 30 seconds, I am going to make it official.”   Alderson said the bank demanded appellant resign or be terminated and that the bank was concerned about “political pressure” and “the bank's image.”   Alderson said the bank simply wanted to “lose” appellant.¹  Alderson concluded that the bank wanted appellant's termination “effective yesterday” but gave appellant until Monday, November 7, to get back to him.  (Quotation marks in original declaration.)

On November 7, 1988, appellant's attorney delivered a letter to Sanwa asking the bank to comply with a provision in its personnel manual requiring investigation of employee complaints in exceptional circumstances.   The bank did not respond to this request, but instead terminated appellant by sending a mailgram which did not set forth the reasons for the termination.

According to appellant's counsel, Sanwa did not explain the reasons for appellant's termination until it moved for summary judgment two years after the fact and “contrived” the four grounds discussed above.

II

DISCUSSIONA. The Summary Judgment.

We first address the propriety of the summary judgment on appellant's causes of action for breach of employment contract, breach of the covenant of good faith and fair dealing, and fraud.

 Summary judgment is proper only if there is no triable issue of material fact and the moving party is entitled to judgment as a matter of law.  (Code of Civ.Proc., § 437c.)   In reviewing a summary judgment, we determine only whether the facts shown by the parties give rise to a triable issue of material fact.   In making this determination the moving party's papers are strictly construed, while those of the opposing party are liberally construed.  (Howell v. State Farm Fire & Casualty Co. (1990) 218 Cal.App.3d 1446, 1448, 267 Cal.Rptr. 708;  Safeco Ins. Co. v. Gibson (1989) 211 Cal.App.3d 176, 179–180, 259 Cal.Rptr. 206.)   The trial court's ruling on a motion for summary judgment is one of law based upon the papers submitted;  consequently, the reviewing court must make its own independent determination whether the conflicting affidavits raise a triable issue of material fact.   (Wilkerson v. Wells Fargo Bank (1989) 212 Cal.App.3d 1217, 1224–1225, 261 Cal.Rptr. 185.)

1. Breach of Employment Contract.

For the purpose of the motion for summary judgment, Sanwa conceded it could terminate appellant only for “good cause.”   It claimed, however, that it had established “good cause” as a matter of law and was accordingly entitled to summary judgment on appellant's cause of action for breach of employment contract.

The general evidentiary burdens on a cause of action for breach of employment contract are well settled.  “After an employee establishes a prima facie case of breach of the implied employment contract, the employer has the burden of going forward with the evidence to show the reason for the discharge.   The employee may then attack the employer's proffered explanation either on the ground that it is pretextual and that the real reason is one prohibited by the contract or public policy, or on the ground that it is insufficient to meet the employer's contract or legal obligations.   The employee, however, has the ultimate burden of proving that he or she was wrongfully terminated.”  (Pugh v. See's Candies, Inc. (1988) 203 Cal.App.3d 743, 752, 250 Cal.Rptr. 195 [Barry–Deal, J.] [hereafter “Pugh II ”], citing Pugh v. See's Candies, Inc. (1981) 116 Cal.App.3d 311, 329–330, 171 Cal.Rptr. 917 [hereafter “Pugh I ”];  see also Crosier v. United Parcel Service, Inc. (1983) 150 Cal.App.3d 1132, 1137–1138, 198 Cal.Rptr. 361, disapproved on other grounds in Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, 688, 254 Cal.Rptr. 211, 765 P.2d 373;  cf. County of Alameda v. Fair Employment & Housing Com. (1984) 153 Cal.App.3d 499, 504, 200 Cal.Rptr. 381.)

 It bears emphasizing that even when an employer produces evidence of a facially sufficient reason for discharging an employee, the employee may nevertheless prevail by showing that the facially valid reason is a mere pretext, and the true reason for termination is improper.  (Pugh II, supra, 203 Cal.App.3d at pp. 752, 761, 767, 769–770, 250 Cal.Rptr. 195;  Wilkerson v. Wells Fargo Bank, supra, 212 Cal.App.3d at p. 1228, 261 Cal.Rptr. 185;  Clutterham v. Coachmen Industries, Inc. (1985) 169 Cal.App.3d 1223, 1227, 215 Cal.Rptr. 795;  Crosier v. United Parcel Service, Inc., supra, 150 Cal.App.3d at pp. 1138–1139, 198 Cal.Rptr. 361;  Toussaint v. Blue Cross & Blue Shield of Mich. (1980) 408 Mich. 579, 292 N.W.2d 880, 896.)

In the present case, appellant contends he has raised triable issues of fact on two levels.   First, he argues there is a triable issue of fact whether the evidence supporting the four alleged instances of misconduct constitutes “good cause” for his termination.   Second, appellant contends there is a triable issue of fact whether this was the real reason for his termination or whether it was a mere pretext obscuring the bank's true (and improper) motive.

a) Sanwa Established a Facially Valid Reason For Terminating Appellant as a Matter of Law.

We consider first whether Sanwa has established a facially valid reason for terminating appellant as a matter of law.   We conclude that it has.

 The jury performs two functions in deciding whether an employer has a facially valid reason for terminating an employee.   First, when the employer claims the employee was fired for specified misconduct (e.g., illegal conduct, intoxication or dishonesty), and the employee disputes that he committed the alleged acts, the jury must determine as an issue of fact whether the employee did what the employer claimed he did.   Second, assuming the jury finds the employee committed the alleged misconduct, it must still determine whether the reason for the discharge amounts to good cause;  that is, whether the misconduct is “the kind of thing that justifies terminating the employment relationship[.]”  (Toussaint v. Blue Cross & Blue Shield of Mich., supra, 292 N.W.2d at p. 896, cited with approval in Pugh II, supra, 203 Cal.App.3d at pp. 767–768, 250 Cal.Rptr. 195.)

 Although the first jury function described above presents a straightforward question of fact, the second function is more problematic.   As the Pugh II court observed, “the role of the jury is more difficult to resolve where the employee is discharged for stated reasons, but the employee contends that those reasons do not amount to good cause.”  (203 Cal.App.3d at p. 767, 250 Cal.Rptr. 195.)   Because an employer has wide latitude in making personnel decisions—particularly with respect to employees in managerial positions—the test for good cause “is not whether the jurors would have fired the employee [for the stated reasons], but rather, whether the discharge was within the bounds of the employer's discretion, or instead, was trivial, capricious, [or] unrelated to business needs or goals․”   (Wilkerson v. Wells Fargo Bank, supra, 212 Cal.App.3d at p. 1230, 261 Cal.Rptr. 185;  Pugh II, supra, 203 Cal.App.3d at pp. 769–770, 250 Cal.Rptr. 195.)

In the present case there is yet another level of complexity because Sanwa is essentially contending appellant was discharged for two separate and sufficient reasons:  First, because appellant actually violated federal law and internal bank policies;  and second, because the undisputed facts establish the appearance of impropriety, and this, in itself, is sufficient to constitute good cause for termination.

 In our view, there is a triable issue of fact whether appellant actually violated federal law or specific bank policies.²  Although Sanwa established a prima facie case of four instances of actual misconduct, appellant's counter-affidavit either directly disputed the facts alleged by Sanwa (as in the Rivilla, Araneta and “concealed files” incidents) or disputed whether the admitted conduct violated then existing bank policies (as in the Romualdez loan).   In each case, appellant raised a triable issue of fact whether he knowingly engaged in any actual misconduct.   As the court observed in Wilkerson, “[i]f an employer claims the employee was discharged for specific misconduct, and the employee denies the charge, the question of whether the misconduct occurred is one of fact for the jury.”  (Wilkerson v. Wells Fargo Bank, supra, 212 Cal.App.3d at p. 1230, 261 Cal.Rptr. 185, citation omitted [summary judgment reversed—triable issue of fact whether bank employee knowingly approved overdraft effectively resulting in loan to himself in violation of bank policy].)  Since there is a triable issue of fact whether appellant actually engaged in misconduct, the summary judgment cannot be supported on this ground.

 Nevertheless, this does not end our inquiry into good cause.   As indicated, Sanwa also contends that even if appellant did not engage in any actual misconduct, his activities “gave the appearance of impropriety and risked injuring the Bank, jeopardizing its hard-earned, vital reputation for honesty and integrity in the financial community.”   Sanwa contends this “appearance of impropriety” supplied a legitimate business reason for terminating appellant, which should not be second-guessed by a jury.

First, we agree with Sanwa that the undisputed facts establish “the appearance of impropriety” as a matter of law, even if they do not conclusively establish actual wrongdoing.   The undisputed facts show appellant received a short term loan from a bank customer, counseled a depositor to set up multiple accounts which were later used in an apparent attempt to avoid currency transaction reporting laws, and kept numerous files in his office which were the subject of a grand jury investigation.   Even though appellant may, in fact, be innocent of any actual wrongdoing, his conduct clearly created an appearance of impropriety.

The question remains whether “the appearance of impropriety” created by appellant's conduct constitutes good cause for his discharge as a matter of law.   Based on the unique facts of this case, we conclude that it does.   Appellant contends the jury must always determine whether the reasons advanced to justify a discharge amount to good cause.   However, several courts have found that specific conduct or circumstances constitute good cause as a matter of law.  (Moore v. May Dept. Stores Co. (1990) 222 Cal.App.3d 836, 840, 271 Cal.Rptr. 841 [violation of jewelry store security procedures resulting in $50,000 loss];  Fowler v. Varian Associates, Inc. (1987) 196 Cal.App.3d 34, 42–43, 241 Cal.Rptr. 539 [disloyalty to employer];  Clutterham v. Coachmen Industries, Inc., supra, 169 Cal.App.3d at p. 1227, 215 Cal.Rptr. 795 [reduction in force necessitated by business conditions];  Crosier v. United Parcel Service, Inc., supra, 150 Cal.App.3d at pp. 1139–1140, 198 Cal.Rptr. 361 [violation of rule prohibiting fraternization between management and non-management employees].)  Consequently, appellant's contention that the jury must “always” determine the existence of “good cause” is incorrect.  (Fowler v. Varian Associates, Inc., supra, 196 Cal.App.3d at pp. 42–43, 241 Cal.Rptr. 539.)

Appellant is a mid-level managerial employee in a bank, an institution with a particular interest in preserving the reputation of its employees for utmost honesty.   Indeed, courts have said it is essential to the financial health of a bank that it have unfettered authority to immediately remove any officer suspected of dishonesty or carelessness.  (Westervelt v. Mohrenstecher (8th Cir.1986) 76 Fed. 118, cited in Aalgaard v. Merchants Nat. Bank, Inc. (1990) 224 Cal.App.3d 674, 689, 274 Cal.Rptr. 81.)   Moreover, where, as here, “the employee occupies a sensitive managerial or confidential position, the employer must of necessity be allowed substantial scope for the exercise of subjective judgment” in determining good cause.  (Pugh I, supra, 116 Cal.App.3d at p. 330, 171 Cal.Rptr. 917.)   Finally, during the time appellant engaged in the questioned activities, both Lloyds and Sanwa had written policies prohibiting employees from entering into transactions or relationships which might give rise to an appearance of impropriety.   Based on these three factors—the sensitive nature of banking, appellant's managerial duties, and the express written policy prohibiting the appearance of impropriety—we conclude that the appearance of impropriety established by Sanwa amounted to good cause for termination as a matter of law.   That is, Sanwa's purported reason for terminating appellant is not “trivial, capricious [or] unrelated to business needs or goals․”  (Wilkerson v. Wells Fargo Bank, supra, 212 Cal.App.3d at p. 1230, 261 Cal.Rptr. 185;  Pugh II, supra, 203 Cal.App.3d at pp. 769–770, 250 Cal.Rptr. 195.) ³

b) Evidence Showing Pretextual Firing.

 Appellant also contends that even if the purported reasons for his termination constitute good cause as a matter of law, those reasons are a mere pretext obscuring the bank's true reason for firing him.  (Pugh II, supra, 203 Cal.App.3d at pp. 752, 761, 767, 769–770, 250 Cal.Rptr. 195;  Wilkerson v. Wells Fargo Bank, supra, 212 Cal.App.3d at p. 1228, 261 Cal.Rptr. 185;  Clutterham v. Coachmen Industries, Inc., supra, 169 Cal.App.3d at p. 1227, 215 Cal.Rptr. 795;  Crosier v. United Parcel Service, Inc., supra, 150 Cal.App.3d at pp. 1138–1139, 198 Cal.Rptr. 361;  Toussaint v. Blue Cross & Blue Shield of Mich., supra, 292 N.W.2d at p. 896.)   As we understand it, appellant believes he was terminated “purely and simply because he associated with persons who were under investigation by the FBI and IRS and because he was ‘excessively involved with the Philippine community.’ ”   According to appellant, “the fact that some of [his] friends and business acquaintances were related to the Marcos family was the [true] ground for the termination and ․ [he] was used as a scapegoat for the bank to placate the federal authorities․”

The only evidence in support of appellant's claim of a pretextual firing is his discussion with B.T. Alderson shortly before he was fired.   In that discussion, Alderson allegedly told appellant they were friends, but Sanwa management had determined that appellant was “tainted” and, as far as the bank was concerned, appellant was “history.”   Appellant asked Alderson whether this was an off-the-record observation or whether it was the bank's official position.   Alderson replied, “[I]n less than 30 seconds, I am going to make it official.”   Alderson said the bank demanded appellant resign or be terminated and that the bank was concerned about “political pressure” and “the bank's image.”   Alderson said the bank simply wanted to “lose” appellant.  (Quotation marks in original affidavit.)

The problem with this evidence is that appellant assumes Alderson was either involved in the termination decision, or, at minimum, was made privy to management's reasons for the termination.   However, the uncontradicted evidence establishes the contrary;  due to the federal gag order, senior management did not reveal, and Alderson did not know, why appellant was being terminated.   Viewed in this light, Alderson's statements are not evidence of management's “true” reason for firing appellant.

A similar conclusion was reached in Wilkerson v. Wells Fargo Bank, supra, 212 Cal.App.3d 1217, 261 Cal.Rptr. 185.   There, the plaintiff (who was Black) contended the bank had fired him because of racial discrimination, not because of alleged misconduct involving approval of an overdraft.   The only facts plaintiff cited to support this claim were racially insensitive statements made by the manager of the branch where plaintiff worked before being transferred.   However, the manager stated in his deposition that he had no input into the decision to terminate the plaintiff and did not even know where plaintiff was working when he was fired.   Based on this uncontradicted statement, the court concluded the plaintiff did not raise a triable issue of fact that his termination was racially motivated.  (Id., at pp. 1228–1229, 261 Cal.Rptr. 185.)

Similarly, the uncontradicted declarations in this case establish that Alderson was not involved in the decision to terminate appellant and did not know the reasons for the termination.   Consequently, his statements do not raise a triable issue of fact that the termination was motivated by improper reasons.

In addition to the evidence in his declaration, appellant also produced a letter from Alex Radovich, Sanwa's manager of corporate security, to Joe Joslin, executive vice president/director of personnel, in which Radovich described appellant's alleged wrongdoing and concluded that “It seems quite evident that [appellant] is excessively involved with the Philippine community and has violated Bank policy.”   We do not believe this letter is sufficient to raise a triable issue of fact that appellant was terminated simply for his “excessive involvement” in the Philippine community.   To the contrary, the letter specifically notes appellant's violation of bank policy.   In short, appellant's “suspicions of improper motives are primarily based on conjecture and speculation.   Without the support of stronger evidence, he does not show that the reasons for his discharge were pretextual․”  (Crosier v. United Parcel Service, Inc., supra, 150 Cal.App.3d at p. 1139, 198 Cal.Rptr. 361.)

Finally, appellant suggests he was terminated in retaliation for his written request for an investigation pursuant to Sanwa's personnel policies.   The record does not support his claim.   First, the undisputed evidence established that Sanwa conducted a thorough investigation before it decided to terminate appellant.   Second, and most important, the decision to terminate appellant was indisputably made before his attorney requested an investigation.   Consequently, Sanwa could not have terminated appellant in retaliation for the request to investigate.

In sum, Sanwa has established as a matter of law that it terminated appellant for good cause;  there is no triable issue of fact on this issue.

2. Breach of the Implied Covenant of Fair Dealing and Fraud Causes of Action.

 Because Sanwa had good cause to discharge appellant as a matter of law, the discharge was not in bad faith.  (Fowler v. Varian Associates, Inc., supra, 196 Cal.App.3d at p. 40, 241 Cal.Rptr. 539;  see Koehrer v. Superior Court (1986) 181 Cal.App.3d 1155, 1171, 226 Cal.Rptr. 820, disapproved on other grounds in Foley v. Interactive Data Corp., supra, 47 Cal.3d at pp. 688–700, 254 Cal.Rptr. 211, 765 P.2d 373.)   Consequently, appellant's cause of action for violation of the implied covenant of good faith and fair dealing also fails.

The same is true of appellant's cause of action for fraud.   The gravamen of appellant's fraud complaint was that Sanwa represented (1) he would not be terminated except for good cause, and (2) that he had the right to consult the personnel director and the personnel division had an obligation to investigate and present findings on his complaint before he would be fired.⁴  The first ground for fraud fails because we have determined that Sanwa did have good cause to terminate appellant;  consequently, there is no ground for concluding the alleged representation was false, an essential element of a fraud cause of action.  (Okun v. Morton (1988) 203 Cal.App.3d 805, 828, 250 Cal.Rptr. 220.)

Appellant's second ground for fraud fares no better.   First, the uncontradicted evidence establishes that the personnel division did investigate appellant's conduct (albeit with the assistance of the corporate security division) and that corporate security prepared written findings concerning appellant's misconduct, which were communicated to the personnel division.   Thus, Sanwa substantially complied with its own policy regarding investigations and findings.   Moreover, an additional essential element of fraud is that the plaintiff establish “resulting damages” from his reliance on a misrepresentation.  (Okun v. Morton, supra, 203 Cal.App.3d at p. 828, 250 Cal.Rptr. 220.)   Assuming there was a misrepresentation because Sanwa did not precisely follow the fourth step of the dispute resolution procedure, appellant has not presented any evidence he was injured by the variance.   He has not—and cannot—claim he would not have been fired if the step four procedure had been followed to the letter.   Because Sanwa thoroughly investigated the evidence against appellant before he was fired, and gave appellant an opportunity to relate his side of the story, he suffered no injury.   Thus, appellant's fraud cause of action also fails.

B. The Demurrer.

Our decision that Sanwa has established good cause for termination as a matter of law renders moot appellant's additional contentions that the court incorrectly sustained the demurrers to his causes of action for wrongful discharge in violation of public policy and intentional and negligent infliction of emotional distress.

An appellate court will not review questions which have become moot and are merely academic.  (Swart v. Swart (1942) 49 Cal.App.2d 44, 47, 120 P.2d 940.)  “A final judgment in a related proceeding may determine all the issues in a pending appeal and render it moot.”  (9 Witkin, Cal. Procedure (3d ed. 1985) Appeal, § 521, p. 503.)   Although the final judgment here is not technically in another proceeding, we believe the effect is the same.

Sanwa has established as a matter of law that it terminated appellant for good cause and not for any pretextual reason.   Consequently, we must affirm the summary judgment on appellant's causes of action for violation of employment contract, violation of the implied covenant of good faith and fair dealing, and fraud.   It would be wholly inconsistent, and contrary to principles of collateral estoppel, if we were to affirm the summary judgments and permit appellant to proceed with his causes of action for violation of public policy and infliction of emotional distress.

 First, appellant's cause of action for violation of public policy is premised on his claim that Sanwa violated his constitutional rights by firing him for merely associating with persons who were friends and relatives of Ferdinand Marcos and who were suspected of being involved in a money laundering scheme.   The legal question whether termination for this reason amounts to a violation of public policy (see Foley v. Interactive Data Corp., supra, 47 Cal.3d at pp. 665–671, 254 Cal.Rptr. 211, 765 P.2d 373) is moot because we have concluded that, as a matter of law, appellant was not fired for this alleged pretextual reason, but for good cause.

 Second, appellant's causes of action for infliction of emotional distress required that he prove Sanwa engaged in “extreme and outrageous conduct” resulting in severe emotional injury.  (Cervantez v. J.C. Penney Co. (1979) 24 Cal.3d 579, 593, 156 Cal.Rptr. 198, 595 P.2d 975;  Alcorn v. Anbro Engineering, Inc. (1970) 2 Cal.3d 493, 497–498, 86 Cal.Rptr. 88, 468 P.2d 216.)   Because we have found that Sanwa terminated appellant for good cause as a matter of law, this cause of action is also moot, since such conduct is not extreme or outrageous as a matter of law.  (See Ankeny v. Lockheed Missiles & Space Co. (1979) 88 Cal.App.3d 531, 536, 151 Cal.Rptr. 828.)

C. Disposition.

The judgment and orders are affirmed.

FOOTNOTES

1.   Appellant also produced a letter from Alex Radovich, Sanwa's manager of corporate security, to Joe Joslin, executive vice president of personnel, in which Radovich described appellant's alleged wrongdoing and concluded that “It seems quite evident that [appellant] is excessively involved with the Philippine community and has violated bank policy.”

2.   Sanwa essentially concedes this point in its brief when it describes the evidence against appellant as “strong, but not absolute.”

3.   Of course, we do not mean to imply that the “appearance of impropriety” will amount to good cause for termination in all industries and in all circumstances.   We stress that our holding is based upon the particular facts of this case, and is not to be construed as a general proclamation that “the appearance of impropriety” amounts to good cause for termination.

4.   Sanwa's personnel manual provides a four step procedure for resolving employee disputes.   The final step provides:  “In exceptional circumstances such as when the employee feels that the employment relationship may be jeopardized, or that the employee believes he/she has been a victim of discrimination or sexual harassment, contact should be made directly with the Personnel Division.   In this instance, the role of the Personnel Division is to act as a third-party intermediary.   Personnel Division will investigate an employee's complaint and present its findings to management.   A course of action will then be presented in a constructive manner to both parties directly involved with the issue.”

WHITE, Presiding Justice.

MERRILL and CHIN, JJ., concur.