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Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 

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FILED 

United States Court of Appeals 

Tenth Circuit 

UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

JAN 2 51989 

ROBERT L. HOECKER 

Clerk 

J OSEPH L. VALIQUETTE, 

Plaintiff-Appellant, 

v . 

PI TMAN-MOORE, INC., 

Defendant-Appellee. 

) 

) 

) 

) 

) No. 86-1999 

) (D.C. No. 84-M-1137) 

) (D. Colo.) 

) 

) 

ORDER AND JUDGMENT 

Before BALDOCK, BRORBY, Circuit Judges, and BURCIAGA, District 

Judge.* 

*The Honorable Juan G. Burciaga, 

District Court for the District 

designation. 

District Judge, United States 

of New Mexico, sitting by 

After examining the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

assist the determination of this appeal. See Fed. R. App. P. 

34(a); 10th Cir. R. 34.1.9. 

submitted without oral argument. 

The cause is therefore ordered 

Plaintiff brought this diversity action against his former 

employer alleging that defendant's discharge of him "constituted a 

breach of an implied covenant of good faith and fair dealing." 

Appellate Case: 86-1999 Document: 01019962385 Date Filed: 01/25/1989 Page: 1 
~he district court directed a verdict in favor of defendant and 

plaintiff has appealed from that determination. 

On review of the grant of a directed verdict, this court must 

view the evidence and all reasonable inferences which can be drawn 

from that evidence in the light most favorable to the nonmoving 

party. Guilfoyle v. Missouri, Kan., and Tex. R.R., 812 F.2d 1290, 

1292 (10th Cir. 1987). A directed verdict is justified if the 

evidence points but one way or is so overwhelmingly preponderant 

in favor of the movant as to permit no other rational conclusion. 

McKinney v. Gannett Co., 817 F.2d 659, 663 (10th Cir. 1987). 

The parties have agreed that California law controls for the 

purposes of this appeal. Under that law the covenant of good 

faith and fair dealing, which is contained in all contracts 

including employment contracts, is breached when an employer 

engages in bad faith action, extraneous to the employment 

relationship, with the motive to frustrate the employee's 

enjoyment of contractual rights. Shapiro v. Wells Fargo Realty 

Advisors, 152 Cal. App. 3d 467, 199 Cal. Rptr. 613 (1984). Bad 

faith describes a state of mind of the employer which is 

fraudulent or one in which the neglect or refusal to fulfill some 

contractual duty is not the result of an honest mistake but rather 

the conscious doing of a wrong because of a dishonest purpose. 

Pugh v. See's Candies, Inc., 203 Cal. App. 3d 743, 250 Cal. Rptr. 

195, 209 (1988). 

Plaintiff's evidence established that he was hired by 

defendant for an indefinite period of time in 1951 and remained 

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Appellate Case: 86-1999 Document: 01019962385 Date Filed: 01/25/1989 Page: 2 
employed by defendant until 1983. While employed by defendant, 

plaintiff regularly received pay raises based on merit and 

f avorable job performance evaluations. Defendant's uncontroverted 

evidence shows that plaintiff was discharged as part of a general 

reducti on in force when it decided to reorganize its distribution 

operations. Thus, defendant established a fair and honest cause, 

regulated by good faith, for plaintiff's discharge. Clutterham v. 

Coachmen Indus., Inc., 169 Cal. App. 3d 1223, 215 Cal. Rptr. 795, 

797 (1985). 

None of the arguments plaintiff has raised suggest that 

defendant's general reduction in force argument was pretextual and 

that defendant had an improper motive in discharging him. 

Plaintiff has suggested that his age was improperly considered in 

t he decision to discharge him. However, age cannot be used to 

establish a breach of the implied covenant of good faith and fair 

dealing because such a claim is preempted by a state statute. 

Strauss v. A.L. Randall Co., 144 Cal. App. 3d 514, 194 Cal. Rptr. 

520 (1983). Under these circumstances there was but one 

reasonable conclusion as to the verdict and no issue for the jury. 

Accordingly, the judgment of the United States District Court 

for the District of Colorado is AFFIRMED. 

The mandate shall issue forthwith. 

ENTERED FOR THE COURT 

PER CURIAM 

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Appellate Case: 86-1999 Document: 01019962385 Date Filed: 01/25/1989 Page: 3