Court Opinion

ID: 9583406
Source: CourtListenerOpinion
Date Created: 2023-08-21 22:38:16.718146+00
Date Added: 2024-06-11T13:39:00.150515
License: Public Domain

MOSK, J.
I concur in the judgment. I also agree with much of the reasoning of the majority opinion. I continue to believe, however, that Hunter v. Up-Right, Inc. (1993) 6 Cal.4th 1174 [26 Cal.Rptr.2d 8, 864 P.2d 88] (Hunter) was wrongly decided. The majority today do not overrule Hunter—indeed, because the present case is factually distinguishable, they have no occasion to do so. Instead, they reject the more extreme view of that case urged by real party in interest Rykoff-Sexton, Inc. (Rykoff), and attempt to put Hunter on a firmer logical basis. Although I remain unpersuaded that Hunter is soundly reasoned, I welcome the majority’s limitation of Hunter's potentially broad holding.
The majority wisely repudiate Rykoff’s view that Hunter and Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654 [254 Cal.Rptr. 211, 765 P.2d 373] stand for the radical proposition that courts should not, for public policy reasons, enforce any tort liability arising in connection with the wrongful termination of an employment contract. They correctly identify the question in Hunter and the present case as whether all the traditional elements of fraud, and specifically the element of detrimental reliance, are present. They maintain that no detrimental reliance could be found in Hunter, stating: “Hunter’s employer had the power to terminate him, rightly or wrongly. . . . Had Hunter not resigned, he would, presumably, have been discharged in any event.... [*]□ In short, because Up-Right had both the power and intention of discharging him in any event, Hunter was no worse off for being induced by Up-Right’s misrepresentation to resign.” (Maj. opn., ante, at p. 642.) Thus, they reason that Hunter did not detrimentally *650rely on Up-Right’s misrepresentation inducing him to resign because he would have been discharged in any case.
Although I disagree with the majority’s interpretation of the facts of the Hunter case (see Hunter, supra, 6 Cal.4th at p. 1191 (dis. opn. of Mosk, J.)), there is no need to reargue the merits of a case already decided. But the majority appear to recognize that the question central to Hunter—whether an employee who is deceived into resigning may sue the employer for fraud— turns on the answer to a question of fact: whether it is probable that the employee would have been terminated anyway, and therefore did not rely detrimentally on the employer’s misrepresentation in any actual sense. The majority appear to presume that if an employer had both the intention and the power to discharge an employee, then the employee will be inevitably discharged by either truthful or deceptive means, and is therefore no worse off for having been deceived into resigning. But that presumption must be rebuttable on a contrary factual showing.
Under what circumstances would an employer who has the ability and intention to discharge an employee nonetheless refrain from discharging him except by means of misrepresentation? The answer, surely, is that under some circumstances, the employer will refrain from discharging the employee outright because it is too costly to do so. Employers may, for example, resort to such fraudulent deception when they know that to terminate the employee straightforwardly will lead to a lawsuit in which the employee would likely prevail. This species of fraud may be especially common in those situations in which a manager superior to the employee seeks to be rid of the employee, but finds such a decision to be at variance with official company policy. In such a case, the manager may seek not only to avoid potential lawsuits, but also the employer’s internal disciplinary processes (see, e.g., Scott v. Pacific Gas & Electric Co. (1995) 11 Cal.4th 454, 460-461 [46 Cal.Rptr.2d 427, 904 P.2d 834]) by obtaining the employee’s resignation through trickery. Under these circumstances, the employee would likely not have been fired unless the manager could resort to deception. Therefore the employee who resigns in reliance on such deception can be said to have “detrimentally relied,” by any reasonable understanding of that term. The employee would therefore have a cognizable action for fraud against the manager and against his employer.
In the present case, the majority rightly recognize that all the elements of fraud, including detrimental reliance in the traditional sense, have been properly alleged in this ordinary fraudulent inducement case. By framing the Hunter opinion in narrow terms, the majority move in the direction of acknowledging that the question whether an employee has detrimentally *651relied on an employer’s misrepresentations in connection with a discharge is one of fact, to be determined from the totality of the circumstances.