Plaintiff franchisee’s first amended complaint alleged breach of contract, tortious interference with a prospective economic advantage, and other claims against defendant franchisor. The grant of summary adjudication to the franchisor on the contract claim was affirmed on appeal. After a jury trial the Superior Court of Sacramento County (California) entered judgment for the franchisee on the tort claim. Both parties appealed.

Overview

The parties consulted with several counsel which included labor law attorney and business counsel. After summary adjudication was granted to the franchisor on the contract claim, the franchisee appealed, arguing that no tort claim could like regarding a breach of contract. The appeal was dismissed by the court on its own motion because it was from a nonfinal judgment, and the franchisee’s motion to reinstate the appeal was denied. The court first addressed the summary adjudication and reversed, holding that the franchisee was allowed contract damages in addition to reinstatement under the California Franchise Relations Act, Cal. Bus. & Prof. Code § 20000 et seq., because Cal. Bus. & Prof. Code § 20037, which allows franchisees to seek rights under any other law, applied to Cal. Bus. & Prof. Code § 20035. The franchisee’s pleadings did not limit its claim to be exclusively under the Act. Regarding the tort claim, the franchisee was forced to argue on appeal that the tort judgment was proper, the opposite of its prior position. The court disagreed, holding that a tort claim could not lie against the franchisor because it was a party to the contract, especially where the conduct complained of was the wrongful termination of the franchise agreement.

Outcome

The judgments reversed the grant of summary adjudication on the breach of contract claim and the trial judgment on the tort claim. The court further remanded the case to the trial court for litigation of the breach of contract claim and ordered both parties to bear costs on appeal.

Procedural Posture

Both sides appealed from the judgment of the Superior Court of Sutter County, California, in a wrongful termination/breach of employment contract action.

Overview

Shortly after plaintiff anesthesiologist and defendant a surgeon engaged in an altercation over the wisdom of proceeding with a particular surgery, defendant medical group terminated plaintiff’s employment. The trial court non-suited plaintiff’s claims that defendants discharged him in violation of Cal. Bus. & Prof. Code §2056. The jury determined that defendant breached its oral employment agreement with plaintiff, and both sides appealed. On appeal, the court reversed the nonsuit. Cal. Bus. & Prof. Code §2056 provided that the termination of a physician for advocating for medically appropriate health care violated the public policy of the State of California. Plaintiff presented sufficient evidence for this claim to be presented to a jury. Defendants’ termination of plaintiff, a employee who had properly performed his contract, ran afoul of Cal. Lab. Code §2924, which limited termination of a employment for a specified term to certain conditions such as willful breach of duty.

Outcome

Judgment was reversed in part, remanded in part, and affirmed in part. The nonsuit in favor of defendants on claim that plaintiff was terminated in violation of public policy was reversed, because sufficient evidence was presented to put the question before the jury. In all other respects, the judgment was affirmed.