Hunter v. Up-Right, Inc.

Summary

The Supreme Court of California held that wrongful termination ordinarily does not support an independent fraud or deceit claim when the alleged misrepresentation was made to effect the termination. Tort recovery may be available for a misrepresentation separate from the termination that induced the employee to detrimentally alter their position, but the record supported only contractual damages for constructive wrongful termination. The court reversed the Court of Appeal and directed modification of the judgment to award $38,013 plus costs.

Holdings

1. Wrongful termination of employment ordinarily does not give rise to a cause of action for fraud or deceit merely because the employer made a misrepresentation in the course of the dismissal. Tort recovery is available only when the plaintiff establishes all elements of fraud based on a misrepresentation separate from the termination contract and the fraud damages do not result from the termination itself.
2. Hunter could not recover tort damages because the alleged misrepresentation was aimed at effecting his termination and his claimed damages resulted from the termination itself. He was limited to the contractual damages established by the jury.
3. The judgment had to be modified to award Hunter $38,013 in contractual damages plus costs of suit, rather than $120,000 including the fraud award.

Questions Presented

1. Whether Foley v. Interactive Data Corp. precludes recovery of tort damages for fraud and deceit based on a misrepresentation made to effect termination of employment.
2. Whether an employer's misrepresentation that a position has been eliminated, allegedly inducing an employee to resign, constitutes a separately actionable fraud claim when the resulting damages arise from the wrongful termination itself.
3. Whether Hunter was entitled to recover more than contractual damages on the record presented.

Disposition

reversed_and_remanded