Procedural Posture

Defendant contractor and cross-defendant surety appealed the order of the Contra Costa County Superior Court (California), which awarded cross-defendant completion costs pursuant to an indemnification agreement and awarded defendant damages, prejudgment interest, and attorney fees and costs for a breach of contract and interference with prospective economic relations.

Overview

Defendant contractor was terminated from a public works project. Cross-defendant surety recovered completion costs from defendant under their indemnification agreements executed in connection with performance bonds. Defendant recovered on its tort and breach of contract claims. Both parties appealed. The court reversed in part as to the tort claim of interference with prospective economic relations, struck the award of prejudgment interest, and directed judgment for cross-defendant. The trial ended with the jurors receiving CACI civil jury instructions.  The court held that cross-defendant's reporting of defendant's "in claim" status to other sureties and reinsurers was not wrongful conduct, but standard business practice. The court remanded for a recalculation of reasonable costs and fees to be awarded to the prevailing party on each independent contract enforced and not on net recovery in the litigation as a whole. The court affirmed in part, because the trial court properly found that cross-defendant was entitled to indemnification for the takeover expenses incurred in good faith and not for settlement costs; read portions of its earlier findings to the jury in the bifurcated trial; and approved the method of calculating lost profits.

Outcome

The court reversed in part, remanded for a recalculation of attorney fees and costs, struck the prejudgment interest award, and directed judgment for cross-defendant surety, who committed no wrongful conduct to support defendant contractor's claim for interference with prospective economic relations. The court affirmed defendant's award for breach of contract and cross-defendant's indemnification for takeover expenses incurred in good faith.

Procedural Posture

Appellant, at-will employee, challenged a decision by the Superior Court of San Mateo County (California) that returned a verdict for respondent employer in appellant's wrongful termination action.

Overview

Appellant, an at-will employee, was employed with respondent employer for 32 years. He occupied a managerial position and was a member of the board of directors when he was summarily discharged without prior notice. Asserting that his involuntary termination was a breach of contract and against public policy, appellant filed an action against respondent for wrongful discharge. The jury returned a verdict for respondent, and appellant challenged the decision, contending the trial court committed prejudicial error in its evidentiary rulings and in instructing the jury. Appellant urged both contract and tort theories to support recovery for wrongful discharge. The reviewing court found appellant had failed to object to the evidentiary rulings in the prior proceeding and had waived any error. Regarding the jury instruction, appellant contended the court misapplied the instruction on bad faith to his contract action. The focus in the contract action was whether respondent had good cause to terminate appellant. The court found it not probable the jury was misled by the term "good cause" in view of the court's specific instructions in the tort action. Therefore, the judgment was affirmed.

Outcome

The judgment for respondent employer was affirmed. Because appellant employee failed to object to evidentiary rulings in the prior proceeding, he waived any error. The jury was not misled by the term "good cause" in the jury instructions for the contract action because the trial court gave specific instructions in the tort action.