In a class action alleging claims for breach of fiduciary duty and money had and received brought by plaintiff client on behalf of himself and all other persons who were represented by defendants, an attorney and his law firm, in a previous lawsuit by plaintiff and other employees against their employer and others, the Superior Court of Los Angeles County (California) granted defendants’ motion for summary judgment. Plaintiff appealed with help from their small business attorney.
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Plaintiff’s alleged defendants misappropriated part of the settlement funds paid by the settling defendants in the underlying action for the benefit of plaintiff and other class members. The court held that the trial court erred in concluding that because the statute of limitations objectively barred plaintiff’s causes of action in the underlying action, as a matter of law he could not prevail on his claims against defendants. A trial within a trial was not necessary because the merits of the underlying action did not need to be decided in order to determine whether defendants’ alleged misappropriation of the settlement proceeds caused plaintiff damages. Defendants allegedly misappropriated the settlement proceeds after the settlement agreements were executed. At that point, as to the settling defendants, the case was over. The settling defendants could no longer raise any defenses, including their statute of limitations defense. Therefore, if the misappropriation allegations against defendants were true, their conduct caused plaintiff to incur damages regardless of whether the settling defendants could have raised a statute of limitations defense prior to settling the case.
The court reversed the judgment.
Plaintiff employee sought review of the judgment of dismissal entered by the Superior Court of the City and County of San Francisco (California) on a demurrer by defendant employer and its agents and defendant association and its agents, on plaintiff’s complaint for wrongful discharge and conspiracy to obtain wrongful discharge.
Plaintiff employee sued defendant employer and its agents for wrongful discharge, contending that his discharge breached a collective bargaining agreement. Plaintiff also claimed that defendant employer and its agents and defendant association and its agents conspired to breach the collective bargaining agreement, resulting in plaintiff’s wrongful discharge. Defendants filed a joint demurrer sustained by the lower court, which entered a judgment of dismissal. On appeal, the court reversed. It held that plaintiff’s complaint alleged with sufficient clarity and particularity the essential facts upon which he based his cause of action for wrongful discharge. As to the civil conspiracy, the court held that an action for conspiracy could lie against a party to the contract; thus, defendant employer was properly named as a party to the conspiracy with defendant association and its agents. However, plaintiff’s allegations that defendant agents were co-conspirators were not sufficient to support conspiracy because the complaint alleged that defendant agents were acting within the course and scope of their employment. There was no allegation that they were acting in any other capacity.
The court reversed and remanded the dismissal entered by the lower court on the joint demurrer of defendant employer and its agents and defendant association and its agents on plaintiff employee’s complaint for wrongful discharge and for conspiracy. The allegations as to defendant employer’s agents were not sufficient to support a civil conspiracy charge against them, but were sufficient to support the other alleged causes of action.