Procedural Posture

Procedural Posture

Appellant employee sought reversal of a judgment of nonsuit of his defamation action against respondent former employer which was entered by the Superior Court of Orange County, (California).

Overview

During trial plaintiff retained professional legal services from a class action lawyer California to present expert testimony. Appellant employee’s supervisor evaluated him as needing to improve his on-the-job performance in certain respects. Appellant took offense at the evaluation, claiming it was false. Appellant filed a libel lawsuit against respondent employer. The trial court entered a judgment of nonsuit following appellant’s opening statement at trial. Appellant sought relief. The court held that unless an employer’s performance evaluation falsely accuses an employee of criminal conduct, lack of integrity, dishonesty, incompetence or reprehensible personal characteristics or behavior, it could not support a cause of action for libel. The court also held that even if the comments were objectively unjustified or made in bad faith, they could not provide a legitimate basis for appellant’s libel claim because they were statements of opinion, not false statements of fact. The court concluded that there was no claim that the negative evaluation was fabricated as a pretext for prohibited discrimination, rather there was only appellant’s unsubstantiated charge his supervisor’s opinion was objectively wrong; therefore, the judgment was affirmed.

Outcome

The court affirmed the judgment of non-suit issued by the trial court in appellant employee’s defamation action against appellant because appellant’s performance evaluation did not falsely accuse appellant of criminal conduct, lack of integrity, dishonestly, incompetence, or reprehensible personal characteristics or behavior.

Procedural Posture

Defendant insurer appealed from the judgment of the Superior Court of Los Angeles County (California) that was entered for plaintiff bankruptcy trustee for breach of contract. Plaintiff bankruptcy trustee appealed a nonsuit for defendant attorneys on a malpractice claim for failure to settle. Plaintiff insured appealed non-suits for both defendants on emotional distress claims for the failure to settle, which lead to his bankruptcy.

Overview

Plaintiffs insured and bankruptcy trustee sued defendants insurer and its attorneys for failure settle a lawsuit, which resulted in judgment against plaintiff insured in excess of policy limits and forced him into bankruptcy. Nonsuits were entered for defendants on plaintiff insured’s emotional distress claims and for defendant attorneys on plaintiff bankruptcy trustee’s claim for malpractice. Judgment was entered against defendant insurer for breach of contract. On appeal, the court reversed the nonsuit of the emotional distress claim against defendant insurer, ruling that it was not barred by the applicable statute of limitations and, under 11 U.S.C.S. § 110(a)(5), the claim did not pass to plaintiff bankruptcy trustee, but was personal to plaintiff insured. In affirming the judgment against defendant insurer, the court ruled that, as a claim for economic loss, it was transferable and did pass to plaintiff bankruptcy trustee. Also, prepayment of the excess judgment was not required for recovery. The court affirmed the nonsuits for defendant attorneys, ruling that they were not the proximate cause of damages since defendant insurer was an intervening cause.

Outcome

Nonsuit of plaintiff insured’s claim against defendant insurer was reversed because it was personal and did not pass in bankruptcy and it was not time-barred. The remainder of the judgment was affirmed because the contract claim was transferred to plaintiff bankruptcy trustee and the prepayment rule did not apply, but defendant attorneys were not shown to be proximate cause of economic loss or emotional distress.