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MORALES v. THE HOME DEPOT U.S.A.

December 15, 2005.

STEVEN PAUL MORALES, Plaintiff,
v.
THE HOME DEPOT U.S.A., INC., a Delaware corporation; MAINTENANCE WAREHOUSE/AME, dba MAINTENANCE WAREHOUSE, a Home Depot company and Texas corporation; and DOES 1-100, inclusive, Defendants.



The opinion of the court was delivered by: BARRY MOSKOWITZ, District Judge

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
On April 30, 2004, Plaintiff Steven Paul Morales filed suit in California Superior Court against his former employers, Home Depot U.S.A., Inc. and Maintenance Warehouse ("MWH"), alleging wrongful termination. Morales's original complaint alleged six causes of action: (1) conversion; (2) intentional misrepresentation; (3) negligent misrepresentation; (4) breach of implied contract; (5) breach of the covenant of good faith and fair dealing; (6) wrongful termination in violation of public policy; and (7) violation of Cal. Lab. Code § 2802. See Pl.'s Mem. of P. & A. in Support of Mot. to Remand, Ex. A. Defendants subsequently brought a motion for summary judgment or, in the alternative, summary adjudication. The Superior Court granted Defendants' motion in part, holding that there was no triable issue of fact as to Plaintiff's first three causes of action, which were for conversion, intentional misrepresentation, and negligent misrepresentation. Exs. TT & RRR of Def.'s Notice of Removal ("NOR"). The Superior Court, however, denied Defendants' motion as to the remaining four claims, which were for breach of implied contract; breach of the covenant of good fair and fair dealing; wrongful termination in violation of public policy; and violation of Cal. Lab. Code § 2802. Id. The Court also granted Plaintiff leave to amend his complaint to state a cause of action for misappropriation. Ex. RRR to NOR.

In May 2005, Plaintiff filed his First Amended Complaint ("FAC") in Superior Court. The complaint alleged the following five causes of action: (1) misappropriation in violation of Cal. Civ. Code § 3344(a) and the Lanham Act, 15 U.S.C. 1125(a)(1)(A); (2) breach of implied-in-fact contract; (3) breach of duty of good faith and fair dealing; (4) wrongful termination in violation of public policy; and (5) violation of Cal. Lab. Code § 2802(a) — duty to defend and indemnify. Ex. YYY to NOR. On June 14, 2005, Defendants, based on the newly pleaded misappropriation claim under the Lanham Act, removed the case to this Court. On June 21, 2005, Plaintiffs filed a motion to remand. The Court denied Plaintiff's motion to remand, finding that the FAC, on its face, clearly pleaded a federal cause of action. See Order Denying Pl.'s Mot. to Remand, entered Aug. 12, 2005, at 3. The Court held that removal was therefore proper under 28 U.S.C. § 1441(b). Id.

  On September 29, 2005, Defendants filed a motion for summary judgment, or in the alternative, a motion for partial summary judgment. For the reasons discussed below, Defendants' motion is GRANTED IN PART and DENIED IN PART.

  I. FACTUAL BACKGROUND

  The following facts, pursuant to the summary judgment standard, are presented in the light most favorable to the Plaintiff, the non-moving party. Morales first began working for Defendant Home Depot in 1993. Pl.'s Opp'n at 1. Beginning as a retail sales associate, Morales eventually rose to the position of director. Id. He received no negative reviews or warnings. Id. In early 2001, Morales obtained a contractor's license for the state of Wyoming, becoming involved with construction projects there on behalf of Home Depot. Id. See Ross Decl., Ex. 2. Morales's name was listed as the Qualifying Supervisor for the Wyoming license. Pl.'s Opp'n at 1. In February 2002, Plaintiff transferred and relocated to accept a position with Maintenance Warehouse ("MWH"), a company wholly owned by Home Depot. Id. After Morales's transfer, the company informed him that it would not continue to use his name and license to continue work in Wyoming. Morales Decl. at 2, ¶ 4.

  At MWH, Morales worked with another employee named Paul Raymond. Raymond was terminated in October 2002. Pl's Opp'n at 2. In January 2003, a few months after he was terminated, Raymond, an African-American, sent a letter to MWH CEO Lew Klessel, alleging discrimination due to color and race. Id.; Def.'s Request for Judicial Notice, Ex. A at 4 (Raymond Compl.) Raymond alleged that Plaintiff Morales sent him an October 2002 e-mail, which stated "you people can never be good managers so stop trying." Pl.'s Opp'n at 2. Raymond filed charges of discrimination with the California DFEH and the EEOC in February 2003, and eventually filed suit in Superior Court. Opp'n at 3; Def.'s Mot. at 6.

  MWH also initiated its own internal investigation, after which it determined that the offensive e-mail had been sent from Plaintiff's computer. Def.'s Mot. at 6-7. Furthermore, through a cross check of phone records, MWH determined that both Morales and Raymond likely had been at their desks at the time the e-mail was sent. This fact, according to Defendants, precluded the possibility that Raymond had gone into Morales's office to send the e-mail. Id. As a result, MWH terminated Morales on or about May 1, 2003. Id.

  Plaintiff, on the other hand, contends that he was told in early 2003 that he would be terminated if Raymond brought suit so that the company could avoid having to defend and indemnify him. Morales Decl. at 3. He claims that MWH "falsely claimed it had evidence that conclusively showed [he] sent the e-mail to Mr. Raymond" to justify the termination. Id.

  II. LEGAL STANDARD

  Summary judgment is appropriate if the moving party demonstrates that "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact." Fed.R.Civ.P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). A fact is material when, under the governing substantive law, it could affect the outcome of the case. See Anderson, 477 U.S. at 248; Freeman v. Arpaio, 125 F.3d 732, 735 (9th Cir. 1997). A dispute is genuine if a reasonable jury could return a verdict for the nonmoving party. See Anderson, 477 U.S. at 248.

  A party seeking summary judgment always bears the initial burden of establishing the absence of a genuine issue of material fact. See Celotex, 477 U.S. at 323. Although the nonmoving party bears the burden of proof on a matter at trial, the moving party need only demonstrate to the Court that there is insufficient evidence to support the nonmoving party's case. Id. at 325. The moving party can satisfy this burden in two ways: (1) by presenting evidence that negates an essential element of the nonmoving party's case; or (2) by demonstrating that the nonmoving party failed to establish an essential element of the nonmoving party's case on which the nonmoving party bears the burden of proof at trial. See Id. at 322-23. "Disputes over irrelevant or unnecessary facts will not preclude a grant of summary judgment." T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987).

  Once the moving party establishes the absence of genuine issues of material fact, the burden shifts to the nonmoving party to set forth facts showing that a genuine issue of disputed fact remains. See Celotex, 477 U.S. at 314. The nonmoving party cannot rest on the mere allegations or denials of his pleading, but must "go beyond the pleadings and by his own affidavits, or by the `depositions, answers to interrogatories, and admissions on file' designate `specific facts showing that there is a genuine issue for trial.'" Id. at 324 (citing Fed.R.Civ.P. 56(c)). When making this determination, the court must view all inferences drawn from the underlying facts in the light most favorable to the nonmoving party. See Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Fontana v. Haskin, 262 F.3d 871, 876 (9th Cir. 2001). The court must not weigh the evidence or make credibility determinations in evaluating a motion for summary judgment. See Anderson, 477 U.S. at 255.

  III. DISCUSSION

  As a preliminary matter, this Court has jurisdiction to consider the summary judgment motion. When a federal claim (here the Lanham Act) is joined with non-removable state claims, "the entire case may be removed." 28 U.S.C. § 1441(c). Plaintiff argues that the Superior Court's previous denial of the Defendants' motion for summary judgment precludes this Court's consideration of the issues. Plaintiff claims that because his claims for breach of implied contract, breach of the covenant of good faith and fair dealing, wrongful termination, and violation of Labor Code § 2802 survived summary judgment in state court, the case is ready for trial, at least as to those causes of action. However, the Ninth Circuit has expressly stated that a "state court's denial of summary judgment [does] not preclude ...


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