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Singh v. Southland Stone

July 1, 2010

GURPREET SINGH, PLAINTIFF AND APPELLANT,
v.
SOUTHLAND STONE, U.S.A., INC., ET AL., DEFENDANTS AND APPELLANTS.



APPEALS from a judgment and order of the Superior Court of Los Angeles County, Mary Thornton House, Judge. Judgment is affirmed in part and reversed in part; order is affirmed in part and reversed in part. (Los Angeles County Super. Ct. No. BC350196)

The opinion of the court was delivered by: Croskey, J.

CERTIFIED FOR PUBLICATION

In this case, we review a trial court's judgment regarding the contract and tort claims of an alien employee who was induced to come to the United States by the defendants and who, within just a few months of his arrival, had his promised salary reduced and then was pressured to resign.

Gurpreet Singh moved from India to California to work as a general manager for Southland Stone, U.S.A., Inc. (Southland Stone). Ravinder S. Johar was president of the company. After Singh resigned and had returned to India, he filed suit against Southland Stone and Johar (collectively, defendants), alleging a number of causes of action. The jury awarded Singh compensatory damages for economic and emotional injuries, and punitive damages. Defendants appeal the judgment and the denial of their motion for judgment notwithstanding the verdict. Singh also appeals, challenging a limiting jury instruction and the denial of leave to amend his complaint during trial.

As we explain, we resolve the several issues presented as follows:

(1) Singh has shown no prejudicial error in either the limiting instruction or the denial of his request for leave to amend the complaint; (2) the refusal of defendants' proposed jury instruction regarding the salary reduction was error; (3) defendants are entitled to judgment in their favor on the count for breach of the implied covenant of good faith and fair dealing; (4) the special verdict findings regarding alleged misrepresentations and promises made to Singh are inconsistent; (5) such inconsistency also extends to the finding of malice, oppression, or fraud; (6) defendants have shown no error in the award of damages for unpaid wages; (7) the award of damages for intentional infliction of emotional distress is based on injuries suffered in the course and scope of employment for which workers' compensation provides the exclusive remedy; and (8) the workers' compensation exclusivity rule does not, however, preclude this entire action.

We therefore will affirm the judgment in part and reverse in part, and affirm in part and reverse in part the denial of defendants' motion for judgment notwithstanding the verdict.

FACTUAL AND PROCEDURAL BACKGROUND*fn1

1. Factual Background

Johar is the president and owner of Southland Stone, an importer and distributor of natural stone based in North Hollywood. Johar and Singh are related through marriage. Johar is married to Singh's first cousin. During a visit to India in November 2003, Johar informed Singh that Southland Stone was seeking a general manager for Internet sales.

Singh visited the Los Angeles area for 10 days in January 2004, at Johar's invitation, to learn more about the employment opportunity. After returning to India, Singh corresponded with Johar regarding potential employment terms. Johar offered a monthly salary of $10,000. He stated in an e-mail to Singh that employment in the United States was " 'at will' " and, "This is not intended to be a 1 year contract." Singh responded by asking Johar what "at will" meant and, upon hearing that it meant that his employment could be terminated at any time, responded that he was uncomfortable with that.

Southland Stone submitted to the United States Immigration and Naturalization Service (INS) in July 2004 a petition for an H-1B1 nonimmigrant visa (specialty occupation) for Singh. The petition stated that the dates of intended employment were from October 1, 2004, to September 30, 2007, that his job title would be "Marketing Management Analyst," and that the annual salary for the position was $33,500.

Singh resigned from his employment in India in September 2004, before he and Johar had agreed to all of the terms of his employment. The INS notified Southland Stone in November 2004 that the visa petition was approved and that the visa was valid from October 2004 through September 2007. Southland Stone sent a copy of the approval notice to Singh in November 2004 and also, for the first time, sent him a copy of the petition. Singh expressed concerns regarding his job title and salary as stated in the petition. Johar responded that the information in the petition was meant for government officials and not for Singh, and that the information for Singh would be in an appointment letter.

Singh returned to the Los Angeles area for three weeks in November and December 2004 to work as a consultant for Southland Stone. Johar provided an appointment letter at that time. The letter stated that Singh's salary was $10,000 per month and that he would receive 10 percent of the net profits from the website in addition to his salary. The letter did not state how long he would be employed on those terms and did not state either that Singh was employable at will or that his employment was terminable only for good cause. The letter concluded, "The appointment is subject to a 90 day probationary period."*fn2 The letter was signed by Johar and called for a counter-signature by Singh, but Singh did not sign the letter at that time. Singh returned to work at Southland Stone on January 31, 2005. He signed the appointment letter in February 2005.

Johar had hired a company to develop a website for Internet sales and was hopeful that the website would be operational by February 2005. The technical development experienced delays, and the website was not operational until June 2005. Meanwhile, Singh worked on logistical issues regarding Internet sales, including trucking and warehousing arrangements, establishing a payment system, contracting with an Internet service provider, and other matters. During this time, Johar expressed his dissatisfaction with Singh's job performance and work ethic.

Singh's wife resigned from her employment in India and moved to the Los Angeles area with their two children in May 2005. Johar reduced Singh's monthly salary from $10,000 to $5,000 in early June 2005. The parties dispute whether Johar provided any forewarning of the salary reduction. Singh and his wife reevaluated their prospects in this country after the salary reduction and decided that his wife and children should return to India. His wife and children returned to India approximately six weeks after their arrival in the United States.

Johar continued to express his dissatisfaction with Singh's job performance and, after the salary reduction, increasingly berated him and insulted him with profanities. Johar suggested that Singh should resign and repeatedly asked him to provide an "exit plan." Singh tendered his resignation in writing, by fax, on February 19, 2006.

Singh returned to the office on February 24, 2006, to return some items and pick up his last paycheck. Southland Stone's bookkeeper, Sunita Singh (known as Choti), met with him first and offered him three checks, including his last regular salary ($991.61), compensation for two weeks' unused vacation time ($1,875.89), and an expense reimbursement.*fn3 Choti handed him an envelope containing three checks and asked him to sign a letter releasing defendants from liability.*fn4 Choti left the room and returned to find that the letter was missing. When she asked Singh where "the paper" was, he responded, "What paper?" and stated, "Do you want to do a body search? Should I drop my pants down?"

Johar then asked Singh to sign the letter. Singh signed, but only after striking some words from the letter. Johar insisted that Singh sign the letter as originally presented and told him to go to the conference room. Once in the conference room, Singh again refused to sign. Johar threatened to physically throw him out of the office and grabbed him by the lapels. Johar and Choti both shouted at Singh, and he left the office. According to Choti, she gave the envelope containing the three checks to another Southland Stone employee to mail to Singh. According to Singh, he received only a check for his final salary in the mail.

Singh returned to India in March 2006. He worked as a consultant for an employment recruiter for several months and then started his own employment recruiting company.

2. Pretrial Proceedings

Singh filed a complaint against defendants in April 2006. His second amended complaint filed in June 2007 alleges counts for (1) breach of contract; (2) breach of the implied covenant of good faith and fair dealing; (3) unpaid wages, also seeking a waiting time penalty (Lab. Code, §§ 201, 203); (4) false promise; (5) wrongful termination in violation of public policy; (6) intentional infliction of emotional distress; (7) promissory estoppel; and (8) misrepresentation to induce relocation for employment (Lab. Code, § 970).

Defendants moved for judgment on the pleadings in January 2008, arguing that several counts failed to allege facts sufficient to state a cause of action and that the count for intentional infliction of emotional distress was barred by the workers' compensation exclusivity rule. The trial court denied the motion.

3. Trial

The jury trial commenced on February 1, 2008. On February 7, 2008, Singh moved for leave to amend his complaint to add statutory (Pen. Code, § 632) and common law counts for invasion of privacy. He argued that evidence produced by defendants for the first time at trial showed that they had intercepted his private e-mail messages in violation of his privacy rights. The court stated that the proposed amendments would introduce new issues that were completely different from the issues being tried and denied the motion.

After the presentation of Singh's case-in-chief, Johar moved for a non-suit on all counts on the grounds that the proper defendant was Southland Stone as the employer and that there was no basis for Johar to be held liable individually. Southland Stone also moved for a non-suit on the second through eighth counts on the grounds that the evidence did not support a finding of liability. Southland Stone also argued that the count for intentional infliction of emotional distress was barred by the workers' compensation exclusivity rule. The court granted Johar's motion for a non-suit as to the first, second, third, fifth, and eighth counts only, and denied the motion as to the other counts. The court also granted Southland Stone's motion for a non-suit as to the fifth count only, finding that there was no evidence of any public policy violation. The court denied the motion as to the other counts against Southland Stone.

The trial court denied defendants' request for the following special jury instruction regarding the salary reduction:

"In an at-will employment relationship, a reduction in the rate of pay is not a breach of the relationship. It is, in effect, a termination of the existing employment relationship, which the employee may accept by continuing to work or reject by discontinuing working for the employer."

The court instructed the jury, at defendants' request, that the visa petition was admitted in evidence for a limited purpose:

"The petition for the H-1 visa was admitted into evidence for the limited purpose [of] showing the contents of the petition and for no other purpose. You may not consider the contents of the petition for H-1 visa as evidence of any provision of any employment agreement between Mr. Singh and his employer in this action."

The court also instructed, on CACI No. 361, that Singh could not be awarded duplicative damages on different counts:

"Gurpreet Singh has made claims against Southland Stone U.S.A., Incorporated, for breach of contract, breach of implied covenant in fair dealing [sic], promissory fraud, Labor Code violation for nonpayment of wages, promissory estoppel, and Labor Code violations based on willful misrepresentation and claims against Ravinder Johar for promissory estoppel and promissory fraud. If you decide that Gurpreet Singh has proved one or more than one of these claims against Southland Stone, U.S.A., Incorporated, or Ravinder Johar, the same damages that resulted from both claims can be awarded only once."*fn5

The jury was also instructed on counts for (1) breach of contract, (2) breach of the implied covenant of good faith and fair dealing, (3) promissory estoppel, (4) false promise, (5) misrepresentation to induce relocation for employment, (6) intentional misrepresentation; (7) concealment, (8) unpaid wages and waiting time penalty, and (9) intentional infliction of emotional distress.

4. Special Verdict and Judgment*fn6

The jury returned a special verdict finding that:

(1) the employment agreement did not specify a duration of employment;

(2) defendants prevented Singh from performing his job duties and from realizing the benefits of the employment agreement, and failed to act in good faith, and Singh suffered or will suffer $45,000 ...


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