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Tautges v. Global Datacenter Management

August 26, 2010

DANIEL J. TAUTGES, PLAINTIFF,
v.
GLOBAL DATACENTER MANAGEMENT, INC., ET AL., DEFENDANT.



The opinion of the court was delivered by: Honorable Janis L. Sammartino United States District Judge

ORDER: (1) GRANTING JOINT MOTION TO DISMISS ACTION; (2) DENYING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT; (3) GRANTING PARTIAL SUMMARY JUDGMENT IN FAVOR OF PLAINTIFF DEFAMATION CAUSE OF (Doc. Nos. 31, 37.)

Presently before the Court is Defendant Global Datacenter Management, Inc.'s motion for summary judgment of Plaintiff Daniel J. Tautge's First Amended Complaint ("FAC"). Also before the Court is a joint motion stipulating to the dismissal of Plaintiff's third cause of action for defamation. For the reasons below, the Court GRANTS the parties' joint motion to dismiss the third cause of action for defamation; DENIES Defendant's motion for summary judgment of the first cause of action for breach of contract and the second cause of action for breach of statutory duty; and sua sponte GRANTS partial summary judgment in favor of Plaintiff.

BACKGROUND

I. Factual Background*fn1

This action arises out of the termination of Plaintiff Daniel Tautges' employment by Defendant Global Datacenter Management, Inc. ("Inc."), the North American subsidiary of Defendant Global Datacenter Management, Ltd. ("Ltd.").*fn2 Defendant employed Plaintiff as its President for just over a year, commencing December 15, 2007 and terminating January 23, 2009. Pursuant to Plaintiff's employment, Defendant executed an offer letter which both parties signed. (Tautges Decl. ISO MSJ, Ex. 1 ("Offer Letter").) As to severance pay, the Offer Letter reads:

While we anticipate that our employment relationship will be long and mutually rewarding, in the event that your employment at Global Datacenter Management is terminated by the Company, the Company will make a severance payment based on your length of service on the following terms: 1 -- 12 months: No severance pay 13 -- 24 months: 3 months of your Base Salary 25 months: 6 months of your Base Salary * * * In the event that the Company is acquired or undertakes an IPO the severance payment will be 6 months of your Base Salary. (Offer Letter at 2.)Upon Plaintiff's termination in January 2008, Defendant paid three months severance pay consistent with his length of service. Plaintiff contends that he was entitled to 6 months severance pay given the purported acquisition of Defendant, discussed at length below.

Plaintiff commenced this action in San Diego Superior Court on March 17, 2009. The action was removed to federal court on April 16, 2009 on the basis of diversity jurisdiction.*fn3 (Doc. No. 1.) The Complaint alleged five causes of action: (1) Wrongful termination in violation of public policy; (2) Breach of Contract; (3) Breach of Statutory Duty; (4) Defamation; and (5) Alter Ego Liability. (Doc. No. 1.) On April 21, 2009, Defendant moved to dismiss the first, third and fifth cause of action, which this Court granted on November 13, 2009. (Doc. Nos. 5 & 21.) Though the Court granted Plaintiff leave to amend these causes of action, he did not do so. Instead, on December 14, 2009, Plaintiff filed a First Amended Complaint ("FAC") maintaining only the causes of action for defamation, breach of contract, and breach of statutory duty insofar as it relied on non-dismissed provisions. (Doc. No. 26.)

On March 18, 2010, Defendant filed the present motion for summary judgment of all three causes of action. (Doc. No. 31.) On June 17, 2010, both parties filed a joint motion to dismiss the cause of action for defamation. (Doc. No. 37.) As such, Plaintiff's opposition to the motion for summary judgment, which was filed on June 18, 2010, addresses only the breach of contract and breach of statutory duty causes of action. (Doc. No. 40.) Defendant filed its reply on July 8, 2010. (Doc. No. 45.) The motion was heard before this Court on August 5, 2010 and thereafter taken under submission.

LEGAL STANDARD

Federal Rule of Civil Procedure 56 permits a court to grant summary judgment where (1) the moving party demonstrates the absence of a genuine issue of material fact and (2) entitlement to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). "Material," for purposes of Rule 56, means that the fact, under governing substantive law, could affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Freeman v. Arpaio, 125 F.3d 732, 735 (9th Cir. 1997). For a dispute to be "genuine," a reasonable jury must be able to return a verdict for the nonmoving party. Anderson, 477 U.S. at 248.

The initial burden of establishing the absence of a genuine issue of material fact falls on the moving party. Celotex, 477 U.S. at 323. The movant can carry his 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 make a sufficient showing on an essential element of her case with respect to which she has the burden of proof." 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. Celotex, 477 U.S. at 324. The nonmoving party cannot oppose a properly supported summary judgment motion by "rest[ing] on mere allegations or denials of his pleadings." Anderson, 477 U.S. at 256. When ruling on a summary judgment motion, the court must view all inferences drawn from the underlying facts in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

DISCUSSION

I. Breach of ...


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