The opinion of the court was delivered by: Honorable Christina A. Snyder
Present: The Honorable CHRISTINA A. SNYDER
MONICA SALCIDO ANNE KIELWASSER N/A Deputy Clerk Court Reporter / Recorder Tape No.
Proceedings: DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
Plaintiff filed this case in Los Angeles County Superior Court on October 5, 2011, against defendant DG FastChannel, Inc ("DG"). Defendant removed the case to this Court on November 4, 2011. After the Court granted defendant's motion to dismiss with leave to amend, plaintiff filed her First Amended Complaint ("FAC") on December 23, 2011. The Court denied defendant's motion to dismiss plaintiff's FAC on February 16, 2012, Dkt. No. 23, and thereafter granted plaintiff leave to file the operative Second Amended Complaint ("SAC") on October 29, 2012, Dkt. No. 43. Plaintiff's SAC asserts three claims for relief: (1) negligent misrepresentation, (2) wrongful termination, and (3) breach of the implied covenant of good faith and fair dealing.
On January 14, 2013, defendant filed a motion for summary judgment. Dkt. No. 54. Plaintiff filed an opposition on January 30, 2013, Dkt. No. 57, and defendant replied on February 11, 2013. Dkt. No. 58. The Court held a hearing on February 25, 2013. After considering the parties' arguments, the Court finds and concludes as follows.
Plaintiff's claims arise out of her termination in August 2011 from her position as a sales director at defendant's digital advertising business.
In 2009, plaintiff was a top performer at a rival digital advertising company, EyeWonder, with much of her success coming from advertising sales to the motion picture industry. Sevigny Decl. ¶ 2.*fn1 Recognizing this success, EyeWonder bestowed upon her the title of "Senior Sales Executive" in April of 2009, at which time EyeWonder and plaintiff entered into a new "Employment Agreement." Sevigny Decl. ¶ 4; Ex. 61. Pursuant to this written contract, plaintiff agreed not to solicit or compete with EyeWonder during or after her employment. DG 1516, §§ 5(e) and 5(f). Plaintiff had no plans of leaving her position at EyeWonder at that time, although she was "getting frustrated" that she was not being promoted or "growing within the company." Sevigny Depo. 101:20--102:10.
Shortly thereafter, Mark Calabrese, a recruiter acting on behalf of Unicast, a division of defendant, contacted plaintiff to weigh her interest in leaving EyeWonder. At that time, Unicast was seeking to increase its advertising sales to the film industry, which made plaintiff a particularly attractive potential employee. Calabrese Depo. 9:5--10:8. At first, plaintiff rebuffed Calabrese's inquiries, but she eventually reconsidered in or around September 2009. Sevigny Decl. ¶ 6. During the course of their discussions, plaintiff informed Calabrese about her concerns regarding the non-compete clause in her employment contract, and the fact that EyeWonder would possibly file suit to enforce the non-compete and solicitation clauses if she went to work for a competitor. Calabrese Depo. 14:17--15:10. Calabrese relayed these concerns to Fred Tietze, Vice President of Sales for Unicast, Calabrese's chief contact at defendant. Id. at 19:7--15. In addition, Sevigny communicated her concerns directly to Tietze, telling him that she would not accept employment with Unicast unless she received confirmation that the non-compete clause was "null and void." Sevigny Decl. ¶ 7; Tietze Depo. 35:21--36:1. She also asked whether Unicast would defend her in the event EyeWonder brought suit; she expressed her disinclination to join Unicast unless it promised to defend her in the event such a suit was filed. See Depo. of Lori Stevens 13:5--22;24:5--11; 26:25--29:13; Sevigny Decl. ¶ 7.
Sevigny's concerns led to several rounds of internal communication at Unicast. Pl.'s Exs. 49-2, 49-3, 49-6, 49-9; see also Pl.'s Exs. 1-1, 1-2, 2, 4. In addition to recounting Sevigny's concerns regarding her non-compete clause, Unicast managers stated that Omar Choucair, the Chief Financial Officer at DG, had the ultimate responsibility for determining whether or not Unicast could commit to hiring Sevigny.
See, e.g., Pl.'s Exs. 1-1, 1-2; Ex. 2 (e-mail describing the need to "call Omar directly to discuss your concerns/questions about the EyeWonder non-compete"). As a matter of company policy, Choucair and Unicast's president, Adam Moore, stated that any prospective hire who may be burdened by a non-compete clause had to be cleared with Choucair. Choucair Depo. at 50:5--51:4; Moore Depo. 40:10--21.
After a satisfactory review of the non-compete clause in Sevigny's EyeWonder employment contract by outside counsel, Choucair advised Moore and Tietze that they could proceed with the hiring process in October 2009. Choucair Depo. at 54:24--57:10. Sevigny's concerns regarding the enforceability of the non-compete clause were allegedly addressed at an October 13, 2009 meeting, where Tietze told Sevigny that if EyeWonder did sue Sevigny, "then DG would have its attorneys defend [her]." Sevigny Decl. ¶ 8; see also SAC ¶ 29. Tietze, on the other hand, testifies that he told Sevigny that DG "will stand by her and support her" in the event EyeWonder chose to try and enforce the non-compete clause, but did not remember any "conversation about any legal discussions or defending her. . . ." Tietze Depo. at 82:10--84:21. None of the other executives at DG or Unicast involved in Sevigny's hiring recall providing Tietze with any specific instructions with respect to what to communicate to Sevigny regarding DG's willingness to defend her in the event that litigation ensued. See, e.g., Tietze Depo. at 50:13--25, 59:5--60:13, 74:24--75:7; Choucair Depo. at 61:12--62:12; 66:23--67:17; Moore Depo. at 49:7--25; 52:14--54:8; Pl.'s Ex. 20. In reliance on the alleged representations that Tietze made, and after her own independent research regarding the enforceability of covenants not to compete, Sevigny accepted a position at Unicast on November 24, 2009. Sevigny Decl. ¶ 9 and Exs. 8 (DG Offer Letter) and 9 (DG Employment Agreement); see Doty Decl. Ex. F., Sevigny Depo. 107:20--109:16. Sevigny's new position as West Coast Sales Director for Unicast was more senior and offered a higher salary then her previous one, in addition to covering a larger sales territory. Sevigny Depo. 278:12--279:24, 232:20--24.
Apparently unbeknownst to Sevigny, DG and EyeWonder were engaged in negotiations regarding DG's potential acquisition of EyeWonder at the time of Sevigny's hiring. Depo. of Scott Ginsburg, CEO of DG, 8:4--16, 17:22--18:1. The day after Sevigny executed her offer letter with DG, EyeWonder's CEO, John Vincent, emailed Choucair and Ginsburg his concerns that DG had hired one of EyeWonder's employees.
Choucair Depo. Ex. 64. Vincent stated that he presumed DG's executives were not aware of Unicast hiring a member of EyeWonder's sales team, but that such "underhanded business tactics" jeopardized the potential acquisition. Id. Upon receiving this email, Ginsburg immediately called Vincent and stated that DG would withdraw its offer letter to Sevigny, only to later discover that Sevigny had already signed the letter. Ginsburg Depo. at 26:6--29:10; Pl.'s Ex. 90. In light of Sevigny's signed employment contract, Ginsburg then communicated to Vincent that DG would enforce the non-compete clause against Sevigny, instructing Moore, Unicast's President, to "do his best to comply with the agreement [Sevigny] signed." Ginsburg Depo. 29:15--30:12; 30:18--31:12; see also Pl.'s Ex. ...