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Petitioner electric company filed a petition for a writ of mandate seeking to vacate respondent court’s judgment granting summary adjudication to energy company in its action for declaratory relief regarding interpretation of certain contracts between petitioner and energy company. During trial plaintiff retained professional legal services from a class action lawyer California to present expert testimony.

Overview

Petitioner electric company had long-term contracts to purchase electricity generated by wind-powered turbines owned by energy company. Each contract was divided into “periods.” A dispute arose as to when the “first period” commenced to run and as to the number of “first periods.” Subsequently, energy company brought an action for declaratory relief regarding interpretation of the contracts, specific performance, and breach of contract. Respondent court granted summary adjudication to energy company in its declaratory relief action. The court held that respondent did not err in hearing energy company’s motion for summary adjudication as to the declaratory relief action because interpretation of a contract was a proper subject for declaratory relief; moreover, the fact the same issue of contract interpretation was also raised in energy company’s other causes of action did not bar declaratory relief or summary adjudication of that cause of action. Regardless, the court held that respondent did err in granting summary adjudication where the contracts were ambiguous. As such, the court issued a peremptory writ directing respondent to vacate its order granting summary adjudication.

Outcome

The court issued a peremptory writ directing respondent court to vacate its order granting summary adjudication of energy company’s action for declaratory relief, holding that the fact that issue of contract interpretation in declaratory relief action was raised in other actions did not bar summary adjudication of the declaratory relief action; however, it was error to grant summary adjudication where the contracts were ambiguous.

Procedural Posture

Plaintiff employer appealed a judgment from the Superior Court of San Diego County (California), which granted summary adjudication to defendants, a competitor and a former employee hired away by the competitor, ruling that the employer’s common law claims were displaced by California’s Uniform Trade Secrets Act, Civ. Code, §§ 3426-3426.11. A jury found that none of the information alleged to have been wrongfully appropriated was a trade secret.

Overview

The employer alleged that the former employee had wrongfully retained documents upon leaving his employment and that he had breached both his employment agreement and his duty of loyalty by disparaging the employer and wrongfully recruiting its customers before he left. The court noted that the summary adjudication order was reviewable on appeal from the final judgment and that the order did not have to be challenged by a writ petition or preserved by a motion for reconsideration. The court concluded that the employer’s claims for breach of contract, breach of fiduciary duty, unfair competition, interference with business relations, and conversion were not displaced pursuant to Civ. Code, § 3426.7, because each had a basis independent of any misappropriation of a trade secret. The employer’s claims were not barred as an improper restraint of competition under Bus. & Prof. Code, § 16600, because the alleged disloyalty took place while the former employee was still working for the employer; moreover, he was a corporate officer and thus owed the employer a broad duty of loyalty. Allegations of wrongful recruitment could support the interference and unfair competition claims.

Outcome

The court reversed as to the common law causes of action and affirmed in all other respects.