A college coach, who picked up a legal victory against her former employer in a breach of contract case, was denied a bid to have that judgment set aside and have enforced a liquidated damages provision of her employment contract.
In affirming a trial court ruling, a California appeals court held that “the trial court properly exercised its discretion not to vacate the judgment and reopen the proceedings to an entirely new theory.”
The impetus for the litigation was plaintiff Maureen O’Toole’s poor bookkeeping, while she was the coach of the women’s water polo team at the Berkeley campus of the University of California (UC).
O’Toole not only coached Berkeley’s varsity team, but also a private “club team” in the off season. UC did not budget for or finance the club team, which was financially supported by the participating students.
While O’Toole’s performance in the pool as a coach was respectable, her immediate supervisor reported to AD John Kasser that the coach struggled with issues of administrative compliance, bookkeeping procedures and processing of expenses. Among the problems was a commingling of her personal funds with UC funds. That led to Kasser’s concern that there was a possible “misuse of state funds.”
After a UC audit and other revelations, including NCAA violations, O’Toole was terminated. “After leaving UC, O’Toole received offers of employment from the University of California campuses at San Diego and Santa Barbara and Southwestern University,” wrote the court. “She turned them down, because they involved pay cuts, she was training for the Olympics and she did not want to move with her young daughter. However, O’Toole and her daughter did move to Southern California, where O’Toole trained for the Olympics seven hours a day, six days a week for three years.”
In April of 1999, O’Toole filed discrimination charges with the Department of Fair Employment and Housing and received a right to sue letter. On November 16, 2001, she filed the second amended complaint in this action, alleging sex discrimination, wrongful discharge, breach of contract, breach of the covenant of good faith and fair dealing, infliction of emotional distress and defamation. UC moved for summary adjudication, and was granted as to all causes of action except breach of contract and breach of the covenant of good faith.”
After a trial on the remaining two issues, O’Toole testified that “she asked a lot of questions about how to do paperwork and arrange travel, but got few answers,” wrote the court. “Bob Driscoll, her immediate supervisor, did not know how the rules applied to emerging sports. He often promised to find the answers to her questions, but did not follow up.”
O’Toole was successful in proving that UC breached her employment contract by terminating her for conduct that did not rise to the level of a willful breach of duty as required by Labor Code section 2924. Notably, “she argued that the damages from the breach were the salary due under the contract plus interest. Regarding the Regents’ claim that she failed to mitigate the damages, O’Toole’s counsel argued that the three other positions offered were not comparable in that they involved large salary cuts and a move out of the area.”
The court found for O’Toole, finding that the Regents did not have good cause to terminate O’Toole. The court found that “the applicable policies were not clear and the enforcement was not consistent.” The judgment was entered in accordance with the court’s decision on May 7, 2003.
Thirteen days later, O’Toole moved to set aside the judgment, “arguing that the court made an error of law by failing to enforce a provision of the contract that provided for liquidated damages in the event of a termination without cause.” The trial court denied the motion, finding that “the contract was ambiguous, no evidence on the issue had been presented at trial, and noting that the concept of estoppel might apply.”
The plaintiff appealed.
“Reliance on the clause that concerned termination without cause and its liquidated damages provision was first asserted after the trial, the post-trial motions and argument regarding the statement of decision, and after the judgment was entered,” wrote the court. “Counsel’s only explanation for his late change of theory was that the issues were not fresh in his mind when he read the statement of decision and he did not see the new theory until after judgment was entered.”
At trial, Kasser replied stated that the plaintiff was fired for cause. “O’Toole appears to be arguing that in a breach of contract action, when an employee is terminated for cause, but cause is not proven at a subsequent trial, the termination is converted to a no cause termination under the contract and the buy out provisions are activated. She has cited no authority for this argument.”
Consequently, the court denied the plaintiff’s motion. O’Toole v. Regents of the University of California; Ct.App.Calif., 1st App. Div.; A103693, A104969; 8/24/04