Case Name: Benjamin Le v. Oxford Global Resources, LLC, et al.
Case No.: 16CV298735

This is an action for breach of an employment contract brought by plaintiff Benjamin Le (“Plaintiff”) against defendants Oxford Global Resources, LLC (“Oxford”) and Nutanix, Inc. (“Nutanix”) (collectively “Defendants”).

I. Background Facts

As alleged, Oxford is a staffing and recruiting firm that hires consultants to work for other companies. (Complaint, ¶ 11.) In January, 2016, Oxford recruited Plaintiff for a full-time Devops Engineer position with Nutanix. (Complaint, ¶¶ 12, 17.) On January 28, 2016, Plaintiff signed a Consultant Agreement (“Agreement”) with Oxford wherein Plaintiff would start work for Nutanix on February 15, 2016. (Complaint, ¶ 13 & Exh. A.) At that time, Oxford informed Plaintiff that he would “transition” from consultant status to regular employee status with Nutanix after three months. (Complaint, ¶ 14.)

The same day, Plaintiff notified his employer that he would be resigning his position to take the new position with Nutanix. (Complaint, ¶ 18.) His employer summarily terminated him. (Ibid.)

On February 12, 2016, Nutanix, through Oxford, informed Plaintiff his start date would be delayed. (Complaint, ¶ 18.) Oxford later informed Plaintiff that Nutanix was on a “hiring freeze” and there would be no job opportunity with it. (Complaint, ¶ 19.)

Plaintiff asserts causes of action against Defendants for: (1) promissory estoppel and (2) breach of contract.

Oxford now demurs to the two causes of action. Plaintiff opposes the demurrer.

For the reasons discussed below, the demurrer is SUSTAINED, with 10 days leave to amend.

II. Demurrer

Oxford demurs to each cause of action on the ground Plaintiff fails to state facts sufficient to constitute a cause of action. (See Code Civ. Proc., § 430.10, subd. (e).)

A. Legal Standard

When reviewing the sufficiency of a complaint against a demurrer, it is treated as admitting all material facts properly pleaded. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) Facts appearing in exhibits attached to the complaint are given precedence over inconsistent allegations in the complaint. (Holland v. Morse Diesel Int’l, Inc. (2001) 86 Cal.App.4th 1443, 1447.) If the exhibit is ambiguous and can be construed in the manner stated in the complaint, it will be interpreted in that manner. (SC Manufactured Homes, Inc. v. Liebert (2008) 162 Cal.App.4th 68, 83.)

B. Choice of Law

Oxford argues this matter should be decided under Massachusetts law because of a contractual choice of law provision. (See Exh. A, ¶ 7.)
Generally speaking, California will apply its own law to a matter unless a party timely invokes the law of another state. (Washington Mutual Bank, FA v. Superior Ct. (2001) 24 Cal.4th 906, 919-920 (“Washington Mutual”.) When a contractual provision identifies a particular state’s law to govern the parties’ contractual rights, that state’s law will be applied unless either: (1) “the chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties choice;” or (2) “application of the law of the chosen state would be contrary to a fundamental policy of a state which has a materially greater interest than the chosen state in the determination of the particular issue and which … would be the state of the applicable law in the absence of an affective choice of law by the parties.” (Nedlloyd Lines B.V. v. Superior Ct. (1992) 3 Cal.4th 459, 465.)

The party seeking to invoke another state’s law must demonstrate that state’s substantial relationship. (1-800-Got Junk? LLC v. Superior Ct. (2010) 189 Cal.App.4th 500, 513.) In showing this substantial relationship, that party must “identify the applicable rule of law in each potentially concerned state and must show it materially differs from the law in California.” (Washington Mutual, supra, 24 Cal.4th at p. 919.) If the relevant laws of the states are identical, the trial court may apply California law. (Id. at p. 920.)

Here, Oxford points to a term in the Agreement that states, “This agreement shall be governed and construed in accordance with the laws of the Commonwealth of Massachusetts.” (Exh. A, ¶ 7.) Oxford then refers to the fact it is based in Massachusetts and the Agreement was finalized there when Oxford approved it as the basis to show Massachusetts has a substantial relationship and a greater interest in having its laws applied to this matter. (See Oxford MPA ISO Demurrer, at pp. 5:21-6:3.) It also states the laws for promissory estoppel and breach of contract are the same in California and Massachusetts. (See Oxford MPA ISO Demurrer, at pp. 9:14-9:23, 11:2-11:3.)
Oxford’s location and the fact the Agreement was finalized in Massachusetts are not facts properly before the Court. As such, the Court cannot rely on these statements to determine whether Massachusetts law should apply. (See Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994 [stating the court cannot consider matters outside the pleadings or not subject to judicial notice on demurrer].) Accordingly, Oxford has not demonstrated Massachusetts’ substantial relationship to the parties or transaction.

Additionally, Oxford has not demonstrated any differences between the laws of California and Massachusetts on the relevant matters. Thus, for the purposes of ruling on this demurrer, the Court shall decide the matter under California law.

C. First Cause of Action – Promissory Estoppel

Oxford argues the first cause of action, for promissory estoppel, fails to facts sufficient to constitute a cause of action against it because the promise Plaintiff relies on is ambiguous and he could not reasonably rely on any such promise. It asserts Plaintiff’s start date was subject to cancellation, making the promise to start work ambiguous, and any employment was at-will making any employment duration unknown and reliance unreasonable.

The elements of a promissory estoppel claim are: “(1) a promise clear and unambiguous in its terms; (2) reliance by the party to whom the promise is made; (3) the reliance must be both reasonable and foreseeable; and (4) the party asserting the estoppel must be injured by his reliance.” (Flintco Pacific, Inc. v. TEC Management Consultants, Inc. (2016) 1 Cal.App.5th 727, 734.)

1. Promises Made in the Agreement

Oxford asserts the fact Plaintiff’s start date could be cancelled and employment was at-will made the promises in the Agreement ambiguous.

A promise sufficient to invoke promissory estoppel must be clear and unambiguous in its terms. (Aceves v. U.S. Bank, N.A. (2011) 192 Cal.App.4th 218, 226 (“Aceves”) citing Garcia v. World Savings, FSB (2010) 183 Cal.App.4th 1031, 1044.) “‘To be enforceable, a promise need only be “definite enough that a court can determine the scope of the duty, and the limits of performance must be sufficiently defined to provide a rational basis for the assessment of damages.”’” (Ibid.) “‘That a promise is conditional does not render it unenforceable or ambiguous.’” (Ibid.)

Here, the fact the employment contract is at-will does not make the promise to hire an ambiguous promise. (See Sheppard v. Morgan Keegan & Co. (1990) 218 Cal.App.3d 61, 67 [holding that rescinding offer to hire an at-will employee after the employee terminated his prior job sufficient for promissory estoppel].)

As to the start date, the language under it explicitly states it was “[s]ubject to change or cancellation by [Nutanix].” (Exh. A.) Thus, the promise in the Agreement was, at most, to attempt to get Plaintiff work, subject to the whim of Nutanix, and not a guarantee of placement. Accordingly, the promise in the Agreement was ambiguous as to whether the job would even start.

2. Other Promises

Oxford argues Plaintiff’s allegations of other prior and contemporaneous promises made in connection with the signing of the Agreement must not be considered because the Agreement is fully integrated, implicating the parol evidence rule. Oxford also asserts statements made after the Agreement was signed cannot be considered because it includes a term that it may only be modified in writing. Plaintiff argues because the theory of promissory estoppel is not based on a contract, the parol evidence rule is irrelevant.

The parol evidence rule bars the introduction of statements made prior or contemporaneous with the making of an integrated written agreement that contradict that agreement. (Code Civ. Proc., § 1856, subd. (a); See also Riverisland Cold Storage, Inc. v. Fresno-Madera Production Credit Ass’n (2013) 55 Cal.4th 1169, 1174-1175 [barring fraud or other circumstances to challenge the validity of the agreement, parol evidence cannot be relied upon to dispute the terms of an agreement] (“Riverisland”).) “‘An integrated agreement is a writing or writings constituting a final expression of one or more terms of an agreement.’” (Riverisland, supra, 55 Cal.4th at p. 1174.) The existence of an integration clause is a key factor in determining whether the parties intended the writing to serve as a final expression. (Grey v. American Management Services (2012) 204 Cal.App.4th 803, 807.)

The parol evidence rule encompasses any “writing intended by the parties as a final expression of their agreement.” (See Code Civ. Proc, § 1856, subd. (a).) As alleged, the promise of employment is “contained in the Consulting Agreement”. (See Complaint, ¶ 17.) The promise Plaintiff seeks to enforce is, therefore, the language of the Agreement. The fact Plaintiff seeks recovery on a promissory estoppel action instead of a breach of contract action does not eliminate the use of the rule because both actions seek enforcement of promises with the only difference being promises under a contract are supported by consideration. (See Aceves, supra, 192 Cal.App.4th at p. 230 [promissory estoppel “provide[s] a substitute for the consideration which ordinarily is required to create an enforceable promise”].)
The Agreement includes a paragraph that states, “This Agreement constitutes the entire agreement between Oxford and [Plaintiff] with respect to the subject matter therefore. All prior agreements, representations, statements, negotiations and undertakings are superseded hereby.” (Exh. A, ¶ 7.) This language indicates the Agreement is fully integrated, thereby precluding Plaintiff’s introduction of any prior or contemporaneous oral or written statements under the parol evidence rule. Thus, Plaintiff cannot rely on such statements to represent a promise that contradicts the statements made in the Agreement.

The Agreement also states, “The Agreement may be altered, varied, revised, amended or otherwise modified only in writing signed by both Oxford and [Plaintiff].” (Exh. A, ¶ 7.) Plaintiff alleges, “Defendants … made oral and/or written representations … that Plaintiff would be employed at [Nutanix] … with a start date of February 15, 2016.” (Complaint, ¶ 22.) This allegation sufficiently identifies a written representation that might modify the Agreement. Because all reasonable inferences are to be made in favor of the Plaintiff, the Court will consider whether this allegation could refer to a representation made after the Agreement was signed. (See Rickley v. Goodfriend (2013) 212 Cal.App.4th 1136, 1142.)

Plaintiff alleges he relied on the promise of employment on January 28, 2016, the day the Agreement was signed, by notifying his employer that he would be resigning. (See Complaint, ¶ 17.) Thus, if the written representation occurred after signing the Agreement on January 28, 2016, Plaintiff’s alleged reliance on the promise occurred before the promise was made. This later promise, therefore, could not induce Plaintiff’s alleged reliance. Accordingly, Plaintiff has not demonstrated an unambiguous promise on which he relied.

Because the initial element of a clear and unambiguous promise has not been met, the Court is unable to analyze the issue of reasonable reliance on that promise.

Thus, Plaintiff has failed to state facts sufficient to constitute a cause of action for promissory estoppel.

D. Second Cause of Action – Breach of Contract

Oxford argues it did not breach the contract when Nutanix did not hire Plaintiff because the contract was for at-will employment and the terms of the contract specifically indicated the start date may be delayed or cancelled entirely. Plaintiff argues the contract required Oxford to secure employment with Nutanix regardless of whether Nutanix could have immediately terminated him.

As discussed above, a breach of contract cause of action is similar to a promissory estoppel cause of action except for the element of consideration. (See Aceves, supra, 192 Cal.App.4th at p. 230.) Because the consideration is not challenged, the analysis of the breach of contract action is the same as for the promissory estoppel cause of action above.

Oxford’s promise in the Agreement was at most a promise to attempt to get Plaintiff work at Nutanix. The allegations do not demonstrate Oxford failed to make such an attempt.

Accordingly, Plaintiff has failed to state facts sufficient to constitute a cause of action for breach of contract.

E. Conclusion

For the foregoing reasons, Oxford’s demurrer to the first and second causes of action are SUSTAINED with 10 days leave to amend. (See Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, 1037.)