Procedural Posture

Procedural Posture

Appellant employer sought review of a judgment from the Superior Court of Santa Clara County (California), which sustained, without leave to amend, respondent former employee’s demurrer to the employer’s suit alleging breach of contract and conversion of patents.

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Overview

The employee had cross-complained for wrongful termination in a prior suit brought against him by the employer. The trial court ruled that the employer’s claims were barred under Code Civ. Proc., § 426.30, because they should have been raised in the prior suit. The court held that the employer’s claims for breach of contract and conversion of patents were logically related to the former employee’s cross-complaint for wrongful termination in the prior action because they arose from the parties’ employment relationship and because the employer’s claims were of such a nature as might be raised in responding to a wrongful termination claim. Thus, the claims were related causes of action as defined in Code Civ. Proc., § 426.10, subd. (c). Moreover, the allegations of the complaint did not clearly show that any of the claims arose after the employer answered the cross-complaint; thus, the demurrer was properly sustained. The trial court erred, however, in denying leave to amend because the employer made a sufficient showing that its complaint could be amended to allege that the claims at issue arose after the employer had filed its answer to the cross-complaint in the prior action.

Outcome

The court reversed and remanded with instructions to enter an order sustaining the demurrer with leave to amend.