Casella v. SouthWest Dealer Services, 157 Cal. App. 4th 1127 (2007)

Zachary Casella was employed as a sales representative for SouthWest Dealer Services, which sells its aftermarket auto products to auto dealerships and helps train auto dealership finance and insurance salespeople on how to promote and sell SouthWest’s products. Casella moved from New York to California to accept the position. After his employment was terminated approximately five months later, Casella sued SouthWest for wrongful termination in violation of public policy, fraud, and fraudulent inducement in violation of Labor Code § 970. Casella alleged that his employment was terminated in retaliation for his having reported SouthWest’s participation in some of its car dealership clients’ fraudulent business practices known as “payment packing” (which involved dealership sales personnel quoting inflated monthly payment amounts in order to hide the true cost of aftermarket products). Casella also alleged that he was fraudulently induced to move to California to take the job because SouthWest had failed to disclose its involvement in these fraudulent activities. The jury found in favor or Casella, awarding him $240,000 in compensatory damages and $240,000 in punitive damages. The Court of Appeal affirmed the judgment on the grounds that Casella’s public policy claim was “tethered” to Penal Code § 487 (criminal fraud) and that the Section 970 verdict was supported by substantial evidence. Finally, the Court affirmed an award of $12,500 in attorney’s fees to Casella associated with his successful defense against SouthWest’s cross-complaint for breach of contract – however, he could not recover any attorney’s fees associated with the prosecution of his affirmative claims against SouthWest since he did not allege a breach of the contract that contained the prevailing-party attorney’s fees provision.