Jacobs

In this wrongful discharge case, Jeffrey Jacobs alleges Universal Development Corporation (UDC) and managerial employees Robert Cross and Herbert Palmtag contravened public policy by firing him after he refused to participate in a rebate program which violated federal lending laws. Jacobs appeals from the granting of defense summary judgment motions in which the court found Cross and Palmtag had no individual liability for the tort, and that Jacobs—through his earlier participation in and profit from UDC’s illegal rebate program—was in pari delicto with UDC and thus precluded from maintaining this action. We conclude the trial court properly granted Cross’s and Palmtag’s motions, but erred in granting UDC’s motion as the in pari delicto doctrine is inapplicable under the circumstances of this case.

Factual and Procedural Background

In June 1990 UDC hired Jacobs as sales and marketing director for four San Diego residential developments. Jacobs received a salary and $125 for every home closing escrow. His duties included reviewing and initialing purchase offers before they were given to his superiors for acceptance or rejection. Initially, Jacobs’s immediate supervisor…