The plaintiffs engaged the defendant as an independent contractor to provide systems engineering services to their clients.
The defendant subsequently went to work directly for one of the clients.
The plaintiffs sued for breach of fiduciary duty and breach of confidence.
After the trial, the trial judge raised new theories of liability on her own motion—duty of good faith, unconscionability, and implied contractual terms—and found the defendant liable on those unpleaded bases while dismissing the pleaded claims.
The Court of Appeal allowed the appeal, holding that it is fundamentally unfair to find liability on theories that were never pleaded and not subjected to the adversarial process.
The cross-appeal regarding fiduciary duty and breach of confidence was dismissed.