Dorman v. Petrol Aspen, Inc.
| Citation | 914 P.2d 909 |
| Decision Date | 15 April 1996 |
| Docket Number | No. 95SC96,95SC96 |
| Parties | 131 Lab.Cas. P 58,105, 11 IER Cases 1077 Ben M. DORMAN, Petitioner, v. PETROL ASPEN, INC., Respondent. |
| Court | Colorado Supreme Court |
Sander N. Karp, Thomas A. Feldman, Denver, for Petitioner.
Jean E. Dubofsky, P.C., Jean E. Dubofsky, Boulder, Lance R. Cote, Snowmass Village, for Respondent.
Barry D. Roseman, Denver, Jeffrey Menter, Englewood, for Amicus Curiae Plaintiff Employment Lawyers Association.
This case presents the issue of whether a contract of employment between the plaintiff employee, Ben M. Dorman, and the defendant employer, Petrol Aspen, Inc., provided for employment at will or for a definite term. The district court granted Petrol Aspen's motion to dismiss Dorman's complaint, which alleged breach of contract, promissory estoppel, and breach of an alleged duty of good faith and fair dealing, all arising from the termination of Dorman's employment by Petrol Aspen. Petrol Aspen's motion was brought under C.R.C.P. 12(b)(5) for failure to state a claim upon which relief can be granted and was predicated on the contention that Dorman's employment was at will and therefore could be terminated by Petrol Aspen at any time without incurring liability to Dorman. The Colorado Court of Appeals affirmed the dismissal, holding that under applicable legal principles, the contract provided for employment at will. Dorman v. Petrol Aspen, Inc., No. 93CA1714 (Colo.App. Dec. 15, 1994). We hold that the contract is ambiguous as to the term of employment, that Dorman must be permitted to offer extrinsic evidence to resolve the ambiguity, and that the trial court therefore erred in dismissing the complaint. Accordingly, we reverse the judgment of the court of appeals and return the case to that court with directions to reverse the district court's judgment and remand the case to the district court for further proceedings.
On September 14, 1992, Ben M. Dorman filed a complaint against Petrol Aspen, Inc. (Petrol Aspen) in Garfield County District Court, alleging breach of contract, promissory estoppel, and breach of an alleged duty of good faith and fair dealing. In his complaint, Dorman contended (1) that Petrol Aspen operates an Amoco gasoline and service station in Aspen, Colorado, (2) that Petrol Aspen extended an employment offer to Dorman after negotiations, (3) that Dorman left gainful employment elsewhere and began work for Petrol Aspen as a result of the negotiations and in reliance upon the employment offer letter that he received from Petrol Aspen, and (4) that Petrol Aspen terminated Dorman's employment after approximately four months, in breach of his employment contract. Dorman attached the employment offer letter as an exhibit to the complaint, and we reproduce the letter in its entirety as Appendix A to this opinion. 1
Petrol Aspen filed a motion to dismiss for failure to state a claim upon which relief can be granted, pursuant to C.R.C.P. 12(b)(5), asserting in part that the exhibit attached to Dorman's complaint "does not constitute a contract for employment other than at-will." Dorman responded by asserting in a brief in opposition to the motion to dismiss that the contract offered employment for a definite period of time and thus was not terminable during the agreed employment period without just cause. Alternatively, Dorman contended that at minimum the contract was ambiguous as to the employment term and that he therefore "must be entitled to engage in discovery in order to determine the parties' intent with regard to the intended length of his employment." The district court granted Petrol Aspen's motion to dismiss in a brief written order, noting only that its decision was based on "the reasons stated in [Petrol Aspen's] Motion to Dismiss and in [Petrol Aspen's] Memoranda in support thereof."
The Colorado Court of Appeals affirmed the judgment of the district court in an unpublished opinion. Dorman, slip op. at 4. The court relied on its prior decision in Justice v. Stanley Aviation Corp., 35 Colo.App. 1, 4, 530 P.2d 984, 985 (1974), in rejecting Dorman's contention that the employment agreement was ambiguous as to duration of employment and holding that it created employment terminable at the will of either party. In view of its conclusion that Dorman's contract with Petrol Aspen was one of employment at will, the court declined to address Dorman's other claims.
We granted certiorari to review the decision of the court of appeals. 2 We now reverse based on our determination that the court of appeals misapplied Justice, 35 Colo.App. 1, 530 P.2d 984, in that the employment contract between Petrol Aspen and Dorman was sufficiently ambiguous to preclude the trial court from granting Petrol Aspen's motion to dismiss pursuant to C.R.C.P. 12(b)(5).
The purpose of a motion under C.R.C.P. 12(b)(5) to dismiss a complaint for failure to state a claim upon which relief can be granted is to test the formal sufficiency of the complaint. Dunlap v. Colorado Springs Cablevision, 829 P.2d 1286, 1290 (Colo.1992). Under our rules for notice pleading, all that is required is "a short and plain statement of the claim showing that the pleader is entitled to relief." C.R.C.P. 8(a)(2); Shapiro & Meinhold v. Zartman, 823 P.2d 120, 122 (Colo.1992). In evaluating a motion to dismiss under C.R.C.P. 12(b)(5), all averments of material fact must be accepted as true, Shapiro, 823 P.2d at 122, and the allegations of the complaint must be viewed in the light most favorable to the plaintiff, Dunlap, 829 P.2d at 1291. C.R.C.P. 12(b)(5) motions to dismiss a complaint are viewed with disfavor, and a complaint is not to be dismissed unless it appears beyond doubt that the plaintiff cannot prove facts in support of the claim that would entitle the plaintiff to relief. Id. In evaluating such motions, trial courts and appellate courts apply the same standards. Shapiro, 823 P.2d at 123. With these principles in mind, we first set forth the relevant standards for contract interpretation and then assess the sufficiency of Dorman's complaint.
When a document is unambiguous, it cannot be varied by extrinsic evidence. E.g., Buckley Bros. Motors v. Gran Prix Imports, 633 P.2d 1081, 1083 (Colo.1981). On the other hand, "written documents containing ambiguities or unclear language must be construed in accordance with the intent of the parties, and relevant extraneous evidence may be considered to resolve the factual question of the parties' intent." Chambliss/Jenkins Assocs. v. Forster, 650 P.2d 1315, 1318 (Colo.App.1982); accord, e.g., Kuta v. Joint Dist. No. 50(J), 799 P.2d 379, 382 (Colo.1990); Hammond v. Caton, 121 Colo. 7, 12-13, 212 P.2d 845, 847 (1949). 3 Therefore, the only issue before us is whether Dorman's complaint and the attached employment contract between Dorman and Petrol Aspen could support a claim that Dorman's employment relationship with Petrol Aspen either was for a definite term extending beyond the date his employment was terminated or was ambiguous as to the employment term. In evaluating these possibilities, we must view the complaint and the employment contract in the light most favorable to Dorman and must accept all of the material allegations in Dorman's complaint as true regarding alleged negotiations surrounding the formation of the contract. We express no opinion as to the substantive merits of Dorman's case.
Dorman contends that the employment relationship was for a definite term, and alternatively that at minimum the employment contract was ambiguous regarding the term of employment. Petrol Aspen responds that the employment contract established an at will employment relationship. Of course, "[t]he mere fact that the parties differ on their interpretations of an instrument does not of itself create an ambiguity." Fibreglas Fabricators, Inc. v. Kylberg, 799 P.2d 371, 374 (Colo.1990). "Interpretation of a written contract and the determination of whether a provision in the contract is ambiguous are questions of law," and this court need not defer to the trial court's interpretation. Id. In determining whether a contractual provision is ambiguous, "the instrument's language must be examined and construed in harmony with the plain and generally accepted meaning of the words used," with reference to all of the agreement's provisions, and a provision is ambiguous "if it is fairly susceptible to more than one interpretation." Id.; accord, e.g., Cheyenne Mountain Sch. Dist. v. Thompson, 861 P.2d 711, 715 (Colo.1993). Lastly, "[o]nce a contract is determined to be ambiguous, the meaning of its terms is generally an issue of fact to be determined in the same manner as other disputed factual issues." Union Rural Elec. Ass'n v. Public Utils. Comm'n, 661 P.2d 247, 251 n. 5 (Colo.1983); accord, e.g., Cheyenne Mountain, 861 P.2d at 715.
The language of the employment contract between Dorman and Petrol Aspen is fairly susceptible to more than one interpretation regarding Dorman's term of employment. Although the contract between Dorman and Petrol Aspen does not expressly identify a term of employment, the contractual provisions relating to the term of Dorman's employment are at minimum ambiguous. Specifically, the employment agreement's (1) stock option provisions, (2) listed series of salaries applicable to specific years, and (3) other references to Dorman's long-term status as a Petrol Aspen employee create ambiguities regarding the intended term of Dorman's employment. Consequently, Dorman must be afforded the opportunity to present to a fact-finder extrinsic evidence of the parties' intentions concerning the term of the employment contract, see, e.g., Kuta, 799 P.2d at 382; Hammond, 121 Colo. at 12-13, 212 P.2d at 847; Chambliss/Jenkins, 650 P.2d at 1318, including any evidence supporting Dorman's assertion that oral negotiations supplemented or expanded upon the written...
To continue reading
Request your trial
-
Henderson v. Gunther
...is "a short and plain statement of the claim showing that the pleader is entitled to relief." C.R.C.P. 8(a)(2); Dorman v. Petrol Aspen, Inc., 914 P.2d 909, 911 (Colo.1996). The only instance in which complaints must be particular is when fraud or mistake are alleged. C.R.C.P. 9(b). Intent, ......
-
Wainscott v. Centura Health Corp.
...doubt that the plaintiff cannot prove facts in support of the claim that would entitle the plaintiff to relief.” Dorman v. Petrol Aspen, Inc., 914 P.2d 909, 911 (Colo.1996). “But if the plaintiff is not entitled to relief upon any theory of the law, the complaint should be dismissed for fai......
-
McAuliffe v. The Vail Corp.
...Recall that at the pleading stage, Passholders needed to show only that their interpretation of the no-refund clause was reasonable. Dorman, 914 P.2d at 912. To determine Passholders have met that standard, we begin with the plain language in the contract, see Renfandt, 419 P.3d at 580. Acc......
-
Public Service Co. of Colorado v. Van Wyk
...state a claim upon which relief can be granted serves as a test of the formal sufficiency of a plaintiff's complaint. Dorman v. Petrol Aspen, 914 P.2d 909, 911 (Colo.1996). The chief function of a complaint is to give a defendant notice of the transaction or occurrence that is the subject o......
-
Chapter 2 - § 2.5 • DEFENSES
...1184 (Colo. 1997) (enforcing promise that plaintiff would have better future prospects with the company); Dorman v. Petrol Aspen, Inc., 914 P.2d 909 (Colo. 1996) (refusing to dismiss claim based on offer letter and oral statements concerning plaintiff's long-term status with the company); T......
-
Chapter 2 - § 2.5 • DEFENSES
...1184 (Colo. 1997) (enforcing promise that plaintiff would have better future prospects with the company); Dorman v. Petrol Aspen, Inc., 914 P.2d 909 (Colo. 1996) (refusing to dismiss claim based on offer letter and oral statements concerning plaintiff's long-term status with the company); T......
-
Chapter 2 - § 2.1 • EXPRESS CONTRACTS
...about salary in the future, and provided for a stock option that could be exercised only during a one-year period of time in the future. 914 P.2d 909, 914 (Colo. 1996). The court held that, as a result of the ambiguities in that document, which constituted a contract of employment, the plai......
-
Chapter 2 - § 2.1 • EXPRESS CONTRACTS
...about salary in the future, and provided for a stock option that could be exercised only during a one-year period of time in the future. 914 P.2d 909, 914 (Colo. 1996). The court held that, as a result of the ambiguities in that document, which constituted a contract of employment, the plai......