Fair v. Red Lion Inn

Decision Date12 October 1995
Docket NumberNo. 94CA0810,94CA0810
Parties11 IER Cases 146 Patricia FAIR, Plaintiff-Appellee, v. RED LION INN, Operating as L.P., Defendant-Appellant. . II
CourtColorado Court of Appeals

Cleveland & Cross, P.C., Keith Cross, Colorado Springs, for Plaintiff-Appellee.

Holland and Hart, John M. Husband, Elaine H. Turner, Denver, for Defendant-Appellant.

Opinion by Judge CASEBOLT.

Defendant, Red Lion Inn, appeals the judgment entered upon a jury verdict in favor of plaintiff, Patricia Fair, on her claim for breach of implied employment contract. On appeal, Red Lion contends that the evidence is insufficient to support a verdict for Fair on her claim for breach of implied contract, that the trial court erred in failing to direct a verdict in its favor, and that Fair has failed to mitigate her damages as a matter of law because she refused to accept an unconditional offer of reemployment. We conclude that the evidence was sufficient to support the jury's finding of liability, but determine that Fair is limited to recovery of damages incurred before Red Lion's unconditional offer of reinstatement was made. Consequently, we affirm the liability finding, but reverse and remand for a new trial on damages.

Fair was hired by Red Lion in June of 1987. Before being hired, Fair completed and signed an employment application which, immediately above the signature line, stated:

I understand that employment with Red Lion Inns is voluntary, and at-will, and that I am free to resign my position at any time. I also understand that Red Lion Inn has the right to discharge any employee for any reason, at any time, with or without cause. I have read and understand the foregoing statements and accept the same as conditions of employment.

At the time she was hired, Fair was given an employee manual, which she read. The manual set forth the policies of Red Lion with regard to a variety of employment matters, including leaves of absence, medical leave, and termination of employment. The manual and an employment agreement, which Fair also signed, contained additional specific "at-will" clauses.

On the first page of the employee manual was the following disclaimer language:

The policies, practices, and procedures set forth in this Employees' Manual are guidelines for supervision. They are not intended to confer contractual rights of any kind upon any employee or to create contractual obligations of any kind for the Company. The Company may revise, delete or supplement any policy, practice or procedure in this Employees' Manual at any time in its sole discretion.

Also according to the manual, after completion of ninety days service with Red Lion, a medical leave of absence could be granted without pay to a qualified individual for up to three months. During the employee's medical leave of absence, Red Lion would continue to pay the employer cost for group insurance benefits.

Concerning a medical leave of absence, the manual stated:

During a medical leave of absence, every effort will be made to keep a position available for the employee's return. If it is not possible to keep the position open because of business necessity, preference will be given for a similar position of equal to or lesser pay. Preference will be based upon job openings and qualifications.


Failure to advise the company of availability to return to work, failure to return to work upon doctor's release or continued absence from work beyond the time approved by the company will be deemed a voluntary termination of employment with Red Lion Inns.

A medical leave of absence form must be completed and kept with the employee's personnel records.

Fair continued her employment with Red Lion for approximately three years, at which time she was injured in an automobile accident. She found working with her injuries difficult and applied for a medical leave of absence as set forth in the employee manual.

Red Lion granted Fair a medical leave of absence, and Fair and representatives of Red Lion signed a document entitled "Medical Leave of Absence." This form reprinted, verbatim, the information concerning medical leaves contained in the manual and then noted that her medical leave had been approved for the period between May 25, 1990, and June 20, 1990. The form further stated that a failure by Fair to provide by June 20, 1990, either a doctor's release to work or a statement of disability "will result in removal from the payroll records."

On June 20, Fair requested that she be allowed to bring her doctor's release in on June 22 and was told by her supervisor and an individual in the personnel department that there would be "no problem" with doing so. After submitting a release, she was told that it was not acceptable because it was not a full release. She then asked if she could submit the full release by June 29, the next Friday, and was again told that this would be acceptable. When she later did so, the release specified she could return to work without restrictions on Monday, July 2, 1990. Because Fair could not be returned to the active work schedule until July 2 in any event, her supervisor again consented to this extension.

The following week Fair contacted Red Lion to determine her work schedule and was informed that she had been terminated. Red Lion later informed her that the reason for her termination was that it could not hold open her position. Red Lion issued a back dated termination notice stating that she was not given a full release by her doctor until July 2, 1990, and that it was unable to hold her position open past the expiration date of June 20, 1990.

After Fair retained counsel, Red Lion made an initial offer of reinstatement to her which, however, did not discuss how any fringe benefits would be treated nor whether she would return as a new employee. Fair's attorney replied with a counteroffer, which, in addition to requesting reimbursement for all monetary damages, specified that she would return to employment if four special conditions were met: (1) Fair would be given a position at the front desk with specific days and hours; (2) all employee benefits would be restored without penalty for interruption; (3) restrictions would be placed on Red Lion's right to terminate Fair; and (4) Fair would be given an opportunity to transfer to another Red Lion facility.

Red Lion declined the counteroffer. Thereafter, on October 9, 1990, Red Lion sent a final offer to Fair, in which it proposed reinstatement to her previous position, restoration of appropriate benefits with coverage "bridged," maintenance of her seniority, and indicated that Fair would have rights to transfer based on company policy just as any other employee would have. It declined to restrict its asserted right to terminate Fair.

Fair declined the offer for three reasons: (1) she was concerned about the language "appropriate benefits," because she had become pregnant, had contacted the medical insurance carrier for Red Lion, and had been told that the carrier was the entity that made decisions concerning insurance coverage; (2) she feared she would be terminated in retaliation; and (3) she was concerned about her ability to meet the physical requirements of her job because of her pregnancy.

Thereafter, Fair initiated this action, alleging that Red Lion had breached an implied contract not to discharge her if she complied with the terms of Red Lion's medical leave policy. In defense, Red Lion argued that it had no contractual obligation to continue Fair's employment and that Fair had failed to mitigate her damages by accepting the offer of reinstatement.

At trial, Red Lion moved for a directed verdict on Fair's claim, contending that there was insufficient evidence to submit the claim to the jury. Alternatively, Red Lion moved for a directed verdict on Fair's damage claim, essentially renewing its motion in limine to limit damages to those incurred before the final offer of reinstatement was made. The trial court denied both requests and the jury returned a verdict for Fair. Red Lion's motion for judgment notwithstanding the verdict was denied and this appeal followed.


Red Lion asserts that there is insufficient evidence to support a verdict for Fair concerning the existence of an implied contract. In connection with that assertion, it contends that the trial court erred in failing to grant its motion for directed verdict. We disagree.

In evaluating a motion for directed verdict, we must determine whether there is any evidence of sufficient probative force to support the verdict. We do so by indulging every reasonable inference that can be legitimately drawn in the prevailing party's favor and by considering whether the evidence, when viewed as a whole and in the light most favorable to the prevailing party, is sufficient to support the jury's verdict. Evans v. Webster, 832 P.2d 951 (Colo.App.1991).

A verdict should be directed only in the clearest of cases when the evidence is undisputed and it is plain no reasonable person could decide the issue against the moving party. McGlasson v. Barger, 163 Colo. 438, 431 P.2d 778 (1967).

When sufficiency of the evidence is challenged on appeal, we likewise must determine whether the evidence, viewed as a whole, and in the light most favorable to the prevailing party, is sufficient to support the jury's verdict. Frontier Exploration, Inc. v. American National Fire Insurance Co., 849 P.2d 887 (Colo.App.1992).

It is the right of the jury, not the province of this court, to determine the weight of the evidence and the credibility of witnesses and to draw all reasonable inferences of fact from the evidence. National Canada Corp. v. Dikeou, 868 P.2d 1131 (Colo.App.1993).

When parties manifest their agreement by either written or oral words, the contract is generally said to be express....

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