Kloss v. Honeywell, Inc.

• Decision Date: 30 January 1995
• Docket Number: No. 33091-8-I,33091-8-I
• Citation: 890 P.2d 480,77 Wn.App. 294
• Court: Washington Court of Appeals
• Parties: Charles W. KLOSS, a single man, Respondent, v. HONEYWELL, INC., a Delaware corporation, Appellant.

Page 294

77 Wn.App. 294

890 P.2d 480

Charles W. KLOSS, a single man, Respondent, v. HONEYWELL, INC., a Delaware corporation, Appellant.

No. 33091-8-I.

Court of Appeals of Washington Division 1.

Jan. 30, 1995.

Publication Ordered March 16, 1995.

Mary L. Gaudio, Bellevue, for appellant.

Michael B. King, Timothy J. Pauley, Wayne W. Hansen, Seattle, for respondent.

WEBSTER, Judge.

Honeywell, Inc. appeals a judgment in favor of Charles W. Kloss alleging the court erred in finding a written contract, suit was barred by the 6-year statute of limitations, and Kloss failed to mitigate his damages. We affirm.

FACTS

Charles W. Kloss sued his former employer, Honeywell, for breach of contract in which Honeywell promised to place him in the position of industrial nurse upon completion of an educational program to obtain a Registered Nurse Degree. The trial court found Honeywell had breached the contract and awarded Kloss $130,084.50 in damages and $29,467.75 in costs and attorneys' fees.

Kloss began his employment with Honeywell in October 1967. By the late 1970s he held the position of Plant Engineer in Honeywell's Marine System Division (MSD). Kloss remained in that position through Spring 1983. In late 1983, Honeywell was planning to transfer its employees from Ballard to its Harbour Pointe facility. Aware that Honeywell anticipated hiring a medical person at Harbour Pointe, Kloss met with Director of Employee and Community Relations, Curtis L. White, and asked to be assigned to the position. After discussing the matter with Kloss's supervisor, James Messner, and Messner's supervisor, James Durand, White advised Kloss that if he enrolled into a nursing program, the Company would pay for his tuition under its tuition reimbursement policy.

In September 1983, Kloss met with Adam Heller, Human Resources Development Manager, and Messner to coordinate his work schedule with his nursing program. According to Heller, neither he nor Messner stated that if Kloss completed the nursing program he would be given a job as a nurse. Kloss testified such a commitment was made at the meeting. ¹ Messner drafted a memorandum to Durand confirming what transpired at the September 23 meeting. In January 1984, Kloss entered the licensed practical nurse (LPN) program at Seattle Central Community College.

Meanwhile, Honeywell's corporate medical department recommended that the medical position at Harbour Pointe be for a registered nurse (RN). White decided that the medical position at Harbour Pointe should be filled by a Registered Nurse (RN) rather than a Licensed Practical Nurse (LPN). Heller wrote a memorandum to Durand and Messner with copies to Kloss and White stating the medical position at Harbour Pointe should be filled by an RN and that Kloss's education should be directed to that end. Kloss then focused his nursing education on becoming a RN.

Honeywell had completed transfer of its MSD operations from Ballard to its Harbor Pointe facility in the fall of 1985. The facility had an immediate need for a medical person, and Kloss had not yet acquired his nursing degree. Dorothy Martin, a Honeywell employee and an LPN, was assigned to the position.

After Kloss became aware of Martin's assignment, he met with White, in March 1986. White reminded Kloss of the downsizing that Honeywell was experiencing at the time and told him that Martin's position was in jeopardy. He explained that he could not guarantee a medical position. White stated that since he had been notified he was being transferred to another Honeywell facility, Kloss would have to speak to his successors about any such positions.

Kloss graduated from his RN nursing program in June 1986. Honeywell did not assign him to a nursing or medical position. Kloss returned to work in the Company's maintenance department. In February 1987, Kloss was granted a voluntary layoff.

Kloss filed his complaint almost 5 years after he graduated from the nursing program, having not been offered a nursing or other medical position at Honeywell. The court found a written employment contract and awarded Kloss lost wages as damages.

I

Honeywell claims Kloss's suit was untimely alleging that the contract was insufficient under the 6-year statute of limitations because the memoranda lacked a compensation term. Ex parte writings are sufficient to bring a contract within the 6-year statute of limitations if the writing contains all of the elements of a contract. Cf. Cahn v. Foster & Marshall, Inc., 33 Wash.App. 838, 841-42, 658 P.2d 42, review denied, 99 Wash.2d 1012 (1983); Evans v. Yakima Valley Grape Growers Ass'n, 52 Wash.2d 634, 644, 328 P.2d 671 (1958). A written agreement for purposes of the 6-year statute of limitations must contain all the essential elements of the contract, and if resort to parol evidence is necessary to establish any material element, then the contract is partly oral and the 3-year statute of limitations applies. Cahn, 33 Wash.App. at 840-41, 658 P.2d 42.

Honeywell claims a valid employment contract cannot exist without an express agreement on the amount of compensation. Kloss disagrees. Employment contracts are governed by the same rules as other contracts. Comfort & Fleming Ins. Brokers, Inc. v. Hoxsey, 26 Wash.App. 172, 176, 613 P.2d 138, review denied, 94 Wash.2d 1008 (1980). "A unilateral contract [such as the one here] consists of a promise on the part of the offeror and performance of the requisite terms by the offeree." Multicare Medical Ctr. v. D.S.H.S., 114 Wash.2d 572, 583, 790 P.2d 124 (1990). The "consideration consists of the offeree performing the requisite terms of the offer." Multicare, 114 Wash.2d at 584, 790 P.2d 124. The essential elements of any contract which must be set forth in writing are "the subject matter of the contract, the parties, the promise, the terms and conditions, and (in some but not all jurisdictions) the price or consideration." Family Medical Bldg., Inc. v. D.S.H.S., 104 Wash.2d 105, 108, 702 P.2d 459 (1985). ²

Occasionally, those who offer or agree to employ others, or to buy goods, will make no statement as to the wages or price to be paid. In such a case, the law invokes a standard of reasonableness so that the fair value of services or property is recoverable....

* * * * * *

... Thus, in some jurisdictions a promise that one shall be well paid or providing for sufficient monies is interpreted as a promise for reasonable compensation, and a promise to pay a good or living wage has also been upheld....

In short, though the necessity for definiteness may compel the court to find the language used is too uncertain to be given any reasonable effect, when the parties' language and conduct evidences an intention to contract, and there is some reasonable means for giving an appropriate remedy, the court will strain to implement their intent. Thus, if a promise indefinite as to price is capable of being made certain by an objective standard through extrinsic facts, it will be enforced.

(Footnotes omitted). 1 S. Williston, Contracts § 4:22, at 507-09, 518-520 (4th ed. 1992).

RCW 4.16.040(1) applies a limitations period of 6 years to "[a]n action upon a contract in writing, or liability express or implied arising out of a written agreement." (Emphasis added). This language is very broad in its scope and

differs from the statutes of limitation of most, if not all, other states ... [in] that an implied liability arising out of a written instrument is included in the same clause with an express liability arising out of a written contract.

Evans, 52 Wash.2d at 645, 328 P.2d 671. ³

As a result, what is normally regarded as a necessary element of a written contract need not be expressly addressed if it is implicit in the writing, and the fact that the obligation is implicit in the writing does not cause the contract to be "partly oral" for statute of limitations purposes. "The general rule is that failure to agree upon the precise amount of compensation does not defeat the existence of a contract. In other words, once the fact of compensation is established, failure to agree upon the precise degree of compensation does not vitiate the performing party's right to reasonable compensation." Rutcosky v. Tracy, 89 Wash.2d 606, 610, 574 P.2d 382 (1978) (en banc), cert. denied, 439 U.S. 930, 99 S.Ct. 317, 58 L.Ed.2d 323 (1978). ⁴ Other jurisdictions similarly uphold obligations which are implicit in contracts. ⁵

Honeywell does not dispute that the writing established the subject matter of the contract, the parties, and the promise of employment. Implicit in the agreement to employ Kloss as a nurse is the obligation to pay him for that work. Thus, this writing acknowledges a state of affairs from which it can fairly be implied that the contract imposes an obligation to pay Kloss a reasonable salary. Kloss provided the consideration for the agreement by performing, obtaining his nursing degree. Honeywell's action in paying for Kloss's nurses training shows very forcefully that it intended to bind itself by its "offer" to hire him as a nurse.

Since the amount of compensation need not be specified for a contract to be enforceable, and this writing establishes that compensation was to be paid, the writing was sufficient to bring the contract within the 6-year statute of limitations. The trial court was entitled to invoke its equitable powers to determine a reasonable amount of compensation. Rutcosky, 89 Wash.2d at 610, 574 P.2d 382.

II

Honeywell next claims that Kloss failed to mitigate his damages because he requested and was granted a voluntary lay-off from his job at Honeywell. "The doctrine of mitigation of damages ... prevents recovery for those damages the injured party could have avoided by reasonable efforts taken after the wrong was committed." Bernsen v. Big Bend Elec. Co-op., Inc., 68 Wash.App. 427, 433, 842 P.2d 1047 (1993). " 'If a choice of two reasonable courses presents itself, the person whose wrong forced...