Pickell v. Arizona Components Co., 93CA1771

• Citation: 902 P.2d 392
• Decision Date: 01 December 1994
• Docket Number: No. 93CA1771,93CA1771
• Parties: 10 IER Cases 942 Cynthia PICKELL, Plaintiff-Appellee and Cross-Appellant, v. ARIZONA COMPONENTS COMPANY, Defendant-Appellant and Cross-Appellee. . III
• Court: Court of Appeals of Colorado

Page 392

902 P.2d 392

10 IER Cases 942

Cynthia PICKELL, Plaintiff-Appellee and Cross-Appellant, v. ARIZONA COMPONENTS COMPANY, Defendant-Appellant and Cross-Appellee.

No. 93CA1771.

Colorado Court of Appeals,

Div. III.

Dec. 1, 1994.

Rehearing Denied Jan. 19, 1995.

Certiorari Granted Sept. 5, 1995.

David P. Kozma, Denver, for plaintiff-appellee and cross-appellant.

Laurence J. Rich, James N. Sigman, Englewood, for defendant-appellant and cross-appellee.

Opinion by Judge DAVIDSON.

In this claim for promissory estoppel, defendant, Arizona Components Company, appeals from the judgment in favor of plaintiff, Cynthia Pickell, entered after a bench trial. Plaintiff cross-appeals from the trial court's denial of her motion to amend her complaint. We affirm in part and reverse in part.

Plaintiff was employed by an electronic components supplier. When defendant decided to expand its competing business in the Denver area, it contacted plaintiff and offered her a position. Although the new Denver office was to be a "start up" venture, defendant told her it would have the backing of the more established Phoenix, Arizona, office.

Plaintiff subsequently left her former employment and began work for defendant. Approximately two months later, defendant closed the Denver office and terminated plaintiff's employment.

As pertinent here, plaintiff brought suit on a single claim of promissory estoppel. Specifically, she alleged that defendant induced her to leave her previous position by promising employment, employment related benefits, and higher compensation.

At the close of plaintiff's evidence, defendant moved for a directed verdict on the ground that the existence of an at-will employment contract precluded plaintiff's claim.

The trial court denied the motion without comment and, after presentation of all evidence, found that defendant had told plaintiff "if she came and worked for [it], she would have employment with a better job, better benefits, and better future prospects that she currently had." The court further found that, by so doing, defendant "certainly induced the action on the plaintiff's part in leaving her job and that the promises that [it] made were promises which would reasonably induce such action."

The court then specifically found that defendant had promised plaintiff a job for a length of time which "was certainly not only two months," but was instead "for a reasonable time." Based upon this finding, the trial court concluded that one year constituted a reasonable time and consequently awarded plaintiff one year's salary as damages.

I.

Promissory estoppel is available as a remedy only in the absence of an otherwise enforceable contract. Scott Co. v. MK-Ferguson Co., 832 P.2d 1000 (Colo.App.1991); see also Gilmore v. Ute City Mortgage Co., 660 F.Supp. 437 (D.Colo.1986). If there has been mutual agreement between the parties as to all the essential terms of a contract, the alternative remedy of promissory estoppel is not applicable. See Vigoda v. Denver Urban Renewal Authority, 646 P.2d 900 (Colo.1982).

In accordance with these principles, defendant argues that the existence of an express at-will employment contract precludes plaintiff from asserting a claim for promissory estoppel based upon representations inconsistent with its terms and that, therefore, the judgment in favor of plaintiff must be reversed.

In response, plaintiff suggests that there was no contract because the parties had never completed negotiations on its terms. Her primary contention, however, is that, even if there was a contract, she is entitled to enforce defendant's promises to her because the promises were: (1) ancillary to any employment contract; or (2) constituted an unconscionable injury; or (3) were supported by special consideration.

We agree with defendant that there was an at-will contract for employment and that plaintiff is not entitled to assert promissory estoppel on any of the three theories she advances.

II.

We first consider, and reject, plaintiff's contention that she had no contract with defendant.

The general rule in Colorado is that, in the absence of special consideration or an express stipulation as to the length of employment, employment for an indefinite term constitutes an "at-will" contract that is terminable at any time. Lampe v. Presbyterian Medical Center, 41 Colo.App. 465, 590 P.2d 513 (1978); Justice v. Stanley Aviation Corp., 35 Colo.App. 1, 530 P.2d 984 (1974); see also Roberts v. Conoco, Inc., 717 F.Supp. 724 (D.Colo.1989).

The undisputed evidence here showed that plaintiff's employment was for no definite length of time. All evidence in the record indicated that the parties had completely negotiated the terms of plaintiff's employment contract by the time she started working for defendant. That her employment was to be for an indefinite term merely demonstrates that the parties intended to enter into a typical at-will employment agreement and does not reflect a failure to agree upon all essential terms of the contract. Thus, plaintiff's suggestion notwithstanding, the absence of a definite term of employment does not negate the existence of a valid employment contract. See Schur v. Storage Technology Corp., 878 P.2d 51 (Colo.App.1994); see also Burrill v. GTE Government Systems, Corp., 804 F.Supp. 1356 (D.Colo.1992).

III.

At-will employment is terminable at any time by either party, with or without cause. See Lampe v. Presbyterian Medical Center, supra. Promises which are ancillary to an otherwise at-will employment arrangement, such as termination procedures contained in employee manuals, may support a claim for promissory estoppel because in such situations the employer has represented to that employee, who has relied on such promise to his or her detriment, that it would follow these procedures when discontinuing the employment. See Churchey v. Adolph Coors Co., 759 P.2d 1336 (Colo.1988); Continental Air Lines, Inc. v. Keenan, 731 P.2d 708 (Colo.1987).

Accordingly, plaintiff argues, even if she had an express at-will employment contract, she has a valid promissory estoppel claim because she relied to her detriment upon ancillary representations that the Denver office had the support of the successful Arizona office and that she would receive future benefits, such as health insurance and yearly bonuses, in addition to her salary. We disagree.

A.

Defendant's representation that the Denver office would receive assistance from the Arizona office, as plaintiff asserts, was not a material term of plaintiff's at-will employment contract. Moreover, even if we assume without deciding, that such representation constitutes an ancillary promise, nonetheless, the undisputed evidence at trial was that support from the Phoenix office, in fact, was supplied in the form of services and resources until the Denver office closed. Plaintiff has not alleged that defendant represented either that this support would continue for any particular period of time or that it would follow any particular procedures before withdrawing this support, closing the Denver office, and terminating her employment. Thus, in this regard, no ancillary promise, even if sufficient to support a claim for promissory estoppel, was unfulfilled.

B.

Plaintiff argues that, nevertheless, the additional representation by defendant that she would receive benefits in addition to her salary resulted in "unconscionable injury" sufficient to support a promissory estoppel claim under Chidester v. Eastern Gas & Fuel Associates, 859 P.2d 222 (Colo.App.1992). We disagree. The benefits plaintiff was to receive were part of, not ancillary to, her contract of employment. Further, plaintiff misconstrues the scope of the Chidester decision.

In Chidester v. Eastern Gas & Fuel Associates, supra, the plaintiffs were offered key positions with an oil and gas venture and were promised a minimum of five years to make it a viable operation. This employment contract, which was oral, could not be performed within one year and, hence, the employer defended by asserting the statute of frauds. See § 38-10-112(1)(a), C.R.S. (1982 Repl.Vol. 16A) (any contract not performable within one year, is void, unless it is in writing and signed by the party to be charged).

The court held that the contract was unenforceable because even partial performance of services and partial payment of compensation did not take the contract out of the statute of frauds. It concluded, however, that because the plaintiffs had asserted reasonable reliance upon representations concerning future financial rewards other than salary, they had alleged sufficient unconscionable injury to justify assertion of a promissory estoppel claim as a remedy for damages resulting from the alleged breach of the otherwise unenforceable oral contract. See Annotation, Action by Employee in Reliance on Employment Contract Which Violates Statute of Frauds as Rendering Contract Enforceable, 54 A.L.R.3d 715 (1974).

Thus, by permitting the plaintiffs to assert a promissory estoppel claim based on an alleged promise for future financial rewards, the court allowed for an equitable remedy in the absence of an enforceable contract.

In contrast, an oral employment contract which--like plaintiff's contract here--is for an indefinite period of time is not barred by the statute of frauds because performance is possible within one year. See Krause v. Dresser Industries, Inc., 910 F.2d 674 (10th Cir.1990) (applying Oklahoma law); Toussaint v. Blue Cross & Blue Shield, 408 Mich. 579, 292 N.W.2d 880 (1980); Kestenbaum v. Pennzoil Co., 108 N.M. 20, 766 P.2d 280 (1988); cf. Woodall v. Davis-Creswell Manufacturing Co., 9 Colo.App. 198, 48 P. 670 (1897) (statute of frauds applies only to employment contracts which are by their terms impossible of performance in one year).

We are aware that dicta in Chidester v. Eastern Gas & Fuel Associates, supra, suggests that at-will employment contracts fall under the...