Title: WERCS v. CAPSHAW

State: wyoming

Issuer: Wyoming Supreme Court

Document:

WERCS v. CAPSHAW2004 WY 8694 P.3d 421Case Number: 02-185Decided: 07/20/2004
APRIL 
TERM, A.D. 2004

 

                                                                                                            

 

WERCS, 
a Wyoming corporation,

dba 
WYOMING FINANCIAL GROUP,

 

Appellant(Defendant),

 

v.

 

MICHAEL 
R. CAPSHAW,

 

Appellee(Plaintiff).

 

Appeal 
from the District Court of Natrona County

 

Representing 
Appellant:

Timothy 
M. Stubson of Brown, Drew & Massey, LLP, Casper, Wyoming; and J. Michael 
Tabor, West Palm Beach, Florida.  
Argument by Mr. Tabor.

 

Representing 
Appellee:

Mark 
W. Gifford, Casper, Wyoming 

 

Before 
HILL, C.J., and GOLDEN, LEHMAN, KITE, and VOIGT, JJ.

 

GOLDEN, 
J., delivers 
the opinion of the Court; LEHMAN, J., files a specially concurring 
opinion.

 

 

GOLDEN, 
Justice.

[¶1]           
In 
this wrongful employment termination case, the jury, having received appropriate 
instructions of applicable Wyoming employment law and a special verdict form, 
returned a special verdict finding that the employer had breached an oral 
employment contract which required cause for termination, and awarded the 
employee $223,656.00 as damages.  On 
appeal, the employer assigns error in the trial court's pretrial summary 
judgment determination that the employee could advance at trial the doctrine of 
substantial performance to counter the employer's affirmative defense that the 
statute of frauds required that a contract incapable of being performed within 
one year must be in writing and signed by the party to be bound.  We affirm.

 

 

ISSUES

 

[¶2]           
The 
employer states the issues on appeal to be:

 

1.                  
Whether 
the district court erred in applying the substantial performance doctrine to an 
employment agreement governed by the presumption of at-will 
employment.

 

2.                  
Whether 
in light of the equitable principles underlying the doctrine of substantial 
performance, the district court erred by applying it in a case where [employee] 
was paid for the performance he provided.

 

The 
employee counters with this statement of the issues:

 

1.                  
Can 
[employer] raise an issue on appeal that it waived by virtue of its failure to 
move for judgment as a matter of law in the trial court?

 

2.                  
Did 
the statute of frauds apply to a contract of employment of indefinite 
duration?

 

3.                  
Does 
the statute of frauds apply to a contract of employment that could be performed 
within one year, i.e., if [employee] were terminated for 
cause?

 

4.                  
Even 
if his contract were for a specific duration, does [employee's] part performance 
take the contract out of the statute of frauds?

 

5.                  
Do 
the equities favor enforcement of [employee's] contract of 
employment?

 

 

FACTS

 

[¶3]           
The 
employer, Wyoming Employee Resource Capital and Service (WERCS), is a Wyoming 
corporation, doing business as Wyoming Financial Group, with its home office in 
Casper, Wyoming.  WERCS serves as a 
holding company for a number of subsidiaries including Wyoming Financial 
Properties (WFP).  In the spring of 
1995, WERCS was acquiring ownership of a number of properties, performing 
remodels on properties, and negotiating to manage other buildings.  Because of this business activity and 
the growth of WFP, its properties subsidiary, WERCS wanted to hire a manager for 
WFP.  Robert Moberly, WERCS' chief 
operating officer, talked to Michael R. Capshaw about taking the position as 
manager of WFP.  At the time of 
their discussions, Capshaw owned a small residential construction company.  The two men discussed the matter several 
times before Capshaw agreed to take the position.  At the final meeting between the two men 
in Moberly's office, Moberly gave Capshaw a sheet of paper on which Moberly had 
written separate columns outlining salary, bonus, and contributions to an 
employee stock option plan for the first five years of employment as manager of 
WFP.  Other figures which Moberly 
had written on the sheet of paper projected compensation if certain 
contingencies were met, such as WFP's acquisition of additional property 
management contracts.  The two men 
discussed Moberly's notations on the sheet of paper, and Capshaw accepted 
Moberly's offer on behalf of WERCS to become WFP's manager.  Although Capshaw signed the sheet of 
paper, neither Moberly nor any other WERCS representative did.  WERCS and Capshaw agree that theirs was 
an oral contract of employment.  
During Capshaw's employment with WERCS from March 1995 to June 1998, his 
duties as manager, and later as president, of WFP included handling leasing 
arrangements and tending the needs of tenants in the office buildings owned by 
WFP, overseeing extensive remodeling in WFP's buildings, remodeling homes owned 
by WERCS' executives and their relatives, and undertaking construction of 
several townhomes that would eventually be offered for sale to the 
public.

            

[¶4]           
In 
June 1998, WERCS fired Capshaw because of alleged deficiencies in his work 
performance including his discretionary spending on tree trimming, his work on 
two remodeling projects, his voiced opposition to WERCS' purchase of a 
check-cashing business which was owned by Moberly's wife and sister-in-law, and 
his alleged plot to set up a WERCS' executive on an unauthorized-practice-of-law 
claim.

 

 

 

[¶5]           
Following 
his firing, Capshaw sued WERCS for wrongful termination of employment without 
good cause.  In his complaint, he 
sought relief under five claims:  
breach of contract, promissory estoppel, breach of the implied covenant 
of good faith and fair dealing, retaliatory firing in violation of public 
policy, and wasting corporate assets.  
With respect to the breach of employment contract claim in his complaint, 
Capshaw averred, among other things, that WERCS offered and he accepted 
employment for a minimum of five years with compensation as embodied on the 
sheet of paper on which Moberly had written such compensation information and 
which Moberly had given to him at their meeting in March 1995 at Moberly's 
office.  Capshaw also averred, among 
other things, that an implicit term of the job offer was that WERCS would not 
terminate his employment without good cause during the initial five years and 
for so long thereafter as Capshaw satisfactorily preformed his job duties.  Finally, Capshaw averred, among other 
things, that WERCS wrongfully fired him without warning or cause, giving as 
reasons several alleged deficiencies in his work 
performance.

 

[¶6]           
WERCS 
filed an answer and asserted a counterclaim.  In that part of its answer which 
addressed Capshaw's breach of employment contract claim, WERCS claimed, among 
other things, that Capshaw was an employee at-will, and WERCS denied that his 
employment could not be terminated without good cause during the initial five 
years and as long as he satisfactorily performed his job duties.  WERCS admitted that it had fired Capshaw 
but denied it had wrongfully fired him.  
WERCS pleaded a number of affirmative defenses, one of those being that 
Capshaw's claims were barred by the statute of frauds.

 

[¶7]           
The 
parties engaged in discovery, after which WERCS moved for summary judgment on 
Capshaw's five claims.  With respect 
to the breach of employment contract claim, WERCS argued that Capshaw had 
alleged he was hired for a specific term of five years, i.e., an 
employment contract of definite duration; but WERCS maintained that Capshaw's 
employment was for an indefinite duration and he was, therefore, an at-will 
employee whom WERCS could fire with or without a reason.  Arguing in the alternative, WERCS 
contended that, even assuming Capshaw's employment was of five years definite 
duration, and not of indefinite duration as WERCS' asserted, a provision of 
Wyoming's statute of frauds, Wyo. Stat. Ann. § 1-23-105(a)(i), required a 
writing signed by the party to be bound, namely WERCS, or the contract would be 
deemed void.  Because no such 
writing existed in this case, WERCS reasoned, Capshaw's claim failed.  Next, WERCS argued that the doctrine of 
substantial performance, as an exception to the application of the statute of 
frauds, was not recognized under Wyoming law in the case of a 
performance-of-services contract, such as an employment 
contract.

 

[¶8]           
In 
Capshaw's response to WERCS' argument on the breach of employment contract 
claim, Capshaw did not contend that the employment contract was one of definite 
duration; rather, referencing his affidavit attached to his memorandum in 
opposition to WERCS' summary judgment motion, Capshaw stated that at their 
meeting in Moberly's office in March 1995, Moberly gave him a sheet of paper 
which showed his guaranteed compensation and said that Capshaw was guaranteed 
that compensation for the first five years of his employment and that his 
compensation could only increase after the first five years.  Capshaw also argued that WERCS' statute 
of frauds affirmative defense failed because he substantially performed his 
employment duties for more than three years before WERCS wrongfully fired 
him.  He also argued that whether 
substantial performance occurred was a question of fact for the jury to decide 
at trial.

 

[¶9]           
At 
the conclusion of the summary judgment hearing, the district court denied WERCS' 
motion with respect to Capshaw's breach of employment contract claim.  Identifying the primary issue to be 
"whether there has been sufficient substantial performance to remove this from 
the statute of frauds as an implied or oral contract," the district court 
rejected WERCS' argument of the inapplicability of substantial performance, 
stated that the court could appropriately consider substantial performance, and 
concluded that "all of these matters involving substantial performance are 
either questions of fact or mixed questions of law or fact for a jury to resolve 
. . . ."

 

[¶10]      With 
respect to WERCS' summary judgment motion on Capshaw's other four claims, the 
district court denied it on the promissory estoppel claim, granted it on the 
breach of the implied covenant of good faith and fair dealing claim, granted it 
(only to later reinstate it) on the retaliatory discharge claim, and did not 
rule on the wasting corporate assets claim because Capshaw had withdrawn 
it.

 

 

Trial

 

[¶11]      The 
parties tried the case to a jury on Capshaw's claims of breach of employment 
contract, promissory estoppel, and retaliatory discharge in violation of public 
policy and on WERCS' counterclaim that Capshaw had violated his duty of good 
faith and loyalty to WERCS.  The 
district judge thoroughly instructed the jury on the applicable law.  WERCS did not object to any of these 
jury instructions and, on appeal, does not assign any error about these jury 
instructions.  After deliberating on 
the verdict, the jury returned its verdict on the special verdict form provided 
by the district court.  WERCS did 
not object at trial to that special verdict form and, on appeal, does not assign 
any error about that special verdict form.

 

[¶12]      On 
the special verdict form returned by the jury, under the heading "Breach of 
Contract Claim," the jury answered "yes" to the single question posed:  "Was there a contract of employment 
between Michael Capshaw and [WERCS] that required good cause for 
discharge?"  Following the 
instructions on that special verdict form, the jury proceeded to Question 5 on 
the special verdict form, thus not answering the questions under either the 
"Promissory Estoppel" heading or the "Violation Of Public Policy" heading.  At Question 5, the jury answered "No" to 
the question:  "Did [WERCS] have 
good cause to discharge Capshaw?"  
Following the instructions on the special verdict form, the jury 
proceeded to Question 6 and answered that $223,656.00 was the amount of damages 
Capshaw suffered because of WERCS' actions.  Following the instructions on the 
special verdict form, the jury proceeded to Question 7, which concerned WERCS' 
counterclaim, and answered that Capshaw did not violate his duty of good faith 
and loyalty to WERCS.  Again 
following the instructions on the special verdict form, the jury proceeded to 
Question 9 and answered that Capshaw did not receive payments from WERCS to 
which he was not entitled.

 

[¶13]      The 
district court entered its judgment on the special jury verdict.  WERCS has timely appealed, raising the 
issues earlier identified.

 

 

DISCUSSION

 

Standard 
Of Review

 

[¶14]      WERCS 
asserts that its appeal addresses the district court's summary judgment 
determination of law concerning the applicability of the statute of frauds 
generally and substantial performance specifically.  Wilkinson v. State ex rel. Wyoming 
Workers' Safety and Comp. Div., 991 P.2d 1228, 1233 n.3 (Wyo. 2000).  A determination of law is, of course, 
subject to de novo review by this Court.

 

[¶15]      Capshaw 
disagrees with the standard of review advanced by WERCS because Capshaw 
disagrees with WERCS' view of the case in light of the special verdict returned 
by the jury.  Because the jury found 
on the special verdict form that Capshaw had an employment contract that could 
be terminated only for good cause and that WERCS did not have good cause to 
terminate that contract, Capshaw asserts that this Court should apply a 
sufficiency-of-the-evidence standard of review.  Daley v. Wenzel,  2001 WY 80, ¶24, 30 P.3d 547, ¶24 (Wyo. 
2001).

 

[¶16]      That 
the district court and the parties submitted a special verdict under W.R.C.P. 
49(a) to be answered by the jury is of paramount importance in our resolution of 
this appeal.  Neither party, 
however, has addressed that rule and that importance.  We must, however, because the rule 
establishes the standard of review which we must apply in this appeal.  The subject of special verdicts is 
addressed in W.R.C.P. 49(a), which is similar to its federal rule 
counterpart.  Under the pleadings 
and evidence in this case, several issues of fact emerged at trial, most notably 
whether the oral employment contract was at-will, was of indefinite duration, 
was of definite duration (five years), and whether there was substantial 
performance if the contract was of definite duration of more than one year.  Special findings on each of these issues 
of fact could have properly been made had the special verdict form so 
provided.  Our inspection of the 
special verdict form submitted by the district court and the parties to the jury 
reveals, however, that some of these issues of fact raised by the pleadings and 
by the evidence were omitted.  The 
only issues of fact upon which the jury was to make special findings concerning 
Capshaw's breach of employment contract claim and WERCS' defenses to that claim 
were "[w]as there a contract of employment . . . that required good cause for 
discharge?" and "[d]id [WERCS] have good cause to discharge . . . Capshaw?"  Omitted issues of fact were "was the 
oral employment contract at-will,"1 "was the oral employment contract 
of indefinite duration," "was the oral employment contract of definite duration 
(five years)," and "if the oral employment contract was of definite duration 
(five years), was there substantial performance by Capshaw."  Under W.R.C.P. 49(a), if any issue of 
fact raised by the pleadings or by the evidence is omitted from the special 
verdict form, "each party waives the right to a trial by jury of the issue so 
omitted unless before the jury retires the party demands its submission to the 
jury."  Further, the trial court may 
make a finding as to an issue of fact omitted without such demand.  W.R.C.P. 49(a).  But, if the trial court fails to do so, 
the trial court "shall be deemed to have made a finding in accord with the 
judgment on the special verdict."  
Id. Our research has not found any Wyoming cases involving the 
application of W.R.C.P. 49(a)'s provisions to a situation like the one before us 
in this appeal.  Our research has 
found, however, several federal cases involving the application of F.R.C.P. 
49(a)'s provisions to situations somewhat similar to those here.  Because of the similarity between 
W.R.C.P. 49(a) and F.R.C.P. 49(a), we find these federal cases helpful.  They are Ansin v. River Oaks 
Furniture, Inc., 105 F.3d 745 (1st Cir. 1997); AG Systems, 
Inc. v. United Decorative Plastics Corp., 55 F.3d 970 (4th Cir. 
1995); Hiltgen v. Sumrall, 47 F.3d 695 (5th Cir. 1995); and 
Hyde v. Land-of-Sky Regional Council, 572 F.2d 988 (4th Cir. 
1978).

 

[¶17]      By 
the pleadings and by the evidence, WERCS maintained that the oral employment 
contract was either at-will or, alternatively, one incapable of being performed 
within one year -- one of five years' duration.  As to the latter type of contract, WERCS 
asserted the affirmative defense of the statute of frauds, i.e., the 
contract must be in writing and signed by WERCS, the party to be bound.  On appeal, the sole error raised by 
WERCS is the trial court's ruling, when denying WERCS' summary judgment, that 
allowed Capshaw to raise at trial the doctrine of substantial performance to 
counter WERCS' statute of frauds affirmative defense.  As we shall show in the discussion that 
follows, WERCS faces a serious problem created by WERCS' failure to seek special 
findings on the special verdict form on the factual issues whether the 
employment contract was at-will; was of more than one year's duration (contract 
of definite duration); and if it was one of more than one year's duration, 
whether Capshaw substantially performed.  
As W.R.C.P. 49(a) and the federal cases referenced above reveal, serious 
consequences befall a party who omits from a special verdict form issues of fact 
crucial to that omitting party's litigative success.

 

The 
Correct View of This Case

 

[¶18]      Before 
trial, the district court denied WERCS' motion for summary judgment on Capshaw's 
breach of employment contract claim.  
At the conclusion of the hearing on that motion, the district court 
stated that the statute of frauds, asserted as an affirmative defense by WERCS, 
and the doctrine of substantial performance, asserted as an exception to the 
statute of frauds by Capshaw, were at play in the case.  Further, the district court concluded 
that "all of these matters involving substantial performance" presented 
questions of fact or mixed questions of law or fact for a jury to 
resolve.

 

[¶19]      In 
the presentation of the case at trial, the parties presented evidence from which 
the jury had to decide what kind of employment contract this was and what were 
its terms.  The only feature of the 
contract on which the parties agreed was that it was oral, not written.  Capshaw maintains that evidence was 
received from which a jury could find a contract of indefinite duration, with 
specified, guaranteed income during the first five years, and at least $100,000 
each year thereafter as long as he satisfactorily performed his job duties; he 
maintains these assurances gave rise to an implied covenant that WERCS would not 
fire him without good cause.  On the 
other hand, WERCS maintains that evidence was received from which a jury could 
find an at-will contract for an indefinite term with no covenant that WERCS 
could fire Capshaw only for cause; and WERCS also maintains that Capshaw 
presented evidence and argument from which a jury could find a contract of 
definite duration, namely, a duration of five years.  In defense of that type of contract, 
WERCS pressed the affirmative defense of the statute of frauds.  And, in response to that affirmative 
defense, Capshaw pressed the substantial performance exception to the statute of 
frauds.

 

[¶20]      It 
was in this posture that the parties submitted the case to the jury.  That this is so is unquestionably 
confirmed by the pertinent instructions of law given by the district court to 
the jury after the evidence was closed and the parties had rested their 
case.  As we know, a party is 
entitled to have the jury instructed upon its theory of the case if that theory 
is supported by competent evidence.  
Thunder Hawk v. Union Pacific R. Co., 891 P.2d 773, 783 (Wyo. 
1995).  The jury instructions most 
pertinent to Capshaw's breach of employment contract claim and WERCS' defenses 
to that claim included Jury Instructions Nos. 11 through 24.  Jury Instruction No. 11 stated the 
parties' contentions. Jury Instruction No. 12 stated the "at-will" presumption 
under Wyoming law and Capshaw's burden to prove the existence of a "for cause" 
employment contract.  Jury 
Instruction No. 13 described the nature of an "at-will" employment.  Jury Instruction No. 14 instructed that 
the parties may alter an "at-will" employment, an express contract may be either 
written or oral, and an implied for-cause contract may arise from the parties' 
conduct and an employer's course of dealing.  Jury Instruction No. 15 instructed that 
offer, acceptance, and consideration were the elements of a binding contract; 
and that the parties' mutual assent, by words or actions, was necessary for 
contract formation.  Jury 
Instruction No. 15A defined consideration.  
Jury Instruction No. 16 identified the four elements of the breach of 
employment contract claim which Capshaw must prove.  Jury Instruction No. 17 instructed that 
evidence of the terms of the employment contract may be found in the parties' 
actions after entering into the contract and the parties' performance under the 
contract.  Jury Instruction No. 18 
instructed on the statute of frauds and the substantial performance exception to 
it.  Jury Instruction No. 19 
explained the concept of substantial performance.  Jury Instruction No. 20 explained WERCS' 
contention about written "at-will" disclaimers signed by Capshaw  in 1996 and 1997.  Jury Instruction No. 21 instructed that 
if the jury decided that the parties' employment contract was for a specified 
time, then WERCS could terminate Capshaw only "for cause;" and the instruction 
generally, and briefly, explained "for cause."  Jury Instruction No. 22 explained 
removal of a corporate officer by the corporation's board of directors.  Jury Instruction No. 23 explained an 
employer's use of information about a terminated employee obtained after the 
employee's termination.  Jury 
Instruction No. 24 instructed on recoverable damages if the jury found breach of 
contract.  In these jury 
instructions, then, the trial court presented the law applicable to the 
breach-of-employment-contract issues actually raised by the evidence.  Thunder Hawk, 891 P.2d  at 783; 
Baier v. State, 891 P.2d 754, 756 (Wyo. 1995).  To reiterate, Capshaw maintained that 
evidence was received from which the jury could find an implied contract of 
indefinite duration, with specified guaranteed income during the first five 
years, and at least $100,000 each year thereafter so long as he satisfactorily 
performed his job duties, and assurances that WERCS would not fire him without 
good cause.  On the other hand, 
WERCS maintained that evidence was received from which the jury could find 
either (1) an "at-will" contract for an indefinite term with no covenant that 
WERCS could fire Capshaw only for cause; or (2) a contract of definite, 
specified duration, namely, five years.  
If the jury had found this latter type of contract, then WERCS relied on 
the statute of frauds jury instruction and Capshaw relied on the substantial 
performance exception jury instruction.

 

[¶21]      As 
we inspect the special verdict form submitted without objection to the jury 
along with the jury instructions set forth above, we see that the special 
verdict form did not ask the jury to find whether the employment contract was 
either (1) a contract of indefinite duration with an implied "for cause" 
requirement, as Capshaw maintained; (2) an "at-will" contract of indefinite 
duration without a "for cause" requirement, as WERCS maintained; (3) a contract 
of definite, specified five years' duration, as WERCS alternatively maintained; 
or (4) if it was a contract of definite duration, then whether Capshaw 
substantially performed.  Instead, 
the special verdict form asked only whether there existed an employment contract 
requiring good cause for discharge.  
And, as we have noted earlier, the jury answered in the affirmative.  It is, then, at this point that we must 
apply W.R.C.P. 49(a)'s provisions and the understanding of those provisions 
which the federal cases give us.  
WERCS' sole issue on appeal is that the trial court's summary judgment 
ruling  which allowed Capshaw to raise at trial the substantial performance 
exception to WERCS' affirmative defense of the statute of frauds  resulted in 
the special verdict and judgment entered against WERCS at trial.  But we do not know that and we will 
never know that because WERCS did not seek the jury's special written finding 
upon whether the contract was of definite duration and whether Capshaw 
substantially performed.  By not 
submitting those issues of fact to the jury on the special verdict form and by 
not demanding their submission to the jury before it retired, WERCS waived its 
right to have those issues tried by the jury.  W.R.C.P. 49(a); Hyde v. Land-of-Sky 
Regional Council, 572 F.2d  at 991.  
The trial court is deemed to have made a finding on those issues in 
accord with the judgment on the special verdict.  Id. As further explained in 
Ansin v. River Oaks Furniture, Inc., addressing the defendant's failure 
to submit affirmative defense issues on the special verdict 
form:

 

Under 
Rule 49(a), if the district court does not make a finding on an issue not 
submitted to the jury, "it will be presumed on appeal that the lower court made 
whatever finding was necessary in order to support the judgment that was 
entered."  9A Wright & Miller, 
Federal Practice and Procedure, § 2507, at 185-86 (1995); see also 
Kavanaugh v. Greenlee Tool Co., 944 F.2d 7, 11-12 (1st Cir. 
1991).  As the district court 
entered a judgment for the plaintiffs, we presume that it found that defendants 
had not proven the claimed equitable defenses.

 

105 F.3d  at 756.

 

[¶22]      Applying 
this understanding of Rule 49(a)'s provisions to WERCS' appeal, because the 
trial court did not make a finding on the issues of fact not submitted by WERCS 
to the jury  whether the employment contract was one of definite duration of 
more than one year and thus within the statute of frauds and whether Capshaw 
substantially performed  we presume on appeal that the trial court made 
whatever finding was necessary in order to support the judgment that was 
entered.  As the trial court entered 
a judgment for Capshaw, we presume that the trial court found that WERCS had not 
proven the claimed defenses and affirmative defenses.  Accord, AG Systems, Inc. v. United 
Decorative Plastics Corp., 55 F.3d  at 974.  The proper standard of review requires 
this Court to adopt a view of the case that makes the jury's answers in the 
special verdict form consistent.  
Hiltgen v. Sumrall, 47 F.3d  at 701.  Based upon the evidence and the jury 
instructions, the jury could have found that a "for cause" employment contract 
existed, without ever finding that it was for a definite term of more than one 
year which would be within the statute of frauds, and without ever having to 
find whether Capshaw substantially performed.  Thus, the trial court's pre-trial 
summary judgment rulings of which WERCS' complains actually played no part in 
the jury's special verdict.  We 
affirm the judgment entered on the jury's special verdict in all 
respects.

 

LEHMAN, 
Justice, concurring.

 

[¶23]   I 
concur with the majority's discussion of W.R.C.P. 49(a) and the consequences 
that befall a party who fails to include crucial factual issues on the special 
verdict form.  I also agree that, 
because the special verdict form failed to specify on what grounds the jury 
found a for-cause contract, it is possible that the jury did not find a 
five-year contract or rely on substantial performance.  I, therefore, do not dispute that WERCS 
faces the problems on appeal that the majority outlines.  However, I believe that some may read 
the majority opinion as embracing the district court's determination that 
substantial performance can be applied in employment cases.  To any extent the opinion may be read 
that way, I do not agree.  

 

[¶24]   As noted by the majority, the 
district court specifically found that the substantial performance exception was 
at play in this case.  ¶18.  Throughout the opinion the majority 
references WERCS' obligation to submit certain findings to the jury, one of 
which is if the contract was of definite duration whether Capshaw substantially 
performed.  Specifically, in ¶21 the 
majority says:  "By not submitting 
those issues of fact to the jury on the special verdict form and by not 
demanding their submission to the jury before it retires, WERCS waived its right 
to have those issues tried by the jury.  
W.R.C.P. 49(a)."  It is these 
statements that cause me concern.  
Even though the opinion is correct to hold WERCS responsible for not 
including those specific findings on the verdict form under the circumstances of 
this case, I would clarify that we have never endorsed the proposition that 
substantial performance can be applied to save an employment contract from the 
statute of frauds.    

 

[¶25]   It is certainly true that 
"[w]hether or not [a party] substantially performed under the agreements is a 
question of fact."  Ferguson v. 
Reed, 822 P.2d 1287, 1290 (Wyo. 1991).  
As such, in instances in which substantial performance can be used as an 
exception to the statute of frauds, such a finding is a proper question for the 
jury.  However, there is some doubt 
that the substantial performance doctrine is applicable in the context of 
employment contracts.  This is due 
to the fact that when a contract of employment states a definite duration, 
dismissal only for cause is presumed.  
Wilder v. Cody Country Chamber of Commerce, 868 P.2d 211, 217 
(Wyo. 1994).  To be entitled to this 
presumption, however, a party must be able to overcome the two restrictions 
incorporated in the presumption, one of which is "performance under a contract 
of definite duration is within the statute of frauds, Wyo. Stat. § 1-23-105 
(1988), making evidence of a writing necessary if the terms are not performed 
within one year."  Id., at 
218.  

 

[¶26]   The doctrine of substantial 
performance is an equitable exception to the statute of frauds.  Fowler v. Fowler, 933 P.2d 502, 
504 (Wyo. 1997).  The purpose of the 
doctrine of substantial performance is to assure that a party who has performed 
under an oral agreement is not denied the benefit of that performance under the 
guise of the statute of frauds or where it is impractical to compensate the 
performing party for the value of his performance.   Exxon Corp. v. Breezevale 
Ltd., 82 S.W.3d 429, 439 (Tex.App. 2002); see also Davis v. Davis, 
855 P.2d 342, 346 (Wyo. 1993); Fischer v. First Chicago Capital Markets, 
Inc., 195 F.3d 279 (7th Cir. 1999).

 

[¶27]   Normally, in cases of substantial 
performance, the performance of the obligations imposed by the contract provides 
evidence of the existence of the parties' intent to enter a contractual 
relationship.  Such is not generally 
the case with employment contracts.  
See Dumas v. Auto Club Ins. Assoc., 473 N.W.2d 652, 660-661 
(Mich. 1991).  When considering 
exceptions to the statute of frauds, it is important to be mindful of the 
purpose of the statute of frauds.  
The statute of frauds is designed to prevent the enforcement of alleged 
promises that never were made.  
Metz Beverage Co. v. Wyoming Beverage, Inc., 2002 WY 21, ¶18, 39 P.3d 1051, ¶18 (Wyo. 2002).  In 
general terms, the statute of frauds requires that contracts of a certain type 
be shown by trustworthy evidence to avoid the uncertainty of casual promises and 
parol testimony.  See generally 
Fowler v. Fowler, 933 P.2d 502; Yates v. Ball, 181 So. 341, 344 (Fla. 
1937).  

 

[¶28]   Thus, when substantial performance 
applies, the parties' performance serves as proof of the parties' intent under 
the contract.  The performance 
should be generally referable to the asserted contract and nothing else.  Rowland v. Ewell, 174 So. 2d 78, 
80 (Flo.App. 1965); Exxon Corp. v. Breezevale Ltd., 82 S.W.3d  at 439; 
Spears v. Warr, 44 P.3d 742,751 (Utah 2002).  While part performance of an employment 
contract may certainly reference a term-of-years contract, it may just as easily 
also reference an at-will employment relationship.  Performance in these instances does 
nothing to establish the terms of the employment agreement.  "Performance will remove an alleged 
contract from operation of the statute of frauds only when it is unequivocally 
referable to that contract."  
Throndson v. Comm'r of Internal Rev., 457 F.2d 1022, 1026 (9th Cir. 1972).  

 

[¶29]   The Supreme Court of Minnesota has 
stated:  "[I]t is generally held 
that the uncompleted part performance of an oral contract for employment, not to 
be performed within 1 year, does not take the contract out of the statute of 
frauds."   Roaderick v. Lull 
Engineering Co., Inc., 208 N.W.2d 761, 763 (Minn. 1973); see also Rowland 
v. Ewell, 174 So. 2d 78, 80 (Fla.App. 1965).  If it were otherwise, every employment 
contract would be affected and at-will employment would be turned on its 
head.  Allowing performance in the 
form of employment, to act as a bar to the statute of frauds would render the 
relevant provision of the statute of frauds meaningless.  Any contract where the employee had 
begun work and received a paycheck would be protected from the application of 
that statute.  Payne v. Mill Race 
Inn, 504 N.E.2d 193, 199-200 (Ill.App. 1987) (explaining the holding in 
Mapes v. Kalva Corp., 386 N.E.2d 148 (Ill.App. 1979)).  Thus, it appears the doctrine of 
substantial performance cannot be used as an exception to the statute of frauds 
in the context of employment contracts.

 

[¶30]   As such, I do not embrace the 
district court's summary judgment ruling.  
However, because we do not know on what grounds the jury found, because 
WERCS did not seek the jury's special written finding on whether the contract 
was of definite duration and whether Capshaw substantially performed, I 
concur.    

 

 

FOOTNOTES

1The 
jury's finding that there was a contract of employment that required good cause 
for discharge was also a finding that there was no at-will oral employment 
contract; however, including the at-will employment question would not be 
superfluous if it made certain the jury consistently followed all 
instructions.