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Parties Involved:
General Electric Credit Corporation
Appellee
Warren J. Meacham
Appellant

Document Text:

FILED 

United States Court of Appeals 

Tenth Circuit 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

F£B 2 3 1908 

WARREN J. MEACHAM, 

Plaintiff-Appellant, 

v . 

GENERAL ELECTRIC CREDIT 

CORPORATION, 

Defendant-Appellee . 

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ROBERT L. HOECKER 

Clerk 

No. 86-1128 

(D.C. Civ. No. 85-F-505) 

(D. Colo.) 

ORDER AND JUDGMENT 

Before LOGAN, TACHA, and MCWILLIAMS, Circuit Judges. 

This is an appeal from a summary judgment entered by the 

district court in favor of the employer in an action brought by an 

employee for an alleged breach of his employment contract. 

On February 21, 1985, Warren J. Meacham, a resident of 

Colorado, brought a breach of contract action against General 

Electric Credit Corporation, a New York corporation. Jurisdiction 

was based on diversity of citizenship. 28 U.S.C. § 1332. Meacham 

alleged, inter alia, that in August of 1984 he entered into an 

employment contract with General Electric whereby the latter 

agreed to employ him "for not less than five years as a territory 

sales manager," and that General Electric breached its contract by 

Appellate Case: 86-1128 Document: 010110027491 Date Filed: 02/23/1988 Page: 1 
terminating his employment as a territory sales manager and by 

demoting him, for which breach Meacham sought $300,000. 

On April 5, 1985, General Electric filed an answer. On April 

19, 1985, the district court entered an order which set a pretrial conference for July 30, 1985, a discovery cut-off date of 

July 30, 1985 (later changed to September 1, 1985), a status 

conference for September 10, 1985, and a trial date sometime during a three-week calendar commencing October 7, 1985. On May 23, 

1985, the parties were granted until July 31, 1985, to amend their 

pleadings. Discovery ensued. 

On July 30, 1985, Meacham sought leave of court to file an 

amended complaint and tendered an amended complaint with the motion. The amended complaint contained five claims for relief. 

The second claim in the tendered amended complaint was the same as 

the original claim for breach of the August, 1984, contract. The 

other four claims were additional claims all arising out of 

Meacham's employment with General Electric and the ultimate 

termination thereof. 

The first claim for relief in the amended complaint was based 

on negligent disclosure. More specifically, Meacham alleged that 

he entered into an employment contract with General Electric in 

August, 1984, and that in connection therewith General Electric 

"negligently failed to make certain material disclosures to 

plaintiff [and] further negligently led plaintiff to 

believe, without justification, that the job offered would last 

approximately five years if plaintiff performed his duties." 

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In his second claim for relief, which was a restatement of 

his original claim, Meacham alleged that in November, 1984, 

General Electric breached the contract entered into in August, 

1984, by changing his duties and otherwise demoting him. 

Meacham alleged in his third claim for relief that when he 

was demoted in November, 1984, General Electric promised to give 

him a reasonable time to meet his individual sales quota and that 

General Electric breached its promise when it fired him on March 

15, 1985. 

In his fourth claim for relief, Meacham alleged that in early 

March, 1985, General Electric threatened to fire him if he did not 

dismiss the action which he filed on February 21, 1985, and that 

when he refused to dismiss the action, General Electric followed 

through on its threat and fired him on March 15, 1985. 

The fifth claim for relief was based on promissory estoppel, 

Meacham alleging that General Electric, in connection with the 

contract of employment entered into in August, 1984, and as 

modified in November, 1984, made certain promises which Meacham 

relied on to his detriment. 

On August 2, 1985, General Electric filed a response to 

Meacham's motion to file an amended complaint wherein it asked, in 

the alternative, that (1) the motion to amend be denied; or (2) 

that discovery and other deadlines be delayed and that the October 

trial date be vacated; or (3) that the October trial date be not 

changed, that the discovery cut-off date be extended by two weeks 

and the date for filing a motion for summary judgment be extended 

by one week. 

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On August 9, 1985, the district court granted Meacham's motion to file an amended complaint and allowed "the filing of the 

amended complaint excluding the Fourth Claim for relief 

[which] is dismissed without prejudice." The record before us 

does not disclose why the district court refused to allow Meacham 

to assert his fourth claim for relief, but, at the same time, 

permitted Meacham to assert the other four claims in his amended 

complaint, three of which were different from the one claim set 

forth in his original complaint. 

On August 13, 1985, Meacham asked the district court to reconsider that part of its order of August 9, 1985, wherein it 

refused to allow Meacham to assert his fourth claim for relief. 

The district court denied the motion. 

On September 16, 1985, General Electric filed a motion for 

partial summary judgment, seeking judgment on Meacham's second, 

third, and fifth claims on the ground, inter alia, that Meacham's 

employment "was not for a fixed period of time and therefore could 

be terminated at will." After hearing, the district court granted 

General Electric's motion and entered summary judgment in favor of 

General Electric on the second, third, and fifth claims for 

relief, agreeing with General Electric that the oral contract 

between the parties did not provide for employment for a "fixed 

term," and only provided for "an employment at will situation in 

which either party could terminate the employment.'' 

On October 25, 1985, General Electric filed a motion for summary judgment on Meacham's first claim for relief. The district 

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court denied that motion, but at the same time restricted the type 

of damages recoverable under that claim to pecuniary loss. 

On December 23, 1985, the parties agreed to a dismissal 

without prejudice of Meacham's first claim for relief. In that 

stipulation, General Electric agreed not to raise any statute of 

limitations by way of defense to any action filed by Meacham "no 

later than ninety (90) days after the issuance of any decision by 

the United States Court of Appeals for the Tenth Circuit affirming 

or reversing, in whole or in part, the ruling of the United States 

District Court for the District of Colorado on plaintiff's second, 

third, and fifth claims for relief." On December 31, 1985, the 

district court, pursuant to this stipulation, dismissed the first 

claim without prejudice and entered "final orders'' dismissing the 

second, third and fifth claims. This appeal followed. 

General Electric attached to its motion for partial summary 

judgment on counts two, three, and five of Meacham's amended 

complaint a part of the transcript of Meacham's testimony given at 

the taking of his deposition. Meacham filed a response to General 

Electric's motion and attached to his response other parts of his 

deposition. So, the only evidentiary matter before the district 

court when it granted General Electric's motion was a part, but 

not all, of Meacham's deposition. Based on such, the district 

court concluded that there was no genuine issue of material fact, 

and that any agreement between the parties was, under Colorado 

law, terminable at will by either of the parties because Meacham's 

employment with General Electric was not for a "fixed term." We 

agree. 

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This is a diversity case and involves consideration of local 

Colorado contract law. The district court was of the view that 

under Colorado law any employment contract is terminable at the 

will of either party thereto unless the contract itself provides 

that such employment is for a fixed and clearly expressed period 

of time. We will examine the Colorado authority bearing on this 

particular issue infra, and at this point we would merely state 

that we are disinclined to disturb the district court's 

understanding of Colorado law. Having determined the Colorado 

rule, the district court concluded that Meacham's testimony in his 

deposition did not measure up to the rule. 

As above stated, count two in the amended complaint charged 

General Electric with a breach in November, 1984, of the agreement 

entered into between the parties in August, 1984, at which time, 

i.e., in November, 1984, Meacham, though not discharged, was 

demoted. Count two is premised on the assumption that in August, 

1984, Meacham and General Electric entered into an oral contract, 

fixing his employment duties and compensation for a fixed, 

definite and stated period of time. In this latter regard, 

Meacham testified in his deposition that he was told by Richard 

Rowack, General Electric's representative with whom Meacham dealt 

in late July of 1984, that he (Meacham) should "look at it as a 

four-to-five year opportunity." Meacham also testified in his 

deposition that Rowack wanted Meacham to "commit to taking the 

position and maintaining the position for at least a four- to 

five-year period." Under the Colorado authorities referred to 

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below, such is not a guarantee by the employer of continued 

employment for a fixed, defined and stated period of time. 

Count three charged General Electric with a breach of the 

agreement entered into between the parties in 

wherein General Electric allegedly promised 

"reasonable time" to meet sales quotas. In 

November, 1984, 

to give Meacham a 

this connection, 

Meacham in his deposition stated that Rowack told him it would be 

at least six months before he was checked out on his sales. Such 

does not in our view equate to a binding contract entered into on 

November, 1984, that Meacham was guaranteed continued employment 

for a fixed, certain and expressed period of time, be it six 

months or four to five years. 

Count five, as indicated, was based on promissory estoppel 

and charged that General Electric in August, 1984, and again in 

November, 1984, made certain promises which Meacham relied on to 

his detriment and that under such circumstances an "injustice can 

only be avoided by enforcement of the promises." In this regard, 

Meacham did testify in his deposition as to promises made by 

General Electric, but not kept. However, the district court was 

of the view that the contract between the parties was still 

terminable at will and barred recovery on any theory of promissory 

estoppel. We are in accord. 

As indicated above, there is no written contract between 

Meacham and General Electric, and as far as we can ascertain from 

the record before us, there was nothing in writing between the 

parties. So, we are concerned with an oral contract. But regardless of whether there is a written or oral contract, the Colorado 

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law on the subject appears quite clearly to be that an employment 

contract is terminable at the will of either party thereto unless 

the contract itself provides that the employment is for a definite 

and described period of time. Garcia v. Aetna Financing Co., 752 

F.2d 488 (10th Cir. 1984); Continental Air Lines v. Keenan, 731 

P.2d 708 (Colo. Sup. Ct. 1987); Pittman v. Larson Distributing 

Co., 724 P.2d 1379 (Colo. Ct. App. 1986); and Justice v. Stanley 

Aviation Co., 530 P.2d 984 (Colo. Ct. App. 1974). 

In Garcia, an appeal arising out 

District Court in the District of Colorado, 

of 

we 

the 

held 

United States 

that under 

Colorado law an employment contract with "no fixed term of employment" was terminable at will notwithstanding the fact that the 

employer had termination procedures set forth in its policy manual 

and notwithstanding the further fact that employees were hired at 

a salary based on a yearly amount. 

Continental Airlines was also concerned with the effect of an 

employer's manual setting forth termination 

not here concerned with any employer's 

procedures. We are 

manual. However, in 

Continental Airlines the Colorado Supreme Court reiterated the 

rule previously announced in prior Colorado cases that an employee 

hired for an indefinite period of time is an "at will" employee. 

In Pittman, the Colorado Court of Appeals held that in the 

absence of special considerations an oral contract providing for 

even ''permanent employment" is no more than an indefinite general 

hiring terminable at the will of either party. 

In Justice, the Colorado Court of Appeals held that where a 

contract of employment contains "no fixed term of employment," 

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either party may terminate the contract at any time without incurring liability, and the fact that such contract sets forth an "annual salary" rate does not change the result. 

We agree with the district court that any understanding 

between Meacham and General Electric did not contain a fixed, 

definite and clearly expressed time period for which Meacham would 

be employed. A hope, or expectation, or anticipation that it will 

be long-term, or is an "opportunity" for four or five years, or it 

will be about six months before an "evaluation" can be made, are 

not enough, and do not constitute a clear-cut understanding that 

Meacham's employment was for a fixed, certain, and precisely 

described period of time. 

Counsel does not argue that Meacham should be allowed to 

pursue his fifth claim based on promissory estoppel even if his 

contract with General Electric did not provide for a definite 

period of employment. In this regard, see, for example, 

Grandchamp v. United Airlines, 36 E.P.D. ,r 34,987 (D.C. Colo. 

1985) where the United States District Court for the District of 

Colorado held that where an employment contract did not set forth 

a definite period of employment the employee could not have 

"reasonably relied" on a promise of lifetime employment and 

entered summary judgment for the employer on the employee's third 

claim for relief based on promissory estoppel. 

Meacham also challenges on appeal the district court's denial 

of his motion to include a fourth claim in his amended complaint. 

As indicated, the district court permitted Meacham to file an 

amended complaint setting forth five claims, but excluding the 

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fourth claim which the district court dismissed without prejudice. 

The record does not indicate why the district court allowed 

Meacham to file three new claims in his amended complaint, but 

refused to allow him to file his so-called fourth claim for 

relief. In any event, we think the district court erred in 

excluding the fourth claim from Meacham's amended complaint. 

Leave to amend should be freely granted. Fed. R. Civ. P. 15(a}; 

Fernan v. Davis, 371 U.S. 178 (1962}; Federal Insurance Co. v. 

Learjet Corp., 823 F.2d 383 (10th Cir. 1987}; Triplett v. Leflore 

County, 712 F.2d 444 (10th Cir. 1983}; Lease America Corp. v. 

Eckel, 710 F.2d 1470 (10th Cir. 1983). We are not here examining 

the sufficiency of the fourth claim. We are simply holding that 

the district court erred in refusing to allow Meacham to amend by 

inclus ion of his fourth claim. As indicated, the district court 

gave no reason for refusing to allow Meacham to file his fourth 

claim for relief, and we are not persuaded by any of the reasons 

advanced in this court by General Electric as justification for 

the district court's refusal. 

Judgment reversed insofar as 

court's refusal to allow Meacham 

it 

to 

relates 

include 

to 

in 

the district 

his amended 

complaint his fourth claim. Otherwise, the judgment is affirmed. 

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