Opinion ID: 172375
Heading Depth: 3
Heading Rank: 2

Heading: Negative Reference

Text: Mr. Puls argues that even if Trader was an affiliate of LCNI, the severance agreement still prevented LCNI from providing Trader with a negative employment reference about Mr. Puls or was at least ambiguous as to such a reference. In making this argument, Mr. Puls relies on the provision in the severance agreement stating “LCNI and Evergreen Newspapers will give Puls a neutral reference,” which he claims prevented LCNI from giving a negative -24- reference to any entity, including itself, internally, or Trader, as an affiliate. In turn, LCNI argues no breach of contract or intentional interference of a contract could occur, even if LCNI gave Trader a negative reference, because Trader is a party to the contract and the “neutral reference” provision was intended to apply only to third parties. As before, we look to Colorado contract law. As previously noted, under Colorado law we examine the contract terms and attempt to determine the mutual intent of the parties. See Level 3 Commc’ns, 535 F.3d at 1154. In the absence of an ambiguity, a written contract cannot be varied by extrinsic evidence, see id. at 1154-55, but if an ambiguity exists, the mutual intent of the parties at the time of contracting must be determined by extrinsic evidence, see Travelers Indem. Co. v. Howard Elec. Co., 879 P.2d 431, 434-35 (Colo. Ct. App. 1994). “In determining the parties’ mutual intent, the court should consider the contract’s subject matter and the purposes and objects it purports to accomplish,” and “[i]n making this evaluation, the circumstances surrounding the creation of the contract may also be considered.” Bd. of County Comm’rs v. City & County of Denver, 40 P.3d 25, 29 (Colo. Ct. App. 2001). As previously discussed, we may also consider the parties’ conduct under the agreement and their conduct before the controversy arose. See Level 3 Commc’ns, 535 F.3d at 1154-55. -25- In this case, the record establishes the parties to the severance agreement were Mr. Puls and “Landmark Community Newspapers, Inc., Landmark Community Publications, Inc., their past, present, and future agents, employees, directors, officers, shareholders, affiliates, insurers, reinsurers, affiliated corporations or other entities, successors in interest, and newspapers (included but not limited to the newspapers referred to as Evergreen Newspapers) (referred to herein collectively as ‘LCNI.’” Apt. App. at 18 (emphasis added). As a result, it is clear Trader, as an affiliate at the time in question, was a party to the severance agreement and was included in the severance agreement’s collective reference to LCNI. Accordingly, the term “LCNI” in the “neutral reference” provision included Trader. Thus, it seems rudimentary that any communications by LCNI representatives to Trader representatives regarding an employment reference about Mr. Puls were made to the same party under the agreement and not a third party. Under such circumstances, no breach of contract could occur, regardless of whether LCNI gave Trader a negative employment reference about Mr. Puls. In addition, for intentional interference with a contract to occur under Colorado law, “there must be a showing of improper and intentional interference by the defendant that prevents the formation of a contract between the plaintiff and a third party.” MDM Group Assoc. v. CX Reinsurance Co., 165 P.3d 882, 886 (Colo. Ct. App. 2007) (emphasis added). Here, arguably, no third party was involved in the negative reference of which Mr. Puls complains because Trader -26- was a party to the severance agreement containing the “neutral reference” provision. To the extent an ambiguity still exists, we turn to Mr. Puls’s argument that the “neutral reference” provision nevertheless applied internally to LCNI, including its affiliates, because it does not explicitly indicate to whom the neutral reference must be given. In determining to whom this provision applied, it is undisputed LCNI fired Mr. Puls from its employment and that the firing was contentious, resulting in their entering into the severance agreement for the purpose of avoiding future litigation. LCNI does not contend, nor has Mr. Puls shown, that after LCNI fired Mr. Puls, and at the time it executed the severance agreement, it intended to rehire him. Instead, the severance agreement states Mr. Puls was finally and permanently separated from “LCNI[’s]” employment, which, by the terms of the agreement, included Trader in its reference to “LCNI.” Given Mr. Puls was permanently separated from both LCNI and Trader under the contract terms, it is evident, as LCNI contends, that it did not intend to have the “neutral reference” provision apply to it or any of its affiliates after it fired Mr. Puls. As to Mr. Puls’s intent, he admitted in his pleadings before the district court that when executing the severance agreement, he did not intend to reapply -27- for employment with LCNI or intend for the “neutral reference” provision to apply to LCNI or “LCNI itself and its community newspapers,” making his appellate contention that the “neutral reference” provision was intended to apply to all prospective employers, including LCNI, extremely self-serving. As a consequence, even if we viewed extrinsic evidence to ascertain the parties’ mutual intent as to the “neutral reference” provision (i.e., the circumstances surrounding the contract’s creation and the parties’ intention Mr. Puls would not work for “LCNI” after his firing), such evidence, together with the agreement’s permanent separation provision, indicates a mutual intent for the “neutral reference” provision not to apply to LCNI or Trader, as an affiliate. In other words, while neither Trader nor LCNI could give a negative reference to a third party under that provision, it did not prevent them from providing a negative reference to each other. In making this determination, we recognize Mr. Puls made an averment in support of his district court pleadings that he intended the “neutral reference” provision to apply to other companies “even if owned in part by Landmark,” although he admitted he did not know what those companies were. 7 But, as 7 While Mr. Puls contends on appeal he rejected LCNI’s first two drafts of the severance agreement because they did not include a “neutral reference” provision, the record establishes both prior drafts included such a provision. Similarly, Mr. Puls suggests that the fact he insisted the first two drafts of the (continued...) -28- previously recognized, Mr. Puls knew, or should have known, some connection between Trader and LCNI existed, given LCNI’s human resources and training materials repeatedly referenced Trader. We also recognize Mr. Puls’s averment that he did not intend the “neutral reference” provision to include Landmark companies illustrates only his intent, not the parties’ mutual intent, and is a statement made during litigation, so it does not fully demonstrate the circumstances surrounding the creation of the severance agreement or conduct under the agreement before the controversy began. For these reasons, we conclude LCNI is entitled to summary judgment as a matter of law on the issue concerning the “negative reference” provision and the breach of contract and intentional interference with contract claims. Moreover, even when viewing the extrinsic evidence in determining the parties’ intent with respect to the “neutral reference” provision, Mr. Puls has not overcome his burden of showing a genuine issue of material fact exists. 7 (...continued) agreement be changed, from stating he “was terminated” or “is terminating” from LCNI to stating he “separated” from LCNI, support his contention that the “neutral reference” provision was intended to apply to LCNI and its affiliates. However, our view of this conduct does not materially demonstrate the parties’ intent as to that provision, but only implies that when the neutral reference was given to a third party, LCNI could not state they fired or terminated him from employment. -29-