Court Opinion

ID: 9534766
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:42:40.410149+00
Date Added: 2024-06-11T13:32:28.231582
License: Public Domain

BISTLINE, Justice,
dissenting.
The majority’s indifference to readily available Idaho case precedent dealing with the statute of frauds defense is somewhat of a puzzlement. If it be that the Court’s opinion does err in its application of the language of I.C. § 9-505(1), presumably so where prior case law is ignored, we are once again thereby rendering a disservice to the bench and bar. The resultant confusion as to what is the law causes this case to fall in line with Duthie v. Lewiston Gun Club, 104 Idaho 751, 663 P.2d 287 (1983), a landmark case which eroded the doctrine of res judicata, as it had previously existed.
Far better that prior precedent should this day be explicitly rejected or reaffirmed. To simply ignore prior precedent muddles the law. Accordingly, it behooves the Court to provide the reasoning which explains to Lila Burton how it is that she is stripped of the jury’s verdict in her favor.
Idaho Code § 9-505 states:
9-505. Certain agreements to be in writing. — In the following cases the agreement is invalid, unless the same or some note or memorandum thereof, be in writing and subscribed by the party charged or by his agent. Evidence, therefore, of the agreement cannot be received without the writing or secondary evidence of its contents:
1. An agreement that by its terms is not to be performed within a year from the making thereof.
Idaho case law since long ago created an exception to I.C. § 9-505(1) by this Court’s holding that, if a contingency may occur, which will in less than one year terminate a contract for indefinite employment, such employment contract is not subject to the *24statute of frauds. In the case before us, the Credit Union’s ability to terminate Burton’s employment for just cause, plus Lila Burton’s right to quit created two such contingencies, either of which might have occurred within one year.
Such meanderings do not originate with me. In Darknell v. Coeur D’Alene Transp. Co., 18 Idaho 61, 108 P. 536 (1910), the Court discussed an employment contract which provided for Darknell’s termination if he sold his stock in the company. The Court said: “By a long line of authorities it is held that such a contract as this does not fall within the statute of frauds, for the reason that it was capable of being performed, and might have been fully performed and terminated, within a year, and that such contracts are not within the statute.” Id., 18 Idaho at 69, 108 P. at 539 (emphasis supplied). Thus, it is seen that the contingency need not have actually occurred; that it might and conceivably could occur is enough.
A later Idaho case had a similar holding. In Hubbard v. Ball, 59 Idaho 78, 81 P.2d 73 (1938), Hubbard claimed that he had been promised compensation by Mr. White in return for certain care to be rendered, and services attendant to White’s business, all promised for the duration of White’s life. Upon White’s death, Hubbard submitted a thousand dollars creditor’s claim to Ball, who was executrix of the estate. Ball resisted payment and invoked the statute of frauds. Hubbard prevailed in full. Because White’s death could have happened at any time after Hubbard commenced performance of the contract, the Court held that: “[Wjhere the termination of a contract is dependent upon the happening of a contingency which may occur within a year it is not within the statute of frauds, although the contingency may not take place until after the expiration of a year.” Hubbard, 59 Idaho at 82, 81 P.2d at 75. That holding was identical to the holding in Seder v. Grand Lodge, 35 Idaho 277, 206 P. 1052 (1922).
The majority opinion relies upon Allen v. Moyle, 84 Idaho 18, 367 P.2d 579 (1961), in advancing its hypothesis that the statute of frauds applies to employment contracts which call for the award of retirement benefits at age 65. Allen does discuss the requirement of a writing where a contract would not be performed within one year, but not involved there was an employment contract providing retirement as a pensioner at age 65. Involved was an oral agreement for a definite seven year term of employment; accordingly, the Court applied the statute. Allen, 84 Idaho at 23, 367 P.2d at 582. There is no doubting that an employment contract for a definite term of more than one year is subject to the statute of frauds. Unlike Allen, Lila Burton did not allege that her employment was for any specific term; hers was but an oral contract for employment — no term specified.
In Whitlock v. Haney Seed Co., 110 Idaho 347, 715 P.2d 1017 (Ct.App.1986), our Court of Appeals recognized that while an employment contract for a definite term of years is subject to the statute of frauds, a word of mouth employment contract of indefinite duration is not. Like Burton, Whitlock was hired under an oral contract. After discussing the holdings in Darknell and Hubbard, supra, the Court remarked:
If Whitlock’s deposition were interpreted to mean that he was hired for a fixed period ..., then the fixed period would place his employment contract squarely within the statute of frauds.
Whitlock, 110 Idaho at 349, 715 P.2d at 1019 (citation to Allen v. Moyle omitted).
The majority chooses to entirely bypass the Whitlock case; instead it turns to another Court of Appeals opinion for the proposition that a term of years contract remains subject to the statute of frauds defense even though contract termination may occur within one year because of death. See Frantz v. Parke, 111 Idaho 1005, 729 P.2d 1068 (Ct.App.1986). Frantz is not controlling precedent on the application of the statute of frauds in this case because of the different treatment accorded contracts of employment for an indefinite term. Unlike the litigants in Frantz, Burton never understood or alleged that her contract was for a term of years. And, *25unlike the litigants in Frantz, Burton was not subject to or brought suit concerning a covenant not to compete for a term of years.
The Credit Union’s employee manual provided the basis for Burton’s belief that she would be allowed to work until at least age 65. It was not just that the employee manual designated 65 as the age at which an employee would be eligible for retirement benefits, but such retirement benefits were an incentive to continue working at the Credit Union, at least until age 65.4 Moreover, although it might have, the manual did not mandate retirement at age 65. Accordingly, Lila Burton was at liberty to retire at any time before or after age 65— but the fact is that she did not. What was at stake for Lila Burton if she left the Credit Union prior to age 65 was loss of retirement benefits. What was at stake for the Credit Union was the saving it could make by effecting her uncompensated discharge before she attained retirement age. No matter that; what counts is that an oral agreement providing for retirement benefits at 65 in no way, in and of itself, creates a term of years employment contract. Hence it is manifestly incorrect to assert that the statute of frauds applies to those employment contracts which allow for retirement benefits at age 65.5
Since 1910, the Idaho Supreme Court had been restricting the application of the statute of frauds to employment contracts. Employment contracts of indefinite duration have consistently been held to be excepted from the statute of frauds wherever it is possible that the contract can be performed within one year. This is so even though the actual duration of the contract for indefinite employment extends beyond that year.
Idaho has not been alone in so restricting the use of the statute of frauds. In 1954 the British Parliament repealed nearly all of England’s statute of frauds. The English Law Reform Committee cited two reasons for repealing the statute: (1) the requirement of a writing is “out of accord with the way in which business is normally done;” and (2) the statute “promotes more frauds than it prevents.” E. Allen Farnsworth, Contracts 371 (1982). Both of these reasons readily apply to the circumstances here present.
It is not and should not become the law that employees who intend to work until retirement must obtain written employment contracts whenever it is contemplated that the projected date for retirement will be more than one year from the making of the contract. This practice is “out of accord with the way in which business is normally done.” Rather, it is common practice for an employer to hire employees with no fixed date for termination. It is also common practice to contract for employment verbally. Most employees are hired with the understanding that as long as they perform their duties well, and economic difficulties do not intervene, they can expect to remain employed until they choose to leave. As was the case here, it is normal for a business to reward faithful employees by offering them retirement benefits if they stay until age 65, or any other age at which such benefits are made payable. Because it is good business practice for an employer to set the age for retirement, an employer, by designating 65 as that age, is not creating a term of years employment contract. The employer may be seen as thus establishing sound policy aimed at promoting efficiency and fairness, but he is not obligated to remain in business, nor is an employee obliged to stay or precluded from dying.
There is no valid reason for the majority’s attempt to expand the statute of *26frauds. Surely there is no thought of penalizing Lila Burton. More likely than that is it that the failure to consider case precedent is but a memory lapse as to law learned in law school, and a reluctance to admit error. If there are valid reasons for the attempt at making new law, now is the time to expose those reasons to public view. Not doing so can only result in casting doubt as to existing employment contracts and future contracts — all on the slender reed that the employee manual provides for retirement benefits at age 65. As noted earlier, criticism which the English Law Reform Committee leveled at the statute of frauds was that it “promotes more frauds than it prevents.” Such an analysis is especially applicable to Lila Burton’s circumstances. On the one hand she was enticed to stay on with the Credit Union until age 65 because she or anyone would understand that at that time retirement benefits were her entitlement. The Credit Union then invoked the statute of frauds as its defense to her claim based on an employment agreement. This is a prime example of the statute of frauds promoting fraud. The existence of an employment relationship is beyond dispute, and by mutual assent or consent it lasted 19 years. The only fraud here involved is found in the invoking of I.C. § 9-505(1). If the holding of this Court’s opinion stands as written, from now until who knows when, employers are given license to use the statute of frauds defense as often as an unjustly discharged employee seeks judicial relief.
There is not to be found any precedent for such a holding. There is no precedent to support the expansion of the statute of frauds so as to apply to the employment as existed here, which was not just a day, a month, or a year, but for nineteen years of faithful service. With all due respect to the majority, its opinion compels this dissent, or, alternatively, this humble servant of the State is greatly in need of enlightenment in this particular area of law.
If the majority wishes to overrule such cases as Whitlock v. Haney Seed Co., 110 Idaho 347, 715 P.2d 1017 (Ct.App.1986), then it should be done explicitly. As the Court of Appeals in Whitlock explained, after quoting a portion of I.C. § 9-505:
This provision has been narrowly construed by our Supreme Court. The statute does not govern an oral contract that ‘might have been fully performed and terminated, within a year____’ Darknell v. Coeur d’Alene & St. Joe Transportation Co., 18 Idaho 61, 69, 108 P. 536, 539 (1910). See generally RESTATEMENT (SECOND) CONTRACTS § 130, comment a (1981). Thus, even if a contract appears on its face to anticipate performance for more than one year, it may fall outside the statute if it is subject to a condition or contingency that could occur within a year, terminating further performance. Hubbard v. Ball, 59 Idaho 78, 81 P.2d 73 (1938); J. CALAMARI & J. PERILLO, THE LAW OF CONTRACTS § 19-20 (2d. 1977).
Whitlock, 110 Idaho at 348, 715 P.2d at 1018 (footnote omitted).
Let us consider the defendant’s requested jury instructions, refusal of which was deemed error by this Court. Defendant’s requested instruction 21 states:
INSTRUCTION NO. 21
You are instructed that if the employment agreement relied on by Plaintiff Lila Burton was by its terms incapable of being performed within a year from the making thereof, such an agreement is voidable and unenforceable under the laws of the State of Idaho.
Section 9-505, Idaho Code.
R. 230. Defendant’s requested instruction 22 states:
INSTRUCTION NO. 22
You are instructed that a contract for personal services which by its terms are to be rendered for a period in excess of one year, is within the meaning of the Idaho statute of frauds provision requiring contracts not to be performed within a year to be in writing. Unless it is in writing, it is voidable and unenforceable. Therefore, if you find that the contract relied on by the Plaintiff Lila Burton in
*27this case is such an agreement, you must find in favor of the Defendant and against the Plaintiffs.
Section 9-505, Idaho Code.
Allen v. Moyle, 84 Idaho 18, 367 P.2d 579 (1961).
Remlinger v. Dravo Corporation, 94 Idaho 292, 486 P.2d 1005 (1971).
R. 231. Both of these instructions, according to the majority, should have been given to the jury. It is not in the least understood why this Court would want the jury misled by instructions that misstate the law, and also based on theories wholly unsupported by the facts of the case! As stated in Bratton v. Slininger, 93 Idaho 248, 251, 460 P.2d 383, 386 (1969), “[instructions should not be given which are not based on evidence adduced at trial.”
Defendant’s requested instruction 21 is wrong as a matter of law because it does not specify that an agreement subject to the statute of frauds is oral, unsupported by a writing. In addition, such agreement must only, by a mere possibility, be terminable within a year for the statute of frauds not to apply. By omitting this information, this requested instruction is designed to mislead the jury, not instruct the jury.
Defendant’s requested instruction 22 is improper as a matter of law because nowhere and in no way has Burton alleged that she had a contract for a term of years. Without a shred of evidence to suggest that Burton understood that both the contract was to last for more than one year, and that there was no possibility of termination of the contract without liability before one year had expired, the defendant’s requested instruction 22 is simply unsupported by the facts.
The two cases relied upon by the defendant for instruction 22 are informative. Allen v. Moyle, a specific seven year employment contract case, was discussed earlier. Remlinger v. Dravo Corp., held that the statute of frauds did apply because the employee’s answers to interrogatories stated that the contract was for four or five years. The majority can point to no evidence in the record from either party that Burton could not possibly be relieved of her duties under the contract for employment within one year, because Burton understood that she was hired for no specific term. Therefore, the statute of frauds is inapplicable to this case.

. District and supreme court judges in Idaho, on taking office are aware of an incentive, by statute rather than an employee manual, to remain for four years, else there are no retirement benefits. It is recognized that such positions are not contractual. The only point of the analogy is to bring attention to the factor of the incentive which would keep an employee working for more years than if the employee did not see the carrot dangling from the Credit Union’s stick.

. Compare a former statutory provision, which was repealed, mandating judicial retirement at age 70. See Boughton v. Price, 70 Idaho 243, 215 P.2d 286 (1950).