Court Opinion

ID: 161269
Source: CourtListenerOpinion
Date Created: 2010-08-14 07:04:11+00
Date Added: 2024-06-11T17:24:36.582341
License: Public Domain

F I L E D
                                                                 United States Court of Appeals
                                                                         Tenth Circuit

                                                                          JUL 3 2001

                     UNITED STATES COURT OF APPEALS                 PATRICK FISHER
                                                                             Clerk

                                  TENTH CIRCUIT

 THOMAS E. WHATLEY; LINDA
 LAUREN WHATLEY, Independent
 Executrix of the Estate of Marie H.
 Whatley, *

          Plaintiff - Appellees
                                                  Nos. 99-1420 & 99-1446
          - Cross-Appellants,
                                                   (D.C. No. 96-D-1939)
 v.
                                                   (District of Colorado)
 CRAWFORD & COMPANY, a
 Georgia corporation,

          Defendant - Appellant
          - Cross-Appellee.

                             ORDER AND JUDGMENT **

Before EBEL and LUCERO, Circuit Judges, and VRATIL, *** District Judge.

      *
        Plaintiffs filed a “Suggestion of Death” on September 15, 2000, to inform
this Court of Marie’s death on August 29, 2000.
      **
         This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. This Court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
      ***
           The Honorable Kathryn H. Vratil, United States District Judge for the
District of Kansas, sitting by designation.
      Plaintiffs Tom and Marie Whatley obtained a $265,000 judgment on a jury

verdict in their favor against defendant Crawford & Company. The award was

made on claims of negligent misrepresentation, fraudulent misrepresentation, and

fraudulent concealment in connection with Tom Whatley’s employment by

Crawford. Crawford appeals, claiming that a number of prejudicial errors so

infected the trial as to require wholesale reversal and remand. The Whatleys

cross-appeal, challenging the court’s reduction of the jury’s punitive damages

award and the dismissal of their additional claims for breach of contract and

promissory estoppel. We have jurisdiction pursuant to 28 U.S.C. § 1291.

Because we conclude that the trial court improperly permitted plaintiffs to pursue

inconsistent remedies, we reverse in part, affirm in part, and remand for a new

trial on all claims.

                                         I

      This diversity suit 1 arose out of Crawford’s attempt to transfer Tom

Whatley, a move that defendant calls a promotion but plaintiffs claim was a

constructive discharge. The Whatleys were living and working in San Antonio,

      1
         Because the district court’s jurisdiction is based upon diversity of
citizenship under 28 U.S.C. § 1332(a)(1), we apply state law to the substantive
issues on this appeal. See Peck v. Horrocks Eng’rs, Inc. , 106 F.3d 949, 952 (10th
Cir. 1997). The district court applied Colorado law to plaintiffs’ substantive
claims, and the parties have not challenged the applicability of Colorado law on
appeal.

                                        -2-
Texas—Tom as an insurance adjuster earning $51,252 annually and Marie as a

legal secretary earning $25,000 to $28,000—when Tom was hired by Crawford as

an “Outside Casualty Adjuster.” Although Tom was technically assigned to the

Grand Junction branch office, Crawford hired him to work in Montrose,

Colorado, hoping eventually to open a Montrose branch. Crawford’s letter of

confirmation did not promise any particular duration of employment.

      Crawford did not expect the fledgling Montrose office (which was run out

of one of the Whatleys’ spare bedrooms) to be immediately profitable but did

expect that it would “break even” after a few months. (Appellant’s Opening Br.

at 6.) Tom appears to have understood at the time of his hiring that he might

have to be transferred if the Montrose office “was proven to be doing bad.” (I

App. at 939.) After the Montrose office continued to lose money, Crawford

decided to close it, and it has not been reopened since.

      Rather than firing Tom, Crawford offered to transfer him to Alamosa,

Colorado, where Crawford “had an established office and workload.”

(Appellant’s Opening Br. at 10.) The transfer would have incorporated a

promotion and a raise. After looking unsuccessfully for a house to rent in

Alamosa during the long weekend he was given to make a decision regarding the

transfer, Tom refused the transfer and ended his employment with Crawford. He

                                        -3-
remained in Montrose, returning to his previous line of work as an independent

catastrophe insurance adjuster.

      In their suit for damages resulting from the attempted transfer, plaintiffs

alleged that Crawford had a “covert policy” of terminating employees by offering

them a position in a different, less desirable location and piling on work, and that

Crawford made a number of misrepresentations regarding job security, working

conditions, training, and reimbursement. (Answer Br. Appeal & Opening Br.

Cross-appeal at 7, 11–12.) In addition to alleging fraudulent and negligent

misrepresentation, plaintiffs alleged fraudulent concealment of the “covert

policy” of terminating through transfer, of overstaffing in the southwest region,

and of Crawford’s expectations of Tom’s work performance. They also brought

alternative claims of breach of contract and promissory estoppel.

      The jury returned verdicts in Tom’s favor on his claims of negligent

misrepresentation, fraudulent misrepresentation, and fraudulent concealment and

in Marie’s favor on her claim of negligent misrepresentation. On appeal,

Crawford argues the judgment must be reversed because of a number of errors by

the trial court, including (1) improperly allowing plaintiffs to pursue inconsistent

remedies; (2) entry of judgment on an inconsistent jury verdict as to Marie’s

mitigation of damages; (3) inadequate jury instructions; (4) improper exclusion of

evidence; (5) an award of prejudgment interest on future wages; and (6) the award

                                         -4-
of noneconomic damages for negligent misrepresentation. On cross-appeal, the

Whatleys argue (1) the trial court erroneously reduced Tom’s punitive damages

award by $60,000 and (2) their claims for breach of contract and promissory

estoppel should be reinstated on appeal. We conclude that the district court erred

in allowing plaintiffs to pursue inconsistent remedies and therefore reverse and

remand for a new trial on all issues. We affirm the district court’s dismissal of

plaintiffs’ breach of contract claim but conclude that Tom’s promissory estoppel

claim may be revived on remand.

                                          II

      The crux of Crawford’s argument on appeal is that the trial court permitted

the Whatleys to pursue inconsistent remedies in contravention of the Colorado

election of remedies doctrine. We agree with Crawford’s contention and reverse.

                             A. Election of Remedies

      Crawford argues the Whatleys’ decision to affirm Tom’s employment

contract prior to trial dictated, under the doctrine of election of remedies, that

they were not entitled to pursue a simultaneous rescission remedy on their tort

claims.

      “In a diversity case, the doctrine of election of remedies is an element of

state substantive law which we are bound to apply.” McKinney v. Gannett Co.,

817 F.2d 659, 671 (10th Cir. 1987); see also Berger v. State Farm Mut. Auto. Ins.

                                          -5-
Co., 291 F.2d 666, 667–68 (10th Cir. 1961) (applying state law to decide an

election of remedies issue). Election of remedies is an issue of law that we

review de novo. See Salve Regina Coll. v. Russell, 499 U.S. 225, 231 (1991)

(holding that a district court’s rulings on issues of state law are reviewed de

novo); Dang v. UNUM Life Ins. Co. of Am., 175 F.3d 1186, 1189 (10th Cir.

1999) (noting that questions of law are considered by the appellate court de

novo).

         The doctrine of election of remedies requires that a plaintiff choose

between inconsistent remedies available on the same set of facts and prevents the

plaintiff from recovering twice for the same wrong. Elliott v. Aston Brokers,

Ltd., 825 F. Supp. 268, 269 (D. Colo. 1993). “Election is necessary whenever the

theories of recovery are inconsistent.” Trimble v. City & County of Denver, 697

P.2d 716, 723 (Colo. 1985) (en banc).

         Under Colorado law,

         [o]ne seeking to remedy fraudulent inducement of a contract must
         elect either to rescind the entire contract to restore the conditions
         existing before the agreement was made, or to affirm the entire
         contract and recover the difference between the actual value of the
         benefits received and the value of those benefits if they had been as
         represented.

Id. at 723; see also In re Hedged-Invs. Assocs., Inc., 84 F.3d 1286, 1289–90 (10th

Cir. 1996) (same); W. Cities Broad., Inc. v. Schueller, 849 P.2d 44, 48 (Colo.

1993) (en banc) (“A plaintiff who has been fraudulently induced to enter a

                                           -6-
contract may either rescind the contract or affirm the contract and recover in tort

for the damages caused by the fraudulent act.” (citing Trimble, 697 P.2d at 723)).

       In their response to Crawford’s pretrial motion to compel election of

remedies, plaintiffs stated that they “have elected to affirm the contract.” (I

Appellant’s App. at 140.)

              Since the institution of this lawsuit, Plaintiffs have been
       proceeding upon a theory that they have affirmed the employment
       contract and seek to recover damages. Although Plaintiffs have
       alleged fraud claims which would allow the remedy of rescission,
       they have not asserted a claim for rescission nor alleged they are
       entitled to rescind.

(Id.) In addition, the following exchange occurred at a February 12, 1998,

summary judgment hearing:

       The Court: Don’t you agree that you have to elect remedies, Mr.
       Erickson? What have you elected to do?

       Mr. Erickson: Yes. We have elected to affirm the contract and
       pursue damages.

       The Court: I agree that you can’t seek rescission and then also seek
       damages on the contract as if it had been fully performed in the same
       case.
       ....
       So you need to then tailor jury instructions, so it’s clear that you
       aren’t seeking relief on claims that are really in conflict.

(Id. at 483–84.) 2

       2
         As this exchange indicates, the district court appears to have endorsed the
proposition that election of remedies was necessary at the outset of trial and that
conflicting claims could not be pursued at trial. See Kline Hotel Partners v.

                                          -7-
      Under Colorado law, plaintiffs could “seek either affirmance or rescission

under their fraud-type claims.” (Id. at 73.) Their decision to affirm permitted the

Whatleys to “seek benefit-of-the bargain [sic] damages under certain of their

fraud claims” as well as under promissory estoppel and breach of contract

theories. (Appellant’s Opening Br. at 47–48.)

      Prior to trial, Crawford sought a motion in limine to prevent plaintiffs from

pursuing recovery based on restitution for “what was left behind in San Antonio.”

(Id. at 48.) 3 In other words, Crawford argued that because plaintiffs proceeded on

an affirmance theory—seeking the value of the employment contract as it was

represented to them—they should not have been permitted to pursue any

additional claims based on rescission and restitution. Crawford correctly asserts

that “[w]hen the Whatleys elected to affirm, the situation they left behind in San

Antonio became irrelevant to the measure of recovery.” (Id. at 48.) “If they

choose to affirm the contract for employment in Colorado, they cannot claim

damages resulting from a relocation that was inherent in that employment

opportunity.” (I Appellant’s App. at 75.)

Aircoa Equity Interests, Inc., 729 F. Supp 740, 743 (D. Colo. 1990) (concluding
the timing of election is in the court’s discretion and deciding that plaintiff must
make a pretrial election between affirmance and rescission of a partnership
agreement).
      3
         Crawford raised the election issue repeatedly with the trial judge in
addition to its motion to compel election of remedies.

                                          -8-
      As a necessary consequence of the Whatleys’ election to affirm and seek

only lost wages under a fraudulent inducement theory, Crawford argues, the

negligent misrepresentation claims should have been dismissed. We agree that

the election to affirm and seek lost wages from the Crawford job as represented

precluded plaintiffs from pursuing negligent misrepresentation claims along with

their fraud claims.

      In Colorado, damages recoverable under a claim of negligent

misrepresentation include “out-of-pocket expenses” and “consequential damages,”

but not benefit-of-the-bargain damages. W. Cities Broad., 849 P.2d at 49

(upholding vacation of damages award on plaintiff’s negligent misrepresentation

claim and relying on Restatement (Second) of Torts § 552B); see also Rosales v.

AT&T Info. Sys., Inc., 702 F. Supp. 1489, 1501 (D. Colo. 1988) (concluding the

plaintiff’s “recovery for negligent misrepresentation must be limited to his out-of-

pocket loss”). “The damages recoverable for a negligent misrepresentation do not

include the benefit of the plaintiff’s contract with the defendant.” Restatement

(Second) of Torts § 552B(2).

      The damages recoverable for a negligent misrepresentation are those
      necessary to compensate the plaintiff for the pecuniary loss to him of
      which the misrepresentation is a legal cause, including
             (a) the difference between the value of what he has received in
      the transaction and its purchase price or other value given for it; and
             (b) pecuniary loss suffered otherwise as a consequence of the
      plaintiff’s reliance upon the misrepresentation.

                                        -9-
Id. § 552B(1) (quoted in Rosales, 702 F. Supp. at 1501); see also Robinson v.

Poudre Valley Fed. Credit Union, 654 P.2d 861, 863 (Colo. Ct. App. 1982)

(adopting Restatement (Second) of Torts § 552B). Although negligent

misrepresentation is defined in the Restatement in terms of money losses from a

business transaction, see W. Cities Broad., 849 P.2d at 49 (“In Colorado, we

recognize the tort of negligent misrepresentation as providing a remedy in cases

involving money losses due to misrepresentation in a business transaction.”), in

the Whatleys’ case, “the difference between the value of what [was] received in

the transaction and its purchase price or other value given for it” means the

difference between the value of the Crawford job and the value of what they gave

up in exchange for it—i.e., their San Antonio jobs. Restatement (Second) of

Torts § 552B(1)(a). The jury instruction providing for damages under the

negligent misrepresentation claims closely resembles the Restatement.

      In giving jury instructions based on both benefit-of-the-bargain damages

and out-of-pocket damages, the trial judge allowed plaintiffs to pursue affirmance

and rescission remedies simultaneously. 4 By permitting recovery of the difference

      4
          See 2 Dan D. Dobbs, Law of Remedies § 9.2(2), at 555–56 (1993)
(“[T]he effect of an out-of-pocket damages recovery is the same as the effect of a
rescission . . . . The financial identity of these two remedies—rescission and out-
of-pocket damages—suggests that they might be more or less interchangeable, so
that if rescission would be permissible, a recovery of out-of-pocket damages
would be equally so . . . .”).

                                        -10-
between the value of the Crawford job and what the Whatleys gave up to accept

it, the negligent misrepresentation instruction allowed the jury to award a

rescission-based remedy. Under Colorado election of remedies law, that

conflicted with the fraud instructions, which permitted plaintiffs to be made

whole based on the value of the promised Crawford employment.

      The only other possible recovery under the negligent misrepresentation

instructions was consequential damages. As plaintiffs themselves have insisted,

there were no consequential damages at issue: lost wages were the only recovery

sought under each of the claims brought.

      Thus, while claims for fraud and negligent misrepresentation are not

inconsistent, the remedies available under those claims are inconsistent in this

case. Cf. Trimble, 697 P.2d at 723 (allowing claims for breach of an employment

agreement and fraud to proceed because they were based on a consistent

affirmance theory). Because plaintiffs sought only lost wages from the Montrose

post, and a negligent misrepresentation claim does not permit recovery of lost

bargain damages, the negligent misrepresentation claim should have been

dismissed after the election to affirm. That error not only was prejudicial to

Crawford, but it so vitiates the result of the trial that wholesale reversal is needed

to correct it. Accordingly, we reverse and remand for a new trial on all claims.

                                         -11-
       In a separate claim of error also grounded in Colorado election of remedies

doctrine, Crawford argues that Marie’s negligent misrepresentation claim should

have been dismissed because it was inconsistent with the affirmance measure of

damages she sought—“a projection of lost future income (less applicable offsets)

based upon what legal secretaries in Montrose earned.” (Answer Br. Appeal &

Opening Br. Cross-appeal at 44.) Crawford did not object to the verdict form

permitting the jury to award Marie damages for negligent misrepresentation and

thus failed to preserve the issue properly for appeal. In any case, we have

concluded that both Tom’s and Marie’s negligent misrepresentation claims should

have been dismissed as incompatible with the election to affirm the employment

agreement, and we need not address Crawford’s argument. This Court will not

“undertake to decide issues that do not affect the outcome of a dispute.” Griffin

v. Davies, 929 F.2d 550, 554 (10th Cir. 1991) (citation omitted). To issue an

opinion in such a case would result in “an opinion that is unnecessary and

meaningless as applied to the [parties] in this case.” United States v. Torres, 182

F.3d 1156, 1164 n.2 (10th Cir. 1999); see also Unit Drilling Co. v. Enron Oil &

Gas Co., 108 F.3d 1186, 1193 (10th Cir. 1997) (“Our disposition of the case

eliminates the need for us to consider most of the remaining issues raised by the

parties.”).

                                        -12-
      In its third and final argument based on election of remedies, Crawford

argues that the Whatleys’ fraudulent concealment claim should have been

dismissed because it, too, was inconsistent with the pretrial decision to affirm the

employment agreement. Relying in part on Tom’s deposition, Crawford asserts

that the concealment claim—in which plaintiffs assert, inter alia, that Crawford

knew it would close the Montrose office, enticing them to give up their situation

in San Antonio and move to Colorado—seeks restitution-type damages

inconsistent with the pursuit of affirmance damages.

      The jury instructions on fraudulent concealment, like the instructions on

fraudulent misrepresentation, permitted the jury to award “[t]he extent the value

of the benefits conferred upon the plaintiff by Crawford fell short of the value of

those benefits as represented.” (I Appellant’s App. at 275.) In other words, the

jury was instructed that it could award benefit-of-the-bargain damages—along

with non-economic damages—under the concealment claim. Crawford merely

claims that the Whatleys’ theory that they would not have moved to Montrose if

certain facts had been disclosed upon the offer of employment does not support an

award of damages based on affirmance of the contract. If the jury did not find

sufficient evidence of damages under the measure of damages permitted on the

concealment claim, it could have found for defendants. We hold that it was not

                                        -13-
error for the trial court to allow plaintiffs to proceed with their claims of

fraudulent concealment.

                           B. Inconsistent Jury Verdict

      At trial, Crawford asserted the affirmative defense of failure to mitigate

damages. Although the jury found that Marie had failed to mitigate damages, it

proceeded to find that the loss incurred by her failure to mitigate was $0.

Because one of the elements of the affirmative defense of failure to mitigate is

that “such failure caused the plaintiff . . . to incur more losses than he or she

otherwise would have,” the jury must find incurrence of additional unnecessary

losses in order to find for defendant. (I Appellant’s App. at 285.) Crawford

argues the $0 figure cannot be reconciled with the affirmative response on the

verdict form.

      Crawford failed to raise the issue before the jury was dismissed or in a

post-trial motion. That the issue was not presented to the trial court counsels

against our addressing it on appellate review.

      In any event, because we reverse and remand for a new trial on all claims,

it is unnecessary for us to address the alleged inconsistency of the jury’s verdict.

Doing so would not affect the outcome of the dispute, and the nature of the

alleged inconsistency makes it highly unlikely that it will arise on retrial. See

                                          -14-
Torres, 182 F.3d at 1164 n.2; Unit Drilling, 108 F.3d at 1193; Griffin, 929 F.2d at

554.

          C. Non-Economic Damages for Negligent Misrepresentation

       Crawford alleges the verdict form for negligent misrepresentation was

patently erroneous because it allowed the jury to award non-economic damages.

The verdict form and the jury verdict were inconsistent with the corresponding

jury instruction, which did not instruct the jury that it could award non-economic

damages for negligent misrepresentation.

       Crawford’s claim is twofold. First, the jury’s award of non-economic

damages in the absence of a jury instruction allowing for such damages shows

jury confusion. Second, the verdict was improper on its face because non-

economic damages (e.g., damages for emotional distress) are not available on a

negligent misrepresentation claim in Colorado.

       Our disposition of Crawford’s election of remedies argument moots the

question whether the damages awarded on plaintiffs’ negligent misrepresentation

claim were impermissible under Colorado law, and we decline to address that

issue at this stage.

                               D. Jury Instructions

       Also contested is the trial court’s refusal to give a number of Crawford’s

proposed jury instructions. Primarily, Crawford contends that the court should

                                        -15-
have submitted the parties’ stipulated constructive discharge instruction because,

without it, the jury had no guidance regarding whether the Alamosa transfer was a

legitimate assignment or a constructive discharge. 5 According to Crawford,

because the absence of a constructive discharge instruction made it impossible for

the jury to conclude that Crawford was liable for the Whatleys’ losses, the proper

remedy is reversal and remand for dismissal of all claims. The Whatleys respond

that they are not precluded from pursuing fraud claims simply because they

withdrew their constructive discharge claim.

      Claiming the jury was given insufficient guidance on legal issues crucial to

a proper understanding of the case, Crawford also challenges the court’s refusal

to instruct the jury on for-cause termination and on the difference between a

vague assurance and a promise, as well as its refusal of Crawford’s proposed

instruction on negligent misrepresentation in favor of an instruction drafted nearly

      5
          The stipulated instruction read as follows:

             A constructive discharge occurs when an employer deliberately
      makes or allows an employee’s working conditions to become so
      intolerable that the employee has no reasonable choice but to quit or
      resign and the employee does quit or resign because of those
      conditions. However, a constructive discharge does not occur unless
      a reasonable person would consider those working conditions to be
      intolerable.

(I Appellant’s App. at 218.) At the charge conference, the Whatleys withdrew the
instruction over Crawford’s objection, and the court agreed it was not necessary.

                                         -16-
verbatim from the Restatement (Second) of Torts § 552B. Again, Crawford

contends the deficient instructions deprived the jury of a proper understanding of

the issues, resulting in prejudice to it.

       In light of our conclusion that the decision to allow plaintiffs to pursue

inconsistent remedies so vitiated the litigation that wholesale reversal is required,

it is unnecessary for us to address Crawford’s allegations of inadequate jury

instructions. See Torres, 182 F.3d at 1164 n.2; Unit Drilling, 108 F.3d at 1193;

Griffin, 929 F.2d at 554.

                              E. Exclusion of Evidence

       Because the parties dispute whether the Alamosa post was a legitimate

transfer or a constructive discharge, the Whatleys’ motivation for refusing the

transfer was at issue before the trial court. Crawford contends that the trial court

erroneously excluded evidence and argument regarding a 1995 award of $34,320

in attorney fees against the Whatleys in their suit against Liberty Mutual

Insurance Company. Crawford’s theory is that plaintiffs refused the Alamosa

assignment because they feared Tom’s wages would be garnished to satisfy the

outstanding judgment and preferred that Tom earn an irregular income as an

independent contractor. Because the judgment against the Whatleys was relevant

to the legal and factual issues at trial, as well as to the Whatleys’ credibility,

Crawford argues, it should have been allowed into evidence. After sustaining

                                            -17-
objections regarding the judgment’s relevance, the trial court ultimately excluded

it as substantially more prejudicial than probative under Rule 403 of the Federal

Rules of Evidence.

      Plaintiffs note that Crawford had not announced its intention to use the

judgment at trial. In response, Crawford alleges discovery abuse on the part of

plaintiffs, claiming the financial statements it received from them during

discovery did not mention the outstanding judgment so that Crawford was

unaware of its significance until it was too late to declare its intention to

introduce it. Additionally, Crawford claims it introduced the judgment as

impeachment evidence, 6 which under Rule 26(a)(3) of the Federal Rules of Civil

Procedure need not be listed in advance of trial.

      Although the outstanding judgment against the Whatleys may be highly

relevant, we will not pass on the propriety of the trial court’s excluding it from

evidence. The judgment’s existence is now known to both parties, and the district

court will have to revisit the question of its admissibility on retrial. As a result,

this particular evidentiary dispute is not likely to recur in the same form. See

Torres, 182 F.3d at 1164 n.2; Griffin, 929 F.2d at 554; cf. Unit Drilling, 108 F.3d

at 1193.

      6
        Marie had testified that the judgment was “just a piece of paper,” and
both plaintiffs had testified that they had no outstanding debt that might have
influenced their decisionmaking in 1995. (II Appellant’s App. at 1190.)

                                         -18-
                   F. Prejudgment Interest on Future Wages

      The trial court awarded plaintiffs prejudgment interest of 8% on the lump

sum award of $190,000 in economic damages. Crawford argues that to the extent

the award constituted “front pay,” assessing prejudgment interest was improper

because future wages are not “due and owing” prior to entry of judgment.

Shannon v. Colo. Sch. of Mines, 847 P.2d 210, 213 (Colo. Ct. App. 1993).

      Colo. Rev. Stat. § 5-12-102 provides for interest on money that has been

“wrongfully withheld.” Courts interpreting § 5-12-102 have held that the plain

language of the statute indicates prejudgment interest is available only as to “past

losses.” Shannon, 847 P.2d at 213 (“[I]nterest may not be awarded on lost future

wages and benefits because they are not due and owing prior to the entry of

judgment. Simply put, since future wages are not due, there is no delay in the

receipt of the money, and therefore, a plaintiff does not experience a loss on such

earnings.”).

      Because we remand for a new trial, we decline to pass on whether the

award of prejudgment interest was proper under Colorado law. It is at least

conceivable that the issue will not arise on retrial.

                                         -19-
                   G. Reduction of Punitive Damages Award

      The jury awarded $100,000 in punitive damages on Tom Whatley’s fraud

claims. On cross-appeal, plaintiffs claim the trial court erroneously reduced the

jury’s punitive damages award from $100,000 to $40,000. The court did so

because under Colo. Rev. Stat. § 13-21-102(1)(a), exemplary damages may not

exceed the amount of actual damages, and the jury awarded only $40,000 in actual

damages on the fraud claims. 7 Plaintiffs incorrectly contend the trial court struck

that portion of the award associated with Tom Whatley’s negligent

misrepresentation claim on the ground that punitive damages are not available in

Colorado unless the requisite culpability has been established. 8 That contention

misses the mark because the jury did not award punitive damages on the negligent

misrepresentation claim: the jury instructions and verdict form did not permit it

to do so.

      Because it is uncertain whether the issue of what punitive damages are

available will arise on retrial, it is unnecessary for us to address the Whatleys’

      7
         That amount included $50,000 in actual damages minus $10,000 for
failure to mitigate, a total of $40,000.
      8
         Colo. Rev. Stat. § 13-21-102(1)(a) provides for punitive damages only
when the injury “is attended by circumstances of fraud, malice, or willful and
wanton conduct,” and restricts them to “an amount which is equal to the amount
of the actual damages awarded to the injured party.”

                                         -20-
claim. See Torres, 182 F.3d at 1164 n.2; Unit Drilling, 108 F.3d at 1193; Griffin,

929 F.2d at 554.

          H. Dismissal of Tom Whatley’s Breach of Contract Claim

      Tom Whatley conditionally cross-appeals the dismissal of his breach of

contract and promissory estoppel claims, which presented an alternative theory

for the same benefit of the bargain damages that were recovered under the fraud

claims, asking that those claims be reinstated in the event of remand. Because we

reverse and remand for a new trial on all issues, we will address his arguments

regarding the dismissed claims.

      The trial court dismissed Tom’s breach of contract claim on the ground that

his agreement with Crawford was an oral contract of employment that could not

be completed in less than one year and, as a result, was void under the statute of

frauds. Colo. Rev. Stat. § 38-10-112(1)(a) (precluding enforcement of an oral

contract that can not be performed within one year). Whatley contends that

certain “aspects” of his oral agreement with Crawford could have been performed

within one year, including the availability of Crawford’s “step program” and its

alleged commitment to establishing a Montrose office. (Answer Br. Appeal &

Opening Br. Cross-appeal at 64–65.) Whatley’s claim for breach appears to be

based not on his at-will contract of employment, but on some sort of separate

contract consisting of “oral promises regarding the duration of Whatley’s

                                        -21-
employment” and capable of breach by Crawford within one year. (Amended

Reply Br. Appeal & Answer Br. Cross-appeal at 48.) However, because the

statute of frauds permits enforcement only of contracts that may be fully

performed within one year, both Whatley’s open-ended contract for at-will

employment with Crawford and any alleged oral contract regarding conditions of

employment are unenforceable. The mere allegation that an employment contract

was breached within one year does not place it beyond the reach of the statute of

frauds.

      We affirm the dismissal of Tom Whatley’s breach of contract claim.

          I. Dismissal of Tom Whatley’s Promissory Estoppel Claim

      Finally, Tom Whatley argues that his promissory estoppel claim should be

reinstated in the event of remand. The trial court dismissed the claim after the

jury verdict because a damages award based on promissory estoppel would have

been duplicative. The Whatleys correctly note that the promissory estoppel claim

was dismissed not on the merits, but because it had become moot. In contrast,

Crawford’s attempt to argue the claim on its merits is misplaced. “As a general

rule, we do not consider issues not passed on below, and it is appropriate to

remand the case to the district court to address an issue first.” N. Tex. Prod.

Credit Ass’n v. McCurtain County Nat’l Bank, 222 F.3d 800, 812 (10th Cir. 2000)

                                        -22-
(citation omitted). Because we reverse and remand for a new trial, we hold that

Tom Whatley’s promissory estoppel claim may be revived on remand.

                                       III

      The judgment of the trial court is REVERSED in part and AFFIRMED in

part. This matter is REMANDED for proceedings consistent with this opinion.

                                              ENTERED FOR THE COURT

                                              Carlos F. Lucero
                                              Circuit Judge

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