Mullins v. Southern Pacific Transportation Co.

851 P.2d 839, 174 Ariz. 540, 122 Ariz. Adv. Rep. 119, 1992 WL 230632, 1992 Ariz. App. LEXIS 269
CourtCourt of Appeals of Arizona
DecidedSeptember 24, 1992
Docket2 CA-CV 92-0049
StatusPublished
Cited by14 cases

This text of 851 P.2d 839 (Mullins v. Southern Pacific Transportation Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mullins v. Southern Pacific Transportation Co., 851 P.2d 839, 174 Ariz. 540, 122 Ariz. Adv. Rep. 119, 1992 WL 230632, 1992 Ariz. App. LEXIS 269 (Ark. Ct. App. 1992).

Opinion

OPINION

HATHAWAY, Judge.

This appeal is taken from the trial court’s granting of a defense motion for summary judgment in a dismissal from employment case.

Appellant Michael E. Mullins was discharged by his employer, appellee Southern Pacific Transportation Company (Southern Pacific). The record does not indicate the reason for his firing; however, the details of his discharge are not essential to our resolution of this case.

After the complaint and Southern Pacific’s answer were filed, appellant’s deposition was taken. During the deposition, appellant stated that when he was hired, he understood that “I would be employed until such time as I reaped the benefits of the officer pension plan.” He was then asked, “Did that mean to you that you would be employed by Southern Pacific from your initial hire until you reached age 65?”, to which appellant replied, “Yes.” There is nothing in writing evidencing appellant’s employment contract.

Shortly after receiving the transcript of the deposition, Southern Pacific filed a motion for summary judgment in which it raised the defense of the Statute of Frauds. This affirmative defense had not been raised in the answer. Appellant’s attorney did not challenge the failure to raise the defense in the answer, but rather argued the applicability of the Statute of Frauds to the facts of this case. The trial court granted the motion for summary judgment and this appeal followed.

Appellant raises three issues on appeal: (1) the Statute of Frauds does not apply, and even if it did, the circumstances impose a constructive trust which makes it inapplicable; (2) judgment was prematurely entered by the trial court; and, (3) the award of attorney’s fees was an abuse of discretion. We affirm.

Arizona’s Statute of Frauds, A.R.S. § 44-101 states:

No action shall be brought in any court in the following cases unless the promise or agreement upon which the action is brought, or some memorandum thereof, is in writing and signed by the party to be charged, or by some person by him thereunto lawfully authorized:
* * * # * *
5. Upon an agreement which is not to be performed within one year from the making thereof.

Appellant argues that the Statute of Frauds does not apply because: (1) the employment contract could have been fully performed within one year; (2) the Statute of Frauds does not apply in Arizona because of Wagenseller v. Scottsdale Memorial Hospital, 147 Ariz. 370, 710 P.2d 1025 (1985), and Leikvold v. Valley View Community Hospital, 141 Ariz. 544, 688 P.2d 170 (1984); and, (3) the equitable doctrine of promissory estoppel should be invoked to preclude the application of the Statute of Frauds.

Appellant claims the oral contract to employ him until he was eligible to retire could have been performed within one year because he might have died within one year, he might have been terminated for cause within one year or he might have quit within one year. The authorities appellant cites for his position all concern employment for an indefinite period, not for a definite period, such as here, where the period of employment was to extend until appellant was 65.

Appellant quite correctly states that the Statute of Frauds applies only to oral contracts in which there is not the “slightest possibility” that the contract could be performed within one year, citing Edward Greenband Enterprises of Arizona v. Pepper, 112 Ariz. 115, 118, 538 P.2d 389, 392 (1975). Appellee does not disagree with this contention.

*542 The distinction between a contract for “permanent” employment and employment for a fixed term when one of the parties dies is set forth in 2 A.L. Corbin, Corbin on Contracts § 446, pp. 549-550 (1950):

A contract for “permanent” employment is not within the one-year clause for the reason that such a contract will be fully performed, according to its terms, upon the death of the employee, [footnote omitted] The word “permanent” has, in this connection, no more extended meaning than “for life.”
And Id. at § 447 p. 555:
If A promises to work for B or B promises to employ A for more than one year, the promise is held to be within the statute. [Footnote omitted] This is in spite of the fact that A or B may die within a year and that death wholly extinguishes duty of the promisor in contracts for personal service. [Footnote omitted]

The Restatement of the Law (Second) of Contracts § 130, at 329 (1981), in comment (b) and illustrations 5 and 7, further explain that a contract for a definite term cannot be deemed performable within one year, and, therefore, is covered by the Statute of Frauds:

b. Discharge within year. Any contract may be discharged by a subsequent agreement of the parties, and performance of many contracts may be excused by supervening events or by the exercise of a power to cancel granted by the contract. The possibility that such a discharge or excuse may occur within a year is not a possibility that the contract will be “performed” within a year. This is so even though the excuse is articulated in the agreement.
******
Illustrations:
5. A orally promises to work for B, and B promises to employ A for five years at a stated salary. The promises are within the Statute of Frauds. Though the duties of both parties will be discharged if A dies within a year, the duties cannot be “performed” within a year. This con-' elusion is not affected by a term in the oral agreement that the employment shall terminate on A’s death.
******
7. The facts being otherwise as stated in Illustration 5, the agreement provides that A may quit at any time. The agreement is within the Statute.

“In the absence of contrary authority Arizona courts follow the Restatement of the Law.” Bank of America v. J. & S. Auto Repairs, 143 Ariz. 416, 418, 694 P.2d 246, 248 (1985). Appellant’s argument that his contract until age 65 could have been fully performed if he had died, quit or been discharged for cause, is not .supported by Professor Corbin or the Restatement.

Appellant’s second argument is based on Arizona’s recognition of the implied-in-fact employment contracts in Wagenseller and Leikvold. The Statute of Frauds was not an issue in those cases; however, since both dealt with contracts “of indefinite duration,” Wagenseller, 147 Ariz. at 381, 710 P.2d at 1036, Leikvold, 141 Ariz.

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Bluebook (online)
851 P.2d 839, 174 Ariz. 540, 122 Ariz. Adv. Rep. 119, 1992 WL 230632, 1992 Ariz. App. LEXIS 269, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mullins-v-southern-pacific-transportation-co-arizctapp-1992.