search the entire site.
or go to the recent opinions, or the chronological or subject indices.
Alaska Democratic Party v. Rice (4/4/97), 934 P 2d 1313
NOTICE: This opinion is subject to formal correction before
publication in the Pacific Reporter. Readers are requested to bring
errors to the attention of the Clerk of the Appellate Courts, 303 K
Street, Anchorage, Alaska 99501, phone (907) 264-0607, fax (907)
THE SUPREME COURT OF THE STATE OF ALASKA
ALASKA DEMOCRATIC PARTY and )
GREG WAKEFIELD, ) Supreme Court No. S-6638
Appellants, ) Superior Court No.
) 3AN-93-5225 CI
) O P I N I O N
KATHLEEN RICE, )
) [No. 4800 - April 4, 1997]
Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Anchorage,
Joan Woodward, Judge.
Appearances: Joe P. Josephson, Anchorage, for
Appellant Alaska Democratic Party. Paul
Stockler, Anchorage, for Appellant Greg
Wakefield. Thomas A. Ballantine, Anchorage,
Before: Compton, Chief Justice, Rabinowitz,
Matthews, Eastaugh, and Fabe, Justices.
Kathleen Rice (Rice) contended that Greg Wakefield, in
his capacity as chair-elect of the Alaska Democratic Party (Party),
offered her a two-year position as executive director of the Party.
When the job failed to materialize, Rice sued on the alleged oral
contract. She was awarded damages after a jury trial. The Party
and Wakefield now appeal. We affirm.
II. FACTS AND PROCEEDINGS
Rice worked for the Party in one capacity or another from
approximately 1987 to 1991. In 1991, she was fired from her
position as executive director by Rhonda Roberts, the then current
chair of the Party. In 1991, Rice began working for the Maryland
Democratic Party. While she was in Maryland, Greg Wakefield
contacted her regarding his potential candidacy for the Party chair
and the possibility of Rice serving as his executive director.
In May 1992, Wakefield was in fact elected to chair the
Party. His term was set to begin the following February. Rice
claims that sometime during the summer after Wakefield had been
elected, he "confirmed his decision"to hire her as executive
director on the following specific terms: "$36,000.00 a year for at
least two years and an additional two years if . . . Wakefield is
re-elected; and approximately $4,000.00 a year in fringe benefits."
In August 1992, Nathan Landau, the chair of the Maryland
Democratic Party, resigned and asked Rice to come work for him in
his new capacity as co-finance chair of the Gore vice-presidential
campaign. She accepted this offer. Rice asserts that later, in
either September or October, she accepted Wakefield's offer to work
for the Party in Alaska. In November, Rice moved to Alaska,
resigning her position with Landau, which she claims "could have
continued indefinitely . . . at a pay scale the same as that
offered by Wakefield." No written contract was entered into
between Rice and Wakefield or between Rice and the Party.
In a closed-door meeting on February 5, 1993, the
executive committee of the Party advised Wakefield that he could
not hire Rice as executive director. Rice alleges that even after
this meeting, Wakefield continued to assure her that she had the
job. However, on February 15, Wakefield informed her that she
could not have the job. Rice filed suit.
On cross-motions for summary judgement, the superior
court dismissed all counts except those based on the theories of
promissory estoppel and misrepresentation. After a trial by jury,
Rice was awarded $28,864 in damages on her promissory estoppel
claim and $1,558 in damages on her misrepresentation claim. The
superior court denied the Party's and Wakefield's motions for
directed verdicts and judgment N.O.V. This appeal followed.
A. The Superior Court Did Not Err in Denying the Party's
Motion for Summary Judgment on Rice's Promissory Estoppel
The question of whether the doctrine of promissory
estoppel can be invoked to enforce an oral contract that falls
within the Statute of Frauds presents a question of first
impression. In order to resolve this question, the policy concerns
behind both the Statute of Frauds and the doctrine of promissory
estoppel must be examined. The purpose of the Statute of Frauds is
to prevent fraud by requiring that certain categories of contracts
be reduced to writing. However, "it is not intended as an escape
route for persons seeking to avoid obligations undertaken by or
imposed upon them." Eavenson v. Lewis Means, Inc., 730 P.2d 464,
465 (N.M. 1986), overruled on other grounds by Strata Prod. Co. v.
Mercury Exploration Co., 916 P.2d 822 (N.M. 1996).
In its ruling on cross summary judgment motions in this
case, the superior court addressed some of the conflicting case law
on this question and ultimately concluded that as between the
Statute of Frauds and promissory estoppel, the latter would
prevail. It based this conclusion, in large part, on section 139
of the Restatement (Second) of Contracts which provides that
[a] promise which the promisor should
reasonably expect to induce action or
forbearance on the part of the promisee or a
third person and which does induce the action
or forbearance is enforceable notwithstanding
the Statute of Frauds if injustice can be
avoided only by enforcement of the promise
. . . .
Restatement (Second) of Contracts sec. 139 (1981) (emphasis added).
Section 139(2) then goes on to enumerate factors to consider in
making the determination of "whether injustice can be avoided only
by enforcement of the promise." Id.
In reaching its decision on this issue, the superior
The Restatement test referenced herein
provides an appropriate balance between the
competing considerations supporting strict
enforcement of the Statute, on the one hand,
and prevention of a miscarriage of justice, on
the other. Plaintiff's burden in overriding
the Statute is to establish the promise's
existence by clear and convincing evidence.
This heightened burden, along with the other
criteria imposed by Section 139, insure that
the polices which gave rise to the Statute of
Frauds will not, in fact, be nullified by
application of the Restatement exception.
(Emphasis added.) Commentators have noted that "there is no
question that many courts are now prepared to use promissory
estoppel to overcome the requirements of the statute of frauds."
2 Arthur L. Corbin, Corbin on Contracts sec. 281A (1950 & Supp.
1996). We join those states which endorse the Restatement approach
in employment disputes such as this one. (EN2)
Concerning the applicability of section 139, (EN3) the
requisites for a claim must be met, as the jury reasonably found
they were here. The Party and Wakefield reasonably could have
expected to induce Rice's action by their promise. Rice did in
fact resign from her job, move from Maryland, and lose money as a
result of her reliance on the Party and Wakefield, which amounted
to a substantial worsening of her position. In addition, her
reliance on the oral representations was reasonable.
Nonetheless, the promise is only enforceable where
injustice can only be avoided by enforcement of the promise. The
following circumstances are relevant to this inquiry:
a) the availability and adequacy of other
remedies, particularly cancellation and
b) the definite and substantial character of
the action or forbearance in relation to the
c) the extent to which the action or
forbearance corroborates evidence of the
making and terms of the promise, or the making
and terms are otherwise established by clear
and convincing evidence;
d) the reasonableness of the action or
e) the extent to which the action or
forbearance was foreseeable by the promisor.
Restatement (Second) of Contracts sec. 139(2) (emphasis added). In
the context of this factual record, the jury could reasonably find
that Rice would be a victim of injustice without an award of
damages, considering her induced resignation, her move from
Maryland, and her loss of money and position.
The Statute of Frauds represents a traditional contract
principle that is largely formalistic and does not generally
concern substantive rights. The extent to which a reliance
exception would undermine this principle is minimal and the rights
that it would protect are significant. The need to satisfy the
clear and convincing proof standard with respect to the subsection
139(2)(c) factor also reassures us that promissory estoppel will
not render the statute of frauds superfluous in the employment
context. Accordingly, we affirm the superior court's treatment of
this issue and adopt section 139 as the law of this jurisdiction.
B. The Superior Court Did Not Commit an Error By Not
Incorporating the Phrase "Definite and Substantial"into
Jury Instruction Number 12. (EN5)
In regard to Rice's section 139 claim, one aspect of Jury
Instruction 12 directed the jury to decide whether Rice "took
action in reliance upon the promise . . . ." The Party and
Wakefield claim that section 139 of the Restatement (Second) of
Contracts requires more than that "action"be taken; they contend
that the action must be of a "definite and substantial"character.
As such, they argue that "instruction 12 omitted a crucial
component of the section 139 factors."
The Restatement lists "the definite and substantial
character of the action or forbearance in relation to the remedy
sought"as a significant "circumstance"to consider when applying
the doctrine of promissory estoppel. Restatement (Second) of
Contracts sec. 139. The Party and Wakefield are wrong to
characterize this language as creating a "requirement." Further,
the "definite and substantial"language was given to the jury in
Instruction 13. (EN6).
When read as a whole, the instructions clearly direct the
jury to consider the definite and substantial character of Rice's
action before concluding that an injustice could be avoided only by
enforcing the promise. As such, the instructions are compatible
with the Restatement, and it was not error to omit this modifier
from the text of Instruction 12.
C. The Evidentiary Record Supports the Jury's Verdict
The Party argues that Wakefield, as chair-elect, had
neither implied nor apparent authority to contract on behalf of the
party. Consequently, they conclude that "the Party is not
vicariously liable to Rice under the law of agency." The jury,
after being properly instructed on the law of agency, apparently
concluded that Wakefield was acting as an agent for the Party when
he allegedly offered Rice the job.
The superior court declined to reverse the jury's implied
determination of this issue. In denying the Party's motion for a
judgment N.O.V. on this issue, the superior court concluded that it
would have been reasonable for the jury to find that Wakefield had
implied authority, apparent authority, or both. In this respect,
the superior court observed that "[t]he Party elected Greg
Wakefield as its new Chair. In so doing, the Party arguably
cloaked Wakefield with apparent authority to conduct business on
behalf of his incoming administration." The superior court also
concluded, after discussing the Party Plan and comments allegedly
made by Party officials, that the "evidence provides a sufficient
basis for a finding of the Chair's implied general authority to
make hiring decisions regarding executive personnel."(EN7)
In addition to its more general complaints on this topic,
the Party specifically claims that "even if Wakefield, as chair-
elect, had the implied or apparent authority to hire someone, he
lacked the authority to hire Rice at all, and most especially for
a set term employment contract of two or more years, as opposed to
an employment contract at will." The superior court properly
refuted both branches of this argument. In response to the first
branch, the superior court concluded that "[b]ecause the evidence
supported a finding of general authority, there was no need to
adduce evidence of a specific intention to authorize Rice's hiring
in particular." With respect to whether Wakefield had the
authority to hire someone for a term of years, the superior court
held that since the question had not been raised at trial or on
motion for directed verdict, it was accordingly waived. (EN8)
The question of whether Wakefield had implied or apparent
authority to retain an executive director during the term of his
chairmanship was properly submitted to the jury for resolution.
(EN9) 2. Misrepresentation
The Party and Wakefield do not, in this appeal, dispute
the fact that the jury instructions covering Rice's
misrepresentation claim accurately set forth the correct legal
standards. The only legal contention that they raise with this
claim is that since at the time that the alleged representations
were made "Wakefield was a volunteer, not speaking in his business
or professional capacity,"his representations cannot provide a
basis for recovery. This argument is derived from the text of
subsection 552(1) of the Restatement (Second) of Torts (1977).
That section would allow recovery against "[o]ne who, in the course
of his business, profession or employment, or in any other
transaction in which he has a pecuniary interest, supplies false
information . . . ." Id.
The Party and Wakefield argue that this language
constitutes a "prerequisite for claiming negligent
misrepresentation." However, the comment to Subsection 552(1)
explains that it is designed primarily to distinguish cases where
"the information is given purely gratuitously . . . ." That is not
this case. Wakefield had a significant stake in Rice's acceptance
of his alleged offer; he apparently wanted her to serve as his
executive director. Despite the fact that his term had not yet
commenced when the representations were made, they were clearly
made in the course of the business of running a political party.
As such, even if the Restatement (Second) of Torts does create a
prerequisite, that prerequisite was functionally met in this case.
The remainder of the Party's and Wakefield's arguments
under this heading essentially amount to claims that the jury's
verdict is not compatible with the evidence that was introduced at
trial. (EN10) First, they claim that "there was insufficient
evidence of reasonable and justifiable reliance by Rice." Since
Wakefield was chairman-elect of the Party, and since, according to
Rice's testimony, he offered her a job on certain and specific
terms, the jury was well within the bounds of reason to conclude
that her reliance was justifiable and reasonable under the
The Party's only other claim is that the requirements of
section 161 of the Restatement (Second) of Contracts were not met
by the evidence. Even assuming that section 161 has application to
this claim, which is founded primarily in tort, a reasonable jury
could have found that its requirements were met. More
specifically, the jury could have concluded, based upon the
evidence in this case, that Wakefield knew "that disclosure of the
[executive committee's veto power was] necessary to prevent some
previous assertion from being fraudulent or material." Restatement
(Second) of Contracts sec. 161(a) (1981).
The comment to section 161 states that "one is expected
to disclose . . . such facts as he . . . has reason to know will
influence the other in determining his course of action." Id.
Since Wakefield could certainly be expected to know that disclosure
of the fact that he did not actually have the authority to offer
Rice a job would influence her actions, the facts alleged here
satisfy section 161.
Both legal and factual support for the jury's verdict on
the misrepresentation claim are found in this record. The Party's
and Wakefield's arguments to the contrary are without merit.
D. The Damage Amount Was Not Excessive in Light of the
1. Section 139 claim
According to the special verdict form, Rice was awarded
$28,864.00 in damages for lost earnings and benefits on her section
139 claim. The salary that Rice claims to have been offered was
$36,000.00 per year plus $4,200.00 in employee benefits. The Party
and Wakefield do not seem to dispute the fact that the $28,864.00
amount is a fair measure of Rice's lost wages based upon the salary
figures she alleges. The gist of their argument on the promissory
estoppel claim is rather that the full "benefit of the bargain
[was] not necessary to avoid injustice."
As discussed in section III.A., supra, a proven section
139 claim has the effect of rendering the oral contract, which
would have been invalid under the Statute of Frauds, legally
enforceable on the terms established by Rice. The superior court
correctly instructed the jury as to the proper method of
calculating damages. (EN11)
Further, since this jury was specifically instructed not
to find for Rice on this claim unless "[i]njustice can be avoided
only be enforcement of the promise,"it can be inferred that the
jury concluded that the damages award was "necessary to avoid
injustice." This question was properly reserved for the jury, and
there is nothing unreasonable or outrageous about their award. The
Party's and Wakefield's contentions to the contrary are without
The special verdict forms indicate that the jury awarded
Rice $1,558.00 on her misrepresentation claim. This amount
represents what Rice claims to have spent on moving expenses. As
a result of this award, the Party and Wakefield complain that
"under the judgement, [Rice] gets both her travel costs . . . and
damages calculated with reference to the terms of the promise,"
giving her more than she would have received even if the alleged
contract had been honored.
This argument would have been valid if the superior court
had actually awarded this damage item to Rice. It did not. The
final judgement order reduced the total award of the jury, which
would have been $30,422.00 with the misrepresentation award, to the
$28,864.00 amount that represents only lost wages and benefits.
(EN12) Consequently, we reject the Party and Wakefield's
contention that the damage award is excessive on this ground.
We AFFIRM the judgment of the superior court.
1. This is a pure question of law which this court reviews de
novo. Langdon v. Champion, 745 P.2d 1371 (Alaska 1987).
2. See McIntosh v. Murphy, 469 P.2d 177 (Hawaii 1970); Eavenson
v. Lewis Means, Inc., 730 P.2d 464 (N.M. 1986), overruled by Strata
Prod. Co. v. Mercury Exploration Co., 916 P.2d 822, 828 (N.M. 1996)
(recasting elements of promissory estoppel), and Glasscock v.
Wilson Constructors, Inc., 627 F.2d 1065 (10th Cir. 1980).
Numerous decisions have rejected the Restatement approach both
implicitly and explicitly. See, e.g., Venable v. Hickerson,
Phelps, Kirtley & Assoc., Inc., 903 S.W.2d 659 (Mo. App. 1995),
Greaves v. Medical Imaging Sys., Inc., 879 P.2d 276 (Wash. 1994),
Collins v. Allied Pharmacy Management, Inc., 871 S.W.2d 929 (Tex.
App. 1994), Dickens v. Quincy College Corp., 615 N.E.2d 381 (Ill.
App. 1993), Stearns v. Emery-Waterhouse Co., 596 A.2d 72 (Me.
1991), Sales Serv., Inc. v. Daewoo Int'l (America) Corp., 770
S.W.2d 453 (Mo. App. 1989), Whiteco Indus., Inc. v. Kopani, 514
N.E.2d 840 (Ind. App. 1987), Cunnison v. Richardson Greenshields
Securities, Inc., 485 N.Y.S.2d 272 (N.Y. App. Div. 1985), Moran v.
NAV Servs., 377 S.E.2d 909 (Ga. App. 1989), Munoz v. Kaiser Steel
Corp., 203 Cal. Rptr. 345 (Cal. App. 1984).
3. In reviewing a jury's determination, this court views the
evidence in the light most favorable to the judgement. It does not
"weigh the evidence or judge the credibility of the witnesses,"but
instead, "determine[s] whether there is room for diversity of
opinion among reasonable people. If so, the question is one for
the jury." Levar v. Elkins, 604 P.2d 602, 604 (Alaska 1980).
In denying the Party's and Wakefield's motions for judgment
N.O.V., the superior court stated in part:
Rice, however, testified that Caroline
Covington had told her that the Chair makes
the decision regarding employment of executive
directors. Rice claimed Wakefield told her it
was his decision who to hire. He allegedly
said that if everyone was mad, he and Kathleen
would work together through May and then both
quit, suggesting again that the decision would
be his, notwithstanding opposition. Plaintiff
said that when John Pugh was chair, he had
communicated that it was within his discretion
to fire executive director Bob Speed. And the
Party Plan did not give the executive
committee authority over such hiring
decisions. This was sufficient evidence for
the jury to decide that Rice relied on
Wakefield's implicit promise that the
executive committee could not derail his
selection for executive or finance director.
While the Party focuses on the reasonableness
of Rice's reliance, that is only one factor
for the jury to evaluate in deciding whether
injustice could be avoided only by enforcing
Our review of the record persuades us that there is ample evidence
supporting the superior court's analysis.
4. The Party and Wakefield present further arguments as to why
they should prevail on the promissory estoppel claim. They argue
first that "[t]here was no substantial change of position, no
reliance, and no foreseeability of reliance." And second, that
"'[t]he interests of justice' do not require enforcement of the
These arguments were not included in the points on appeal
submitted at filing, nor were they presented anywhere in the body
of the opening brief; they are only argued in the reply brief. As
such, they will not be considered by this court. Alaska Rule of
Appellate Procedure 204(e). See also Swick v. Seward School Bd.,
379 P.2d 97 (Alaska 1963). The arguments are, in any event,
without merit. They involve issues that were appropriately
resolved against the Party and Wakefield by the jury.
Wakefield further claims that the terms of the contract cannot
be enforced against him personally. Rice, however, argues that
"Wakefield has waived this argument by his conduct at trial."
Indeed, it does not appear, based upon the record, that he raised
this defense until his motion for judgment N.O.V. Further, as the
superior court properly held, the entire judgment N.O.V. motion was
improper since Wakefield had failed to move for a directed verdict
at the close of the evidence. As a result, this court regards the
defense as having never been raised at trial and accordingly waived
for purposes of appellate review.
5. The question here is essentially whether or not the jury
instruction is an accurate statement of the law. This court
reviews questions of law de novo. Langdon v. Champion, 745 P.2d
1371 (Alaska 1987).
6. Instruction 13 reads in full as follows:
In determining whether injustice can be
avoided only by enforcement of a promise, you
may consider, among others, the following
(a) the definite and substantial
character of the plaintiff's action in
relation to the remedy sought;
(b) the extent to which plaintiff's
action corroborates evidence of the making and
terms of the promise, or the making and terms
are otherwise established by clear and
(c) the reasonableness of plaintiff's
(d) the extent to which plaintiff's
action was foreseeable by the promisor.
7. In regard to these issues the superior court correctly
Plaintiff relied on the fact that the Party
Plan did not indicate any intent to endow the
executive committee with authority to override
the Chair. As noted previously, moreover,
Rice testified to comments purportedly made by
Caroline Covington and John Pugh which
suggested an intention on the part of Party
officials to vest complete discretion over
hiring decisions in the Chair. Additionally,
John Alexander, an executive committee member
at the time Wakefield offered Rice the
position, testified that he understood
Wakefield to have the unfettered authority to
hire a finance director.
This evidence provides a sufficient basis
for a finding of the Chair's implied general
authority to make hiring decisions regarding
executive personnel. Because the evidence
supported a finding of general authority,
there was no need to adduce evidence of a
specific intention to authorize Rice's hiring
in particular. Similarly, if an installed
Chair could make a binding job offer, the jury
could reasonably find that the Party
contemplated that a Chair-elect could do the
same, so long as the employment was not to be
effective prior to the time that the Chair
actually assumed the office.
The jury was also instructed that the
party could be found vicariously liable based
on apparent authority. Apparent authority
entails conduct of the principal by which
third parties are given reason to believe that
the agent is authorized to act on the
principal's behalf. 3 Am. Jur. 2d Agency sec.
78. "Unless the evidence allows but one
inference, the question of apparent authority
is one of fact for the jury." Jackson v.
Power, 743 P.2d 1376 (Alaska 1987); City of
Delta Junction v. Mack Trucks, Inc., 670 P.2d
1128 (Alaska 1983).
The Party elected Greg Wakefield as its
new Chair. In so doing, the Party arguably
cloaked Wakefield with apparent authority to
conduct business on behalf of his incoming
administration. Wakefield was allowed to
speak for the Party in certain respects. He
did radio commentary as the Party's spokesman
at the November general election. He
organized fund raisers. And he travelled to
various meetings in his capacity as Chair-
Wakefield's actions, moreover,
corresponded to those of Rhonda Roberts, when
she was Chair-elect. Rice testified that
during Roberts' pre-installation phase, she
(Roberts) called the Party office on occasion
requesting assistance. Rice responded to
these requests. As discussed previously, the
Party also promulgated its Party Plan, which
placed no limitations on the Chair (or Chair-
elect)'s prerogative to make employment
decisions. Thus, there was an historical
context within which Rice could have construed
the Party's position on Wakefield's hiring
authority. There was sufficient evidence for
the jury to find that Rice understood from
Party conduct that Wakefield was authorized to
hire personnel for the finance director
8. The Party now contends that it did, in fact, raise this
question when moving for directed verdict. In support of this
proposition, it offers only the following transcript excerpt:
We don't think there's a showing of an implied
or apparent agency at all in the -- on this
record. So, we would ask for directed verdict
for [the previously listed] reasons.
This is not adequate. The Party apparently never mentioned
anything about the term of employment as it related to agency. As
such, the argument has been effectively waived.
9. "Unless the evidence allows but one inference, the question of
apparent authority is one of fact for the jury."Jackson v. Power,
743 P.2d 1376, 1382 (Alaska 1987) (citations omitted).
10. This court will not disturb a jury's verdict unless the
evidence, considered in the light most favorable to the verdict, is
so clearly to the contrary that "reasonable persons could not
differ in their judgment." Diamond v. Wagstaff, 873 P.2d 1286,
1290 (Alaska 1994).
11. In regard to the section 139 claim, the superior court
instructed the jury in part as follows:
If you decide in favor of the plaintiff,
you must then decide how much money, if any,
will fairly compensate her. I will list for
you the items of loss claimed by the
plaintiff. You may not assume because I list
an item of loss or explain how to measure a
particular loss that you are required to make
an award for that loss. For each item of loss
you must decide that it is more likely than
not true that:
1. The plaintiff had such a loss or is
reasonably probable to have such a loss in the
2. The loss was legally caused by the
conduct of one or both defendants that forms
the basis for your verdict.
If both of these things are more likely
than not true, you must then decide how much
money will fairly compensate the plaintiff for
that item of loss. If you do not conclude
that both of these things are more likely than
not true for a particular item of loss, you
may not make an award for that loss.
As explained in Instruction 12, the items
of claimed loss on the promissory estoppel
claim are either
1. Lost earnings of $36,000 per year
and employment benefits of $4,200 per year for
two years, minus earnings actually received
and to be received from plaintiff's bill
collector's job; or
2. Relocation damages in the amount of
The item of claimed loss on the
misrepresentation claim is
1. Relocation damages in the amount of
To award plaintiff damages, if any, on
her claim for lost earnings and benefits, you
must calculate the total amount of earnings
and employment benefits that plaintiff would
have received during her employment with the
From the amount just calculated you must
(a) the amount of salary and the value of
any benefits that plaintiff has received or
will receive from her bill collecting job
during the period in which she expected to be
employed by the Party;
(b) the amount of payments, if any, given
her by the Party that would not have been
made, had she been hired as Finance Director;
(c) the amount of salary and value of any
benefits that plaintiff could have earned in
mitigation. Mitigation is described
12. In its jury instructions on the misrepresentation claim, the
superior court explicitly noted its intention to "make any
adjustments that may be necessary to insure that there is no double