Cheyenne Mountain School Dist. No. 12 v. Thompson

In Cheyenne Mountain School Dist. No. 12 v. Thompson, 861 P.2d 711 (Colo. 1993), the Supreme Court of Colorado considered whether the employment contract of the School District Superintendent was ambiguous as to whether he was entitled to compensation for his unused vacation time when his contract expired and he chose not to renew it. In finding the terms of the employment contract ambiguous as to the superintendent's entitlement to compensation, the court held: The contract is silent on the specific question of whether Thompson is entitled to compensation for unused vacation at the expiration of his contract. Silence does not by itself necessarily create ambiguity as a matter of law. Silence does create ambiguity, however, when it involves a matter naturally within the scope of the contract. Consolidated Bearings Co. v. Ehret-Krohn Corp., 913 F.2d 1224, 1233 (7th Cir. 1990). Compensation for unused accrued vacation on expiration of Thompson's contract is a matter naturally within the scope of the contract. . . . . Central to this ambiguity is the question of whether to apply paragraph 17 to Thompson's situation. The School District argues that Thompson is not entitled to compensation and urges us to apply paragraph 17 of the contract, which would deny Thompson payment if he had been fired without cause by the School Board. Thompson counters by noting that paragraph 17 only applies to the unilateral termination of the contract by the School Board. He contends that, because the School Board provided unequivocally for the disposition of vacation compensation in the specific case of unilateral termination, its failure to provide at all for other forms of termination means that it did not intend to deny him vacation compensation in those cases. Under the terms of the contract, Thompson's employment could terminate in five ways: (1) by expiration of the term of employment; (2) by discharge for cause; (3) by agreement; (4) by abandonment or breach by Thompson; and (5) by termination without cause. Only for the last, termination without cause, does the contract address the issue of whether Thompson would be compensated for unused vacation time. In that case, paragraph 17 applies and Thompson would not be compensated. The contract does not address the disposition of vacation pay if Thompson's employment terminated in any other way, including where, as here, the contract merely expired. (Id. at 715-16.) The court in Thompson having found, inter alia, that the employment contract covered such a broad sweep regarding the terms of the superintendent's employment, concluded that the silence with respect to his entitlement to compensation for unused vacation time created an ambiguity because it involved a matter naturally within the scope of the contract.