## Facts

- James D. Fogleman, a Tucson welder, accepted an overseas job with Peruvian Associates and related entities for work at a copper mine in Quajone, Peru.
- The parties executed a written employment contract on September 24, 1973, for a two-year term at $1,700 per month plus benefits and allowances.
- The Foglemans relocated to Peru; the employers terminated Fogleman on March 8, 1974, before the contract term ended.
- The Foglemans sued for breach of the employment contract, seeking economic damages (including relocation-related losses), consequential non-pecuniary damages (including emotional distress and reputational harm), punitive damages, and prejudgment interest.
- After a bench trial, the court found the contract was terminable only for cause, found no cause for termination, and awarded $14,989.33 in economic damages plus costs and interest from the date of judgment.
- Although the court entered findings describing emotional distress and wanton or reckless conduct, it denied consequential non-pecuniary damages and punitive damages as unavailable on a contract claim.
- The Foglemans appealed the denial of consequential damages, punitive damages, and prejudgment interest from the time the losses became liquidated.
- The employers cross-appealed, challenging the inclusion of certain relocation-related economic losses and the findings concerning emotional distress and wanton conduct.

## Issues

1. Whether consequential non-pecuniary damages (including emotional distress, humiliation, and embarrassment) are recoverable for breach of an employment contract absent an independent tort or special contractual context.
2. Whether punitive damages are available for breach of an employment contract based on findings of wanton, reckless, or spiteful conduct.
3. Whether relocation-related economic losses (including losses on sale of a residence and personal property) are recoverable as foreseeable contract damages, or are too remote or speculative.
4. Whether prejudgment interest must be awarded from the date damages became liquidated rather than only from the date of judgment.

## Decision

- The court upheld the determination that the employers breached a for-cause employment contract by terminating Fogleman without cause.
- The court affirmed the denial of consequential non-pecuniary damages for emotional distress and related harms in a contract-only employment termination case.
- The court affirmed the denial of punitive damages, holding that punitive remedies are not available for breach of contract absent an independent tort or special duty.
- The court evaluated the challenged economic items under foreseeability, causation, and proof standards, sustaining recovery for foreseeable relocation-related losses while excluding amounts deemed speculative or insufficiently supported.
- The court modified the interest ruling to conform to Arizona’s liquidated-claim doctrine, allowing prejudgment interest on damages that were capable of exact calculation when due, but not on unliquidated components until fixed by judgment.

## Legal Principles

- Contract damages generally compensate pecuniary loss that naturally and proximately flows from the breach and was within the parties’ contemplation at contracting.
- In an employment contract breach case, emotional distress and similar non-pecuniary harms are not recoverable absent an independent tort or a contract whose central purpose includes emotional tranquility.
- Punitive damages are not recoverable for breach of contract alone; describing the breaching conduct as wanton or spiteful does not convert a contract claim into a punitive-damages claim without a separate tort basis.
- Economic losses incident to a required relocation may be recoverable when a relocation is contemplated by the employment contract and the loss is a foreseeable consequence of premature termination, provided the amount is proven with reasonable certainty.
- Prejudgment interest is available on liquidated claims from the time the amount becomes due; a claim is liquidated when it is subject to exact computation without reliance on discretion or opinion.

## Conclusion

The court treated the wrongful termination as a contract breach warranting compensation for foreseeable, proven economic loss (including certain relocation-related losses), while barring emotional distress and punitive damages in the absence of an independent tort, and it applied Arizona’s liquidated-claim rule to award prejudgment interest only on components capable of exact calculation when due.


Fogleman v. Peruvian Assocs., 622 P.2d 63 (Ariz. Ct. App. 1980)