Even more basic, however, with regard to the Statute of Frauds is its inapplicability to plaintiff's tort (i.e. fraud) claims. The jury, having granted punitive damages, clearly found for Jarrett on his tort claims, concluding that Epperly's conduct was intentional, malicious and wanton. The application of the Statute of Frauds to the tort of fraudulent misrepresentation was specifically addressed by the Tennessee Court of Appeals in Haynes v. Cumberland Builders, Inc., 546 S.W.2d 228 (Tenn.Ct.App.1976). There, the Court held that the Statute did not preclude a claim for fraud, and rejected the appellant's argument to the contrary as "meritless". Id. at p. 231. The Court reasoned that the Statute of Frauds applied only to contract actions, and not to tort claims. We find meritless Defendants' reliance on Webb v. Shultz, 184 Tenn. 235, 198 S.W.2d 333 (1946). This, as well as other cases cited by Defendants, involved claims for breach of contract, and not tort claims for fraud. The Webb decision antedated the Tennessee Supreme Court's decision in Blasingame by more than a quarter of a century, moreover, and the latter decision--which is strikingly close to the instant case on its facts--would control here regardless of what Webb said.

Defendant contends that the trial court erred in rejecting tendered instructions on the Statute of Frauds. This Court has held that the failure to give a tendered instruction is not error where other instructions given by the Court adequately address the same issue. Blackwell v. Sun Electric Corp., 696 F.2d 1176, 1182-1183 (6th Cir.1983); Mitroff v. Xomox Corp, 797 F.2d 271, 278 (6th Cir.1986), Jones v. Consolidated Rail Corp., 800 F.2d 590 (6th Cir.1986). Here, because the parties' agreement was undisputedly oral, the jury issue was whether Jarrett's partial performance of the agreement, and his reliance thereon, brought his contract claim within an exception to the Statute of Frauds. The trial court instructed the jury that, to prevail on his contract claim, Jarrett had the burden of proving "that in reliance on the promise of eventual ownership, he altered his position so far as to incur an unjust and unconscionable injury and loss; and ... [t]hat his actions performed pursuant to the alleged promise of eventual part ownership are clearly referable to that promise, rather than to some other reason such as increases in compensation." Because this instruction adequately addressed the factual dispute between the parties relevant to the Defendants' Statute of Frauds defense, the court did not err in refusing Defendants' tendered instructions.

Moreover, even if the trial court's instructions as to the Statute of Frauds were erroneous, any such error was clearly harmless, inasmuch as the jury's verdict was also based on Jarrett's fraud claims, which were not subject to the Statute of Frauds defense. Haynes, supra, at p. 231.

We also conclude that the district court correctly declined to instruct the jury that in a case of promissory fraud, the promisor has an absolute legal right to change his mind. The facts presented at trial did not support such a charge. Defendant apparently claims here that Epperly originally intended to keep his promise, but changed his mind after the business expanded beyond his expectations. At trial, however, Epperly denied that he ever made the promise in the first instance. He never claimed at trial that he had indeed changed his mind. Even though a party's requested jury charge is a correct statement of the law, for the trial court to be held in error for refusing the charge, it must not only be legally correct, but must also be applicable to the facts in evidence. Strickland v. City of Lawrenceburg, 611 S.W.2d 832, 837 (Tenn.Ct.App.1980). No error occurred.

Defendants next advance the argument that by permitting plaintiff to proceed on the theories of fraudulent concealment and actual fraud, the trial court allowed "trial by ambush". We reject such a contention for the reason that the prior pleadings, as well as the pre-trial proceedings, were sufficient to place defendants on notice of these claims. The evidence in the case remained the same. Defendants show no real prejudice to their trial preparation effort. Accordingly, the district court committed no abuse of discretion by allowing these claims to go to the jury. "[A] claim of surprise that is not borne out by the facts, or an objection to a mere technical addition to the theory of the claim for relief or the facts on which it is based or a change in the nature of the defense typically will not entail sufficient prejudice to warrant the denial of a motion to amend." Wright and Miller, Federal Practice and Procedure, Sec. 1495, pp. 478-79. Even at a late stage in the proceedings, parties may amend their pleadings to conform to the proofs and to the findings of fact. Brandon v. Holt, 469 U.S. 464, 105 S. Ct. 873, 83 L. Ed. 2d 878 (1985). See also 3 J. Moore, Federal Practice p 15.13, p. 15-157 (2d ed 1984) (amendment to conform to evidence may be made at any time); id., at 15-168 (Rule 15(b) amendment allowed "so long as the opposing party has not been prejudiced in presenting his case").

Appellants allege that Jarrett affirmatively waived his claims because he supposedly discovered years in advance of his lawsuit that Epperly did not intend to keep his promise, and therefore should have taken prompt action to rescind the contract. To support these contentions, Appellants rely heavily on statements made by Jarrett at his deposition, inferring that he knew six or seven years before filing suit that Epperly never intended to fulfill his promise. Appellants, however, ignore Plaintiff's affidavit and trial testimony. In his affidavit in opposition to summary judgment, Jarrett averred that the reference to six or seven years "refers to when the Nashville branch stopped using the name United Brake Systems of Tennessee" and not to any such discovery as Defendants claim. In addition, at trial he testified that he did not learn that a corporation entitled United Brake Systems of Tennessee had never been set up by Epperly, as promised, until after his ten years of employment when he consulted legal counsel, who informed him. Significantly, he also testified at trial that when he approached Epperly as his tenth anniversary neared, Epperly promised him stock certificates representing forty-nine percent of the stock of the Nashville branch. Therefore, Defendants' contention that Jarrett affirmatively waived his claims is not supported by the evidence and the jury had substantial and material evidence from which to conclude the contrary.

Finally, Defendants object to the form of the verdict submitted to the jury. They argue that it was error to use a general verdict form, rather than a special verdict in the form of interrogatories. However, the form of jury verdict is within the discretion of the trial judge, and is not ordinarily reviewable. Lummus Industries, Inc., v. D.M & E. Corp., 862 F.2d 267 (Fed.Cir.1988); see also Fed.R.Civ.P. 49 Commentaries ("It appears that the privilege of calling for a special verdict is not a right to be demanded by the parties but is rather a matter to be determined by judicial discretion.") and Flanigan v. Burlington Northern Inc., 632 F.2d 880 (8th Cir.1980) cert. denied, 450 U.S. 921, 101 S. Ct. 1370, 67 L. Ed. 2d 349 (1981) ("The decision whether to use a general verdict accompanied by special interrogatories ... is similarly committed to the unreviewable discretion of the trial judge."), quoting 9 Wright & Miller, Federal Practice and Procedure, Civil Sec. 2511, at 522 (1971).

The jury awarded compensatory and punitive damages. The award of punitive damages supports the conclusion that the jury found a species of fraud. In Adkins v. Ford Motor Company, 446 F.2d 1105, 1108 (6th Cir.1971), this Court held:

Tennessee adheres to the rule that where more than one theory of recovery is submitted to the jury, and there is evidence to support one or more, but not all, of the theories, a general verdict should be construed to be attributable to the theory or theories supported by sufficient evidence and submitted free from error. [Citations omitted].

The trial judge acted within his discretion by submitting the case to the jury through a general verdict form.

The decision of the district court is AFFIRMED.

I dissent from the majority view in this case, and I would reverse and remand the case for the reasons indicated.

As conceded by plaintiff, the alleged agreement between the parties was not in writing and there was no documentary evidence establishing its precise terms. I find the statement by the magistrate in this case to set forth the facts succinctly:

[W]hen the facts are construed in a light most favorable to Jarrett, as required in consideration of this motion for summary judgment, Jarrett, by his own testimony and the testimony of other employees, has presented sufficient facts to establish an oral agreement between Jarrett and Epperly for Epperly to convey a 49% interest in UBSI's Nashville operation upon Jarrett's successful completion of 10 years employment with Epperly and UBSI. Jarrett testified that Epperly so agreed in 1976 and gave subsequent assurances to Jarrett in the following years. Other employees described conversations with Epperly in which Epperly acknowledged the agreement. Jarrett left his prior employment to take the position and declined to pursue subsequent employment offers and business ventures in reliance upon Epperly's promise. Although the dollar value of these other offers are [sic] unclear, the length of Jarrett's commitment suggests an unjust loss if the agreement were breached. To be sure, Epperly disputes these facts, but these factual disputes can not be resolved by a motion for summary judgment.

... It appears that Jarrett [sic] version of the 1976 agreement include [sic] a subsequent promise to convey the real estate on which UBSI's Nashville branch was located. Of course, UBSI did not acquire ownership of the real estate on which its Nashville branch was located until 1980. However, in his deposition testimony, Jarrett clearly states that this real estate was to be embedded in the agreement.

An oral contract for sale of an interest in land is clearly not enforceable in Tennessee. Blasingame v. American Materials, Inc., 654 S.W.2d 659 (Tenn.1983); Baliles v. Cities Service Co., 578 S.W.2d 621 (Tenn.1979). It is error to rely upon a sixty-one year old district court decision (Interstate Co. v. Bry-Block Mercantile Co., 30 F.2d 172 (W.D.Tenn.1928) to "supercede" the holding of the Tennessee Supreme Court in this regard.

The doctrine of partial performance, relied upon by plaintiff, does not change the rule on sale of real estate in Tennessee. Blasingame, supra, n. 2; Baliles, supra. The Blasingame court specifically noted that a situation where real estate is the subject matter of an oral agreement is distinguishable from a situation which involves the partial performance of a verbal employment contract. 654 S.W.2d at 663.

Plaintiff formally pleaded that real estate was part of the alleged contract upon which he relied:It was understood by the parties that the forty-nine percent (49%) of the Nashville operation, included inventory, equipment, accounts receivable, accounts payable, business goodwill and real estate.

Joint Appendix 21 and 91 (emphasis added).

Plaintiff is suing for the value of real estate assets acquired in 1980 and claims that since there was no real estate involved in 1976 when he made the oral agreement, he is not barred by the Statute of Frauds. Jarrett cannot escape, however, from the fact that he is nevertheless claiming an interest in real estate based on an unenforceable oral agreement. To the extent the district court and the majority have permitted recovery for the value of real estate, contrary to the Tennessee Statute of Frauds as construed by the Tennessee Supreme Court, I am convinced they are in error and to this extent, at least, I would reverse and remand for a redetermination of damages, excluding the value of real estate entirely. This would be the case if the alleged oral contract were deemed to be severable giving plaintiff the benefit of very considerable doubt under Womble v. Walker, 181 Tenn. 246, 181 S.W.2d 5 (1944), and Brockett v. Pipkin, 25 Tenn.App. 1, 149 S.W.2d 478 (1941).

In sum, then, I dissent from the majority's holding that the Statute of Frauds was inapplicable to the real estate assets claimed by plaintiff. The entire basis for plaintiff's claim is breach of an oral contract, an oral agreement which purportedly included and involved a 49% interest in Epperly's "Nashville operation." The Statute of Frauds is clearly applicable to breach of contract claims as plaintiff admits in his brief, citing Haynes v. Cumberland Builders, Inc., 546 S.W.2d 228 (Tenn.Ct.App.1976) (Appellee's Brief at 11). Later Tennessee Supreme Court cases also make this clear. Plaintiff characterizes in both the complaint and amended complaint that he is suing on a "breach of contract" claim.

The other claim asserted by Jarrett in his amended complaint is for promissory fraud. Plaintiff claims in this regard that defendant Epperly made false representations in the agreement, discussed above, with the idea at the outset to deceive plaintiff, because he had "no reasonable expectation of performing those promises." Plaintiff claims, therefore, that defendant "expected to induce reliance" and did so, causing him "to change his position," and then Epperly "repudiated" the oral agreement to plaintiff's "irreparable detriment." This claim amounts to an alleged oral offer and acceptance by plaintiff and the subsequent failure on the part of defendant-offeror to carry out the parol agreement, his part of the bargain.

The promissory fraud claim should not have been submitted to the jury. The Tennessee Supreme Court has not expressly recognized promissory fraud as a tort in Tennessee. It has not yet found the "right" set of facts to apply such a doctrine. Fowler v. The Happy Goodman Family, 575 S.W.2d 496 (Tenn.1978); Bolan v. Caballero, 220 Tenn. 318, 417 S.W.2d 538, 541 (1967). The Tennessee Supreme Court has, nevertheless, expressly held that there is no judicial remedy for breach of an oral promise within the statute of frauds even if "the promise [was made] with no intention of complying with it." Southern States Development Co. v. Robinson, 494 S.W.2d 777, 782 (Tenn.Ct.App.1972), cert. denied, (Tenn.1973) (quoting Webb v. Shultz, 184 Tenn. 235, 198 S.W.2d 333, 336 (1946)).

When enforcement of a promise is barred by the Statute of Frauds, a claim for promissory fraud on that same promise is likewise barred. In the Webb decision, the Tennessee Supreme Court stated:

In Hackney v. Hackney, 27 Tenn. 452, it was held that the fraud which will take a case from the operation of the statute of frauds is not fraud in making the promise with no intention of complying with it; but a fraud by which the reduction of it to writing is prevented, the parties so intending; and the complaining party being induced to believe that it has been done, and this fraud may be perpetrated in two ways--one by signing a false paper, at the same time inducing the belief that it is the true one, and the other by inducing the belief that the paper had been signed when in fact it had not. If there was no intention of reducing the promise to writing, or if there were knowledge that though there was an intention of reducing it to writing, that this had not been done, the promise is void under the statute.

... It is, therefore, clear that a false promise to sign an instrument in the future [or to do any act in the future] is not such fraud as will take the case out of the operation of the statute of frauds.

198 S.W.2d at 336. Webb thus distinguished between fraud in the inducement--e.g., having someone sign a false paper--from fraud in factum, such as the fraud alleged in this case in which Jarrett alleges that Epperly had no intention of complying with the promise at the time he made it. While fraud in the inducement will take a case away from the operation of the Statute of Frauds where there was allegedly no intention of ever complying with the promise, "the promise is void under the statute." Id. The Webb language was quoted with approval by the Tennessee Court of Appeals in Southern States. See 494 S.W.2d at 782.

Southern States was decided five years after the Tennessee Supreme Court discussed the theory of promissory fraud in Caballero, supra. Even though the Tennessee Court of Appeals was on notice of the consideration of the concept of promissory fraud by the Tennessee Supreme Court in Bolan, it nevertheless recognized that certain oral promises are not actionable regardless of the maker's intent.

The district court should have been guided by those decisions and recognized that submitting the promissory fraud claim to the jury would be contrary to Tennessee law. Neither the magistrate nor the district judge even acknowledged the existence of the Webb and the Southern States decisions.

The plaintiff has elected first to go forward to sue for a breach of contract and obtain damages for the breach. To the extent he is entitled to recover damages for the oral contract (not involving real estate), plaintiff cannot also claim a recovery for a remedy for promissory fraud saying there was never such an agreement because defendant never intended to perform it. See Dunham v. Fortner Furniture Co., 1987 WL 6372 (Shelby Law No. 99, 2/13/87, Tenn.Ct.App.).

Tennessee appellate courts have not seen fit to allow a promissory fraud recovery for the type of claim made in this case. Brungard v. Caprice Records, Inc., 608 S.W.2d 585 (Tenn.Ct.App.1980), involved a claim for rescission of a contract and for relief based on fraudulent misrepresentation, a different situation from the instant case. The Tennessee Court of Appeals in Farmers & Merchants Bank v. Petty, 664 S.W.2d 77, 81 (Tenn.Ct.App.1983), recognized that the Supreme Court of Tennessee has not adopted the doctrine of promissory fraud. In Fowler, the Supreme Court of Tennessee stated:

Although a minority view, the rule established by the cases in this state has been that a misrepresentation of intention or a promise without intent to perform is legally insufficient to support a claim for rescission or damages. This rule has been adhered to in a number of decisions, including the fairly recent case of Bolan v. Caballero.

Fowler, 575 S.W.2d at 499 (citations omitted).

I would agree, therefore, with magistrate William J. Haynes, Jr. in this case that the defendants' Statute of Frauds defense was sound as to "any agreement to convey any interest in the UBSI-Nashville realty," and that the promissory fraud claim simply cannot stand under applicable Tennessee law and the facts of this case.

Jarrett was never denied fair consideration during the time he worked for defendants. He testified that he was "well paid" during this period and was treated fairly during the employment relationship. From the outset defendants paid plaintiff more than he had previously ever been paid and he received regular and generous raises. I find no proven basis for equitable estoppel to preclude defendants' reliance on the Statute of Frauds. See Webb, supra; Southern States, supra.

Giving plaintiff, then, the benefit of doubt about severability of the oral agreement and about application of equitable estoppel in this situation, I would reverse and remand to the district court only for a determination of compensatory damages for the personalty value of the breach of the oral contract I would also reverse and set aside the punitive damages award entirely.