Daily Development for Tuesday, May 25, 1999

By: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
prandolph@cctr.umkc.edu

Another interesting case from Ira Meislick - posted unedited.

STATUTE OF FRAUDS; RELATED DOCUMENT: Although the Statute of Frauds can be satisfied by a signed writing on one of a set of related documents and the printed name of a builder on a set of related drawing would satisfy that requirement, when the drawings are neither attached to the otherwise unsigned contract nor do they expressly refer to the contract, the Statute of Frauds is not satisfied.

Middleton v. Realen Homes, Inc., 24 F.Supp.2d 430 (E.D.Pa. 1998).

As part of an employment agreement with a residential developer, its division manager was offered an opportunity to purchase a home at a discounted rate. The architectural drawings were prepared, as was an Addendum Agreement of Sale, which includes some figures regarding the cost of the property, its location and specific description, and referencing the architectural drawings. However, the home builder did not sign the Agreement of Sale. The division manager's employment was terminated and he wrote a letter to his former employer indicating, that among other things, that he did not accept their "proposal" for the sale of the house and thus indicated that the purchase of the home was impossible. Subsequently, he filed an action claiming that his former employer reneged on the sale of the house.

The homebuilder successfully sought summary judgment, arguing that its former employee could not recover on a breach of contract theory because he had not shown sufficient evidence to demonstrate a signed writing to satisfy Pennsylvania's Statute of Frauds. Under Pennsylvania law, the required signed writing can consist of more than one document even though only one writing is signed if (i) the signed writing is physically annexed to the other writing by the party to be charged, or (ii) the signed writing refers to the unsigned writing, or (iii) it appears from examination of all the writings that the signed writing was signed with reference to the unsigned writings. In addition, whether the memorandum is relied upon as a single document or consists of several related or connected writings, the complete terms of a valid agreement must be ascertainable therefrom with certainty and must also disclose an intention to be bound. The former employee argued that the architectural drawings represented a signed writing because the home builder's name was "prominently displayed on every page." The Court felt that even though there was no requirement that a signature be in any particular form, there had to be some reliable indication that the person to be charged intended to authenticate the agreement. Here, not only was there no evidence that the drawings were "physically annexed" to the unsigned agreement, but the drawings themselves did not in any way refer to the Agreement or the Addendum.

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