Opinion of the Court by
Appellant Barbara Lucinda Sawyer appeals a decision affirming the circuit court’s judgment notwithstanding the verdict (“JNOV”) in favor of Appellee Melbourne Mills, Jr., in a dispute over the validity of an alleged oral agreement. Because the oral agreement violated the Statute of Frauds, lacked consideration, and could not have induced Sawyer’s action, it was unenforceable, and the decision of the Court of Appeals is affirmed.
I. Background
Mills met Appellant Sawyer and her husband in 1991. In 1994, Sawyer requested that Mills become involved in already-pending class action litigation involving breast implants, and she solicited some women she knew as clients. Mills promised to give her a bonus if he ever had a big “payday” with one of his class actions, and she continued to research potential products liability claims. Between 1994 and 2001, she assisted Mills in marketing his law practice, researching potential class action lawsuits, and in performing work as a contract employee for relatively brief periods of time, for which she was paid. Her employment ended on March 31, 2002.
In 1997, the prescription drugs Fenflu-ramine and Phentermine (commonly known as “Fen-Phen”) were receiving national media attention due to the possibility they were causing heart valve damage. Sawyer claims that she recommended Mills pursue a class action against Fen-Phen’s manufacturer, and the drugs were recalled soon after Mills began to advertise for Fen-Phen clients. Mills received an overwhelming response from his advertising campaign and ultimately had about 2600 clients (about 400 of whom were from Kentucky) that he signed up on a contingency fee basis. Sawyer assisted with clerical work in processing the claims.
On May 1, 2001, a settlement for millions of dollars was reached between Fen-Phen’s manufacturer and Mills’s clients. After receiving his initial portion of the substantial attorney’s fees on June 20, 2001, Mills made bonus payments to all of his employees. Six long-term employees received a $100,000 bonus, one paralegal who Mills thought was instrumental to the Fen-Phen litigation’s success received more than a $1,000,000 bonus, and an attorney received an initial $1,000,000 bonus (and a more substantial additional bonus later). Hourly employees such as Sawyer received a bonus equal to two weeks’ wages. Sawyer’s bonus was $1,300. Over the years, Mills had mentioned to Sawyer that he would reward her with a large bonus when he hit a “payday” in the class action cases, and the Sawyers were disappointed in the $1,300 bonus. 1
On June 25, 2001, the Sawyers invited Mills to their art studio and secretly tape-recorded their conversation. Mills admitted that the voices on the recording were his and the Sawyers’. Sawyer and her
Mills refused to make a lump sum payment even though he had the financial ability to do so; instead he agreed to make the payments in installments of $10,000 per month. They would also be hidden from his office employees (Sawyer claimed Mills did not wish to make the other employees jealous). 2 Mills also agreed to pay for an attorney to draft a written agreement to memorialize their understanding, and he spoke to the Sawyers’ attorney, Mark Moseley, on the phone and confirmed he had agreed to pay a bonus to Sawyer. However, Mills later refused to sign any written agreement.
Mills made his first payment of $10,000 to Sawyer the day of the meeting, and he eventually made a series of payments of $10,000 each, and one of $15,000, totaling $65,000. Mills also made a one-time payment of $100,000 on October, 3, 2001. The last payment was paid on February 7, 2002, and Mills informed Sawyer in March that he was terminating her employment at the end of the month. He had paid her a total amount of $165,000. It was undisputed that Sawyer had completed her performance that might justify any bonus pri- or to the June 25 conversation between the parties, and also that she continued to work for Mills after the agreement.
Prior to trial, Mills moved for summary judgment, arguing that enforcement of the agreement was barred by Kentucky’s Statute of Frauds and raising lack of consideration as a defense. The trial court denied the motion.
After a four-day trial, the jury returned a verdict for Sawyer and awarded her $900,000, and a trial verdict and judgment was entered. In response to two interrogatories, the jury answered that it was satisfied from the evidence that the parties reached an understanding and agreement as to the bonus at issue, and that the understanding and agreement could have been fully performed within one year of its making.
Mills moved the trial court for a JNOV, and it was granted. The court specifically explained that it
had previously addressed its concerns that this Statute of Frauds barred the claims of Cindy against Mel in this case. However, out of an abundance of precaution, in order to allow Cindy to present her full evidence at trial before a jury, the Court Overruled Mel’s Motion for Summary Judgment on this issue in an Opinion and Order entered December 1, 2005.
After hearing Sawyer’s full evidence at trial, however, the trial court found that the Statute of Frauds did in fact bar her claims and it granted Mills’s JNOV motion. The Court of Appeals affirmed the trial court’s ruling, and this Court granted discretionary review.
II. Analysis
A. The June 25, 2001 Oral Agreement
1. Application of the Statute of Frauds Where the Agreement’s Terms and the Parties’ Intentions Demonstrate It Could Not Be Completed Within One Year
Assuming there was a contract in this case, the Statute of Frauds applies
No action shall be brought to charge any person ... [u]pon any agreement that is not to be performed within one year from the making thereof ... unless the promise, contract, agreement, representation, assurance, or ratification, or some memorandum or note thereof, be in writing and signed by the party to be charged therewith, or by his authorized agent....
KRS 371.010(7). “In construing the Statute of Frauds, the general rule is that, if a contract may be performed within a year from the making of it, the inhibition of the Statute does not apply, although its performance may have extended over a greater period of time.”
Williamson v. Stafford,
The Statute of Frauds “refers to a contract which, by its terms, is not to be performed within a year, and which, from its stipulations, is not capable of being performed within a year.”
Nickell v. Johnson,
Under well-settled precedent, this Court must determine whether Sawyer and Mills contemplated that their oral contract would be, or could be under its terms, performed within a year, even though Mills acknowledged that he could have paid the entire amount at the time of the negotiations.
Williamson,
This case involves the trial court’s grant of a JNOV motion.
Upon review of the Order Granting JNOV, we must examine the trial court’s decision under the clearly erroneous standard.... That is to say, we must review all the evidence presented to the jury and must uphold the trial court’s decision if after all the evidence is construed most favorably to the verdict winner, a finding in his favor would not be made by a reasonable [person],
Moore v. Environmental Constr. Corp.,
(5) That in the June 25, 2001 conversation between Mel, Cindy, and Cindy’s husband, Steve Sawyer (hereinafter “Steve”), the figure of One Million Dollars ($1,000,000.00) was first proposed by Cindy and Steve as a lump sum payment. Mel clearly balked at that figure as a lump sum payment. Quickly, Steve Sawyer, with Cindy’s encouragement and agreement, suggested that a total payment of One Million Dollars ($1,000,000.00) plus the cost of a new luxury car to be paid over ten (10) years at Ten Thousand Dollars ($10,000.00) per month until paid would be acceptable to them. This was the undisputed sworn testimony of Cindy, Steve, and their attorney Mark Mosely [sic] at trial. The Court, in accordance with the above JNOV standard, accepts that testimony without qualification. Further, that testimony was accepted by the jury in this case as reflected by the jury verdict when ‘Tes” was checked in response to Interrogatory No. 1 which specifically found that Cindy and Mel had each understood and agreed that Mel would pay Cindy a bonus in the amount of One Million Dollars and the value of a new car costing Sixty Five Thousand Dollars for services performed by Cindy for the benefit of Mel per Jury Instruction No. 1.
Based on the undisputed fact that Mills “clearly balked” at an agreement where he would have to make a one-million-dollar lump sum payment, such a payment was not a part of the oral agreement.
Instead, Mills orally agreed to make a $1,065,000 payment “over ten (10) years at Ten Thousand Dollars ($10,000.00) per month until paid.” The trial court noted that this understanding was also reflected in Sawyer’s Answer to Interrogatory No. 8 in which she stated in her Amended Answer in part, “The bonus was to be paid in monthly installments of $10,000.00 and on the first of each month.” Attorney Mark Moseley’s written draft agreement, which Mills never signed, recognized that the total amount would be paid out over 107 months, with the last month’s payment being $5,000.
In
Kentucky Utilities Co. v. Hurst,
court should have sustained defendant’s motion for a peremptory instruction, upon the ground that the alleged special contract for the furnishing of the water, and upon which the action is based, was verbal, and was one which, under the circumstances and the contemplation of the parties at the time, was not to be performed within one year from the time of its making, and was therefore inhibited by ... the statute of frauds.
Id. at 526.
Subsequent to
Hurst,
the Court was again confronted with a similar issue and it reaffirmed its position. The Court quoted the appellee’s testimony and concluded “[cjlearly, the evidence for both parties shows that it was not contemplated by either of them that the contract was to be performed, or could be performed, within a year.”
Williamson,
Consistent with
Hurst
and
Williamson,
the trial court in this case was not clearly erroneous in finding that Mills never agreed to a lump sum payment payable within one year. Mills never signed a writing consistent with the oral discussions
2. Completed Performance and Past Consideration
Sawyer claims the agreement is nonetheless enforceable because she completed her performance, taking the agreement outside the operation of the Statute of Frauds, as a completed executory contract. However, because Sawyer concedes she had completed her performance prior to the June 25, 2001 oral agreement, it was supported only by past performance, which is no consideration at all, and thus, under this argument, there was not a binding contract.
Sawyer cites
Pilcher v. Stadler,
“[I]t is a general rule that past consideration is insufficient to support a promise.” 17A Am.Jur.2d Contracts § 152 (2009). Simply put, Sawyer’s claim that her completed performance takes her agreement outside of the operation of the Statute of Frauds fails, because the fact that her performance was done prior to the offer Mills made on June 25 means there was no consideration for the promise Mills made on that date.
In
Greenup v. Wilhoite,
Appellants insist that the services for which appellee claims compensation had all been performed before the making of the contract sued on, and the consideration for the contract having all passed, the contract has failed for want of a supporting consideration. They insist that a past consideration which is some act of forbearance in time past by which a man has benefited, without thereby incurring any liability, is not sufficient to support an executory contract, and this is ordinarily true.
Id. In that case, however, the agreement was upheld because part of the consideration — in the form of services — was not yet given at the time the parties entered into the agreement, which further underscores that the agreement and consideration must be dependent on each other. Id. (“Manifestly the parties to the contract contemplated that the appellee Mrs. Wil-hoite was to receive compensation, not only for services which she had performed up to the time of the making of the contract, but for all services which she was to perform for Miller Wilhoite, Sr., during the remainder of his life.”).
Though Sawyer also contends that she continued to work for Mills after the agreement regarding her prior performance was made on June 25, she did in fact receive other multiple substantial pay
Sawyer also relies upon
Fisher v. Long,
Finally, Sawyer objects to Mills’s attempt “to obfuscate this issue with circular logic,” arguing that if Sawyer had completed her performance at the time the bonus amount was filled in (as she concedes), there was no consideration and the contract was unenforceable, but if she had not completed performance at the time the bonus was filled in, the contract had to be in writing to be enforceable. This is not obfuscation. That Sawyer loses for two independent reasons does not undermine the logic, or make it circular. Consequently, the JNOV granted by the circuit court was appropriate.
3. The Audio Tape Recording of the Parties’ Conversation and Cancelled Signed Checks as a Basis for Satisfying the Statute of Frauds’ Writing Requirement
Sawyer also claims that the audio tape of Mills’s voice and cancelled signed checks provide the basis for satisfying the Statute of Frauds’ writing requirement under the federal Electronic Signatures in Global and National Commerce Act (“E-SIGN”) and
Calloway v. Calloway,
She first claims that the Statute of Frauds’ writing requirement is preempted by 15 U.S.C. § 7001(a), which provides,
Notwithstanding any statute, regulation, or other rule of law ... with respect to any transaction in or affecting interstate or foreign commerce—
(1) a signature, contract, or other record relating to such transaction may not be denied legal effect, validity, or enforceability solely because it is in electronic form; and
(2) a contract relating to such transaction may not be denied legal effect, validity, or enforceability solely because an electronic signature or electronic record was used in its formation.
However, under 15 U.S.C. § 7001(a)(1), the oral agreement is not being denied “legal effect, validity, or enforceability solely because it is in electronic form.” (Emphasis added.) The oral agreement is being denied legal effect because it fails the writing requirement of the Statute of Frauds and under E-SIGN there is not an electronic signature. Therefore, contrary to Sawyer’s assertions, the Statute of Frauds’ writing requirement is not preempted by E-SIGN in this case.
Under E-SIGN, “ ‘electronic’ means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.”
Id.
§ 7006(2). “ ‘[Electronic record’ means a contract or other record created, generated, sent, communicated, received, or stored by electronic means.”
Id.
§ 7006(4). At issue in this case is the tape recording of the conversation between Sawyer and Mills. Under 15 U.S.C.
However, contrary to Sawyer’s assertions, Mills’s voice does not constitute an electronic signature merely because it was identifiable and was identified at trial as being his. An electronic signature under 15 U.S.C. § 7006(5) requires that “an electronic sound, symbol, or process, attached to or logically associated with a contract or other record” be “executed or adopted by a person with the intent to sign the record.”
There must be intent to attach or logically associate the electronic signature to the agreement, that is, an intent to execute the contract. That was impossible here, because the medium on which the alleged agreement and electronic signature were recorded (the audio tape) was used surreptitiously. Mills did not know he was being recorded when he went to the Sawyers’ art studio. Thus, Mills’s identifiable voice on the tape, even if construed as an electronic signature, was procured without Mills’s knowledge or intent, and would be tantamount to a forgery which cannot be used to demonstrate a valid contract.
Cf
E.L. Strobin, Amnotation,
Procuring Signature by Fraud as Forgery,
That the recording was not intended to be a signature is further supported by the fact that the parties evidenced some intent to draft and sign a written contract to memorialize their understanding, which Mills refused to sign. Clearly then, Mills did not have any intent to “execute” or “adopt” the conversation that took place, and he did not “sign the record” memorializing it that was drafted by Sawyer’s attorney. Sawyer’s claim that E-SIGN provides a basis for satisfying the Statute of Frauds in this case fails.
Sawyer next claims that
Calloway,
Finally, Sawyer claims that Mills’s voice, coupled with cancelled signed checks, is sufficient to satisfy the Statute of Frauds. The same rationale for why the recording cannot be a sufficient electronic signature
As for the checks, in addition to the fact that the cancelled signed checks for monthly payments to Sawyer are inconsistent with her claim that the agreement could be completed within one year, Sawyer does not cite any law that signed checks satisfy the Statute of Frauds, and this Court is not persuaded that they do. Though some courts have held that checks can be used to demonstrate the existence of a contract, those checks almost invariably include references to the terms of the contract or a document that contains the terms.
See, e.g., Walter E. Heller & Co. v. Video Innovations, Inc.,
In this case, the checks, rather than evincing an agreement involving a quid pro quo, are just as consistent with a gratuitous bonus of the sort paid to Mills’s other employees. Sawyer is basically claiming that two halves make a whole, but in this case neither side makes a “half,” and thus together they do not make a “whole” writing sufficient to satisfy the Statute of Frauds.
4. Promissory Estoppel
Despite the parties’ dispute over whether the issue of promissory estoppel was properly preserved and appealed, it is clear that the trial court was correct in concluding there was insufficient proof to support a jury instruction on the issue.
The doctrine of promissory es-toppel provides as follows:
“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 such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires.”
Meade Constr. Co. v. Mansfield Commercial Elec., Inc.,
First, it is not clear that under Kentucky law promissory estoppel can defeat the Statute of Frauds. Though the
While this Court has stated that “the statute of frauds is not a bar to a fraud or promissory estoppel claim based on an oral promise of indefinite employment,”
United Parcel Service Co. v. Rickert,
But even assuming that promissory estoppel could allow a plaintiff to get around the Statute of Frauds, Sawyer cannot invoke the doctrine in this case. First, promissory estoppel requires “[a] promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee ... and which does induce such action or forbearance. ...”
Meade Constr. Co.,
But there is no reasonable basis to argue that Mills believed Sawyer continued working for him from June 25, 2001 through March 2003 because of his promise. During that time, he paid her $165,000 in line with his promise, and
paid her as an hourly employee
until he released her from employment. At no time has the testimony indicated that his promise to her on June 25 was premised on her continued employment with him. There is no indication that he asked her not to
B. Prejudgment Interest
Because this Court concludes the trial court did not err in granting the JNOV motion in Mills’s favor, it is unnecessary to address the issue of prejudgment interest for Sawyer.
III. Conclusion
Because the terms of the agreement and the parties’ intentions demonstrate it could not be completed within one year, the Statute of Frauds required that it be in writing, but that was never done. Additionally, since Sawyer concedes she completed performance before the June 25, 2001 conversation, the agreement lacked valid consideration and could not be a binding contract. The audio tape recording and cancelled signed checks do not serve as a basis for satisfying the Statute of Frauds’ writing requirement in this case. Finally, Sawyer does not have a claim for promissory estoppel because the record does not substantiate her claim that she relied on Mills’s promise by way of a forbearance or action, and Mills could not have reasonably been expected to believe that she had. The JNOV entered by the trial court was appropriate.
For the foregoing reasons, the Court of Appeals is affirmed.
Notes
. Previously, Sawyer was paid more than $150,000 through an advertising agency set up by her and through which the Mills Law Office placed its advertising. Additionally, when Sawyer and her husband told Mills they were about to be evicted from the building where their art studio was located, Mills wired her $100,000 so they could buy the building. Finally, the Sawyers often accompanied Mills on vacations at his expense.
. Though Sawyer describes the complicated manner in which Mills attempted to keep the payments he made hidden from his employees, the details are not relevant to the disposition of this case.
. Though after quoting the doctrine of promissory estoppel in
Meade Constr. Co.,
this Court noted that it did not at that time "decide whether the doctrine of promissory es-toppel applies in this state or whether, if so, it governs this case,”
id.
at 106, it has since become clear that "the doctrine of promissory estoppel, if it can be established, is 'alive and well’ in this Commonwealth.”
McCarthy v. Louisville Cartage Co.,
. Even those states allowing equitable estop-pel to reach the Statute of Frauds frequently require, for example, that “either an unconscionable injury or unjust enrichment would result from refusal to enforce the contract....’’
Monarco v. Lo Greco,