Zander v. Ogihara Corp.Zander v. Ogihara Corp.
Following a jury trial, plaintiffs were awarded $746,000 on their claim of breach of contract against defendant. Defendant appeals as of right, asserting that the trial court erred in failing to dismiss plaintiffs’ complaint against defendant because the parties’ letter of intent regarding defendant’s future lease of plaintiffs’ commercial property did not satisfy the statute of frauds, MCL 566.108; MSA 26.908. We agree and reverse the judgment.
The facts here are largely undisputed. Plaintiffs and defendant negotiated for defendant to lease a new commercial warehouse and properties that plaintiffs were developing. During the course of negotiations, plaintiffs sent three different letters of intent to defendant. These letters of intent stated, among other things, that the parties agreed
Moreover, on cross-examination, plaintiff Mariann Zander conceded that she and her husband must not have signed the copy of li-2 that she faxed to Matano because the faxed li-2 found in Matano’s file was unsigned. Also, in the fax cover sheet, Mariann Zander asked Matano to call her after he reviewed her changes to the document, not to sign and fax back the li-2. Additionally, she subsequently sent to Matano the original of li-2 that bore plaintiffs’ signatures. At the top of this document, plaintiffs wrote "please return this copy after signature & witness.” Neither Matano nor any other representative of defendant signed or returned this original. Finally, some time later, plaintiffs drafted and sent a third letter of intent to Matano (li-3). Plaintiffs admitted that Matano never signed li-3, however. On the basis of this testimony, the jury found that a contract existed, that defendant breached the contract, and that plaintiffs were entitled to damages for loss of rent and liquidated damages for improvements they made to the property.
This Court reviews, de novo questions of law such as whether the statute of frauds bars enforcement of a purported contract. See, e.g.,
Cardinal Mooney High School v Michigan High School Athletic Ass’n,
Here, we believe that the evidence was insufficient to establish a prima facie case of breach of contract because the statute of frauds precluded plaintiffs from enforcing li-2. According to the
Every contract for the leasing for a longer period than 1 year, or for the sale of any lands, or any interest in lands, shall be void, unless the contract, or some note or memorandum thereof be in writing, and signed by the party by whom the lease or sale is to be made, or by some person thereunto by him lawfully authorized in writing.
See also MCL 566.132(l)(a); MSA 26.922(l)(a), which states in pertinent part:
(1) In the following cases an agreement, contract, or promise is void unless that agreement, contract, or promise, or a note or memorandum of the agreement, contract, or promise is in writing and signed with an authorized signature by the party to be charged with the agreement, contract, or promise:
(a) An agreement that, by its terms, is not to be performed within 1 year from the making of the agreement.
A letter of intent may be characterized as an agreement to agree at a later date and is as valid as any other contract.
Opdyke Investment Co v Norris Grain Co,
We have found no Michigan cases that are factually on point. Defendant relies, however, on the decision in Weinsier v Soffer, 358 So 2d 61, 62-63 (Fla App, 1978), where the Florida Court of Appeals reversed the trial court’s decision for the plaintiff, whose testimony provided the only proof that the defendants had signed an investment agreement that was subsequently destroyed in a fire. The defendants denied that the agreement existed and asserted the statute of frauds as a defense. In holding that the statute of frauds applied to the claimed contract and that sufficient evidence did not exist to avoid the statute’s application, the Weinsier court held as follows:
The absence of a lost or destroyed document does not necessarily preclude proof of its contents. It is clear that such proof must be clear, strong and unequivocal. In the cited case, the proof of the contents of the lost instrument was an exact copy.
Where the contents of a claimed lost document are relied upon to avoid the Statute of Frauds, each step in the proof to avoid the statute must be carefully examined. In the case now before us, the existence of the writing was denied by the testimony of the defendants. There is no fact in evidence to support the plaintiffs claim of its existence. The attorney involved had no recollection of its existence. No copy of other evidence of the contents was submitted. Plaintiffs recollection concerned only the purpose for drafting the document. The very purpose of the Statute of Frauds is defeated where the sole proof of the existence and contents of a document relied upon to avoid the Statute is the testimony of the plaintiff. [Id. at 63. Emphasis added; citations omitted.]
It is well-established in Michigan that extrinsic
In the case at bar, the only evidence that plaintiffs presented at trial with respect to this issue was plaintiff Mariann Zander’s testimony that she saw a faxed copy of li-2 containing Matano’s signature.
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Plaintiffs produced virtually every other document and correspondence between the parties, but they could not produce either a faxed copy of li-2 signed by all parties or the original with all necessary signatures. Indeed, Matano testified at trial that he never signed or faxed li-2 back to plaintiffs, and all the exhibits relating to li-2 countered plaintiffs’ testimony that Matano had signed li-2. Moreover, Matano told plaintiffs that he could not sign anything until defendant confirmed that the commercial space was operational. Also, a third letter of intent was prepared and admittedly not signed by defendant. Although plaintiffs assert that this dispute establishes a
Thus, even after construing the evidence in a light most favorable to plaintiffs, we believe that the record does not contain the clear and convincing evidence requisite to avoid the application of the statute of frauds. We, like the Weinsier court, will not permit plaintiffs to defeat the purpose and intent of this statute solely on the basis of their own self-serving testimony. Id.
Moreover, plaintiffs cannot avoid the statute’s effect by claiming that defendant partially performed the agreement. Where the contract cannot be performed within one year, partial performance fails to negate the statute’s writing or signature requirements. See
Dumas v Auto Club Ins Ass’n,
Accordingly, even after construing the evidence adduced at trial and all legitimate inferences drawn therefrom in a light most favorable to plaintiffs, we find that reasonable minds could not differ because plaintiffs failed to establish that li-2 satisfied the statute of frauds. American Town Center, supra; Weinsier, supra. The trial court erred, therefore, in refusing to grant defendant’s motions for a directed verdict or jnov. See Jim-Bob, Inc, supra at 85.
Our resolution of this issue makes it unneces
Reversed and remanded to thé trial court for proceedings consistent with this Court’s opinion. We do not retain jurisdiction.
Notes
Plaintiff Nicholas Zander testified at his deposition, but not at trial, that his wife showed him Matano’s signature on the faxed copy of li-2.