STATUTE OF FRAUDS: SAWYER V. MILLS (COA 3/30/2007)

SAWYER V. MILLS
CONTRACTS:  STATUTE OF FRAUDS
2006-CA-000697
PUBLISHED: AFFIRMING (WINE)
DATE RENDERED: 3/30/2007

Fayette Circuit Ct – Hon. James Ishmael

Sawyer appeals TC’s entry of a JNOV following jury trial that awarded her $900,000. This is the case where Sawyer alleges that her employer, Attorney Melbourne Mills, Jr., agreed to pay her $1 million (and a shiny, new luxury car to the tune of $65,000) for her work in starting up the now-famous Phen-Fen class action lawsuits. The background facts are that after Mills (and his co-horts) received their respective share of the Phen-Fen settlement, Sawyer and her husband met with Mills to discuss how much she would be paid on their agreement. Mills ultimately agreed to pay Sawyer the above sums during the meeting, and agreed to reduce it to writing. Mills never signed the agreement, but did make total payments of $165,000 before refusing to pay any more. What Mills did not realize was that Sawyer had secretly tape-recorded their conversation and soon filed suit to enforce their contract. Prior to trial, Mills sought summary judgment on the argument that the Statute of Frauds barred the claims since the oral agreement entailed Mills making monthly payments of $10,000 for 107 months and therefore could not be performed within 1 year. Although initially agreeing with Mills’ argument, the TC nevertheless allowed the case to proceed to trial where the jury ultimately found that Mills had agreed to pay Sawyer a bonus once the class action settlement was received and awarded her the $900,000. Mills filed a Motion for JNOV and again asserted the Statute of Frauds argument. This time, the TC agreed and granted the motion.

On appeal, Sawyer argued that the writing requirement of the Statute of Frauds was satisfied here through the combination of the tape recorded conversation and the checks Mills did write for the required monthly installments before refusing to pay more. The COA rejected this argument and distinguished on their facts the cases cited and relied upon by Sawyer to support same. The COA also rejected Sawyer’s alternative argument that the statute was not applicable since the contract could conceivably be performed within 1 year by Mills making a lump sum payment. The COA merely had to cite to the written agreement prepared by Sawyer’s attorney clearly stating that the payments would be stretched over 107 months and Sawyer’s own admission that the parties did not contemplate performance in less than 1 year. The fact that it could be completed in 1 year by a voluntary act of one of the parties does not render the Statute of Frauds inapplicable when the parties specifically agree that the contract will extend beyond 1 year. The COA affirmed the TC’s "well-reasoned" ruling in all respects.

As digested by Chad Kessinger.

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