ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Thursday, May 3, 2012

Supreme Court of Tennessee Holds that Email Satisfies Statute of Frauds

597px-Tennessee-StateSeal.svgIn a family squabble over the transfer of land, the parties' attorneys settled on the eve of trial in the following exchange of emails:

At 4:34 p.m., Ms. Hagan sent the following email to Mr. Reed:

This confirms that we have settled this case on the following terms:
Elrod deeds property interest back to Waddle, Both [sic] parties sign full release, Waddle bears no court costs.
Let me know if I have correctly stated our agreement.
Mary Bethpage3image20624

At 5:02 p.m., Mr. Reed responded:

That is the agreement. I understand that you will draft the deed and take a shot at the court’s order. No admission of guilt is to be included.
Greg Reed

Chief_justice_clark_066_-_croppedOne of the parties later challenged the settlement agreement as unenforceable because it did not comply with the Statute of Frauds.  First, the Supreme Court of Tennessee held that the settlement agreement came within the Statute of Frauds because it required a transfer of land.  Next, the Court held that Mr. Reed's email satisfied the signature requirement of the Staute of Frauds.  The Court held that UETA applied and, therefore, the email contained an "electronic signature."  Chief Jusice Cornelia Clark reasoned:

The parties, through their attorneys, evidenced an intent to finalize the settlement by electronic means; thus, the UETA applies. See, e.g., Crestwood Shops, L.L.C. v. Hilkene, 197 S.W.3d 641, 651-53 (Mo. Ct. App. 2006) (holding that the UETA applied because the parties manifested their intent to conduct business by email). Pursuant to section 47-10-107(c), the emails counsel exchanged constitute a signed memorandum, note, or writing for purposes of the Statute of Frauds. 

Waddle v. Elrod (Tenn. Apr. 24 2012).

[Meredith R. Miller]



May 3, 2012 in Recent Cases | Permalink | Comments (0) | TrackBack (0)

Breaking News on the Miramax and David Bergstein

Earlier this week, we posted about David Bergstein's lawsuit against Miramax's principals.  Apparently, by the time we reported on it, the case had already settled.  Today, we received this update in the form of the following press release:



Bergstein Dismisses Lawsuit, Retracts All Claims and Accusations

SANTA MONICA, CA – April 24, 2012 – Filmyard Holdings LLC and David Bergstein today announced they have reached an agreement under which Mr. Bergstein will dismiss the lawsuit filed on April 9, 2012 in the Superior Court of California for the County of Los Angeles, Central District.  Terms of the agreement are not being made public.

Mr. Bergstein stated, “I am pleased that I was able to sit down with my counterparties in this suit, discuss our differences and resolve them.  I fully retract the claims made in the lawsuit against Filmyard, Miramax, Colony Capital, Richard Nanula and Josh Grode.  I’d like to thank everyone involved for their understanding and cooperation.”

Richard Nanula, a principal at Colony Capital, one of the owners of Filmyard, stated, “We want to recognize the contributions David made that ultimately led to Filmyard’s ownership of Miramax.  Without his efforts this very successful transaction wouldn’t have happened.”


May 3, 2012 in In the News, Recent Cases | Permalink | Comments (0) | TrackBack (0)

Wednesday, May 2, 2012

Trend Spotting: Suits Over Liquidated Damages in Private School Contracts

If you teach O'Brian v. Langley School, you will want to read a NY Times article from earlier this week, For Some Parents, Leaving a Private School is Harder Than Getting In.  Here's a taste:

In February 2011, Nicole Smolowitz’s son was admitted to the Mandell School on the Upper West Side. She signed a contract and paid the $7,500 deposit.

By late April, the family’s financial situation had changed, and private school was no longer an option. Ms. Smolowitz called the school to say her son would not be able to attend. She did not expect to get her deposit back — but she was told she had to pay the remaining $26,250, as well.

“It’s April,” she said she told them. “I will find someone for you to take my child’s spot.” The school told her that was not how things were done. Then, in September, Mandell sued.

For most parents, getting their child into a private school is a moment of joy, or at least relief. But uncomfortable conversations take place at this time of year, as some parents reconsider.

Sometimes these conversations lead to an amicable parting. Other times, they lead to a bare-knuckled fight in court.

Since 2009, at least five private schools in New York City — Mandell, York Preparatory School, Friends Seminary, Léman Manhattan Preparatory School and the Little Red School House and Elisabeth Irwin High School — have sued parents for tuition.

The schools’ argument is simple: Parents sign a contract when they accept placement, saying they will send their child to the school the next year and pay the agreed-upon price.

The article includes discussion of a few specific cases, including the Gunderson case:

In 2007, Erik Gunderson and Sarah Brooks enrolled their son for another year at Park West Montessori School, a preschool on the Upper West Side of Manhattan. They put down a deposit of $4,700 of the $19,300 tuition.

Soon afterward, Ms. Brooks was offered a tenure-track position at a university in Virginia. When she told the school that her family was moving, the school said she had to pay the remaining tuition, according to the lawsuit. Her father, Russell Brooks, a lawyer at Milbank, Tweed, Hadley & McCloy, represented her in court, and won a ruling forcing Park West to turn over records showing that it would be financially harmed by his daughter’s decision to withdraw her son.

“They had no damages,” Mr. Brooks said. “The entire contract amount — the deposit amount plus what they were seeking — would be a windfall to them, because they could fill up the spot in the class from the waiting list.”

Mr. Brooks said the school dropped its demand for payment.

Kathy Roemer, executive director of Twin Parks Montessori Schools, which includes Park West, said the Gundersons’ deposit had not been refunded. The court denied the school’s counterclaim for the remaining tuition, and while Dr. Roemer called that ruling “contrary to basic contract law,” the school did not pursue the case because “the amount was too small.”

Since the Gunderson case, other parents, including Ms. Langbecker, have used the same defense, arguing that schools must prove they have been hurt financially. It is unclear how successful this argument is, as many cases are settled out of court.

Read the article.  Given that tuition at some private schools in Manhattan has surpassed the $40,000 mark, file it under "rich people problems."

[Meredith R. Miller h/t Robert Merrihew]

May 2, 2012 in In the News, Recent Cases, Teaching | Permalink | Comments (1) | TrackBack (0)

Tuesday, May 1, 2012

Weekly Top Tens from the Social Science Research Network

SSRNRECENT HITS (for all papers announced in the last 60 days) 
TOP 10 Papers for Journal of Contracts & Commercial Law eJournal 

March 2, 2012 to May 1, 2012

RankDownloadsPaper Title
1 365 The Impact of the Broker-Dealer Fiduciary Standard on Financial Advice 
Michael S. FinkeThomas Patrick Langdon
Texas Tech University, Unaffiliated Authors - affiliation not provided to SSRN
2 281 Emerging Policy and Practice Issues (2011) 
Steven L. SchoonerDavid J. Berteau
George Washington University - Law School, Center for Strategic and International Studies, Defense - Industrial Initiatives Group
3 177 The Effect of Bargaining Power on Contract Design 
Albert H. ChoiGeorge G. Triantis
University of Virginia School of Law, Stanford University - Law School
4 141 Does the Constitution Protect Economic Liberty? 
Randy E. Barnett
Georgetown University Law Center
5 121 Zotero - A Manual for Electronic Legal Referencing 
John PrebbleJulia Caldwell
Victoria University of Wellington, Victoria University of Wellington
6 115 Controlling Financial Chaos: The Power and Limits of Law 
Steven L. Schwarcz
Duke University - School of Law
7 97 Transaction Simplicity 
Stephen J. Lubben
Seton Hall University - School of Law
8 96 'Offer to Sell' as a Policy Tool 
Lucas Osborn
Campbell University Law School
9 88 The Perils of Social Reading 
Neil M. Richards
Washington University in Saint Louis - School of Law
10 87 Why Courts Make Orders (and What this Tells Us About Damages) 
Stephen A. Smith
McGill University - Faculty of Law

RECENT HITS (for all papers announced in the last 60 days) 
TOP 10 Papers for Journal of LSN: Contracts (Topic)  

March 2, 2012 to May 1, 2012

RankDownloadsPaper Title
1 314 The Common European Sales Law and the CISG - Complicating or Simplifying the Legal Environment? 
Nicole KornetNicole Kornet
Maastricht University - European Private Law Institute (M-EPLI), Maastricht University - METRO Institute
2 177 The Effect of Bargaining Power on Contract Design 
Albert H. ChoiGeorge G. Triantis
University of Virginia School of Law, Stanford University - Law School
3 141 Does the Constitution Protect Economic Liberty? 
Randy E. Barnett
Georgetown University Law Center
4 117 Modern Chinese Real Estate Law: Property Development in an Evolving Legal System (Chapter 1) 
Gregory M. Stein
University of Tennessee College of Law
5 88 The Perils of Social Reading 
Neil M. Richards
Washington University in Saint Louis - School of Law
6 83 Errors of Fact and Law: Race, Space, and Hockey in Christie v. York 
Eric M. Adams
University of Alberta - Faculty of Law
7 71 The Common European Sales Law (CESL) Beyond Party Choice 
Jan M. Smits
Maastricht University Faculty of Law - Maastricht European Private Law Institute (M-EPLI)
8 68 Parallel Contract 
Aditi Bagchi
University of Pennsylvania - Law School - Faculty
9 57 Instructing Juries on Noneconomic Contract Damages 
David A. HoffmanAlexander Radus
Temple University - James E. Beasley School of Law, Temple University James E. Beasley School of Law
10 53 From Lord Coke to Internet Privacy: The Past, Present, and Future of the Law of Electronic Contracting 
Juliet M. MoringielloWilliam L. Reynolds
Widener University - School of Law, University of Maryland - Francis King Carey School of Law


May 1, 2012 in Recent Scholarship | Permalink | TrackBack (0)

Suit over 2010 Sale of Miramax

CinemaFilm financer David Bergstein has filed suit against the his co-venturers in the 2010 acquisition of the Miramax Film Company (Miramx).  Bergstein alleges that his former business partners denied him money and an equity stake owed for his role in the acquisition of the film label from the Walt Disney Company.  The suit, filed in Los Angeles Superior Court, is for breach of contract, fraud, unjust enrichment, and other claims, and named as defendants Miramax Chairman Richard Nanula, Colony Capital and Filmyard Holdings.  According to the Chicago Tribune, non-party Ron Tutor and his group of partners created Filmyard Holdings to finance the deal for Miramax and control the studio after the sale was complete.  Colony Capital, an investment firm, was one of the investors, and Nanula, a former Disney executive who is now Miramax’s chairman, is one of Colony’s principals.  

Bergstein claims that he is owed tens of millions of dollars for his part in structuring and negotiating the purchase.  Bergstein acknowledges that he was paid his $6.1 million “Closing Fee” but claims that he is owed an additional $6.1 million “Transaction Fee.”  In addition, Bergstein maintains that, although he was originally promised a non-dilutable 5% stake in the equity of the transaction, he agreed to reduce his non-dilutable stake to 3.3%, in return for a promise from Colony that his interest would not be further reduced.  He claims that defendants then sought to further reduce his stake “[a]s soon as the ink was dry on the operative agreements.”  The heart of the suit seems to be a claim that his share was further diluted by transactions about which the defendants have refused to provide information.

As reported by The Wrap, Bergstein has been a controversial figure in the movie industry in recent years and has said that Nanula and other investors planned to use the bad publicity surrounding his legal problems as a way to keep from honoring their deal.  As the complaint in this case makes clear, Bergstein can give as good as he gets when it comes to bad publicity.

[JT, Janelle Thompson & Christina Phillips]

May 1, 2012 in Film, In the News, Recent Cases | Permalink | Comments (0) | TrackBack (0)

Monday, April 30, 2012

Elizabeth Travis Sues Ex-Husband Randy Travis for Breach of Management Contract

Randy_TravisWe were hoping to bring you a copy of the complaint from the EOnline site, but the link seems to be broken (we are keeping it here in case it comes back up).  In any case, the EOnline provides the basics here.  Apparently Elizabeth Travis served as manager for her husband, Randy Travis (pictured)  for nearly 30 years, including throughout their 19-year marriage.  After their divorce, the parties allegedly agreed that she was to continue to serve as his manager but Elizabeth Travis now claims that the singer breached that agreement.  According to the complaint (as summarized on EOnline):

"[Randy] had a large truck, an armed guard and several other men" turn up at her Music Row office and remove "practically all of the property and business records" from her custody, including computers, photographs and framed record plaques.

It's not clear from these reports (and that's why we'd love to see the complaint) if her claim is that this conduct constituted a constructive termination of the management agreement or if there was some separate termination letter.  If the former, than one is put in mind of Schwarzenegger's rather poorly delivered "Consider that a divorce." 


According to HuffPo, Mr. Travis is unimpressed: "It is unfortunate that it's come to this," Travis said. "We believe the lawsuit lacks merit and that we have legal defenses to her claims."


April 30, 2012 in Celebrity Contracts, In the News, Music, Recent Cases | Permalink | Comments (0) | TrackBack (0)

Insurance Companies Agree to Pay Death Benefits Despite Clear Contractual Obligations

Met Life BuildingFriend of the blog Alan White, whose whereabouts are currently unknown but who was recently seen in New Orleans and who, according to a Google search, is currently an adjunct professor at the CUNY law school, sent us this news item from the New York Times last week.  According to the Times, MetLife is now the third major life insurance company to settle with regulators from numerous states.  The basic issue is that policy holders die and the insurance companies do not pay out their claims.  The way the policies are written, a survivor or representative must contact the insurer to colelct on the claim, but often the survivors either do not know of the policy or cannot find any information relating to it.  The states say that it is no great burden for the insurers to run their list of policy holders against the Social Security Administration's master death index.  They do so regularly in the case of customers who purchase annuities, and they halt payments upon learning of the eath of an annuity holder.

The states expect to collect over $1 billion from the three major insurers over a number of years.  New York state has been separately pursuing unpaid death benefits and has recovered $262 million from the insurers.


April 30, 2012 in In the News | Permalink | Comments (0) | TrackBack (0)