May 3, 2012
Supreme Court of Tennessee Holds that Email Satisfies Statute of Frauds
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.
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.
One 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]
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:
FOR IMMEDIATE RELEASE
MIRAMAX AND DAVID BERGSTEIN REACH AGREEMENT
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 2, 2012
New in Print (Featuring a Larry Cunningham Two-Fer)
Contracts, the foundation of economic activity, are both vital and misunderstood. This book corrects the misunderstandings through a series of engaging stories involving such diverse individuals as Martin Luther King, Maya Angelou, Clive Cussler, Lady Gaga, and Donald Trump. Capturing the essentials of this subject, the book explores recurring issues people face in contracting. It shows how age-old precedents and wisdom still apply today and how contract law's inherent dynamism cautions against exuberant reforms. The book will appeal to the general reader and specialists in the field alike, and to both teachers and students of contracts.
Lawrence A. Cunningham, Rhetoric Versus Reality in Arbitration Jurisprudence: How the Supreme Court Flaunts and Flunks Contracts, 75 Law & Contemp. Probs. 129 (2012)
Henry D. Fetter, From Flood to Free Agency: the Messersmith-McNally Arbitration Reconsidered. 5 Alb. Gov't L. Rev. 156 (2012)
Jeffrey Douglas Jones, Property Rights, Property Wrongs, and Chattel Dispossession under Self-Storage Leases. 78 Tenn. L. Rev. 1015 (2011)
John E., Jr. Murray, The Dubious Status of the Rolling Contract Formation Theory, 50 Duq. L. Rev. 35 (2012).
David L. Snyder, The Cobra's Contract: Revisiting Dave Parker's 1979 Contract with the Pittsburg Pirates, 5 Alb. Gov't L. Rev. 188 (2012)
Sarah Swan, A New Tortious Interference with Contractual Relations: Gender and Erotic Triangles in Lumley v. Gye, 35 Harv. J.L. & Gender 167 (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.
[Meredith R. Miller h/t Robert Merrihew]
May 1, 2012
Weekly Top Tens from the Social Science Research Network
|1||365||The Impact of the Broker-Dealer Fiduciary Standard on Financial Advice
Michael S. Finke, Thomas Patrick Langdon,
Texas Tech University, Unaffiliated Authors - affiliation not provided to SSRN
|2||281||Emerging Policy and Practice Issues (2011)
Steven L. Schooner, David 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. Choi, George 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 Prebble, Julia 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
Stephen J. Lubben,
Seton Hall University - School of Law
|8||96||'Offer to Sell' as a Policy Tool
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
Suit over 2010 Sale of Miramax
Film 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.
April 30, 2012
Elizabeth Travis Sues Ex-Husband Randy Travis for Breach of Management Contract
We 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."
Insurance Companies Agree to Pay Death Benefits Despite Clear Contractual Obligations
Friend 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.