Case Title: Van Dyke v. Glover

Citation: 

Docket Number: 

State: arkansas

Court: Arkansas Supreme Court

Date: 1996-11-25T00:00:00Z

Document:
Jerry VAN DYKE and Shirley Van Dyke v. Dorsey
D. GLOVER, Robert Ward, Nature Estates, Inc.,
Phinis Warnex, and Sparks Brothers Realty

95-1348                                            ___ S.W.2d ___

                    Supreme Court of Arkansas
               Opinion delivered November 25, 1996


1.   Appeal & error -- motion to dismiss -- standard of review. --
     In considering a motion to dismiss under ARCP Rule 12(b)(6),
     the facts in the complaint are treated as true and are viewed
     in the light most favorable to the plaintiff.

2.   Contracts -- offer and acceptance -- offer may be accepted by
     spoken words or conduct  -- question for trier of fact. --
     Oral acceptance of a written offer by a party sought to be
     charged meets the requirements of the statute of frauds;
     generally speaking, an offer may be accepted by spoken words
     or conduct; whether there was an acceptance is a question for
     the trier of fact.

3.   Statute of frauds -- land-sale contract -- essential terms
     must be ascertainable from writing itself or reference to
     something else. -- Unless the essential terms of a land sale
     can be ascertained from the writing itself, or by reference in
     it to something else, the writing is not in compliance with
     the statute of frauds; if the writing is defective, it cannot
     be supplied by parol proof, for that would at once introduce
     all the mischiefs that the statute was intended to prevent.

4.   Statute of frauds -- land-sale contract -- terms and
     conditions, price to be paid, and time for payment must be
     shown. -- A contract for the sale of land that fails to show
     the terms and conditions of the sale, the price to be paid,
     and the time for payment is not sufficient to satisfy the
     requirements of the statute of frauds.

5.   Statute of frauds -- land-sale contract -- land must be
     sufficiently described. -- A writing may not satisfy the
     requirements of the statute of frauds when it does not
     sufficiently describe the land to be sold; in this case, the
     land was adequately described because there was not only a
     letter giving the acreage in each tract but also a color-coded
     map accompanying the letter that illustrated the tracts of
     land at issue.  

6.   Statute of frauds -- land-sale contract -- time and method of
     payment must be set forth. -- A writing may also fail to
     comply with the statute of frauds because the time and method
     of payment are not set forth; in this case, the purchase price
     per acre per tract of land was adequately set out, together
     with down payments and option payments as well as the terms
     for financing the balance due.

7.   Contracts -- offer and acceptance -- acceptance and payment
     plan became questions of fact and matters of proof in trial
     court. -- The supreme court concluded that whether an
     acceptance was actually made on the part of appellants to
     purchase one tract of land and to preserve an option to
     purchase the remaining three tracts and the precise payment
     plan agreed to became questions of fact and matters of proof
     in the trial court.

8.   Estoppel -- promissory estoppel -- when it arises. -- A
     promise that the promisor should reasonably expect to induce
     action or forbearance on the part of the promisee or a third
     person and that 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.

9.   Estoppel -- promissory estoppel -- reasonable detrimental
     reliance may defeat statute-of-frauds defense. -- Whether
     there was actual reliance by appellants and whether it was
     reasonable was a question for the trier of fact, but at the
     pleading stage, the allegation must be sufficiently stated;
     reasonable detrimental reliance may be raised to defeat the
     defense of statute of frauds.

10.  Estoppel -- promissory estoppel -- appellants sufficiently
     stated cause for promissory estoppel or detrimental reliance -
     - reversed and remanded. -- Where appellants alleged that they
     relied on the existence of the contract to their detriment and
     that they incurred expenses while investigating timber values,
     water service on the property, and the feasibility of building
     a lake on the property, they sufficiently stated a cause of
     action for promissory estoppel or detrimental reliance; the
     supreme court, concluding that appellants adequately stated
     facts to withstand a motion to dismiss on their five counts
     for relief, reversed and remanded the matter.


     Appeal from Hot Spring Chancery Court; Robert Garrett,
Chancellor; reversed and remanded.
     Friday, Eldredge & Clark, by:  John Dewey Watson and Allison
Graves, for appellants.
     Glover, Glover & Roberts, by: David M. Glover and Mark
Roberts, for appellees Dorsey D. Glover and Robert Ward.
     Ellis Law Firm, by: George D. Ellis, for appellees Nature
Estates, Inc., Phinis Warnex, and Sparks Brothers Realty.

     Robert L. Brown, Justice. 
     Appellants Jerry Van Dyke and Shirley Van Dyke appeal a
dismissal of their complaint against appellees Dorsey D. Glover,
Robert Ward, Nature Estates, Inc., Phinis Warnex, and Sparks
Brothers Realty.  They contend that the trial court erred in
finding that they did not state facts upon which relief can be
granted under Ark. R. Civ. P. 12(b)(6).  We agree with the
appellants, and we reverse the order of dismissal and remand the
matter.
     On May 26, 1995, the Van Dykes filed their complaint against
Glover, Ward, Nature Estates, Warnex, and Sparks Brothers.  The
history of the dealings among the parties, according to the Van
Dykes, is set out in the allegations of the complaint.  They first
alleged that Glover and Ward owned four tracts of land in Hot
Spring County.  The Van Dykes owned land near those tracts and
approached Ward and Glover about purchasing the tracts.  On or
about June 20, 1994, Glover on behalf of himself and Ward hand-
delivered an offer of sale to Shirley Van Dyke with a color-coded
map of the four tracts.  (The map was Exhibit A and the Glover
offer was Exhibit B to the complaint.)  Shirley Van Dyke then went
to Glover's office on June 21, 1994, and orally accepted the terms
of the written offer.  Shirley Van Dyke also offered to make a down
payment on the tract to be purchased and option payments on the
three tracts to be optioned and to pay earnest money as well, but
Glover told her that was not necessary at that time to consummate
the contract because he did not want to receive payment until after
the first of the year.  The Van Dykes left for California with the
belief that they had a contract, and Glover left for Europe. 
Shirley Van Dyke later began pursuing information on timber values
on the tracts, water service, and the feasibility of constructing
a lake.
     The Van Dykes asserted in their complaint that Shirley's
actions informed Nature Estates, Warnex, and Sparks Brothers of
their contract with Glover and Ward and that Nature Estates,
Warnex, and Sparks Brothers offered Ward and Glover a higher price
for the land.  The Van Dykes further assert that Nature Estates,
Warnex, and Sparks Brothers were engaged in subdividing the
property for mobile home/trailer sites, and they had entered into
purchase agreements to sell some of the subdivided tracts.  The Van
Dykes sought (1) cancellation of the Glover/Ward contract with
Nature Estates, Warnex, and Sparks Brothers as well as any
contracts to third persons; (2) specific performance of their
contract with Glover and Ward; (3) a preliminary injunction to
prevent any further transfer or sale of the property by Nature
Estates, Warnex, and Sparks Brothers; and (4) recovery from Nature
Estates, Warnex, and Sparks Brothers for tortious interference with
their contract.
     The letter from Glover to the Shirley Van Dyke was attached to
the complaint as Exhibit B and reads:
          The purpose of this letter is to set forth in
     writing for your convenience the terms Robert Ward and I
     discussed with you here in my office on Friday regarding
     a tract of land you are interested in purchasing, and to
     make a proposal to you regarding options on three
     additional tracts of land you have indicated that you and
     Jerry might be interested in purchasing.
          I will hand you with this letter a copy of an
     ownership map with the various tracts of land marked with
     a different color for easy identification.  The land you
     have expressed an interest in buying now is marked in
     pink and contains approximately 109 acres.  At $675.00
     per acre, the total purchase price on this tract will be
     $73,575.00.  With a 20% down payment ($14,715.00) we
     would agree to finance the $58,860.00 balance of the
     purchase price for a period of five years with interest
     at 8% per annum, which would make your monthly payments
     approximately $1,200.00.  Obviously, if you want to pay
     more down there would [be] less to finance and your
     payments would be reduced accordingly.  You let us know
     what you are comfortable with and we will put the figures
     together for you.
          The tracts you have indicated you would like an
     option to purchase are the area marked in blue on your
     map containing 77 acres, which we will refer to as Tract
     1, the area marked in yellow containing 57 acres, which
     we will refer to as Tract 2 and the area marked in green
     containing 100 acres, which we will refer to as Tract 3. 
     We value Tract 1 and 2 at $800.00 an acre and Tract 3 at
     $900.00 an acre.  We feel that this land, by virtue of
     timber growth, etc., is increasing in value at the rate
     of 10% a year.  We would grant you a two year option to
     purchase either or all option tracts of land in exchange
     for your payment of 5% of the current value as option
     money (all of which would be credited back against the
     purchase price if you elect to buy) and an amount equal
     to 10% per annum to your date of purchase if you elect to
     buy, which we feel will offset the growth factor and
     increased value of the property.
          As an example, if you wanted to buy the 77 acre
     tract marked in blue, which we have referred to as Tract
     1 today, the price at $800.00 per acre would be
     $61,600.00.  If, instead of buying it today, you wanted
     a two year option to buy it, you would pay 5% of that
     value ($3,080.00) for that option with that amount to be
     credited against the purchase price if you elect to buy,
     otherwise to be forfeited.  Using that same example, if
     you decided to go ahead and buy the land one year after
     the option date, you would pay the purchase price of
     $61,600.00, plus the 10% growth factor of $6,160.00 for
     a total of $67,760.00, from which would be deducted the
     $3,080.00 option money payment, which would result in a
     total purchase price of $64,680.00, if my math is
     correct.
          We will go over all of this when you are here at the
     office again today, but I thought that Jerry might not
     come with you, and it would be beneficial to have
     something in writing to discuss with him.
The Van Dykes filed a notice of lis pendens against the four
tracts.
     On June 13, 1995, Glover and Ward moved to dismiss the
complaint on grounds that the Glover letter did not comply with the
statute of frauds -- Ark. Code Ann.  4-59-101(a)(4) (Repl. 1996). 
Glover and Ward also argued that the complaint otherwise failed to
state sufficient facts to satisfy the statute of frauds for an oral
contract.  Nature Estates, Warnex, and Sparks Brothers filed their
separate answer and affirmatively pled that the complaint should be
dismissed because the statute of frauds had not been satisfied.  In
addition, they filed a counterclaim for slander of title and
interference with contractual relations and business expectancy.
     On July 18, 1995, a hearing was held on the motion to dismiss. 
Counsel for the Van Dykes maintained that all of the essential
elements of an agreement were contained in the Glover letter.  At
the conclusion of the hearing the trial court informed the parties
that its letter opinion would be forthcoming after it had reviewed
the law.  In a letter dated July 21, 1995, the trial court advised
the attorneys that it had decided to grant the motion to dismiss
for failure to comply with the statute of frauds.
     On August 21, 1995, the Van Dykes filed an amended and
substituted complaint in which they added a fifth count for
promissory estoppel or detrimental reliance against Glover and
Ward.  Also on August 21, 1995, the Van Dykes filed a motion for
the trial court to reconsider its ruling to dismiss the original
claims in their complaint.  The order of dismissal had not yet been
entered.
     On September 5, 1995, a hearing was held on the motion for
reconsideration and the amended complaint.  On September 19, 1995,
the trial court entered its order of dismissal.  The trial court
stated in its order that it had considered "the pleadings, the
briefs, the arguments of counsel and the cases cited to the court"
and specifically found that the Glover letter did not comply with
the statute of frauds and, therefore, was not an enforceable
contract:
     The [C]ourt thinks the letter is an offer but the letter
     has options in it.  The Court cannot find an acceptance
     because to the document on its face one cannot say, "I
     accept."  There are too many options in there to just
     accept it.  It takes a specific acceptance of option one,
     two or three.  The Court thinks that could have been
     done.  There were sufficient items there (sic) it could
     constitute an offer; but the Court finds no acceptance. 
     Likewise for the above reasons, the court finds the
     amended and substituted complaint does not state facts
     upon which relief may be granted on the doctrine of
     detrimental reliance or promissory estoppel.  Defendants'
     counterclaims are pending and are transferred to circuit
     court.
The trial court dismissed the Van Dykes' original complaint and
their amended and substituted complaint and granted a Rule 54(b)
certification for purposes of appeal because the counterclaim
against the Van Dykes was still pending.  See Ark. R. Civ. P.
54(b).
     The Van Dykes urge on appeal that they did plead sufficient
facts on which relief could be granted, including facts sufficient
to satisfy the statute of frauds.  In considering a motion to
dismiss under Arkansas Rule of Civil Procedure 12(b)(6), the facts
alleged in the complaint are treated as true and are viewed in the
light most favorable to the plaintiff -- in this case, the Van
Dykes.  Malone v. Trans-States Lines, Inc., 325 Ark. 383, ___
S.W.2d ___ (1996); Deitsch v. Tillery, 309 Ark. 401,