Opinion ID: 2979236
Heading Depth: 3
Heading Rank: 1

Heading: The Existence of an Oral Sales Agreement

Text: Appalachian’s first argument is that the evidence creates a genuine issue of material fact as to whether Sigmon and KST entered into an oral sales agreement at the meeting on March 9, 2005. Under Tennessee law, “[o]ral contracts are enforceable, but persons seeking to enforce them must prove mutual assent to the terms of the agreement, and must also demonstrate that the terms of the contract are sufficiently definite to be enforceable.” Castelli v. Lien, 910 S.W.2d 420, 426–27 (Tenn. Ct. App. 1983). Naturally, proof of mutual assent and definite terms may be made through witness testimony. See, e.g., Davidson v. Holtzman, 47 S.W.3d 445, 454 (Tenn. Ct. App. 2000) (“[T]he only evidence presented at trial regarding the parties’ agreement was the testimony of the parties and their correspondence after the agreement was allegedly made.”); Frizzell v. Frizzell, No. 03A01-9709-CH00387, 1998 WL 481977, at  (Tenn. Ct. App. 1998) (“In the instant case, the complaint alleges, and [the] testimony, if believed, makes out, an oral agreement.”). To establish the existence of an oral sales agreement, Appalachian offers the affidavits of William Connolly, one of Appalachian’s managers, and Scott Tepper, one of KST’s principals. Both Connolly and Tepper aver that they were present at the March 9, 2005 meeting. According to their affidavits, the meeting resulted in “[a]n agreement on all essential terms of a sale on Mr. Sigmon’s terms.” Connolly Aff. at ¶ 12. Connolly and Tepper claim that the terms were as follows: “(1) a sale price of $70,000,000; (2) a refundable payment of $2,000,000 into escrow; (3) a short Due Diligence; -9- No. 08-6258 Sigmon v. Appalachian Coal Properties, Inc. (4) confidentiality of Mr. Sigmon’s records; and (5) an agreement to cooperate and use commercially reasonable efforts to close on the deal within a certain period of time.” Tepper Aff. at ¶ 6. However, the affidavits are of little value to the present inquiry. While an affidavit may certainly be sufficient to establish a genuine issue of material fact, see Courtney v. Biosound, Inc., 42 F.3d 414, 418 (7th Cir. 1994) (“The nonmoving party’s own affidavit . . . can constitute affirmative evidence to defeat a summary judgment motion.”), that is not the case if the affidavit contains only conclusory allegations and naked conclusions of law, see Galindo v. Precision Am. Corp., 754 F.2d 1212, 1216 (5th Cir. 1985) (“[U]nsupported allegations or affidavits setting forth ‘ultimate or conclusory facts and conclusions of law’ are insufficient to either support or defeat a motion for summary judgment.” (citing C. Wright, A. Miller, & M. Kane, Federal Practice and Procedure § 2738 (1983))). Here, the affidavits are entirely devoid of details, asserting only that a sales agreement was reached. Whether an agreement is reached is a legal conclusion that must be determined on the basis of specific facts. For example, a court might conclude that a contract had been formed if it were averred that Sigmon said, “I agree to sell on these particular terms; it’s a done deal.” No such facts are present in this case. Given this dearth of specifics, it cannot be said that the affidavits offer anything beyond conclusory allegations and bald conclusions of law. Therefore, the affidavits alone are insufficient to create a genuine issue of material fact as to the existence of an oral sales agreement. Nor is there anything else in the record that might give rise to a legitimate dispute. There is, of course, the draft letter of intent, but the letter, revised by the putative buyer after the crucial meeting, clearly states that “neither KST nor [Sigmon] shall be obligated to complete the - 10 - No. 08-6258 Sigmon v. Appalachian Coal Properties, Inc. transactions contemplated by this letter, and it is not intended to constitute and shall not create a binding contract.” There is also the March 16, 2005 letter from Sigmon, which indicates that Sigmon does not enter into verbal agreements and that any “tentative agreements” should not be construed as binding. While one might look at this second letter and infer that Sigmon had at one time in the past entered into verbal agreements, the letter offers no indication of when such agreements might have been reached, with whom, or on what terms. We therefore hold that the March 16, 2005 letter is insufficient to create a genuine dispute as to the existence of a contract of sale. Accordingly, the district court properly granted summary judgment on the issue of whether Sigmon agreed to sell the coal businesses.