Opinion ID: 2402187
Heading Depth: 1
Heading Rank: 4

Heading: The Purported Oral Modification

Text: In granting relief to plaintiff, the trial justice relied on two alternate theories. First, referring to the specific facts of this case, she found that plaintiff's response of okay to Ms. DiMuro when she said she would fax plaintiff's lawyer a copy of the purchase-and-sales agreement signed by Mr. Stamas manifested an intent by plaintiff only to review the proposed purchase-and-sales agreement, and not to extend the deadline set forth in the option agreement. Second, as a principle of more universal application, the trial justice found that an oral extension of an option deadline in a written option to purchase real estate is not enforceable. We address the latter and broader ruling first. Although we agree with the trial justice that as a general rule time is of the essence in option contracts, see Moulson v. Iannuccilli, 84 R.I. 85, 90, 121 A.2d 662, 664 (1956); Hicks v. Aylsworth, 13 R.I. 562, 566 (1882), we reject her conclusion that an expiration provision in an option contract is, by its very essence, impervious to oral modification. In Berube v. Montgomery, 463 A.2d 158, 159 (R.I.1983), this Court held that once a document meets the requirements of the statute of frauds, other elements may be supplied by oral agreement. There, we upheld the lower court's finding that an oral agreement to extend the time of performance did not offend the statute, but suggested that there are some portions of an agreement subject to the statute of frauds which may be so essential to the heart of the transaction as to be not susceptible to modification by parol. Id. at 160. However, in the present case, plaintiff has supplied no authority or persuasive rationale to support the supposition that an explicit time element to an option contract qualifies as such. We observe that other jurisdictions that more abundantly have explored option contracts and that have recognized that time is generally of the essence in them, nevertheless have excused an optionee's delay in exercising his or her option if attributable to, inter alia, an optionor's oral representations. See, e.g., Wilson v. Bidwell, 88 Cal.App.2d 832, 199 P.2d 439, 441-42 (Cal. Dist.Ct.App.1948) (holding that the optionor's statement, disclosed to the optionee through a third party, that a few more days would not make any difference, excused the optionee's delay); Unatin 7-Up Co. v. Solomon, 350 Pa. 632, 39 A.2d 835, 836-37 (1944) (holding that a disclosure to the optionee that the optionor was about to enter upon the observance of sacred religious holidays that would extend beyond the option term excused the optionee's delay); see also Lusco v. Tavitian, 296 S.W.2d 14, 17 (Mo.1956) (Notwithstanding that time is of the essence, the optionor by his words, acts or conduct may waive the requirement of acceptance or exercise of the option within the time stipulated.); Smith v. Hues, 540 S.W.2d 485, 488 (Tex. Civ.App.1976) (using similar language). We note further, in the context of contracts for the sale of real estate, this Court has expelled any notion that an expiry date to a contract that has satisfied the statute of frauds is not susceptible to modification by waiver evidenced by parol, irrespective of whether parties intended to make time of the essence. See, e.g., Fracassa v. Doris, 814 A.2d 357, 363 (R.I.2003) ( Fracassa I ) ([L]ike any other provision to a contract, time is of the essence may be waived by express agreement or impliedly by conduct that contributes to the delay in performance.); Thompson v. McCann, 762 A.2d 432, 437 (R.I.2000) ([E]ven `[a] provision making time of the essence may be waived either expressly or impliedly.') (quoting Alk v. Lanini, 61 Or.App. 158, 656 P.2d 367, 369 (1982)). We are not persuaded that the timeliness of an option contract, though perhaps presumed by the inclusion of a fixed expiration date, is any less susceptible to waiver than the performance date of a contract for the sale of land to which the parties undisputedly made time of the essence. Next, we proceed to consider, in light of our case law, whether the purported oral modification lengthened the term in which Mr. Stamas could exercise his option to purchase Ms. Haydon's land beyond February 23, 2004. This Court has held in repeated pronouncements that [w]aiver is the voluntary intentional relinquishment of a known right. It results from action or nonaction   . Lajayi, 860 A.2d at 687 (quoting Haxton's of Riverside, Inc. v. Windmill Realty, Inc., 488 A.2d 723, 725 (R.I.1985)). Waiver that results from a party's actions may be expressed in the actions themselves or implied from them, and may arise where a person against whom the waiver is asserted has pursued such a course of conduct as to sufficiently evidence an intention to waive a right or where his [or her] conduct is inconsistent with any other intention than to waive it. Sturbridge Home Builders, Inc. v. Downing Seaport, Inc., 890 A.2d 58, 65 (R.I.2005) (quoting Ryder v. Bank of Hickory Hills, 146 Ill.2d 98, 165 Ill.Dec. 650, 585 N.E.2d 46, 49 (1991)). Importantly, as we noted in 1800 Smith Street Associates, L.P. v. Gencarelli, 888 A.2d 46, 54-55, 55 n.4 (R.I. 2005), and held in Sturbridge Home Builders, 890 A.2d at 65-66, this Court will not lightly infer, to the extent that the record supports such an inference, the waiver of contractual provisions; evidence supporting an inference of waiver must be manifest and apparent. The party arguing that there has been a waiver bears the burden of showing clearly its existence, and, generally, the ultimate determination is one of fact. Gencarelli, 888 A.2d at 54-55, 55 n. 4. [T]his Court will not disturb the findings of a trial justice sitting without a jury unless such findings are clearly erroneous or unless the trial justice misconceived or overlooked material evidence   . Imperial Casualty and Indemnity Co. v. Bellini, 888 A.2d 957, 961 (R.I.2005) (quoting Macera v. Cerra, 789 A.2d 890, 892-93 (R.I.2002)). We are satisfied that defendant has met this burden, and that the trial justice misconceived material evidence when she found that [a]lthough she did agree to review a proposed Purchase and Sales Agreement, the Plaintiff never expressly stated that she would extend the deadline set forth in the option agreement. The record discloses the uncontradicted evidence that, on the date the option was set to expire, plaintiff responded okay to Ms. DiMuro's statement that she would over-night a purchase-and-sales agreement to defendant, who, at that time, was in Florida. We also observe that, during their conversation, plaintiff informed Ms. DiMuro that her attorney, Mr. Comery, would review the proposed purchase-and-sales agreement before it was signed, and she permitted Ms. DiMuro to transmit a copy of the proposed agreement by fax to Mr. Comery for that purpose. These statements and actions provide clear evidence of plaintiff's intent to extend the deadline and operate to excuse Mr. Stamas's delay in exercising his option. Although we hold that the plaintiff expressly agreed to extend the deadline for the execution of a purchase-and-sales agreement, we recognize that the question of how long the time for performance may have been extended requires further findings of fact. We therefore remand the case to the Superior Court for a factual determination of: (1) how long the parties intended to extend the time for delivery of the purchase-and-sales agreement: a reasonable period of time, or some other period of time; and (2) whether the defendant, in fact, performed within that period.