Court Opinion

ID: 9582223
Source: CourtListenerOpinion
Date Created: 2023-08-21 22:23:59.395612+00
Date Added: 2024-06-11T13:37:33.824893
License: Public Domain

WYNN, Judge,
dissenting.
“Land is regarded as such a high species of property that exceptional safeguards have been devised for the preservation and security of its title ... .”2 In recognition of the need for safeguards against fraud and ambiguity in the sale or conveyance of land, the North Carolina General Statutes requires: “All contracts to sell or convey any lands . . . shall be void unless said contract, or some memorandum or note thereof, be put in writing and signed by the party to be charged therewith, or by some other person by him thereto lawfully authorized.” N.C. Gen. Stat. § 22-2. Because there was no written settlement agreement or memorialization signed by the Plaintiff in the present case, I would hold that the trial court erred by concluding that the Statute of Frauds does not apply.
I respectfully disagree with the majority’s conclusion that the settlement agreement at issue in this case was in “total compliance with the statute of frauds.” As the majority opinion recognizes, the parties informed the judge during trial that they had reached a verbal settlement agreement regarding their dispute. In open court, the counsel for the City of Newton informed the trial judge “the plaintiff and defendant have settled this case for the sum of $40,000 in exchange for which the plaintiff has agreed to execute a Quitclaim deed to the City for this tract of land that’s depicted in Plaintiff’s exhibit 1, the 3.122 acres.” The trial court then conducted the following inquiry of Plaintiff:
THE COURT: Is that your agreement, sir?
[THE PLAINTIFF]: I don’t have any choice. THE COURT: Well—
[PLAINTIFF’S COUNSEL]: You do have a choice.
THE COURT: I understand your sentiment, sir. But is that your agreement?
[THE PLAINTIFF]: Yes, that’s my agreement.
The record and hearing transcript indicate that counsel for the City of Newton circulated a written proposed settlement agreement on 21 November 2007 via e-mail, seven days after the trial court’s inquiry. Additionally, neither the parties nor their attorneys signed either of *352the two “Settlement Agreement and Release” documents included in the record.
In my view, (I) the unsworn exchange in court was insufficient to satisfy the Statute of Frauds; (II) emails from Plaintiff’s counsel did not constitute an electronic signature to an agreement that was purportedly already agreed to and approved by the trial court; and (III) any agreement reached during the trial court session was conditional and not mutual because the “agreement” was subject to approval by the City Council.
I.
First, I do not agree with the majority’s contention that the exchange between Plaintiff and the trial judge was sufficient to satisfy the Statute of Frauds. Although I acknowledge the majority’s contention that other jurisdictions have found “oral stipulations" made in open court to satisfy the Statute, no North Carolina court has done so, and the facts of this case do not compel such a recognition. While a number of jurisdictions recognize a “judicial admission exception” to the Statute, even if this Court were to adopt such an exception, the exception would not be applicable to the statements made in the instant case.
In Gibson v. Arnold, 288 F.3d 1242, 1246-47 (10th Cir. 2002), the U.S. Court of Appeals for the Tenth Circuit noted that “virtually every court that has addressed the issue during the last twenty-five years has held that judicial admissions are an exception to the statute of frauds.” However, such jurisdictions have generally limited the “judicial admissions exception” to admissions by sworn testimony, deposition, pleading, or sworn affidavit. See, e.g., Flight Sys., Inc. v. Elec. Data Sys. Corp., 112 F.3d 124, 127-28 (3d Cir. 1997) (applying exception to admission of the contract in pleadings or testimony); Roth Steel Products v. Sharon Steel Corp., 705 F.2d 134, 142 (6th Cir. 1983) (applying exception to admission in deposition); Litzenberg v. Litzenberg, 514 A.2d 476, 480 (Md. 1986) (recognizing the exception applies to admissions by sworn testimony or deposition, or in pleadings). Here, Plaintiff was not under oath at the time of his statement, nor was there an “admission” to the existence of an agreement in any writings submitted to the court.
Further, I note that Szymkowski, on which the majority relies, is distinguishable. In Szymkowski, the Illinois Court of Appeals held the Statute of Frauds inapplicable to an oral settlement agreement *353approved and evidenced in the trial court’s order, entered the same day. Szymkowski, 432 N.E.2d at 1212. However, as the majority notes, Illinois’ law contains a provision excepting sales “pursuant to a judgment or order of any court in this state” from the Statute of Frauds such that “any subsequent performance of the settlement would have been ‘pursuant to order of the court’ and therefore within the statutory exception to the Statute of Frauds.” Szymkowski, 432 N.E.2d at 1211-12 (emphasis in first omitted). Because section 22-2 of the North Carolina General Statutes governing contracts for the sale of land contains no such statutory exception, Szymkowski is inapplicable.
Accordingly, I do not support the conclusion that the in court exchange acknowledging that the parties had reached a verbal agreement constituted an exception to the Statute of Frauds.
II.
Additionally, I disagree with the majority’s argument in the alternative, that a memorialization of the oral settlement agreement was electronically “signed by the party to be charged therewith, or by some other person by him thereto lawfully authorized.” N.C. Gen. Stat. § 22-2. As the majority notes, “ ‘a writing or memorandum is ‘signed’ in accordance with the statute of frauds if it is signed by the person to be charged ....’” Yaggy, 7 N.C. App. at 598, 173 S.E.2d at 501 (quoting Bishop, 353 P.2d at 1025) (citations omitted).
Section 66-312(9) defines an “electronic signature” as “an electronic sound, symbol, or process attached to, or logically associated with, a record and executed or adopted by a person with the intent to sign the record.” N.C. Gen. Stat. § 66-312(9). The official comment further explains that an electronic signature includes “one’s name as part of an electronic mail communication.” N.C. Gen. Stat. § 66-312(9) official commentary.
Here, the record on appeal contains no email communication originated by Plaintiff or his counsel. Indeed, the record shows no electronic communication containing any electronic signature by either Plaintiff or his counsel that would evidence an intent to sign the communication. Accordingly, I can find no evidence to support the conclusion that a writing was “signed” by either Plaintiff or his counsel. See Sel-Lab Marketing, Inc. v. Dial Corp., 48 U.C.C. Rep. Serv. 2d 482 (S.D. N.Y. 2002) (holding series of emails memorializing agreement did not satisfy Statute of Frauds, in part, because none of the emails were signed by the party to be charged).
*354III.
Finally, I would hold that the parties did not mutually agree to a settlement because the settlement was conditioned upon the approval of the City Council.
“Mutuality of promises means that promises to be enforceable must each impose a legal liability upon the promisor. Each promise then becomes a consideration for the other.” Wellington v. Dize Awning & Tent Co., 196 N.C. 748, 751, 147 S.E. 13, 15 (1929). In contracts involving the sale of realty, the issue has occasionally arisen that the promise of the purchaser is contingent upon his securing adequate financing. In such cases, this Court has held the purchaser’s promise not illusory where it is “accompanied by an implied promise of good faith and reasonable effort” to secure such financing. Mezzanotte v. Freeland, 20 N.C. App. 11, 17, 200 S.E.2d 410, 415 (1973), cert. denied, 284 N.C. 616, 201 S.E.2d 689 (1974).
Other cases, however, have held that where an agreement is made subject to the approval of another promisor, there can be no implied promise, and thus there is no mutuality of obligation to support the agreement. In Hilliard v. Thompson, for example, W.L. Thompson contracted with WH & G Realty Inc. to sell a piece of realty in Durham County for $70,000. 81 N.C. App. 404, 344 S.E.2d 589 (1986). The purchasers tendered a check to Thompson in the amount of $500, and the parties agreed that Thompson would take the contract home to be signed by his wife. That night, Thompson called one of the purchasers and said his wife wouldn’t sign the contract unless the price was raised. The purchasers agreed to the new price, and it was agreed that all parties would meet to amend the contract the following day. The next day, Thompson returned the check and told the purchasers he had found a buyer willing to pay more. The property was sold to a third party before WH & G could meet the higher offer. WH & G sued, claiming breach of contract. The trial court awarded summary judgment for defendant based on lack of mutuality. In affirming the trial court’s ruling, this Court stated:
One of the terms of the alleged contract provided that William L. Thompson deliver to the plaintiffs a general warranty deed which would contain a fee simple marketable title. Without the signature of his wife Mr. Thompson could not have delivered such a deed. The plaintiffs would not have been liable on the contract if Mr. Thompson had sued them. There was not a mutuality of obligation.
Id. at 406-07, 344 S.E.2d at 590.
*355This holding accords with the decisions of other courts that have considered the issue in situations more analogous to the one sub judice. In Heuser v. Kephart, the Tenth Circuit, applying “basic contract rules”, reviewed a settlement agreement between a municipality and an individual that was contingent upon approval of the settlement amount by the City Council. 215 F.3d 1186, 1191 (10th Cir. 2000). “The district judge found that the consideration, which she also found had been specifically bargained for, was the [City] attorneys’ promise to recommend the terms of the proposed settlement to their clients.” Id. On appeal, the agreement was held unenforceable for lack of mutuality:
The [County and City] were completely free to choose between two alternatives — they could accept the attorneys’ recommendation and extend the offer, or they could reject the recommendation. Obviously, if the [County and City] were to choose the second alternative, [the other party] would have received nothing in exchange for their agreement.. .. Where, as here, a party “has an unfettered choice of alternatives, and one alternative would not have been consideration if separately bargained for, the promise in the alternative is not consideration.”
Id. (quoting Restatement (Second) of Contracts § 77, cmt. b (1981)). See also Mastaw v. Naiukow, 306 N.W.2d 378, 380 (Mich. Ct. App. 1981) (“Since the Detroit Common Council had unfettered discretion to accept or reject the settlement, its options were in no way limited by the supposed settlement.”).
In the present case, the attorney for the municipality made clear to the court that the agreement was contingent upon receiving the blessing of the City Council. Contrary to what the attorney stated, this was not “just a technicality.” Indeed, the attorney’s recommendation was susceptible to the City Council’s rejection.
I would hold that because the purported agreement presented in open court was nonbinding and conditional, the trial court’s colloquy with Plaintiff did not warrant the invocation of the doctrine of judicial estoppel in this case. As Defendants’ counsel stated during the open court session, the purported agreement was still subject to approval by the City. Though characterized as a “mere technicality”, this condition meant that Defendants were not bound by the agreement after the open court session until the City Council approved it, whereas the majority’s holding indicates that Plaintiff was so bound by purported agreement after the open court *356session and before the City Council approved the purported agreement. That result is not what was intended by the invocation of the doctrine of judicial estoppel.
In sum, I would hold that the trial court erred by concluding that Plaintiff entered into a “valid and binding” settlement agreement because (I) the record on appeal fails to establish the compliance with the Statue of Frauds, (II) the exchange of emails after the open court session did not constitute an electronic signature by Plaintiffs counsel to an agreement, and (III) the discussions during the open court session concerned a purported subject to approval by the City Council.

. Davis v. Ely, 104 N.C. 16, 23, 10 S.E. 138, 140 (1889).