Court Opinion

ID: 9465627
Source: CourtListenerOpinion
Date Created: 2023-08-05 00:51:36.670168+00
Date Added: 2024-06-11T17:39:16.999640
License: Public Domain

WATERMAN, Circuit Judge,
dissenting:
I respectfully dissent from the result reached by my colleagues. I would reverse the judgment below and order that judgment be entered for the defendant. The sole contention the parties have presented to us upon this appeal is whether the district court erred in failing to grant the defendant-appellant’s motions for a directed verdict or for judgment notwithstanding the verdict. The question of whether the trial court’s charge to the jury was so prejudicial that the case ought to be retried was not raised as error by either of the parties; it was not argued in the appellate briefs; and, indeed, it was not preserved for appellate review at the trial court level. Despite this, my colleagues have chosen not to address the issue of the sufficiency of the evidence below to sustain the verdict but instead have remanded the case for retrial on the ground that erroneous instructions were given to the trial jury. I cannot agree with this disposition of the case. I believe that we should adjudicate the issue the parties asked us to adjudicate, that of whether there was enough evidence before the jury to support the refusals to grant defendant’s motions, and certainly we should do so here where such an adjudication could result in a final termination of the litigation. Of course, when adjudication upon the issue the parties raise could terminate the litigation, adjudication upon that issue should have priority over other issues which could require a new trial. Here it is my belief that any error in the court’s instructions to the jury has no bearing upon the determination as to whether *111there was sufficient evidence to sustain the jury’s verdict. Johnson v. United States, 434 F.2d 340 (8th Cir. 1970); Myra Foundation v. United States, 267 F.2d 612 (8th Cir. 1959); Coca-Cola Bottling Company of Black Hills et al. v. Hubbard, 203 F.2d 859 (8th Cir. 1953). Accord, Scola v. Boat Frances R., Inc., 546 F.2d 459, 460 (1st Cir. 1976); Gorsalitz v. Olin Mathieson Chemical Corp., 429 F.2d 1033, 1040, n. 5 (5th Cir. 1970), cert. denied, 407 U.S. 921, 92 S.Ct. 2463, 32 L.Ed.2d 807, reh. den., 409 U.S. 899, 93 S.Ct. 108, 34 L.Ed.2d 159 (1972).
Should the district court have granted the defendant’s motion for a directed verdict, or its motion made after verdict for judgment n. o. v.?
Examining the evidence in the record in the most favorable light for appellee, perhaps there was evidence sufficient to allow a reasonable inference that further discussions between MacEdward and Lobb as to the term of the employment contract superseded the Exhibit C application form language, the application MacEdward signed on December 12, 1973. MacEdward testified that “at various times” and “on many occasions,” Transcript (hereinafter “Tr.”) 29, 30, he raised with Lobb the thought that he would like a contract for a specific term of years, and that each time the response was that Lobb would personally take care of it. Tr. 30. At no time did Lobb say anything to the contrary. Tr. 29, 30. MacEdward had the opportunity to speak to Lobb about this desire on any number of occasions following December 12, 1973, Tr. 37, 38, 41, 42; and, in view of his testimony that, as of February 1974, he was “still pushing for ... a contract, this was continuous all the time,” Tr. 156, it is reasonable to infer that he utilized those opportunities so to speak.
Thus, there may have been enough evidence to permit the case to go to the jury on the factual issue of whether the parties entered into an oral contract of employment for a specific term of years. Nevertheless, assuming this to be so, I cannot find sufficient evidence to permit the case to go to the jury on the factual issue of whether there existed the necessary elements of promissory estoppel to remove the bar of the Statute of Frauds to the enforcement of such a putative oral contract.
I agree with my colleagues that the Vermont Supreme Court would be likely to follow the Restatement of the Law of Contracts in a case such as this, were the American Law Institute finally to adopt the tentatively drafted Section 217A. However, I cannot subscribe to a belief that the court would, in applying that section, find that the facts here are sufficient to estop this defendant from effectively interposing the Statute of Frauds as a defense to plaintiff’s action.
The Vermont Supreme Court thus far has never addressed the issue of whether the doctrine of promissory estoppel may be used so as to bar the defense of the Statute of Frauds in contract actions. While the Supreme Court of Vermont in Overlook v. Central Vermont Public Service Corp., 126 Vt. 549, 237 A.2d 356 (1967), appears to have adopted in dicta the principles of promissory estoppel as those are set forth in Section 90 of the Restatement of Contracts, the Overlook case concerned the use of promissory estoppel as a substitute for a missing element of consideration in contract formation and did not concern its use to overrule the defense of the Statute of Frauds.
True, in those cases in which the court has discussed the Statute of Frauds, the court has allowed principles of equitable estoppel and the closely related doctrine of part performance to mitigate the harsh inequities that would result from a mechanical application of the Statute. Towsley v. Champlain Oil Co., 127 Vt. 541, 254 A.2d 440 (1969); Cooley v. Hatch, 97 Vt. 484, 124 A. 589 (1924); Taplin v. Hinckley Fibre Co., 97 Vt. 184, 122 A. 426 (1923). But, I point out that before doing so, the court has implicitly bound the plaintiff in each case “to introduce evidence supporting the proposition that insistence on the requirements of the Statute of Frauds would, in effect, be using the Statute to promote, rather than prevent, a fraud.” Towsley v. Champlain Oil Co., supra, 127 Vt. at 543, 254 A.2d at 442.
*112This limitation upon the exercise of equitable powers to estop the application of the Statute of Frauds is the traditional limitation, and has not been abandoned by those courts which permit the use of the doctrine of promissory estoppel to bar the interposition of the Statute of Frauds as a defense.
In looking at the history of this doctrine, one will find that, practically speaking, courts had adopted the underlying principles of the doctrine of promissory estoppel long before Section 217A was drafted by the American Law Institute. The traditional element of equitable estoppel which required a misrepresentation or concealment of material fact at the inception of the agreement had already been abandoned. Thus, rather than requiring the plaintiff seeking enforcement of an agreement within the Statute to demonstrate a fraudulent intent on the part of the promisor, some courts had held that it was sufficient for the application of equitable estoppel by a plaintiff if a fraudulent effect would follow if a defendant should set up a defense inconsistent with his former declarations and the plaintiff had reasonably relied on those declarations. See Seymour v. Oelrichs, 156 Cal. 782, 106 P. 88 (1909); 28 Am.Jur.2d, Estoppel & Waiver §§ 48, 49; 73 Am.Jur.2d, Statute of Frauds § 562; Annot., 56 A.L. R.3d 1037 (1974), Annot., 54 A.L.R.3d 715, 724 (1973).
Quite clearly, the evidence here fails to demonstrate either that the appellant possessed a fraudulent intent at the inception of the agreement or that a successful defense to plaintiff’s action on the basis of the Statute of Frauds would have an effect upon plaintiff that would amount to the perpetration of a fraud upon him.
This consideration of whether the enforcement of the provisions of the Statute of Frauds will result in the promotion of fraud and injustice marks the point of counterbalance between the doctrine of equitable estoppel and the Statute of Frauds; it is a limitation upon equitable powers that is implicit in the history and development of the doctrine of equitable estoppel in this context.
The Statute of Frauds was first enacted in 1677. Entitled a “Statute for the Prevention of Frauds and Perjuries,” the Statute, as stated in its preamble, was aimed at “many fraudulent practices which are commonly endeavored to be upheld by perjury and subornation of perjury.” 29 Car. 2, C.3 (1677). It soon became apparent, however, that “its strict interpretation and literal application frequently resulted in a successful consummation of fraud and injustice.” 2A Corbin, Contracts, 28 at n.23. Concerned that the Statute not become a refuge for contract-breakers, the courts of chancery set about carving out exceptions to its application with a view toward obtaining the chief purpose of the Statute. Thus, the development of the doctrine of equitable estoppel and the enforcement of the Statute of Frauds have occurred simultaneously, counterbalancing each other, each with an aim toward preventing fraud and injustice. As Professor Williston has stated: “The Statute was designed as the weapon of the written law to prevent frauds; the doctrine of estoppel is that of the unwritten law to prevent a like evil.” 3 Williston on Contracts § 533A, 798 at n.27 (3d ed. W. Jaeger 1972).
Accordingly, the courts in applying the principles of equitable estoppel have been at the same time ever vigilant to prevent the extension of this exception to the enforcement of the provisions of the Statute of Frauds beyond its strict bounds lest extensions of the exception swallow up the rule and purpose of the Statute and thus amount to a judicial nullification of the legislative will, a will constantly evidenced by the continued legislative enactment of the Statute.
The drafters of Section 217A have affirmed this historical balance between the Statute and the equitable exception to its use. That section provisionally and tentatively reads as follows:
§ 217A. Enforcement by Virtue of Action in Reliance
(1) A promise which the promisor should reasonably expect to induce action or forbearance on the part of the prom*113isee or a third person and which does induce the action or forbearance is enforceable notwithstanding the Statute of Frauds if injustice can be avoided only by enforcement of the promise. The remedy granted for breach is to be limited as justice requires, (emphasis added). ALI Restatement (Second) of Contracts, Tentative Drafts Nos. 1-7 (rev. & ed. 1973).
Section 217A goes on to list those factors which are significant in determining whether only by enforcement of the promise can injustice be avoided. It is instructive to note of those factors the two most pertinent to our case: “(b) the definite and substantial character of the action or forbearance in relation to the remedy sought; (c) the extent to which the action or forbearance corroborates evidence of the making and terms of the promise, or the making and terms are otherwise established by clear and convincing evidence.”
With these factors in mind, I note that MacEdward places great emphasis upon the relinquishment of his employment with Air North, with the loss of his seniority, pension rights, privilege of reduced air fare, and the personal use of aircraft which his resignation entailed; and accords much significance to his attainment of landed immigrant status with the Canadian government.
His evidence, however, does not disclose the nature and details of his pension and seniority rights. Too, there is nothing in the record to indicate that obtaining this landed immigrant status involved any burden or detriment — financial or otherwise— to MacEdward. As for the personal use of Mr. Deeds’ aircraft, MacEdward conceded on cross-examination that this privilege was not a part of his employment relationship with Mr. Deeds but, rather, grew out of a personal friendship between himself and Deeds. Tr. at 121.
This evidence is inadequate to overcome the provisions of the Statute. The relinquishment of one’s prior employment, standing alone, has never been an adequate detriment or a sufficient reliance to remove the bar of the Statute of Frauds. Indeed, were it otherwise, the bar of the Statute would only be applicable when the plaintiff-employee had been previously unemployed. The appellee has shown precious little beyond the giving up of his employment with Air North. There is nothing to indicate that his prior employment with Air North was anything other than one terminable at will. Moreover, upon accepting employment with appellant he did not relocate his family to Montreal but chose instead to commute between Middlebury, Vermont, and Montreal, and there is no evidence of the costs of the travel and housing expenses incurred by him as a result of his commuting.
The evidence of detriment suffered by MacEdward as a result of his claim of reliance on Lobb’s assurances of a two-year contract does not rise to the level of the detrimental reliance required in other cases to remove the bar of the Statute. There was no relocation to a distant city, Lucas v. Whittaker, 470 F.2d 326 (10th Cir. 1972); Montgomery v. Moreland, 205 F.2d 865 (9th Cir. 1953); Fibreboard Products, Inc. v. Townsend, 202 F.2d 180 (9th Cir. 1953); Alaska Airlines v. Stephenson, 217 F.2d 295, 15 Alaska 272 (9th Cir. 1954); MacEdward was not placed temporarily in an inferior job at a reduced rate of pay, Fibreboard Products, Inc. v. Townsend, supra; he did not relinquish valuable retirement benefits, Pursell v. Wolverine-Pentronix, Inc., 44 Mich.App. 416, 205 N.W.2d 504 (1973); he did not give up a secure, tenured position of employment, Seymour v. Oelrichs, supra; Alaska Airlines v. Stephenson, supra, or a substantial financial or business investment, St. Louis Trading Co. v. Barr, 168 Okl. 184, 32 P.2d 293 (1934).
As to the factors in subsection (c) of Section 217A, I point out that while there probably was evidence sufficient to allow the case to be submitted to the jury on the question of whether there was any alleged contract arrived at for any definite term, such evidence was minimal indeed. At MacEdward’s first October meeting with Lobb, MacEdward demanded as a condition of employment that he be granted a “sub*114stantial contract,” a “contract for two, three or five years,” or a “gentleman’s agreement.” Tr. 28, 29. It is fair to say that MacEdward’s proposals at this point were anything but well-defined ones. Furthermore, it is clear that these proposals were advanced at what was essentially a preliminary negotiating session only. MacEdward then testified that his subsequent discussions with Lobb were less specific in nature, Tr. 96, and that there were no further detailed employment discussions after his submission of the December 12 application form. Tr. 155.
In contrast to this, Lobb adamantly denied ever promising MacEdward any specified term of employment, stating: “There’s no possibility [that I made such a promise] because we have no contracts in the company, even for officers of the company.” Tr. 162-63. Other employees of Northern Electric also testified that no contracts for a definite term were ever granted by the corporation.
Thus, it can hardly be said that there was clear and convincing evidence of the existence of a two-year contract. Nor do the circumstances surrounding MacEdward’s acceptance of the job otherwise corroborate the making of such a contract. Rather, to my mind, they are probative of little more than the fact of his being hired by Northern Electric. MacEdward did what thousands of Americans do each year in our upwardly mobile society. He left a steady job for a better paying job of greater responsibility. My colleagues in holding that the relinquishment of prior employment under these circumstances is sufficient to prevent the interposition of the Statute of Frauds as a defense to the enforcement of an unwritten contract repeal the Statute and nullify the legislative intent constantly evidenced by its continued enactment.
Vermont first adopted its Statute of Frauds in 1822, and very recently its policy has been extended to include new classes of cases. 1975 Vt. Acts (adj. sess.), Pub.L.No. 250, § 1 (1976), 12 Vt.Stat.Ann. tit. 12 § 181(6) and (7). This can therefore fairly be said to reflect a continuing and present declaration of legislative public policy to endorse the Statute and to further its purposes.
The particular section of the Statute of Frauds with which we are dealing “grew out of a purpose to intercept the frequency and success of actions based on nothing more than loose, verbal statements or mere innuendos.” 72 Am.Jur.2d, Statute of Frauds, § 7. Our case presents precisely that sort of situation.
Accordingly, as stated by me earlier, I would reverse the judgment below and order that upon remand entry of judgment for the defendant be entered. In so doing, I am not unmindful of the fact that a Court of Appeals, in reversing a district court’s denial of a motion for judgment n. o. v., has the discretionary power which the district court has to order a retrial rather than to direct the entry of judgment for the moving party. F.R.Civ.P. 50(d), 28 U.S.C.; 5A Moore, Federal Practice, 150.15; 9 Wright & Miller, Federal Practice & Procedure, § 2540. See also, Neely v. Martin K. Eby Construction Co., 386 U.S. 317, 87 S.Ct. 1072, 18 L.Ed.2d 75 reh. den., 386 U.S. 1027, 87 S.Ct. 1366, 18 L.Ed.2d 471 (1967). However, a review of those cases in which the district and appellate courts have dealt with this question convinces me that cases in which a court exercises this discretion and, though judgment might have been ordered, directs a new trial, are rare, and appear to be limited to those instances wherein the appellee has demonstrated the possibility of a cure on remand of defects in proof occasioned through no fault of his own, or where, similarly, the appellee was handicapped in the full development of the evidence at trial. See Samuels v. Health & Hospitals Corp., 591 F.2d 195, 199 (2d Cir. 1979) (new trial; “all parties were at a disadvantage in investigation and preparing for trial”); Proctor & Gamble Defense Corp. v. Bean, 146 F.2d 598, 601 (5th Cir. 1945) (new trial; “evident confusion” as to pleadings and admissions); Mercer v. New York Trap Rock Corp., 91 F.Supp. 434, 438 (E.D.N.Y.1950) (new trial; “death case and the plaintiff was obviously at a disadvan*115tage in the preparation of her case”); cf. Ferrell v. Trailmobile, Inc., 223 F.2d 697 (5th Cir. 1955) (newly discovered evidence which amounts to a conclusive demonstration of appellee’s nonliability requires a new trial, although proper diligence was not used to secure evidence at trial). See also Geller v. New England Industries, Inc., 535 F.2d 1381 (2d Cir. 1976) (judgment n. o. v. reversed; new trial in interests of justice partially due to confusion of parties).
The appellee here should not get a new trial. He had a fair and reasonable opportunity at trial to develop fully all issues of law and of fact. His counsel demonstrated early in the case an understanding of the principles of promissory estoppel in his colloquy with Judge Holden, Tr. 27, and in effectively eliciting information to support his client’s claims through the examination of the witnesses. The interests of justice require, to my mind, not the granting to plaintiff of a second chance in order to fill any gaps in his case, but a final termination of this litigation. I find the present case quite similar to that of Neely v. Martin K. Eby Construction Co., supra, wherein the U. S. Supreme Court upheld the court of appeals’ reversal of a denial of a motion for judgment n. o. v. and order of entry of judgment below for the appellant. As in Neely v. Martin K. Eby Construction Co., supra, the appellee here has suggested no grounds for a new trial and does not claim error in the trial. Appellee did not object to the instructions given by Chief Judge Holden when given in the district court, and made none to us on appeal. In fact, neither the appellee nor the appellant, in the submission to us of the portions of the trial record they deemed pertinent, included a transcript of the court’s charge, the charge which my brothers find so erroneous that they believe the ease should be retried.
In seizing, sua sponte, as justification for a grant of a new trial, the ground that an unclear charge was given to the jury, my brothers completely disregard the existence of Rule 51 F.R.Civ.P., 28 U.S.C. Rule 51 states:
No party may assign as error the giving or the failure to give an instruction unless he objects thereto before the jury retires to consider its verdict, stating distinctly the matter to which he objects and the grounds of his objection.
Here the parties made no pertinent objection before the jury retired and, of course, did not assign as error any inadequacies in the charge as given or, indeed, submit the charge to us for our inspection. Yet, regardless of this, a new trial is being ordered in complete disregard of the purpose of Rule 51.
As is stated in Troupe v. Chicago, D. & G. Bay Transit Co., 234 F.2d 253, 259-60 (2d Cir. 1956), often quoted:
The purpose of this salutary rule is to expedite the administration of justice by insuring that the trial judge is informed of possible errors so that he may have an opportunity to reconsider his charge, and, if necessary, to correct it.
Here, neither of the parties objected to Judge Holden’s inadvertent confusion of Exhibits A and C nor was there any objection to the failure to instruct the jury as to the defense of the Statute of Frauds. Had objections been made, it is extremely likely that Judge Holden would have corrected these errors. As no objections were taken, fairness to the district court and to the litigants requires that these errors not be made the grounds for a reversal of the judgment below. Palmer v. Hoffman, 318 U.S. 109, 119, 63 S.Ct. 477, 87 L.Ed. 645 (1943); United States v. Atkinson, 297 U.S. 157, 56 S.Ct. 391, 80 L.Ed. 555 (1936); Westerman v. Sears, Roebuck & Co., 577 F.2d 873, 882 (5th Cir. 1978) (appellant pleaded “misuse” as an affirmative defense but its requests and objections were limited to misuse as a proximate cause of injury; hence appellant’s contention that the trial judge erred in not instructing on “misuse” as affirmative defense could not be considered); Cohen v. Franchard, 478 F.2d 115 (2d Cir.), cert. denied, 414 U.S. 857, 94 S.Ct. 161, 38 L.Ed.2d 106 (1973); McNamara v. Dionne, 298 F.2d 352 (2d Cir. 1962); Alexander v. Kramer, 273 F.2d 373, 375 (2d Cir. 1959); 5 *116Moore, Federal Practice 151.03; 9 Wright & Miller, Federal Practice & Procedure, § 2558.
The case at bar simply does not present any factors warranting the exceptional use of the plain error doctrine. The instructions are not “totally contradictory and inconsistent,” Frederic P. Wiedersum Assoc. v. Nat. Homes Const., 540 F.2d 62, 66 (2d Cir. 1976), nor are they so confusing as to fail “to provide even the barest legal guideposts to aid the jury in rationally reaching a decision.” McNello v. John B. Kelly, Inc., 283 F.2d 96, 102 (2d Cir. 1960) (“The question of liability . . . was submitted to the jury with what was tantamount to no instructions at all”). See also Johnson v. Erie Railroad Company, 236 F.2d 352 (2d Cir. 1956).
While Judge Holden’s instruction as to the legal significance of Exhibits A and C was confusing, the clear import of his instruction was that subsequent dealings could supersede prior agreements. This is an easily understood concept, and we must assume that the jury had access during the course of its deliberations to the exhibits which were clearly marked, were readily identifiable, and which bore the correct dates. In light of this, Judge Holden’s mistaken identification was harmless.
The remaining portions of the instructions were correct insofar as they went. Judge Holden’s instructions on reliance were unquestionably meant to reflect the objective theory of contractual intent, placed as they were in the middle of a paragraph dealing with determining the contractual intent of the parties. Cf. Jordon v. Dyer, 34 Vt. 104 (1861) (whatever is expected by one party to a contract and known to be so expected by the other is deemed to be a part or condition of the contract).
Nor were the other instructions improper, as their clear intendment was to inform the jury that a contract may consist of several different writings and need only be signed by the party to be charged, which is not inconsistent with the requirements of the Statute of Frauds, Ide v. Stanton, 15 Vt. 685 (1843); 37 C.J.S. Frauds, Statute of § 206, and to convey the concept of the integrated versus the nonintegrated written contract. X Wigmore on Evidence, 3d ed., §§ 2429-31; 32A C.J.S. Evidence § 1013(1).
I submit that an issue which was not properly raised at trial or presented on appeal should not provide a predicate for reversing the court below. I respectfully dissent from the remand ordering that a new trial be granted.