Court Opinion

ID: 9476424
Source: CourtListenerOpinion
Date Created: 2023-08-05 05:55:50.485824+00
Date Added: 2024-06-11T17:45:18.896081
License: Public Domain

MacKINNON, Senior Circuit Judge
(dissenting in part and concurring in part).
Due to the death of Judge Tamm, who had concurred in the original opinion of the court,1 Judge Robinson was designated to become the third member of the panel considering Appellee Hodge’s petition for rehearing. This has resulted in a reversal of the judgment originally reached by the court, as Judge Robinson now joins Chief Judge Wald in an opinion that generally follows her earlier dissent. My response to this development is to adhere to my original opinion for the court holding that the. contract was unenforceable under the Statute of Frauds and to incorporate by reference the court’s prior opinion. In addition, the following comments are offered with respect to the current majority opinion.
I.
First, the majority dismisses Hodge’s testimony to the effect that the oral contract he entered into with Evans Financial Corp. was for permanent work until he retired not “much beyond 65.” (Tr. 115). Hodge *572testified, in response to interrogation by his own counsel, that his conditions for entering into a contract of employment with Evans were as follows:
I said, No. 1, the job must be permanent. Because of my age, I have a great fear about going back into the marketplace again. I want to be here until I retire.
Tr. 109 (emphasis added). What he intended by his condition “until I retire” according to his testimony was that the contract must meet his condition to permit him to work not “much beyond 65.”
Q: Had you formed an intention as to how long you planned to continue to work?
THE WITNESS [Hodge]: The Bank had a plan, a pension plan which had recently been expanded from 65 years to 70 years, and I had originally thought in terms of 65, and they would send around notices and printed material. I really questioned if I was going to go much beyond 65.
Tr. 115 (emphasis added). Hodge’s answer to the question is in the last sentence, and cannot be characterized as merely a statement of intention. The response indicates Hodge’s understanding of the contract— that he had a specific right to work not “much beyond 65.” The contract, by Hodge’s interpretation, was thus definite until age 65, but he could work a little beyond that age. Since Hodge was 54 at that time, the contract permitted him to work for 11 years at a minimum. Such a contract is a long-term contract, for more than one year, and thus is unenforceable under the Statute of Frauds.
The majority responds to this testimony2 by claiming that the statement merely expresses Hodge’s “expectation as to. how long he intended to continue working” and that “there is no evidence that Hodge and Tilley agreed that Hodge would be permitted to work for eleven years or for any other definite period of time.” Maj. Op. at 564 n. 5. Testimony should not be so narrowly read and given such a restrictive construction. Clearly, Hodge would not have had an “expectation” to work until a distant date in the future unless the contract, that he claimed he had entered into and upon which he relied, permitted him to work until that distant time. He cannot contend in one breath that he had a long-term contract and in the next breath that the contract could be “fully performed” within one year. The majority further tries to avoid the long-term character of the contract by claiming that the contract was not “for a specified period of time.” Maj. Op. at 563. Of course, the contract did not run until a fixed day certain, but it was, according to Hodge’s understanding, “definite” until age 65, and “indefinite” beyond that but not “much beyond.” The fact that the contract could run beyond the 11 years that were definite does not destroy the long-term character of the contract. The contract was therefore not capable of performance within a year of its making and thus is unenforceable under the Statute of Frauds.
II.
Another fatal flaw in the majority opinion is its reliance on cases involving contracts not analogous to the agreement at issue here. In two of the cases the majority cites for support, the court found oral contracts containing “life” terms to be outside the Statute of Frauds, because the relevant party could have died within a year of the contract’s formation. See Farrow v. Cahill, 663 F.2d 201, 207 n. 29 (D.C.Cir.1980) (promise of lifetime employment); Launay v. Launay, Inc., 497 A.2d 443, 449 n. 4 (D.C.1985) (buy-sell agreement triggered upon death of stockholder). In the other two cases cited by the majority— holding that oral partnership agreements for an indefinite term were enforceable— the duration of the contracts was not only not fixed, but not even discussed. See *573Snyder v. Hillegeist, 246 F.2d 649 (D.C.Cir.1957) (co-brokerage agreement for commission to be performed upon acquisition of building or building site); Cooper v. Saunders-Hunt, 365 A.2d 626 (D.C.1976) (no term of years discussed in oral partnership agreement).
The agreement between Hodge and Til-ley is of a very different character than the contracts addressed in the foregoing cases. The agreement was not for lifetime employment as in Farrow and Launay nor was it of undefined duration as in Snyder and Cooper. Rather, the agreement Hodge entered into complied with his condition that he be permitted to work until retirement around age 65. As such, it was an oral agreement for long-term employment, not capable of performance within one year from the making of the agreement, and thus is unenforceable under the District .of Columbia Statute of Frauds. See Prouty v. National Railroad Passenger Corp., 572 F.Supp. 200, 204 (D.D.C. 1983); Gebhard v. GAF Corp., 59 F.R.D. 504, 506 (D.D.C.1973).
Simply because a contract may be discharged within one year (for example, by death) does not take the contract outside the Statute. See Coan v. Orsinger, 265 F.2d 575, 577-79 (D.C.Cir.1959). The Restatement (Second) of Contracts supports this interpretation of the Statute. Speaking directly to this case, the Restatement of Contracts states:
[Performance of many contracts may be excused by supervening events or by the exercise of a power to cancel granted by the contract. The possibility that such a discharge or excuse may occur within a year is not a possibility that the contract will be “performed” within a year. This is so even though the excuse is articulated in the agreement. This distinction between performance and excuse for nonperformance is sometimes tenuous; it depends on the terms and the circumstances, particularly on whether the essential purposes of the parties will be attained. Discharge by death of the promisor may be the equivalent of performance in the case of a promise to forbear, such as a contract not to compete. Illustrations:
5. A orally promises to work for B, and B promises to employ A for five years at a stated salary. [This is the equivalent of Hodge’s contract; the dispositive fact being that the contract was intended to last beyond one year]. The promises are within the Statute of Frauds.
Though the duties of both parties will be discharged if A dies within a year, the duties cannot be “performed” within a year. This conclusion is not affected by a term in the oral agreement that the employment shall terminate on A’s death.
7. The facts being otherwise as stated in Illustration 5, the agreement provides that A may quit [or, in this case, retire] at any time. The agreement is within the Statute.
Restatement (Second) of Contracts § 130, comment b (1981) (emphasis added). Thus, the possibility that a discharge or excuse may occur within one year does not take the contract outside the Statute; only the possibility of full performance within one year of the making of the contract will render the agreement enforceable.
It is clear that the parties here created a contract for a period longer than one year’s duration. The jury so agreed, as is evident from the jury’s award of $175,000 to compensate Hodge for his lost income (less mitigation) due to his discharge by Evans Financial, where Hodge’s annual income was about $47,500 per annum.3 Thus, the only question is whether the contract could have been fully performed within one year.
It is possible that Hodge’s contract for employment until retirement not “much beyond 65” could have terminated within one year. Hodge could have died or retired *574within one year without breaching his contract. The key to determining whether the Statute of Frauds applies is whether Hodge’s death or retirement within one year would have resulted in the contract being fully performed or merely excused. As quoted above, the Restatement recognizes that sometimes, as here, the distinction between “performance” and “excuse” is tenuous and “depends on the terms and the circumstances, particularly on whether the essential purposes of the parties will be attained.” Id.
The original opinion for the court held that Hodge’s death or retirement within one year would not have resulted in performance of the contract, but rather would have constituted an excuse for non-performance (or, in Judge Bastian’s words “defeasance,” Coan v. Orsinger, 265 F.2d 575, 577 (D.C.Cir.1959)). This conclusion is supported by the Restatement and its illustrations, quoted above. Hodge’s death or retirement within one year would not have resulted in the attainment of the parties’ objectives — i.e., service until not much beyond age 65 — which is the touchstone for distinguishing between performance and excuse under the Restatement. The contract here is not similar to a contract not to compete, where the death or retirement of the promisor accomplishes the parties’ objectives and is therefore equivalent to performance.
The Restatement illustrations to comment b also support the court’s original opinion. Illustration 5 presents the following facts: A orally promises to work for B for five years (note, however, that any period extending beyond one year will do). The Restatement states that the contract is within the Statute of Frauds even though A could die within one year, because the duties of the parties to the contract would be left unperformed. Illustration 7 presents the same facts, but also specifies that the contract provides that A may quit (or, for our purposes, retire) at any time. The Restatement concludes: “The agreement is within the Statute.” Id. (emphasis added). As with these examples, Hodge’s contract was for a term exceeding one year since by his own testimony, the contract met his requirement of permitting him to work not “much beyond 65.” The contract could terminate within one year at Hodge’s death or voluntary retirement, but, as with the examples in the Restatement, such termination would not constitute full performance. Hodge’s contract thus falls within the Statute of Frauds.
III.
The majority claims that its adoption of a narrow interpretation of the Statute of Frauds will “mollify the often harsh and unintended consequences of the statute.” Maj. Op. at 565. But the Statute is not a welfare act. It was designed to protect against the danger of fraud. Because Mr. Tilley, the only other witness to the negotiations at issue here had died before trial, Hodge was able to testify without contradiction concerning the particulars of the oral agreement between the two. This presents precisely the kind of situation that justifies application of the Statute’s requirement that the contract be in writing.
I respectfully dissent from the majority’s holding that the Statute of Frauds does not bar enforcement of the employment agreement between Hodge and Evans and concur in the reduction in damages called for by the majority opinion.

. Hodge v. Evans Financial Corp., 778 F.2d 794 (D.C.Cir. 1985).

. Instead of seriously considering Hodge’s testimony on this point, the majority elects to rely upon the allegations in plaintiffs complaint, i.e., “See, Complaint If6, Record excerpts at 13 ..." Maj. Op. at 563. But cases are decided on the testimony at trial, not on mere allegations in the pleadings.

. That the parties stipulated they did not intend to create a contract for "a fixed period of time” is irrelevant. The contract need not run until a fixed date. All that is relevant for our purposes is whether the contract was intended to run beyond one year.