Court Opinion

ID: 9652275
Source: CourtListenerOpinion
Date Created: 2023-08-23 17:21:40.349468+00
Date Added: 2024-06-11T18:12:49.840063
License: Public Domain

SCOTT, Dissenting Justice.
The commitment letter dated July 11, 1996 contains the following language regarding the closing date of the loan: “Closing of the loan shall occur on or before August 10, 1996 unless extended in writing by the Bank.”
Subsequently, on August 2, 1996, David Smith, the Bank’s vice-president, sent a signed cover letter with an accompanying written Loan Agreement to the Appellees which contained the following language: “the closing of the loan shall occur.. .on August 10, 1996 at 9:00 a.m. local time or at such other time and such other date as the parties shall mutually agree upon.” (Section 8.9, draft Loan Agreement). The author of this written agreement, Kenneth Sagan, was the Bank’s attorney. He testified this phrase was meant to suggest the closing could occur before, on or after *12August 10, 1996. Willmott also understood this phrase to be a written extension of the closing date.
Even more telling, the parties actually met after the originally scheduled closing date of August 10, 1996, to discuss the closing re-scheduled for August 23rd, 1996. Present at this August 16th meeting were Willmott; vice-president of the Bank, David Smith; and Hardwoods’ accountant, Rhonda Mash. Smith’s notes from the meeting indicate “closing 23rd — money available before closing.”
On August 19th, in a conference call with Willmott and Bruce Lankford, Will-mott’s attorney, Smith confirmed the loan was to close on Friday, August 23, 1996, and authorized Lankford to perform the title search. Later that same day, Smith called Willmott to tell him the loan would not be closed on the 23rd, and that the matter would be resubmitted to the Bank’s Board of Directors. The Bank then refused to complete the loan — citing the failure to close by August 10,1996.
“The goal of any court in interpreting a contract is to ascertain and to carry out the original intentions of the parties.” Wilcox v. Wilcox, 406 S.W.2d 152, 153 (Ky.1966). Upon these facts, I believe the Loan Agreement modified the commitment letter and acted as a written extension of the closing date to “.. .such other time and such other date as the parties shall mutually agree upon.”
The record shows that John Willmott of Willmott Hardwoods and David Smith, vice-president of the Bank, orally agreed before the original closing date of August 10, 1996, to extend the closing date to August 23, 1996. Thus, even in this context, I agree with the Court of Appeals that a “written or oral extension of the closing date by agreement of the parties holds the expiration date in abeyance until the alternate date set.”
Smith noted in his August 16th meeting with Willmott and Rhonda Mash, “closing 23rd — money available before closing.” I believe this note acts as a written extension of the closing date made within the extended time frame justified above. Even if the parties’ oral agreement to extend the closing date could arguably be said not to hold the expiration date in abeyance until the later agreed upon date, I believe this note could be construed as a retroactive extension of the time for closing. I know of no legal principle that would preclude the party to be charged from granting a retroactive extension of time for the performance of a contract. The commitment letter did not require that the written extension be signed (as does, e.g., the Statute of Frauds, itself). KRS 371.010.
Furthermore, “it is competent to vary the date of, or time for performance of, a contract, by contemporaneous parol extrinsic testimony.” Apple v. McCullough, 239 Ky. 74, 38 S.W.2d 955, 957 (1931). And if there was any ambiguity about the handwritten note, “ambiguous and uncertain expressions in the written evidence of a contract may be explained by parol evidence ... to the end that the true meaning of the contract may be ascertained,” Akins v. City of Covington, 265 Ky. 740, 97 S.W.2d 588, 590 (1936) (quoting Macpherson v. Bacon’s Ex’r, 180 Ky. 773, 203 S.W. 744, 746-47 (1918)); and parol evidence can be used to clarify ambiguities arising out of extrinsic facts. Id. (citing Breeding’s Heirs v. Taylor’s Heirs, 52 Ky. 385, 393-94 (13 B. Mon. 477, 487 (1852)).
Thus, evidence of what was said at the August 16th meeting and of the subsequent telephone call canceling the August 23rd closing date would be admissible to clarify that the handwritten note had, indeed, referenced an agreement to retroac*13tively extend the time for the closing until August 23rd.
Here the majority found that the Bank’s alleged promises to postpone the closing date violated the statute of frauds since extending the closing date materially affected the terms of the written agreement. With this assertion, I cannot agree. I believe extending the closing date was not a material modification of the original agreement between the parties.
As indicated in Klatch v. Simpson, 237 Ky. 84, 34 S.W.2d 951, 954-55 (1931), the statute of frauds does not apply to an oral modification of a written contract with respect to the mode or time of performance where time is not of the essence of the contract.
Thus, if time is not “of the essence,” the parties’ subsequent written and oral extensions of the closing date for the loan need not meet the strict requirements of the statute of frauds. Notably, this contract did not designate time being “of the essence” as would normally be the case.
A well-founded rule in Kentucky law provides, “unless the intention to make time of the essence is evidenced by expression, or implication, it may not be so regarded.” Distillery Rectifying & Wine Workers International Union of America v. Brown-Fonnan Distillers Corp., 308 Ky. 380, 213 S.W.2d 610, 612-13 (1948) (internal citation omitted). Yet, the majority supplies an intention to make “time of the essence” as implied from the words of the contract. More specifically, the majority reasons that because the contract stated it would expire if the closing date was not met — by implication, the closing time was of the essence to the contract. This reasoning ignores not only Distillery Rectifying & Wine Workers v. Brown-Forman Distillers Corp., cited above, but the plain language of the commitment letter, which specifically authorized a written extension of the closing date by an agreement which the evidence supports was actually made!
Moreover, this case is distinguishable from McConathy v. Lanham, 116 Ky. 735, 76 S.W. 535 (1903), which required an extension of the expiration date to be in writing, because the writing there did not contain words specifically allowing for an extension of the expiration date. The writing in McConathy stressed “if the consideration herein named is not paid on or before the 31st of December, 1899, this contract shall be null and void.” Id. at 536. Therefore, in McConathy, the parties’ subsequent oral agreement to extend the expiration date was rightly ruled unenforceable. This was not the case here.
Additionally, the majority disagrees with the Court of Appeals in its holding that the statute of frauds cannot bar an action where there is detrimental reliance by one party upon the representations of another, citing United Parcel Service v. Rickert, 996 S.W.2d 464, 469 (Ky.1999). The majority felt the Court of Appeals incorrectly inferred from Rickert that detrimental reliance is a bar to the statute of frauds. They limit Rickert to apply only in a fraud or promissory estoppel action involving a promise of employment.
Yet, like the Court of Appeals, I too, read Rickert to apply when, as here, Will-mott detrimentally relied on the Bank’s written and oral assertions that the closing date would be and was extended to August 23, 1996. I believe if the Bank intended for August 10, 1996 to be a “drop dead date,” or if a failure on Willmott’s part to obtain financing specifically from National City Bank would void the entire deal between the Bank and Willmott, the Bank had a duty to make these facts known. One party cannot allow the other to detrimentally rely on its actions and assertions, *14then later assert the statute of frauds as a defense to performance.
For the above stated reasons, I respectfully dissent.
COOPER, J., joins this dissent.