Barbara Lucinda Sawyer v. Melbourne Mills Jr

AS MODIFIED : NOVEMBER 2, 2009
RENDERED : AUGUST 27, 2009
TO BE PUBLISHED

,SUyrkMr Courf of ~i
2007-SC-000296-DG

BARBARA LUCINDA SAWYER APPELLA

ON REVIEW FROM COURT OF APPEALS
V. CASE NO. 2006-CA-000697-MR
FAYETTE CIRCUIT COURT NO . 2003-CI-01679

MELBOURNE MILLS, JR. APPELLEE

OPINION OF THE COURT BY JUSTICE NOBLE

AFFIRMING

Appellant Barbara Lucinda Sawyer appeals a decision affirming the

circuit court's judgment notwithstanding the verdict ("JNOV") in favor of

Appellee Melbourne Mills, Jr., in a dispute over the validity of an alleged oral

agreement. Because the oral agreement violated the Statute of Frauds, lacked

consideration, and could not have induced Sawyer's action, it was

unenforceable, and the decision of the Court of Appeals is affirmed.

I. Background

Mills met Appellant Sawyer and her husband in 1991 . In 1994, Sawyer

requested that Mills become involved in already-pending class action litigation

involving breast implants, and she solicited some women she knew as clients .

Mills promised to give her a bonus if he ever had a big "payday" with one of his

class actions, and she continued to research potential products liability claims .
Between 1994 and 2001, she assisted Mills in marketing his law practice,

researching potential class action lawsuits, and in performing work as a

contract employee for relatively brief periods of time, for which she was paid.

Her employment ended on March 31, 2002 .

In 1997, the prescription drugs Fenfluramine and Phentermine

(commonly known as "Fen-Phen") were receiving national media attention due

to the possibility they were causing heart valve damage . Sawyer claims that

she recommended Mills pursue a class action against Fen-Phen's

manufacturer, and the drugs were recalled soon after Mills began to advertise

for Fen-Phen clients . Mills received an overwhelming response from his

advertising campaign and ultimately had about 2600 clients (about 400 of

whom were from Kentucky) that he signed up on a contingency fee basis.

Sawyer assisted with clerical work in processing the claims .

On May 1, 2001, a settlement for millions of dollars was reached between

Fen-Phen's manufacturer and Mills's clients . After receiving his initial portion

of the substantial attorney's fees on June 20, 2001, Mills made bonus

payments to all of his employees. Six long-term employees received a $100,000

bonus, one paralegal who Mills thought was instrumental to the Fen-Phen

litigation's success received more than a $1,000,000 bonus, and an attorney

received an initial $1,000,000 bonus (and a more substantial additional bonus

later) . Hourly employees such as Sawyer received a bonus equal to two weeks'

wages. Sawyer's bonus was $1,300. Over the years, Mills had mentioned to

Sawyer that he would reward her with a large bonus when he hit a "payday" in
the class action cases, and the Sawyers were disappointed in the $1,300

bonus . I

On June 25, 2001, the Sawyers invited Mills to their art studio and

secretly tape-recorded their conversation . Mills admitted that the voices on the

recording were his and the Sawyers'. Sawyer and her husband suggested to

Mills that he pay her a substantial bonus due to her encouragement of Mills to

pursue class actions. After a lengthy discussion, the Sawyers suggested that

Mills pay Sawyer a $1,065,000 bonus, consisting of $1,000,000 plus the value

of a luxury car ($65,000), and Mills agreed . Mills discussed how and when the

payments would be made.

Mills refused to make a lump sum payment even though he had the

financial ability to do so ; instead he agreed to make the payments in

installments of $10,000 per month . They would also be hidden from his office

employees (Sawyer claimed Mills did not wish to make the other employees

jealous) .2 Mills also agreed to pay for an attorney to draft a written agreement

to memorialize their understanding, and he spoke to the Sawyers' attorney,

1 Previously, Sawyer was paid more than $150,000 through an advertising agency set
up by her and through which the Mills Law Office placed its advertising .
Additionally, when Sawyer and her husband told Mills they were about to be evicted
from the building where their art studio was located, Mills wired her $100,000 so
they could buy the building . Finally, the Sawyers often accompanied Mills on
vacations at his expense .
2 Though Sawyer describes the complicated manner in which Mills attempted to keep
the payments he made hidden from his employees, the details are not relevant to the
disposition of this case.
Mark Moseley, on the phone and confirmed he had agreed to pay a bonus to

Sawyer . However, Mills later refused to sign any written agreement.

Mills made his first payment of $10,000 to Sawyer the day of the

meeting, and he eventually made a series of payments of $10,000 each, and

one of $15,000, totaling $65,000 . Mills also made a one-time payment of

$100,000 on October, 3, 2001 . The last payment was paid on February 7,

2002, and Mills informed Sawyer in March that he was terminating her

employment at the end of the month . He had paid her a total amount of

165,000 . It was undisputed that Sawyer had completed her performance that

might justify any bonus prior to the June 25 conversation between the parties,

and also that she continued to work for Mills after the agreement .

Prior to trial, Mills moved for summary judgment, arguing that

enforcement of the agreement was barred by Kentucky's Statute of Frauds and

raising lack of consideration as a defense . The trial court denied the motion.

After a four-day trial, the jury returned a verdict for Sawyer and awarded

her $900,000, and a trial verdict and judgment was entered . In response to

two interrogatories, the jury answered that it was satisfied from the evidence

that the parties reached an understanding and agreement as to the bonus at

issue, and that the understanding and agreement could have been fully

performed within one year of its making.

Mills moved the trial court for a JNOV, and it was granted . The court

specifically explained that it

had previously addressed its concerns that this Statute of Frauds
barred the claims of Cindy against Mel in this case . However, out
 of an abundance of precaution, in order to allow Cindy to present
her full evidence at trial before a jury, the Court Overruled Mel's
Motion for Summary Judgment on this issue in an Opinion and
Order entered December 1, 2005.

After hearing Sawyer's full evidence at trial, however, the trial court found that

the Statute of Frauds did in fact bar her claims and it granted Mills's JNOV

motion . The Court of Appeals affirmed the trial court's ruling, and this Court

granted discretionary review .

II. Analysis

A. The June 25, 2001 Oral Agreement

1 . Application of the Statute of Frauds Where the Agreement's Terms and

the Parties' Intentions Demonstrate It Could Not Be Completed Within

One Year

Assuming there was a contract in this case, the Statute of Frauds applies

and bars its enforcement. Kentucky's Statute of Frauds provides in pertinent

part,

No action shall be brought to charge any person . . . [ulpon any
agreement that is not to be performed within one year from the
making thereof . . . unless the promise, contract, agreement,
representation, assurance, or ratification, or some memorandum
or note thereof, be in writing and signed by the party to be charged
therewith, or by his authorized agent . . . .

KRS 371 .010(7) . "In construing the Statute of Frauds, the general rule is that,

if a contract may be performed within a year from the making of it, the

inhibition of the Statute does not apply, although its performance may have

extended over a greater period of time." Williamson v. Stafford, 301 Ky. 59,

190 S .W.2d 859, 860 (1945) . However, "there is a well-recognized exception" to
the general rule, "and that is that when it was contemplated by the parties that

the contract would not, and could not, be performed within the year, even

though it was possible of performance within that time, it comes within the

inhibition of the Statute ." Id . (emphasis added) . This Court "must look to the

evidence to determine whether the contracts in question fall within the rule or

the exception ." Id . at 861 .

The Statute of Frauds "refers to a contract which, by its terms, is not to

be performed within a year, and which, from its stipulations, is not capable of

being performed within a year." Nickell v. Johnson, 162 Ky . 520, 172 S .W.

938, 938 (1915) ; see also Lively v. Elkhorn Coal Co . , 101 F.Supp . 1014, 1016-

17 (E.D . Ky. 1952) ("[W]here it is obvious from all surrounding facts and

circumstances that it was not within the contemplation of the parties or within

reason that it would be performed within a year the statute applies .") The

appropriate inquiry thus is whether under the evidence of a particular case the

parties contemplated that the contract at issue would be performed within a

year, and if, by its terms, it could be. It is irrelevant whether performance

would be possible under different terms. A contrary rule-that if it is possible

to perform a contract within a year even though such completion is not

contemplated by the parties-would eviscerate the Statute of Frauds'

requirement that agreements not to be performed within one year be in writing .

Under well-settled precedent, this Court must determine whether Sawyer

and Mills contemplated that their oral contract would be, or could be under its

terms, performed within a year, even though Mills acknowledged that he could
have paid the entire amount at the time of the negotiations . Williamson, 190

S .W .2d at 860 .

This case involves the trial court's grant of a JNOV motion.

Upon review of the Order Granting JNOV, we must examine the
trial court's decision under the clearly erroneous standard . . . .
That is to say, we must review all the evidence presented to the
jury and must uphold the trial court's decision if after all the
evidence is construed most favorably to the verdict winner, a
finding in his favor would not be made by a reasonable [person] .

Moore v . Environmental Constr. Corp. , 147 S .W.3d 13, 16 (Ky. 2004) (internal

citation and quotation marks omitted) . For the purpose of the JNOV motion,

the trial court properly considered the evidence in the light most favorable to

Sawyer, the verdict winner and party opposing the JNOV motion, accepting

many of the disputed facts as true. Among other things, the trial court

accepted the following as true :

(5) That in the June 25, 2001 conversation between Mel,
Cindy, and Cindy's husband, Steve Sawyer (hereinafter "Steve"),
the figure of One Million Dollars ($1,000,000 .00) was first proposed
by Cindy and Steve as a lump sum payment. Mel clearly balked at
that figure as a lump sum payment. Quickly, Steve Sawyer, with
Cindy's encouragement and agreement, suggested that a total
payment of One Million Dollars ($1,000,000 .00) plus the cost of a
new luxury car to be paid over ten (10) years at Ten Thousand
Dollars ($10,000 .00) per month until paid would be acceptable to
them . This was the undisputed sworn testimony of Cindy, Steve,
and their attorney Mark Mosely [sic] at trial. The Court, in
accordance with the above JNOV standard, accepts that testimony
without qualification. Further, that testimony was accepted by the
jury in this case as reflected by the jury verdict when "Yes" was
checked in response to Interrogatory No. 1 which specifically found
that Cindy and Mel had each understood and agreed that Mel
would pay Cindy a bonus in the amount of One Million Dollars and
the value of a new car costing Sixty Five Thousand Dollars for
services performed by Cindy for the benefit of Mel per Jury
Instruction No . 1 .
Based on the undisputed fact that Mills "clearly balked" at an agreement where

he would have to make a one-million-dollar lump sum payment, such a

payment was not a part of the oral agreement.

Instead, Mills orally agreed to make a $1,065,000 payment "over ten (10)

years at Ten Thousand Dollars ($10,000.00) per month until paid ." The trial

court noted that this understanding was also reflected in Sawyer's Answer to

Interrogatory No . 8 in which she stated in her Amended Answer in part, "The

bonus was to be paid in monthly installments of $10,000.00 and on the first of

each month ." Attorney Mark Moseley's written draft agreement, which Mills

never signed, recognized that the total amount would be paid out over 107

months, with the last month's payment being $5,000 .

In Kentucky Utilities Co . v . Hurst, 207 Ky. 448, 269 S .W . 525 (1925), the

Court concluded that the agreement's terms and parties' intentions determine

whether a contract could be completed within one year so as to avoid the

Statute of Frauds. Specifically, the Court concluded the lower

court should have sustained defendant's motion for a peremptory
instruction, upon the ground that the alleged special contract for
the furnishing of the water, and upon which the action is based,
was verbal, and was one which, under the circumstances and the
contemplation of the parties at the time, was not to be performed
within one year from the time of its making, and was therefore
inhibited by . . . the statute of frauds .

Id . at 526 .

Subsequent to Hurst, the Court was again confronted with a similar

issue and it reaffirmed its position . The Court quoted the appellee's testimony

and concluded "[c]learly, the evidence for both parties shows that it was not
contemplated by either of them that the contract was to be performed, or could

be performed, within a year." Williamson , 190 S.W.2d at 861 . The only

testimony offered by the appellees in that case was that if the agreement had

been completed, "the parties contemplated that it would require several years

to perform under it ." Id.

Consistent with Hurst and Williamson , the trial court in this case was

not clearly erroneous in finding that Mills never agreed to a lump sum payment

payable within one year. Mills never signed a writing consistent with the oral

discussions of the parties. The agreement's terms and the parties' intentions

demonstrate this agreement could not be completed within one year, and thus

the trial court was correct that as a matter of law the June 25 oral agreement

between Sawyer and Mills failed the writing requirement of the Statute of

Frauds, and was unenforceable under the statute . As the trial court observed,

"[i]f the Statute of Frauds, codified at KRS 371 .010(7), does not apply to the

undisputed testimony in the case at bar, it would be hard to imagine any case

where it would apply."

2 . Completed Performance and Past Consideration

Sawyer claims the agreement is nonetheless enforceable because she

completed her performance, taking the agreement outside the operation of the

Statute of Frauds, as a completed executory contract. However, because

Sawyer concedes she had completed her performance prior to the June 25,

2001 oral agreement, it was supported only by past performance, which is no
consideration at all, and thus, under this argument, there was not a binding

contract.

Sawyer cites Pitcher v. Sadler, 276 Ky . 450, 124 S .W .2d 475, 479 (1939),

for the proposition that completed performance by one party removes an

agreement from the Statute of Frauds : "[A] contract is no longer executory, and

[the Statute of Frauds] has no application thereto, where it has been fully

performed upon one side and the other party by its terms has a longer time

than one year in which to perform his part thereof." The Court of Appeals

correctly noted, however, that Sawyer did not perform any obligations pursuant

to this agreement.

"[I]t is a general rule that past consideration is insufficient to support a

promise." 17A Am . Jur. 2d Contracts § 152 (2009) . Simply put, Sawyer's

claim that her completed performance takes her agreement outside of the

operation of the Statute of Frauds fails, because the fact that her performance

was done prior to the offer Mills made on June 25 means there was no

consideration for the promise Mills made on that date .

In Greenup v. Wilhoite, 212 Ky . 465, 279 S .W . 665, 666 (1926), the

Court described a similar situation and the applicable law as follows:

Appellants insist that the services for which appellee claims
compensation had all been performed before the making of the
contract sued on, and the consideration for the contract having all
passed, the contract has failed for want of a supporting
consideration . They insist that a past consideration which is some
act of forbearance in time past by which a man has benefited,
without thereby incurring any liability, is not sufficient to support
an executory contract, and this is ordinarily true.
Id . In that case, however, the agreement was upheld because part of the

consideration-in the form of services-was not yet given at the time the

parties entered into the agreement, which further underscores that the

agreement and consideration must be dependent on each other. Id .

("Manifestly the parties to the contract contemplated that the appellee Mrs .

Wilhoite was to receive compensation, not only for services which she had

performed up to the time of the making of the contract, but for all services

which she was to perform for Miller Wilhoite, Sr., during the remainder of his

life .") .

Though Sawyer also contends that she continued to work for Mills after

the agreement regarding her prior performance was made on June 25, she did

in fact receive other multiple substantial payments from Mills after the

agreement for that work. It therefore cannot also be used as the consideration

going forward from the June 25th agreement.

Sawyer also relies upon Fisher v . Long, 294 Ky. 751, 172 S .W.2d 545

(1943), for the proposition that a contract that is unenforceable because a term

is not yet decided becomes enforceable if an agreement on the term is ever

reached, that is, once the blank is filled in by the parties. Fisher, however, is

distinguishable because the parties in that case had already reached a written

agreement with valid consideration and mutual obligations, and all that

remained was to make a simple mathematical calculation. Id. at 547 ("Here

there was a meeting of the minds . . . This was the essential agreement. . . . It
took no expert accountant to `adjust this difference in cash ."') . Fisher is simply

inapposite .

Finally, Sawyer objects to Mills's attempt "to obfuscate this issue with

circular logic," arguing that if Sawyer had completed her performance at the

time the bonus amount was filled in (as she concedes), there was no

consideration and the contract was unenforceable, but if she had not

completed performance at the time the bonus was filled in, the contract had to

be in writing to be enforceable. This is not obfuscation . That Sawyer loses for

two independent reasons does not undermine the logic, or make it circular.

Consequently, the JNOV granted by the circuit court was appropriate .

3. The Audio Tape Recording of the Parties' Conversation and Cancelled

Signed Checks as a Basis for Satisfying the Statute of Frauds' Writing

Requirement

Sawyer also claims that the audio tape of Mills's voice and cancelled

signed checks provide the basis for satisfying the Statute of Frauds' writing

requirement under the federal Electronic Signatures in Global and National

Commerce Act ("E-SIGN") and Calloway v. Calloway, 707 S .W .2d 789 (Ky. App.

1986) .

She first claims that the Statute of Frauds' writing requirement is

preempted by 15 U.S .C. § 7001(a), which provides,

Notwithstanding any statute, regulation, or other rule of law . . .
with respect to any transaction in or affecting interstate or foreign
commerce--
(1) a signature, contract, or other record relating to such
transaction may not be denied legal effect, validity, or
enforceability solely because it is in electronic form; and

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 (2) a contract relating to such transaction may not be denied
legal effect, validity, or enforceability solely because an
electronic signature or electronic record was used in its
formation.

However, under 15 U.S .C . § 7001 (a) (1), the oral agreement is not being denied

"legal effect, validity, or enforceability solely because it is in electronic form ."

(Emphasis added.) The oral agreement is being denied legal effect because it

fails the writing requirement of the Statute of Frauds and under E-SIGN there

is not an electronic signature . Therefore, contrary to Sawyer's assertions, the

Statute of Frauds' writing requirement is not preempted by E-SIGN in this

case.

Under E-SIGN, "`electronic' means relating to technology having

electrical, digital, magnetic, wireless, optical, electromagnetic, or similar

capabilities ." Id . ~ 7006(2) . "'[E]lectronic record' means a contract or other

record created, generated, sent, communicated, received, or stored by

electronic means ." Id . § 7006(4) . At issue in this case is the tape recording of

the conversation between Sawyer and Mills . Under 15 U .S .C . § 7006(2)'s broad

definition of "electronic," the tape recording is electronic, and it is an

"electronic record" because it was a "record created" and "stored by electronic

means" under 15 U .S .C. § 7006(4) .

However, contrary to Sawyer's assertions, Mills's voice does not

constitute an electronic signature merely because it was identifiable and was

identified at trial as being his. An electronic signature under 15 U.S.C . §

7006(5) requires that "an electronic sound, symbol, or process, attached to or
logically associated with a contract or other record" be "executed or adopted by

a person with the intent to sign the record."

There must be intent to attach or logically associate the electronic

signature to the agreement, that is, an intent to execute the contract. That was

impossible here, because the medium on which the alleged agreement and

electronic signature were recorded (the audio tape) was used surreptitiously.

Mills did not know he was being recorded when he went to the Sawyers' art

studio . Thus, Mills's identifiable voice on the tape, even if construed as an

electronic signature, was procured without Mills's knowledge or intent, and

would be tantamount to a forgery which cannot be used to demonstrate a valid

contract. Cf. E . L . Strobin, Annotation, Procuring Signature by Fraud as

Forgery, 11 A .L .R .3d 1074, § 5 (1967 8, Supp . 2009) ("[W]here a genuine

signature to an instrument is procured by some trick or device without intent

on the part of the party signing to execute such an instrument, the attitude of

the courts has been that the signature thereto will be treated in law as a

forgery .) . The statute contemplates more than a mere verbal assent recorded in

secret; it requires the electronic equivalent of a signature, that is, an electronic

sound, symbol, or process solemnizing the agreement and evidencing an intent

to enter into it.

That the recording was not intended to be a signature is further

supported by the fact that the parties evidenced some intent to draft and sign a

written contract to memorialize their understanding, which Mills refused to

sign. Clearly then, Mills did not have any intent to "execute" or "adopt" the
conversation that took place, and he did not "sign the record" memorializing it

that was drafted by Sawyer's attorney. Sawyer's claim that E-SIGN provides a

basis for satisfying the Statute of Frauds in this case fails.

Sawyer next claims that Calloway, 707 S .W.2d 789, controls the outcome

in this case because the tape recording cannot be barred by the Statute of

Frauds . Calloway , which involved an oral statement recorded by a court

reporter, is distinguishable for many reasons . In that case, the husband

explicitly agreed to a settlement agreement under oath, and the court relied on

an estoppel theory "in light of the peculiar circumstances of [that] case," to hold

that a settlement agreement entered into during a judicially sanctioned

proceeding was sufficient to satisfy the Statute of Frauds . Id. at 792 . The

court noted, "We cannot overlook the importance of stipulations between

litigants and the promotion of expeditious and complete justice by their

enforcement provided no harsh or unfair contract results ." Id. In sum,

Calloway involved a unique set of facts involving a stipulation under oath at a

deposition where the court relied on an estoppel theory, not a surreptitiously

recorded conversation as in this case . Therefore, Calloway is easily

distinguished .

Finally, Sawyer claims that Mills's voice, coupled with cancelled signed

checks, is sufficient to satisfy the Statute of Frauds. The same rationale for

why the recording cannot be a sufficient electronic signature applies here to

bar the recording from being a "memorandum" of the parties' agreement .

Given the secret nature of the recording and the expressed intent to draft a
written document, the recording cannot have been intended by Mills as the

repository of the parties' agreement . Cf. Ellis Canning Co . v. Bernstein,

348 F.Supp . 1212 (D . Colo . 1972) (allowing audio recording to satisfy writing

requirement but only where parties agreed that the recording would be the

contract) .

As for the checks, in addition to the fact that the cancelled signed checks

for monthly payments to Sawyer are inconsistent with her claim that the

agreement could be completed within one year, Sawyer does not cite any law

that signed checks satisfy the Statute of Frauds, and this Court is not

persuaded that they do. Though some courts have held that checks can be

used to demonstrate the existence of a contract, those checks almost invariably

include references to the terms of the contract or a document that contains the

terms . See, e .g. , Walter E. Heller 8s Co . v . Video Innovations, Inc . , 730 F .2d 50,

53 (2d Cir. 1984) ("delivery of signed rental checks which contained specific

references to the written lease, would be sufficient to satisfy the Statute of

Frauds") ; Clark v . Larkin , 239 P.2d 970 (Kan. 1952) (notation of terms on

check) . In the one Kentucky case on the subject, the check in question

referred to the "property" and the sale was confirmed in a letter a few days

later. See Purtell v. Bell, 179 Ky. 356, 200 S .W. 644, 645 (1918) ("Obviously

the check, indorsement thereon, and letter together designate and identify the

real estate, its location, and the terms of the contract . . . ." (emphasis added)) .

In this case, the checks, rather than evincing an agreement involving a

quid pro quo, are just as consistent with a gratuitous bonus of the sort paid to
Mills's other employees . Sawyer is basically claiming that two halves make a

whole, but in this case neither side makes a "half," and thus together they do

not make a "whole" writing sufficient to satisfy the Statute of Frauds .

4. Promissory Estoppel

Despite the parties' dispute over whether the issue of promissory

estoppel was properly preserved and appealed, it is clear that the trial court

was correct in concluding there was insufficient proof to support a jury

instruction on the issue .

The doctrine of promissory estoppel provides as follows :

"A promise which the promisor should reasonably expect to
induce action or forbearance on the part of the promisee or a third
person and which does induce such action or forbearance is
binding if injustice can be avoided only by enforcement of the
promise . The remedy granted for breach may be limited as justice
requires ."

Meade Constr. Co . v . Mansfield Commercial Elec ., Inc . , 579 S .W .2d 105, 106

(Ky. 1979) (quoting Restatement (Second) of Contracts § 90 (Tentative Draft No.

2, 1965)) . 3

First, it is not clear that under Kentucky law promissory estoppel can

defeat the Statute of Frauds . Though the headnotes for the case state

otherwise, the Court of Appeals has recently held that a claim of promissory

estoppel "alone is not sufficient to defeat the statute of frauds ; actual fraud

3 Though after quoting the doctrine of promissory estoppel in Meade Constr. Co . , this
Court noted that it did not at that time "decide whether the doctrine of promissory
estoppel applies in this state or whether, if so, it governs this case," _id. at 106, it has
since become clear that "the doctrine of promissory estoppel, if it can be established,
is `alive and well' in this Commonwealth ." McCarthy v. Louisville Cartage Co . , 796
S .W.2d 10, 11 (Ky. App. 1990) .

17
must be proven ." Rivermont Inn, Inc . v . Bass Hotels 8s Resorts, Inc . , 113

S.W .3d 636, 642 (Ky. App. 2003) . As the court then noted, the claim

"confuses promissory estoppel with equitable estoppel, and incorrectly

interchanges the terms . . . ." Id . Equitable estoppel requires a fraudulent

misrepresentation as to a material fact, which has not been claimed in this

case.

While this Court has stated that "the statute of frauds is not a bar to a

fraud or promissory estoppel claim based on an oral promise of indefinite

employment," United Parcel Service Co . v. Rickert, 996 S .W.2d 464, 471 (Ky.

1999), the statement was only dicta, as the decision turned on equitable

estoppel (i.e., a claim of fraud) . More recently this Court stated that it is

"incorrect[] [to] infer[] from Rickert that detrimental reliance is a bar to the

statute of frauds . All that may be deduced from Rickert concerning the statute

of frauds is that in a fraud or promissory estoppel action involving a promise of

employment, it does not act as a bar ." Farmers Bank and Trust Co . of

Georgetown, Kentucky v. Willmott Hardwoods, Inc . , 171 S .W. 3d 4, 10 (Ky.

2005) ; see also Architectural Metal Systems, Inc. v. Consolidated Systems,

Inc. , 58 F .3d 1227, 1231 (7th Cir. 1995) (Posner, J .) ("[T]he statute of frauds is

applicable to a promise claimed to be enforceable by virtue of the doctrine of

promissory estoppel." (citing First National Bank v. McBride, 642 N .E.2d 138,

142 (Ill. 1994) ; Dickens v. Quincy College Corp . , 615 N .E.2d 381, 386 (Ill.

1993), and relying on Illinois law)) . Willmott Hardwoods, Inc. then went on to

hold that except in the most extreme circumstances, even equitable estoppel
(which involves fraud) cannot defeat the statute of frauds, "lest the Court run

afoul of judicially amending the statute in violation of separation of powers."

Id. 4

But even assuming that promissory estoppel could allow a plaintiff to get

around the Statute of Frauds, Sawyer cannot invoke the doctrine in this case.

First, promissory estoppel requires "[a] promise which the promisor should

reasonably expect to induce action or forbearance on the part of the promisee

. . . and which does induce such action or forbearance . . . ." Meade Constr.

Co . , 579 S .W.2d at 106 . Sawyer argues in this regard that she agreed to

continue working for Mills at his request after the agreement and bypassed

other job opportunities, in reliance upon his promise .

But there is no reasonable basis to argue that Mills believed Sawyer

continued working for him from June 25, 2001 through March 2003 because of

his promise . During that time, he paid her $165,000 in line with his promise,

and paid her as an hourly employee until he released her from employment . At

no time has the testimony indicated that his promise to her on June 25 was

premised on her continued employment with him. There is no indication that

he asked her not to accept other employment . Indeed, during that nine month

span of time, the $165,000 dollars paid to her under his promise could

4 Even those states allowing equitable estoppel to reach the Statute of Frauds
frequently require, for example, that "either an unconscionable injury or unjust
enrichment would result from refusal to enforce the contract . . . ." Monarco v. Lo
Greco, 220 P.2d 737, 741 (Cal. 1950) (Traynor, J .) . Though, as one commentator has
noted, following the adoption of the Restatement (Second) of Contracts, some states
required only "injustice" rather than unconscionable injury or unjust enrichment .
See 2 Alan E. Farnsworth, Farnsworth on Contracts § 6.12, at 207-08 (3d ed. 2004) .

19
reasonably have led Mills to believe that she did not need the hourly

employment, but continued working for him in hope of future benefits. He had

no cause to "reasonably expect" action or forbearance from Sawyer. Also, at

best, Sawyer alleges a reliance based only on her own statements ; nothing else

in the record supports her claim that she continued working for Mills for nine

months after his promise because of that promise. Sawyer does not make a

supportable promissory estoppel claim.

B. Prejudgment Interest

Because this Court concludes the trial court did not err in granting the

JNOV motion in Mills's favor, it is unnecessary to address the issue of

prejudgment interest for Sawyer.

III. Conclusion

Because the terms of the agreement and the parties' intentions

demonstrate it could not be completed within one year, the Statute of Frauds

required that it be in writing, but that was never done. Additionally, since

Sawyer concedes she completed performance before the June 25, 2001

conversation, the agreement lacked valid consideration and could not be a

binding contract. The audio tape recording and cancelled signed checks do not

serve as a basis for satisfying the Statute of Frauds' writing requirement in this

case . Finally, Sawyer does not have a claim for promissory estoppel because

the record does not substantiate her claim that she relied on Mills's promise by

way of a forbearance or action, and Mills could not have reasonably been
expected to believe that she had. The JNOV entered by the trial court was

appropriate .

For the foregoing reasons, the Court of Appeals is affirmed .

All sitting . All concur.

COUNSEL FOR APPELLANT:

Thomas W. Miller
Michael Joseph Cox
Miller, Griffin 8z; Marks, PSC
271 West Short Street, Suite 600
Lexington, Kentucky 40507

COUNSEL FOR APPELLEE :

William E. Johnson
Samuel Ryan Newcomb
Johnson, True & Guarnieri, LLP
326 West Main Street
Frankfort, Kentucky 40601
 ,*uyrrntr Courf of ~irufurkV
2007-SC-000296-DG

BARBARA LUCINDA SAWYER APPELLANT

ON REVIEW FROM COURT OF APPEALS
V. CASE NO . 2006-CA-000697-MR
FAYETTE CIRCUIT COURT NO. 2003-CI-01679

MELBOURNE MILLS, JR. APPELLEE

ORDER

On the Court's own motion, the Opinion of the Court by Justice Noble

rendered Au st 27, 2009 shall be modified on page 20, line 8. Pages 1 and 20

shall be substituted, as attached hereto, in lieu of pages 1 and 20 of the

Opinion as originally rendered. Said modification does not affect the holding.

Entered : November 2, 2009.