Waddle v. Elrod, M2009–02142–SC–R11–CV.
| Decision Date | 24 April 2012 |
| Docket Number | No. M2009–02142–SC–R11–CV.,M2009–02142–SC–R11–CV. |
| Parties | Earline WADDLE v. Lorene B. ELROD. |
| Court | Tennessee Supreme Court |
OPINION TEXT STARTS HERE
Wm. Kennerly Burger, Murfreesboro, Tennessee, for the appellant, Lorene B. Elrod.
Mary Beth Hagan and John T. Blankenship, Murfreesboro, Tennessee, for the appellee, Earline Waddle.
In this appeal we must determine whether the Statute of Frauds, Tenn.Code Ann. § 29–2–101(a)(4) (Supp.2011), applies to a settlement agreement requiring the transfer of an interest in real property; and, if so, whether emails exchanged by the parties' attorneys satisfy the Statute of Frauds under the Uniform Electronic Transactions Act (“UETA”), Tenn.Code Ann. §§ 47–10–101 to –123 (2001 & Supp.2011). We hold that the Statute of Frauds applies to settlement agreements requiring the transfer of an interest in real property and that the emails, along with a legal description of the property contained in the cross-claim, satisfy the Statute of Frauds. Accordingly, we affirm the judgment of the Court of Appeals enforcing the settlement agreement.
On January 29, 2007, Regent Investments 1, LLC (“Regent”) sued octogenarian Earline Waddle,1 and her niece, Lorene Elrod. According to the allegations of the complaint, Regent contracted to purchase from Ms. Waddle approximately four acres of real property located at 2268 Prim Lane, in Rutherford County, Tennessee (“the Prim Lane property”), for $230,000. Regent paid Ms. Waddle $10,000 earnest money when the contract was signed. However, in preparing to close the deal, Regent learned of a quitclaim deed by which Ms. Waddle had conveyed one-half of her interest in the Prim Lane property to Ms. Elrod. Regent sued Ms. Waddle, alleging breach of contract, fraud, and intentional and negligent misrepresentation. Regent requested specific performance, $1,000,000 in damages, attorney's fees, costs, and pre-judgment interest. Regent also asked the trial court to set aside the quitclaim deed, arguing that Ms. Elrod had wrongfully obtained her one-half interest by exercising undue influence over Ms. Waddle.
On May 14, 2007, Ms. Waddle filed a cross-claim against Ms. Elrod, also alleging that Ms. Elrod had acquired her one-half interest in the Prim Lane property through undue influence. The cross-claim included a legal description of the Prim Lane property. According to the allegations of the cross-claim, after Ms. Waddle's husband of more than fifty years died on February 12, 2001, Ms. Elrod began frequently visiting Ms. Waddle. In early March 2001, Ms. Elrod arranged for her own attorney, whom Ms. Waddle did not know, to draft both the quitclaim deed conveying a one-half interest in the Prim Lane property to Ms. Elrod and a durable power of attorney naming Ms. Elrod as Ms. Waddle's attorney-in-fact. On March 15, 2001, Ms. Elrod drove Ms. Waddle to the attorney's office and persuaded her to sign both documents. Ms. Waddle alleged that she did not have the benefit of independent legal counsel prior to signing the documents, that Ms. Elrod provided no money or consideration for the interest she acquired in the Prim Lane property, that she did not willingly or knowingly intend to convey any interest in the Prim Lane property to Ms. Elrod, and that the power of attorney executed contemporaneously with the quitclaim deed created a confidential relationship giving rise to a presumption of undue influence with respect to the quitclaim deed. Ms. Waddle asked the trial court to set aside the quitclaim deed and to award her “any and all damages” caused by Ms. Elrod's undue influence, including, and in particular, the damages resulting from Ms. Waddle's inability to convey Regent marketable title to the Prim Lane property.2
On July 10, 2007, Ms. Elrod filed an answer to the cross-claim, denying all allegations of undue influence and wrongdoing and arguing that the assistance she had provided Ms. Waddle served as consideration for the quitclaim deed.
On April 28, 2009, Regent agreed to dismiss with prejudice its claims against Ms. Waddle and Ms. Elrod. In exchange, Ms. Waddle agreed 3 to return Regent's $10,000 earnest money, and both Ms. Waddle and Ms. Elrod agreed that Regent would not be responsible for any portion of the court costs 4 Ms. Waddle's cross-claim against Ms. Elrod remained pending, however, with a jury trial scheduled for June 2 to June 4, 2009.
The day before trial, Ms. Elrod's attorney, Mr. Gregory Reed, advised Ms. Hagan, counsel for Ms. Waddle, that Ms. Elrod was willing to return her one-half interest in the Prim Lane property to avoid going to trial if Ms. Waddle would settle the case and release all other claims against her. Through her attorney, Ms. Waddle agreed to settle the case on the condition that she would not be responsible for any of the court costs. Around 4:00 p.m., Mr. Reed advised Ms. Hagan that Ms. Elrod had agreed to settle the case with Ms. Waddle's condition. At 4:34 p.m., Ms. Hagan sent the following email to Mr. Reed:
Greg,
This confirms that we have settled this case on the following terms:
Elrod deeds property interest back to Waddle, Both [sic] parties sign full release, Waddle bears no court costs.
Let me know if I have correctly stated our agreement.
Thanks,
Mary Beth
At 5:02 p.m., Mr. Reed responded:
That is the agreement. I understand that you will draft the deed and take a shot at the court's order. No admission of guilt is to be included.
The attorneys thereafter advised the trial court of the terms of the agreement. Believing that a settlement had been reached and that a written order memorializing the settlement would be entered later, the trial court cancelled the jury trial and excused prospective jurors. Counsel for Ms. Waddle prepared and forwarded the settlement documents to counsel for Ms. Elrod. Ms. Waddle, understanding that the settlement had returned sole ownership of the Prim Lane property to her, paid all outstanding property taxes. Approximately three weeks later, however, Ms. Elrod advised her attorney that she had changed her mind and no longer wanted to settle the case. When Ms. Elrod refused to sign the settlement documents, Mr. Reed moved to withdraw from further representation, and the trial court granted Mr. Reed's motion.
On July 13, 2009, Ms. Waddle filed a motion asking the trial court to enforce the settlement agreement. On September 2, 2009, Ms. Elrod filed a response, arguing that the discussions on June 1, 2009, resulted merely in an agreement to agree, with many important material terms unresolved. Alternatively, Ms. Elrod argued that the Statute of Frauds, Tenn.Code Ann. § 29–2–101 (Supp.2011), bars enforcement of the settlement agreement because it required the transfer of an interest in real property and was not evidenced by a writing signed by Ms. Elrod or her attorney describing with specificity the terms of the agreement and the property at issue. Relying on the Uniform Electronic Transactions Act (“UETA”), seeTenn.Code Ann. §§ 47–10–101 to –123 (2001 & Supp.2011), Ms. Waddle argued in response that the email from Ms. Elrod's attorney, which confirmed the terms of the settlement and included Mr. Reed's typewritten name, constituted a writing signed by an agent of the party to be charged and satisfied the Statute of Frauds.
Following a hearing, the trial court entered an order on September 15, 2009, enforcing the settlement agreement. The trial court found that Ms. Elrod had agreed through her attorney and authorized agent to settle the case on the terms set out in the June 1, 2009 email. As a result, the trial court divested Ms. Elrod of any right, title, or interest in the Prim Lane property and vested ownership of the property in Ms. Waddle. The trial court also dismissed with prejudice Ms. Waddle's remaining claims against Ms. Elrod, ordered each party to bear her own attorney's fees and discretionary costs, and taxed court costs to Ms. Waddle. The trial court's order did not expressly address either Ms. Elrod's argument that the Statute of Frauds precluded enforcement of the settlement or Ms. Waddle's argument that the emails constituted writings signed by the party to be charged under the UETA and satisfied the Statute of Frauds.
Ms. Elrod appealed, but she did not challenge the trial court's factual finding that the parties had reached an agreement to settle the case. Rather, she argued that the Statute of Frauds precludes enforcement of the settlement agreement. The Court of Appeals rejected this argument and affirmed the trial court's judgmentenforcing the settlement agreement,5 reasoning that the Statute of Frauds applies only to “any contract for the sale of lands,” Tenn.Code Ann. § 29–2–101(a)(4) (emphasis added), and does not apply to a settlement agreement requiring the transfer of an interest in real property. Waddle v. Elrod, No. M2009–02142–COA–R3–CV, 2011 WL 1661772, at *2 (Tenn.Ct.App. Apr. 29, 2011).
We granted Ms. Elrod's application for permission to appeal.
The issue before this Court is whether the Statute of Frauds applies to a settlement agreement that requires the transfer of an interest in real property. This is an issue of statutory construction, which we review de novo with no presumption of correctness. See Brundage v. Cumberland Cnty., 357 S.W.3d 361, 364 (Tenn.2011). Similarly, whether a writing is sufficient to satisfy the Statute of Frauds is a question of law subject to de novo review. Blair v. Brownson, 197 S.W.3d 681, 683 (Tenn.2006) ).
As the Court of Appeals recognized, Ms. Elrod does not dispute that the parties reached an agreement; 6 rather, she argues that the Statute of Frauds applies and precludes...
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