Dean v. Myers

• Citation: 466 So.2d 952
• Parties: William G. DEAN, Jr. v. Doyle R. MYERS and Alfred R. McCracken. 83-245.
• Decision Date: 22 March 1985
• Court: Supreme Court of Alabama

Page 952

466 So.2d 952

William G. DEAN, Jr. v. Doyle R. MYERS and Alfred R. McCracken.

83-245.

Supreme Court of Alabama.

March 22, 1985.

Aubrey O. Lammons of Lammons, Bell & Sneed, Huntsville, for appellant.

J. Allen Brinkley of Brinkley & Ford, Huntsville, for appellees.

ALMON, Justice.

This is an appeal from a judgment on a verdict awarding $45,000 to plaintiffs, Doyle R. Myers and Alfred R. McCracken, in their suit against William G. Dean, Jr., for breach of a joint venture agreement among the three. Dean argues that the contract was void under the Statute of Frauds and that there was insufficient evidence of breach or damages.

Although Dean raised the Statute of Frauds as an affirmative defense, he admitted the existence of a joint venture agreement and most of its terms in alternative defenses and in his testimony. He also filed a counterclaim based on the contract.

The essence of the agreement, admitted by all parties, is that Dean, Myers, and McCracken agreed to pool their efforts and resources to construct a condominium complex in Huntsville. The complex was to be known as "Crossgate Condominiums." Dean was to provide the land and financial backing, while Myers and McCracken were to provide construction expertise and to oversee construction and sales. The plans called for construction in five phases of twelve units each.

The parties agreed to divide profits, 50% to Dean and 50% to Myers and McCracken. Myers and McCracken were to receive $25,543.31 in construction fees for Phase I, and they did receive this amount plus about $3,000 more. Dean contended at trial that this money was intended to be a draw against their share of the profits, but Myers and McCracken denied this. Myers testified that this fee was paid for their actual services as general contractors and had nothing to do with their design, consulting, and other work performed before, during, and after the construction phase. Moreover, Myers and McCracken contended this figure was less than half what they would charge as general contractors without the profit sharing agreement. Dean, on the other hand, was to receive $20,000 per acre for his land (about 4.4 acres in all), and he did not consider this to come out of his share of the profits.

The parties made the oral agreement to form the joint venture around September of 1979. Construction of Phase I began in April 1981 and was completed by March 1982.

In December 1981, after Myers and McCracken had substantially completed Phase I of the project, Myers walked in on a meeting between Dean and a realtor in which Dean was discussing selling out of the project. According to Myers and McCracken, Dean told them on the following day that he was selling the project to another developer, that he had made no financial provisions for them, and that he was terminating the relationship. Dean had their utilities at the construction site turned off the following month, effectively driving them off the property and terminating their involvement in the project.

At the beginning of the project, Dean transferred title to his land to Crossgate, Incorporated, a corporation of which he was the sole stockholder. On May 6, 1980, Dean, as president of Crossgate, Inc., caused the corporation to mortgage this land to him individually as security for a $16,000 debt. On the same date, he personally mortgaged the same land for $180,000 to a third party who contemporaneously transferred the mortgage back to Dean. These two mortgages (but not the transfer back) were recorded. Dean never told Myers and McCracken of these mortgages.

On March 27, 1981, Dean executed an affidavit "for the purpose of inducing the Phenix Federal Savings and Loan Association of Phenix City, Alabama, to pay out money." On the same date, Phenix Federal accepted a mortgage from Crossgate, Inc., for construction financing. Dean's affidavit recited that Dean was the owner of the land in question and that there were no encumbrances on the property except a preliminary development mortgage, which was to be subordinated to the mortgage to Phenix Federal. Dean did not mention the two above-described mortgages.

Dean contends that the trial court erred in failing to grant his motion for directed verdict or his motion for JNOV or new trial, because the oral joint venture agreement is void under the Statute of Frauds, Code 1975, § 8-9-2, either as a contract not to be performed in one year or as a contract for the sale of an interest in land.

We question whether the joint venture agreement was a contract for the sale of land within the contemplation of the Statute of Frauds. Hunt v. Hammonds, 257 Ala. 586, 60 So.2d 355 (1952). The contract was not to be performed within one year, however; certainly not the full five-phase development, whose anticipated profits formed a major part of the complaint. The plans prepared by the parties showed development over the course of three years, and the first phase alone was not actually completed until more than two years after they entered into the agreement.

We are aware of the statements that a contract is not within the Statute of Frauds unless it cannot possibly be performed within a year. See, e.g., Kitsos v. Mobile Gas Service Corp., 404 So.2d 40 (Ala.1981), appeal after remand, 431 So.2d 1150 (Ala.1983); Land v. Cooper, 250 Ala. 271, 34 So.2d 313 (1948). There must be a reasonable possibility of performance within a year, however. W.P. Brown & Sons Lumber Co. v. Rattray, 238 Ala. 406, 192 So. 851 (1939). We see no such reasonable possibility under the circumstances, and certainly not within the intentions of the parties. ¹ The contract therefore was within the Statute of Frauds.

The trial court did not err in denying Dean's motions, however, because the facts of the case support a conclusion that Dean was estopped to assert the Statute of Frauds. He admitted the existence of the contract in his answer, counterclaim, and sworn testimony. Although Dean did not sign a joint venture agreement as such, he formed Crossgate, Inc., to...