Sullivan v. Porter

• Citation: 2004 ME 134,861 A.2d 625
• Parties: Joan SULLIVAN et al. v. Merval PORTER Jr. et al.
• Decision Date: 02 November 2004
• Court: Maine Supreme Court

861 A.2d 625

2004 ME 134

Joan SULLIVAN et al. v. Merval PORTER Jr. et al.

Supreme Judicial Court of Maine.

Argued: May 13, 2004.

Decided: November 2, 2004.

Bernard J. Kubetz, Esq. (orally), Laura Lee Klein, Esq., Eaton Peabody, Bangor, for plaintiffs.

Catherine L. Haynes, Esq. (orally), Ellsworth, William Reiff Jr., Esq., Mt. Desert, for defendants.

Panel: SAUFLEY, C.J., and CLIFFORD, RUDMAN, DANA, ALEXANDER, CALKINS, and LEVY, JJ.

SAUFLEY, C.J.

[¶ 1] Merval and Susan Porter appeal from a judgment in the Superior Court (Hancock County, Hjelm, J.) entered in favor of Joan Sullivan and David Andrews in which the jury found that the parties had entered into an oral contract for the sale of the Porters' farm and the trial court ordered the Porters to transfer the property to Sullivan and Andrews. The Porters argue that (1) the evidence was insufficient for a jury to find that the parties entered into an oral contract for the sale of real estate; (2) the evidence of "part performance" and "reasonable reliance" was insufficient to remove the oral contract for the sale of real estate from the statute of frauds; (3) the court committed error in its jury instructions; (4) the court committed error in its production of the jury verdict form; and (5) the court erred in entering an order of specific performance. We affirm the judgment.

I. BACKGROUND

[¶ 2] Accepting the facts in the light most favorable to Sullivan and Andrews, as we must, see, e.g., Marquis v. Farm Family Mut. Ins. Co., 628 A.2d 644, 648 (Me.1993),

the jury and the court could have relied on the following facts. In December 1999, Sullivan began managing a horse stable located on property owned by Merval and Susan Porter in Bar Harbor. In July 2000, Merval informed Sullivan that he planned to move, and asked if she would like to rent the property to run a horse trail riding and lesson business. The property included a farmhouse, large barn, and over fifty-two acres of land.

[¶ 3] Sullivan and Andrews expressed an interest in the proposal, but after touring the property decided to rent only the barn and fields because the farmhouse required too much rehabilitation. Sullivan and Andrews never had a chance to explain their decision to Merval because, when the parties met in August 2000, Merval offered to sell the property to them for $350,000. At the same time, he also offered to owner-finance the sale at an interest rate between five and seven percent for a period between twenty and thirty years, and asked for a $20,000 down payment. Sullivan and Andrews orally accepted his offer. Merval told Sullivan and Andrews that he would contact his attorney to start the paperwork. Sullivan and Andrews informed Merval that they would refinance their house to obtain the down payment for the property.

[¶ 4] When the Porters moved out of the farmhouse in September 2000, they gave the keys to Sullivan and Andrews. Sullivan and Andrews took possession of the property and began improving the stable and trails. The parties continued on this course without incident until November 24, 2000, when Merval arrived at the farm with a real estate agent. When questioned by Sullivan, Merval informed her that there was interest from another buyer, but told Sullivan that he would honor their agreement. The parties agreed to meet the following day for presentation of half of the down payment.

[¶ 5] When the parties met the next day, Merval again reaffirmed his intention to honor the agreement. Sullivan offered him $10,000 in cash toward the down payment, but Merval stated that he did not feel right accepting the money until the paperwork was prepared. Nonetheless, he and his wife eventually accepted $3000 toward the down payment.¹

[¶ 6] After the November 25, 2000 meeting, Sullivan and Andrews began extensive renovations of the farmhouse, which included removing four tons of horsehair plaster from the walls and replacing it with insulation and sheetrock, rewiring the electricity, installing new plumbing, erecting new fencing, and removing trash. They also started their new business, joined the chamber of commerce, repaired horse trails, began giving riding lessons and rehabilitating horses, placed advertisements in the local newspaper, and paid for an appraisal of the property. During the renovation process, Merval visited the property regularly and received updates about the renovations. When asked about the necessary paperwork, Merval always responded that he was too busy to contact his attorney.

[¶ 7] In June 2001, Sullivan forwarded a copy of an appraisal of the Porters' property, valuing the property at $250,000, and a letter stating that Sullivan and Andrews planned to "stick to the $350,000 price [they] agreed on."² Merval responded to this correspondence by offering to sell the property to Sullivan and Andrews for $450,000 with a $50,000 down payment. After the parties were unable to resolve the issues privately, Sullivan and Andrews filed a complaint alleging, among other things, the existence of a contract and promissory estoppel, and requesting specific performance. The Porters asserted the statute of frauds as an affirmative defense.

[¶ 8] The parties agreed to allow the jury to decide whether a contract existed and to have the jury sit in an advisory capacity relating to the statute of frauds, promissory estoppel, and specific performance. After the close of evidence, the trial court provided instructions to the jury including an ordinary contract instruction articulating the burden of proof for the existence of a contract and the part performance of that contract as a preponderance of the evidence.³ The court thereafter instructed that the alternative claim for promissory estoppel required proof by clear and convincing evidence. Both parties agreed to the court's prepared jury instructions before they were delivered to the jury.

[¶ 9] The jury found that the parties entered into a contract for the sale of the farm. Acting in an advisory capacity, the jury found in favor of Andrews and Sullivan on the issues of the part performance doctrine, promissory estoppel, and specific performance. Although not bound by the jury's decision, the court concluded that the jury's assessment of the equitable issues was warranted. The court also found that the evidence at trial established that the parties agreed to a $350,000 purchase price and that the Porters agreed to finance the sale at an interest rate between five and seven percent for a term of between twenty and thirty years. The court ordered the Porters to execute a purchase and sale agreement for $350,000 to be financed by the Porters unless otherwise agreed, and required them to provide notice of the terms of repayment and interest rate in the range found by the court within ten days of the judgment.

II. DISCUSSION

A. Statute of Frauds

[¶ 10] We begin with the axiom that, absent extraordinary circumstances, a contract for the sale of land must be in writing to be enforceable. 33 M.R.S.A. § 51(4) (1999) (statute of frauds).⁴ A transfer of real property without a written instrument may be enforced only if the party seeking to enforce the contract proves by clear and convincing evidence that an oral contract exists and that an exception to the statute of frauds applies. See Landry v. Landry, 641 A.2d 182, 183 (Me.1994)

; Goodwin v. Smith, 89 Me. 506, 508, 36 A. 997, 998 (1897). One exception to the statute of frauds is found in the part performance doctrine. Landry, 641 A.2d at 183.

[¶ 11] The part performance doctrine requires the party seeking to enforce the contract to establish both that she acted in partial performance of her contractual duties and that the other party made misrepresentations that induced that partial performance. Cottle Enters., Inc. v. Town of Farmington, 1997 ME 78, ¶ 17 n. 6, 693 A.2d 330, 335-36; Woodbury v. Gardner, 77 Me. 68, 70 (1885). Thus, to remove the contract from the operation of the statute of frauds pursuant to this doctrine, the party seeking to enforce the contract must establish by clear and convincing evidence⁵ (1) that the parties did enter into a contract; (2) that the party seeking to enforce the contract partially performed the contract; and (3) that the performance was induced by the other party's misrepresentations, which may include acquiescence or silence. Cottle Enters., Inc., 1997 ME 78, ¶ 17 n. 6, 693 A.2d at 335-36; Goodwin, 89 Me. at 508, 36 A. at 998; Woodbury, 77 Me. at 70.

1. Existence of a Contract

[¶ 12] Because any action to enforce a contract depends on the existence of the contract itself, we begin by addressing the Porters' argument that there was insufficient evidence for the jury to find the existence of a contract for the sale of their farm to Sullivan and Andrews. We apply a deferential standard of review to a jury's findings of fact, and we will sustain a jury's verdict if, when viewed in the light most favorable to the plaintiff, there is any credible evidence in the record to support the verdict. Marquis, 628 A.2d at 648.

[¶ 13] Generally, "`[t]he existence of a contract is a question of fact to be determined by the jury.'" June Roberts Agency, Inc. v. Venture Props., Inc., 676 A.2d 46, 48 (Me.1996) (quoting Bates v. Anderson, 614 A.2d 551, 552 (Me.1992)). A contract exists if the parties mutually assent to be bound by all its material terms, the assent is either expressly or impliedly manifested in the contract, and the contract is sufficiently definite to enable the court to ascertain its exact meaning and fix exactly the legal liabilities of each party. Forrest Assocs. v. Passamaquoddy Tribe, 2000 ME 195, ¶ 9, 760 A.2d 1041, 1044.

[¶ 14] A review of the record supports the jury's findings that there was a meeting of the minds between the Porters and Sullivan and Andrews. The parties' agreement in August 2000⁶ embodied the essential material terms for a contract to sell the farm, including the identification of the property, the...