UXB Sand & Gravel, Inc. v. Rosenfeld Concrete Corp.

• Decision Date: 04 May 1994
• Parties: UXB SAND & GRAVEL, INC. v. ROSENFELD CONCRETE CORPORATION et al. 92-447-Appeal.
• Court: Rhode Island Supreme Court

Page 75

641 A.2d 75

UXB SAND & GRAVEL, INC. v. ROSENFELD CONCRETE CORPORATION et al.

92-447-Appeal.

Supreme Court of Rhode Island.

May 4, 1994.

John F. Bomster, W. James McKay, William Russo, Adler, Pollock & Sheehan, Providence, for plaintiff.

Robert Fine, Licht & Semonoff, Providence, for defendants.

OPINION

LEDERBERG, Justice.

This case came before the Supreme Court on appeal by UXB Sand & Gravel, Inc. (UXB), from a judgment of the Superior Court that granted the motion of Rosenfeld Concrete Corporation, Judith P. Parker, D. Barry Parker, and Myrtle Elizabeth Price (defendants) for a directed verdict and granted the defendants' subsequent motion for a new trial. In addition, attorneys' fees were awarded to the defendants. The primary issue on appeal is whether the statute of frauds precluded enforcement of an alleged agreement between UXB and Judith P. and D. Barry Parker (Parkers) for the sale of certain real property belonging to the Parkers. For the reasons stated herein, we affirm the trial justice's judgment regarding the motion for the directed verdict, and vacate the award of attorneys' fees to the defendants.

I FACTS

The evolution of this case began in the summer of 1984 when Judith P. Parker contacted Jackson Despres (Despres) to determine whether he would be interested in excavating high-grade, bank-run sand and gravel from her Uxbridge, Massachusetts property (property). Despres and Charles Tasca (Tasca), coowners of UXB (formed in 1984), first visited the property in August 1984. Immediately after touring the property, Despres and Tasca met with the Parkers and agreed to buy 300,000 yards of gravel (first gravel deposit) over a four-year period for $1 per cubic yard and also to buy gravel from a second gravel deposit (second gravel deposit), if one could be identified, for $1 per cubic yard. A few days later, Tasca and Despres tendered to the Parkers two checks totaling $5,000, as a deposit. In December 1984, UXB and the Parkers memorialized the terms of their August agreement in writing (December 1984 agreement). The written contract, as amended by a side letter agreement, gave UXB an option to purchase the second gravel deposit during the term of the December 1984 agreement and, in the alternative, the right of first refusal to purchase the second gravel deposit for $1 per cubic yard.

Toward the end of the four-year term of the December 1984 agreement, the Parkers decided to sell the property outright and move to Florida. Hence, in November 1988--approximately one month prior to the end of the agreement--they forwarded to UXB a letter (November 1988 letter) offering UXB the opportunity to purchase the remaining gravel on the property or to purchase the property itself "by signing a purchase and sale agreement for the gravel or the entire parcel."

That same month the Parkers notified UXB that they had received an offer of $1.3 million from Hood Construction and a $1.44 million offer from Rosenfeld Concrete Corporation (Rosenfeld). UXB apprised the Parkers that it, too, was interested in acquiring the property. On November 28, 1988, UXB and the Parkers executed another signed, written agreement (November 1988 agreement) concerning their rights and obligations under the December 1984 agreement. The November 1988 agreement provided, in part, as follows: "UXB agrees to exercise its right of first refusal set forth in the [December 1984 agreement] on or before December 19, 1988."

On December 16, 1988, UXB notified the Parkers of its intent to exercise its right of first refusal to purchase the second gravel deposit. The parties began negotiations to finalize the transaction, and they were able to agree on all terms except the issue of who had the obligation to secure a permit for the removal of gravel from the second gravel deposit.

Prior to resolving this issue, UXB offered to purchase the entire property for $1.2 million. Although the Parkers viewed the purchase and sale of the property as the best way to resolve the right-of-first-refusal dispute, their February 13, 1989 letter of response indicated that UXB's offer was inadequate but negotiable. UXB responded by raising its offer to $1.25 million, but negotiations continued on other issues.

On March 1, 1989, the Parkers, under a cover letter signed by their attorney, Ralph Kinder (Kinder), sent to UXB two proposed purchase-and-sale agreements calling for a total cash deposit of $62,500. Each agreement referred to a separate and distinct portion of the property. The property contained forty-two acres and consisted of a gravel pit and a residential portion. Although these proposed agreements were never executed by either party, negotiations continued.

On March 13, 1989, the Parkers forwarded to UXB a second set of proposed purchase-and-sale agreements also under a cover letter signed by Kinder. The letter reflected UXB's dissatisfaction with the deposit requirement specified in the March 1, 1989 proposed agreements. The March 13, 1989 proposals suggested a lower but mandatory deposit of $30,000.

As it had done with the March 1, 1989 proposals, UXB also refused to sign this set of proposed agreements, for "[t]here were additional items that [UXB] felt warranted some additional discussion." The Parkers became frustrated with UXB's second rejection. As of March 24, 1989, no agreement had been reached. In an effort to resolve the disputes, UXB and the Parkers met on March 30, 1989. According to UXB, the parties resolved their differences at this meeting, including the deposit disagreement. The Parkers, however, felt that no agreement had been reached, especially regarding the deposit issue. Indeed, no written agreement was executed at this meeting or anytime thereafter. The Parkers subsequently sold the property to Rosenfeld on April 12, 1989.

In response, UXB filed a nine-count complaint in the Providence County Superior Court, seeking, inter alia, damages for breach of contract, fraud, and tortious interference with a contract. UXB later amended its complaint by adding two counts that alleged violations of the Rhode Island Antitrust Act, G.L.1956 (1992 Reenactment) §§ 6-36-4 and 6-36-5. The trial justice granted summary judgment in favor of defendants on the antitrust counts. UXB appealed to this court, and on November 19, 1991, we affirmed the entry of partial summary judgment and remanded the remaining counts to the Superior Court. UXB Sand & Gravel, Inc. v. Rosenfeld Concrete Corp., 599 A.2d 1033, 1038 (R.I.1991). In 1992, UXB again amended its complaint, reducing the number of counts to five. Counts 1 and 2 alleged breach of contract arising from the Parkers' sale of the property to Rosenfeld and the Parkers' refusal to allow UXB to extract and remove additional gravel from the property. Count 3 charged that the Parkers' conduct amounted to a breach of the duty of good faith and fair dealing. Counts 4 and 5 charged Rosenfeld with tortious interference with contractual relations. Rosenfeld counterclaimed, seeking damages from UXB for slander.

At the conclusion of trial in 1992, the jury returned a special verdict that awarded UXB $2 million after finding that the Parkers breached an agreement to sell the property to UXB, and awarded UXB $200,886 because the Parkers breached an agreement with UXB when they sold the second gravel deposit to Rosenfeld and thereby breached the covenant of good faith and fair dealing. The jury found in favor of Rosenfeld on the tortious-interference claims and in favor of UXB on Rosenfeld's counterclaim.

On July 30, 1992, the trial justice granted defendants' motion for directed verdict on counts 1, 2, 3, and 4 and granted their alternative motion for a new trial on counts 1, 2, and 3 and on Rosenfeld's counterclaim. The trial justice also awarded defendants $107,382.85 in attorneys' fees. UXB again responded with an appeal to this court pursuant to G.L.1956 (1985 Reenactment) § 9-24-1.

On appeal UXB primarily contended that the trial justice erred in ruling that because it failed to comply with the statute of frauds, UXB failed to establish breach of an agreement to sell the property to UXB.

We conclude that the trial justice properly directed a verdict on this claim.

II

BREACH OF THE "AGREEMENT"

Our starting point is clear:

"In reviewing the trial justice's decision on a motion for a directed verdict, this court is bound by the same rules that govern the trial justice. We must examine all the evidence in the light most favorable to the nonmoving party without considering the weight of the evidence or the credibility of the witnesses. We must draw from that evidence only those reasonable inferences that support the position of the opposing party." Rodrigues v. Miriam Hospital, 623 A.2d 456, 460 (R.I.1993).

If such an examination discloses competent, credible evidence in support of UXB's claim, then the motion for the directed verdict should have been denied. Achille v. Colonial Penn Insurance Co., 505 A.2d 1173, 1174-75 (R.I.1986).

Rhode Island's statute of frauds, G.L.1956 (1985 Reenactment) § 9-1-4, provides in part that "[n]o action shall be brought * * * to charge any person upon any contract for the sale of lands * * * unless the promise or agreement upon which such action shall be brought, or some note or memorandum thereof, shall be in writing, and signed by the party to be charged therewith, or by some other person by him thereunto lawfully authorized."

It is undisputed that UXB never executed a written agreement for the purchase of the property. Unfortunately, this fact standing alone falls far short of resolving the issue before us.

A. THE MARCH 13 COMMUNICATION

In support of its position that the trial justice misapplied the statute of frauds, UXB asserted that the March 13 cover letter signed by the Parkers' attorney, coupled with the accompanying unsigned purchase-and-sale agreements, "signified the Parkers' agreement to all elements essential to a contract or agreement...