Tuesday, March 20, 2007, 4:13 PM

Dismissal Of Breach Of Contract Action With Ostensibly Fewer Than All Parties Signing Affirmed

In Parker v. Glosson, a divided panel of the COA ruled today that a breach of contract action based on a contract requiring all parties' signatures to be enforceable could not withstand a motion to dismiss where: 1) part of the contract identified 2 sellers and no buyer; and 2) the contract was signed by 1 seller and 1 buyer.

In Parker, the parties had a real estate sale contract. The contract said it "shall become an enforceable contract when a fully executed copy has been communicated to both parties." At the beginning of the contract, there were spaces for identifying the buyer and the seller. In those spaces, 2 sellers, plaintiff and a Sandy Glosson were identified. No buyer was identified. At the end of the contract, there were spaces designated for the signatures of the buyer and the seller. There, only one seller, the plaintiff, and one buyer signed the contract. Sandy Glosson did not sign the document.

The COA majority held that the contract required execution, i.e., the signature, of all parties to become enforceable. Because 2 sellers had been identified at the beginning of the contract but only one had signed, the COA majority held that not all parties had executed the contract and that the contract was therefore not enforceable. Plaintiff's suit based on the unenforceable contract was therefore properly dismissed.

Judge Tyson dissented. Judge Tyson focused on the standard for dismissing a claim under Civil Procedure Rule 12(b)(6). That standard demands that a case should not be dismissed unless it appears beyond doubt that plaintiff could prove no set of facts in support of his claim and that the complaint must be liberally construed.

Judge Tyson would have held that the fact that Sandy Glosson, whose identity, status, and interest weren't defined and who wasn't a party to the law suit, did not sign the contract did not make the contract per se unenforceable. For example, if the plaintiff signed the contract as Sandy's agent, a fact that could perhaps be proven with parol evidence, the contract might not be unenforceable. Moreover, Judge Tyson would also hold that the contract was enforceable against the defendant seller, Douglas Glosson, to the extent of his interest in the property (a fact not established). And to the extent the trial court's dismissal of the plaintiff's suit was based on the statute of frauds, which requires a written contract for a land sale, Judge Tyson would hold that the statute of frauds cannot support a 12(b)(6) dismissal but must be raised in an answer and argued, e.g., at the summary judgment stage.


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