Parma Tile Mosaic & Marble Co. v. Estate of Short - 87 N.Y.2d 524, 640 N.Y.S.2d 477, 663 N.E.2d 633 (1996)

Rule:

A signature for Statute of Frauds purposes may be "a name, written or printed, but is not to be reckoned as a signature unless inserted or adopted with an intent, actual or apparent, to authenticate a writing."

Facts:

In September 1989, Sime Construction Co. (Sime), a subcontractor, sought to purchase from the plaintiff supplier a large quantity of ceramic tile for use in a construction project. When the supplier expressed reluctance to enter into such a large contract without a guaranty, Sime suggested that the supplier approach MRLS Construction Corporation (MRLS), the general contractor on the project, for a guaranty of payment. The supplier contacted MRLS and after several discussions, MRLS faxed a document to the supplier which the supplier asserts is a guaranty. MRLS contends that it merely transmitted an unsubscribed proposal for a guaranty by fax. The supplier copy of the document bore a heading at the top of each page which indicated the name "MRLS Construction," a telephone number, the date and time, an unidentified number and a page number. It is undisputed that sometime before sending the document at issue, MRLS had programmed its fax machine to automatically imprint this information on every transmitted page. By this method, the heading would appear only on the recipient's faxed copy, not on the originating document. The two-page fax document in issue was not preceded by a cover letter or any other identifying document. After the facsimile transmission, the supplier began furnishing Sime with quantities of ceramic tile. When Fred Short, the principal of Sime, died in April 1990, the supplier sought payment for Sime's outstanding invoices from MRLS. MRLS refused to make payment on the ground that the document was not an enforceable guaranty. The supplier commenced this action against MRLS and Sime (sued as the estate of Fred Short herein) to recover the outstanding balances for the ceramic tiles furnished to Sime. After issue was joined, the supplier and MRLS moved for summary judgment, and the trial court, finding issues of fact, denied both motions. Both parties moved for reargument. After reargument, the trial court granted the supplier’s motion on the third cause of action, which alleged a guaranty of payment, severed the third cause of action from the rest of the supplier’s complaint, and directed entry of judgment against MRLS. In granting summary judgment to the supplier, the trial court rejected MRLS' contention that the fax document had not been subscribed as required by the Statute of Frauds. The court held that the heading automatically imprinted by the fax machine on the supplier’s copy of the document satisfied the subscription requirement because an intent to be bound had been demonstrated. MRLS appealed the judgment, and the Appellate Division affirmed the trial court.

Issue:

Did the automatic imprinting, by a fax machine, of the sender's name at the top of each page transmitted, satisfy the requirement that a writing be subscribed under New York State's general Statute of Frauds (General Obligations Law § 5-701)?

Answer:

No.

Conclusion:

The court held that the supplier failed to demonstrate that the general contractor affixed its "signature" to the document sent by facsimile machine sufficient to fulfill the subscription requirement. The court reasoned that a signature for Statute of Frauds purposes could be a name, written or printed, but was not to be reckoned as a signature unless inserted or adopted with an intent, actual or apparent, to authenticate a writing. The act of identifying and sending the document to a particular destination did not, by itself, constitute a signing authenticating the contents of the document for Statute of Frauds purposes, and the court rejected the supplier's argument that such an inference was warranted.