Waddle v. Elrod

367 S.W.3d 217 (Tenn. 2012)

 

RULE:

A settlement agreement made during the course of litigation is a contract between the parties, and as such, contract law governs disputes concerning the formation, construction, and enforceability of the settlement agreement. Like other contracts, a settlement agreement may be subject to the Statute of Frauds.

FACTS:

Regent Investments 1, LLC ("Regent") sued octogenarian Earline Waddle, and her niece, Lorene Elrod. According to the allegations of the complaint, Regent contracted to purchase from Ms. Waddle approximately four acres of real property located at 2268 Prim Lane, in Rutherford County, Tennessee ("the Prim Lane property"), for $230,000. Regent paid Ms. Waddle $10,000 earnest money when the contract was signed. However, in preparing to close the deal, Regent learned of a quitclaim deed by which Ms. Waddle had conveyed one-half of her interest in the Prim Lane property to Ms. Elrod. Regent sued Ms. Waddle, alleging breach of contract, fraud, and intentional and negligent misrepresentation. The two entered into a settlement agreement under which appellant agreed to return her interest in the property to appellee. Waddle argued that the Statute of Frauds, Tenn. Code Ann. § 29-2-101 (Supp. 2011), barred enforcement of this agreement because it required the transfer of an interest in real property and was not evidenced by a writing signed by appellee or her attorney describing with specificity the terms of the agreement and the property.

ISSUE:

Was the Statute of Frauds applicable to a settlement agreement requiring the transfer of an interest in real property; and, if so, whether emails exchanged by the parties' attorneys satisfy the Statute of Frauds under the Uniform Electronic Transactions Act ("UETA")?

ANSWER:

Yes

CONCLUSION:

The high court held that the Statute of Frauds applied to settlement agreements requiring the transfer of an interest in real property, and the intermediate appellate court erred in holding otherwise. As the parties intended to finalize the settlement by electronic means, under Tenn. Code Ann. § 47-10-107(c) of the Uniform Electronic Transactions Act, Tenn. Code Ann. §§ 47-10-101 to 47-10-123 (Supp. 2011), emails counsel exchanged constituted a writing for purposes of the Statute of Frauds, and the typed name of appellant's counsel on the emails constituted an "electronic signature" under § 47-10-107(d).

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