News: Fayette Judge Ishmael Reverses Melbourne Mills Verdict Citing Statute of Frauds

From Herald-Leader (4/4/06) is a story by Brandon Ortiz:

Ruling benefits Melbourne Mills Jr.

A Fayette Circuit judge has overruled a jury's verdict in a lawsuit against Melbourne Mills Jr., ruling that the Lexington attorney's verbal promise to pay an assistant $1.065 million is not a legally enforceable contract.

In January, a jury awarded $900,000 to Cindy Sawyer of Versailles. Her lawsuit contends that she agreed to research and suggest potential class-action lawsuits for Mills if he agreed to reward her with a large bonus if one ever "obtained a big payday."

Sawyer says she persuaded Mills to file a class-action lawsuit on behalf of 431 fen-phen users who claimed the diet pill damaged their hearts. Mills negotiated a controversial $200 million settlement in 2001.

In a secretly recorded June 2001 conversation played at Sawyer's trial, Mills agreed to pay $1 million, plus $65,000 for a new car, over a series of payments lasting 10 years. Sawyer says the bonus was modeled after the one received by Erin Brockovich, a California legal assistant made famous by the 2000 movie starring Julia Roberts.

Last week, Judge James D. Ishmael said that the oral agreement is not legally enforceable because it was not in writing. His opinion, which dismissed the lawsuit, cited the Statute of Frauds, originally drafted in 1677 in England to prevent bogus oral contracts.

The statute, versions of which have been adopted in every state, requires that any contract lasting longer than a year be in writing. It has numerous exceptions, but Ishmael said none applied in this case.

"Honoring that oral agreement would be the 'moral' and 'right' thing for Mel to do," Ishmael wrote in his opinion, rendered Thursday. "However, this Court is obligated by Oath of Office and Kentucky law, to consider cases based on the facts presented and the applicable law.

"The end result may not seem 'fair' to Cindy after the jury verdict in her favor. ... The Statute of Frauds, by its own terms, can be considered 'harsh' in that it will bar oral agreements between parties in certain conditions."

Frankfort attorney William E. Johnson, who represents Mills, declined to respond to Ishmael's comments.

"I think the judge did exactly what you would expect the judge to do," Johnson said. "He looked at the case and followed the law."

Mills did not immediately return a voice message left at his Lexington office.

Sawyer's attorney, Michael J. Cox, disagrees. He is appealing the ruling.

Cox says that because Mills was capable of paying the bonus -- Mills allegedly received at least $22 million in attorneys fees, according to briefs filed by Sawyer's attorneys -- the oral agreement is enforceable.

More importantly, Sawyer fulfilled her part of the deal, Cox said.

Johnson argued in the January trial that Mills had not actually made an agreement. Mills asked Sawyer to put the deal in writing, but never signed the contract, Johnson said.

Sawyer's husband, Steve, said he was disappointed in Ishmael's ruling.

"For the truth to become a victim of a technicality to me is a tragedy," he said.

Comments

[T. Rauf]

Question:
I am a law student, and in class today my Contracts Professor cited the case holding as incorrect b/c the test for performance is one where it must only be possible that the bonus is able to be paid within a year?