Text Messages Insufficient to Satisfy Statute of Frauds Mandate that Writing Memorializing Oral Contract be "Subscribed"

On May 6, 2022, in Han v. Chen, Index No. 651073/2018, Justice Joel Cohen of the New York County Commercial Division granted defendants’ motion for summary judgment dismissing plaintiff’s claim of breach of an oral agreement to sell two cemetery plots. The Court rejected plaintiff’s argument that text messages along with a signed Application for Approval to Transfer Cemetery Property, a signed and acknowledged Lost Deed Affidavit, two checks cashed by defendants identified as payment by plaintiff, and handwritten notes on the cemetery map identifying the locations of the two lots satisfied the statute of frauds because text messages are not a satisfactory writing and the documents did not state all of the material and essential terms of a complete agreement such as price, identity of the parties, the parcel of real estate to be sold, the closing date, the quality of title to be conveyed, adjustments for taxes and risk of loss. As the Court explained:

[T]ext messages—as opposed to emails, which may in some cases be sufficient to satisfy the statute of frauds (see e.g. Naldi v Grunberg, 80 AD3d 1, 6-7, 908 N.Y.S.2d 639 [1st Dept 2010])—do not satisfy the mandate that [*12] the writing memorializing an oral contract be "subscribed," i.e., signed, "by the party to be charged," i.e., the Chens (see e.g. Hershkowitz v Think Tech Labs, LLC, 651 Fed. Appx. 15, 2015 WL 13016357, * 8 [SDNY 2015] [holding text message conversation fails statute of frauds subscription requirement "because it does not contain a signature of 2022 N.Y. Misc. LEXIS 2391, *8; 2022 NY Slip Op 31501(U), **7 either [defendant] or Plaintiff'], affirmed in part and vacated in part on other grounds, 651 Fed Appx 15 [2d Cir 2016]; see also Truman v Brown, 434 F Supp 3d 100, 114 [SD NY 2020]; Bayerische Landesbank v 45 John St. LLC, 102 AD3d 587, 587, 960 N.Y.S.2d 64 [1st Dept 2013]; Leist v Tugendhaft, 64 AD3d 687, 688, 882 N.Y.S.2d 521 [2d Dept 2009]; Page v Muze, Inc., 270 AD2d 401, 402, 705 N.Y.S.2d 383 [2d Dept 2000]; LIF Industries, Inc. v Fuller, 2015 NY Slip Op 32973[U], ** 12-13 [Sup Ct, NY County 2015]).

Further, although signed and unsigned writings may be read together for purposes of the statute of frauds (see Crabtree v Elizabeth Arden Sales Corp., 305 NY 48, 54, 110 N.E.2d 551 [1953]), they must clearly refer to the same subject matter or transaction, contain all of the essential terms of a binding contract, and the unsigned writing must be prepared by the party to be charged (see Bent v St. John's Univ., New York, 189 AD3d 973, 974, 138 N.Y.S.3d 199 [2d Dept 2020]; Knapp v Maron, 2015 WL [**10] 2452409, * 3, 2015 US Dist LEXIS 67372 [SD NY 2015]; Post Hill, LLC v E. Tetz & Sons, Inc., 122 AD3d 1126, 1127, 997 N.Y.S.2d 525 [3d Dept 2014]).

Moreover, in order to satisfy the statute of frauds, the writing must sufficiently state all the material and essential terms of a complete agreement (Nemelka v Questor Mgt. Co., LLC, 40 AD3d 505, 505, 836 N.Y.S.2d 598 [1st Dept 2007]), such as the "price, identity of the parties, and the parcel of real estate to be sold" (Argent Acquisitions, LLC v First Church of Religious Science, 118 AD3d 441, 444, 990 N.Y.S.2d 1 [1st Dept 2014]), the closing date and medium of payment (see Ferchaw v Troxel, 112 AD3d 1310, 1312, 979 N.Y.S.2d 206 [4th Dept 2013]; Sabetfard v Djavaheri Realty Corp., 18 AD3d 640, 641, 795 N.Y.S.2d 643 [2d Dept 2005]), and "the quality of title to be conveyed, adjustments for taxes and risk of loss" (Argent Acquisitions, LLC, 118 AD3d at 444).

Accordingly, a writing purporting to memorialize an oral contract is inadequate where, as here, it lacks language indicating an intent [*13] to be bound (see Nesbitt v Penalver, 40 AD3d 596, 597-598, 835 N.Y.S.2d 426 [2d Dept 2007]; Eichorn v Eichorn, 2018 NY Slip Op 30111[U], ** 8 [Sup Ct, NY County 2018]), and where, as here, it lacks language indicating assent on all essential terms of a complete agreement in the nature of a real estate transaction, e.g., price, payment, closing date, and risk of loss (see e.g. Nesbitt, 40 AD3d at 597- 98 [letters between prospective purchaser and vendor's attorney failed to satisfy statute of frauds, where although letters identified parties, described parties, described property, and indicated proposed purchase price, they failed to set forth manner of payment and financing, closing date, quality of title to be conveyed and allocation of risk of loss]; Coston v Greene, 2018 NY Slip Op 32343[U], ** 8-9 [Sup Ct, Kings Country 2018] [finding that text message "fails to describe the subject property with the degree of certainty necessary to satisfy the Statute of Frauds," because it "refers only to 'the house' and makes no reference to real property or land," [and] no property street address is stated in the text [**11] message, nor does it set forth dimensions, acreage, metes and bounds, or lot number"]), or it otherwise fails to set forth the "'full intention'" of the parties without recourse to parol evidence (see Dahan v Weiss, 120 AD3d 540, 542, 991 N.Y.S.2d 119 [2d Dept 2014]).

The attorneys at Schlam Stone & Dolan frequently litigate breach of contract claims. Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning such issues.