Opinion
C.A. No. 00A-05-001-PLA.
Submitted: November 6, 2000.
Decided: February 5, 2001.
Upon appeal from a decision of the Court of Common Pleas — Reversed.
Brian E. Lutness, Esquire, Silverman McDonald, Wilmington, Delaware, Attorney for Appellant.
David S. Shamers, Esquire, Wilmington, Delaware, Attorney for Appellee.
MEMORANDUM OPINION
This is an appeal from a decision of the Court of Common Pleas entered against Appellants, Kirkwood Motors, Inc. ("Kirkwood"), for breach of contract regarding the sale of a new van and trade-in of a used van to Appellees, George and Frances Conomon (the "Conomons"), wherein Appellees were awarded $2,700, plus costs and interest. The facts surrounding the above-captioned action are set forth below, as determined from the record in this case. For the reasons that follow, the decision of the Court of Common Pleas is hereby Reversed.
FACTUAL AND PROCEDURAL BACKGROUND
This matter arises out the purchase of a new van, by the Conomons, from Kirkwood. On February 26, 1998, the Conomons went to purchase a 1998 Dodge Caravan using their 1988 Dodge Caravan's trade-in value as partial payment. The Conomons allege that they orally negotiated with a salesperson from Kirkwood, Albert Barrish ("Barrish"), to sell them the new van for a total price (including taxes and sales tax) of $19,305, less a factory rebate of $750, and minus $3,000 for the trade-in value of their old van. To the Conomons' understanding, the above terms were reduced to writing by Kirkwood in the form of a Sales Agreement, which the Conomons signed.
After signing the requisite documents on February 26, 1998, the Conomons took delivery of their new van and left the old van at the dealership. According to the Conomons, after returning home and reviewing the paperwork from Kirkwood, they realized that their trade-in was given an allotment of $300, rather than the $3,000 allotment that they believed Barrish had originally stated. In an attempt to have this discrepancy explained, George Conomon returned to Kirkwood the following day to speak with Barrish. Although Barrish claimed that he never spoke with either of the Conomons after the sale on February 26, 1998, Frances Conomon testified at trial that she had a conversation with Barrish the following day, on February 27, 1998. She stated that Banish said he was calling because there was some confusion and he wanted to explain, "where all the money was going for the car." In response, Mrs. Conomon asked, "[W]ell, are you going to allow us the three thousand dollars for the car? And he [Barrish] said "yes." Despite this conversation about which Mrs. Conomon testified, the Conomons never received the three thousand dollars they were promised for their car.
Trial Transcript at 13, Conomon v. Kirkwood Motors, Inc., Del. CCP, C.A. No. 98-11-058, James, J. (Apr. 17, 2000) (hereinafter "Tr. Trans. at ____."
Id.
Id.
On April 17, 2000, the Court of Common Pleas issued its Decision After Trial. The Court resolved all factual and legal issues in favor of the Conomons and found that the Conomons proved by a preponderance of the evidence that Kirkwood breached the agreement entered into by the parties. The Court determined that the Conomons had contracted with Kirkwood for the purchase of the 1998 van with a $3,000 trade-in value for their 1988 van, and further, "that Kirkwood failed to accurately reduce this oral agreement in the written documents presented to the Conomons for [their] signature."
Conomon v. Kirkwood Motors, Inc., Del. CCP, C.A. No. 98-11-058, James, J. (Apr. 17, 2000), Mem. Op. at 4.
The trial court rejected Kirkwood's assertion that the Statute of Frauds precludes enforcement of the oral contract, reasoning that "part performance of a parol contract within the statute of frauds removes the bar of the statute." The Court held that the Conomons were entitled to "receive the benefit of their bargain with Kirkwood" and found that the Conomons should be returned "to the position that they would have been in had the breach not occurred." Kirkwood Motors appealed, arguing that the trial court committed legal error by relying on parol evidence.
Tr. Trans. at 5.
Id.
STANDARD AND SCOPE OF REVIEW
Appeals in civil cases from the Court of Common Pleas to the Superior Court "shall be reviewed on the record and shall not be tried de novo." This Court is limited to correcting errors of law and to determining whether substantial evidence exists in the record to support the factual findings. Substantial evidence is defined as relevant evidence that a reasonable mind might accept as adequate to support a conclusion.
10 Del. C. § 1326(c); Super. Ct. Civ. R. 72(g). See also Cahill v. State, Del. Super., 411 A.2d 317 (1980). rev'd on other grnds, Del. Supr., 443 A.2d 497 (1982).
State v. Fallon, Del. Super., C.A. No. 96A-12-010, Cooch, J. (Feb. 27, 1998), Mem. Op. at 9 (citing Shanahan v. Landing, Del. Supr., 643 A.2d 1357 (1994)).
Oceanport Indus. v. Wilmington Stevedores, Del. Supr., 636 A.2d 892, 899 (1994).
DISCUSSION
Kirkwood argues in this appeal that the Court of Common Pleas erred by relying on parol evidence. It submits that the language of the contract, which was reduced to writing, was unambiguous, that it was subject to the Statute of Frauds as it was for the sale of goods over $500, and that parol evidence was therefore improperly admitted by the Court. For the reasons set forth below, this Court concludes that the trial court erred in admitting evidence at trial that contradicted the terms of the parties' written agreement.Under Delaware law, a contract for the sale of goods for the price of $500 or more is not enforceable by way of action or defense unless there is a writing signed by the party against whom enforcement is sought. The purchase of the van by the Conomons for a sum certain, and the trade of their used van as partial payment of the price, was an unambiguous agreement between the parties that was reduced to writing. Indeed, the parties do not disagree that such a document exists.
When parties to a contract reduce to writing part or all of the agreement, should a dispute arise, a party may not seek to introduce evidence of earlier negotiations in an effort to show that the terms of the agreement are other than as shown on the face of the writing. That principle, known as the parol evidence rule, thus bars a party from introducing extrinsic evidence to alter, modify, or contradict the terms of the writing. Only in limited circumstances will parol evidence be admissible, such as when the terms of the parties' agreement are ambiguous, or to show "`that the agreement was rendered invalid, void, [or] voidable by fraud . . . [or] mutual mistake. . . ."' In general, a court should not consider extrinsic evidence when presented with clear and consistent unambiguous terms of a contract.
6 Del. C. § 2-202.
See 32A C.J.S. Evidence § 1132 ("Parol evidence is inadmissible to vary, alter, or contradict a written instrument or the terms thereof where the instrument is complete, integrated, final, unambiguous, and valid."). See Carey v. Sheilburne, Inc., Del. Supr., 224 A.2d 400, 402 (1966).
James River-Pennington Inc. v. CRSS Capital Inc., Del. Ch., C.A. No. 13870, Steele, V.C. (Mar. 6, 1995).
See American Home Prods. Corp. v. Norden Labs, Inc., Del. Ch., C.A. No. 11615, Hartnett, V.C. (July 24, 1991), Mem. Op. at 9; Fort Howard Cup Corp. v. Quality Kitchen Corp., Del. Super., C.A. No. 89C-DE-34, Steele, V.C. (Aug. 17, 1992).
See American Home Prods. Corp. v. Norden Labs, Inc., Hartnett, V.C. (July 24, 1991), Mem. Op. at 9; McGrew v. Vanguard Corp., Del. Ch., C.A. No. 5743, Marvel, C. (Sept. 25, 1979).
Rodgers v. Erickson Air-Crane Co., Del. Super., C.A. No. 98C-07-014, Quillen, J. (Aug. 17, 2000), Ltr. Op. at 7 (quoting Richard A. Lord, 11 Williston on Contracts § 33:17 (4th ed. 1992); Restatement (Second) of Contracts § 214(d)).
Pellaton v. Bank of New York, Del. Supr., 592 A.2d 473, 478 (1991)("If the instrument is clear and unambiguous on it face, neither [the Delaware Supreme Court] nor the trial court may consider parol evidence "to interpret it or search for the parties' intentions. . . ." (quoting Hibbert v. Hollywood Park, Inc., Del. Supr., 457 A.2d 339, 343 (1983)).
In this case, there is no ambiguity concerning the terms of the contract. The Conomons bargained for a new van in exchange for and in consideration of their old van plus an additional sum of money. By reducing the agreement to writing, Kirkwood was demonstrating its intent to be bound by its terms. By signing the agreement, the Conomons were also indicating their intent to be bound by its terms.
Notwithstanding the trial court's finding, there was no evidence of mutual mistake by the parties, or of any fraud on the part of Kirkwood in inducing the Conomons to purchase the van. In the contract in question, the only real term in dispute is a number. The Conomons claim that the value of their car was $3,000. Kirkwood insists that it agreed to pay only $300. The Conomons do not suggest that the contract was physically altered or that a zero was added or removed. In essence, this dispute amounts to little more than a failure on the part of the buyers to read the contract before signing it and before accepting delivery of the new vehicle. Had the Conomons done so, they would have identified the discrepancy between the value set forth in the written contract that Kirkwood had allotted for their used van and the amount that they believed they had been promised. No matter how sincere or genuine was the belief held by the buyers, and no matter how convincing their testimony at trial — which the trial judge obviously believed — nevertheless, Kirkwood cannot be held responsible for the Conomons' unilateral mistake in failing to read the contract.
Indeed, the United States Supreme Court has long recognized the responsibility one has to read a contract before signing or executing it. In similar circumstances, in a case over one hundred and twenty-five years ago, the United States Supreme Court emphasized that the language of the written document is critical:
That . . . [the Conomons] did not read the . . . [contracts], if such were the fact, was [their] own fault. It will not do for a man to enter into a contract, and, when called upon to respond to its obligations, to say that he did not read it when he signed it, or did not know what it contained. If this were permitted, contracts would not be worth the paper on which they are written. But such is not the law. A contractor must stand by the words of his contract; and, if he will not read what he signs, he alone is responsible for his omission."
Pellaton v. Bank of New York, Del. Supr., 592 A.2d 473, 477 (1991) (citing Upton, Assignee v. Tribilcock, 91 U.S. 45, 50 (1875) (citations omitted)).
Similarly, the Delaware Supreme Court has emphasized the significance of the written word in enforcing contracts. In Graham v. State Farm Mut. Auto Ins. Co. for example, the Supreme Court upheld a binding arbitration clause in an automobile insurance policy over the objection of the insured. The Court expressly noted that "if the [plaintiffs] had read their policy after receiving it, they would have discovered the arbitration clause. If they believed this clause to be sufficiently objectionable, they could have cancelled the policy . . . . Nevertheless, the [plaintiffs] continued to accept coverage." The Court reasoned that "[a] party to a contract cannot silently accept its benefits and then object to its perceived disadvantages, nor can a party's failure to read a contract justify its avoidance."
Del. Supr., 565 A.2d 908 (1989).
Id. at 913.
Graham, 565 A.2d at 913. See also Pellaton v. Bank of New York, Del. Supr., 592 A.2d 473 (1991).
The plaintiffs in the case at bar signed the written document that plainly allocated only $300 for their trade-in vehicle. They accepted delivery of the new van and even questioned the salesman the following day regarding the discrepancy between the amount allocated on the written contract and what they believed they heard. Yet, they continued to drive the new 1998 van, did not rescind the transaction immediately upon discovering the misunderstanding, and did not seek to return or exchange the new car for their old one, thereby continuing to enjoy the benefits of the bargain. They then sought the additional $2700 that they believed they were owed by filing this lawsuit — almost a year later. To allow plaintiffs relief in these circumstances, irrespective of their age, disability, or lack of business acumen — in the face of a clear and unambiguous written agreement — would establish an unworkable precedent that is clearly unacceptable in the modern business world. Indeed, it is this precise situation that the Statute of Frauds was intended to prevent.
Finally, I do not agree that the doctrine of part performance is applicable to this case such as to take the contract out of the Statute of Frauds. Since the trial court apparently applied that doctrine in allowing evidence of the parties' oral negotiations, and in admitting evidence of the NADA value of the car, its ultimate decision in reliance upon such evidence was in error.
It is established law that part performance may be used to enforce an oral agreement that would otherwise be barred by the Statute of Frauds. A contract is said not to fall within the Statute "with respect to goods for which payment has been made and accepted or which have been reviewed and accepted," which is known as the doctrine of part performance. As the Court noted in In the Matter of the Real Estate of Willis Warren, "[t]o the extent there is a Statute of Frauds issue in this case, "[p]art performance may be deemed to take a contract out of the provisions of the statute of frauds on the theory that acts of performance, even if incomplete, constitute substantial evidence that a contract actually exists.'"
See Wagner v. Ware, Del. Ch., CA. No. 7683, Berger, V.C., (Feb. 7, 1985), aff'd 547 A.2d 634 (1988).
Del. Ch., C.M. No. 1204-K, Kiger, M. (Mar. 17, 1999), Report at 16 (citing Quillen v. Sayers, Del. Supr., 482 A.2d 744, 747 (1984) (confirmed at In the Matter of the Real Estate of Willis Warren, Del. Ch., C.M. No. 1204-K, Chandler, C. (Mar. 17, 1999)(ORDER), attached to the opinion). See also Durand v. Snedeker, Del. Ch., 177 A.2d 649, 651-2 (1962)("actual part performance of an oral contract is recognized as a substitute for the statute of frauds on the theory that acts of performance constitute substantial evidence of a contract").
In those cases where partial performance has been held to remove the agreement from the bar of the Statute of Frauds, the issue was one of the existence or non-existence of a contract, rather than the specific or precise terms of a contract that unquestionably existed. Under those circumstances, it would make sense to relax the parol evidence rule in order to establish that one party to the bargain had already acted or performed in reliance upon a contract, the existence of which the opposing party denies. Here, the parties do not dispute that a contract exists. Only one of its terms is in controversy. The doctrine of partial performance is simply not applicable, either logically or legally, to the facts of this case.
CONCLUSION
The written contract must control in this case if the Statute of Frauds is to have any meaningful purpose in the law. By admitting parol evidence to contradict the plain meaning of this contract, the Court of Common Pleas erred as a matter of law. Accordingly, the judgment of the Court of Common Pleas is reversed.
IT IS SO ORDERED.