DONALD SEAMAN v. THE DREES COMPANY
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RENDERED: October 29, 1999; 2:00 p.m.
NOT TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO.
1998-CA-001073-MR
DONALD SEAMAN
v.
APPELLANT
APPEAL FROM KENTON CIRCUIT COURT
HONORABLE WILLIAM J. WEHR, SPECIAL JUDGE
ACTION NO. 1996-CI-01371
THE DREES COMPANY
APPELLEE
OPINION
AFFIRMING
** ** ** ** **
BEFORE:
GUDGEL, CHIEF JUDGE; HUDDLESTON AND KNOPF, JUDGES.
KNOPF, JUDGE:
Donald Seaman appeals from a March 26, 1998,
summary judgment of Kenton Circuit Court denying his claim for
damages allegedly stemming from his former employer’s, The Drees
Company’s, breach of its agreement to pay him a commission.
The
trial court ruled that Seaman’s claim is barred by KRS 371.010,
the Statute of Frauds.
Seaman maintains that the trial court
misapplied the statute and that it abused its discretion by
permitting Drees to raise the Statute-of-Frauds defense by way of
an amended answer.
Finding neither error by the trial court, nor
abuse of discretion, we affirm the judgment.
Because Seaman is appealing from the trial court’s
summary judgment, this Court reviews the record “in a light most
favorable” to the party against whom judgment was rendered.
Summary judgment is improper unless “it appears that it would be
impossible for the respondent to produce evidence at the trial
warranting a judgment in his favor . . . .”
Steelvest, Inc. v.
Scansteel Service Center, Inc., Ky., 807 S.W.2d 476, 480, 483
(1991).
Viewed thus in a manner favorable to Seaman, the record
indicates that the Drees Company develops and manages real estate
on a large scale.
It buys, sells, builds, and leases both
commercial and residential properties.
In 1986 it hired Seaman,
a licensed real-estate broker, to work as a commercial marketing
manager.
In that position Seaman undertook to arrange sales of
Drees’ commercial properties.
In exchange for his efforts, he
was to receive a base salary of $25,000.00 per year, a travel
allowance, and a commission of one and one-half percent of his
gross sales.
In 1988, the company reassigned Seaman to the
position of commercial leasing agent.
Although he was still
involved in some sales, his primary duty changed from arranging
sales to arranging and servicing leases of the company’s retail
and office spaces.
His compensation remained the same, except
that his commission came to include one percent of his gross
leases, which were calculated by multiplying the monthly rent
times the number of months in the initial lease term.
Some time prior to 1992, Drees began building a
shopping center in Crescent Springs, Kentucky.
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By early 1992,
the project was far enough advanced to make securing an anchor
tenant a high priority.
Drees tried to interest Walgreen’s,
Inc., in the anchor-tenant space, but without success.
Seaman
then contacted, or renewed contact with, Hooks-SupeRx, Inc.
did that in March 1992.
He
In early July 1992, Hooks-SupeRx
executed a lease with Drees for the anchor-tenant space in the
new shopping center, and in late 1994 it occupied the premises.
In the meantime, on June 22, 1992, Drees terminated Seaman’s
employment.
Seaman maintains that he is entitled to a commission
for his work on the Hooks-SupeRx lease.
In agreeing with Drees
that Seaman is not entitled to such a commission, the trial
court, relying on Louisville Trust Co. v. Monsky, Ky. App., 444
S.W.2d 120 (1969), ruled that enforcement of the alleged contract
is barred by KRS 371.010(8), a section of the Statute of Frauds.
KRS 371.010(8) provides that
[n]o action shall be brought to charge any
person: . . . (8) Upon any promise,
agreement, or contract for any commission or
compensation for the sale or lease of any
real estate or for assisting another in the
sale or lease of any real estate . . . unless
the promise, contract, agreement,
representation, assurance, or ratification,
or some memorandum or note thereof, be in
writing and signed by the party to be charged
therewith, or by his authorized agent. It
shall not be necessary to express the
consideration in the writing, but it may be
proved when necessary or disproved by parol
or other evidence.
Seaman maintains that employment contracts such as his
are excluded from this statute because the Statute of Frauds does
not bear upon contracts for personal services.
He purports to
derive this rule from the case of Buttorff v. United Electronics
-3-
Laboratories, Inc., Ky., 459 S.W.2d 581 (1970).
In that case, a
salesman of security cameras sought damages against the
manufacturer for unpaid commissions.
Denying the claim, the
trial court applied KRS 355.2-201(1), the Uniform Commercial
Code’s provision barring enforcement of “contract[s] for the sale
of goods for the price of $500 or more” unless sufficiently
evidenced in writing.
Our highest Court reversed on the ground
that, although the salesman nominally agreed to purchase the
cameras from the manufacturer and then resell them to the
manufacturer’s customers, the agreement between salesman and
manufacturer was in fact an employment contract for the
salesman’s services, not a bona fide sale of goods, and thus it
did not come within the statute.
KRS 371.010(6) (which precludes
enforcement of inadequately memorialized contracts “for the sale
of real estate, or any lease thereof for longer than one year”)
has likewise been construed as not applying to brokerage
agreements.
Henson v. Arnold, 310 Ky. 742, 221 S.W.2d 662
(1949).
KRS 371.010(8), however, unlike the Statute-of-Fraud
provisions just cited, does apply to contracts for personal
services.
Indeed, it applies to “any” promise or agreement to
“assist[] another in the sale or lease of any real estate.”
Clearly, Seaman’s alleged employment contract with Drees was such
an agreement, and thus the trial court did not err by subjecting
it to the Statute of Frauds.
Louisville Trust Co. v. Monsky, Ky.
App., 444 S.W.2d 120 (1969); Treacy v. James, Ky., 274 S.W.2d 46
-4-
(1954); 20th Century Coal Company v. Taylor, Ky., 275 S.W.2d 72
(1954).1
Seaman also maintains that Drees waived the Statute-ofFrauds defense.
Seaman filed his complaint on July 19, 1996.
Drees answered on August 13, 1996.
That original answer included
three (3) affirmative defenses, but none based upon the Statute
of Frauds.
Not until November 1997 did Drees, in its motion for
summary judgment, assert that the Statute of Frauds bars Seaman’s
claim.
Following that motion, in March 1998, the trial court
permitted Drees to amend its answer and thereby to introduce the
new affirmative defense into its case.
Seaman correctly notes
that, without the amendment, Drees would be deemed to have waived
its right to assert the Statute of Frauds.
CR 8.03; City of
Whitesburg v. Bates, Ky., 320 S.W.2d 316 (1959).
With the
amendment, of course (supposing the amendment proper), the new
defense relates back to the original answer and so would not have
been waived.
CR 15.03.
Seaman thus maintains that the amendment
was not proper and that the trial court abused its discretion by
permitting it.
We disagree.
1
The trial court did overstate what the statute requires,
which is not that there be a written contract, but only that
there be adequate written evidence that a contract exists and
that its terms are what the plaintiff claims. Antle v. Haas,
Ky., 251 S.W.2d 290 (1952); Purtell v. Bell, 179 Ky. 356, 200
S.W. 644 (1918). No objection was made to this error, however,
nor, per force, was there any complaint that the error was
prejudicial. The error not having resulted in a patent
injustice, we do not believe that it provides a sufficient basis
for our sua sponte review. Mitchell v. Hadl, Ky., 816 S.W.2d 183
(1991); Regional Jail Authority v. Tackett, Ky., 770 S.W.2d 225
(1989).
-5-
The amendment of pleadings is governed by CR 15.01,
under which courts are admonished to grant leave to amend freely
“when justice so requires.”
Amendments that are not permitted by
right, therefore, are entrusted to the trial court’s sound
discretion.
That discretion is concerned primarily with
balancing the movant’s interest in having the case decided on the
full merits (whether of the claim or the defense) against the
non-movant’s interest in timely notice.
395 S.W.2d 591 (1965).
Stout v. Martin, Ky.,
As discussed above, the Statute of Frauds
applies to this case, and thus Drees has a compelling interest in
having the statute’s affect considered.
Seaman, on the other
hand, has not complained that he was denied a fair opportunity to
respond.
He complains rather that Drees’ initial failure to
raise the defense led him to spend time and money he otherwise
would not have spent.
Seaman’s protest is certainly
understandable, but in ordinary cases, such as this one, where
the amounts involved are not egregious, a motion to amend need
not be denied merely because resources have already been spent on
aspects of the case the amendment renders moot.
supra.
Stout v. Martin,
Estes v. Kentucky Utilities Co., 636 F.2d 1131 (6th Cir.
1980).
In sum, we are not persuaded that the trial court
abused its discretion by allowing Drees to amend its answer,
tardy as that amendment was, to assert a Statute-of-Frauds
defense.
We agree with the trial court, moreover, that the
Statute of Frauds applies to the contract Seaman alleged, and
thus precludes enforcement of it unless its existence and terms
-6-
be adequately proved by writing.
No such writing having been
proffered, the trial court did not err by granting summary
judgment for Drees.
Accordingly, we affirm the March 26, 1998, judgment of
Kenton Circuit Court.
ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
Jeffrey C. Seaman
Reminger & Reminger Co.,
L.P.A.
Cincinnati, Ohio
Stephen S. Eberly
Rodney L. Drinnon (pro hac
vice)
Vorys, Sater, Seymour and
Pease LLP
Cincinnati, Ohio
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