Df Activities Corporation, a Michigan Corporation v. Dorothea F. Brown

851 F.2d 920
Court of Appeals for the Seventh Circuit·Decided July 28, 1988·No. 87-2712·Published·Cited by 30 cases

Opinions

POSNER, Circuit Judge.

This appeal in a diversity breach of contract case raises an interesting question concerning the statute of frauds, in the context of a dispute over a chair of more than ordinary value. The plaintiff, DF Activities Corporation (owner of the Domino’s pizza chain), is controlled by a passionate enthusiast for the work of Frank Lloyd Wright. The defendant, Dorothy Brown, a resident of Lake Forest (a suburb of Chicago) lived for many years in a house designed by Frank Lloyd Wright — the Willits House — and became the owner of a chair that Wright had designed, the Willits Chair. This is a stark, high-backed, uncomfortable-looking chair of distinguished design that DF wanted to add to its art collection. In September and October 1986, Sarah-Ann Briggs, DF’s art director, negotiated with Dorothy Brown to buy the Wil-lits Chair. DF contends — and Mrs. Brown denies — that she agreed in a phone conversation with Briggs on November 26 to sell the chair to DF for $60,000, payable in two equal installments, the first due on December 31 and the second on March 26. On December 3 Briggs wrote Brown a letter confirming the agreement, followed shortly by a check for $30,000. Two weeks later Brown returned the letter and the check with the following handwritten note at the bottom of the letter: “Since I did not hear from you until December and I spoke with you the middle of November, I have made other arrangements for the chair. It is no longer available for sale to you.” Sometime later Brown sold the chair for $198,-000, precipitating this suit for the difference between the price at which the chair was sold and the contract price of $60,000. Brown moved under Fed.R.Civ.P. 12(b)(6) to dismiss the suit as barred by the statute of frauds in the Uniform Commercial Code. See UCC § 2-201. (The Code is, of course, in force in Illinois, and the substantive issues in this case are, all agree, governed by Illinois law.) Attached to the motion was Brown’s affidavit that she had never agreed to sell the chair to DF or its representative, Briggs. The affidavit also denied any recollection of a conversation with Briggs on November 26, and was accompanied by both a letter from Brown to Briggs dated September 20 withdrawing an offer to sell the chair and a letter from Briggs to [922] Brown dated October 29 withdrawing DF’s offer to buy the chair.

The district judge granted the motion to dismiss and dismissed the suit. DF appeals, contending that although a contract for a sale of goods at a price of $500 or more is subject to the statute of frauds, the (alleged) oral contract made on November 26 may be within the statutory exception for cases where “the party against whom enforcement is sought admits in his pleading, testimony or otherwise in court that a contract for sale was made.” UCC § 2-201(3)(b). DF does not argue that Brown’s handwritten note at the bottom of Briggs’ letter is sufficient acknowledgment of a contract to bring the case within the exemption in section 2-201(1).

At first glance DF’s case may seem quite hopeless. Far from admitting in her pleading, testimony, or otherwise in court that a contract for sale was made, Mrs. Brown denied under oath that a contract had been made. DF argues, however, that if it could depose her, maybe she would admit in her deposition that the affidavit was in error, that she had talked to Briggs on November 26, and that they had agreed to the sale of the chair on the terms contained in Briggs’ letter of confirmation to her.

There is remarkably little authority on the precise question raised by this appeal — whether a sworn denial ends the case or the plaintiff may press on, and insist on discovery. In fact we have found no authority at the appellate level, state or federal. Many cases hold, it is true, that the defendant in a suit on an oral contract apparently made unenforceable by the statute of frauds cannot block discovery aimed at extracting an admission that the contract was made, simply by moving to dismiss the suit on the basis of the statute of frauds or by denying in the answer to the complaint that a contract had been made. See, e.g., M & W Farm Service v. Callison, 285 N.W.2d 271, 275-76 (Iowa 1979). There is also contrary authority, illustrated by Boylan v. G.L. Morrow Co., 63 N.Y.2d 616, 618, 479 N.Y.S.2d 499, 500, 468 N.E.2d 681, 682 (1984). The clash of views is well discussed in Triangle Marketing, Inc. v. Action Industries, Inc., 630 F.Supp. 1578, 1581-83 (N.D.Ill.1986), which, in default of any guidance from Illinois courts, adopted the Boylan position. We need not take sides on the conflict. When there is a bare motion to dismiss, or an answer, with no evidentiary materials, the possibility remains a live one that, if asked under oath whether a contract had been made, the defendant would admit it had been. The only way to test the proposition is for the plaintiff to take the defendant’s deposition, or, if there is no discovery, to call the defendant as an adverse witness at trial. But where as in this ease the defendant swears in an affidavit that there was no contract, we see no point in keeping the lawsuit alive. Of course the defendant may blurt out an admission in a deposition, but this is hardly likely, especially since by doing so he may be admitting to having perjured himself in his affidavit. Stranger things have happened, but remote possibilities do not warrant subjecting the parties and the judiciary to proceedings almost certain to be futile.

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Df Activities Corporation, a Michigan Corporation v. Dorothea F. Brown, 851 F.2d 920 (7th Cir. 1988).

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