Case Law Summaries

Consolidated Mortgage Buying Group v. American General Finance, Inc.

• Opinion Date: March 12, 2001
• Real Property Law
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CONTRACTS; STATUTE OF FRAUDS—Where a court believes that parties only intended to be bound in writing, the portion of the Statute of Frauds that permits a party to show the existence of a contract by clear and convincing evidence does not apply.

A finance company held a foreclosure judgment on a piece of property and a buyer sought to purchase the foreclosure judgment and the underlying note and mortgage. Negotiations ensued, and discussions were had with respect to a specific purchase price. Documents were drafted, including an assignment of the note and mortgage for the proposed sale. While this was taking place, the scheduled sheriff’s sale was postponed and postponed. Eventually, and immediately prior to the sheriff’s sale that actually took place, the buyer attempted to contact the finance company’s representative to advise that funds were available and the assignment documents were acceptable. Nonetheless, despite these many attempts, these agreements were never signed by the finance company’s representatives or finalized by the parties. The property was sold by the sheriff to a third party for slightly more than the figure that had been discussed between the finance company and the disappointed buyer. The disappointed buyer filed suit arguing that the finance company breached an oral agreement to sell it the note, mortgage, and foreclosure judgment. The lower court held that the buyer and the finance company were both sophisticated organizations, “who evidently negotiate deals of this sort in the regular course of their business.” All of the offers and counteroffers were communicated in writing. The draft documents were memorialized in writing. Therefore, according to the lower court, “[t]hese are certainly not circumstances in which the parties evidenced any desire to be bound other than in writing. Thus, absent a contract signed by the party to be charged, the trial judge properly concluded that no ‘clear and convincing evidence’ of a finalized agreement between the parties existed.” Indeed, the unsuccessful efforts of the buyer to contact the finance company’s representative during the days immediately proceeding the sheriff’s sale to finalize the draft documents further supported the court’s determination. As a result, the portion of the Statute of Frauds that permits parties to show the existence of an oral agreement by “clear and convincing evidence” was inapplicable because the Court believed that the parties only intended to be bound in writing.

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