ROSENFELD v. ZERNECK

Citation Codes

Equivalent Citations

citation codes

Docket Number

24143

Attorney(S)

Harold M. Hoffman, New York City, for defendant. Esanu, Katsky, Korins Siger, LLP, New York City, for plaintiffs.

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Smart Summary

Factual and Procedural Background

Plaintiffs sought specific performance of a contract for the sale of defendant's home based on e-mail communications. Plaintiffs made a $3,500,000 all-cash offer after viewing the property and followed up with an e-mail confirming their offer subject to normal inspections. Defendant responded by e-mail confirming acceptance of a $3,525,000 offer with no contingencies and a closing date, but indicated that a formal contract would be prepared after inspections. Defendant moved for summary judgment dismissing the complaint on the ground that the e-mails did not constitute a binding contract as they lacked a vital term and did not satisfy the statute of frauds.

Legal Issues Presented

Whether an e-mail with a typewritten signature satisfies New York’s general statute of frauds requirement for a writing subscribed by the party to be charged.
Whether the e-mail communications between the parties constituted a binding contract for the sale of real property.

Arguments of the Parties

Defendant's Arguments

The e-mail sent by defendant was preliminary and not intended as a final agreement.
The e-mail did not satisfy the statute of frauds because it lacked essential terms and required further discussion.
The signature on the e-mail is valid under the statute of frauds.

Plaintiffs' Arguments

This information was not available in the provided opinion.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Parma Tile Mosaic Marble Co. v. Estate of Short, 87 NY2d 524 (1996)	Determined that an automatic fax signature imprint does not satisfy the statute of frauds because it lacks the sender’s specific intent to authenticate the document.	Distinguished from the present case because the defendant’s e-mail contained a typewritten signature evidencing intent to authenticate, thus satisfying the statute of frauds.
Page v. Muze, Inc., 270 AD2d 401 (2d Dept 2000)	Held that an e-mail memorandum with a typewritten signature did not satisfy the subscription requirement of the former UCC statute of frauds provision.	Not controlling here because the general statute of frauds (General Obligations Law § 5-701[b][4]) now accommodates electronic signatures, unlike the repealed UCC provision.
Gibraltar Estates v. U.S. Bank, 5 AD3d 728 (2d Dept 2004)	Established that omission of essential contract terms, such as the deposit amount, prevents formation of a binding contract.	Applied to find the e-mails lacked essential terms (e.g., contract deposit, treatment of existing commercial lease), precluding a binding agreement.

Court's Reasoning and Analysis

The court first addressed whether the defendant’s typed name at the bottom of the e-mail satisfied the statute of frauds’ subscription requirement. Drawing on Parma Tile, the court explained that unlike an automatic fax imprint, the defendant’s intentional typing of his name demonstrated an intent to authenticate the writing, thus meeting the statute’s requirements under the amended General Obligations Law § 5-701(b)(4). The court distinguished this from Page v. Muze, noting that the latter applied a now-repealed UCC provision that did not accommodate electronic signatures, whereas the current statute does.

Next, the court analyzed the substance of the e-mail communications. Although the e-mails identified the parties, property, price, and closing date, they omitted essential terms such as the contract deposit amount and the handling of an existing commercial lease on the property. This lack of vital terms meant the parties did not reach a meeting of the minds necessary for contract formation. Consequently, the court granted defendant’s motion for summary judgment, dismissing the complaint and cancelling the notice of pendency.

Holding and Implications

The court held that the defendant’s e-mail satisfied the statute of frauds’ subscription requirement but did not constitute a binding contract due to the absence of essential terms.

As a direct consequence, the defendant’s motion for summary judgment dismissing the complaint was granted, and the notice of pendency was cancelled. The decision clarifies that while electronically signed e-mails can satisfy the statute of frauds in New York, all essential contract terms must be present to form a binding real estate contract. No new precedent beyond the application of the amended statute of frauds to e-mail signatures was established.

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TOMMY ROSENFELD et al., Plaintiffs, v. MICHAEL ZERNECK, Also Known as MICHAEL VON ZERNECK, Defendant.

OPINION OF THE COURT

HERBERT KRAMER, J.Page 194

A great deal can be accomplished over the Internet: A few well placed keystrokes can send us to exotic places, requisition goods and services, find employment and educate us. Is it possible to make a contract for the sale of real property via e-mail?

Defendant moves for summary judgment dismissing a complaint that seeks specific performance of the contract for the sale of the defendant's home. Defendant argues that the e-mail he sent was merely preliminary and was never intended as the consummate agreement which, he argues, required further discussion. Accordingly, defendant claims that this e-mail did not satisfy the statute of frauds. Although as will be discussed below, the "signature" on the e-mail is valid under our general statute of frauds, the e-mail messages that were exchanged in the instant matter did not create a binding agreement as they lacked a vital term.

After viewing the property, plaintiffs informed the defendant that they "loved the house" and offered a $3,500,000 cash deal. They followed up with an e-mail to the defendant.

"Dear Michael and Liz,
"I am glad I had an opportunity to speak with Michael last night. Debbie, Zachary, Noah and I loved your home and its warmth and wish to confirm our firm $3,500,000 all cash offer, subject to normal property inspections.
"Moreover, we see no problem with your desire to close about July 1, 2004.
"This is our best offer and, as you know, it is net of any broker fees.
"We look forward to hearing from you at your earliest convenience.
"Best Regards,
"Tom Debbie Rosenfeld."
(Defendant's name, address and telephone number were typed in.)

Shortly thereafter, defendant and plaintiff had a telephone conversation. Defendant followed up with the following e-mail that is at the heart of this controversy:

The subject line recites: "18 Prospect Park West." It is followed by a "date" line and "from" and "to" lines which recite the parties' e-mail addresses and a "cc" line.

"Dear Tom Debbie,

"This note is to confirm yesterday's telephone conversation in which I accepted your all cash offer of $3,525,000 for 18 PPW, with no contingencies for financing or sale of your present residence, to close no later than July 1, 2004.

"As we discussed, please contact Liz early next week to schedule your inspection. My attorney will prepare a contract of sale, to be signed after your engineer's report. (What is the contact information for your attorney? Will you be making the purchase jointly? What is your present address?)

"We look forward to continuing cordial relations regarding the sale of this very special home to you and your family.

"With kind regards,

"Michael."

Thereafter, plaintiffs e-mailed the defendant providing him with the information he requested.

A threshold issue of apparent first impression in this state, which was not raised by either party, is whether the typed signature at the bottom of defendant's e-mail satisfies the requirement that a "writing be subscribed under New York State's general Statute of Frauds (General Obligations Law § 5-701)." ( Parma Tile Mosaic Marble Co. v. Estate of Short, 87 NY2d 524, 526.) In Parma Tile, the Court of Appeals decided that "the automatic imprinting, by a fax machine, of the sender's name at the top of each page transmitted" ( id. at 526) did not "constitute a signing authenticating the contents of the document for Statute of Frauds purposes" because the fax machine "after being programmed to do so, automatically imprinted [the sender's name] on every page transmitted, without regard to the applicability of the Statute of Frauds to a particular document." ( Id. at 528.) Nor does the intentional programming of the fax machine suffice to demonstrate the sender's "intention to authenticate every document subsequently faxed." ( Id. at 528.)

The fax transmission in Parma did not satisfy the statute of frauds because there was never any demonstration of the sender's specific intent to authenticate it and not because it was electronically transmitted. Electronic transmissions are not, in and of themselves, incapable of subscription and indeed as the Parma court itself observed, the statute of frauds was specifically amended as of September 1994 to say just this. ( Id. at 528 n 1.)

"[T]he Legislature amended section 5-701 of the General Obligations Law to provide that: `the tangible written text produced by telex, telefacsimile, computer retrieval or other process by which electronic signals are transmitted by telephone or otherwise shall constitute a writing and any symbol executed or adopted by a party with the present intention to authenticate a writing shall constitute a signing' (General Obligations Law § 5-701 [b] [4])." ( Id. at 528 n 1.)

Here, in contradistinction to the fax machine imprint in Parma, we have the defendant's typewritten name upon an e-mail which the defendant acknowledges that he sent. This court holds that the sender's act of typing his name at the bottom of the e-mail manifested his intention to authenticate this transmission for statute of frauds purposes and the copy of the e-mail in question submitted as evidence by the defendant constitutes a sufficient demonstration of same.

In so holding, this court is aware of a decision in the Second Department which holds that an e-mail memorandum with a typewritten signature does not satisfy the subscription requirement of the former statute of frauds provision contained in the Uniform Commercial Code (UCC 8-319, as repealed by L 1997, ch 566, § 5; Page v. Muze, Inc., 270 AD2d 401 [2d Dept 2000]). The rationale for that decision may lie in the fact that the UCC provision, unlike the general statute of frauds (General Obligations Law § 5-701 [b] [4]) discussed infra, did not make any accommodation for the realities of doing business in our electronic age. Indeed, it is for that very reason that the UCC provision was repealed. ( See UCC 8-113, Comment.) Indeed, if the general statute of frauds, which controls in our case, had not been amended to provide for the subscription of electronically transmitted memoranda, we would be constrained by this decision to hold that this e-mail did not satisfy the subscription requirements. However, under the General Obligations Law as amended it does and we so hold.

This court has reviewed the briefs on appeal and the record in Page. The e-mail in Page was very similar in form to the e-mail at bar, containing a typewritten signature below the body of the letter. Appellant argued that the general statute of frauds governed. Disagreeing, the Page court held that the former UCC statute of frauds controlled and under that provision the subscription requirement was not deemed to have been satisfied.

As to the content of the e-mail: Although this e-mail identified the parties and the property and stated the price, it failed to lay out all of the essential terms of the agreement since it did not set forth any understanding as to the amount of the contract deposit ( Gibraltar Estates v. U.S. Bank, 5 AD3d 728 [2d Dept 2004]). Nor did it indicate how the parties intended to treat the commercial lease then encumbering the premises.

Accordingly, this court finds that the parties did not have a meeting of the minds as to the terms of the sale of this premises. The defendant's motion is granted. The complaint is dismissed and the notice of pendency is cancelled.