Rudinsky v. Harris (CA1 11/23/12)

This contract case says a little about the Statute of Frauds and a bit about attorney’s fees. But its main feature, to us, is an unfortunate footnote.

The parties were real estate agents. Rudinsky contracted, in return for a split of commission, to refer buyers to Harris’ outfit (called “Green Light”), which represented developers. This was in writing. But she alleged an oral agreement that Green Light could never, without compensating her, deal directly with any buyers she referred to it nor with any buyers those buyers referred it (“second-generation” buyers), even 10-20 years in the future. Harris moved for summary judgment on the Statute of Frauds, which the court granted. It then awarded fees and entered a Rule 54(b) judgment (Rudinsky’s Complaint also sued for defamation because of some things Harris said about her in connection with her deals with Green Light). The Court of Appeals affirms.

Rudinsky argued on appeal that the contract was capable of performance within one year because she might die that soon. She had an Arizona for this but it discussed the promisor’s death, not the promisee’s; the court says that it doesn’t apply because “there is no provision in the contract allowing Green Light to terminate the agreement within the year.” Rudinsky also argued that there might never be any second-generation buyers; Green Light’s alleged obligations as to them, though, would continue even if they took forever to exist.

As to fees, Rudinsky argued that they shouldn’t be awarded until her defamation claim, with which her contract claim was “interwoven,” was decided. But cases about the interweaving of tort and contract claims mean that you can get attorneys fees for the former, not that you can’t get them for the latter. And the point of the Rule 54(b) certification is that Green Light is entitled to relief now.

But the court includes a footnote implying that Rule 54(b) language shouldn’t have been granted. Perhaps that wasn’t its intent; if the court thinks 54(b) certification incorrect then the proper course is to remand for lack of jurisdiction. The footnote’s effect, though, is to suggest that “interweaving” is, after all, a reason not to certify. Yet in this case certification was, from what this opinion tells us, correct. The causes of action were separate. The opinion doesn’t explain why the outcome of one depended in any significant way on the outcome of the other. That some facts involved in one may also have been involved in the other is not a reason to deny 54(b) language.

(link to opinion)