SS-II, LLC v. BRIDGE STREET ASSOCIATES, SC 18271

Judicial District of Middlesex

     Contracts; Whether Partial Performance of a Contract Removes it from the Purview of the Statute of Frauds; Whether Parties' Efforts to Arrive at an  "Adjusted" Purchase Price Constituted Part Performance of the Contract.  In May, 2003, the plaintiff entered into an agreement to lease the defendant's commercial property in Haddam.  The property was environmentally contaminated.  The lease contained an option to purchase clause, which provided that the purchase price for the property would be $1.2 million, "adjusted to take into account environmental conditions existing at the leased premises, which adjustment shall be mutually determined by Lessor and Lessee."  In September, 2007, the plaintiff notified the defendant of its intention to exercise its option to purchase the property.  The defendant, however, refused to proceed with the sale.  Subsequently, the plaintiff brought this action seeking specific performance of the option to purchase provision.  The defendant moved for summary judgment, claiming that the provision violated the statute of frauds, General Statutes § 52-550, because it did not provide a definite purchase price for the property.  The plaintiff objected to the motion, arguing that the defendant was estopped from invoking the statute of frauds defense based on the parties' part performance of the option to purchase provision.  More specifically, the plaintiff claimed that a "collaborative environmental investigation" of the property undertaken by the parties in an attempt to arrive at an adjusted purchase price for the property constituted part performance of the option to purchase provision, thereby removing the matter from the purview of the statute of frauds.  Noting that the purchase price is an essential element of a contract for the sale of real estate, the trial court granted summary judgment for the defendant, ruling that because the option to purchase provision did not provide a fixed purchase price, but rather called for the purchase price to be adjusted and determined at a later date, it violated the statute of frauds.  The court also concluded that "the partial performance, if any, [was] incapable of legally rescuing [the option to purchase  provision]" from the statute of frauds.  On appeal, the plaintiff claims that, contrary to the trial court's determination, it is well established that partial performance of a contract removes it from the scope of the statute of frauds.  The plaintiff  argues that the defendant was not entitled to summary judgment because a genuine issue of material fact existed regarding whether the actions of the parties, including their "collaborative environmental investigation," constituted part performance of the option to purchase provision.  In response, the defendant maintains that, while partial performance may be used to prove the existence of an oral agreement and thereby overcome a statute of frauds defense, it cannot be used to prove or create an agreement that never existed in the first place.  Here, the defendant claims that there was never a meeting of the minds between the parties regarding the purchase price of the property.