As business is increasingly conducted through a variety of electronic communication devices, courts must make determinations regarding the evidentiary weight that should be placed upon records of those communications. The New York Supreme Court recently encountered this issue in Esther Creative Group LLC v. Gabel, in which it held that a collection of writings that included emails, summary financial statements, and checks “may well satisfy the [Statute of Frauds] writing requirement.” 2009 WL 3490942, at *3 (N.Y. Sup. Ct. Oct. 7, 2009).
In 2008, Esther Creative Group, a management company involved in the music industry, commenced an action against the members of a band called Against Me! alleging breach of contract and seeking recovery based on quantum meruit for the value of its services. According to Esther, it was contractually entitled to fifteen percent of the band’s income. Id. at *1. In support of its claim, Plaintiffs produced a variety of written evidence, including (1) emails between Tom Sarig, the principal of Esther, and Defendants, in which Sarig refers to Defendants as “part of the team,” and (2) financial statements, prepared by Defendants, which indicated the band’s income and the amount of commission the band owed to Esther based upon a calculation of fifteen percent of its income. Id. at *2. Defendants moved to dismiss the claim on the grounds that it was barred under the New York Statute of Frauds. Id.
The Court agreed that the Statute of Frauds applied to the agreement at issue. However, it refused to dismiss the claim, finding that Esther could potentially satisfy the writing requirement by producing a set of writings, including emails, that taken together would demonstrate the existence of an agreement sufficient to satisfy the statute. The Court stated, “[t]he summary statements, emails and checks issued by Defendants considered together in addition to other evidence that may be uncovered through discovery may well satisfy the statute’s writing requirement.” Id. at *3.
In making its determination, the Court cited a First Department case which held that memoranda, i.e. writing sufficient to meet the New York Statute of Frauds, “need not be in one document, but may be pieced together from separate writings if they can be shown to be related to the transaction.” Nausch v. AON Corp., 2 A.D.3d 101, 102 (1st Dep’t 2003). Here, the Court refined that holding by indicating that emails, specifically, may constitute some of those “separate writings” that evidence the existence of an agreement.
Where seeking to uphold a contract that falls within the Statute of Frauds’ ambit, counsel may find opinions such as Esther Creative Group helpful to argue the appropriateness of reliance on and the use of emails or other forms of electronic communication to establish the existence of a writing.