BARUFFI v. MERIT CAPITAL MGMT., 51274-9-I (Wash.App. 5-12-2003)

No. 51274-9-IThe Court of Appeals of Washington, Division One.
Filed: May 12, 2003 DO NOT CITE. SEE RAP 10.4(h). UNPUBLISHED OPINION

Appeal from Superior Court of King County Docket No: 01-2-13735-2 Judgment or order under review Date filed: 10/21/2002

Counsel for Appellant(s), Jon Howard Rosen, The Rosen Law Firm, 705 2nd Ave Ste 1200, Seattle, WA 98104-1798.

Counsel for Respondent(s), Joshua J. Preece, Corr Cronin LLP, 1001 4th Ave Ste 3900, Seattle, WA 98154-1051.

Jon Howard Rosen, The Rosen Law Firm, 705 2nd Ave Ste 1200, Seattle, WA 98104-1798.

PER CURIAM.

A March 1998 employment agreement for payment of a bonus at the end of 1999 cannot be performed within one year and therefore must be reduced to writing to satisfy the statute of frauds. Because Anthony Baruffi could produce no writing signed by his employer setting forth the terms of his bonus agreement, the agreement is void and Baruffi may not recover for breach. We accordingly affirm the trial court’s order granting summary judgment. Devin Wate, managing partner of Merit Capital Corporation (MCM), hired Anthony Baruffi in March 1998 to manage an investment fund. Although Wate and Baruffi met and discussed the potential for compensation based on the fund’s performance, the terms they finally settled on were not reduced to writing in an employment contract. Baruffi began work in May, understanding his hiring was subject to a probationary period. The fund performed poorly in 1998, and MCM discharged Baruffi in the summer of 1999.

In January 2000, Baruffi learned that the fund had performed very well by the 1999-year’s end. He demanded a bonus based on the fund’s performance. MCM refused. Baruffi filed suit against MCM and Wate, alleging that his employment agreement entitled him to more than $220,000 based on the fund’s performance. MCM denied making such an agreement, but moved for summary judgment, arguing that even if there were an agreement, it failed to satisfy the statute of frauds and could not be enforced. The trial court granted summary judgment. .

We review the trial court’s order de novo, considering all facts and reasonable inferences therefrom in the light most favorable to Baruffi.[1] Baruffi first contends that the agreement to pay him a bonus at the end of 1999 did not come within the scope of the statute of frauds because the agreement was of indefinite duration and his employment was terminable at will. We disagree.

The statute of frauds provides that ‘[e]very agreement that by its terms is not to be performed in one year from the making thereof’ is void unless the agreement is in writing and signed by the party to be charged therewith.[2] In French v. Sabey Corp.,[3] our Supreme Court reaffirmed the long-standing rule that a party’s option to end a contract within a year does not remove the contract from operation of the statute if, independent of the exercise of such a power, the agreement cannot be performed within a year. The Supreme Court accordingly rejected an employee’s argument that his contract was removed from the reach of the statute because his employment was terminable at the employer’s will.[4]
Baruffi cites cases holding that the statute of frauds does not control when performance is possible within a year, even if it is highly unlikely and actual performance takes more than a year.[5] These cases, however, are inapposite. It was not merely unlikely that Baruffi’s bonus agreement could be performed within a year. It was impossible. Regardless of MCM’s power to terminate Baruffi’s employment at will, MCM’s contractual obligation to pay Baruffi a bonus at the end of 1999 could not be performed within a year of the March 1998 agreement. French v. Sabey controls. Baruffi’s bonus agreement is void for violation of the statute of frauds. Baruffi argues alternatively that a letter Wate sent to Baruffi’s banker satisfies the statute’s writing requirement. At Baruffi’s request Wate sent a memorandum confirming Baruffi’s employment to a prospective lender in April 1998. The memorandum contains the representation that Baruffi would receive a fixed salary and an `incentive bonus tied to the fund[‘]s performance.’[6] To satisfy the statute of frauds, however, a memorandum must not only be signed by the party to be charged, it must also be complete in itself, making recourse to parol evidence unnecessary to establish any material element.[7] In other words, the writing is insufficient if elements of the agreement must be found outside the writing.[8] Wate’s memorandum does not identify the length of Baruffi’s employment agreement, the timing of any bonus payment or the means by which the bonus would be calculated. It is insufficient to satisfy the statute of frauds.[9] As a second alternative, Baruffi cites the rule that multiple writings may satisfy the writing requirement[10] and argues that terms missing from Wate’s letter appear in other documents in the record. This argument also fails. Baruffi relies on minutes of MCM’s 1998 annual meeting, a memorandum regarding Baruffi’s duties prepared by Wate’s wife, a letter Baruffi testified he sent to Wate in March 1998[11] and Baruffi’s personal notes. But to satisfy the statute of frauds by multiple writings, it must appear “that the writings are so connected by internal reference in the signed memorandum to the unsigned one, that they may be said to constitute one paper relating to the contract.”[12] Wate’s memorandum to Baruffi’s bank contains no reference to the other writings Baruffi discusses. The various documents cannot be said to constitute one paper.

Finally, Baruffi argues that the strong policy in favor of full payment of wages expressed in the wage withholding statute[13] requires a narrow construction of the statute of frauds in this case. But we cannot use the guise of statutory construction to create the exception to the statute that would be necessary to give Baruffi relief in this case.[14]
Affirmed.

GROSSE and BAKER, JJ., concur.