Statute of Frauds - Oral Stock Purchase Agreement - Full Performance - Conversion of Corporate Property
Patel v. Shah, etc., et al., [Ms. 1180012, Sept. 30, 2019] __ So. 3d __ (Ala. 2019). In a plurality opinion, the Court (Parker, C.J.; Wise, Mendheim, and Mitchell, JJ., concur; Bolin, Shaw, Bryan, and Stewart, JJ., concur in the result; Sellers, J., dissents) affirms in part and reverses in part a summary judgment entered by the Madison Circuit Court dismissing contract and tort claims filed by Dahyalal Patel to enforce his ownership rights as a shareholder in Subway No. 43092, Inc. The circuit court dismissed Patel’s breach of contract claim, citing § 8-9-2(8), Ala. Code 1975, requiring that stock purchase agreements be in writing subscribed by the party to be charged. Ms. *4-5.
Patel argued that the statute of frauds did not apply, because he had fully performed the oral stock purchase agreement by paying to Shah the full purchase price due under the agreement. The Court agreed with Patel holding that “our precedent shows that the common-law full-performance exception applies to all contracts within the scope of § 8-9-2. Consequently, when the Legislature in 1997 added stock-purchase agreements to § 8-9-2, it did not need to expressly reference the full-performance exception.” Ms. *13-14.
The Court affirmed the summary judgment dismissing Patel’s tort claims governed by a two-year statute of limitations, because the complaint showed on its face that the two-year limitations period had expired. Ms. *16. Also, “Patel did not submit any evidence to meet” the tolling requirements of § 6-3-2. Ibid. Instead, “he merely alleged in his response to the motion for a summary judgment that his ‘claims based in fraud – fraudulent suppression, misrepresentation, and fraud – did not accrue until [he] discovered the fraud....’” Ms. *17.
With regard to Patel’s conversion claim, the Court affirmed the summary judgment on Patel’s claim that Shah converted money belonging to the corporation. Ms. *18. The Court reversed the summary judgment dismissing Patel’s claim that Shah had converted personal property of the corporation. Ms. *19.