WDNY — Statute of Frauds: Haughton v. Cognisigt LLC

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U.S. District Court, WDNY

Statute of Frauds

Business Opportunity — Terminable at Will

Haughton v. Cognisigt LLC
13-cv-6010L
Judge Larimer

Background: The plaintiff commenced an action seeking reimbursement for services he provided the defendant. The parties never entered into a formal contract. However, in the defendant’s business plan, the director of the non-profit defendant indicated that the plaintiff would receive eight percent of profits after all other expenses. The defendants moved to dismiss the complaint as being barred by the Statute of Frauds because the contract could not be performed in one year and that it was an agreement to negotiate a business opportunity.

Ruling: The District Court denied the motion. The court held that alleged contract did not have a fixed duration or termination date. Therefore, it was terminable at will. A contract terminable at will is not subject to the Statute of Frauds. Further, the plaintiffs duties went well beyond negotiating a business opportunity.

Mark J. Moretti and Kevin Joseph Mulvehill of Phillips Lytle for the plaintiff; James A. Hobbs, Michael R. Wolford, Victoria Schmidt Gleason and Sarah Snyder Merkel of the Wolford Law Firm for the defendants