William J. Jenack Estate Appraisers & Auctioneers, Inc. v. Rabizadeh
22 N.Y.3d 470, 5 N.E.3d 976 (2013)
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Rule of Law:
Under New York's Statute of Frauds for public auctions, multiple related documents may be pieced together to create a memorandum of sale that satisfies the writing requirement. The statutory requirement for 'the name of the person on whose account the sale was made' is satisfied by the name of the auctioneer acting as the seller's agent, and does not require the disclosure of the seller's actual identity.
Facts:
- William J. Jenack Estate Appraisers and Auctioneers, Inc. (Jenack) is an auction house that accepts in-person, online, and absentee telephone bids.
- To bid by telephone, Jenack required prospective bidders to submit a signed 'Absentee Bid Form' containing their personal and payment information, and agreeing to the terms of sale.
- Several days before a September 21, 2008 auction, Albert Rabizadeh submitted a signed Absentee Bid Form to Jenack, listing the items he intended to bid on, including 'Item 193', a Russian silver box.
- Upon receiving the form, Jenack assigned Rabizadeh bidder number 305.
- During the auction, Rabizadeh participated by telephone and placed a winning bid of $400,000 for Item 193.
- Jenack's chief clerk recorded the sale on a 'clerking sheet,' noting the lot number, a description of the item, Rabizadeh's bidder number (305), and the winning price ($400,000).
- Jenack sent Rabizadeh an invoice for the purchase, which Rabizadeh failed to pay.
Procedural Posture:
- Jenack commenced an action for breach of contract against Rabizadeh in the New York Supreme Court, the state's trial court.
- Rabizadeh moved for summary judgment, arguing the claim was barred by the Statute of Frauds.
- Jenack cross-moved for summary judgment on liability.
- The Supreme Court denied Rabizadeh's motion and granted summary judgment on liability to Jenack.
- Following a non-jury trial on damages, the Supreme Court entered a judgment in favor of Jenack.
- Rabizadeh, as appellant, appealed to the Appellate Division, Second Department.
- The Appellate Division reversed the trial court's judgment and dismissed Jenack's complaint.
- The New York Court of Appeals, the state's highest court, granted Jenack leave to appeal.
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Issue:
Does the combination of a signed absentee bidder form and an auctioneer's clerking sheet satisfy the writing requirement of New York's Statute of Frauds, General Obligations Law § 5-701(a)(6), even if the seller's name is not disclosed?
Opinions:
Majority - Rivera, J.
Yes. A combination of a signed absentee bidder form and an auctioneer's clerking sheet can satisfy the Statute of Frauds. The court reasoned that the statutorily required writing does not need to be a single document; related writings can be pieced together. Here, Rabizadeh's signed absentee bidder form provided his name as the buyer, and the clerking sheet provided the price and nature of the goods. While the clerking sheet alone was insufficient because it used numbers instead of names, when combined with the bidder form, it identified the buyer. Citing long-standing precedent (Hicks v Whitmore), the court held that the statute's requirement for 'the name of the person on whose account the sale was made' is satisfied by the name of the auctioneer (Jenack), who acts as the seller's agent. This interpretation protects the common and legitimate auction practice of keeping a seller's identity confidential.
Analysis:
This decision clarifies the application of the Statute of Frauds to modern auction practices, particularly those involving remote bidding and seller anonymity. By allowing multiple documents to be combined to satisfy the statute's requirements, the court adapted a traditional rule to contemporary commercial realities. The ruling reinforces the principle that the Statute of Frauds should not be used as a tool to evade just obligations, and provides legal security for the widely-used practice of consignor confidentiality in the auction industry. Future cases will rely on this precedent to validate contracts formed through a combination of bid forms, sale records, and other related documents.
