662 S.E.2d 711
In determining whether injustice can be avoided only by enforcement
of the promise, the following circumstances are significant: (a) the availability and adequacy
of other remedies, particularly cancellation and restitution; (b) the definite and substantial
character of the action or forbearance in relation to the remedy sought; (c) the extent to which
the action or forbearance corroborates evidence of the making and terms of the promise, or
the making and terms are otherwise established by clear and convincing evidence; (d) the
reasonableness of the action or forbearance; (e) the extent to which the action or forbearance
was foreseeable by the promisor. Syllabus point 3, Everett v. Brown, 174 W. Va. 35, 321
S.E.2d 685 (1984).
5. Before a court may dismiss an action under Rule 41(b), notice and an opportunity to be heard must be given to all parties of record. Syllabus point 2, in part, Dimon v. Mansy, 198 W. Va. 40, 479 S.E.2d 339 (1996).
Johnnie Hoover, appellant/plaintiff below, appeals from an order of the Circuit Court of Kanawha County that dismissed his complaint against Peter K. Moran, appellee/defendant below. The circuit court dismissed the action under Rule 12(b)(6) of the West Virginia Rules of Civil Procedure for failure to state a claim against Mr. Moran in his individual capacity. Here, Mr. Hoover contends that his complaint adequately stated a cause of action against Mr. Moran in his individual capacity. In a cross-appeal filed by Mr. Moran, he contends that the circuit court committed error in reinstating Mr. Hoover's complaint after it was initially dismissed, under Rule 41(b) of the West Virginia Rules of Civil Procedure, for inactivity for more than one year. After a careful review of the record, briefs, and consideration of the arguments by the parties, we affirm the trial court's order reinstating the case under Rule 41(b), but reverse the order dismissing the case under Rule 12(b)(6).
A few days before said [$20,000.00] loan was due,
defendant Peter Moran in his capacity as President of Princess
Beverly Coal Company requested an extension of time to repay
the loan. The consideration for this extension and late
repayment was a promise made by Peter Moran that 10% of the
profits would be given to the plaintiff if the company was ever
We do not view the above allegations with the clarity that Mr. Moran proposes. At best, the above allegations are ambiguous. True, the first sentence clearly alleges that Mr. Moran was acting in his official capacity when he requested an extension of time to repay the loan. However, the second sentence is less clear. The second sentence does not state whether Mr. Moran was acting in his official or individual capacity when he allegedly promised to give Mr. Hoover 10% of the profits from the sale of the Coal Company. In other words, we must look to other allegations in the complaint to see in what capacity Mr. Moran may have acted in making the promise.
The following allegations found in the complaint shed light on whether or not Mr. Moran was being sued in his individual capacity.
On February 13, 1997, defendant Peter Moran, in his
own behalf and as President of Princess Beverly Coal Company,
entered into negotiations with plaintiff to satisfy him with his
claim of his equitable interest in the Coal Company, which offer
was never finalized or reduced to writing and signed by the
Defendants breached their agreement with the plaintiff, made in 1985, as aforesaid, by failing to account to the plaintiff the terms of the sale of Princess Beverly Coal Company, and to render an accounting to him as to his share of the sale proceeds.
As a direct and proximate result of defendants' breach of their agreement to the plaintiff, plaintiff has been damaged in an unspecified amount, which breach occurred on or about February 18, 1999 and has continued thereafter.
WHEREFORE, plaintiff prays that he be awarded judgment against defendants jointly and severally[.]
By viewing the above allegations found in the complaint in the light most favorable to Mr. Hoover, and by drawing all reasonable inferences in his favor, we believe that the allegations sufficiently placed Mr. Moran on notice that he was being sued in his individual capacity. See Loggins v. Franklin County, Ohio, 218 Fed. Appx. 466, 470 (6th Cir. 2007) ([Defendant] was named in [plaintiff's] third amended complaint 'in his official capacity as Chief Deputy, Corrections Division with the Franklin County Sheriff's Department.' [Plaintiff] alleged [defendant] was acting in this capacity 'at all times relevant to this Complaint.' Despite this language, the district court construed the language in the complaint as sufficient to put [defendant] on notice in his individual capacity.). Consequently, we find that the complaint does in fact, set out a cause of action against Mr. Moran in his individual capacity. (See footnote 6)
Mr. Moran further contends that should the complaint be found to set out a
cause of action against him personally, the action is barred because the agreement was
required to be in writing by the provisions of the statute of frauds contained in W. Va. Code
§ 46-8-319 (1979) (Repl. Vol. 1993) (See footnote 7) of the Uniform Commercial Code_Investment
Securities. (See footnote 8) Although the circuit court did not address the issue of the statute of frauds in its
dismissal order, Mr. Moran, in fact, raised and briefed the issue before the circuit court.
Further, our cases have made clear that it is permissible for us to affirm the granting of
[dismissal] on bases different or grounds other than those relied upon by the circuit court. Gentry v. Mangum, 195 W. Va. 512, 519, 466 S.E.2d 171, 178 (1995). See Subcarrier
Communications, Inc. v. Nield, 218 W. Va. 292, 297, 624 S.E.2d 729, 734 (2005); Aluise v.
Nationwide Mut. Fire Ins. Co., 218 W. Va. 498, 504, 625 S.E.2d 260, 266 (2005).
The relevant text of W. Va. Code § 46-8-319 set out the following limitations on the sale of investment securities:
A contract for the sale of securities is not enforceable by
way of action or defense unless:
(a) there is some writing signed by the party against whom enforcement is sought or by his authorized agent or broker sufficient to indicate that a contract has been made for sale of a stated quantity of described securities at a defined or stated price. (See footnote 9) (Footnote added). See also Syl. pt. 1, Quinn v. Beverages of West Virginia, Inc., 159 W. Va. 571, 224 S.E.2d 894 (1976) (An option to purchase corporate stock constitutes a contract for the sale of securities, as contemplated by W. Va. Code, 1931, 46-8-319, as amended, and if the requirements of that code provision are not met, such contract falls within the Statute of Frauds set forth in the above code section and is unenforceable.). Assuming, without deciding, that the writing requirement of W. Va. Code § 46-8-319 was applicable to the facts in the present case, we agree with Mr. Hoover that the doctrine of promissory estoppel precludes dismissal of his case under that statute.
This Court set out the principles governing the doctrine of promissory estoppel in Everett v. Brown, 174 W. Va. 35, 321 S.E.2d 685 (1984), as follows:
A promise which the promisor should reasonably expect
to induce action or forbearance on the part of the promisee or a
third person and which does induce the action or forbearance is
enforceable notwithstanding the Statute of Frauds if injustice
can be avoided only by enforcement of the promise. The remedy
granted for breach is to be limited as justice requires.
In determining whether injustice can be avoided only by enforcement of the promise, the following circumstances are significant: (a) the availability and adequacy of other remedies, particularly cancellation and restitution; (b) the definite and substantial character of the action or forbearance in relation to the remedy sought; (c) the extent to which the action or forbearance corroborates evidence of the making and terms of the promise, or the making and terms are otherwise established by clear and convincing evidence; (d) the reasonableness of the action or forbearance; (e) the extent to which the action or forbearance was foreseeable by the promisor.
Syl. pt. 3, Everett, id. Insofar as we are only reviewing the body of the complaint in this
case, we find that there are adequate allegations in the complaint to satisfy the promissory
estoppel requirements of Everett.
The complaint in this case alleges that Mr. Hoover agreed to extend the deadline for the repayment of $20,000.00 that he loaned to the Coal Company, in exchange for a promise by Mr. Moran of giving him 10% of the profits from the sale of the Coal Company. After this agreement was made, Mr. Hoover alleged in the complaint that Mr. Moran continued borrowing money from him, on behalf of the Coal Company, that was in excess of $31,000.00. Mr. Hoover also asserted that he continued to make his personal assets available to Mr. Moran because of the promise to pay him 10% of the profits from the sale of the Coal Company. The complaint further alleges that even though Mr. Hoover fulfilled his part of the agreement with Mr. Moran, and continued to provide Mr. Moran with needed funds for the Coal Company, when the Coal Company was sold Mr. Moran refused to pay him the promised 10% of the profits from the sale of the Coal Company. To the extent that Mr. Hoover's allegations are true, an injustice would occur were we to allow the statute of frauds contained in W. Va. Code § 46-8-319 to defeat his cause of action. We believe that under the doctrine of promissory estoppel, Mr. Hoover should have his day in court notwithstanding the possible application of the statute of frauds writing requirement of W. Va. Code § 46-8-319. Indeed, this Court has observed that the underlying purpose of a statute of frauds is to prevent the fraudulent enforcement of unmade contracts, not the legitimate enforcement of contracts that were in fact made. Timberlake v. Heflin, 180 W. Va. 644, 648, 379 S.E.2d 149, 153 (1989) (citation omitted). See also Fry Racing Enters., Inc. v. Chapman, 201 W. Va. 391, 395, 497 S.E.2d 541, 545 (1997) ('It is well settled, that courts of equity will notwithstanding the statute of frauds enforce oral contracts . . . which have been partially performed[.]' (quoting Syl. pt. 2, Kimmins v. Oldham, 27 W. Va. 258 (1885))); Bennett v. Charles Corp., 159 W. Va. 705, 711, 226 S.E.2d 559, 563 (1976) ([A] defendant may be estopped to assert the Statute of Frauds in defense of an action for enforcement where certain limited circumstances exist. Those limited situations include fraud and part performance.); Syl. pt. 1, Ross v. Midelburg, 129 W. Va. 851, 42 S.E.2d 185 (1947) (A party to an oral contract . . ., to which the statute of frauds is applicable, may, by conduct on his part, be estopped in equity to assert the statute of frauds
as a defense to such contract.).
To begin, this Court held in Syllabus point 2 of Dimon v. Mansy, 198 W. Va.
40, 479 S.E.2d 339 (1996), in part, that [b]efore a court may dismiss an action under Rule
41(b), notice and an opportunity to be heard must be given to all parties of record. We have
further held that [u]nder [Rule] 41(b), in order to reinstate a cause of action which has been
dismissed . . ., the plaintiff must move for reinstatement within three terms of entry of the
dismissal order and make a showing of good cause which adequately excuses his neglect in
prosecution of the case. Syl. pt. 1, Brent v. Board of Trs. of Davis & Elkins Coll., 173
W. Va. 36, 311 S.E.2d 153 (1983), overruled on other grounds by Dimon v. Mansy, 198
W. Va. 40, 479 S.E.2d 339.
We need not labor long on the issue presented as a cross-appeal. The circuit court's reinstatement order indicated that [a]fter careful consideration the Court finds that neither the plaintiff or plaintiff's counsel received notice of dismissal pursuant to Rule 41(b) . . . and that notice was required. In other words, the circuit court found that its dismissal order violated Dimon, because neither Mr. Hoover nor his counsel received a pre-dismissal notice. Mr. Moran has failed to present any evidence to show that Mr. Hoover or his counsel in fact received the required Dimon pre-dismissal notice. Therefore, we have no basis to disturb the trial court's decision to reinstate the case. (See footnote 12)