[Cite as Olympic Holding Co., L.L.C. v. ACE Ltd., 122 Ohio St.3d 89, 2009-Ohio-2057.]




OLYMPIC HOLDING COMPANY, L.L.C., ET AL., APPELLEES, v. ACE LIMITED ET
        AL.; ACE CAPITAL TITLE REINSURANCE COMPANY, APPELLANT.

                 [Cite as Olympic Holding Co., L.L.C. v. ACE Ltd.,
                        122 Ohio St.3d 89, 2009-Ohio-2057.]
Statute of frauds — Promissory estoppel — Damages — The breach of a promise
        to sign an agreement does not remove the agreement from the signing
        requirement of the statute of frauds — A party may not use promissory
        estoppel to bar the opposing party from asserting the affirmative defense
        of the statute of frauds, which requires that an enforceable contract be in
        writing and signed by the party to be charged — Damages for promissory
        estoppel are an adequate remedy for the breach of an oral promise, absent
        a signed agreement — A joint-venture agreement that does not comply
        with the statute of frauds is unenforceable, and an unenforceable joint-
        venture agreement cannot impose any fiduciary duties on the parties.
  (No. 2008-0200 — Submitted December 16, 2008 — Decided May 7, 2009.)
              APPEAL from the Court of Appeals for Franklin County,
                           No. 07AP-168, 2007-Ohio-6643.
                                 __________________
                               SYLLABUS OF THE COURT
1. The breach of an oral promise to sign an agreement does not remove the
        agreement from the signing requirement of the statute of frauds.
2. A party may not use promissory estoppel to bar the opposing party from
        asserting the affirmative defense of the statute of frauds, which requires
        that an enforceable contract must be in writing and signed by the party to
        be charged.
                             SUPREME COURT OF OHIO




3. Damages for promissory estoppel are an adequate remedy for the breach of an
       oral promise, absent a signed agreement.
4. A joint-venture agreement that does not comply with the statute of frauds is
       unenforceable, and an unenforceable joint-venture agreement cannot
       impose any fiduciary duties on the parties.         (Garg v. Venkataraman
       (1988), 54 Ohio App.3d 171, 561 N.E.2d 1005, approved; Al Johnson
       Constr. Co. v. Kosydar (1975), 42 Ohio St.2d 29, 71 O.O.2d 16, 325
       N.E.2d 549, distinguished.)
                               __________________
       LUNDBERG STRATTON, J.
                                    I. Introduction
       {¶ 1} The primary question before the court is whether the breach of a
promise to execute an agreement justifies using promissory estoppel to remove
the agreement from the statute of frauds. Ancillary to this question is whether a
joint agreement can impose fiduciary duties absent compliance with the statute of
frauds. We answer both questions in the negative. Accordingly, we reverse the
judgment of the court of appeals.
                                       II. Facts
       {¶ 2} Appellant, ACE Capital Title Reinsurance Company (“ACE”), is a
title reinsurance company located in New York.          ACE is owned by several
companies located in Bermuda (“Ace Group”). Appellees Sutton Land Services,
L.L.C., Title First Agency, Inc., and Title Midwest, Inc. (“title agencies”) are title
insurance companies located in New York, Ohio, and Kansas respectively.
Appellee Olympic Holding Company, L.L.C., a Delaware company located in
Columbus, was created by the title agencies in preparation for the proposed joint
agreement herein to hold the stock of Olympic Title Insurance Company
(“OTIC”).




                                           2
                                     January Term, 2009




         {¶ 3} ACE approached the title agencies with a proposal to create a joint
venture that would “revolutionize the title insurance industry by creating a new
and unique system of title insurance and reinsurance of national scope.” 1 ACE
envisioned a new integrated system of title insurance and reinsurance that
consisted of a residential real estate component (policy coverage up to
$1,000,000) and a commercial real estate component (policy coverage over
$1,000,000).
         {¶ 4} The plan called for the title agencies to acquire OTIC, an Ohio title
insurer. The title agencies would then use OTIC to underwrite title insurance
policies that the title agencies issued for residential transactions. OTIC would
reinsure these transactions through ACE. Meanwhile, ACE would issue title
insurance policies for commercial transactions.                 OTIC would reinsure these
transactions up to $100,000; ACE would provide the balance of the reinsurance.
         {¶ 5} Before the plan could be implemented, the title agencies had to
acquire OTIC, and the acquisition required approval by the Ohio Department of
Insurance. Additionally, ACE would have to apply with the Ohio Department of
Insurance to sell direct title insurance.
         {¶ 6} In early 2003, the parties began negotiating by exchanging draft
“term sheets” in an attempt to reach a consensus on the “general business terms”
of the agreement. Each page of the term sheet contained the following disclaimer:
“NOT AN OFFER OF INSURANCE.”
         {¶ 7} In March 2003, the title agencies, through Sutton Land Services,
initiated the acquisition of OTIC by sending OTIC a letter of intent to acquire.
Thereafter, Sutton and the other two title agencies formed Olympic Holding


1. “Title insurance” is “[a]n agreement to indemnify against loss arising from a defect in title to
real property.” Black’s Law Dictionary (8th Ed.2004) 819. Reinsurance is “[i]nsurance of all or
part of one insurer’s risk by a second insurer, who accepts the risk in exchange for a percentage of
the original premium.” Id. at 1312.




                                                 3
                               SUPREME COURT OF OHIO




Company, L.L.C. (referred to collectively as the “Olympic Group”), for the
purpose of acquiring OTIC.
           {¶ 8} From August 2003 through November 2003, ACE and the
Olympic Group exchanged nine drafts of a proposed reinsurance agreement. The
reinsurance agreement sought to define the obligations of the parties (ACE and
OTIC) regarding issuing and underwriting direct title insurance and reinsurance
for residential real estate deals. Each of these drafts contained contract-disclaimer
language that provided:
           {¶ 9} “This document is intended for discussion purposes only. Neither
this document nor any other statement (oral or otherwise) made at any time in
connection herewith is an offer, invitation or recommendation to enter into any
transaction. Any offer would be made at a later date and subject to contract,
satisfactory documentation and market conditions.” (Emphasis added.)
           {¶ 10} Each draft also provided:
           {¶ 11} “This Agreement may be executed in any number of counterparts,
and by the parties on separate counterparts, but will not be effective until each
party has executed at least one counterpart.” (Emphasis added.)
           {¶ 12} Each draft also referred to a “Capital Support Agreement.” On
October 8, 2003, ACE circulated an initial draft of the capital-support agreement,
which required the Olympic Group to maintain a minimum amount of capital for
OTIC.
           {¶ 13} Finally, each draft of the reinsurance agreement also required
OTIC to enter into agreements with an agency that would write title-insurance
policies for residential transactions, subject to ACE’s approval. On November 13,
2003, ACE circulated an “initial draft” of the “Model Agency Agreement” to
Olympic Group.        However, no agency agreement was ever executed by the
parties.




                                              4
                               January Term, 2009




       {¶ 14} A commercial reinsurance agreement was discussed by the parties,
but none was ever completed.
       {¶ 15} On November 10, 2003, ACE submitted its application to the Ohio
Department of Insurance to become licensed to sell title insurance.
       {¶ 16} On November 6, 2003, the Olympic Group submitted its
application to the Ohio Department of Insurance seeking approval to acquire
OTIC. In support of its application, the Olympic Group attached an August 2003
draft of the residential reinsurance agreement. The draft was not executed. It had
no contract-disclaimer language or capital-support provision.
       {¶ 17} On December 2, 2003, the Ace Group announced a $1 billion
initial public offering (“IPO”). ACE assured the Olympic Group that the IPO
would not endanger the joint agreement and in fact could help it.
       {¶ 18} After obtaining approval from the Ohio Department of Insurance,
the Olympic Group closed on the acquisition of OTIC on December 29, 2003.
That same week, ACE’s chief operating officer became aware that ACE would
not go forward with the joint agreement. On January 2, 2004, ACE informed the
Olympic Group that ACE would probably be spun off and that it was unlikely to
proceed with the proposed reinsurance agreement.
       {¶ 19} The day after learning of ACE’s cancellation, the Olympic Group
signed and sent its own draft of the residential reinsurance agreement to ACE for
signature. ACE refused to execute the agreement.
       {¶ 20} In January 2004, the Olympic Group filed a multicount complaint
against ACE and the Ace Group. The trial court dismissed the Bermuda-based
Ace Group for lack of personal jurisdiction, and the Olympic Group then
voluntarily dismissed the complaint.
       {¶ 21} In 2006, the Olympic Group refiled the complaint against ACE and
Ace Group. The trial court again dismissed the Ace Group. The complaint
alleged ten causes of action, including breach of a joint-venture agreement, breach




                                        5
                              SUPREME COURT OF OHIO




of fiduciary duty, promissory estoppel, negligent misrepresentation, tortious
interference with a contractual relationship, tortious interference with a business
relationship, and fraud. The title agencies sought specific performance of the
joint-venture agreement and damages, including punitive damages.
        {¶ 22} ACE filed a motion for summary judgment claiming that the
agreement did not comply with the statute of frauds, R.C. 1335.05. The Olympic
Group argued that promissory estoppel removed the agreements from the statute
of frauds.
        {¶ 23} The trial court held that promissory estoppel did not remove this
agreement from the statute of frauds, and therefore, the Olympic Group could not
use promissory estoppel to bar ACE from asserting the statute of frauds as an
affirmative defense to Olympic Group’s breach-of-contract claims. Because the
trial court could find no agreement that complied with the statute of frauds, it
granted summary judgment in favor of ACE as to specific performance and on
Olympic Group’s breach-of-contract, breach-of-fiduciary-duty, and negligent-
misrepresentation claims. However, the court held that the Olympic Group’s
claim of promissory estoppel, seeking detrimental-reliance damages, survived
summary judgment, as did its claims for tortious interference with contractual and
business relationships.
        {¶ 24} On appeal, the court of appeals dismissed Olympic Group’s
assignments of error pertaining to promissory estoppel and fraud for lack of a
final, appealable order. Olympic Holding Co. v. ACE Ltd., Franklin App. No.
07AP-168, 2007-Ohio-6643, ¶ 62. After examining Olympic Group’s remaining
assignments of error, the court of appeals affirmed the trial court’s judgment in
part and reversed it in part. Id. at ¶ 102.
        {¶ 25} The court of appeals reversed the trial court’s summary judgment
in favor of ACE on the Olympic Group’s breach-of-contract claim and breach-of-
fiduciary-duty claim. Olympic Holding Co., 2007-Ohio-6643, ¶ 103. With regard




                                              6
                                January Term, 2009




to the contract claims, the court of appeals held that there were genuine issues of
material fact as to whether the parties had reached an agreement and that ACE
had promised that it would execute the agreement after the Olympic Group
acquired OTIC. Id. at ¶ 11. The court, determining that ACE had never intended
to go through with its promise, further held that “[u]nder these circumstances, it is
appropriate to allow appellants to assert the equitable doctrine of promissory
estoppel,” and therefore, ACE “should be equitably estopped from using the
affirmative defense of the statute of frauds because of a misrepresentation to
supply signed written memoranda of the parties’ agreements.” Id. at ¶ 48.
         {¶ 26} In reversing the judgment in favor of ACE regarding Olympic
Group’s claim for breach of fiduciary duty, the court of appeals held that a joint
venture can be express or implied, and therefore, “ ‘joint venturers may incur
fiduciary obligations to each other regardless of whether any written agreement is
then in force, since such a writing is not necessary for the creation of such a
venture.’ ” Olympic Holding Co., 2007-Ohio-6643, ¶ 54, quoting Doctors Hosp.
v. Hazelbaker (1995), 106 Ohio App.3d 305, 309-310, 665 N.E.2d 1175. Relying
on testimony from ACE pertaining to the nature of its relationship with the
Olympic Group, the court determined that there was at least a genuine issue of
material fact as to whether there was a fiduciary duty between the parties. Id. at ¶
55.
         {¶ 27} The court of appeals otherwise affirmed the trial court’s judgment
or found Olympic Group’s remaining assignments of error moot. Id. at ¶ 103.
         {¶ 28} This cause is before this court upon our acceptance of ACE’s
discretionary appeal. Olympic Holding Co., L.L.C. v. ACE Ltd., 117 Ohio St.3d
1496, 2008-Ohio-2028, 885 N.E.2d 954.
                                   III. Analysis
      A. The Breach of a Promise to Sign an Agreement Does Not Justify Using
      Promissory Estoppel to Remove the Agreement from the Statute of Frauds




                                         7
                            SUPREME COURT OF OHIO




        {¶ 29} We begin by examining whether breaching a promise to execute an
agreement equitably removes the agreement from the statute of frauds. We
recognize that numerous jurisdictions have held that under various circumstances,
promissory estoppel may be used to remove an agreement from having to comply
with the statute of frauds. See Annotation, Promissory Estoppel as Basis for
Avoidance of Statute of Frauds (1974), 56 A.L.R.3d 1037, 1974 WL 35112.
However, we decline to adopt that exception under the circumstances of this case
because it is both unnecessary and damaging to the protections afforded by the
statute of frauds.
        {¶ 30} R.C. 1335.05, Ohio’s codification of the statute of frauds,
provides:
        {¶ 31} “No action shall be brought whereby to charge * * * a person upon
an agreement * * * that is not to be performed within one year from the making
thereof; unless the agreement upon which such action is brought, or some
memorandum or note thereof, is in writing and signed by the party to be charged
therewith * * *.” (Emphasis added.)
        {¶ 32} Agreements that do not comply with the statute of frauds are
unenforceable. Hummel v. Hummel (1938), 133 Ohio St. 520, 11 O.O. 221, 14
N.E.2d 923, paragraph one of the syllabus. See also Shepherd v. Westlake (1991),
76 Ohio App.3d 3, 10, 600 N.E.2d 1095; DeCavitch v. Thomas Steel Strip Corp.
(1990), 66 Ohio App.3d 568, 572, 585 N.E.2d 879.
        {¶ 33} The purpose of the statute of frauds is to prevent “frauds and
perjuries.” Wilber v. Paine (1824), 1 Ohio 251, 255. The statute does so by
informing the public and judges of what is needed to form a contract and by
encouraging parties to follow these requirements by nullifying those agreements
that do not comply. “[T]he statute of frauds is supposed both to make people take
notice of the legal consequences of a writing and to reduce the occasions on
which judges enforce non-existent contracts because of perjured evidence.”




                                       8
                                January Term, 2009




Kennedy, Form and Substance in Private Law Adjudication (1976), 89
Harv.L.Rev. 1685, 1691. “In every case, the formality means that unless the
parties adopt the prescribed mode of manifesting their wishes, they will be
ignored. The reason for ignoring them, for applying the sanction of nullity, is to
force them to be self conscious and to express themselves clearly * * *.” Id. at
1692.
        {¶ 34} Courts have long recognized that a signed contract constitutes a
party’s final expression of its agreement. See Fillinger Constr. Inc. v. Coon
(Sept. 28, 1993), Greene App. No. 93-CA-0002, 1993 WL 386320, *3 (“contract
signed by Coon constituted the final expression of the agreement of the parties”
[emphasis added]); Breed, Elliott & Harrison v. Lima (1920), 12 Ohio App. 485,
1920 WL 711, *3, quoting Bunday v. Huntington (C.A.8, 1915), 224 F. 847, 853
(executed contract “ ‘is presumed to express the final agreement of the parties’ ”
[emphasis added]). Thus, the statute of frauds is necessary because a “signed
writing provides greater assurance that the parties and the public can reliably
know when such a transaction occurs.” Seale v. Citizens S. & L. Assn. (C.A.6,
1986), 806 F.2d 99, 104.
        {¶ 35} If promissory estoppel is used as a bar to the writing requirements
imposed by the statute of frauds, based on a party’s oral promise to execute the
agreement, the predictability that the statute of frauds brings to contract formation
would be eroded. Parties negotiating a contract would no longer know what
signifies a final agreement.    Promissory estoppel used this way would open
contract negotiations to fraud, the very evil that the statute of frauds seeks to
prevent. Thus, “[t]o allow [a] plaintiff to recover on a theory of promissory
estoppel where the oral contract is precluded by the Statute of Frauds, ‘ “would
abrogate the purpose and intent of the legislature in enacting the statute of frauds
and would nullify its fundamental requirements.” ’ ” Essco Geometric, Inc. v.
Harvard Industries, Inc. (Sept. 30, 1993), E.D.Mo. No. 90-1354C(6), 1993 WL




                                         9
                             SUPREME COURT OF OHIO




766952, *3, quoting Sales Serv. v. Daewoo Internatl. (Am.) (Mo.App.1989), 770
S.W.2d 453, 457, quoting Morsinkhoff v. Deluxe Laundry & Dry Cleaning Co.
(Mo.App.1961), 344 S.W.2d 639, 644.             See also Kahn v. Cecelia Co.,
(D.C.N.Y.1941), 40 F.Supp. 878, 880, quoting Deutsch v. Textile Waste
Merchandising Co. (1925), 212 A.D. 681, 685, 209 N.Y.S. 388 (declining to
enforce an oral agreement because enforcing a promise that the defendant would
reduce the agreement to writing would result in the “ ‘practical nullification of the
statute of frauds’ ”).
        {¶ 36} We decline to recognize an exception to the statute of frauds even
when the promise to execute an agreement is fraudulent or misleading. If a party
establishes that a promise to execute an agreement is misleading or fraudulent,
promissory estoppel is an equitable remedy available to recover reliance damages.
        {¶ 37} As recognized by the Supreme Court of Utah, “[i]n most instances
of negotiations for transactions included within the Statute [of Frauds], a
reduction of the contract to writing is contemplated and, in all probability, the
parties will discuss who will draw the instrument and when and where it will be
signed.”   Easton v. Wycoff (1956), 4 Utah 2d 386, 388-389, 295 P.2d 332.
However, until parties execute the agreement, “ ‘[r]eliance on a statement of
future intent made prior to the conclusion of negotiations in a complex business
transaction is unreasonable as a matter of law. * * * Such a rule is particularly
appropriate when two sophisticated business entities are involved in negotiations.
“Until the documents are signed and delivered the game is not over. Businessmen
would be undesirably inhibited in their dealings if expressions of intent and the
exchange of drafts were taken as legally binding agreements.” ’ ” Carcorp, Inc.
v. Chesrown Oldsmobile-GMC Truck, Inc., Franklin App. No. 06AP-329, 2007-
Ohio-380, ¶ 20, quoting Continental Fin. Servs. Co. v. First Natl. Boston Corp.
(Aug. 30, 1984), D.Mass. No. CA-82-1505-T, at 9-10, quoting Tull v. Mister
Donut Dev. Corp. (1979), 7 Mass.App. 626, 632, 389 N.E.2d 447.




                                         10
                               January Term, 2009




       {¶ 38} Accordingly, we hold that a party may not use promissory estoppel
to bar the opposing party from asserting the affirmative defense of the statute of
frauds, which requires that an enforceable contract be in writing and signed by the
party to be charged, but may pursue promissory estoppel as a separate remedy for
damages.
    B. Promissory Estoppel as an Action for Damages Provides an Adequate
            Remedy for Detrimental Reliance on a Breached Promise
       {¶ 39} An action for damages under promissory estoppel provides an
adequate remedy for an unfulfilled or fraudulent promise.        “The doctrine of
promissory estoppel comes into play where the requisites of contract are not met,
yet the promise should be enforced to avoid injustice.”         Doe v. Univision
Television Group, Inc. (Fla.App.1998), 717 So.2d 63, 65, citing Restatement of
the Law 2d, Contracts (1981) Section 90; see also Cohen v. Cowles Media Co.
(Minn.1992), 479 N.W.2d 387, 389. We adopted promissory estoppel through the
Restatement of the Law 2d, Contracts (1973), Section 90 in Talley v. Teamsters,
Chauffeurs, Warehousemen, & Helpers, Local No. 377 (1976), 48 Ohio St.2d 142,
146, 2 O.O.3d 297, 357 N.E.2d 44. “To be successful on a claim of promissory
estoppel, ‘[t]he party claiming the estoppel must have relied on conduct of an
adversary in such a manner as to change his position for the worse and that
reliance must have been reasonable in that the party claiming estoppel did not
know and could not have known that its adversary's conduct was misleading.’ ”
Shampton v. Springboro, 98 Ohio St.3d 457, 2003-Ohio-1913, 786 N.E.2d 883, ¶
34, quoting Ohio State Bd. of Pharmacy v. Frantz (1990), 51 Ohio St.3d 143, 145,
555 N.E.2d 630, citing Heckler v. Community Health Serv. (1984), 467 U.S. 51,
59, 104 S.Ct. 2218, 81 L.Ed.2d 42.
       {¶ 40} Thus, promissory estoppel is an adequate remedy for a fraudulent
oral promise or breach of an oral promise, absent a signed agreement. See Karnes
v. Doctors Hosp. (1990), 51 Ohio St.3d 139, 142, 555 N.E.2d 280 (promissory




                                        11
                             SUPREME COURT OF OHIO




estoppel is an “equitable doctrine designed to prevent the harm resulting from the
reasonable and detrimental reliance of [the promisee] upon the false
representations of [the promisor]” [emphasis added]).
 C. A Joint Venture Agreement that Does Not Comply with the Statute of Frauds
                         Cannot Impose Fiduciary Duties
       {¶ 41} Next, we examine whether a joint-venture agreement that does not
comply with the statute of frauds can impose fiduciary duties upon the parties.
       {¶ 42} The court of appeals below, quoting Doctors Hosp. v. Hazelbaker
(1995), 106 Ohio App.3d 305, 310-311, 665 N.E.2d 1175, held, “ ‘ [J]oint
venturers may incur fiduciary obligations to each other regardless of whether any
written agreement is then in force, since such a writing is not necessary for the
creation of such a venture.’ ”
       {¶ 43} Hazelbaker relied on Al Johnson Constr. Co. v. Kosydar (1975), 42
Ohio St.2d 29, 71 O.O.2d 16, 325 N.E.2d 549, paragraph one of the syllabus, for
the proposition that a joint venture may be implied. In Al Johnson, a signed
agreement was not at issue. The facts involved parties who had entered into a
joint venture for construction and had completed the construction. Id. at 30. The
dispute was whether the joint venture or the individual venturers should pay the
tax imposed on the project. Id. at 31. The parties in Al Johnson actively engaged
in and completed the joint venture, as opposed to merely promising to enter an
agreement. Full performance removed the agreement in Al Johnson from the
statute of frauds. See Rutledge v. Hoffman (1947), 81 Ohio App. 85, 36 O.O. 405,
75 N.E.2d 608, paragraph five of the syllabus.
       {¶ 44} In Hazelbaker, the parties did enter into several signed agreements.
While the Tenth District Court of Appeals, relying on Al Johnson, asserted that
the parties, a medical corporation and a nursing-home developer, formed a joint
venture before signing the agreement, the court ironically held that the joint-
venture oral agreements did not obligate one party to proceed at all with the




                                        12
                                January Term, 2009




project at that stage, as there was no obligation on the part of the medical center to
continue with the joint venture. Hazelbaker, 106 Ohio App.3d at 312, 665 N.E.2d
1175. The court of appeals stated: “Doctors was, at that time, free to forgo
participation in the retirement center project at all, so Hazelbaker could not assert
a firm expectation to the $4.5 million in credit enhancements which Doctors was
to provide, if it was to participate in the retirement center project.” (Emphasis
sic.) Id. at 311.
        {¶ 45} In this case, the dispute over what constituted a joint venture or
what the parties’ obligations were before the contracts were even signed
demonstrates the policy reasons that underlie the statute of frauds. We reject
Hazelbaker’s application of Al Johnson.
        {¶ 46} In Garg v. Venkataraman (1988), 54 Ohio App.3d 171, 172-173,
561 N.E.2d 1005, the court stated, “While joint venture agreements may be oral,
they are, nonetheless, still contracts, and thus subject to all of the applicable
requirements of contract law, including the Statute of Frauds.” Thus, Garg held
that if a joint-venture agreement does not comply with the statute of frauds, it is
unenforceable and cannot impose any fiduciary duties upon the parties. Id. at
172. We agree with Garg and therefore hold that a joint-venture agreement that
does not comply with the statute of frauds is unenforceable, and an unenforceable
joint-venture agreement cannot impose any fiduciary duties on the parties.
        D. The Statute of Frauds Applies to the Proposed Joint Agreement
        {¶ 47} In the court of appeals, two of Olympic Group’s assignments of
error asserted that the trial court erred in granting summary judgment on
plaintiff’s contract claims (1) because the parties’ agreements were capable of
performance in one year and thus fell outside the statute of frauds and (2) because
there were signed writings chargeable against ACE defendants that satisfy the
statute of frauds. Based on its reversal of the trial court’s judgment on other
grounds, the court of appeals overruled these two assignments of error as being




                                         13
                              SUPREME COURT OF OHIO




moot. In the interest of judicial economy, we now resolve these assignments of
error.
          {¶ 48} The statute of frauds applies to agreements that cannot be
performed within a year. R.C. 1335.05. When parties to an alleged agreement
did not intend the agreement to be performed in less than a year, the statute of
frauds renders that agreement unenforceable. Pro Arts Inc. v. K Mart Corp.
(N.D.Ohio 1984), 580 F.Supp. 1073, 1075; see also Lingo v. Ohio Cent. RR.,
Franklin App. No. 05AP-206, 2006-Ohio-2268, ¶ 44, 47.
          {¶ 49} In the instant case, the parties envisioned that the proposed joint
agreement would last five years. Therefore, the proposed joint-venture agreement
in the instant case comes within the statute of frauds.
          {¶ 50} With regard to Olympic Group’s assertion that the requisite
writings exist, we find nothing in the record of a final agreement that satisfies the
statute of frauds. The draft term sheets exchanged by the parties in an attempt to
negotiate a joint-venture agreement all contained contract-disclaimer language,
and none were signed by ACE. There is no commercial reinsurance agreement.
And there is no signed residential reinsurance agreement. Finally, there is no
written joint-venture agreement. There are simply no documents that sufficiently
satisfy the writings required by the statute of frauds.
                                   IV. Conclusion
          {¶ 51} We hold that the breach of an oral promise to sign an agreement
does not remove an agreement from the signing requirement of the statute of
frauds.     Consequently, a party may not use promissory estoppel to bar the
opposing party from asserting the affirmative defense of the statute of frauds,
which requires that an enforceable contract must be in writing and signed by the
party to be charged.
          {¶ 52} Because there are no documents that comply with the statute of
frauds, the proposed joint agreement for insurance and reinsurance is




                                          14
                                January Term, 2009




unenforceable. And because the joint agreement is not enforceable, it imposes no
fiduciary duties on the parties. Finally, Olympic Group has a promissory estoppel
claim for reliance damages pending in the trial court, which is an adequate
remedy to recover damages it sustained in detrimentally relying upon ACE’s
allegedly false promise.
       {¶ 53} Accordingly, we reverse the judgment of the court of appeals and
remand the cause to the trial court for further proceedings not inconsistent with
this opinion.
                                                               Judgment reversed
                                                             and cause remanded.
       MOYER, C.J., and O’CONNOR, LANZINGER, and CUPP, JJ., concur.
       PFEIFER and O’DONNELL, JJ., dissent.
                               __________________
       O’DONNELL, J., dissenting.
       {¶ 54} I respectfully dissent. In my view, today’s holding leads to an
unjust result and will adversely affect business in Ohio, much of which involves
complex transactions that must of necessity be taken on a step-by-step and
handshake basis. This court should instead join the majority position among
jurisdictions that have considered this issue, embrace the view espoused by legal
scholars, and hold that the equitable doctrine of promissory estoppel may preclude
assertion of a statute-of-frauds defense.
                               The Statute of Frauds
       {¶ 55} This court has long held that an agreement subject to the statute of
frauds, now codified at R.C. 1335.05, is not enforceable unless it has been
properly memorialized. See Heaton v. Eldridge & Higgins (1897), 56 Ohio St.
87, 101, 46 N.E. 638; Hummel v. Hummel (1938), 133 Ohio St. 520, 523-524, 11
O.O. 221, 14 N.E.2d 923. And as stated in Stickney v. Tullis-Vermillion, 165
Ohio App.3d 480, 2006-Ohio-842, 847 N.E.2d 29, ¶ 22, “[t]he statute of frauds is




                                            15
                              SUPREME COURT OF OHIO




essentially an evidentiary rule the purpose of which is to protect the integrity of
certain enumerated contractual transactions.         The statute requires that these
transactions be in writing or accompanied by a memorandum witnessing the
transaction.”
                  Promissory Estoppel and the Statute of Frauds
        {¶ 56} Ohio has adopted the view of promissory estoppel expressed in
Restatement of the Law 2d, Contracts (1993), Section 90.                 See Talley v.
Teamsters, Chauffeurs, Warehousemen, & Helpers, Local No. 377 (1976), 48
Ohio St.2d 142, 146, 2 O.O.3d 297, 357 N.E.2d 44. That section states: “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
such action or forbearance is binding if injustice can be avoided only by
enforcement of the promise.”
        {¶ 57} Importantly, the doctrine of promissory estoppel has two distinct
functions in the law of contracts. First, it may be asserted offensively as a
separate, equitable cause of action. See, e.g., Hortman v. Miamisburg, 110 Ohio
St.3d 194, 2006-Ohio-4251, 852 N.E.2d 716, ¶ 23. Second, as the Alabama
Supreme Court stated in Mazer v. Jackson Ins. Agency (Ala.1976), 340 So.2d 770,
772, promissory estoppel may be asserted defensively, as it “prevent[s] a party
from asserting rights under a general technical rule of law when his own conduct
renders the assertion of such rights contrary to equity and good conscience.”
        {¶ 58} This case concerns the latter function, and in fact, one of our
earliest decisions, Wilber v. Paine (1824), 1 Ohio 251, 255, establishes that equity
may bar application of Ohio’s statute of frauds. We explained, “The great object
of the statute [of frauds] is clearly expressed in the title prefixed to it. It is for the
prevention of frauds and perjuries. It is not, therefore, to be presumed that it was
intended, in any instance, to encourage fraud, and we may infer that any
construction which would have a certain tendency to do so, would counteract the




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design of the legislature, by advancing the mischief intended to be prevented.” Id.
Thus, we stated, “we can not forbear to enforce the contract [that was not in
writing], without sanctioning a fraud on the plaintiff.” Id. at 256. See also
LaBounty v. Brumback (1933), 126 Ohio St. 96, 100-101, 184 N.E. 5. And in
Hodges v. Ettinger (1934), 127 Ohio St. 460, 466, 189 N.E. 113, we emphasized
that “the statute of frauds cannot be permitted to legalize a fraud it was intended
to suppress. It cannot be made a shield and protection for injustice.” (Emphasis
added.)
          {¶ 59} Ohio precedent in this regard is consistent with the position of
legal scholars, who have uniformly recognized that it may be appropriate in some
instances to bar a party from asserting that a contract is unenforceable due to the
statute of frauds. For example, Corbin states, “It is understandable that courts are
reluctant to thwart what is perceived as statutory policy, but it should be
remembered that the statute of frauds’ application has been circumscribed by its
purpose and subjected to equitable judicial limitation whenever appropriate since
its inception.” (Emphasis added.) 4 Corbin on Contracts (1997) 43, Section 12.8,
citing Costigan, The Date and Authorship of the Statute of Frauds (1913), 26
Harv.L.Rev. 329, 344. As the treatise further emphasizes, “The older view that
the statute of frauds is impervious to the challenge of promissory estoppel has
been correctly criticized.” Id. at fn. 28.
          {¶ 60} Similarly, Professors Calamari and Perillo assert, “The doctrine of
estoppel, promissory or otherwise, is as much a part of our law as the Statute of
Frauds.” Calamari & Perillo, The Law of Contracts (4th Ed.1998) 776. And 10
Lord, Williston on Contracts (4th Ed.1999) 146-148, Section 27:16, explains that
estoppel “is called into operation to defeat what would be an unconscionable use
of the Statute, and guards against the utilization of the Statute as a means for
defrauding innocent persons who have been induced or permitted to change their
position in reliance upon oral agreements within its operation.”




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                            SUPREME COURT OF OHIO




       {¶ 61} Although the analyses differ in some respects, an overwhelming
majority of jurisdictions recognize that promissory estoppel may bar a party from
asserting a defense under the statute of frauds in certain circumstances. See, e.g.,
Reeves v. Alyeska Pipeline Serv. Co. (Alaska 1996), 926 P.2d 1130, 1139;
Johnson v. Gilbert (App.1980), 127 Ariz. 410, 414, 621 P.2d 916; Ralston Purina
Co. v. McCollum (App.1981), 271 Ark. 840, 843-844, 611 S.W.2d 201; Monarco
v. Lo Greco (1950), 35 Cal.2d 621, 623-624, 220 P.2d 737; Kiely v. St. Germain
(Colo.1983), 670 P.2d 764, 767; McIntosh v. Murphy (1970), 52 Hawaii 29, 36,
469 P.2d 177; Warder & Lee Elevator, Inc. v. Britten (Iowa 1979), 274 N.W.2d
339, 342-343; Decatur Coop. Assn. v. Urban (1976), 219 Kan. 171, 178-180, 547
P.2d 323; Snyder v. Snyder (1989), 79 Md.App. 448, 459, 558 A.2d 412; Andrews
v. Charon (1935), 289 Mass. 1, 6, 193 N.E. 737; McMath v. Ford Motor Co.
(1977), 77 Mich.App. 721, 725-726, 259 N.W.2d 140; Norwest Bank Minn., N.A.
v. Midwestern Mach. Co. (Minn.App.1992), 481 N.W.2d 875, 880; Sanders v.
Dantzler (Miss.1979), 375 So.2d 774, 776; Trad Industries, Ltd. v. Brogan
(1991), 246 Mont. 439, 446, 805 P.2d 54; Alpark Distrib., Inc. v. Poole (1979), 95
Nev. 605, 607-608, 600 P.2d 229; Kubin v. Miller (S.D.N.Y.1992), 801 F. Supp.
1101, 1112 (New York law); Allen M. Campbell Co., Gen. Contrs., Inc. v.
Virginia Metal Industries, Inc. (C.A.4, 1983), 708 F.2d 930, 933-934 (North
Carolina law); McCarthy, Lebit, Crystal & Haiman Co., L.P.A. v. First Union
Mgt., Inc. (1993), 87 Ohio App.3d 613, 623-624, 622 N.E.2d 1093 (Eighth
District); Potter v. Hatter Farms, Inc. (1982), 56 Or.App. 254, 260, 641 P.2d 628;
Atlantic Wholesale Co., Inc. v. Solondz (App.1984), 283 S.C. 36, 40-41, 320
S.E.2d 720; Shaw v. George (1966), 82 S.D. 62, 67, 141 N.W.2d 405; D & S Coal
Co., Inc. v. USX Corp. (E.D.Tenn.1988), 678 F.Supp. 1318, 1323 (Tennessee
law); Nagle v. Nagle (Tex.1982), 633 S.W.2d 796, 800; In re Estate of Nelson
(1975), 85 Wash.2d 602, 610-611, 537 P.2d 765; Everett v. Brown (1984), 174
W.Va. 35, 38-39, 321 S.E.2d 685; U.S. Oil Co., Inc. v. Midwest Auto Care Servs.,




                                        18
                                January Term, 2009




Inc. (App.1989), 150 Wis.2d 80, 89, 440 N.W.2d 825; Remilong v. Crolla
(Wyo.1978), 576 P.2d 461, 465.
       {¶ 62} In contrast, only a few jurisdictions hold that promissory estoppel
does not preclude assertion of a defense pursuant to the statute of frauds. See, e.g.,
Tanenbaum v. Biscayne Osteopathic Hosp., Inc. (Fla.1966), 190 So.2d 777, 779;
Bridges v. Reliance Trust Co. (1992), 205 Ga.App. 400, 402, 422 S.E.2d 277;
Dickens v. Quincy College Corp. (1993), 245 Ill.App.3d 1055, 1058, 615 N.E.2d
381; Fields v. R.S.C.D.B., Inc. (Mo.App.1993), 865 S.W.2d 877, 878; Farmland
Serv. Coop, Inc. v. Klein (1976), 196 Neb. 538, 544, 244 N.W.2d 86; Atlantic
Paper Box Co. v. Whitman's Chocolates (E.D.Pa.1994), 844 F.Supp. 1038, 1043,
fn. 7; Heyman v. Adeack Realty Co. (1967), 102 R.I. 105, 108, 228 A.2d 578;
Ravarino v. Price (1953), 123 Utah 559, 568, 260 P.2d 570.
       {¶ 63} In accord with our own precedent, and in view of the position of
legal scholars and the majority of our sister states, this court should hold that
promissory estoppel may bar application of the statute of frauds.
       {¶ 64} The appellate court in the instant case followed the decision of the
Eighth District Court of Appeals in McCarthy, Lebit, Crystal & Haiman Co.,
L.P.A., 87 Ohio App.3d at 627, 622 N.E.2d 1093, which held that “the doctrine of
promissory estoppel may be used to preclude a defense of statute of frauds, but
only when there has been (1) a misrepresentation that the statute’s requirements
have been complied with or (2) a promise to make a memorandum of the
agreement.” Olympic Holding Co., 2007-Ohio-6643, ¶ 37. See also Gilbert, 127
Ariz. at 414, 621 P.2d 916; Tiffany Inc. v. W.M.K. Transit Mix, Inc. (1972), 16
Ariz.App. 415, 419, 493 P.2d 1220; 21 Turtle Creek Square, Ltd. v. New York
State Teachers' Retirement Sys. (C.A.5, 1970), 432 F.2d 64, 66; “Moore” Burger,
Inc. v. Phillips Petroleum Co. (Tex.1972), 492 S.W.2d 934, 938. This approach,
it seems to me, strikes a reasonable balance between the equitable considerations
of promissory estoppel set forth in Section 90 of the Restatement Second of




                                         19
                             SUPREME COURT OF OHIO




Contracts, which we have already adopted, and the statute of frauds’ purpose of
maintaining the integrity and certainty of certain types of contracts.
       {¶ 65} The facts in the instant case demonstrate the injustice of permitting
ACE to assert that the agreement it had with Olympic is unenforceable for lack of
a writing pursuant to the statute of frauds. The record here demonstrates that
executives for Olympic and ACE reached a mutual understanding on the essential
terms of their joint business venture. Richard Reese, the chief operating officer of
ACE, assured Olympic that ACE would sign the agreement as soon as Olympic
closed on its acquisition of the local title insurance companies. The record further
reveals that Reese told Olympic that their agreement was “just awaiting
signature” by ACE’s board of directors, implying not only that the agreement had
been, or would be, reduced to writing, but also that the term sheets exchanged by
the parties substantially reflected their mutual understanding.
       {¶ 66} The court of appeals properly determined that genuine issues of
material fact exist in this case with respect to whether Olympic and ACE had
reached a mutual understanding on the material terms of their agreement and
whether Olympic reasonably and detrimentally relied upon ACE’s promise that
their agreement had been written and executed upon Olympic’s acquisition of the
Ohio title agency.
       {¶ 67} Accordingly, I would affirm the judgment of the court of appeals
with respect to the issue of using promissory estoppel as a defense to the statute of
frauds when a party has induced reliance on a broken promise. See Wilber, 1
Ohio at 256.
       PFEIFER, J., concurs in the foregoing opinion.
                               __________________
       Carpenter, Lipps, & Leland, L.L.P., Michael H. Carpenter, Jeffrey A.
Lipps, and Katheryn M. Lloyd, for appellee.




                                         20
                              January Term, 2009




       Porter, Wright, Morris & Arthur, L.L.P., Kathleen M. Trafford, James D.
Curphey, Jay A. Yurkiw, and L. Bradfield Hughes; and Wollmuth, Maher &
Deutsch, L.L.P., Fredrick R. Kessler, and William A. Maher, for appellant.
       Bricker & Eckler, L.L.P., Kurtis A. Tunnell, Anne Marie Sferra, and
Vladimair P. Belo, urging reversal for amici curiae, Ohio Manufacturers
Association and Ohio Chemistry Technology Counsel.
                           ______________________




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