Skywalker Comm In v. Skywalker Comm Inc

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 02-1180
SKYWALKER COMMUNICATIONS OF INDIANA, INC.,
Plaintiff-Appellant,
v.
SKYWALKER COMMUNICATIONS, INC.,
Defendant-Appellee.
____________
Appeal from the United States District Court for the
Northern District of Indiana, Fort Wayne Division.
No. 1:99-CV-385—William C. Lee, Judge.
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ARGUED FEBRUARY 13, 2003—DECIDED JUNE 25, 2003
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Before COFFEY, MANION, and ROVNER, Circuit Judges.
ROVNER, Circuit Judge. In this appeal, an Indiana cor-
poration originally known as Apollo Satellite Systems,
Inc. challenges the dismissal of its contract-based diver-
sity suit as barred by Indiana’s statute of frauds. We affirm.
According to the complaint and attached documents,
Apollo entered a written contract with a Missouri corpora-
tion called Skywalker Communications, Inc. to sell satellite
equipment under the “Skywalker” name through a net-
work of dealers. The written contract, which was dated
1992 and was attached to the complaint, provided for
automatic yearly renewal but required Apollo to cease
2 No. 02-1180
using the Skywalker name upon the contract’s termination.
Four years later, the complaint alleged, Apollo (which
was then operating as “Skywalker Communications of
Indiana, Inc.”) entered a second agreement with Sky-
walker that was “separate and independent” from the
first. The 1996 agreement, which Apollo conceded was
unwritten, concerned the sale of EchoStar brand satellite
equipment in a seven-state territory for which the par-
ties hoped to obtain distribution rights. According to
the complaint, the parties agreed to split the sales terri-
tory but to hold themselves out to EchoStar as a single
entity for purposes of securing the contract. A contract
attached to the complaint shows that EchoStar granted
distribution rights for the territory to Skywalker (but
not Apollo) for a five-year period. Also attached were two
letters from Skywalker dated 1999: one notifying Apollo
that Skywalker would not be renewing the 1992 contract
for the following year and that Apollo must cease using
the Skywalker name; another to Apollo’s dealers inform-
ing them that Apollo was no longer an authorized dis-
tributor of EchoStar products and inviting the dealers
to place future EchoStar orders through Skywalker instead.
The complaint sought recovery under a variety of theo-
ries: constructive fraud based on Skywalker’s misrepresen-
tations relating to the oral agreement; criminal mischief,
conversion, and breach of contract and fiduciary duty
based on Skywalker’s failure to pay amounts owed to
Apollo under the oral agreement; and tortious interfer-
ence with Apollo’s dealer contracts relating to EchoStar
equipment sales. Skywalker sought dismissal based on
Indiana’s statute of frauds, which bars actions involving
an agreement not to be performed within one year from
its making unless the agreement or a memorandum
describing it is in writing and signed by the party to be
charged, see Ind. Code § 32-21-1-1, and the district court,
observing that the object of the oral agreement was the
No. 02-1180 3
fulfillment of a five-year EchoStar distribution contract,
granted the motion. See Blackstone Realty LLC v. FDIC,
244 F.3d 193, 197 (1st Cir. 2001) (complaint may be dis-
missed based on statute of frauds); Zayre Corp. v. S.M. &
R. Co., Inc., 882 F.2d 1145, 1153 (7th Cir. 1989) (same).
Apollo does not dispute the district court’s conclusion
that the oral agreement could not be performed within
one year, but it contends that the agreement is suffi-
ciently described by certain documents attached to its
complaint. That argument is waived, however, because
Apollo failed to raise it in the district court, where it ar-
gued instead that the agreement was capable of being
performed within one year and that partial performance
removed the agreement from the statute of frauds. See, e.g.,
Zayre, 882 F.2d at 1154-56 (refusing to consider new
arguments about why oral contract survived Illinois stat-
ute of frauds). Even were we to consider the argument
we would not find it persuasive. Multiple memoranda
may satisfy the writing requirement if each indicates
that it is related to the same transaction and is signed
by the party to be charged, see, e.g., Newman v. Huff,
632 N.E.2d 799, 803 (Ind. Ct. App. 1994), and if the memo-
randa, taken together, contain all of the agreement’s
“essential stipulations and undertakings,” see Whiteco
Indus., Inc. v. Kopani, 514 N.E.2d 840, 847 (Ind. Ct. App.
1987); Block v. Sherman, 34 N.E.2d 951, 955 (Ind. Ct. App.
1941). See also Consolidation Servs. Inc. v. Keybank Nat’l
Ass’n, 185 F.3d 817, 819 (7th Cir. 1999) (under Indiana law,
writing must be evidence of the contract itself and its
essential terms). Here, Apollo points to several documents:
the 1992 contract; distributor agreements Skywalker
entered with EchoStar and another satellite company;
a letter reflecting a territory-sharing agreement the par-
ties reached in 1998; and Apollo’s own business records
from 1999. But none of these documents mention an
agreement formed between Skywalker and Apollo in 1996,
4 No. 02-1180
let alone specify what amounts Skywalker might have
been obligated to pay Apollo under such an agreement. Cf.
Zayre, 882 F.2d at 1152-54 (letters between company
presidents unlikely to satisfy writing requirement be-
cause they did not mention agreement to buy jewelry or
agreement to pay mark-up price for it). Apollo’s only
explanation as to how these documents imply the exis-
tence of a 1996 agreement is its assertion that “[g]iven [ ]
that the 1992 Agreement existed between the [ ] corpora-
tions, only a short leap is required to reach the conclu-
sion that [the 1996 agreement] did as well.” We disagree.
On the contrary, the 1992 contract and other documents
are no more supportive of Apollo’s contention that the
parties formed a second agreement in 1996 than with
Skywalker’s position that the parties did not enter a sec-
ond agreement in 1996 but instead continued operating
under the 1992 written contract until Skywalker prop-
erly terminated it in 1999. Cf. Consolidation Servs., 185
F.3d at 820-21 (partial performance that is equally con-
sistent with competing versions of contract will not re-
move contract from Indiana statute of frauds).
Apollo also contends that its claims for fraud, conver-
sion, criminal mischief, promissory estoppel, and tortious
interference with contractual relations are unaffected
by the statute of frauds, which Apollo says is a defense
only to contract claims. But the statute works more like
a rule of evidence, see, e.g., Webcor Packaging Corp. v.
Autozone, Inc., 158 F.3d 354, 356 (6th Cir. 1998); Blanke v.
Alexander, 152 F.3d 1224, 1231 (10th Cir. 1998), barring
any action, however labeled, that turns on proof of an
oral promise, see Ohio Valley Plastics, Inc. v. Nat’l City
Bank, 687 N.E.2d 260, 263-64 (Ind. Ct. App. 1997) (bor-
rower’s fraud suit based on loan officer’s false assur-
ances that loan had been approved was in substance an
action upon an unwritten loan agreement and so was
barred by statute of frauds); Whiteco, 514 N.E.2d at 844.
No. 02-1180 5
It is true, as Apollo notes, that promissory estoppel may
be used to avoid the statue of frauds, see, e.g., Brown
v. Branch, 758 N.E.2d 48, 52 (Ind. 2001); Ohio Valley,
687 N.E.2d at 264, but as we have explained before, the
exception is limited to cases where reliance on an oral
promise provides compelling evidence of the existence
and terms of a contract, see Consolidation Servs., 185 F.3d
at 822. Apollo’s only asserted acts of reliance are expen-
ditures on advertising, inventory, and dealership devel-
opment. Because these acts are fully consistent with
Skywalker’s position that the parties were operating
under the original contract, they are not compelling evi-
dence of the existence or terms of a later oral agreement.
AFFIRMED.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—6-25-03