1. Assess the quality of Dr. Bithoney’s decision to sell his house in New York and move to Atlanta without a properly executed employment agreement.

2. Why was the severance agreement subject to the statute of frauds?

3. How should the oral agreement have been structured to avoid application of the statute of frauds?

Despite not having an executed employment agreement, Dr. William Bithoney sold his home in New York and moved to Atlanta in early October in anticipation of his October 15 start work date as an executive at Grady Memorial Hospital. But the night before his anticipated start, he was informed that Grady’s governing body, the Fulton- DeKalb Hospital Authority, did not approve his hiring and would not permit him to commence work. He sued the Authority for breach of an oral contract for severance, claiming that he and Grady’s CEO, Otis Story, had agreed that he would receive “a severance payment of 15 months salary if Grady terminated his employment without cause”. Subsequently, Bithoney received a draft employment contract from Grady, which included a provision that, in the event Bithoney was terminated without cause, he would receive “full severance payment,” which would be “payable for 15 months from the effective date of said termination.”

JUDICIAL OPINION

DILLARD, J….

Analysis

Under Georgia law, the Statute of Frauds requires, inter alia, that “[a]ny agreement that is not to be performed within one year of the making thereof be in writing and signed by the party to be charged. To fall within the ambit of this statutory provision, a contract must be incapable of being performed within a year; “the possibility of performance of the contract within one year is sufficient to remove it from the Statute of Frauds.” Thus, in the event that Bithoney’s oral severance agreement contained a provision that it be paid over the span of 15 months’ time, its enforcement is barred by the Statute of Frauds. If the payment terms were otherwise unspecified, the oral agreement would not fall within the statute.

In the case sub judice, the trial court based its finding that the 15–month payment schedule was a term of the severance agreement on Bithoney’s deposition testimony. And as a result of the trial court’s determination that Bithoney’s deposition responses constituted a “clear and unambiguous” admission of the 15–month payment term, the trial court rejected Bithoney’s averments that he and Story did not discuss how the severance was to be paid….

Although Bithoney is not a lawyer and may have been less sensitive to the significance attached to certain words, the Authority’s counsel clearly and unambiguously asked if the draft employment agreement—which provided that the severance “shall be payable for 15 months from the effective date of said termination”—“contain[ed] a written description of the severance terms” that he and Story had agreed upon, and Bithoney answered in the affirmative. This representation mirrored the allegation made by Bithoney in his complaint and repeated in his interrogatory response that the draft employment agreement “contain[ed],” among other things, “the severance terms” agreed upon….

Thus, because we cannot say that there is no evidence to support the trial court’s ruling, we are constrained to conclude that it did not clearly err in applying the rule of Prophecy to hold that enforcement of the oral severance agreement was barred by the Statute of Frauds….

Judgment affirmed.