## Facts

- Ray E. and Jo Ann DePugh owned land from which The Mead Corporation sought to excavate and remove up to 225,000 cubic yards of clay for landfill cover.
- The DePughs alleged an agreement under which Mead would pay $100,000 and, after excavation, restore, seed, and mulch the property, build a gravel road, and construct a lake.
- Mead drafted a written “Borrow Agreement” describing entry rights, topsoil removal and storage, clay excavation, road construction, and creation of a lake.
- The Borrow Agreement was never signed by Mead, and the DePughs did not execute any deed or other written instrument conveying an interest in land.
- Mead never began performance; the DePughs claimed reliance expenses for surveys, site planning, and a title search.
- Mead later sent a letter describing the Borrow Agreement as “proposed” and stating that the rights and obligations described in it were terminated.
- The DePughs sued for breach of contract and also pleaded promissory estoppel and quantum meruit; Mead denied a contract and asserted the Statute of Frauds.
- The trial court granted partial summary judgment for Mead on the contract claim as barred by the Statute of Frauds; the DePughs appealed.

## Issues

1. Whether an agreement granting a buyer the right to enter land and sever clay is a sale of goods under the UCC or a transfer of an interest in land subject to Ohio’s Statute of Frauds.
2. Whether the unsigned draft Borrow Agreement or the termination letter satisfied the Statute of Frauds as a signed memorandum stating essential terms.
3. Whether the alleged agreement was divisible so non-land-related promises could be enforced even if the excavation grant was within the Statute of Frauds.

## Decision

- The appellate court affirmed summary judgment for Mead on the breach of contract claim.
- The transaction was treated as involving an interest in land because it granted rights to enter and substantially alter the realty by severing clay.
- No signed writing by Mead (the party to be charged) satisfied the Statute of Frauds.
- The draft Borrow Agreement was ineffective because it was unsigned.
- The letter terminating the “proposed” agreement did not constitute a sufficient memorandum of a binding contract because it did not clearly state essential terms and characterized the arrangement as proposed and terminated.
- The agreement was indivisible; the restoration, road, and lake obligations were dependent on the excavation right, so the Statute of Frauds defect defeated the entire bargain.

## Legal Principles

- A contract granting a purchaser the right to enter land and sever soil or minerals that are part of the realty is generally treated as conveying an interest in land, not merely selling goods.
- Agreements conveying an interest in land are unenforceable under the Statute of Frauds absent a writing signed by the party to be charged that states the essential terms with reasonable certainty.
- An unsigned draft agreement does not satisfy the Statute of Frauds.
- A writing that references only a “proposed” agreement and purports to terminate it, without clearly setting out essential contract terms, is not an adequate Statute of Frauds memorandum.
- When promises form a single integrated exchange dependent on a land-related grant, the contract is not divisible for purposes of avoiding the Statute of Frauds.

## Conclusion

The court held that the alleged clay-excavation arrangement conveyed an interest in land requiring a Statute of Frauds-compliant signed writing; because no sufficient signed memorandum existed and the bargain was indivisible, the breach of contract claim was unenforceable and summary judgment for Mead was proper.


DePugh v. Mead Corp., 79 Ohio App. 3d 503, 607 N.E.2d 867 (Ohio Ct. App. 4th Dist. 1992)