The Volokh Conspiracy
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From today's decision in Kolodziej v. Mason (11th Cir. Dec. 28, 2014):
This case involves a law student's efforts to form a contract by accepting a "million-dollar challenge" that a lawyer extended on national television while representing a client accused of murder…. [W]e find that the challenge did not give rise to an enforceable unilateral contract ….
The current dispute - whether [James] Mason formed a unilateral contract with [Dustin] Kolodziej - arose from comments Mason made while representing criminal defendant Nelson Serrano, who stood accused of murdering his former business partner as well as the son, daughter, and son-in-law of a third business partner. During Serrano's highly publicized capital murder trial, Mason participated in an interview with NBC News in which he focused on the seeming implausibility of the prosecution's theory of the case. Indeed, his client ostensibly had an alibi - on the day of the murders, Serrano claimed to be on a business trip in an entirely different state, several hundred miles away from the scene of the crimes in central Florida. Hotel surveillance video confirmed that Serrano was at a La Quinta Inn (La Quinta) in Atlanta, Georgia, several hours before and after the murders occurred in Bartow, Florida.
However, the prosecution maintained that Serrano committed the murders in an approximately ten-hour span between the times that he was seen on the security camera. According to the prosecution, after being recorded by the hotel security camera in the early afternoon, Serrano slipped out of the hotel and, traveling under several aliases, flew from Atlanta to Orlando, where he rented a car, drove to Bartow, Florida, and committed the murders. From there, Serrano allegedly drove to the Tampa International Airport, flew back to Atlanta, and drove from the Atlanta International Airport to the La Quinta, to make an appearance on the hotel's security footage once again that evening.
Mason argued that it was impossible for his client to have committed the murders in accordance with this timeline; for instance, for the last leg of the journey, Serrano would have had to get off a flight in Atlanta's busy airport, travel to the La Quinta several miles away, and arrive in that hotel lobby in only twentyeight minutes. After extensively describing the delays that would take place to render that twenty-eight-minute timeline even more unlikely, Mason stated, "I challenge anybody to show me, and guess what? Did they bring in any evidence to say that somebody made that route, did so? State's burden of proof. If they can do it, I'll challenge 'em. I'll pay them a million dollars if they can do it."
NBC did not broadcast Mason's original interview during Serrano's trial. At the conclusion of the trial, the jury returned a guilty verdict in Serrano's case. Thereafter, in December 2006, NBC featured an edited version of Mason's interview in a national broadcast of its "Dateline" television program. The edited version removed much of the surrounding commentary, including Mason's references to the State's burden of proof, and Mason's statement aired as, "I challenge anybody to show me - I'll pay them a million dollars if they can do it."
Enter Kolodziej, then a law student at the South Texas College of Law, who had been following the Serrano case. Kolodziej saw the edited version of Mason's interview and understood the statement as a serious challenge, open to anyone, to "make it off the plane and back to the hotel within [twenty-eight] minutes" - that is, in the prosecution's timeline - in return for one million dollars. Kolodziej subsequently ordered and studied the transcript of the edited interview, interpreting it as an offer to form a unilateral contract - an offer he decided to accept by performing the challenge. In December 2007, Kolodziej recorded himself retracing Serrano's alleged route, traveling from a flight at the Atlanta airport to what he believed was the former location of the now-defunct La Quinta within twenty-eight minutes. Kolodziej then sent Mason a copy of the recording of his journey and a letter stating that Kolodziej had performed the challenge and requested payment. Mason responded with a letter in which he refused payment and denied that he made a serious offer in the interview.
Here's the heart of the court's explanation for why no binding contract was entered into:
"To prove the existence of a contract, a plaintiff must plead: (1) offer; (2) acceptance; (3) consideration; and (4) sufficient specification of the essential terms." An oral contract is subject to all basic requirements of contract law, and mutual assent is a prerequisite for the formation of any contract….
We do not find that Mason's statements were such that a reasonable, objective person would have understood them to be an invitation to contract, regardless of whether we look to the unedited interview or the edited television broadcast seen by Kolodziej. Neither the content of Mason's statements, nor the circumstances in which he made them, nor the conduct of the parties reflects the assent necessary to establish an actionable offer - which is, of course, essential to the creation of a contract.
As a threshold matter, the "spoken words" of Mason's purported challenge do not indicate a willingness to enter into a contract. Even removed from its surrounding context, the edited sentence that Kolodziej claims creates Mason's obligation to pay (that is, "I challenge anybody to show me - I'll pay them a million dollars if they can do it") appears colloquial. The exaggerated amount of "a million dollars" - the common choice of movie villains and schoolyard wagerers alike - indicates that this was hyperbole. As the district court noted, "courts have viewed such indicia of jest or hyperbole as providing a reason for an individual to doubt that an 'offer' was serious." Thus, the very content of Mason's spoken words "would have given any reasonable person pause, considering all of the attendant circumstances in this case."
Those attendant circumstances are further notable when we place Mason's statements in context. As Judge Learned Hand once noted, "the circumstances in which the words are used is always relevant and usually indispensable." Here, Mason made the comments in the course of representing a criminal defendant accused of quadruple homicide and did so during an interview solely related to that representation. Such circumstances would lead a reasonable person to question whether the requisite assent and actionable offer giving rise to contractual liability existed. Certainly, Mason's statements - made as a defense attorney in response to the prosecution's theory against his client - were far more likely to be a descriptive illustration of what that attorney saw as serious holes in the prosecution's theory instead of a serious offer to enter into a contract….
By way of comparison, consider Lucy v. Zehmer, 84 S.E.2d 516 (Va. 1954), the classic case describing and applying what we now know as the objective standard of assent. That court held that statements allegedly made "in jest" could result in an offer binding the parties to a contract, since "the law imputes to a person an intention corresponding to the reasonable meaning of his words and acts." Therefore, "a person cannot set up that he was merely jesting when his conduct and words would warrant a reasonable person in believing that he intended a real agreement." In so holding, the Lucy court considered that the offeror wrote, prepared, and executed a writing for sale; the parties engaged in extensive, serious discussion prior to preparing the writing; the offeror prepared a second written agreement, having changed the content of the writing in response to the offeree's request; the offeror had his wife separately sign the writing; and the offeror allowed the offeree to leave with the signed writing without ever indicating that it was in jest. Given that these "words and acts, judged by a reasonable standard, manifest[ed] an intention to agree," the offeror's "unexpressed state of … mind" was immaterial. Under the objective standard of assent, the Lucy court found that the parties had formed a contract.
Applying the objective standard here leads us to the real million-dollar question: "What did the party say and do?" it is what both parties did not say and did not do that clearly distinguishes this case from those cases where an enforceable contract was formed. Mason did not engage in any discussion regarding his statements to NBC with Kolodziej, and, prior to Kolodziej demanding payment, there was no contact or communication between the parties. Mason neither confirmed that he made an offer nor asserted that the offer was serious. Mason did not have the payment set aside in escrow; nor had he ever declared that he had money set aside in case someone proved him wrong. Mason had not made his career out of the contention that the prosecution's case was implausible; nor did he make the statements in a commercial context for the "obvious purpose of advertising or promoting [his] goods or business." He did not create or promote the video that included his statement, nor did he increase the amount at issue. He did not, nor did the show include, any information to contact Mason about the challenge. Simply put, Mason's conduct lacks any indicia of assent to contract.
In fact, none of Mason's surrounding commentary - either in the unedited original interview or in the edited television broadcast - gave the slightest indication that his statement was anything other than a figure of speech. In the course of representing his client, Mason merely used a rhetorical expression to raise questions as to the prosecution's case. We could just as easily substitute a comparable idiom such as "I'll eat my hat" or "I'll be a monkey's uncle" into Mason's interview in the place of "I'll pay them a million dollars," and the outcome would be the same. We would not be inclined to make him either consume his headwear or assume a simian relationship were he to be proven wrong; nor will we make him pay one million dollars here….
Just as people are free to contract, they are also free from contract, and we find it neither prudent nor permissible to impose contractual liability for offhand remarks or grandstanding. Nor would it be advisable to scrutinize a defense attorney's hyperbolic commentary for a hidden contractual agenda, particularly when that commentary concerns the substantial protections in place for criminal defendants. Having considered the content of Mason's statements, the context in which they were made, and the conduct of the parties, we do not find it reasonable to conclude that Mason assented to enter into a contract with anyone for one million dollars.
Thanks to Louis Bonham for the pointer.