In the Matter of a Mail Dispute Between:

 DAVID RAKES, CONNIE RAKES
 and
 JAMES MERRIMAN

 P.S. Docket No. MD-15

 06/21/88

 Mason, Randolph D., Administrative Law Judge

By Order dated June 10, 1988, the Associate Judicial Officer remanded the instant case to the Administrative Law Judge for the purpose of resolving two issues: 1) Whether disputants Rakes were fraudulently induced to enter the contract with disputant Merriman, and 2) whether Merriman breached the contract. This Initial Decision on Remand clarifies the Initial Decision, and the latter is incorporated herein by reference.

In connection with the first issue, the Administrative Law Judge held in Conclusion of Law 2 (I.D. at p. 5) that "the Rakes have failed to demonstrate that they were fraudulently induced to enter into the contract." This constituted a holding that the Rakes had failed to sustain their burden of proving the fraudulent inducement which they alleged in their first submittal dated March 18, 1988 (P12, p. 3). The Rakes were represented by counsel throughout this proceeding and had every opportunity to present evidence to substantiate their claim of fraud. However, they have merely shown that Merriman failed to fulfill the promise he made to pay off certain debts, and have introduced no evidence indicating that he never intended to fulfill his promise or that he otherwise intended to defraud the Rakes. If he had fraudulently induced the Rakes to enter into the contract of sale of the business, the contract would be considered void and ownership of the business would never have passed to the Bahama Trust. However, since the Rakes failed to carry their burden of proof, it was held in the Initial Decision that "the contract [transferring ownership of the business] is . . . enforceable" (COL 2, I.D. p. 5). Accordingly, ownership of the business passed from the Rakes to the Bahama Trust on November 27, 1987. Since the above issue has already been resolved based upon the evidence presented by counsel in accordance with the schedule of submissions and comments provided by the regulations, no further evidence need be taken. The undersigned does not understand the Order of the Associate Judicial Officer to require a reopening of the record and taking of further evidence in a situation where the decision has already been made based upon a failure to sustain the burden of proof.

The June 10 Order also states that the issue of whether Merriman breached the contract also remains unresolved. Although the Initial Decision states that "Merriman failed to fulfill his promise to pay off the tax liabilities," no determination was made whether this failure constituted a breach. The record is not clear as to when the parties contemplated that these debts would be paid by Merriman. However, no further evidence need be taken on this matter because a subsequent breach of the contract would not be relevant to the resolution of the mail dispute. In this regard, the contract was enforceable and transferred ownership to the Bahama Trust. The fact that Merriman subsequently failed to pay the tax liabilities may mean that the Rakes are entitled to an award of damages in the Florida court, but that would not alter the fact that ownership passed to the Trust. As previously stated, if the Rakes had been able to prove that they were fraudulently induced into the contract or that they were laboring under a mistake of fact when they entered into the contract, then the contract would have been declared void. However, no such proof has been adduced, and as held in the Initial Decision, the contract is enforceable.

Accordingly, the holding of the Initial Decision remains the same.