Present: All the Justices
C. PORTER VAUGHAN, INC., REALTORS
v. Record No. 090110 OPINION BY JUSTICE DONALD W. LEMONS
February 25, 2010
MOST REVEREND FRANCIS X. DILORENZO,
BISHOP OF THE CATHOLIC DIOCESE OF RICHMOND
FROM THE CIRCUIT COURT OF THE CITY OF RICHMOND
Beverly W. Snukals, Judge
In this appeal from the dismissal of an action for real
estate brokerage commissions, we consider whether the trial
court erred when it sustained a demurrer of the defendant, the
Most Reverend Francis X. DiLorenzo (“Bishop DiLorenzo”), to the
amended complaint of C. Porter Vaughan, Inc., Realtors
(“Vaughan”) on the grounds that its claim for a breach of an
oral agreement was barred by the statute of frauds.
I. FACTS AND PROCEEDINGS BELOW
Vaughan filed a complaint against Bishop DiLorenzo, the
Bishop of the Catholic Diocese of Richmond, alleging that
Bishop DiLorenzo had “employed” Vaughan, through its agent
Marie Beitz (“Beitz”), to act as the real estate broker in the
offering for sale of several properties located on North Laurel
Street and South Cathedral Place in the City of Richmond (“the
Chancery Buildings”). The complaint further alleged that
Vaughan marketed the property to several potential purchasers,
including Virginia Commonwealth University (“VCU”), the
ultimate purchaser of the property. As a result of these
marketing efforts, Vaughan alleged that it was owed a real
estate commission in the amount of $242,400 for its services
rendered in procuring a purchaser for the Chancery Buildings.
Bishop DiLorenzo filed a demurrer to Vaughan’s complaint
in which he argued that the complaint failed to satisfy the
requirements of Code § 11-2(7), namely because the complaint
“fail[ed] to allege a writing which complie[d] with the statute
of frauds and as such any alleged contract is unenforceable.”
The trial court sustained Bishop DiLorenzo’s demurrer and
granted Vaughan leave to amend its complaint.
In its amended complaint, Vaughan repeated its assertion
that it marketed the Chancery Buildings to several potential
buyers, including VCU, on behalf of Bishop DiLorenzo.
Additionally, Vaughan alleged that Bishop DiLorenzo “entered
into an oral agreement” for Vaughan to act as the real estate
broker in the offering for sale of the Chancery Buildings.
As evidence of the purported oral agreement between the
parties, Vaughan referred to several writings. The first was a
November 28, 2006 letter to Beitz from the director of real
estate and insurance services for VCU (“the VCU Letter”). The
VCU Letter requested Beitz’s “client’s permission to allow VCU
to order one or more appraisals of the” Chancery Buildings. On
a signature line labeled “APPROVED,” Monsignor Thomas F. Shreve
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(“Shreve”) signed the VCU Letter. In its amended complaint,
Vaughan refers to Shreve as “Vicar General of the defendant.”
A second writing, dated March 2, 2007, was a letter from
Bishop DiLorenzo to Beitz in which he thanked her for
“forwarding the contract from David Solodar to purchase the
Chancery buildings.” Bishop DiLorenzo informed Beitz that he
was “unable to accept [Solodar’s] offer at the current bid.”
The letter informed Beitz that the Chancery Buildings would be
“off the market for 14 days from today’s date” so the Cathedral
of the Sacred Heart could pursue its option to buy the Chancery
Buildings. Bishop DiLorenzo then noted that after consultation
with his staff and attorney, he was “establishing the sale
price of the Chancery Buildings at $5,600,000.00.” Bishop
DiLorenzo signed this letter.
The third writing consisted of a purchase agreement for
the Chancery Buildings (“the Solodar Agreement”) between Bishop
DiLorenzo and David Solodar (“Solodar”). The Solodar Agreement
identified Bishop DiLorenzo as the seller, and Solodar as the
buyer, of the Chancery Buildings, which were identified in the
Basic Terms and Definitions section of the agreement. The
writing provided for a purchase price of “approximately Five
Million Dollars” and set forth the terms of purchase.
The Solodar Agreement also contained a paragraph entitled
“BROKERAGE COMMISSION,” which stated, in pertinent part,
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[i]t is understood that the Seller has engaged
Marie Beitz of C. Porter Vaughan to represent
[Bishop DiLorenzo] in the transaction. Seller
shall, so long as Closing occurs, be responsible
for the commission in the amount of four percent
(4%). Other than Marie Beitz, neither party has
engaged the services of a real estate broker or
agent in negotiation or consummating the Closing
of the conveyance of the [Chancery
Buildings]. . . . This paragraph shall survive
the Closing or termination of this Agreement.
Bishop DiLorenzo signed the Solodar Agreement on March 8, 2007.
The fourth writing Vaughan introduced was a letter, dated
August 6, 2007, from Bishop DiLorenzo to Beitz. The letter
read,
Dear Marie:
Thank you for your letter of July 23, 2007
regarding the withdrawal of the offer to
purchase the property on Cathedral Place and
Laurel Street.
Certainly we both regret that the sale did not
go through. These things happen, and I just
want you to know that I appreciate all you did
on our behalf.
With gratitude and every best wish, I remain,
Sincerely yours in Our Lord,
Most Rev. Francis X. DiLorenzo
The letter bore the signature “Francis X. DiLorenzo.”
Vaughan’s amended complaint alleged that after the Solodar
Agreement was terminated, Bishop DiLorenzo entered into
negotiations with the VCU Real Estate Foundation without
Vaughan’s knowledge, and he sold the Chancery Buildings by deed
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dated December 14, 2007 to the VCU Real Estate Foundation for
$4,040,000. Despite Vaughan’s assistance in marketing the
Chancery Buildings to the VCU Real Estate Foundation, Bishop
DiLorenzo refused to pay the real estate commission to which
Vaughan claims it is entitled. The amended complaint alleged
that Bishop DiLorenzo owed Vaughan $242,400.
In response to Vaughan’s amended complaint, Bishop
DiLorenzo filed a demurrer, in which he contended that Vaughan
failed to plead either “a written []or oral agreement for the
sale of real estate which sets out the necessary terms to
include parties, duration and compensation.” While Bishop
DiLorenzo conceded that the “documents attached to the Amended
Complaint evidence the existence of an oral contract for the
sale of real estate,” he argued that “[n]one of those
documents, however, read together, constitute a writing
required by Virginia Code § 11-2(7).”
The trial court sustained Bishop DiLorenzo’s demurrer and
ordered Vaughan’s amended complaint dismissed with prejudice.
In its accompanying letter opinion, the trial court found that
“the only writing signed by the defendant which ostensibly
relates to the ultimate sale of the property is an August 6,
2007 letter from Defendant to Marie Beitz, Plaintiff’s agent.”
The trial court held that the contents of that letter were “not
sufficient to prove that Defendant intended for Beitz to
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receive a commission for her assistance in the sale of his
property,” and the statements in the letter “cannot be
considered the essential terms of the contract.” Regarding the
Solodar Agreement, the trial court held that its brokerage
commission clause “cannot be imputed to the sale” of the
Chancery Buildings to VCU.
Vaughan timely filed his notice of appeal and we granted
an appeal on the following assignments of error:
1. The trial court erred in finding that there were not
writings between the parties sufficient to overcome the
requirements of Va. Code § 11-2, commonly referred to as
the Statute of Frauds. Such a finding is contrary to the
intent and requirements of the Statute of Frauds.
2. The trial court erred in finding that exhibit 5 attached to
the amended complaint was the “only writing signed by the
defendant which ostensibly relates to the ultimate purchase
of the property.”
II. ANALYSIS
A. Standard of Review
“A demurrer admits the truth of the facts
contained in the pleading to which it is
addressed, as well as any facts that may be
reasonably and fairly implied and inferred from
those allegations. A demurrer does not,
however, admit the correctness of the pleader’s
conclusions of law.” Yuzefovsky v. St. John’s
Wood Apts., 261 Va. 97, 102, 540 S.E.2d 134,
136-37 (2001) (internal citation omitted).
Accordingly, we will consider the facts stated,
and those reasonably and fairly implied and
inferred, in the [complaint] in a light most
favorable to the plaintiff, but we will review
the sufficiency of the legal conclusions
ascribed to those facts de novo.
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Taboada v. Daly Seven, Inc., 271 Va. 313, 317-18, 626 S.E.2d
428, 429 (2006), aff’d on reh’g, 273 Va. 269, 270, 641 S.E.2d
68, 68 (2007).
B. Statute of Frauds
Code § 11-2(7) provides, in pertinent part:
Unless a promise, contract, agreement . . . or
some memorandum or note thereof, is in writing
and signed by the party to be charged or his
agent, no action shall be brought . . . [u]pon
any agreement or contract for services to be
performed in the sale of real estate by a party
defined in § 54.1-2000 or § 54.1-2101.
Code § 11-2 closes by stating, “[t]he consideration need not be
set forth or expressed in the writing, and it may be proved
(where a consideration is necessary) by other evidence.”
“The purposes of Code § 11-2 are to provide reliable
evidence of the existence and terms of certain types of
contracts and to reduce the likelihood that contracts within
the scope of this statute can be created or altered by acts of
perjury or fraud.” Lindsay v. McEnearney Assocs., Inc., 260
Va. 48, 53, 531 S.E.2d 573, 575 (2000). Code § 11-2(7) “was
intended to protect the public from unscrupulous real estate
agents and brokers.” H-B Ltd. P’ship v. Wimmer, 220 Va. 176,
179, 257 S.E.2d 770, 773 (1979).
The issue in this case is whether the writings signed by
Bishop DiLorenzo or his agent were sufficient evidence of a
real estate brokerage agreement between Bishop DiLorenzo and
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Vaughan to remove the bar of the statute of frauds. We hold
that they were.
The statute [of frauds] is procedural or remedial
in nature, and is concerned, not with the validity
of the contract, but with its enforceability.
The object of the statute of frauds is to prevent
frauds and perjuries, and not to perpetrate them,
so that the statute is not enforced when to do so
would cause a fraud and a wrong to be perpetrated.
T . . . v. T . . ., 216 Va. 867, 871, 224 S.E.2d 148, 151
(1976) (citations omitted).
In Drake v. Livesay, 231 Va. 117, 341 S.E.2d 186 (1986),
we reversed the trial court’s decision to sustain the
defendant’s demurrer, holding that a letter sent by the seller
of real property, in which he apologized for having sold the
property to a higher bidder, “was a memorandum of an oral
contract . . . sufficient to support a breach-of-contract
action between” the seller and the spurned buyer. Id. at 121,
341 S.E.2d at 188. In Drake, we held,
the statute [of frauds] does not require that
contracts within its purview be written. It
merely interposes a bar to the enforcement of
certain oral contracts, which bar may be removed
by proof of a sufficient written memorandum of
the transaction. When the bar is removed, it is
the oral contract which is subject to
enforcement, not the memorandum. Because the
memorandum serves only to remove a bar to the
enforcement of the oral contract, the validity
of the oral contract may be established by other
evidence.
Id. at 120, 341 S.E.2d at 188 (emphasis added).
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The present case contemplates the application of the
statute of frauds not to an oral contract for the sale of real
property, but to an oral real estate brokerage agreement. “A
real estate listing agreement is defined as a contract ‘between
an owner of real property and a real estate agent, whereby the
agent agrees to secure a buyer or tenant for specific property
at a certain price and terms in return for a fee or
commission.’ ” Murphy v. Nolte & Co., Inc., 226 Va. 76, 81,
307 S.E.2d 242, 245 (1983) (quoting Black’s Law Dictionary 840
(5th ed. 1979)). “The [statute of frauds] does not require
that the whole contract be in writing to be enforced when . . .
the memorandum relied on contains the essential terms of the
agreement.” Id. at 82, 307 S.E.2d at 245 (citing Reynolds v.
Dixon, 187 Va. 101, 106, 46 S.E.2d 6, 8 (1948)).
In Murphy, a real estate broker sought his proportionate
share of a sales commission based on an oral listing agreement.
Id. at 78, 307 S.E.2d at 243. The only written evidence of the
oral agreement introduced at trial was the sales contract,
negotiated directly between the sellers and purchasers, for the
subject property. Id. at 79-80, 307 S.E.2d at 244. After
reviewing the contract, we determined that “[m]anifestly” there
was “sufficient written evidence, signed by the sellers,
authorizing [the broker] to act as their agent to secure a
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buyer for the property at a specific price in return for a
commission.” Id. at 81, 307 S.E.2d at 245.
Murphy noted that the written sales agreement before the
trial court “identifie[d] the parties to that agreement, . . .
acknowledge[d] the participation of [the broker], identifie[d]
the property, state[d] a firm price as well as the terms of
sale, and provide[d] that a commission [would] be paid to the
brokers.” Id. at 81-82, 307 S.E.2d at 245. Accordingly, the
trial court affirmed the jury’s award of a verdict in favor of
the broker for his sales commission. Id. at 78, 83, 307 S.E.2d
at 243, 246.
Here, as in Murphy, there was a contract for the sale of
real property – the Solodar Agreement – that “contains the
essential terms of the [brokerage] agreement.” Id. at 82, 307
S.E.2d at 245. This writing alone is sufficient written
evidence of an oral agreement between Vaughan and Bishop
DiLorenzo to remove the bar of the statute of frauds. The
Solodar Agreement identified Bishop DiLorenzo and Solodar as
the parties to the sale, acknowledged Beitz as Bishop
DiLorenzo’s representative in the transaction, identified the
Chancery Buildings as the properties to be sold, stated an
approximate purchase price, identified the terms of sale, and
provided that a commission would be paid to Vaughan.
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In his demurrer to Vaughan’s amended complaint, Bishop
DiLorenzo contends that Vaughan failed to “set[] out the
necessary terms to include parties, duration and compensation.”
Compensation is not required by the plain language of Code
§ 11-2, the last paragraph of which expressly eliminates
consideration as an element of the agreement required in the
writing. And as our analysis in Murphy articulates, no written
durational language is required in order to remove the bar of
the statute of frauds from a real estate brokerage agreement.
It bears repeating that the “statute [of frauds] is concerned,
not with the validity of the contract, but with its
enforceability.” T . . . v. T . . ., 216 Va. at 871, 224
S.E.2d at 151.
The present case is distinguishable from Murphy because
here the Solodar Agreement was not consummated. However, the
terminated Solodar Agreement is not the contract Vaughan seeks
to enforce.
When the bar [of the statute of frauds] is
removed, it is the oral contract which is
subject to enforcement, not the memorandum.
Because the memorandum serves only to remove a
bar to the enforcement of the oral contract, the
validity of the oral contract may be established
by other evidence.
Drake, 231 Va. at 120, 341 S.E.2d at 188. Just as
the sales contract in Murphy contained “references
. . . sufficient to remove the oral [real estate
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brokerage] agreement from the operation of the
statute of frauds,” 226 Va. at 82, 307 S.E.2d at 245,
we hold that the Solodar Agreement, by itself, is
sufficient to overcome a plea of the statute of
frauds in this case.
In addition to the Solodar Agreement, Vaughan introduced
additional writings that bolster its argument that the statute
of frauds should not operate to bar its claim. The VCU Letter
was signed by Shreve, identified in Vaughan’s amended complaint
as “Vicar General of the defendant.” By authorizing that
request, Shreve ratified VCU’s reference to Bishop DiLorenzo as
Vaughan’s “client.” Additionally, while not sufficient
standing alone, the March 2, 2007 and August 6, 2007 letters
from Bishop DiLorenzo to Beitz further support Vaughan’s claim
of a contract between the parties. We have long held that
multiple writings may be used to defeat a plea of the statute
of frauds. See Jordan & Davis v. Mahoney, 109 Va. 133, 136, 63
S.E. 467, 468 (1909). Taken together, in this case
“[m]anifestly” there was “some memorandum . . . in writing and
signed by the party to be charged or his agent,” Code § 11-2,
“sufficient to remove the oral agreement from the operation of
the statute of frauds.” Murphy, 226 Va. at 81, 82, 307 S.E.2d
at 245.
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As we held in Murphy, “while the whole services agreement
is not memorialized by the writing, nevertheless, the
references in the sales contract are sufficient to remove the
oral agreement from the operation of the statute of frauds.”
Id. at 82, 307 S.E.2d at 245. The same principles of law hold
true here. Of course, Vaughan will bear the burden of proof
concerning the oral agreement at trial.
III. CONCLUSION
We hold that the trial court erred when it sustained
Bishop DiLorenzo’s demurrer. Accordingly, we will reverse the
judgment of the trial court and remand this case for a trial on
the merits.
Reversed and remanded.
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