Present: All the Justices
CYNTHIA LINDSAY
OPINION BY JUSTICE LEROY R. HASSELL, SR.
v. Record No. 991945 June 9, 2000
McENEARNEY ASSOCIATES, INC.
FROM THE CIRCUIT COURT OF ARLINGTON COUNTY
William T. Newman, Jr., Judge
The primary issue we consider in this appeal is whether a
contract that must be in writing pursuant to the statute of
frauds, Code § 11-2, may be modified by a parol agreement.
I.
A.
This case was decided on a motion for summary judgment.
Therefore, we must adopt the facts and inferences from those
facts that are most favorable to the nonmoving party, Cynthia
A. Lindsay, unless those inferences are forced, strained, or
contrary to reason. Levine v. Selective Ins. Co. of America,
250 Va. 282, 283, 462 S.E.2d 81, 82 (1995); Renner v.
Stafford, 245 Va. 351, 353, 429 S.E.2d 218, 220 (1993).
Lindsay executed a written "Exclusive Right to Represent
Buyer Agreement" with McEnearney Associates, Inc., which gave
McEnearney Associates the exclusive right to represent Lindsay
in any real estate transactions for the purchase of a home.
The written agreement required Lindsay to pay McEnearney
Associates a commission of three percent of the sales price of
any residential real property that Lindsay purchased between
August 13, 1997, and November 30, 1997.
Subsequently, Lindsay signed a sales contract for the
purchase of property located at 2343 South Nash Street in
Arlington County. She negotiated the price and terms of the
sale "on her own," and she purchased the property without the
assistance of McEnearney Associates. Lindsay claimed that she
entered into an oral agreement with Loretta Connor, McEnearney
Associates' sales associate. Pursuant to the terms of that
parol agreement, Lindsay claims that she was required to pay
to McEnearney Associates a commission of one percent rather
than three percent because Lindsay found the property that she
purchased without the assistance of McEnearney Associates.
She closed on the property, and a statement shows that
McEnearney Associates received a commission of one percent.
In response to requests for admission, Lindsay admitted that
she did not sign a written modification of the "exclusive
right to represent buyer agreement."
B.
McEnearney Associates filed a warrant in debt against
Lindsay in the Arlington County General District Court and
alleged that Lindsay breached the written agreement. Lindsay
alleged in the general district court that McEnearney
Associates breached the agreement, and she asserted that the
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written contract had been orally modified. She asserted a
defense of accord and satisfaction based upon the oral
modification. Lindsay also filed a counterclaim, seeking a
refund of an earnest money deposit on a real estate contract
that was never accepted. The general district court entered a
judgment in favor of Lindsay, and McEnearney Associates
appealed the judgment to the circuit court for a trial de novo
as permitted by Code §§ 16.1-106 and -107. Lindsay did not
appeal the general district court's judgment denying her
counterclaim.
McEnearney Associates filed a motion for summary judgment
in the circuit court and asserted that it was entitled to
judgment because the "exclusive right to represent buyer
agreement" required that Lindsay pay McEnearney Associates a
three percent sales commission in the event that Lindsay
purchased residential property, that Lindsay purchased and
closed upon such property, but she only paid a one percent
commission to McEnearney Associates. Continuing, McEnearney
Associates asserted that the written "exclusive right to
represent buyer agreement" could not be modified orally.
Responding, Lindsay asserted in the circuit court that the
contract between the parties had been modified orally and that
she had a viable defense of accord and satisfaction that could
not be defeated by the statute of frauds. The circuit court
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granted summary judgment in favor of McEnearney Associates,
and Lindsay appeals.
II.
Code § 11-2, often referred to as the statute of frauds,
states in relevant part:
"Unless a promise, contract, agreement,
representation, assurance, or ratification, 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 in any of the following cases:
. . . .
"7. Upon any agreement or contract for
services to be performed in the sale of real estate
by a party defined in § 54.1-2100 or § 54.1-
2101. . . ."
Code § 54.1-2100 defines real estate broker as
"any person or business entity, including, but not
limited to, a partnership, association, corporation,
or limited liability corporation, who, for
compensation or valuable consideration (i) sells or
offers for sale, buys or offers to buy, or
negotiates the purchase or sale or exchange of real
estate . . . ."
Code § 54.1-2101 defines real estate salesperson as
"any person, or business entity of not more than two
persons unless related by blood or marriage, who for
compensation or valuable consideration is employed
either directly or indirectly by, or affiliated as
an independent contractor with, a real estate
broker, to sell or offer to sell, or to buy or offer
to buy, or to negotiate the purchase, sale or
exchange of real estate, or to lease, rent or offer
for rent any real estate, or to negotiate leases
thereof, or of the improvements thereon."
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Lindsay argues that the statute of frauds does not apply
to the written contract she signed with McEnearney Associates
or, alternatively, that the statute of frauds has no
application here because the contract has been fully
performed. We disagree.
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. For example, we stated in Reynolds v.
Dixon, 187 Va. 101, 106, 46 S.E.2d 6, 8 (1948), that
"[t]he statute [of frauds] was founded in
wisdom and sound policy. Its primary object was to
prevent the setting up of pretended agreements and
then supporting them by perjury. There is further a
manifest policy of requiring contracts of so
important a nature as the sale and purchase of real
estate to be reduced to writing since otherwise,
from the imperfection of memory and the honest
mistakes of witnesses, it often happens either that
the specific contract is incapable of exact proof or
that it is unintentionally varied from its original
terms."
Accord Wright v. Pucket, 63 Va. (22 Gratt.) 370, 373 (1872).
We held in Heth's v. Wooldridge's, 27 Va. (6 Rand.) 605,
609-11 (1828), that the statute of frauds rendered
unenforceable an oral modification of a written contract for
the sale of land. Explaining our holding, we stated that the
parol modification of an agreement required to be in writing
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by the statute of frauds would permit "the very mischiefs
which the statute meant to prevent." Id. at 610.
The written contract that Lindsay executed with
McEnearney Associates falls within the scope of Code § 11-2
because the contract is an agreement for services to be
performed in the sale of real estate by a real estate broker
and a real estate salesperson. Applying our established
precedent, we hold that when, as here, a contract is required
to be in writing pursuant to Code § 11-2, any modification to
that contract must also be in writing and signed by the party
to be charged or his agent.
It is true, as Lindsay observes, that in certain
circumstances written contracts, even those that contain
prohibitions against unwritten modifications, may be modified
by parol agreement. See Reid v. Boyle, 259 Va. 356, 369-70,
527 S.E.2d 137, 145 (2000). This principle, however, does not
apply to an agreement which must be in writing to satisfy Code
§ 11-2.
We find no merit in Lindsay's contention that the statute
of frauds does not apply to her agreement with McEnearney
Associates because the agreement has been fully performed.
The agreement has not been fully performed because, as Lindsay
admitted in the circuit court, she failed to pay McEnearney
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Associates three percent of the sales price of the real
property she purchased.
Lindsay argues that the circuit court erred by ruling
that the statute of frauds barred the presentation of her
evidence of an accord and satisfaction as a defense to
McEnearney Associates' breach of contract claim. We disagree.
We have discussed the following principles of accord and
satisfaction which are equally pertinent here:
" 'Accord and satisfaction is a method of
discharging a contract or cause of action, whereby
the parties agree to give and accept something in
settlement of the claim or demand of the one against
the other, and perform such agreement, the "accord"
being the agreement, and the "satisfaction" its
execution or performance.'
" 'The thing agreed to be given or done in
satisfaction must be offered and intended by the
debtor as full satisfaction, and accepted as such by
the creditor.'
" 'Thus an accord and satisfaction is founded
on contract embracing an offer and acceptance. The
acceptance, of course, may be implied, and as a
general rule, where the amount due is unliquidated,
i.e., disputed, and a remittance of an amount less
than that claimed is sent to the creditor with a
statement that it is in full satisfaction of the
claim, or is accompanied by such acts or
declarations as amount to a condition that if
accepted, it is accepted in full satisfaction, and
the creditor accepts it with knowledge of such
condition, then accord and satisfaction results.' "
Virginia-Carolina Elec. Works, Inc. v. Cooper, 192 Va. 78, 80-
81, 63 S.E.2d 717, 718-19 (1951) (citations omitted); accord
John Grier Constr. Co. v. Jones Welding & Repair, Inc., 238
Va. 270, 272, 383 S.E.2d 719, 720-21 (1989).
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We hold that the statute of frauds does not permit
Lindsay to establish a defense of accord and satisfaction.
The purported contract that constitutes the accord is
predicated upon the existence of an oral modification of
Lindsay's written "exclusive right to represent buyer
agreement" with McEnearney Associates. Yet, as we have
already stated, Code § 11-2 requires that any modifications to
that contract must be in writing. Thus, Lindsay cannot assert
the defense of accord and satisfaction based on a contract
that violates the statute of frauds. Approval of this defense
in these circumstances would permit Lindsay to circumvent the
statute of frauds.
In view of our holdings, we need not consider Lindsay's
remaining contentions. Accordingly, we will affirm the
judgment of the circuit court.
Affirmed.
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