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Cooke v. Goethals - No. 39410-3-II, 2010 Wash. App. LEXIS 2135 (Ct. App. Sep. 21, 2010)

Rule:

The real estate statute of frauds provides that “[e]very conveyance of real estate, or any interest therein, and every contract creating or evidencing any encumbrance upon real estate, shall be by deed.”

Facts:

Steve and Dana Cooke (Cookes) entered into an oral contract with Gilbert and Lena Goethals (Goethals) whereby the latter would sell a property to the former for $60,000. The parties then agreed to a 30-year amortization of the purchase price to establish the Cookes’ monthly payment. Steve Cooke attempted to resolve the lot line problem, but the county officials said it was the Goethalses’ responsibility. The Goethalses agreed to resolve it. The Cookes continued to make their monthly payments. They also removed garbage from the property and rebuilt the front of the garage, spending $6000 to $7000.Thereafter, the Cookes and Goethals met, wherein the Goethalses stated that they had recently obtained the lot line adjustment and would now sell the property to the Cookes for $100,000. The Goethalses added that a neighbor was interested in buying the property for $130,000 to $140,000 but that they would give the Cookes a discount. The Cookes responded that the Goethalses should sell the property to their neighbor for $130,000 to $140,000, keep the $100,000 they were willing to accept from the Cookes, and pay the difference to the Cookes to offset their damages and losses. The Goethalses responded by serving the Cookes with a notice requiring them to remove their personal property by December 31, 2008. The Cookes then sued, seeking specific performance of the sales agreement or damages for breach of contract and fraud. The Goethalses moved for summary judgment, arguing that no written sales agreement existed and that any oral agreement was barred by the statute of frauds. The trial court granted the Goethalses' motion for summary judgment and dismissed the Cookes' claims with prejudice. The Cookes appealed, claiming part performance of the oral contract.

Issue:

Was Cookes’ evidence of part performance of the alleged oral agreement sufficient to satisfy the statute of frauds?

Answer:

Yes.

Conclusion:

The Court noted that in determining whether there was sufficient part performance to “remove” an oral contract for the sale of real property from the operation of the statute of frauds, courts consider whether there has been delivery and assumption of actual and exclusive possession; payment or tender of consideration; and the making of permanent, substantial, and valuable improvements in accordance with the contract. In the present case, the Court held that when viewed in the light most favorable to the Cookes, the facts showed sufficient part performance to invoke the statute of frauds. First, the Cookes had sole possession of the property for almost seven years; second, the Cookes paid the consideration that the Goethalses requested; and last, the Cookes modified the garage and cleaned up the property, spending approximately 10 percent of the purchase price for those improvements. Accordingly, the Court reversed the decision of the trial court.

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