Virginia Statute of Frauds: Va. Code Ann. § 11-2 – a Lawyer’s Equity
The General Assembly enacted the Statute of Frauds, making certain oral contracts unenforceable. It explicitly required a contract be “in writing and signed by the party to be charged” in enumerated cases. Va. Code Ann. § 11-2.
For well over a century however, the Commonwealth’s Courts have relaxed that strict statutory requirement of a signed writing to avoid manifest injustice. Specifically, Courts have applied the equitable doctrine of partial performance to the Statute, ameliorating its harsh consequences. E.g., Runion v. Helvestine, 256 Va. 1, 6-8 (1998); Glovier v. Dingus, 173 Va. 268, 280-283 (1939); Clarke v. Collins, 73 Va. Cir. 12, 17 (Lynchburg Oct. 4, 2006); Grant v. Grant, 67 Va. Cir. 412, 414 (Roanoke Jun. 15, 2005); Net Connection v. GWBEH, L.L.C., 67 Va. Cir. 150, 152 (Fairfax Mar. 8, 2005); Fauntleroy v. Borden, 63 Va. Cir. 144, 145-147 (Richmond Sep. 23, 2003).
Following Wright v. Puckett, 63 Va. (22 Gratt) 370 (1872), the Virginia Supreme Court reiterated in Glovier and again in Runion. "[T]he principles upon which courts of equity have avoided the statute of frauds, upon the ground of part performance of a parol agreement, are now as well settled as any of the acknowledged doctrines of equity jurisprudence. From the numerous decisions on the subject the following principles may be extracted and briefly stated as follows: 1st. The parol agreement relied on must be certain and definite in its terms. 2nd. The acts proved in part performance must refer to, result from, or be made in pursuance of the agreement proved. 3rd. The agreement must have been so far executed that a refusal of full execution would operate a fraud upon the party, and place him in a situation which does not lie in compensation. Where these three things concur, a court of equity will decree specific execution." 256 Va. at 6; 173 Va. at 280. Fauntleroy, 63 Va. Cir. at 145. Therefore, grants of demurrers were reversed in Glovier and Runion.
Recent Circuit Court decisions across the Commonwealth are to the same effect. New Connection succinctly explains the salutary purposes and corresponding limitations of the Statute’s signed writing requirement and its relaxation by the judicial doctrine of partial performance. "The Statute [of Frauds] exists as a mandate of public policy to prohibit
enforcement of pretend agreements by perjury, but is limited when the Statute could serve to perpetuate a fraud by enforcement of the Statute. * * * If the Statute of Frauds applied to contracts partially performed, then its application can perpetuate a fraud because it could deny the thing bargained for by the party seeking performance when consideration already had changed hands. The Supreme Court of Virginia holds partial performance to be sufficient to take the case out of the Statute of Frauds . . . ." 67 Va. Cir. at 152 (citation omitted). Thus “an oral contract is enforceable notwithstanding the statute of fraud when there has been partial performance.” Clarke, 73 Va. Cir. at 17. Grant, supra; Fauntleroy, supra.
“Va. Code §20-149 and 20-155 . . . are forms of the Statute of Frauds, subject to the demands of the Statute of Frauds as well as its exceptions.” Cox v. Mixon, 51 Va. Cir. 168 (Fairfax Jan. 4, 2000). “One of the exceptions to the requirement for a writing is the partial or full performance by one of the parties.” Id. at 169. ”[C]ourts of equity will not allow the statute of frauds to be used as an instrument of fraud.” Id. In Cox, performance was “sufficient to withstand a demurrer and take this oral contract outside of the Statute of Frauds and outside of §20-149 and 20-155”. Id. “In consideration of this Commonwealth’s reliance on a court of equity to provide a remedy to a Plaintiff who has fully performed his part of an oral agreement and sufficiently pleaded such facts in his Amended Bill of Complaint, the Court overrules the demurrer and will allow the case to proceed on its merits.” Id. at 171.
Analogously under the Act, it also suffices if there simply is a document signed by one spouse, consistent conduct over time, and detrimental reliance by the other spouse. In Shenk v. Shenk, 39 Va. App. 161, 165 (2002), husband abandoned the marital abode and wife in June, 1998, leaving her a letter signed only by him stating: “As for the proceeds from Shenk Honda, SHFM, Grandma’s Pantry, etc., I leave it all [to you].” On March 19, 1999, husband also signed an assignment to wife. Judge McGrath of Rockingham Circuit Court ruled in Shenk that the 1998 letter was a valid agreement under the Act and, alternatively, that the 1999 assignment was a valid one too. Id. at 168. The Court of Appeals in Shenk exercised judicial restraint and did not reach the point of affirming the trial court: “As we find the ‘assignment’ constituted a valid marital agreement, we do not address this alternative ruling [that the letter was a valid agreement]”. Id. at 168 n.5.
Any abandonment must be mutual to be effective. The party claiming abandonment bears the burden of proving it by the other party. E.g., Rogers v. Yourshaw, 18 Va. App. 816, 821-22 (1994); Noble v. Noble, 37 Va. Cir. 289, 290 (Chesterfield Oct. 17, 1995).
