In a recent Virginia Supreme Court case styled C. Porter Vaughan Inc. v. The Most Reverend Francis S. DiLorenzo, Bishop of the Catholic Diocese of Virginia, Inc. (Record No. 090110) (Va. 2010) and decided February 25, 2010, a real estate company sued to recover $242,000 in commissions from the Catholic Diocese of Richmond. The real estate firm claimed that, despite not having a written real estate brokerage agreement, the Diocese was still liable for commissions due on the sale of property which was ultimately conveyed to Virginia Commonwealth University.
The Supreme Court reversed the trial court’s decision to throw out the real estate firm’s claim based on the Diocese’s argument that the claim was barred by the Statute of Frauds. The Statute of Frauds is a venerable common law principal which says that certain types of contracts must be reduced to writing to be enforceable. In its decision, the Court stated that the real estate contract which was entered into between the Diocese and VCU, naming the realtor from C. Porter Vaughan as the Bishop’s agent, was a sufficient written agreement to evidence the existence of an agreement to pay commissions.
CLewis N.B.: While it will never be good practice for realtors to fail to obtain their clients’ consent to a brokerage agreement, this case certainly signals the Court’s willingness to find an agreement through other writings and agreements, so that equity can be done where a realtor was clearly the “procuring cause.”
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