DIRT DEVELOPMENT for Wednesday, February 10, 2010
Daniel B. Bogart
Donley and Marjorie Bollinger Chair in Real Estate Law
Chapman University School of Law
Orange, California

I heard one interesting suggestion – if residential loans just can’t be handled reasonably within the trusts, then the federal government could condemn all of the mortgages held in RMBS and restructure them however the government believes is appropriate.  The trusts could then take the condemnation proceeds (after how much litigation on value?) and distribute them to their investors pursuant to the loan documents.   This is a lunatic idea with a ton of problems.   But somehow, in light of what is coming out of Washington every  day, it is seeming less and less crazy to me. 

Marshall

Competition Realty Breaking News Alert
Washington, Commerce Department
Friday, January 30, 2009 -- 8:41 AM ET
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Moorman v. Blackstock, Inc., 276 Va. 64, 661 S.E.2d 404 (2008)

IN THE SUPREME COURT OF VIRGINIA

In an action for specific performance of a purported oral contract for the sale of real property, the circuit court erred in finding that various notes, memoranda, and draft agreements circulated between the parties were sufficient to satisfy the statute of frauds, Code § 11-2. The circuit court also erred in finding that one of the property owners acted as the agent of the sellers and in granting the prospective purchasers specific performance based upon equitable estoppel and part performance of the purported contract. The judgment of the circuit court is reversed and final judgment is entered in favor of the sellers.

Record No. 070988

Decided: June 6, 2008

Present: All the Justices

Real Property — Contracts — Oral Agreement to Enter Into a Contract — Presumption of Intent to Embody Final Agreement in a Writing — Exchanging of Multiple Drafts — Notes, Memoranda, and Communications — Mutuality of Assent — Requisite Agreement as to Contract Terms — Agency — Insufficient Evidence of Agency — Performance or Breach — Defenses to Enforcement — Statute of Frauds — Equitable Estoppel to Assert Defense — Partial Performance — Code § 11-2

Several family members and a certain trust, each of whom owned an undivided interest in a 200 acre family farm near a mountain lake resort, desired to sell the property to a developer who would agree to certain restrictions and conditions to assure that the property, located adjacent to their own individual residences, would be appropriately developed into an upscale residential neighborhood. After soliciting proposals from several prospective purchasers, the family members accepted the individual plaintiff's proposal, which provided for a purchase price of $1.7 million and an express promise to abide by their desired restrictions regarding development. One of the family members, who had agreed to serve as liaison between the family members and the prospective purchaser, then began negotiating with the individual plaintiff towards a final written purchase agreement embodying all of the desired provisions, conditions, and other necessary specific terms of the sale. Plaintiff and the family members exchanged a number of electronic mail communications, facsimile communications, notes, and interim draft purchase agreements pertaining to and reflecting some, but not all, of the various terms, amendments, and additional conditions desired by the parties. After approximately 18 months, despite the various [Page 65] documents and communications exchanged between the parties, none of the interim draft purchase agreements — including the last draft sent by the individual plaintiff — contained all of the terms and conditions desired and none was ever signed on behalf of both the purchaser and the sellers. Nevertheless, during this period, the individual plaintiff — unbeknownst to the family members — had contracted to resell the property to another developer for $3 million. Approximately two months after receiving the last draft of the purchase agreement from the individual plaintiff, and still desiring to sell the family farm property, the family members sold the property to another developer for $2.6 million. The individual plaintiff and his development company, to whom he had intended to assign his interests in the agreement for the purchase of the family farm property, subsequently sued, alleging that they had a binding contract obligating the family members to sell them the family farm property for the previously agreed-upon purchase price of $1.7 million, that the multiple written communications and documents exchanged between the parties satisfied the statute of frauds, and that, in any event, equitable estoppel and part performance justified granting them specific performance because they had incurred certain costs and had taken other certain actions in furtherance of and in reliance upon the parties' agreement. Following a bench trial, the circuit court agreed with plaintiffs and awarded them specific performance of the purported contact. This appeal followed.