Culpepper v. Dios

A-5417-96T3 (N.J. Super. App. Div. 1998) (Unpublished)
  • Opinion Date: June 24, 1998

PARTNERSHIPS; STATUTE OF FRAUDS—An agreement to form a real estate partnership is not subject to the real estate Statute of Frauds.

Complainant alleged that he and his intended partner entered into an oral contract in which his intended partner agreed to finance a joint acquisition of foreclosed properties at a sheriff’s sale. According to the complainant, he bid on two foreclosed properties and placed a deposit on each in reliance on this agreement. However, his partner-to-be then “wanted to back out of the deal” and never furnished any of the financing. In its review of a motion for summary judgment, the lower court ruled that, even assuming that a contract existed between the two parties, such a contract was unenforceable because the Statute of Frauds requires any contract that “concerns” or “involves” real estate to be in writing. The appellate division thought otherwise.

According to the Appellate Division’s analysis, if there was an agreement between the two putative partners, it was either in the nature of a partnership or a joint venture agreement, or alternatively, a financing contract in which the intended “partner-to-be” agreed to act as financier. Furthermore, however the allegedly agreed-upon arrangement was characterized, it did not deal with any particular parcel of property. Whether the alleged agreement was reviewed under the Statute of Frauds that was in existence at the time of its alleged making or under the subsequent version of the statute, the substance of the agreement was not the sale or transfer of real estate. The mere fact that the object of the agreement involved real estate was insufficient to bring it within the Statute of Frauds. An “oral agreement to form a partnership for the division of profits from the development or the sale of land” is not subject to the Statute of Frauds defense. Consequently, the matter was reversed and remanded to the lower court for a trial of the issues.