In the case of Modern Construction, Inc. v. Carty, 2013 WL 2996549 (V.I.Super. June 13, 2013), the plaintiffs argued that they didn’t enter into a valid contract for the sale of land and that there was no agreement. Even if there was a binding contract, they stated that it was oral and in violation of the Virgin Islands Statute of Frauds which provides that any interest in property that is orally created, transferred, or assigned for a period more than a year is void and unenforceable.
In 2006, Moses Carty traveled to Anguilla to speak to Maxwell Carty about buying some property (Parcel 380) which was owned by Modern Day Construction, Inc. ("Modern") . Maxwell Carty was its President. During their discussions, Maxwell agreed to sell Parcel 380 to Moses for $250,000. Maxwell purportedly also agreed to give Parcel 381 to Moses as a “bonus” for purchasing the first parcel. However, Moses gave Maxwell $6,000 for the bonus property because he "did not want to receive anything for free". Maxwell then gave Moses the keys to the house on 381 and told Moses to speak with his attorney, Amos Carty, Jr., about the paperwork.
Through the spring of 2006, Moses spoke to Attorney Carty about obtaining the documents needed for the sale and transfer of title to the properties. Attorney Carty did not draft the documents because he was too busy. A few months later, Moses moved onto Parcel 381, began remodeling the house, and landscaped the land. The extensive improvements were conducted from July to November of 2006 at a cost of approximately $80,000. In 2007, another attorney prepared a quitclaim deed to transfer the parcels from Modern to Moses for the agreed upon price of $250,000. Moses then sent the quitclaim deed to Maxwell to sign on behalf of Modern and to convey the land to Moses. At this point, Maxwell told Moses to give the deed to Attorney Carty to sign. When Moses told Attorney Carty about the deed, he refused to execute it explaining that Maxwell did not want the conveyance to be completed by simply signing the deed. Moses explained to Attorney Carty that he needed the deed signed for collateral to obtain a loan for Parcel 380 in the amount of $250,000.00.
Times passed with no action, and at the end of 2008, Modern’s agent gave a lease to Moses that required him to pay monthly rent of $1,200. Moses told the agent that he paid for the land and refused to pay rent. At the start of 2009, another of Modern’s agents tried to present Moses with a lease. When Moses refused to sign it, the agent told Moses that he needed to move out. Moses said he would if he were paid for the $80,000 for the work he’d done on the property.
In February 2009, Moses was given a Notice to Quit for failure to pay rent. The notice advised him to vacate the premises by mid-March 2009. Moses did not. Again, in September, Modern’s agent gave Moses a Notice to Quit and to vacate by the end of October. Moses again refused. In late December 2009, Modern filed the claim against Moses for forcible entry and detainer to recover the property. Moses filed an Answer with counter and cross claims against Modern, Maxwell, and Attorney Carty including specific performance, promissory fraud, and tortious interference with contractual relations.
Modern said that Moses’s alleged oral contract for the sale of Parcels 380 and 381 was unenforceable because it violated the statute of frauds. Under Virgin Islands law, [V.I. Code Ann. Title 28, §§ 241 and 242], any interest in property orally created, transferred, or assigned for a period greater than one year is void and unenforceable.
James S. Carroll III, Judge of the Superior Court of the Virgin Islands, explained that the statute of frauds specifically requires “contracts for sale of land or an interest in land to be in writing or evidenced by a note or memorandum." It also requires the contract, note, or memorandum to be "signed by the party to be charged or by his lawful agent under written authority.” The judge held that the statute of frauds would bar the court from enforcing the alleged oral contract. Moses responded that a writing was not needed because of the doctrine of part performance. Judge Carroll stated that the doctrine of part performance is applicable as a defense to the statute of frauds in the Virgin Islands. He went on to say that in order to assert this defense, an individual must show that their reliance on the oral agreement and subsequent actions were induced or acquiesced to for the plaintiff’s benefit and to the detriment of the defendant.
Where specific enforcement is rested on a transfer of possession plus either part payment of the price or the making of improvements, it is commonly said that the action taken by the purchaser must be unequivocally referable to the oral agreement. But this requirement is not insisted on if the making of the promise is admitted or is clearly proved. Restatement (Second) of Contracts § 129, cmt. d (1989).
Modern admitted that Maxwell—as its agent—agreed to sell Parcels 380 and 381 to Moses. Moses stated that he relied on his oral agreement with Maxwell that Modern would transfer title to Parcels 380 and 381 when he began improving the land and house on 381. Moses also points to his payment of $6,000 for that parcel. However, since Moses did not want to obtain title to Parcel 381 without paying something, he paid Maxwell $6,000 for the property. Despite this payment, Maxwell still required Moses to purchase Parcel 380 in order to obtain title to both parcels. Though Maxwell was aware of this explicit term, Moses mistakenly believed that his payment was enough to obtain title to Parcel 381.
Judge Carroll said that the doctrine of part performance requires a showing of an oral agreement, but an oral contract was not shown based on the undisputed facts here. Accordingly, Moses’s claim for specific performance was dismissed due to his failure to demonstrate an oral agreement with Modern. Likewise, his claim against Attorney Carty for tortious interference with contractual relations was dismissed because he failed to establish the existence of that contractual relationship. Moses’s claims against Modern and Maxwell for promissory fraud were also dismissed because the court did not find that Modern fraudulently made a misrepresentation of its intention to transfer title of the parcels to Moses for the purpose of inducing Moses to act in its reliance. Instead, the Court found that the parties failed to agree, and Moses acted based on his misunderstanding of Modern’s terms for transferring the land. With that, the Superior Court concluded that the parties failed to agree. As a result, an oral contract was not established.