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RI Supreme Court Affirms Summary Judgment in Real Estate Professional Liability Claim

The Rhode Island Supreme Court affirmed a summary judgment ruling that Melick & Porter obtained for a Newport real estate agency. Melick & Porter’s client acted as listing agent for the sale of an exclusive Newport waterfront condominium. Shortly after listing the property, two interested parties made offers to purchase through their respective real estate agents. This led to a bidding war that culminated with the seller accepting one of the offers and ultimately conveying the condominium to that party. The unsuccessful bidder brought suit against the listing agent, the seller, the buyer’s agent and the buyer. With respect to the listing agent, the plaintiff alleged that the agency and its brokers orally accepted one of their offers to purchase on behalf of the seller, and otherwise acted improperly while negotiating with the other agents, thereby depriving the plaintiff of a fair opportunity to purchase the property. Melick & Porter moved for summary judgment and argued that because the sellers did not accept any of the plaintiff’s offers to purchase in writing, the Statute of Frauds precluded all theories of liability advanced by the plaintiff. The Newport County Superior Court granted summary judgment to Melick & Porter’s client, observing that the plaintiff’s theories of liability constituted a novel attempt to circumvent the Statute of Frauds. Attorney Syd Saloman represented the listing agent and its brokers.

On appeal, the Plaintiff contended, based upon several legal arguments and purported factual disputes, that the superior court improperly granted summary judgment. The Rhode Island Supreme Court upheld summary judgment with respect to all claims against Melick & Porter’s client, while reversing summary judgment as to a sole claim against some of the other defendants. The Supreme Court’s opinion demonstrates that the Statute of Frauds will bar claims to enforce oral agreements that should be reduced to writing, even where such claims are cloaked in creative legal theories. The holding reinforces the strong public policy that favors strict application of the Statute of Frauds to avoid the floodgates of litigation that would ensue if parties were permitted to bring civil actions to enforce oral agreements to purchase real estate.