QUESTION OF FACT WHETHER PARTIAL PERFORMANCE TOOK ORAL AGREEMENT OUT OF THE STATUTE OF FRAUDS.

The Third Department determined a question of fact had been raised about whether an oral agreement to extend a mining lease was enforceable because partial performance took the contract out of the statute of frauds. An amendment to extend the mining lease for 20 years was never executed. However, the agreement was mentioned in a 20-year sublease which was subsequently entered:

Defendants’ statute of frauds argument is governed by General Obligations Law § 5-703, which, as relevant here, provides that an interest in real property can be created or conveyed only by a signed writing. While plaintiff concedes that a signed copy of the amendment does not exist, he contends that the statute of frauds is inapplicable, as the parties’ course of conduct constitutes partial performance of an oral contract to extend the term of the lease (see General Obligations Law § 5-703 [4]…). “[P]artial performance of an alleged oral contract will be deemed sufficient to take such contract out of the [s]tatute of [f]rauds only if it can be demonstrated that the acts constituting partial performance are ‘unequivocally referable’ to said contract” … .

Here, plaintiff raised triable issues of fact as to whether the partial-performance exception to the statute of frauds applies. Evidence of such performance can be found in the parties’ mutual decision to execute the 20-year sublease agreement, which explicitly referred to the amendment and acknowledged that plaintiff and [defendant] were parties to it. Indeed, if the parties did not have an understanding that the mining lease was to be extended to 20 years, then [defendant sublessee’s] willingness to enter into a 20-year sublease with plaintiff — despite the fact that plaintiff had only a five-year lease with [defendant] and [defendant’s] express consent to the creation of these incongruous interests in his property — would appear to be “‘unintelligible or at least extraordinary,’ explainable only with reference to the oral agreement” …. . Bowers v Hurley, 2015 NY Slip Op 08884, 3rd Dept 12-3-15

REAL PROPERTY (PARTIAL PERFORMANCE OF ORAL AGREEMENT, STATUTE OF FRAUDS)/CONTRACT LAW (PARTIAL PERFORMANCE OF ORAL AGREEMENT, STATUTE OF FRAUDS)/STATUTE OF FRAUDS (PARTIAL PERFORMANCE OF ORAL AGREEMENT)