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ALTHOUGH THE LIMITED LIABILITY COMPANY (LLC) VOTING AGREEMENT CONCERNED THE SALE OF REAL PROPERTY, IT WAS NOT SUBJECT TO THE STATUTE-OF-FRAUDS PROHIBITION OF ORAL AGREEMENTS (FIRST DEPT). ​

The First Department, reversing (modifying) Supreme Court, determined the counterclaim adequately alleged breach of contract. The contract was an LLC voting agreement which was not subject to the statute of frauds even though the agreement authorized the sale of real property:

Supreme Court should not have dismissed defendants’ counterclaims for breach of contract and specific performance, which it properly construed as a single claim for breach of contract seeking specific performance and monetary relief. The alleged agreement at issue was not an unenforceable oral contract for the sale of real property, as it did not provide for the sale or transfer of real property or any party’s interest in real property (see General Obligations Law § 5-703[2]). Instead, giving defendants’ allegations every favorable inference, defendants sufficiently pled that the oral agreement was effectively an LLC voting agreement under which plaintiff agreed to vote her membership interest in favor of defendants’ sale of their membership interests or a sale of the property. Tsai v Lo, 2023 NY Slip Op 00291, First Dept 1-24-23

Practice Point: Although the voting agreement concerned the sale of real property by the limited liability company, it was not subject to the statute-of-frauds prohibition of oral agreements.

 

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