Litzenberg v. Litzenberg

⁴¹⁰ RODOWSKY, Judge. Md.Code (1974, 1981 Repl.Vol.), § 5-104 of the Real Property Article provides: No action may be brought on any contract for the sale or disposition of land or of any interest in or concerning land unless the contract on which the action is brought, or some memorandum or note of it, is in writing and signed by the party to be charged or some other person lawfully authorized by him. In this case we shall hold that § 5-104 is not satisfied by corroboration of an oral, land disposition contract in testimony given by one who, as agent for the party to be charged, had agreed to the oral contract but who was not the agent of that party when so testifying. By their divorce in 1975 petitioner, Dorothy P. Litzenberg (Dorothy), and respondent, John H. Litzenberg (John), ended a marriage which had produced six children.

We are concerned in this case with two pieces of realty in Elkton, Cecil County, which the divorce left the parties owning as tenants in common. One parcel, 407 Delaware Avenue, is the former marital home which has been occupied by Dorothy who was awarded custody of the minor children. The other property is an office building at 207 West Main Street. The residence is the more valuable property but the amount of the differential is undetermined.

Pursuant to the divorce decree, as modified in 1981, John paid Dorothy child support and $75 per week as alimony. John also owned 51% and Dorothy owned 49% of the stock of A.C. Litzenberg & Son, Inc., an insurance brokerage company. John had petitioned in 1978 for the sale in lieu of partition of numerous parcels of realty owned by the parties. By the fall of 1982 disposition of all of the realty had been resolved, with the exception of the former marital home and the office building.

In November 1982 Leonard H. Lock-hart (Lockhart) entered his appearance in the divorce case as counsel for Dorothy who had previously been represented by a series of attorneys. Shortly thereafter Lockhart ⁴¹¹ petitioned on Dorothy’s behalf for an increase in child support and alimony. A hearing on the applications for increases and on open issues in the partition case was set for the afternoon of February 9, 1983, before Judge George B. Rasin, Jr., sitting in the Circuit Court for Cecil County. Lockhart and John’s lead counsel, Bayard Z. Hochberg (Hochberg), met on Friday, February 4 to exchange discovery materials and at that time Lockhart presented a settlement proposal.

Dorothy thereafter rejected a counter-proposal by John. On February 8, counsel, on behalf of their respective clients, agreed in a telephone conversation on a settlement which was substantially the proposal initially made by Dorothy through Lockhart. The main features of that agreement were: 1. John would convey all of his interest in the former marital home to Dorothy and Dorothy would convey all of her interest in the office building to John. 2.

John would obtain a release of the residence from the lien of a mortgage covering both the residence and the office building and, if unable to do so, would pay the mortgage. Taxes and insurance, however, on the residence were the obligation of Dorothy. 3. The $75 per week paid by John to Dorothy would be converted from modifiable alimony to nonmodifiable contract support. 4. Each party recognized the other as the sole owner of personal property which the other then possessed or controlled. 5.

Dorothy would transfer to John all of her stock in A.C. Litzenberg & Son, Inc. 6. There would be mutual releases. Hochberg prepared the written agreement and certain related court orders. Counsel met in Elkton on the morning of February 9 at which time Lockhart reviewed and approved the documents.

Lockhart then went to Dorothy’s ⁴¹² home for the purpose of obtaining her signature on the agreement but she would not sign. That afternoon the parties and counsel appeared before Judge Rasin at the scheduled time. Judge Rasin took testimony concerning the settlement and subsequently entered an order directing Dorothy to execute the deed and stock assignment. At that hearing Dorothy told the court that she had told Lockhart, when they had reviewed the written agreement, that it did “not cover the things that we discussed entirely and it takes into consideration other matters that we didn’t discuss, and I particularly don’t like the [nonmodifiable alimony] point____” Dorothy appealed to the Court of Special Appeals which remanded, without affirmance or reversal, for further proceedings.

Litzenberg v. Litzenberg, 57 Md.App. 303 , 469 A.2d 1279 , cert. denied, 300 Md. 89 , 475 A.2d 1201 (1984). The intermediate appellate court concluded that the procedures utilized by the trial judge were inadequate to resolve the dispute over the content and nature of the various communications between Dorothy and Lockhart. That court then addressed Dorothy’s argument that, in any event, the settlement agreement did not comply with the Statute of Frauds. On that phase of the case it held that Lockhart’s testimony had contained several statements which would be sufficient to constitute admissions for the purpose of satisfying the Statute of Frauds, if, in fact, Mr. Lockhart was authorized to enter into the agreement.

If he had such authority, any document that he would have signed for appellant would have satisfied the Statute of Frauds. See Strawn v. Jones, 264 Md. 95, 98 , 285 A.2d 659 (1972), and Whittle v. Brown, 217 Md. 161, 167 , 141 A.2d 917 (1958). It follows then, under the reasoning in Trossbach [v. Trossbach, 185 Md. 47 , 42 A.2d 905 (1945) ], that if Mr. Lockhart’s signing of a document would satisfy the Statute, then the admissions in his testimony would also satisfy the Statute. [Litzenberg, supra, 57 Md.App. at 316-17 , 469 A.2d at 1286 .] ⁴¹³ After the remand John formally moved to enforce the settlement agreement. In answer Dorothy raised, inter alia, the Statute of Frauds defense.

An evidentiary hearing was held before Judge John C. North, II at which Dorothy was represented by new counsel who is not Dorothy’s counsel on this appeal. Lockhart testified that the proposal made by him on February 4 had been authorized by Dorothy after many discussions and that Dorothy had empowered him to accept the settlement in a face-to-face conference at Lockhart’s office on February 8 at which Dorothy’s accountant was also present. The accountant substantially corroborated Lockhart’s description of that meeting. Dorothy again said there were variations between what she had told Lockhart she was willing to accept and the written contract.

The court concluded “that Mr. Lock-hart was in fact authorized by Mrs. Litzenberg to negotiate an overall settlement to her advantage; and that he did that; and that the terms and conditions of that agreement, as negotiated by him, were obviously very strongly to Mrs. Litzenberg’s best interests.” Judge North granted the relief requested in John’s motion for enforcement of the settlement agreement. Dorothy appealed that order to the Court of Special Appeals which affirmed in an unreported opinion. That court concluded there was legally sufficient evidence to support the finding that Lockhart was authorized to make the oral agreement on Dorothy’s behalf. The court gave two reasons why the Statute of Frauds was satisfied.

When this case was first before us, we stated that Mr. Lockhart’s in-court testimony regarding provisions of the agreement calling for transfers of interests in land would constitute admissions of a party such as would satisfy the Statute of Frauds, if in fact Mr. Lockhart was authorized to enter into the agreement. 57 Md.App. at 316 . Since the trial court properly found that Mr. Lockhart was indeed so authorized, it follows that his testimony satis ⁴¹⁴ fied the writing and signature requirements of [the Statute of Frauds]. The court additionally found that an acceptable substitute [for a written memorandum signed by the party to be charged] is provided by Mrs. Litzenberg’s own testimony that Mr. Lockhart was her attorney at the time the settlement was entered into, together with the finding of fact that Mr. Lockhart had acted within his authority. Since the aim of the statute is the prevention of fraud, we see no harm in recognizing testimony of [Dorothy’s] attorney that would otherwise constitute a judicial admission of a party but for the fact that [Dorothy] chose to dispute the scope of her attorney’s authority once in court.

We issued the writ of certiorari on Dorothy’s petition which raised the following questions: A. Did the Petitioner’s trial attorney have the requisite express authority from Petitioner to enter into the purported settlement agreement on her behalf? B. Did the lower courts err in enforcing an agreement to convey interests in land where the negotiating agent lacked written authorization from his principal, and where the agency relationship had ceased at the time of sworn testimony by the agent? C. Was the hearing court’s determination that the agreement in question was fair and reasonable clearly erroneous? We shall assume, arguendo, that Dorothy had expressly authorized Lockhart to enter into the oral agreement of settlement on her behalf and that the proposed written agreement prepared by Hochberg fairly and accurately memorialized the oral agreement.

That brings us to the Statute of Frauds issue. The proposed written agreement was prepared for the signatures of John and Dorothy. It has neither been signed by her nor by any other person purporting to act as agent for her. There is no contention that there is any writing, signed by Dorothy or on her ⁴¹⁵ behalf, which satisfies the statute.

John’s position is that the analysis by the Court of Special Appeals is correct. Section 5-104 is the current version of the land contracts clause of the English Statute of Frauds, 29 Charles II, Ch. 3, § 4, Cl. 4 (1677), 2 Alexander’s British Statutes 690 (Coe’s ed. 1912). The English statute was in effect in Maryland until repealed by Ch. 649 of the Acts of 1971 which also enacted a replacement Statute of Frauds. The current enactment “makes no change in the case law interpreting Section IV of the British statute.” See “Comment to Former Article 21, Title 2 [RP, Title 5],” Md.Code (1974), Real Property Article, at 67.

This Court has held that various sections of the 1677 Statute of Frauds, or modern versions thereof, are satisfied by admissions in the form of sworn testimony in court or on deposition, or in an answer to a complaint. See Lewis v. Hughes, 276 Md. 247 , 346 A.2d 231 (1975) (court testimony admitting oral sale of goods at price of $500 or more); R.E.C. Management Corp. v. Bakst Service, Inc., 265 Md. 238 , 289 A.2d 285 (1972) (deposition testimony admitting oral contract not performable within one year); Adams v. Wilson, 264 Md. 1 , 284 A.2d 434 (1971) (court testimony admitting oral contract within one year provision); Martin v. Michaels, 259 Md. 346 , 269 A.2d 833 (1970) (answer to complaint admitting an oral land contract); Oregon Ridge Dinner Theatre, Inc. v. Hamlin, 253 Md. 462 , 253 A.2d 382 (1969) (concession on court record of oral contract to sell securities); Friedman v. Clark, 252 Md. 26 , 248 A.2d 867 (1969) (court testimony admitting guarantee given orally); Pollin v. Perkins, 223 Md. 532 , 165 A.2d 908 (1960) (court testimony by undisclosed principal admitting signators of land contract to be agents and authorized to sign); Sealock v. Hackley, 186 Md. 49 , 45 A.2d 744 (1946) (court testimony admitting oral land contract). The Uniform Commercial Code, in the sales and in the securities ⁴¹⁶ titles, explicitly recognizes in-court admissions as satisfying the statute. 1 In the case before us John contends that Lockhart’s testimony in the proceedings before Judge North obviates any need for a memorandum signed by Dorothy or an agent for Dorothy. The rule which John urges us