FILED: May 3, 2000

OUTBACK CONTRACTING, INC.,
an Oregon corporation,

Appellant,

v.

STONE SOUTHWEST, INC.,
and STONE CONTAINER CORPORATION,
a Delaware corporation,
doing business in Oregon under the assumed business name of
Stone Forest Industries;
and LEONARD SMITH,
individually,

Respondents.

Appeal from Circuit Court, Douglas County.

Thomas W. Kolberg, Judge.

Argued and submitted July 13, 1999.

Doyle L. Schiffman argued the cause and filed the briefs for appellant.

Timothy E. Brophy argued the cause for respondents. With him on the brief were Mark R. Weaver and Brophy, Mills, Schmor, Gerking & Brophy.

Before Edmonds, Presiding Judge, and Armstrong and Kistler, Judges.

KISTLER, J.

Affirmed.

Armstrong, J., dissenting.

KISTLER, J.

This case arises out of an oral agreement between plaintiff Outback Contracting, Inc., and defendant Stone Container Corporation (1) by which Stone agreed to cause a third party to transfer land to Outback. The jury found that Stone breached the agreement and returned a verdict in favor of Outback. Stone moved for judgment notwithstanding the verdict because the agreement fell within the statute of frauds. The trial court allowed the motion and entered judgment in Stone's favor. We affirm.

We state the facts consistently with the jury's verdict. Malensky v. Mobay Chemical Corp., 104 Or App 165, 167, 799 P2d 683 (1990), rev den 311 Or 187 (1991). Beginning in the early 1990s, Outback and Stone had an ongoing business relationship in which Outback would periodically locate timberland for Stone. Typically, Stone would provide Outback with money to acquire the property. Stone would receive the timber from the purchase, and Outback would receive title to the real property.

After viewing property owned by Donald and Helen Lilja, Outback talked to Stone about purchasing the Liljas' property. When Outback and Stone learned that the property was to be sold by bid, Outback entered into an oral agreement with Stone's agents. (2) Stone and Outback agreed orally that Stone would submit a bid in Outback's name to buy the property. If the bid was successful, Stone would pay the Liljas $2,278,632 in return for their deeding the real property to Outback and the timber to Stone. According to Outback, the money and the real property would be placed in escrow, and the escrow agent would be instructed to carry out the various transactions.

Stone submitted a bid on the property. However, instead of putting Outback's name on the bid, Stone submitted the bid in its name only. Stone's bid was successful and Stone acquired title to the property. When Stone failed to transfer the real property to Outback, Outback brought this action claiming that Stone breached their oral agreement and that, as a result of that breach, the property was not deeded to Outback. Outback sought damages of $485,000, an amount equal to the value of the real property.

The jury returned a verdict in Outback's favor, and the trial court granted Stone's motion for judgment notwithstanding the verdict. The trial court found that because the agreement "concern[ed] the sale of an interest in real property," it was unenforceable under ORS 41.580(1)(e). (3)

Additionally, the trial court found that because there was no evidence that Stone's agents had written authority to enter into the agreement with Outback, the agreement was unenforceable under ORS 41.580(1)(f). See n 3 above.

On appeal, Outback argues that the trial court erred in granting Stone's motion for judgment notwithstanding the verdict. Outback does not dispute that the agreement was not in writing. It argues, however, that because the agreement did not require Stone to transfer any property to Outback, the agreement was not within the statute of frauds. (4) Stone's response tracks the trial court's reasoning. It argues that the agreement was an agreement for the sale of land and alternatively that it was an agreement concerning real property made by an agent whose authority was not in writing. We agree with the trial court that the parties' agreement was "[a]n agreement * * * for the sale of real property" and thus came within ORS 41.580(1)(e).

The agreement between Outback and Stone consisted of three steps. The first step required Stone to submit a bid in Outback's name. If the bid were accepted, the second step required Stone to pay the Liljas. The third step required the Liljas to deed the timber to Stone and the real property to Outback. The agreement did not simply require Stone to submit a bid to the Liljas as Outback's agent. Rather, it required Stone both to pay the purchase price and to cause the real property to be deeded to Outback in return for the services that Outback had provided to Stone.

The courts have long recognized that when, as in this case, Stone and Outback agree that Stone would pay the Liljas to transfer their land to Outback, the agreement is an agreement for the sale of land and thus within the statute of frauds. Arthur Linton Corbin, 2 Corbin on Contracts