In Greene v. Mullarkey, Case No. 07-30561-HJB, Adversary Proceeding No. 08-03009, 2009 Bankr. LEXIS 2191 (Bankr. D. Mass. Aug. 13, 2009), Christine Greene, her brother Matthew Mullarkey, and his wife Nicole Mullarkey were entangled in what the Bankruptcy Court described as an intra-family feud. The feud related to ownership of a two-family residential property and "played out on or in the property's porch, attic, basement, garage, yard and in-ground pool," prompting the Court to pay its "respect and admiration for the work done by the Massachusetts Probate and Family Court."

Christine, Matthew, and their sister Susan had owned the property as joint tenants. Thereafter, Christine and Matthew sought to acquire Susan's interest, and Christine claims they did so pursuant to an oral agreement by which Matthew would hold the property in his name alone, purportedly for financing reasons, and then reconvey a 50% interest to Christine once the financing was completed.

When Matthew failed to reconvey the 50% interest to Christine, she sued Matthew and his wife Nicole, and they subsequently filed for bankruptcy protection under Chapter 7 and sought to have Christine's claim discharged. Christine argued that her claim was not dischargeable because, among other reasons, an individual debtor cannot discharge a debt for fraud or defalcation while acting in a fiduciary capacity. Christine claimed that Matthew and Nicole owed fiduciary duties to her as the trustees of an express trust, which led to the portion of the decision that is relevant for our purposes.

In discussing what is required to create an express trust, the Court explained that an express trust exists under Massachusetts law if there is (1) intent to create a trust, (2) a specific trust res, and (3) identifiable beneficiaries. Based on this analysis, the Court found that the oral agreement to reconvey the 50% interest in the property to Christine constituted an express trust: Christine was the intended beneficiary, the 50% interest in the property was the trust res, and Matthew and Nicole were the trustees.

Although the statute of frauds generally renders an oral trust for real property unenforceable, this general rule is not without exceptions. As the Court explained in finding such an exception, an oral agreement to convey an interest in real property may be specifically enforced in equity, notwithstanding the statute of frauds, where the agreement has been partially performed by the party seeking to enforce it. Stated differently, part performance of an oral agreement to convey real property, or detrimental reliance on the oral agreement, may estop a defendant from pleading the statute of frauds.