Hayes v. Darin Moon, Individually & Redox Chems., LLC

Decision Date12 June 2017
Docket NumberCASE NO. 16-80365-CIV-MARRA
PartiesROYAL HAYES, Plaintiff, v. DARIN MOON, individually and REDOX CHEMICALS, LLC, a foreign corporation, Defendants.
CourtU.S. District Court — Southern District of Florida
OPINION AND ORDER

This matter is before the Court on Defendants' Motion for Summary Judgment (DE 20). For the following reasons, the motion is denied.

I. Facts1

Plaintiff Royal Hayes entered into an oral agreement with Defendants Darin Moon and Redox Chemicals in which Defendant was granted the exclusive rights to distribution of Redox Chemicals products in the state of Florida in exchange for Plaintiff's expertise in "developing new markets for agricultural products in the state of Florida." (DE 1 ¶¶ 15-16.) The oral agreement between Plaintiffand Defendants was for a specific term of three years and could not be terminated prior to the end of the three-year term. (DE 1 ¶ 28; R. Hayes Dep. at 19:8-13, 155:2-7.) The oral agreement between Plaintiff and Defendants was not memorialized in any signed writing. (R. Hayes Dep. at 47:23-48:7.)

Plaintiff brought the present action for declaratory judgment, breach of contract, promissory estoppel, and unjust enrichment. (DE 1 ¶ 1.) Plaintiff's action seeks "his unpaid compensation and past or future interests in Redox Chemicals, LLC pursuant to certain promises and agreements made by Defendants by and through their Authorized Officer Darin Moon. (Id. (emphasis added).) Plaintiff's promissory estoppel, unjust enrichment, declaratory judgment, and accounting claims each arise out of, and are based on, the same facts as Plaintiff's alleged oral agreement. (DE 1 ¶¶ 38-45; R. Hayes Dep. at 62:12-16, 63:3-9.)

II. Legal Standard

The Court may grant summary judgment "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The movant bears the burden of establishing the absence of a genuine dispute of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). It must do so by "citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for the purposes of the motion only), admissions, interrogatory answers, or other materials." Fed. R. Civ. P. 56(c)(1)(A). If the burden of persuasion lies with the nonmovant, summary judgment may be granted where the movant either negates an essential element of the nonmovant's claim or demonstrates to the Court that the nonmovant's evidence is insufficient to establish an essential element of that claim. Celotex,477 U.S. at 331. Any doubt regarding whether a trial is necessary must be resolved in favor of the nonmovant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).

After the movant meets its burden of production, this burden shifts to the nonmovant. "A party asserting that a fact cannot be or is genuinely disputed must support the assertion by: (A) citing to particular parts or materials in the record . . . or (B) showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Fed. R. Civ. P. 56(c)(1). The nonmovant's evidence cannot "consist of conclusory allegations or legal conclusions." Avirgan v. Hull, 932 F.2d 1572, 1577 (11th Cir. 1991). Where the nonmovant bears the burden of persuasion, it must produce more than a mere scintilla of evidence supporting its position; "there must be enough of a showing that the jury could reasonably find for that party." Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir. 1990).

III. Discussion
A. Pre-Trial Stipulation

Defendants argue in their Motion for Summary Judgment (DE 20) that the statute of frauds bars Plaintiff's contract claim (DE 20 at 4); that the statute of frauds bars Plaintiff's promissory estoppel and unjust enrichment claims (DE 20 at 6); that Plaintiff's request for an accounting is without an independent cause of action to justify it (DE 20 at 8); and that Plaintiff's declaratory judgment claim is derivative of claims barred by the statute of frauds and must fail (DE 8 at 20). In Plaintiff's Response in Opposition to Defendants' Motion for Summary Judgment (DE 25), Plaintiff addresses only Defendants' argument against the unjust enrichment claim and the associated survivability of Plaintiff's declaratory and accounting relief. (DE 25 at 3-5.) Further, in a Joint Pre-trial Stipulation (DE 46) filed with this Court, the parties have noted that "Plaintiff has stipulatedthe only claim remaining before the Court is for unjust enrichment." (DE 46 at 5.) Accordingly, the Court need only address Defendants' Motion for Summary Judgment as it applies to Plaintiff's unjust enrichment claim, the only claim that has not been abandoned.

B. Motion for Summary Judgment

Defendants assert that "[t]he statute of frauds applies to claims for unjust enrichment where the unjust enrichment arose from the alleged contract." Tews v. Valdeon, No. 12-23026-CIV, 2013 WL 533201, at *3 (S.D. Fla. Sep. 23, 2013). Defendants' argument rests upon a determination that the contract in question is barred by the statute of frauds. Thus, the Court will first address the applicability of the statute of frauds to the subject contract.

1. Enforceability of Alleged Contract under the Statute of Frauds

Defendants aver that it is "undisputed that the sole basis of Plaintiff's contract claim is an alleged oral contract for a definite three-year term that could not be terminated prior to the expiration of that definite term." (DE 20 at 5.) As such, Defendants contend that Plaintiff's contract claim is "unambiguously barred by the statute of frauds." (Id.) In Plaintiff's Response in Opposition to Defendants' Motion for Summary Judgment (DE 25), he does not address Defendants' contention that the statute of frauds bars his contract claim.

The Florida statute of frauds provides that:

No action shall be brought ... upon any agreement that is not to be performed within the space of 1 year from the making thereof ..., unless the agreement or promise upon which such action shall be brought, or some note or memorandum thereof shall be in writing and signed by the party to be charged therewith or by some other person by her or him thereunto lawfully authorized.

Fla. Stat. § 725.01. "The statute of frauds was enacted to prevent fraud and the enforcement of claims based on loose verbal statements made faulty by the lapse of time, and ...should be strictlyconstrued." LaRue v. Kalex Constr. & Dev., Inc., 97 So. 3d 251, 253 (Fla. 3d DCA 2012). "It is well settled that the oral contracts made unenforceable by the statute because they are not to be performed within a year include only those which cannot be performed within that period." Browning v. Poirier, 165 So. 3d 663, 665 (Fla. 2015) (quoting 9 Williston on Contracts § 24:3 (4th ed. 2011)).

It is clear from the undisputed evidence that Plaintiff's contract claim is barred by the statute of frauds as a matter of law. The sole basis for Plaintiff's contract claim is an oral contract for a definite three-year term that could not be terminated prior to the expiration of that term. See R. Hayes Dep. at 19:8-13; 155:2-7. It is undisputed that the alleged oral contract was never reduced to, or memorialized in, any signed writing. See R. Hayes Dep. at 47:23-48:7. As Defendants emphasize, these circumstances are similar to those considered in LaRue. There, the Florida appellate court found that it was "undisputed that LaRue's complaint was based on an alleged oral employment agreement, and the agreement and the intent of the parties was that LaRue would receive a 25% ownership interest in the company if she worked for the company for three years." LaRue, 97 So. 3d at 256. Accordingly, as the agreement between Plaintiff and Defendants was not reduced or memorialized in a signed writing, and because the agreement was incapable of being performed in one year, the contract on which Plaintiff's contract claim is based is rendered unenforceable by the statute of frauds. See Id.

2. Unjust Enrichment Claim

Having determined that the contract between Plaintiff and Defendants is unenforceable by operation of the statute of frauds, the Court next addresses what impact, if any, the unenforceable contract has on Plaintiff's equitable claim for unjust enrichment.

Defendants assert that Plaintiff's unjust enrichment claim is also barred by the statute of frauds. In support, Defendants rely upon a quote from Tews v. Valdeon, No. 12-23026-CIV, 2013 WL 5333205, at *3 (S.D. Fla. Sep. 23, 2013), to the effect that "[t]he statute of frauds applies to claims for unjust enrichment where the unjust enrichment arose from the alleged contract." Id. (Browning v. Poirier, 113 So. 3d 976, 981 (Fla. Dist. Ct. App.), opinion withdrawn and superseded on reh'g en banc, 128 So. 3d 144 (Fla. Dist. Ct. App. 2013), decision quashed, 165 So. 3d 663 (Fla. 2015), and opinion reinstated, 168 So. 3d 344 (Fla. Dist. Ct. App. 2015) ("a party whose contract is unenforceable due to the statute of frauds cannot recover for unjust enrichment, as the law will not imply a contract where an express contract exists regarding the same subject matter.").

The Court concludes that the authority upon which Defendants' rely is ambiguous at best and contrary to the weight of authority. While the court in Tews quoted from the Browning decision, it found that the contract at issue was not barred by the statute of frauds. Tews, 2013 WL 5333205, at *3. Thus, the Court's reference to the Browning decision was clearly unnecessary to its holding.

In Browning, the central issue was whether the contract fell within the statute of frauds. The trial court concluded that it did and granted a directed verdict on both the breach of contract claim and on the unjust enrichment claim. The trial court ruled that...

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