Lynkus Communications, Inc. v. Webmd Corp., No. 2D04-3967.

• Court: Court of Appeal of Florida (US)
• Writing for the Court: Canady
• Citation: 965 So.2d 1161
• Parties: LYNKUS COMMUNICATIONS, INC., Appellant, v. WEBMD CORPORATION, Medical Manager Health Systems, Inc., and John Kang, Appellees.
• Decision Date: 15 August 2007
• Docket Number: No. 2D04-3967.

965 So.2d 1161 LYNKUS COMMUNICATIONS, INC., Appellant,
v.
WEBMD CORPORATION, Medical Manager Health Systems, Inc., and John Kang, Appellees. No. 2D04-3967. District Court of Appeal of Florida, Second District. August 15, 2007.

[965 So.2d 1164]

F. Wallace Pope, Jr., of Johnson, Pope, Bokor, Ruppel & Burns, LLP, Clearwater, and Richard T. Petitt of Bricklemyer Smolker & Bolves, P.A., Tampa, for Appellant.

Dennis P. Waggoner and Landis V. Curry III of Hill, Ward & Henderson, P.A., Tampa, for Appellees WebMD Corporation and Medical Manager Health Systems, Inc.

James M. Landis and Jon P. Tasso of Foley & Lardner LLP, Tampa, for Appellee John Kang.

CANADY, Judge.

This case arises from a stillborn business relationship between appellant LynkUs Communications, Inc., and appellees WebMD Corporation, Medical Manager Health Systems, Inc., and John Kang, who was an officer of Medical Manager. LynkUs sued the appellees. The gravamen of LynkUs's complaint was that the appellees had failed to carry out an oral agreement under which LynkUs would provide a "wireless communications solution" to the customers of Medical Manager and WebMD.

At issue in this appeal are claims by LynkUs against all the appellees for fraud, negligent misrepresentation, promissory estoppel, and quantum meruit and a claim by LynkUs against WebMD and Medical Manager on an account stated. The trial court granted summary judgment in favor of the appellees on these claims on the ground that they were barred by the statute of frauds. The appellees had also moved for summary judgment on the ground that LynkUs's claims were inconsistent with and barred by the merger and modification provisions of a confidentiality agreement.

After the trial court granted summary judgment, LynkUs's remaining claim of misappropriation of trade secrets was tried. The jury returned a verdict in favor of the appellees, and final judgment was entered in their favor. LynkUs has not challenged the verdict on the trade secrets claim.

LynkUs contends that the trial court erred in applying the statute of frauds as a bar to the claims at issue here. LynkUs urges that the statute of frauds was inapplicable because there was a disputed issue of fact concerning whether the agreement could have been performed within one year and thus fell outside the scope of the statute. LynkUs further urges that the doctrine of part performance prevents application of the statute under the circumstances present here. LynkUs also relies on a statutory exception from the statute of frauds for the sale or purchase of securities. Additionally, LynkUs argues that the statute of frauds is not a defense to claims of intentional tort, quantum meruit, or account stated.¹ Finally, LynkUs asserts that the provisions of the confidentiality agreement, which the appellees urge as an alternative ground for affirmance, do not preclude the claims made by LynkUs.

We begin our analysis of LynkUs's arguments with a discussion of the statute of frauds. We then turn to the provisions of the confidentiality agreement and the alternative ground urged by the appellees for affirmance. The summary judgment in favor of the appellees can be affirmed only if they met their burden of "prov[ing] the non-existence of genuine triable issues." Holl v. Talcott, 191 So.2d 40, 43 (Fla.1966).

The statute of frauds provides in pertinent part as follows:

965 So.2d 1165

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.

§ 725.01, Fla. Stat. (2000). "The statute of frauds grew out of a purpose to intercept the frequency and success of actions based on nothing more than loose verbal statements or mere innuendos." Yates v. Ball, 132 Fla. 132, 181 So. 341, 344 (1938). The statute is designed "to prevent persons from being enmeshed in and harassed by claimed oral promises made in the course of negotiations not ending in contracts reduced to writing." Cohen v. Pullman Co., 243 F.2d 725, 729 (5th Cir.1957). "The statute should be strictly construed to prevent the fraud it was designed to correct, and so long as it can be made to effectuate this purpose, courts should be reluctant to take cases from its protection." Yates, 181 So. at 344.

A core feature of the statute is that it applies only to agreements that are "not to be performed within the space of 1 year from the making thereof." § 725.01. For the statute to make an agreement unenforceable, "it must be apparent that it was the understanding of the parties that [the agreement] was not to be performed within a year from the time it was made." Yates, 181 So. at 344.

When . . . no definite time was fixed by the parties for the performance of their agreement, and there is nothing in its terms to show that it could not be performed within a year according to its intent and the understanding of the parties, it should not be construed as being within the statute of frauds.

. . . [W]hen no time is agreed on for the complete performance of the contract, if from the object to be accomplished by it and the surrounding circumstances, it clearly appears that the parties intended that it should extend for a longer period than a year, it is within the statute of frauds, though it cannot be said that there is any impossibility preventing its performance within a year.

Id. (citation omitted).

In the instant case, it is clear "from the object to be accomplished . . . and the surrounding circumstances" that the agreement alleged by LynkUs was intended to "extend for a longer period than a year." Id. The fact that the business arrangement could commence within one year of the parties' alleged agreement is of no moment. The evidence before the trial court shows beyond dispute that the joint business arrangement which was contemplated by LynkUs—but never memorialized in a writing—would be a long-term arrangement or an arrangement that, by its very nature, would extend for...