Moneyhun v. Vital Industries, Inc., 91-3777

• Decision Date: 11 January 1993
• Docket Number: No. 91-3777,91-3777
• Citation: 611 So.2d 1316
• Parties: 18 Fla. L. Week. D319 James MONEYHUN, Appellant, v. VITAL INDUSTRIES, INC., a dissolved Florida corporation, Roupen Nalbandian, as Personal Representative of the Estate of Christopher Donoyan, and as Curator of the Assets of Christopher Donoyan, deceased; and an unnamed Trustee for Vital Industries, Inc., a dissolved Florida corporation, Appellees.
• Court: Florida District Court of Appeals

Page 1316

611 So.2d 1316

18 Fla. L. Week. D319

James MONEYHUN, Appellant, v. VITAL INDUSTRIES, INC., a dissolved Florida corporation Roupen Nalbandian, as Personal Representative of the Estate of Christopher Donoyan, and as Curator of the Assets of Christopher Donoyan, deceased; and an unnamed Trustee for Vital Industries, Inc., a dissolved Florida corporation Appellees.

No. 91-3777.

District Court of Appeal of Florida First District.

Jan. 11, 1993.

Milton H. Baxley II, Gainesville, for appellant.

Michael Wolny and Eilon Krugman-Kadi of the law firm of Eilon Krugman-Kadi, Gainesville, for appellees.

ERVIN, Judge.

Appellant, James Moneyhun, appeals an order granting the motion for final summary judgment filed by appellees, Vital Industries, Inc. (Vital), et al. Appellant contends the trial court erred in concluding that (1) the statute of frauds bars enforcement of an alleged oral contract between the parties; (2) the dead man's statute bars proof of the alleged oral contract; (3) the statute of frauds bars appellant's action for quantum meruit and for damages based upon fraud or fraudulent misrepresentation; (4) the statute of limitations bars appellant's claims for breach of oral contract, quantum meruit, and fraud; and (5) that there are no genuine issues of material fact precluding the entry of summary judgment. We affirm in part, reverse in part, and remand for further proceedings.

Between 1980 and 1985, Moneyhun worked for Vital, which developed and sold, among other things, master-control automation systems called "SAM" and "SANDI" for television and radio stations. Moneyhun was a sales manager for the western United States and alleged in his complaint that because of his expertise in automated business systems, Vital asked him in late 1980 or early 1981 to engage in design and consulting work for Vital in order to improve the system's architecture and performance. Moneyhun testified that his sales profits began to decrease as he spent more of his time designing and consulting with engineers in Florida, and he began negotiating for more compensation in the summer of 1981 with Christopher Donoyan, the owner and sole stockholder of Vital.

Moneyhun claims that he met with Donoyan on October 28, 1981, in Los Angeles, where he orally agreed to provide consulting services to Vital in the design, development, sale, and installation of SAM and SANDI, and that Vital in turn agreed to pay him five percent of the selling price for each SAM and SANDI ordered from Vital between November 1, 1980 and October 28, 1986. Moneyhun testified that Donoyan offered him a $10,000 advance, and the record shows that Moneyhun received a check for $10,000, dated October 28, 1981, in October or November, and another $10,000 check, dated January 8, 1982, thereafter.

On May 22, 1984, appellant submitted a written agreement to Donoyan which allegedly incorporated the terms and conditions of the oral agreement, along with an accompanying letter which acknowledged that the agreement had not yet been signed. Neither Donoyan nor any agent of Vital ever signed the agreement, in spite of Moneyhun's repeated requests. The proposed agreement described the payment arrangement as follows:

3. Vital shall pay to Moneyhun five percent (5%) of the selling price of each SAM, SANDI or similar system ordered from Vital by October 28, 1986. Such payments shall be made within 30 days after receipt by Vital of ninety percent (90%) or more of the selling price of each SAM, SANDI or similar system, or within 60 days after acceptance by the customer of each SAM, SANDI or similar system, whichever is earlier.

Moneyhun testified at deposition that it was his understanding, pursuant to the oral agreement, he would be paid the percentages for sales when Vital was paid for the sales of the video electronics equipment and components.

Moneyhun testified that he began demonstrating SAM to customers in 1982, although he did not recall whether any of the products were delivered that year. He asserted that some features were available in 1982, while others were not until 1985, 1986, and 1987. In January 1983, appellant was appointed senior vice president at a salary of approximately $60,000. He said his appointment did not affect his design and consulting agreement.

In a letter written to Vital's employees, dated July 11, 1985, Moneyhun announced that the SAM system "has finally come to maturity, and is now being sold as Vital's premier product." Moneyhun stated that he was leaving the vice-presidency and going out west to serve as a sales representative for Vital. On or after June 24, 1985, Moneyhun had received and deposited a check from Vital Industries for $5,000, marked, "Final Check between Vital Industries and James Moneyhun." Moneyhun testified that Donoyan told him in June or July 1985 that he could not pay the compensation specified in the oral agreement; he did not have the money, and he had spent too much on the project. Donoyan fired appellant in August 1985 when he learned Moneyhun was working for a competitor.

Donoyan died on September 20, 1987. Moneyhun filed suit on April 11, 1990, alleging that he had fully performed his part of the contract and was owed $86,361.35, less the $20,000 Vital advanced to him. Moneyhun alleged breach of an oral contract in Count I, an action to recover the value of his services in quantum meruit in Count II, and an action for damages for fraud or fraudulent misrepresentation in Count III.

Subsequent to a hearing on appellees' motions to dismiss and for summary judgment, the trial court, on September 4, 1991, found there were no genuine issues of material fact, and granted appellees' motion for summary judgment on all three counts. In a subsequent order denying appellant's motion for rehearing, the trial court stated that the dead man's statute barred proof of facts essential to Moneyhun's complaint; that the statute of frauds barred enforcement of the alleged oral agreement; and that, with the exception of appellant's claim on quantum meruit, the statute of limitations barred appellant's claims as untimely.

We cannot agree with the trial judge's order insofar as it relates to the statute of frauds. The reason given by the trial court in concluding that the statute of frauds, Section 725.01, Florida Statutes (1981), ¹ barred Moneyhun's cause of action for breach of oral contract was that the statute requires the "fully performing party [to] complete his performance or have intended to complete his performance, within one year," but plaintiff's performance continued for a six-year period. We observe, however, that the statute of frauds only applies to executory contracts, not to agreements that have been fully performed. Full performance takes the agreement beyond the operation of section 725.01. W.B.D., Inc. v. Howard Johnson Co., 382 So.2d 1323, 1327 (Fla. 1st DCA), review denied, 388 So.2d 1114 (Fla.1980); Goslin v. Racal Data Communications, Inc., 468 So.2d 390, 392 (Fla. 3d DCA), review denied, 479 So.2d 117 (Fla.1985); AV-MED, Inc. v. French, 458 So.2d 67, 69 (Fla. 3d DCA1984); Hiatt v. Vaughn, 430 So.2d 597, 598 (Fla. 4th DCA1983); Dionne v. Columbus Mills, Inc., 311 So.2d 681, 683 (Fla. 2d DCA1975); Miami Beach First Nat'l Bank v. Shalleck, 182 So.2d 649, 651 (Fla. 3d DCA1966).

In their briefs, the parties debate whether Moneyhun had completely performed his part of the contract, which itself demonstrates the existence of a genuine issue of material fact. Moreover, even partial performance of an oral contract removes the contract from the statute of frauds. Elliott v. Timmons, 519 So.2d 671 (Fla. 1st DCA), review denied, 525 So.2d 878 (Fla.1988). Appellees argue, however, that the doctrine of partial performance is not applicable to personal service contracts, and that Moneyhun's alleged agreement with Vital was a personal services contract. Johnson v. Edwards, 569 So.2d 928, 929 (Fla. 1st DCA1990); Miller Constr. Co. v. First Indus. Technology Corp., 576 So.2d 748, 750-51 (Fla. 3d DCA1991). This issue again is a question of fact. A personal service is a non-delegable performance involving a relationship of trust and confidence between the parties and generally applies to employment contracts "that create the intimate relation traditionally known as master and servant." Restatement (Second) of Contracts Sec. 367 cmt. b (1981). Moneyhun testified at his deposition that he was not an employee under this arrangement but an independent contractor.

Because of the existence of these disputed issues of fact--whether Moneyhun fully performed, or, in the event of partial performance, whether this was a contract for personal services--the trial court erroneously concluded that Moneyhun's cause of action was barred by the statute of frauds.

The trial court also erred in holding that appellant was unable to prove his cause of action due to the prohibition contained in Section 90.602, Florida Statutes (1981), the dead man's statute, providing that conversations with a decedent are barred so long as the action is against "the personal representative, heir-at-law, assignee, legatee, devisee, or survivor of a deceased person." The statute is intended "to protect the estate of a decedent against false and fraudulent claims." Charles W. Ehrhardt, Florida Evidence Sec. 602.1, at 312 (1992 ed.). In contrast, the action at bar is primarily one against the corporate entity, Vital, for breach of an oral agreement, rather than against the individual estate of Christopher Donoyan. Although Donoyan's estate's personal representative is a named defendant, the complaint alleges that the personal representative is named only in the event that there is no trustee for the assets of Vital Industries, and only because the estate of Christopher Donoyan apparently holds Vital's assets. We find no legal basis to extend the prohibition of the dead man's statute to actions against corporations. See Tharp v. Kitchell, 151...