Shell's City, Inc. v. Westerman

• Decision Date: 07 December 1971
• Docket Number: No. 70-893,70-893
• Citation: 257 So.2d 276
• Court: Florida District Court of Appeals
• Parties: SHELL'S CITY, INC., a Florida corporation, Appellant, v. Max WESTERMAN, individually and as Trustee for Gala Showplace, Inc., a dissolved Florida corporation, Appellee.

Page 276

257 So.2d 276

SHELL'S CITY, INC., a Florida corporation, Appellant, v. Max WESTERMAN, individually and as Trustee for Gala Showplace, Inc., a dissolved Florida corporation, Appellee.

No. 70-893.

District Court of Appeal of Florida, Third District.

Dec. 7, 1971.

Rehearing Denied Feb. 23, 1972.

Opinion Vacated 266 So.2d 361.

Shutts & Bowen and Thomas H. Anderson, Miami, for appellant.

Alan H. Rothstein, Miami Beach, for appellee.

Before PEARSON, CHARLES, CARROLL and BARKDULL, JJ.

BARKDULL, Judge.

This is an appeal from a final judgment in the sum of $93,878.60 in favor of Max Westerman, individually ¹ and as trustee for Gala Showplace, Inc. against Shell's City, Inc. The claim arose out of an alleged oral contract to purchase a liquor license and pay Gala Showplace, Inc. therefor two per cent of gross sales of a package store to be operated on the licensed premises for a period of five years.

On December 8, 1966, Max Westerman, individually and as trustee for Gala Showplace, Inc. (a dissolved Florida Corporation), filed a complaint against the defendant, Shell's City, Inc. Count I alleged that on January 31, 1963, Gala Showplace, Inc. was the owner of a business known as Club Twenty-Three located at 2300 Collins Avenue, Miami Beach, as an incident to which it owned an alcoholic beverage license. That, on February 1, 1963, Gala entered into an oral agreement with George McKelvey on behalf of Shell's whereby Shell's promised to pay Gala for transfer of the liquor license two per cent of the gross sales of a package liquor store, to be operated by Shell's on the aforedescribed premises for a period of five years, the first of such annual payments to be due on January 1, 1964. The complaint alleges that the transfer was made, but the defendant (Shell's) had not performed its part of the contract.

Count II was framed in Quantum meruit and asserted that the business and liquor licenses were transferred to the defendant with the understanding that Gala would be paid the fair monetary value thereof.

Count III alleged an oral contract of employment, wherein Shell's agreed that in consideration of Max Westerman granting his consent and approval, as controlling stockholder in Gala Showplace, Inc., to the agreement to be entered into between Gala and the defendant and executing the necessary papers to effect such a transfer, the defendant promised to employ the plaintiff, Max Westerman, for a period of one year as manager of the package liquor store at the usual salary paid to a manager of Shell's City Stores.

Count IV was virtually the same, except that fraud was alleged.

Upon defendant's motion, the court dismissed Count IV early in the proceedings. Count III was withdrawn at trial by the plaintiff. There remained the counts on the alleged oral percentage contract and quantum meruit.

The defendant filed an answer and raised a number of defenses, among which were that the alleged contract sued on was contrary to public policy, was contrary to the statute of frauds; that the plaintiff was not entitled to maintain the derivative action, and that he was guilty of laches.

Even though a jury trial was demanded by the plaintiff, the parties tried the cases non-jury as an accounting suit, which resulted in the final judgment in favor of the plaintiff. This appeal ensued. A number of points have been preserved for appellate review. I deem it necessary to only consider the one urging that there was no competent Credible evidence to support the trial judge's finding of liability.

The record reveals the following: Prior to February 7, 1962, Gala Showplace, Inc. operated a bar and night club known as Club 23, at 2300 Collins Avenue, Miami Beach. On this date, the State Beverage Director revoked Gala's license with prejudice For maintaining a 'B girl' operation upon its premises. Gala exhausted its legal remedies to no avail, and the order of revocation became final in September of 1962. (Gala Showplace, Inc., v. State Beverage Department, Fla.App.1962, 143 So.2d 578; see also further proceedings found in Keating v. State, Fla.App.1964, 167 So.2d 46, quashed in Keating v. State, Fla.1965, 173 So.2d 673.) Thereafter, on October 24, 1962, Gala's landlord, Empire Corp., petitioned the Beverage Director to reissue the license to Empire Corp., stating in part as follows in its petition:

'3. That Gala Show Place, Inc., the last tenant to occupy the premises, and the last holder of a State and County Beverage License No. 23 433, has abandoned and deserted the premises on the date the District Court of Appeal upheld the Director's Order of Revocation, and your petitioner, as president of Empire Corporation, is now in actual physical possession of said premises.'

This petition was supplemented on December 7, 1962, by a letter which reads, in part, as follows:

'The intention of this letter is to serve as a supplement to the Petition for Modification heretofore filed in this cause by Louis DeKovnick, the landlord of the premises at 2300 Collins Avenue, Miami Beach, Florida. Due to a misunderstanding between Mr. DeKovnick, a real estate broker, and Shell's Super Store, Inc., Mr. Dekovnick, as President of Empire Corporation, the landlord of the premises, entered into a lease agreement on behalf of his corporation With Shell's Super Store, Inc., wherein said lease agreement provided for the furnishing of a licensed premise by the landlord, said license to be solely for a package store.

'In reliance upon this Agreement, Shell's Super Store, Inc. has already expended the sum of $30,000.00 in outside alterations, repairs, signs, plate glass, fixtures, etc., all of which were ordered and made especially for this location. This is in addition to the landlord having expended certain monies for inside wall alterations.

'It is my intention to now once again request that the Petition heretofore filed by (sic) granted. Please be advised that Gala Showplace, Inc., the licensee of record, has executed a transfer application, in response to a distress notice given to it, pursuant to Chapter 83 of the Florida Statutes, So that Gala Showplace, Inc. has thereby divested itself of any claim or right to this license, should the Petition be granted.' (emphasis added)

This letter was written in December, some two months Prior to Westerman's claimed oral contract with McKelvey.

Upon the landlord's petition, the Beverage Director issued an amended order dated January 24, 1963, rescinding the 'with prejudice against the location' portion of the order of February 7, 1962 and, on January 31, 1963, issued a second amendment rescinding the revocation of the license Upon the condition that:

'* * * said license must be sold to a bona fide purchaser and application for transfer of the license be made to said purchaser within thirty days from the date of this order. The licensee is hereby authorized to make a late renewal of the license at this time.'

The beverage license was immediately renewed through Empire's attorney for Gala Showplace, Inc. The parties then filed an application ² for transfer of alcoholic beverage license on February 5, 1963. This application contained the standard form 'Affidavit of Seller' Signed by Westerman, consenting to the transfer and stating that a sale in good faith of the business had been made to the applicant. Thereafter, the license was transferred and issued to Shell's City, Inc. Westerman testified that on February 1, 1963, he entered into an oral agreement with George McKelvey, agent for defendant (Shell's City, Inc.), whereby Gala Showplace sold and transferred its liquor license to Shell's in consideration for two per cent of the gross sales of the package store for a period of five years and employment of Westerman as manager of the store for the balance of 1963 at a weekly salary of $125.00, plus approximately $25.00 in commissions. There was no written memorandum of this agreement and there were not witnesses thereto.

Testimony at trial established that the revoked license in question had no value until the reinstatement on January 31, 1963. An expert witness testified that during this period the value of a valid unsuspended liquor license on Miami Beach was between $25,000.00 to $30,000.00.

George McKelvey, general manager of Shell's (with whom Westerman alleges to have made the oral contract), died on January...