Verhaegen v. Montigny
| Decision Date | 15 December 1989 |
| Docket Number | No. 89-00382,89-00382 |
| Citation | 553 So.2d 756,14 Fla. L. Weekly 2906 |
| Parties | 14 Fla. L. Weekly 2906 W.P. VERHAEGEN, Appellant, v. Rudy MONTIGNY, Paul Janssens, and Soft Art, Inc., a Florida corporation, Appellees. |
| Court | Florida District Court of Appeals |
Arnaldo Velez of Taylor, Brion, Buker & Greene, Miami, for appellant.
Lawrence A. Farese and Cathy S. Reiman of Cummings & Lockwood, Naples, for appellees.
This is a suit for damages and other relief based upon an alleged failure by defendants to comply with the portion of an oral joint venture contract calling for the issuance and delivery of corporate stock to plaintiff. Plaintiff appeals from (1) the judgment for defendants entered upon the granting by the trial court of their motion for a directed verdict on the breach of contract count of the complaint; the basis for the judgment was that enforcement of the contract was barred by the statute of frauds, section 725.01, Florida Statutes (1985); (2) the judgment for defendants entered upon the granting by the trial court of their motion for a directed verdict on the fraud count of the complaint under section 517.301, Florida Statutes (1985); a basis for the judgment was that a fraud action cannot be founded upon a contract which is unenforceable by reason of the statute of frauds; and (3) the judgment upon the jury verdict in favor of defendants on their counterclaim containing various counts for money allegedly taken by plaintiff from a corporation formed pursuant to the venture. We affirm in part, reverse in part, and remand.
As to (1), we do not agree with the trial court that the evidence clearly showed that the contract called for the establishment of an ongoing business which was necessarily intended to be performed in over one year and that, therefore, pursuant to Khawly v. Reboul, 488 So.2d 856 (Fla. 3d DCA 1986), the contract count was barred by the statute of frauds. We conclude that the directed verdict should not have been granted because under the evidence there was a question of fact for the trier of fact as to whether performance of the contract called for the establishment of an ongoing business or whether the contract was to be completed by the establishment of corporate entities in one of which plaintiff would be a stockholder, and, if so, whether it was intended to be performed in over one year. See Yates v. Ball, 132 Fla. 132, 181 So. 341 (1937), as quoted in Khawly, 488 So.2d at 858. Additionally for the trier of fact under the particular evidence in this case was whether there was unrevoked performance by plaintiff of a nature which took the contract out of the operation of the statute of frauds. See generally 27 Fla.Jur.2d Statute of Frauds §§ 12-14 (1981); 73 Am.Jur.2d Statute of Frauds § 405 (1974). A directed verdict should not be granted unless "the evidence and all inferences of fact, construed most strictly in favor of the nonmoving party, cannot support in the minds of the jurors any reasonable difference as to any material fact or inference." Reed v. Bowen, 503 So.2d 1265, 1266 (Fla. 2d DCA 1986), approved, 512 So.2d 198 (Fla.1987).
We also do not agree with the trial court's alternate ground for the directed verdict on the breach of contract count that the enforcement of the contract by plaintiff was barred by section 607.051(2), Florida Statutes (1985), which provides that a subscription for shares of corporate stock is not enforceable unless it is in writing. The pertinent provisions of that statute, which are the same as those of the corresponding New York statute, were designed "to establish a defense to the enforcement of an oral subscription by a corporation against a subscriber," Beck v. Motler, 42 A.D.2d 1020, 348 N.Y.S.2d 397 (N.Y.App.Div.1973), which was not the situation here. See also 4 W. Fletcher Cyclopedia of the Law of Private Corporations § 1480 (1985 rev.ed.).
As to (2), our disposition as to (1) renders the trial court's above-referenced basis inappropriate as a ground for the directed verdict on the fraud count under section 517.301. Nonetheless, we affirm in that regard. Section 517.301 is applicable to securities transactions, and plaintiff's own allegations and trial testimony were that a securities transaction was not involved because the venture did not involve "an investment of money in a common enterprise with profits to come solely from the efforts of others." SEC v. W.J. Howey Co....
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Lynkus Communications, Inc. v. Webmd Corp.
...is thus undisputed that the alleged agreement essentially "called for the establishment of an ongoing business." Verhaegen v. Montigny, 553 So.2d 756, 758 (Fla. 2d DCA 1989). "`An oral agreement to enter into a new business which will continue indefinitely has been held to be within the pur......