James A. Sheehan, James A. Sheehan, P.A., St. Petersburg, Fla., for defendant-appellant.
Appeal from the United States District Court for the Middle District of Florida.
Before RONEY, Chief Judge, COX, Circuit Judge, and MORGAN, Senior Circuit Judge.
[1] This is a breach of contract action, the outcome of which partially turns on whether the district court properly held that the statute of frauds bars the enforcement of an alleged oral contract for the sole distributorship of the beer products of plaintiff.
[2] We hold that the Florida Statute of Frauds, Fla.Stat. §
, bars enforcement of an oral contract that was intended by the parties to last longer than a year, even though the contract could have been terminated for cause within a year.
(Fla. 3d D.C.A. 1986).
[3] With this holding, we affirm the judgment of the district court in all respects for the reasons set forth in its order of November 9, 1987 (Case No. 84-1559 Civ-T-10; M.D.Fla.), attached hereto as an appendix.
[4] AFFIRMED.
APPENDIX
United States District Court
Middle District of Florida
Tampa Division
Case No. 84-1559 Civ-T-10
All Brand Importers, Inc., Plaintiff,
-vs-
Tampa Crown Distributors, Inc., Defendant.
ORDER
This is an action for breach of contract. The Plaintiff, All
Brand Importers, Inc. (All Brand), alleges that it had an oral
contract with the Defendant Tampa Crown Distributors (Tampa
Crown), for the sale and purchase of beer. According to the
complaint Tampa Crown agreed to buy beer from All Brand and to
pay for it within thirty days of delivery. All Brand asserts that
Tampa Crown accepted delivery of several shipments of beer in
September and October of 1984, and refuses to pay for those
shipments.
In its answer Tampa Crown admits that the parties had entered
into a contract and that it accepted and did not pay for the
beer. Tampa Crown pleads set-off as an affirmative defense, and
asserts three counterclaims. The basis of the claim for set-off
and the counterclaims is Tampa Crown’s contention that the oral
contract between Tampa Crown and All Brand extended beyond a
contract for sale and purchase of beer, and was a contract for
Tampa Crown to be the sole distributor in this area for All Brand
products. According to Tampa Crown the contract entailed Tampa
Crown developing a market for All Brand goods and acting as sole
distributor for All Brand for as long as its performance was
satisfactory. Tampa Crown contends that All Brand breached the
alleged agreement, and that it is entitled to damages.
All Brand has filed a motion for summary judgment on its
complaint and on the counterclaims, and has supported the motion
with affidavits and deposition excerpts. Tampa Crown has filed a
memorandum in opposition to the motion. The
Page 750
Court will first address that portion of the motion relating to
the counterclaim.
All Brand first argues that the alleged oral contract is
unenforceable under the statute of frauds, Fla.Stat. § 725.01,
which requires that contracts that are not to be performed within
one year be in writing to be enforceable. Tampa Crown does not
dispute this basic contention, but instead argues the contract
was terminable at any time for cause, and was thus susceptible of
completion within one year.
All Brand has submitted an excerpt of a deposition of Miguel A.
Diaz, President of Tampa Crown, in which he describes the oral
contract. According to Mr. Diaz All Brand and Tampa Crown agreed
that Tampa Crown would be the exclusive distributor of beer
within a certain geographical area. The relationship was to
continue for as long as Tampa Crown did a good job, its sales
continued to grow, and it assisted All Brand in merchandising the
beer. No terms were established regarding the price of the beer
or the amount Tampa Crown would purchase.
In Joe Regueira, Inc. v. American Distilling Company, Inc.,
642 F.2d 826 (5th Cir. Unit B 1981), the court considered an
alleged oral contract and ruled that the contract could have been
performed within one year. The court based this finding on the
terms of the contract which permitted cancellation of a
distributorship if the distributor failed to maintain its market
share. Id. at 830. The court relied on Schenkel v. Atlantic
Bank of Jacksonville, 141 So.2d 327 (Fla. 1962), which upheld an
oral contract intended to continue until the death of one of the
parties.
The Regueira Court also referred to First Realty Investment
Corp. v. Gallaher, 345 So.2d 1088 (Fla. 3d D.C.A. 1977). In First
Realty the plaintiff brought suit on an oral contract for a
bonus. The appellate court found that the trial court had
“incorrectly reasoned that the contingencies of death,
resignation and/or firing could take the agreement out of the
statute’s control.” Id. at 1089. The court then explained that
the intent of the parties determined whether an oral contract was
to be performed within one year. Id.
A more recent decision, Khawly v. Reboul, 488 So.2d 856
(Fla. 3d D.C.A. 1986), reiterates the proposition that under
Florida law the intent of the parties with regard to the time of
performance (not the possibility of contingent termination)
is the key factor in determining whether an oral agreement is
enforceable. In Khawly the alleged agreement was to form a
corporation which would begin a retail sales business. The
parties entered into a three-year lease for business space. The
plaintiffs’ attorney stated that the plaintiffs would have
continued working in the business had the defendants not breached
the contract, and asked for the $4,000 a month that the
plaintiffs would have made had they continued working. The court
found that these factors indicated that the parties intended for
the business to continue for more than a year, and enforcement of
the agreement was barred by the statute of frauds. Id. at 858.
Under the reasoning of the Regueira decision the alleged
agreement between Tampa Crown and All Brand is enforceable. The
contract was terminable for cause, thus it could have conceivably
been terminated within one year. However, the recent Khawly
decision requires the Court to make a more comprehensive inquiry
into the intent of the parties at the time the alleged contract
was made.
In the pre-trial stipulation Tampa Crown describes the alleged
contract as perpetual. Tampa Crown contends that it expended time
and money developing a market for All Brand products, and
contracted with sub-distributors to sell All Brand products.
Tampa Crown served as a distributor for All Brand for
approximately seven years, allegedly pursuant to the oral
agreement, and complains because All Brand ceased to do business
with it. In addition, Diaz, in his deposition, indicated that
Tampa Crown entered into its business relationship with All Brand
in anticipation of realizing future profits. These factors
indicate that Tampa Crown and All Brand intended for their
relationship to last for more than one year.
Page 751
Tampa Crown has not presented any evidence to show that the
parties to the alleged agreement intended for performance to be
completed within one year. The allegation that the contract was
terminable for cause does not remove the contract from the
statute. Such a contingency applies to any contract, and to
permit a contingency of early termination to remove an oral
contract from the statute of frauds would rob the statute of its
force.
Because enforcement of the alleged oral agreement is barred by
the statute of frauds, the motion for summary judgment is GRANTED
as to Counts I and II of the counterclaim.
In Count III Tampa Crown asserts that it is entitled to be paid
for the development or enhancement of the market for All Brand
products. All Brand contends that recovery in quantum meruit is
available only for the value of services rendered and materials
used, and that any services rendered by Tampa Crown were
incidental and done to implement the sale of goods for its own
benefit. All Brand also argues that recovery in quantum meruit is
available only when the subject matter of a contract is personal
services.
All Brand’s characterization of quantum meruit is not entirely
accurate. In Sax Enterprises, Inc. v. David and Dash, 92 So.2d 421
(Fla. 1957), the defendant ordered bedspreads which were
delivered to and used by the defendant for a period of time
although the bedspreads did not meet the defendant’s
specifications. The trial court awarded the plaintiff the full
contract price of the bedspreads. The Florida Supreme Court
reversed, ruling that the plaintiff was entitled to recovery in
quantum meruit. The Court described the measure of recovery as
the value of the product to the defendant. Id. at 422 (citation
omitted). The general rule is that recovery in quantum meruit is
available “where one receives goods or services from another
where in the normal course of common affairs a reasonable person
receiving such benefit would ordinarily expect to pay for it.”
Osteen v. Morris, 481 So.2d 1287, 1290 (Fla.D.C.A. 1986).
All Brand contends that the parties, prior to most of the
promotional campaigns conducted by Tampa Crown, agreed that All
Brand would reimburse Tampa Crown for one half of its expenses,
and that Tampa Crown was reimbursed. The parties had no other
agreements or expectations that All Brand would reimburse Tampa
Crown for advertising and expenses. All Brand also asserts that
not only did Tampa Crown recoup its advertising expenses in
increased sales, but also that All Brand engaged in nation wide
advertising campaigns that benefited Tampa Crown.
Tampa Crown has presented no evidence to the Court as to what
expenditures were made on behalf of All Brand nor has it
presented any evidence as to what benefit inured to All Brand as
a result of Tampa Crown’s efforts.
Under Fed.R.Civ.P. 56(c), summary judgment is
proper “if the pleadings, depositions, answers to
interrogatories, and admissions on file, together
with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the
moving party is entitled to a judgment as a matter of
law.” The moving party is entitled to “judgment as a
matter of law” when the nonmoving party fails to make
a sufficient showing of an essential element of the
case to which the nonmoving party has the burden of
proof.
Everett v. Napper, 833 F.2d 1507, 1510 (11th Cir. 1987) citing
Celotex Corp. v. Catrett, [477] U.S. [317], 106 S.Ct. 2548,
253, 91 L.Ed.[2d] 265 (1986).
Here Tampa Crown has not made any showing that it is entitled
to recovery in quantum meruit for goods or services rendered to
All Brand. Accordingly, All Brand’s motion for summary judgment
on Count III of the counterclaim is GRANTED, the counterclaim is
DISMISSED with prejudice and the Clerk is Directed to enter
judgment.
All Brand has also moved for summary judgment on its complaint
for breach of contract, payment for goods sold and delivered and
account stated. Tampa Crown admits the primary allegations of the
complaint
Page 752
that Tampa Crown ordered and received beer worth $74,377.02 from
All Brand and did not pay for the beer. Tampa Crown defends on
the basis that All Brand owed it money as set forth in the
counterclaim.
Accordingly, All Brand’s motion for summary judgment on its
complaint is GRANTED, and the Clerk is directed to enter judgment
for All Brand in the amount of $74,377.02 with interest as
provided by law, and costs awarded to All Brand.
IT IS SO ORDERED.
DONE and ORDERED at Tampa, Florida, this 9th day of November,
1987.
(s) Wm. Terrell Hodges
UNITED STATES DISTRICT JUDGE
