Opinion
Case No. 5D17-3016
06-28-2019
Matthew STAMER and Brokerage Firm, LLC, Appellants, v. FREE FLY, INC. d/b/a Exit Realty Florida, Appellee.
Eric Charles Boughman, Teresa N. Phillips, and Charles W. Sell, of Forster Boughman Lefkowitz & Lowe, Maitland, for Appellants. Carrie Ann Wozniak and Sara A. Brubaker, of Akerman LLP, Orlando, for Appellee.
Eric Charles Boughman, Teresa N. Phillips, and Charles W. Sell, of Forster Boughman Lefkowitz & Lowe, Maitland, for Appellants.
Carrie Ann Wozniak and Sara A. Brubaker, of Akerman LLP, Orlando, for Appellee.
SASSO, J. Appellants, Matthew Stamer and Brokerage Firm, LLC, appeal from a final judgment on Appellee's, Free Fly, Inc. d/b/a Exit Realty Florida, eight-count complaint against them, alleging breach of two real estate franchise agreements and their associated personal guaranties, fraudulent misrepresentation, negligent misrepresentation, promissory estoppel, and unjust enrichment. Appellants raise several issues on appeal. We agree with Appellants that Appellee's claims for fraudulent misrepresentation and promissory estoppel are barred by the statute of frauds. Thus, we reverse the judgment in favor of Appellee on those claims. In all other respects, we affirm.
In 2004, Appellants and Appellee entered into a franchise agreement and personal guaranty to operate an EXIT real estate franchise in Maitland, Florida. They renewed the agreement in 2009 for a five-year period, ending on October 31, 2014. In January 2014, Appellants and Appellee entered into a second franchise agreement and personal guaranty to operate an EXIT real estate franchise on Rosalind Avenue in Orlando, Florida.
In September 2014, Appellee approached Appellant Stamer, a real estate broker and sole member of Brokerage Firm, LLC, about renewing the Maitland franchise agreement. Unbeknownst to Appellee, Stamer was already in negotiations with a competing real estate company, Coldwell Banker, for the sale of the Maitland business assets. Also unbeknownst to Appellee, Stamer was negotiating with a former office manager of the Rosalind franchise, Gil Ramos, to sell the Rosalind business assets and assign the Rosalind franchise agreement to him.
For two-and-a-half months, Stamer assured Appellee of Appellants' intent to renew the Maitland franchise agreement for another five-year term and not to sell the Rosalind franchise to Ramos, while stating the exact opposite during negotiations with Coldwell Banker and Ramos. Believing that Stamer intended to remain in the EXIT system, Appellee allowed Appellants to continue operating the Maitland EXIT franchise after the Maitland franchise agreement expired on October 31, 2014.
In November 2014, instead of returning renewal paperwork as expected, Stamer sent Appellee an email enumerating additional terms he wanted to negotiate prior to renewing the Maitland franchise agreement. Throughout negotiations with Appellee, Stamer expressed his intention to sign on for at least another five years, and the parties discussed the terms of the anticipated five-year renewal agreement. Yet, the record reflects that Stamer's "negotiations" were a veiled attempt to draw out the renewal process until he could close his pending deal with Coldwell Banker. To that end, Stamer continued negotiations with Appellee until December 18, 2014, when he sold all of Brokerage Firm's Maitland business assets and part of Brokerage Firm's Rosalind business assets to Coldwell Banker.
Thereafter, Appellee filed suit against Appellants, alleging breach of the Maitland and Rosalind franchise agreements and their associated personal guaranties, fraudulent misrepresentation, negligent misrepresentation, promissory estoppel, and unjust enrichment. The trial court rendered a judgment in favor of Appellee on all counts, except the negligent misrepresentation and unjust enrichment counts, and awarded damages totaling $748,255.38. In awarding judgment in favor of Appellee on its fraudulent misrepresentation and promissory estoppel claims, the trial court found that Stamer's representations on behalf of himself and Brokerage Firm were "fraudulent promises to enter into a five-year renewal with [Appellee], made with a specific intent not to perform the promises at the time the promises were made."
On appeal, Appellants argue that the trial court erred in finding in favor of Appellee on the fraudulent misrepresentation and promissory estoppel claims because the oral agreement giving rise to those claims was not intended to be performed within one year, and therefore, was barred by Florida's statute of frauds, section 725.01, Florida Statutes. Appellee counters, arguing that the oral agreement was only one to renew the Maitland agreement for an additional five years, and because the renewal could have been accomplished within a year, the statute of frauds does not apply. We agree with Appellants.
The statute of frauds precludes actions brought on any agreement or promise that cannot be performed within one year unless the agreement or promise is in writing and signed by the party to be charged therewith. § 725.01, Fla. Stat. (2014). Whether an oral agreement is unenforceable under the statute of frauds is a question of law, reviewable de novo. DK Arena, Inc. v. EB Acquisitions I, LLC , 112 So. 3d 85, 91 (Fla. 2013) ; see Cascella v. Canaveral Port Auth. , 827 So. 2d 308, 309 (Fla. 5th DCA 2002) (noting that contract and statutory interpretation are questions of law reviewed de novo).
It is well-settled that a party cannot avoid the writing requirement of the statute of frauds by reformulating what amounts to a breach of an oral contract into a fraud claim. See, e.g. , Cohen v. Corbitt , 135 So. 3d 527, 530 (Fla. 1st DCA 2014) ("Appellee cannot avoid the statute of frauds simply by couching her claim in terms of the tort of fraudulent misrepresentation rather than breach of an oral contract."). If It is apparent that the parties intended an oral agreement to extend for longer than one year, the statute of frauds bars its enforcement. See Loper v. Weather Shield Mfg., Inc. , 203 So. 3d 898, 906 (Fla. 1st DCA 2015).
Here, it is evident from the nature of the oral agreement, as well as the circumstances surrounding it, that the parties intended to execute a renewal, the obligations under which would mutually continue for five years. See Conner, I, Inc. v. Walt Disney Co. , 827 So. 2d 318, 319 (Fla. 5th DCA 2002) (holding that oral contract to enter into joint venture to replace, operate, and lease 400 manufactured housing units for not less than twelve years violated statute of frauds because "the development project and the associated responsibilities of the parties were to continue for at least twelve years"). For example, before either party would execute the renewal, they first needed to agree on the terms of the five-year contract. In addition, Appellee's corporate representative testified that EXIT Florida would not have sent Stamer renewal paperwork unless it believed Stamer intended to remain in the EXIT system.
Appellee's characterization of the oral agreement as one to simply renew the Maitland agreement for an additional five years does not remove the agreement from the scope of the statute of frauds. See 72 Am. Jur. 2d Statute of Frauds § 5 (2019) ("[A]n oral agreement to execute an agreement that is within the Statute of Frauds is itself within the statute."). To be sure, the agreement to enter into a renewal was not distinct from the renewal of the franchise agreement itself.
As such, Appellee's reliance on Loper is misplaced. The agreement in that case—refraining from suing in exchange for replacement of defective windows and the issuance of a new ten-year warranty—could be performed within a year. Specifically, the parties fully performed the negotiated terms of that agreement, and the parties' respective obligations thereunder were satisfied, upon delivery of the warranty.
Because we determine that the statute of frauds bars Appellee's fraudulent misrepresentation claim, we also reverse the trial court's judgment in favor of Appellee on the promissory estoppel claim. Florida law is clear that promissory estoppel is not an exception to the statute of frauds. See DK Arena, Inc. , 112 So. 3d at 97 ("As we explained in Tanenbaum ,[ ] application of the Statute of Frauds is a matter of legislative prerogative; the judicial doctrine of promissory estoppel may not be used to circumvent its requirements.").
Tanenbaum v. Biscayne Osteopathic Hosp., Inc. , 190 So. 2d 777 (Fla. 1966).
AFFIRMED in part, REVERSED in part, and REMANDED.
COHEN and LAMBERT, JJ., concur.