Contractual Issues

Eric Kim v. Jason Taylor, Part III

The following article is a guest contribution by Benjamin Haynes, Esq.   Haynes is a former Division 1 Basketball Player at Oral Roberts University and currently practices law in the State of Florida.

On July 11, 2012, Housewall, LLC, filed a lawsuit against former Miami Dolphins football player Jason Taylor and his wife Katina. Housewall is claiming that Taylor failed to pay for the garage organizer installed in their home by Housewall. The complaint for damages was filed and is only three pages long. Attached to that complaint, shown as Exhibit A, is an invoice from the work allegedly done by Housewall.  However, there is no written contract attached to the complaint, even though a written agreement is referenced in Count 1 and paragraph 9 of the complaint.

The CEO of the Housewall company is a man named Eric Kim. Eric was once Jason Taylor’s financial manager, and is currently suing Jason Taylor, in another lawsuit, for $15,000 in unpaid commissions and $1 million in damages connected to that previous work relationship. There is also a pending lawsuit where Taylor is suing Kim for fraud, referencing the previous financial manager relationship, for the amount of $275,000. So there are three law suits between the two parties alone, but for purposes of this article we will focus on the Housewall v. Taylor lawsuit.

Circuit v. County: The first thing I realized when reading this lawsuit was that it should be filed in county court, and not circuit court. According to Florida law, the jurisdiction of county court covers “All actions at law which the matter in controversy does not exceed $15,000 exclusive of interest, costs, and attorneys’ fees, except those within exclusive jurisdiction of the circuit court.” Fla. Const. art. V, § 6(b); Fla. Stat. §§ 34.01 , 34.011(1),(2). In this case, the Plaintiff claims that Defendant owes him $11,619.50 based on the contract. Therefore, this action is less than $15,000 exclusive of interest, costs, and attorneys’ fees, and should be moved to county court.

Contract: Next, the true essence of the alleged contract is in question. In the general allegations, specifically paragraph 6, Plaintiff claims that Taylor has “failed to pay for the garage organizer installed in their home.” Id. However, in Count I of the complaint, specifically paragraphs 9 and 10, the Plaintiff claims that “certain home improvements” were made. Further, the Plaintiff claims that Taylor breached the contract by refusing to pay for “the services and material provided by Housewall.” Id. The general allegations would make it seem that this alleged contract was for goods only, where Count I would infer that this contract was for both services and goods.

This distinction between a goods and services contract is important for purposes of which law will apply. That is, whether the common law or Uniform Commercial Code (U.C.C.) will govern. The common law governs sale of services, where the U.C.C. Article 2 governs the sale of goods. Now, there is always a possibility that a sale will involve both goods and services, in this situation the court will determine which aspect is dominant and apply the law governing that aspect to the whole contract.

Here, the court would most likely find this was a contract for the sale of goods. While placing the garage organizers in the garage could be deemed a service, it seems that the dominant purpose of the contract was the goods themselves. These are referenced as the “storage cabinets” in the exhibit attached to the complaint. Therefore, the UCC article 2 would most likely apply.

Contractual Defenses: An issue that could easily arise in this case is the issue of the statute of frauds. The statute of frauds requires that certain agreements, by statute, must be evidenced by a writing signed by the parties sought to be bound. One of those agreements, which by statute is required to be evidenced by writing, is a contract for the sale of goods for a price of $500 or more. Housewall is stating that more than $500 worth of goods have been delivered. As of now, the only written evidence attached to the complaint was an invoice created by Housewall. There is no signed writing from Jason Taylor, which, under the statute of frauds, would deem the contract unenforceable because the party sought to be bound must have signed the document.

However, there are exceptions when a written agreement is not required. Specifically under U.C.C. section 2-201(3), which states “If goods are either received and accepted or paid for, then the contract is enforceable.” Id. If it can be proven by Housewall that the Taylors received and accepted these cabinets, then this contract would be enforceable.

Restitution: In Count II of the complaint, the Plaintiff is seeking restitution through the theory of unjust enrichment. The Florida Supreme Court has defined unjust enrichment in three elements. They are as follows:

1) The plaintiff has conferred a benefit on the defendant, who has knowledge thereof;

2) Defendant voluntarily accepts and retains the benefit conferred; and

3) The circumstances are such that it would be inequitable for the defendant to retain the benefit without paying the value thereof to the plaintiff.

In this case, the Plaintiff will claim that they conferred the benefit of the cabinets to the Defendant, who has knowledge of the benefit. Further, Housewall will state that Jason knew of the benefit and accepted and retained the cabinets in his garage. Lastly, Housewall will contend that it would be unjust and inequitable to not be compensated for the benefit given to the Plaintiff.

While it seems as if the elements of unjust enrichment are met, we are missing several facts which would help lead us to a more accurate conclusion on this issue. I believe Taylor will file a motion to dismiss on this bare complaint. Once an answer or motion to dismiss is filed by Taylor, it will be easier to determine how the court will most likely rule. As of now, this complaint is extremely bare and not pled with specificity in either the general allegations or the two counts.