ENGELKE, I I I

v.

LOGAN, SMART COMMUNICATIONS PASCO, INC., ET AL.

DISTRICT COURT OF APPEAL OF FLORIDA

SECOND DISTRICT

MELVIN W. ENGELKE, III,

Appellant/Cross-Appellee,

v.

JAMES LOGAN; JONATHAN LOGAN; HLFIP HOLDING, INC.; MAILGUARD, INC.; SMART COMMUNICATIONS DESOTO, INC.; SMART COMMUNICATIONS WEST, INC.; SMART COMMUNICATIONS COLLIER, INC.; SMART COMMUNICATIONS HOLDING, INC.; SMART COMMUNICATIONS LEE, INC.; and SMART COMMUNICATIONS PASCO, INC.,

Appellees/Cross-Appellants.

No. 2D2022-4063

August⁷, 2024

Appeal from the Circuit Court for Hillsborough County; Rex M. Barbas, Judge.

Lindsay Patrick Lopez and Dean A. Kent of Trenam, Kemker, Scharf, Barkin, Frye, O'Neill & Mullis, P.A., Tampa, for Appellant/Cross- Appellee.

Shane B. Vogt and Kenneth G. Turkel of Turkel Cuva Barrios, P.A., Tampa, for Appellees/Cross-Appellants.

SLEET, Chief Judge.

2

Melvin Engelke, III, challenges the trial court's partial final summary judgment entered against him and in favor of Smart Communications West, Inc.; Smart Communications Collier, Inc.; Smart Communications Holding, Inc.; and Smart Communications Pasco, Inc., arguing that the trial court erred by determining that Engelke's declaratory action against these four defendants (collectively, the Time- Barred Entities) was barred by the statute of limitations.¹ See Fla. R. App. P. 9.110(k) ("If a partial final judgment totally disposes of an entire case as to any party, it must be appealed within 30 days of rendition."). Engelke's notice of appeal also purports to challenge the trial court's partial final summary judgment entered in favor of James Logan, individually. However, Engelke has not raised any arguments on appeal specifically challenging that order. Accordingly, we affirm that order without comment. In addition to these five defendants, Engelke also named the remaining appellees2 as defendants in the underlying action. The trial court denied final judgment as to these appellees, a ruling that all appellees now cross-appeal. Because the final judgments ended the litigation below only between Engelke and James Logan and the Time- Barred Entities, the litigation between Engelke and the defendants Jonathan Logan, Smart Communications Desoto, Smart Communications Lee, HLFIP Holding, and Mailguard remains pending. As such, the order on appeal was final as to the Time-Barred Entities but not the five remaining appellees. Accordingly, the cross-appeal is

I.

BACKGROUND

Around 2010, Melvin Engelke was dating Alexis Logan. At some point, while having dinner and drinks with Alexis and her parents at Alexis's apartment, James Logan (Alexis's father) proposed the idea of a business concept and Engelke's potential role in the concept. Some time later, James and Engelke spoke over the phone, and Engelke entered into an oral agreement with James to invest $100,000 in James' Smart Jail Mail⁴ business. The oral agreement was never reduced to writing,

3 The cross-appellants argue that the trial court erred in failing to enter final judgment in favor of the remaining defendants and that it erred in failing to enter a declaration that Engelke did not own 10% of the concept or the defendant entities. The Time-Barred Entities do not have standing to raise the first argument because they are not the injured parties. See Philip J. Padovano, Florida Appellate Practice § 10:4, Entitlement to review—Standing (2024 ed.) ("Appellate review is limited not only to those who are entitled to review an order by virtue of their status in the case but also to those who are aggrieved in some way by the order."). Furthermore, our conclusion that the trial court did not err in determining that the statute of limitations disposed of the declaratory action moots the second argument because once the trial court determined that the declaratory action was time-barred as to these cross-appellants, it could not reach the actual question of whether the declaration should be made.⁴ Smart Jail Mail is described in Engelke's complaint as a concept involving intellectual property and software "that would connect family and friends with inmates, prisoners, and detainees in correctional

institutions using a fast, low cost, and easy to use two-way electronic messaging system."⁵ On June 19, 2019, after Smart Communications US accepted a proposal for settlement, Engelke voluntarily dismissed the original Loan Case.

On May 2, 2019, all defendants filed a motion to dismiss and strike the complaint with prejudice. Specifically, the defendants argued that the underlying action was time-barred as it was filed in March 2019, nine years after the alleged initial investment in the Smart Jail Mail concept and seven years after the formation of the new entities which were alleged to have used the Smart Jail Mail concept. The defendants argued, among other things, that Engelke was aware of the new entities in May 2014 when he filed a breach of fiduciary duty count in the Loan Case and that he therefore was barred by the four-year statute of limitation for oral agreements set forth in section 95.11(3)(k), Florida Statutes (2019).

6

On September⁵, 2019, the trial court entered its order on the defendants' motion, granting the motion to dismiss as to James Logan based on the statute of limitations but denying the motion to dismiss the remaining defendants. Specifically, the trial court took notice of the 2016 derivative action, which also alleged fraud against James Logan. The trial court explained that a review of the 2016 case made it obvious that Engelke's attorney was on notice of the alleged fraud by James Logan in May 2014. It concluded that because knowledge by the attorney is imputed to the client, the 2016 fraud allegations were a basis for dismissal. Following the dismissal of James, the declaratory judgment count remained against Jonathan Logan as well as the defendant entities and the fraudulent misrepresentation count remained only against Jonathan Logan.

Thereafter, Jonathan Logan and all defendant entities filed their answer and affirmative defenses, including statute of limitations. On June⁵, 2020, Jonathan Logan and the defendant entities filed their renewed motion to dismiss and motion for summary judgment. They again argued that Engelke's claims were barred by the statute of limitations. Specifically, they argued that Engelke's March¹¹, 2015, deposition testimony in the Loan Case conclusively established that he knew about the alleged fraud and his exclusion from other Smart-related entities more than four years before the underlying action was filed. In support of the motion, they filed with the trial court copies of (1) their May 2, 2019, Motion to Dismiss and Strike Complaint with Prejudice; (2) the September⁵, 2019, hearing transcript on the motion to dismiss; (3) the September⁵, 2019, order on the motion to dismiss; (4) transcript of Engelke's March¹¹, 2015, deposition in the Loan Case; and (5) transcript of Jonathan Logan's February 19, 2015, deposition in the

The trial court held a hearing on the motion, and on August 31, 2020, it entered an order granting summary judgment in favor of Jonathan Logan and granting summary judgment based on the statute of limitations as to any claims arising out of Engelke's ownership interest in the concept and any claims arising out of any alleged ownership interest in entities formed on or before March¹¹, 2015. The trial court explained that count one was actionable only to the extent it sought to assert a claim based on an alleged oral agreement and that Engelke was not entitled to declaratory relief based on fraud or misrepresentation. The trial court granted leave to amend "for the sole purpose of alleging breaches of the alleged agreement upon which count [one] is based which occurred on or after March 12, 2015."6

On November 14, 2022, upon the Logans' and defendant entities' motions, the trial court entered final judgment for James Logan and the Time-Barred Entities, all of which had incorporation dates prior to March¹¹, 2015. The trial court denied final judgment for Jonathan Logan and HLFIP Holding, Mailguard, Smart Communications Desoto, and Smart Communications Lee (collectively, the Remaining Entities), all of which had incorporation dates after March¹¹, 2015. This timely appeal and cross-appeal followed.

II.

ANALYSIS

On appeal, Engelke argues that the trial court erred in granting summary judgment for the Time-Barred Entities based on the statute of

6 Thereafter, Engelke filed a four-count amended complaint raising new claims which did not include declaratory judgment, and multiple filings and hearings followed. However, because it is not relevant to the issue discussed herein, we do not go into the lengthy history.

" 'Appellate courts review orders granting summary judgment de novo.' A trial court's application of a statute of limitations to an action is a question of statutory interpretation; thus, the substantive issue before us is one we review de novo." Hogg v. Vills. of Bloomingdale I Homeowners Ass'n, 357 So. 3d 1271, 1274 (Fla. 2d DCA 2023) (citation omitted) (quoting Greeley v. Wal-Mart Stores E., LP, 337 So. 3d 478, 480 (Fla. 2d DCA 2022)). The statute of limitations for a declaratory judgment action is determined by the nature of the underlying issue that the action seeks to resolve. See J.J. Gumberg Co. v. Janis Servs., 847 So. 2d 1048, 1050 (Fla. 4th DCA 2003) (explaining that the issues for determination in the declaratory judgment action were based on the insurance contract and that "a specific refusal to pay a claim is the breach which triggers the cause of action and begins the statute of limitations running" (quoting Donovan v. State Farm Fire & Cas. Co., 574 So. 2d 285, 286 (Fla. 2d DCA 1991))). Here, Engelke alleged in his complaint that he invested $100,000 with the Logans in exchange for 10% ownership of the Smart Jail Mail concept and the defendant entities but that the Logans have refused to recognize such ownership. Accordingly, the nature of the underlying issue Engelke seeks to resolve through the declaratory judgment action relates to the terms of the oral agreement between Engelke and the Logans. Specifically, whether Engelke's investment of $100,000 afforded him 10% interest in the Smart Jail Mail concept and the defendant entities, as Engelke alleged, or 10% interest in only the initial Smart Communications US entity, as the Logans argued.

9

Under section 95.11(3)(k), the statute of limitations for "[a] legal or equitable action on a contract, obligation, or liability not founded on a written instrument" is four years. And the limitations period beings to run "when the last element constituting the cause of action occurs." § 95.031(1). The elements of a cause of action for declaratory relief are well established. To be entitled to relief, the plaintiff must show: [T]here is a bona fide, actual, present practical need for the declaration; that the declaration should deal with a present, ascertained or ascertainable state of facts or present controversy as to a state of facts; that some immunity, power, privilege or right of the complaining party is dependent upon the facts or the law applicable to the facts; that there is some person or persons who have, or reasonably may have an actual, present, adverse and antagonistic interest in the subject matter, either in fact or law; that the antagonistic and adverse interests are all before the court by proper process or class representation and that the relief sought is not merely the giving of legal advice by the courts or the answer to questions propounded from curiosity. Riverside Ave. Prop., LLC v. 1661 Riverside Condo. Ass'n, 325 So. 3d 997, 1000 (Fla. 1st DCA 2021) (quoting May v. Holley, 59 So. 2d 636, 639 (Fla. 1952)).

Here, Engelke brought a declaratory judgment action against the Logans and all defendant entities asking the trial court to determine Engelke's rights under the oral contract between him and the Logans. The oral agreement, as alleged in Engelke's complaint, was that in 2010 he "invested $100,000 of his money with Jonathan Logan and James Logan for ownership of 10% of the smart jail mail concept, including its intellectual property and software, generally referred to as 'Smart Jail Mail.' " He explained as follows:

KELLY and LABRIT, JJ., Concur.

Opinion subject to revision prior to official publication.

7 Although logically this legal reasoning should apply to all the entities, the remaining entities are not properly before us. Accordingly, they are not entitled to relief on cross-appeal.