Latell v. Sovereign Bank et al

Filing 68

OPINION AND ORDER granting 52 Motion to dismiss; granting 53 Motion to dismiss; dismissing Second Amended Complaint without prejudice to plaintiffs filing a third and final amended complaint within 21 days of this Opinion and Order. If no third amended complaint is filed, the Clerk shall enter judgment and close the case. Signed by Judge John E. Steele on 11/13/2014. (RKR)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION

FRANK
LATELL,
KATHLEEN
LATELL,
LATELL
CROIX
APARTMENTS, LTD, and LATELL
PEPPERTREE APARTMENTS, LTD,
Plaintiffs,

v.

Case No: 2:13-cv-565-FtM-29CM

PETER
C.
TRIANO,
individually
and
in
his
capacity
as
senior
vice
President at Sovereign Bank
and SANTANDER BANK, NATIONAL
ASSOCIATION,
Defendants.

OPINION AND ORDER
This matter comes before the Court on review of Defendant
Santander Bank National Association’s Motion to Dismiss Second
Amended Complaint (Doc. #52) and Defendant Peter C. Triano’s Motion
to Dismiss Second Amended Complaint (Doc. #53), both filed on July
16, 2014.

Plaintiffs filed a Response (Docs. ##58, 59) on July

30, 2014.

For the reasons set forth below, the motions are

granted.

I.
Plaintiff Frank Latell initiated this action by filing a
complaint against Sovereign Bank (Sovereign) 1 and Peter C. Triano
(Triano).
pleading

(Doc. #2.)
deficiencies

The initial complaint was dismissed for
(Doc.

#23.)

Plaintiff’s

First

Amended

Complaint (Doc. #24) was dismissed for lack of standing, but the
Court granted leave to amend.
Verified

Second

Amended

(Doc. #44.)

Complaint

(Second

Plaintiff filed a
Amended

Complaint)

adding Kathleen Latell (Kathleen), Latell Croix Apartments, Ltd.
(Croix Apts.) and Latell Peppertree Apartments, Ltd. (Peppertree
Apts.)

as

plaintiffs.

(Doc.

#50.)

The

Court

allowed

the

additional plaintiffs, but directed plaintiffs to file an Amended
Supplement to the Verified Second Amended Complaint (Doc. #51)
setting forth the citizenship of the new parties. Plaintiffs filed
an Amended Supplement (Doc. #56) doing so.
The Second Amended Complaint, as supplemented, is now the
operative pleading in this case.

Plaintiffs allege claims for

fraudulent misrepresentation against Sovereign (Count One), fraud
in the inducement against Sovereign (Count Two), constructive
fraud

against

Sovereign

and

Triano

1

(Count

Three),

and

civil

This Court granted defendant’s Motion to Substitute Party
Defendant (Doc. #25) and replaced defendant Sovereign Bank with
Santander Bank, National Association (Santander). (Doc. #29.)
2

conspiracy against Sovereign and Triano (Count Four).
jurisdiction

is

premised

on

diversity

of

Federal

citizenship.

The

underlying facts, as set forth in the Second Amended Complaint,
are as follows:
Plaintiffs’ claims arise out of the default and eventual
foreclosure of two commercials loans made to Croix Apts. and
Peppertree Apts., entities in which Frank and Kathleen Latell are
general partners.

(Doc. # 50, ¶¶ 4, 5, 9, 25.)

The loans were

held by the Federal National Mortgage Association (Fannie Mae) and
serviced by Sovereign.

(Id. at ¶¶ 9-10.)

To secure these loans,

Fannie Mae owned and held promissory notes and mortgages taken by
Peppertree Apts. and Croix Apts. which encumbered two apartment
complexes in Lee County (the Apartment Complexes).

(Id. at ¶ 9.)

According to the Second Amended Complaint, in April 2010,
plaintiffs contacted Sovereign seeking modification of the loan
agreements.

(Id. at ¶ 14.)

A representative of Sovereign advised

plaintiffs that they would need to default on the Fannie Mae loans
if they wanted a modification, since Sovereign would not consider
a modification until they were in default, over 45 days past due.
(Id. at ¶ 15.)

Based on this information, plaintiffs purposefully

defaulted on the Fannie Mae loans, and were placed in contact with
Peter C. Triano (Triano), a senior vice president of Sovereign.
(Id. at ¶ 16.)
3

Thereafter, plaintiffs’ attempts to seek modification of the
Fannie Mae loans went ignored by defendants for eight months. (Id.
at ¶ 18.)

After doing nothing for eight months, Triano advised

plaintiffs to contact Fannie Mae’s attorney.

(Id. at ¶ 18.)

Plaintiffs’ agent subsequently contacted Lawrence P. Rochefort
(Mr. Rochefort), Fannie Mae’s attorney, who told the agent that
Fannie Mae would prefer to modify the loans rather than prosecute
costly

foreclosures.

(Id.

at

¶

22.)

While

Sovereign

told

plaintiffs that all decisions to modify loans were made by Fannie
Mae, Fannie Mae advised plaintiffs the decision to modify or
reinstate was up to Sovereign.

(Id. at ¶¶ 23-24.)

State foreclosure actions were filed, and at a mediation
Sovereign and Triano were unwilling to consider modification under
any circumstances. (Id. at ¶ 26.) Ultimately, Fannie Mae obtained
final judgments of foreclosure on the Apartment Complexes.

(Id.

at ¶ 29.)
II.
Under Federal Rule of Civil Procedure 8(a)(2), a complaint
must contain a “short and plain statement of the claim showing
that the pleader is entitled to relief.”

Fed. R. Civ. P. 8(a)(2).

This obligation “requires more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action will not
do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)(citation
4

omitted).

To survive dismissal, the factual allegations must be

“plausible” and “must be enough to raise a right to relief above
the speculative level.”

Id. at 555.

See also Edwards v. Prime

Inc., 602 F.3d 1276, 1291 (11th Cir. 2010).
than

an

unadorned,

accusation.”

Ashcroft

This requires “more

the-defendant-unlawfully-harmed-me

v.

Iqbal,

556

U.S.

662,

678

(2009)

(citations omitted).
In deciding a Rule 12(b)(6) motion to dismiss, the Court must
accept all factual allegations in a complaint as true and take
them in the light most favorable to plaintiff, Erickson v. Pardus,
551 U.S. 89 (2007), but “[l]egal conclusions without adequate
factual support are entitled to no assumption of truth,”
v.

Berzain,

omitted).

654

F.3d

1148,

1153

(11th

Cir.

Mamani

2011)(citations

“Threadbare recitals of the elements of a cause of

action, supported by mere conclusory statements, do not suffice.”
Iqbal, 556 U.S. at 678.
consistent

with

a

facially plausible.”

“Factual allegations that are merely

defendant’s

liability

fall

short

of

being

Chaparro v. Carnival Corp., 693 F.3d 1333,

1337 (11th Cir. 2012) (internal quotation marks and citations
omitted).

Thus, the Court engages in a two-step approach: “When

there are well-pleaded factual allegations, a court should assume
their veracity and then determine whether they plausibly give rise
to an entitlement to relief.”

Iqbal, 556 U.S. at 679.
5

Claims of fraud are subject to stricter pleading rules.
plaintiff

alleging

fraud

“must

state

with

particularity

A
the

circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b).
To satisfy this standard, the plaintiff must allege: “(1) the
precise statements, documents, or misrepresentations made; (2) the
time, place, and person responsible for the statement; (3) the
content and manner in which these statements misled the plaintiffs;
and (4) what the defendants gained by the alleged fraud.” Am.
Dental Ass'n v. Cigna Corp., 605 F.3d 1283, 1291 (11th Cir. 2010).
See also Ziemba v. Cascade Int'l, Inc., 256 F.3d 1194, 1202 (11th
Cir. 2001).
III.
Defendant Triano seeks dismissal because the Second Amended
Complaint fails to establish a prima facie case of either general
or

specific

statute.

personal

jurisdiction

(Doc. #53, p. 5-14.)

under

the

Florida

long-arm

Triano asserts that he is a New

York resident with no presence in Florida.

(Id.)

In an affidavit,

Triano admits making trips to Florida to conduct business on behalf
of Sovereign, but otherwise has not conducted any personal business
within the state.

(Doc. #53-1, ¶ 12-17.)

Triano thus asserts

that the corporate shield doctrine precludes personal jurisdiction
over him under the Florida long-arm statue.

6

(Doc. #53, pp. 8-10.)

Plaintiff

“bears

the

initial

burden

of

alleging

in

the

complaint sufficient facts to make out a prima facie case of
jurisdiction.”

United Techs. Corp. v. Mazer, 556 F.3d 1260, 1274

(11th Cir. 2009).

A prima facie case is established if plaintiff

alleges enough facts to withstand a motion for directed verdict.
SEC v. Carrillo, 115 F.3d 1540, 1542 (11th Cir. 1997)(citation
omitted).

“Where, as here, the defendant challenges jurisdiction

by submitting affidavit evidence in support of its position, ‘the
burden traditionally shifts back to the plaintiff to produce
evidence supporting jurisdiction.’”
(citations omitted).

Mazer, 556 F.3d at 1274

Plaintiff bears the ultimate burden of

establishing that personal jurisdiction is present.

Oldfield v.

Pueblo de Bahia Lora, S.A., 558 F.3d 1210, 1217 (11th Cir. 2009).
“A federal court sitting in diversity undertakes a two-step inquiry
in determining whether personal jurisdiction exists: the exercise
of jurisdiction must (1) be appropriate under the state long-arm
statute

and

(2)

not

violate

the

Due

Process

Clause

Fourteenth Amendment to the United States Constitution.”

of

the

Mazer,

556 F.3d at 1274.
The Second Amended Complaint alleges that Triano resides in
New York and that he has “substantial and continuing contacts with
the State of Florida, both as an officer of Sovereign and in his
individual

capacity.”

(Doc.

#50,
7

¶

7.)

The

Second

Amended

Complaint makes no factual allegations as to Triano’s contacts
with Florida in his individual capacity.

Although the Second

Amended Complaint fails to identify any portion of the Florida
long-arm statute, plaintiffs’ Response cites Florida’s long-arm
Statute Sections 48.193(1)(b) and 48.193(2) as the basis for their
assertion of both specific and general jurisdiction over Triano.
(Doc. #58, ¶¶ 3-4.)

The Court finds that neither has been

satisfied in this case.
A.

General Jurisdiction:

Florida's
personal

long-arm

jurisdiction

statute

over

“[a]

provides

for

defendant

the

who

is

exercise

of

engaged

in

substantial and not isolated activity within this state . . .
whether or not the claim arises from that activity.”
§ 48.193(2).
isolated

Florida courts have held this “substantial and not

activity”

systematic

Fla. Stat.

general

requirement
business

to

mean

contacts”

the

“continuous

standard

sufficient

and
to

satisfy the due process requirement of minimum contacts for general
jurisdiction, as set forth by the Supreme Court in Helicopteros
Nacionales de Colombia S.A. v. Hall, 466 U.S. 408 (1984), such
that “if the defendant's activities meet the requirements of
section 48.193(2), minimum contacts is also satisfied.”

Woods v.

Nova Companies Belize Ltd., 739 So. 2d 617, 620 (Fla. 4th DCA
1999).

See Mazer, 556 F.3d at 1275 n.16.
8

Plaintiffs’ allegations do not satisfy this standard for
showing general personal jurisdiction.

Neither the Second Amended

Complaint nor plaintiffs’ Response (Doc. #58) to the motion set
forth facts which would support general personal jurisdiction in
Florida.

The Second Amended Complaint sets forth no facts showing

continuous and systematic general business contacts with Florida.
The Response characterizes plaintiffs’ claims as vindicating their
“right to communication about the Loans” with Fannie Mae and
Sovereign, which they claim was denied by Triano, but this is not
the claims set forth in the pleading.

Plaintiffs argue that the

wrongful acts by Triano described in the Second Amended Complaint
occurred over the course of more than one year and were not minimal
contacts, but the acts consisted of eight months of doing nothing
(presumably while in New York) and participation in a Florida
mediation after a foreclosure suit was filed.

The Second Amended

Complaint fails to satisfy the minimum contacts requirements,
Walden v. Fiore, 134 S. Ct. 1115 (2014), and fails to satisfy this
portion of the Florida long-arm statute.

The Court has no general

personal jurisdiction over Triano.
B.

Specific Jurisdiction:

Plaintiffs also assert that the Court has specific personal
jurisdiction over Triano because he committed tortious act in the
State of Florida, i.e., the conduct alleged in Counts III and IV.
9

(Doc. #58, ¶ 3.)

Plaintiffs assert Triano is not protected by the

corporate shield doctrine because the wrongful acts he committed
were outside the scope of his employment with Sovereign.

(Doc.

#58. ¶ 5.)
Plaintiffs allege specific personal jurisdiction pursuant to
Fla. Stat. § 48.193(1)(b) which provides that a defendant “submits
himself or herself ... to the jurisdiction of the courts of this
state

for

any

cause

of

action

arising

from

[the

defendant's

activities] ... [c]ommitting a tortious act within this state.”
Fla.

Stat.

§

48.193(1)(b).

Specific

jurisdiction

refers

to

“jurisdiction over causes of action that arise from or are related
to the party's actions within the forum.”

PVC Windoors, Inc. v.

Babbitbay Beach Constr., N.V., 598 F.3d 802, 808 (11th Cir. 2010).
Florida law requires, however, “before a court addresses the
question of whether specific jurisdiction exists under the longarm statute, the court must determine whether the allegations of
the complaint state a cause of action.”

Id. (citations and

internal quotation marks omitted).
The Court must therefore first examine the sufficiency of the
counts as pled.

Only Counts III and IV contain allegations of

tortious conduct committed by defendant Triano.

As discussed

below, the Court finds both are insufficiently pled causes of
action.

Since the complaint does not adequately allege tortious
10

conduct, there is no basis for personal jurisdiction and the Court
shall dismiss the Second Amended Complaint against Triano.
IV.
Defendant

Sovereign

moves

to

dismiss

the

Second

Amended

Complaint, arguing the each count fails to state a claim upon which
relief can be granted (Doc. #52.)
count was adequately pled.

Plaintiffs respond that each

(Doc. #59.)

A.
Fraudulent Misrepresentation and Fraud in the Inducement
(Counts One and Two) 2
A claim for fraud contains four elements: (1) false statement
of material fact or suppression of truth by the defendant; (2) the
defendant knew or should have known the statement was false, or
made the statement without knowledge as to truth or falsity; (3)
the defendant intended the false statement or omission induce the
plaintiff's
detriment.

reliance;

and

(4)

the

plaintiff

relied

to

his

PVC Windoors, Inc. v. Babbitbay Beach Const., N.V.,

598 F.3d 802, 808–09 (11th Cir. 2010); Butler v. Yusem, 44 So. 3d
102, 105 (Fla. 2010).
In this case, plaintiffs allege Sovereign made two statements
that

constitute

fraud.

Specifically,

2

plaintiffs

assert

that

A cause of action for fraud in the inducement and fraudulent
misrepresentation have identical elements.
Grills v. Philip
Morris USA, Inc., 645 F. Supp. 2d 1107, 1122 (M.D. Fla. 2009).
Therefore, the Court will address Counts I and II together.
11

Sovereign’s statements that (1) a “default of the Fannie Mae loans
was required to obtain a modification,” and (2) “Fannie Mae would
rather

modify

the

Fannie

Mae

loans

rather

constitute false statements of material fact. 3
47.)

Plaintiffs

further

allege

that

than

foreclose”

(Doc. #50, ¶¶ 40,

Sovereign

knew

these

statements were false and that they induced plaintiffs to rely on
them to their detriment. (Id. at ¶41-51.)
Sovereign asserts that the first statement cannot constitute
the basis for fraud because it is a promise of future action or
alternatively, was not a false statement.
Sovereign

also

responds

that

the

(Doc. #52, p. 6.)

second

statement

cannot

constitute fraud because this alleged misstatement did not induce
plaintiffs to rely to their detriment (Id. at p. 7) and plaintiffs
did

not

suffer

an

misrepresentations.

injury

as

a

result

of

the

alleged

(Id. at p. 8.)

As to the first statement, according to the Second Amended
Complaint, a representative of Sovereign advised plaintiffs that
Sovereign

would

not

consider

a

defaulted on the Fannie Mae loans.

3

modification

until

(Doc. #50, ¶ 15.)

plaintiffs

The exhibits

In addition to these two statements, Counts I and II also
include the broad language “including, but not limited to” (Doc.
#50, ¶¶ 40, 47).
The Court will not consider such allegations
because they do not sufficiently identify the precise statements
of material fact as required by Federal Rule of Civil Procedure
9(b).
12

attached to the complaint show that after defaulting, plaintiffs
requested a loan modification which Fannie Mae and Sovereign
rejected. 4

(Id. at pp. 15-20.)

The exhibits also show that Fannie

Mae and Sovereign participated in mediation in attempt to resolve
the defaults.

(Id.)

There is nothing in the Second Amended Complaint that alleges
Sovereign promised or guaranteed plaintiffs a loan modification if
plaintiffs defaulted.

Rather, the complaint alleges simply that

Sovereign would not consider modifying the loans until plaintiffs
were 45 days past due.
show

that

Sovereign

(Id. at ¶ 15.)
and

Fannie

Mae

Furthermore, the exhibits
attended

mediation

ultimately plaintiffs request for modification was rejected.
at pp. 15-20.)

where
(Id.

The allegations in the complaint do not plausibly

establish that this statement by Sovereign was false.

Therefore,

the Court finds the first statement cannot be the basis of a fraud
claim.

4

“A copy of a written instrument that is an exhibit to a
pleading is a part of the pleading for all purposes.” Fed. R. Civ.
P. 10(c). Therefore, a court may consider a document attached to
a pleading without converting a Rule 12(b) motion into a motion
for summary judgment. See CFBP, LLC v. Wells Fargo Bank, No. 8:09–
cv–T–33AEP, 2010 WL 2136535, *2 (M.D. Fla. May 26, 2010).
Additionally, “[u]nder Florida law, ‘if an exhibit facially
negates the cause of action asserted, the document attached as an
exhibit controls and must be considered in determining a motion to
dismiss.’” Id. (quoting Fladell v. Palm Beach County Canvassing
Bd., 772 So. 2d 1240, 1242 (Fla. 2000)).
13

Plaintiffs also allege that Sovereign told them that Fannie
Mae

would

prefer

foreclosures.

to

modify

the

loans

(Doc. #50, ¶¶ 40, 47.)

rather

than

prosecute

Plaintiffs assert this

statement also constitutes a misrepresentation of material fact.
(Id.)

The Court finds this statement cannot be the basis of a

fraud claim against Sovereign.
First, plaintiffs admit it was Fannie Mae’s attorney, Mr.
Rochefort, who made the statement, not Sovereign.

(Id. at ¶ 22.)

The first element of a fraud claim requires the misrepresentation
be made by the defendant. See Jackson v. Shakespeare Found., Inc.,
108 So. 3d 587, n.2 (Fla. 2013).
defendant

in

this

action,

and

Fannie Mae is not a named

nothing

in

the

Second

Amended

Complaint alleges that Mr. Rochefort was an agent or representative
of Sovereign.

Accordingly, Sovereign cannot be held liable for a

statement made by Mr. Rochefort on behalf of Fannie Mae.
In

addition,

plaintiffs
already

only

the

Second

contacted

defaulted

on

the

Mr.

Amended
Rochefort

loans.

(Doc.

Complaint
after
#50,

shows

plaintiffs
¶¶

16-18,

that
had
22.)

Therefore, plaintiffs have failed to allege how they relied on Mr.
Rochefort’s statement to their detriment.
The Court finds that neither statement can be the basis for
a fraud claim.

Because plaintiffs have not sufficiently alleged

a claim for fraud, Counts I and II are due to be dismissed.
14

B.

Constructive Fraud (Count Three)

Both defendant Triano and defendant Sovereign argue that
Count III fails to state a claim for constructive fraud because no
fiduciary duty exists between plaintiffs and defendants.
#52, p. 11.)

(Doc.

The Court agrees.

“Constructive fraud occurs when a duty under a confidential
or

fiduciary

relationship

has

been

unconscionable advantage has been taken.”
2d 48, 53 (Fla. 3d DCA 2003).

abused

or

where

an

Levy v. Levy, 862 So.

“Constructive fraud may be based on

a misrepresentation or concealment, or the fraud may consist of
taking an improper advantage of the fiduciary relationship at the
expense of the confiding party.”

Id.

Plaintiffs allege “Sovereign and Triano have a fiduciary duty
to plaintiffs, by virtue of the banking relationship between the
parties.” (Doc. #50, ¶ 54.) It is clear that there is no fiduciary
relationship created by normal banking relationships, and that it
takes special circumstances to create a fiduciary relationship in
the context of a banking relationship.

E.g., Capital Bank v. MVB,

Inc., 644 F.2d 515 (Fla. 3d DCA 1994);

Watkins v. NCNB Nat’l Bank

of Fla., N.A., 622 So. 2d 1063 (Fla. 3d DCA 1993); Taylor Woodrow
Homes Fla., Inc. v. 4/46-A Corp., 850 So. 2d 536 (Fla. 5th DCA
2003).

The Second Amended Complaint alleges no facts which would

15

suggest a fiduciary relationship, and therefore fails to state a
claim of constructive fraud.
C.

Accordingly, Count III is dismissed.

Civil Conspiracy (Count Four)

“A civil conspiracy requires: (a) an agreement between two or
more parties, (b) to do an unlawful act or to do a lawful act by
unlawful means, (c) the doing of some overt act in pursuance of
the conspiracy, and (d) damage to plaintiff as a result of the
acts done under the conspiracy.” [ ]

Each coconspirator need not

act to further a conspiracy; each need only know of the scheme and
assist in it in some way to be held responsible for all of the
acts of his coconspirators.” Charles v. Fla. Foreclosure Placement
Ctr., LLC, 988 So. 2d 1157, 1159-60 (Fla. 3d DCA 2008)(internal
quotations and citations omitted)(collecting cases).
The Second Amended Complaint seems to allege that the unlawful
acts

of

the

defendants

made

in

furtherance

of

the

alleged

conspiracy are based on the claims asserted in Counts I, II, and
III.

The

Court

has

already

determined

that

the

alleged

misrepresentations cannot be the basis for a fraud claim and
dismissed Counts I and II.

In addition, the Court dismissed Count

III for failure to properly allege the existence of a fiduciary
relationship between plaintiffs and defendants.

Therefore, the

plaintiffs have failed to allege any unlawful conduct to support
the claim for civil conspiracy.

Thus, the Court finds plaintiffs
16

have failed to state a claim for civil conspiracy and Count IV is
due to be dismissed.
Accordingly, it is now
ORDERED:
1. Defendant Santander Bank National Association’s Motion to
Dismiss Second Amended Complaint (Doc. #52) is GRANTED and
the

Second

Amended

Complaint

is

dismissed

without

prejudice.
2. Defendant

Peter

C.

Triano’s

Motion

to

Dismiss

Second

Amended Complaint (Doc. #53) is GRANTED and the Second
Amended Complaint is dismissed without prejudice.
3. Plaintiffs may file a third (and final) amended complaint
within TWENTY-ONE (21) DAYS of the date of this Opinion
and Order.

If no third amended pleading is filed, the

Clerk of Court shall terminate any pending motions, enter
judgment, and close the file.
DONE AND ORDERED at Fort Myers, Florida, this
November, 2014.

Copies:
Counsel of record

17

13th

day of