Spirit Master Funding IV LLC v. All Sports Gill Holdings LLC et al
Filing
67
OPINION and ORDER denying as moot 48 Defendant's Motion to Dismiss the First Amended Complaint; and denying 59 Defendant's Motion to Dismiss the Second Amended Complaint. See Opinion and Order for details. Signed by Judge John E. Steele on 8/18/2014. (MAW)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
SPIRIT
LLC,
MASTER
FUNDING
IV
Plaintiff,
v.
Case No: 2:13-cv-699-FtM-29CM
ALL SPORTS GRILL HOLDINGS
LLC,
a
Florida
limited
liability
company,
FORT
MYERS SPORTS GRILL LLC, a
Florida limited liability
company, and KOUSAY ASKAR, a
single man,
Defendants.
OPINION AND ORDER
This matter comes before the Court on review of Defendant’s
Motion to Dismiss the First Amended Complaint (Doc. #48) filed on
March 5, 2014.
On April 4, 2014, Plaintiff filed a Second Amended
Complaint (Doc. #56).
As the Second Amended Complaint is now the
operative pleading in the case, Defendant’s Motion to Dismiss the
First Amended Complaint (Doc. #48) will be denied as moot.
Also before the Court is Defendant’s Motion to Dismiss the
Second Amended Complaint (Doc. #59) filed on April 23, 2014.
Plaintiff’s Response (Doc. #61) was filed on May 7, 2014.
reasons set forth below, that motion is denied.
For the
I.
Plaintiff Spirit Master Funding IV, LLC (Spirit) has filed a
five-count Second Amended Complaint (Doc. #56) against Defendants
All Sports Grill Holdings, LLC (All Sports), Fort Myers Sports
Grill, LLC (Fort Myers Grill), and Kousay Askar (Askar).
The
underlying facts, as set forth in the Second Amended Complaint,
are as follows.
In August 2009, Spirit and Baig-FM, LLC (Baig) entered into
a lease agreement (the Lease).
(Id. at ¶ 13.)
The Lease required
Baig to make monthly rent payments and provide financial statements
at regular intervals.
(Id. at ¶¶ 14-15.)
On February 7, 2012,
Spirit, Baig, and All Sports executed an assignment agreement (the
Assignment) through which Baig assigned the Lease to All Sports.
(Id. at ¶ 16.)
Askar, the Managing Member of All Sports and Fort
Myers Grill, acted as agent for All Sports in the negotiation and
execution of the Assignment.
(Id. at ¶¶ 8, 51.)
Though the
parties understood that All Sports was to be the assignee, Spirit
alleges that All Sports, Fort Myers Grill, and Askar secretly
replaced the Assignment’s signature page with one that identifies
Fort Myers Grill, not All Sports, as the assignee.
22.)
(Id. at ¶¶ 18-
According to Spirit, it never consented to the substitution
of Fort Myers Grill for All Sports and, therefore, All Sports is
the correct assignee and tenant under the Lease despite the altered
signature page.
(Id.)
2
In November 2012, Spirit notified All Sports that it was in
default under the Lease due to its failure to provide the required
financial statements.
(Id. at ¶¶ 23-24.)
In response, All Sports
contended that Fort Myers Grill was the correct tenant under the
Lease.
(Id. at ¶ 25.)
In June 2013, All Sports further defaulted
by failing to pay rent and, according to Spirit, currently owes in
excess of $1,185,000 in past rent, accelerated rent, interest, and
fees.
(Id. at ¶¶ 26-30.)
Accordingly, in Count I Spirit seeks a declaratory judgment
that All Sports is the proper assignee and tenant under the Lease.
In Counts II, III, and V, Spirit brings claims against All Sports
and Fort Myers Grill for breach of contract, breach of the covenant
of good faith and fair dealing, and conversion.
In Count IV,
Spirit brings a claim for fraud against All Sports, Fort Myers
Grill, and Askar.
Askar now moves to dismiss Count IV on that grounds that (1)
Spirit has failed to state a cause of action for fraud; and (2)
Spirit cannot proceed against Askar in his individual capacity.
Spirit
responds
that
Count
IV
is
adequately
pled
as
to
all
Defendants, including Askar.
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.”
3
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 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).
“more
than
accusation.”
an
unadorned,
Ashcroft
v.
This requires
the-defendant-unlawfully-harmed-me
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,” Mamani v.
Berzain, 654 F.3d 1148, 1153 (11th Cir. 2011) (citations omitted).
“Threadbare
recitals
of
the
elements
of
a
cause
of
action,
supported by mere conclusory statements, do not suffice.” Iqbal,
556 U.S. at 678.
with
a
“Factual allegations that are merely consistent
defendant’s
plausible.”
liability
fall
short
of
being
facially
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 wellpleaded factual allegations, a court should assume their veracity
4
and
then
determine
whether
entitlement to relief.”
they
plausibly
give
rise
to
an
Iqbal, 556 U.S. at 679.
Additionally, fraud claims are subject to the heightened
pleading requirements of Rule 9(b), which require a complaint “to
state with particularity the circumstances constituting fraud.”
Fed. R. Civ. P. 9(b).
“Particularity means that a plaintiff must
plead facts as to time, place, and substance of the defendant's
alleged
fraud,
specifically
the
details
of
the
defendant’s
allegedly fraudulent acts, when they occurred, and who engaged in
them.”
U.S. ex rel. Atkins v. McInteer, 470 F.3d 1350, 1357 (11th
Cir. 2006) (quotations omitted).
The purpose of this requirement
is to alert[] defendants to the precise misconduct with which they
are charged . . . ."
Id. at 1359.
III.
Askar argues that Count IV must be dismissed because (1)
Spirit’s allegations do not contain the specificity needed to
satisfy Rule 9(b); and (2) Spirit cannot maintain a fraud claim
against him in his individual capacity.
The
Second
Amended
Complaint
(Doc. #61.)
alleges
that
Askar’s
misrepresentations began in “early 2012” and ended on February 17,
2012 when he secretly replaced the Assignment’s signature page
with one signed by Fort Myers Grill.
(Doc. #56, ¶¶ 50-57.)
According to Spirit, throughout that six-week time period, Askar,
as agent for All Sports, misrepresented that All Sports would be
5
the assignee under the Lease when, in actuality, Askar intended to
substitute Fort Myers Grill without Spirit’s knowledge.
(Id.)
Once
Askar
the
Assignment
was
executed,
Spirit
alleges
that
completed the fraud by inserting a phony signature page.
(Id.)
In essence, Spirit is alleging one continuous misrepresentation
that
lasted
throughout
the
negotiation
and
execution
of
the
Assignment.
Askar is correct that Spirit does not specify the exact words
said
by
Askar
or
misrepresentations
the
exact
were
date(s)
made.
on
However,
which
alleged
Second
Amended
the
the
Complaint explicitly states that the entirety of the alleged fraud
took place during the six weeks preceding February 17, 2012, and
the
substance
of
the
alleged
fraud—concealing
the
intended
assignee and secretly altering the Assignment’s signature page—is
undeniably clear.
Moreover, Spirit’s allegation that Askar signed
the Assignment on behalf of All Sports prior to inserting a phony
signature page is, in-and of-itself, a misrepresentation pled with
specificity.
Accordingly, Rule 9(b)’s pleading requirements have
been met, as Askar has been alerted to the precise misconduct with
which he has been charged.
Askar’s second argument—that Spirit cannot maintain an action
against him in his individual capacity—is also unavailing.
Spirit
alleges that Askar was acting as an agent for All Sports when he
made the alleged misrepresentations. (Doc. #56 at ¶ 51.)
6
Florida
law is clear that agents may be held personally liable for fraud
committed
in
their
representative
capacity.
Taylor
Newman
Cabinetry, Inc. v. Classic Soft Trim, Inc., 436 F. App'x 888, 890
(11th
Cir.
2011)
(“Under
Florida
law,
officers
or
agents
of
corporations may be individually liable in tort if they commit or
participate in a tort, even if their acts are within the course
and scope of their employment, so long as the agent or officer
personally participated in the tort.”) (quoting Vesta Constr. &
Design, LLC v. Lotspeich & Assocs., Inc., 974 So. 2d 1176, 1180
(Fla. 4th DCA 2008)).
Therefore, Spirit may proceed against Askar
individually on the basis of misrepresentations he allegedly made
while acting as agent for All Sports.
Accordingly, it is now
ORDERED:
1.
Defendant’s
Motion
to
Dismiss
the
First
Amended
Second
Amended
18th
day of
Complaint (Doc. #48) is DENIED as MOOT.
2.
Defendant’s
Motion
to
Dismiss
the
Complaint (Doc. #59) is DENIED.
DONE AND ORDERED at Fort Myers, Florida, this
August, 2014.
Copies: Counsel of record
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