Inglis v. Wells Fargo Bank, N.A.
Filing
35
OPINION AND ORDER denying 8 Motion to Dismiss. Signed by Judge John E. Steele on 9/30/2015. (RKR)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
RICHARD
K.
INGLIS,
as
Special Trustee to the trust
under the will of Rosa B.
Schweiker, the Frederick W.
Berlinger Revocable Deed of
Trust,
as
amended
and
restated,
Plaintiff,
v.
Case No: 2:14-cv-677-FtM-29CM
WELLS FARGO BANK N.A.,
Defendant.
OPINION AND ORDER
This matter comes before the Court on review of defendant's
Motion to Dismiss (Doc. #8) filed on November 19, 2014.
Plaintiff
filed a Response in Opposition (Doc. #17) on January 2, 2015.
For
the reasons stated below, the motion is denied.
I.
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 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. (citation omitted).
See also
Edwards v. Prime Inc., 602 F.3d 1276, 1291 (11th Cir. 2010)(same).
This requires “more than an unadorned, the-defendant-unlawfullyharmed-me accusation.” Ashcroft 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,” 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) (citation 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.”
U.S. at 679.
2
Iqbal, 556
II.
This case involves three family trusts: the Rosa B. Schweiker
Trust, the Frederick W. Berlinger Trust, and the Rose S. Berlinger
Trust (the Berlinger Trusts).
(Doc. #1-1.)
Defendant Wells Fargo
N.A. (Wells Fargo) is a former corporate co-trustee of the Trusts.
(Id.)
Plaintiff Richard K. Inglis is a state-court-appointed
Special Trustee of the Berlinger Trusts (the Special Trustee).
(Id. ¶ 5.)
Stacey Sue Berlinger, Brian Bruce Berlinger, and
Heather Anne Berlinger are beneficiaries to the Berlinger Trusts
(the Beneficiaries).
In a 2011 case filed in the Fort Myers Division of the Middle
District of Florida, Case Number 2:11-cv-00459 (the 2011 Case),
the Beneficiaries of the Berlinger Trusts alleged claims against
Wells Fargo as former co-trustee of the Berlinger Trusts.
Their
Second Amended Complaint (Doc. #93) included a claim for civil
theft against Wells Fargo (Count III), asserting the same essential
facts which are alleged in the current case.
On September 9, 2014,
the Court granted Wells Fargo motion to dismiss the civil theft
claim, finding the Beneficiaries did not have standing to bring
the civil theft claim and that the count failed to state a claim.
The dismissal was specifically stated to be “without prejudice.”
(Case No. 2:11-cv-459, Doc. #220.)
party to the 2011 case.
The Special Trustee was not a
On October 3, 2014, Wells Fargo filed an
Answer and Affirmative Defenses to the Second Amended Complaint
3
(Doc. #240.)
The Beneficiaries thereafter sought to file a Third
Amended Complaint, which did not include a civil theft claim, but
that motion was denied (Doc. #357.)
On October 15, 2014, the Special Trustee filed a one-count
civil theft Complaint (Doc. #1-1) against Wells Fargo in state
court in Palm Beach County, Florida.
That case was removed by
Wells Fargo to the United States District Court for the Southern
District of Florida, which subsequently transferred it to the
Middle District of Florida.
In this current case, plaintiff Special Trustee alleges that
on or about August 8, 2011, the Berlinger Trusts’ assets had a
value of $6,464,723.96.
Plaintiff asserts that on or about that
date Wells Fargo was removed as corporate trustee of the Berlinger
Trusts and the “Office of Trustee” requested Wells Fargo transfer
the trust assets to a new trustee.
(Id. ¶ 17.)
Plaintiff alleges
the Office of Trustee was entitled to immediate possession of the
trust assets, and yet fifty (50) days passed with no transfer of
the trust assets.
(Id. ¶¶ 18-19.)
During the fifty (50) day
period, the Office of Trustee attempted to contact Wells Fargo
regarding the location of the trust assets, but Wells Fargo never
responded.
(Id.
¶
22.)
Plaintiff
asserts
Wells
Fargo
intentionally retained and failed to transfer the trust assets and
intentionally concealed the location of the trust assets.
20-23.)
(Id. ¶¶
Plaintiff further asserts that by delaying the transfer
4
of trust assets, Wells Fargo received management fees and prevented
the trustee from exercising any action within his power.
30; Doc. #17, p. 4.)
(Id. ¶
The Office of Trustee provided a pre-suit
notice pursuant to Fla. Stat. § 722.11 on September 27, 2011, but
Wells Fargo failed to return the Berlinger Trusts’ assets by
November 2, 2011.
The Special Trustee asserts that Wells Fargo
had the felonious intent to steal the Berlinger Trusts’ assets by
temporarily depriving the Office of Trustee of the right to and
benefit
of
the
trust
assets,
causing
actual
damages
of
$6,464,723.96, treble damages in the amount of $19,394,171.88, and
reasonable attorney fees and costs.
III.
Wells Fargo argues the case should be dismissed because the
civil theft claim is barred by res judicata and, in any event, the
Complaint fails to state a cause of action for civil theft.
#8.)
(Doc.
The Court addresses each argument in turn.
(a) Res Judicata
Wells Fargo asserts that the Special Trustee’s Complaint
should be dismissed based on res judicata because it is based on
the same facts as the 2011 Case and brought by a party in privity
with the 2011 Case plaintiffs.
(Doc. #8, ¶ 4.)
The Eleventh
Circuit has recently summarized its res judicata principles:
The party asserting res judicata bears the
burden of showing that the later-filed suit is
barred. For a prior judgment to bar a
5
subsequent action under the doctrine of res
judicata, the following requirements must be
met: (1) the prior judgment must have been a
final judgment on the merits; (2) the prior
judgment must have been rendered by a court of
competent jurisdiction; (3) the parties, or
those in privity with them, must be identical
in both suits; and (4) the same cause of action
must be involved in both cases.
Batchelor-Robjohns v. United States, 788 F.3d 1280, 1285 (11th
Cir. 2015)(internal citation omitted).
While res judicata is
normally an affirmative defense, a party may raise the defense by
motion to dismiss where the defense can be judged on the face of
the complaint and documents of which the court may take judicial
notice.
Concordia v. Bendekovic, 693 F.2d 1073, 1075 (11th Cir.
1982).
The Court finds that there was no final judgment on the merits
in the 2011 Case as to the civil theft claim against Wells Fargo.
The Court found the Beneficiaries had no standing to bring such a
claim
because
it
was
the
duty
of
the
trustee,
not
the
beneficiaries, to protect trust assets and enforce claims of the
trust.
(Doc. #220, p. 7.)
The Court also found the beneficiaries
did not have a vested immediate right to possession of trust
assets, and noted that “[i]f there is a cause of action, it is for
the new trustee, not discretionary beneficiaries.”
of
standing
determination.
is
a
jurisdictional
decision,
(Id.)
not
a
A lack
merits
Nat'l Parks Conservation Ass'n v. Norton, 324 F.3d
1229, 1242 (11th Cir. 2003).
6
Additionally,
prejudice.
the
dismissal
was
specifically
without
“The primary meaning of ‘dismissal without prejudice’
. . . is dismissal without barring the plaintiff from returning
later, to the same court, with the same underlying claim.”
Semtek
Int’l Inc. v. Lockheed Martin Corp., 531 U.S. 497, 505 (2001).
The dismissal for lack of standing and failure to satisfy the
pleading standard is clearly not a judgment on the merits. Semtek,
531 U.S. at 502.
Additionally, “it is no longer true that a
judgment ‘on the merits' is necessarily a judgment entitled to
claim-preclusive effect.”
Id. at 503.
While the Beneficiaries
may now be precluded from filing the civil theft claim against
Wells Fargo, a preclusion from filing based on procedural rules is
not the same as an adjudication on the merits.
The 2011 Case made
no final decision as to a civil theft claim against Wells Fargo by
the Beneficiaries.
Even if the dismissal of the 2011 Case did operate as a final
judgment as to the Beneficiaries, Wells Fargo has not shown a
preclusive effect as to the Special Trustee.
The general rule is
that “one is not bound by a judgment in personam in a litigation
in which he is not designated as a party or to which he has not
been made a party by service of process.”
Taylor v. Sturgell, 553
U.S. 880, 893 (2008) (citations omitted).
The Special Trustee was
not a party to the 2011 Case.
While there are exceptions to the
general rule, Taylor, 553 U.S. at 893-94, nothing in the Complaint
7
establishes
the
applicability
of
any
of
the
exceptions.
Accordingly, the Court finds defendant has not established that
the doctrine of res judicata justifies dismissal.
(b) Failure to State a Claim
Wells Fargo also asserts that plaintiff has failed to allege
all of the necessary elements for a claim for civil theft.
To
state a claim for civil theft under Florida law, plaintiff must
allege an injury resulting from Wells Fargo’s violation of the
criminal
theft
statute,
Fla.
Stat.
§
812.014.
To
do
this,
plaintiff must allege that Wells Fargo (1) knowingly (2) obtained
or used, or endeavored to obtain or use, plaintiff’s property with
(3) felonious intent (4) either temporarily or permanently to (a)
deprive plaintiff of its right to or a benefit from the property
or (b) appropriate the property to Wells Fargo’s own use or to the
use of any person not entitled to the property.
772.11
(providing
civil
remedy
for
theft
or
Fla. Stat. §§
exploitation),
812.014(1) (criminal theft statute); United Techs. Corp. v. Mazer,
556 F.3d 1260, 1270 (11th Cir. 2009); see Almeida v. Amazon.com,
Inc., 456 F.3d 1316, 1326–27 (11th Cir. 2006); Gersh v. Cofman,
769 So. 2d 407, 409 (Fla. 4th DCA 2000) (“In order to establish an
action for civil theft, the claimant must prove the statutory
elements of theft, as well as criminal intent.”).
“Under Florida
law, a plaintiff in an action for conversion or civil theft must
establish possession or an immediate right to possession of the
8
converted property at the time of the conversion.”
United States
v. Bailey, 419 F.3d 1208, 1212 (11th Cir. 2005).
Wells Fargo argues that plaintiff has failed to sufficiently
allege felonious intent (Doc. #8, 13-14); that Wells Fargo had
authorization to hold trust assets until it was commercially
reasonable to transfer the assets (Id.); that the demand letter
sent by the Beneficiaries makes clear that everyone knew the
location of the trust assets and the status of the transfer of
those assets (Id.); and that Florida’s Trust Code allows a former
trustee a reasonable time to transfer trust assets.
18.)
(Id. at 16-
The Court finds that the Complaint alleges sufficient facts
to plausibly state a claim of civil theft for some period of time
resulting in some amount of damages.
No more is required at this
stage of the proceedings.
Accordingly, it is now
ORDERED:
1.
Defendant’s Motion to Dismiss (Doc. #8) is DENIED.
DONE AND ORDERED at Fort Myers, Florida, this
September, 2015.
Copies: Counsel of record
9
30th
day of
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