Gatti v. Goodman et al

Filing 36

OPINION AND ORDER granting 24 defendants' Motion to Dismiss Amended Complaint. Plaintiff's Amended Complaint is dismissed without prejudice. Plaintiff shall have fourteen days from the date of this Opinion and Order to file a Second Amended Complaint. See Opinion and Order for details. Signed by Judge John E. Steele on 7/17/2017. (AMB)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
LOU GATTI,
Plaintiff,
v.

Case No: 2:16-cv-728-FtM-29CM

HELEN
F.
GOODMAN,
GOODMAN,
and
TWIN
RESORT, LLC,

CLIFF
PALMS

Defendants.

OPINION AND ORDER
This matter comes before the Court on review of defendants’
Motion to Dismiss Amended Complaint (Doc. #24) filed on December
19, 2016.

Plaintiff filed a response in opposition (Doc. #28) on

January 9, 2017, to which defendants’ filed a reply on January 18,
2017 (Doc. #33).

For the reasons stated below, the motion is

granted.
I.
This matter arises out of a sales contract between plaintiff
Lou Gatti (“Gatti”) and defendants Helen F. Goodman (“Ms. Goodman”)
and Cliff Goodman (“Mr. Goodman” or collectively “the Goodmans”)
for the purchase of the Twin Palms Camp 1 (the “property” or “camp”).

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The Court adopts the full legal description of the property
provided in the Amended Complaint. (Doc. #23, ¶ 1.)

(Doc. #23, ¶ 1.) Gatti alleges that Ms. Goodman wrongfully refuses
to convey legal title to the property to him pursuant to a sales
contract and is marketing the property for sale for personal profit
without the consent of Gatti.

(Id. ¶ 2.)

The Amended Complaint alleges the following:

On September

27, 1989, Gatti entered into the sales contract with Ms. Goodman
for the purchase of the property on behalf of Twin Palms Inc.
(“TPI”).

(Id. ¶ 11.)

Gatti was President of TPI since its

incorporation on August 9, 1989.

(Id. ¶ 18.)

On May 25, 1990,

the Vice President and Secretary of TPI resigned from his position
in the corporation and assigned all powers, duties, and obligations
to Gatti.

(Id.)

On September 16, 1996, TPI dissolved and Gatti

is the successor-in-interest to TPI.

(Id. ¶ 19.)

The contract between TPI and Ms. Goodman is attached to the
Amended Complaint.

(Doc. #23-1.)

The contract provides that it

is for the purchase of “the Twin Palms Camp, Recorded in #70869
O.R. Book 83, Page 196.”

(Id.; Doc. #23, ¶ 13.)

Gatti alleges he

paid $800,000 in the form of “three notes and respective payment
schedules” to the note holders as agreed under the terms of the
contract.

(Doc. #23, ¶ 14.)

Upon execution of the contract, Gatti operated the camp for
four years using his own staff. (Id.) Gatti occasionally employed
Ms. Goodman and Mr. Goodman to work the camp.

(Id.)

After

operating the camp for four years, the existing manager left and

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Gatti hired Ms. Goodman as the new manager.

(Id. ¶¶ 14, 20.)

Over

time, a personal relationship developed between Ms. Goodman and
Gatti, and in consideration of Ms. Goodman’s stewardship of the
property and in anticipation of Ms. Goodman’s ultimate adherence
to the contract, Gatti allowed Ms. Goodman to retain some of the
camp’s profits without charging her rent.

(Id. ¶ 14.)

This

resulted in Ms. Goodman receiving a benefit in excess of $600,000.
(Id.)
During Ms. Goodman’s management of the camp, Gatti maintained
extensive contact with her and the staff and visited the camp
frequently.

(Id.)

Gatti visited to inspect the property, meet

with the Goodmans, and evaluate and observe the operation of the
property.

(Id.

¶ 20.)

Gatti also assisted with the operation of

the property by dealing with purchase, repair, and improvement
costs.

(Id. ¶ 21.)

The Goodmans acknowledged Gatti’s ownership

of the property many times through conversations with Gatti and
camp visitors.

(Id. ¶¶ 22-23.)

The sales contract provides that Ms. Goodman was to convey
the property by general warranty deed to Gatti.

(Id. ¶ 15.)

Gatti

claims that despite his fulfillment of all of his obligations under
the contract, Ms. Goodman failed to execute the general warranty
deed.

(Id.)

In 2009, Ms. Goodman transferred the property to

3

Twin Palms Resort, LLC. 2

(Id. ¶ 16.)

Ms. Goodman, as manager of

Twin Palms Resort, LLC, retained full control of the property
following the transfer.

(Id.)

According to Gatti, Ms. Goodman

formed the Twin Palms Resort, LLC for the improper purpose of
disguising her interest in the property.

(Id.)

Gatti last visited the property on April 11, 2015.
24.)

(Id. ¶

During that visit, Gatti informed the Goodmans of his

intention to sell the property.

(Id.)

On April 8, 2016, Gatti

learned that the Goodmans had started to market the property for
sale on the Twin Palms Resort website.

(Id. ¶ 25; Doc. #23-2.)

Ms. Goodman did not notify Gatti of her intention to sell the
property or obtain Gatti’s authorization to do so.
26.)

(Doc. #23, ¶

Gatti asserts that by listing the property for sale, the

Goodmans have clouded his title on the property.

(Id. ¶ 25.)

On June 10, 2016, Gatti sent separate letters to Ms. Goodman
and Mr. Goodman requesting adherence to the contractual terms.
(Id. ¶ 27; Doc. #23-3.)
¶ 27.)

The Goodmans did not respond.

(Doc. #23,

Then, on June 14, 2016, through counsel, Gatti sent

separate demand letters to Ms. Goodman and Mr. Goodman in an effort
to compel adherence to the sales contract.
4.)

Gatti

asserts

that

Ms.

Goodman’s

2

(Id. ¶ 28; Doc. #23subsequent

refusal

to

This is a separate and distinct entity from Twin Palms Inc.
– the dissolved Virginia company that is a party to the sales
contract. (Id. ¶ 11 n.1.)

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transfer legal title to the property constitutes a breach of the
contract.

(Doc. #23, ¶ 28.)

On June 15, 2016, Gatti filed a

notarized Memorandum of Agreement with the Clerk of the Circuit
Court for Glades County, Florida which was recorded in the Official
Records of Glades County, Florida at Book 328, Page 300.
29; Doc. #23-5.)

(Id. ¶

The Memorandum of Agreement states that TPI and

Ms. Goodman entered into a contract for the sale of the property,
that TPI complied with all of its obligations pursuant to the
contract, and gives notice of the existence of the sales contract
and TPI’s rights in the property.

(Doc. #23-5.)

Gatti initiated this action on September 26, 2016 to protect
his ownership interest in the property.

(Doc. #1.)

The Amended

Complaint, the operative pleading before the Court, asserts the
following claims: (1) Quiet Title to the Property against Ms.
Goodman and Twin Palms Resort; (2) Unjust Enrichment against Ms.
Goodman

and

Mr.

Goodman;

(3)

Breach

of

Contract

against

Ms.

Goodman; (4) Specific Performance against Ms. Goodman; and (5)
Fraud against Ms. Goodman and Mr. Goodman.

(Id.)

On December 29,

2016, defendants filed a Motion to Dismiss the Amended Complaint
asserting that the Amended Complaint is due to be dismissed because
the Court lacks subject matter jurisdiction and plaintiff’s claims
are barred by the statute of limitations.

(Doc. #24.)

alternatively move for more definite statement.

(Id.)

Defendants
Plaintiff

responds that the Court has subject matter jurisdiction, the claims

5

are timely, and the claims are adequately stated.

(Doc. #28.)

Defendants oppose plaintiff’s positions in their reply.

(Doc.

#33.)
II.
A. Diversity Jurisdiction
Subject matter jurisdiction is premised on the presence of a
diversity of citizenship between the parties. (Id. ¶ 3.) District
Courts have original jurisdiction over civil actions involving
parties with diverse citizenship where the amount in controversy
exceeds $75,000.00, exclusive of interest and costs.

28 U.S.C. §

1332. This requires complete diversity, i.e., that every plaintiff
is diverse from every defendant. Palmer v. Hosp. Auth. of Randolph
Cty., 22 F.3d 1559, 1564 (11th Cir. 1994) (citing Strawbridge v.
Curtiss, 7 U.S. 267, 267 (1806)).
A motion to dismiss pursuant to Rule 12(b)(1) provides for
dismissal

of

jurisdiction.

an

action

if

the

court

lacks

subject

matter

A challenge to subject matter jurisdiction may come

in the form of either a “facial” or “factual” attack.
Amway Corp., 323 F.3d 920, 924 (11th Cir. 2003).

Morrison v.

A factual attack

challenges the existence of subject matter jurisdiction using
materials

extrinsic

from

pleadings,

such

as

affidavits

or

testimony. Stalley ex. rel. U.S. v. Orlando Reg’l Healthcare Sys.,
Inc., 524 F.3d 1229, 1232–33 (11th Cir. 2008).

In contrast, a

facial attack requires the Court to determine whether the pleader

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has sufficiently alleged a basis for subject matter jurisdiction.
Id.

Here, defendants present a factual attack on the Court’s

subject matter jurisdiction.

(Doc #24, p. 2.)

Within the Amended Complaint, plaintiff alleges that the
contract at issue was for $800,000.

(Doc. #23, ¶ 14.)

Plaintiff

also alleges that he is an individual domiciled in Virginia, (id.
¶ 6), defendants Helen and Cliff Goodman are individuals domiciled
in Glades County, Florida, (id. ¶¶ 7-8), and Twin Palms Resort,
LLC is a Florida limited liability company conducting business in
the state of Florida, (id. ¶ 9).

Plaintiff states that Ms. Goodman

is the sole member and manager of Twin Palms Resort, LLC. (Id. ¶
10.)
Based on the allegations that the sales contract totaled
$800,000 (id. ¶ 14), the Court is satisfied that the amount in
controversy alleged in the Amended Complaint is sufficient to meet
the

diversity

jurisdiction

requirements.

Further,

a

limited

liability company is a citizen of any state of which a member is
a citizen.

Rolling Greens MHP, L.P. v. Comcast SCH Holdings

L.L.C., 374 F.3d 1020 (11th Cir. 2004).

Here, plaintiff is

domiciled in Virginia and defendants are all citizens of Florida,
satisfying complete diversity of citizenship among the parties.
(Doc. #23, ¶¶ 6-10.)

Therefore, the Amended Complaint properly

alleges complete diversity among the parties.

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Defendants, however, present an Affidavit of Floyd Goodman,
the alleged Former Vice President and Secretary of TPI, disputing
the

allegations

regarding

his

resignation

from

relinquishment of his interest in TPI’s assets.

TPI

and

any

(Doc. #24-1.)

Because Floyd Goodman represents that he, a citizen of Florida, is
also

a

successor-in-interest

jurisdiction does not exist.

to

TPI,

complete

diversity

(Doc. #24, p. 6.)

This action was brought by Gatti individually.

(Doc. #23.)

TPI is not a named party in this action, (id.), and Floyd Goodman
has not moved to intervene or otherwise be a part of this action.
Although

the

action

was

bought

by

Gatti

individually,

the

underlying contract dispute involves the purchase of property by
TPI and, as discussed infra, the proper party to these claims is
TPI.

Even if Gatti had brought this action on behalf of TPI, a

dissolved corporation has no principal place of business and is
deemed to be a citizen only of its state of corporation.

Holston

Invs., Inc. B.V.I. v. LanLogistics Corp., 677 F.3d 1068, 1071 (11th
Cir. 2012).

Therefore even if TPI’s citizenship were considered,

TPI is a citizen of Virginia, the state it was incorporated prior
to dissolution (Doc. #23, ¶ 11), and the citizenship of its
directors are irrelevant.

Therefore, the Court finds that it has

subject matter jurisdiction and denies this portion of the motion
to dismiss.

8

B. Standing
Defendants assert that Gatti lacks standing to bring this
suit because he is not the sole successor-in-interest.

(Doc. #24,

pp. 4-6.) Defendants also claim that Gatti may not bring this
action individually but must do so behalf of TPI.

(Doc. #33, pp.

2-3.)
The Amended Complaint alleges the dispute arises from a sales
contract between Ms. Goodman and Gatti.

(Doc. 23 ¶ 1.)

However,

the contract attached to the Amended Complaint (Doc. #23-1) shows
the parties to the contract as TPI and Ms. Goodman.

Hoefling v.

City of Miami, 811 F.3d 1271, 1277 (11th Cir. 2016) (“A district
court can generally consider exhibits attached to a complaint in
ruling on a motion to dismiss, and if the allegations of the
complaint about a particular exhibit conflict with the contents of
the exhibit itself, the exhibit controls.” (citation omitted)).
Consequently,
property.

Gatti

does

not

personally

have

a

claim

to

the

Gatti contends, however, that he has standing to bring

the instant action because he is the sole successor-in-interest to
TPI under Virginia Code § 13.1-755.

(Doc. #28, pp. 7-8.)

Virginia state law provides, “[t]he termination of corporate
existence shall not take away or impair any remedy available to or
against the corporation . . . for any right or claim existing or
any liability incurred, prior to such termination,” and that such
actions “may be prosecuted or defended by the corporation in its

9

corporate name.” Va. Code Ann. § 13.1–755 (emphasis added). Gatti
brought this action in his individual capacity. It was not brought
in his capacity as director of TPI or in TPI’s name.

Thus, even

though Gatti alleges that he is the sole successor-in-interest to
TPI’s assets, it is the corporation, and not Gatti, who must
litigate the instant case.

Arora v. Alemparte, No. 1:03CV00020,

2003 WL 21448877, at *1 (W.D. Va. June 23, 2003) (holding that
under Virginia law, it is the corporation, and not the sole
successor-in-interest, who must bring the claim).

See also RBA

Capital, LP v. Anonick, No. 3:08cv494, 2009 WL 960090, at *3 (E.D.
Va. Apr. 8, 2009) (citing City of Virginia Beach v. Bell, 498 S.E.
2d 414, 418 (Va. 1998)); Katz v. Holland & Knight LLP, No.
1:08cv1137, 2009 WL 367204, at *4 n.11 (E.D. Va. Feb. 12, 2009)
(expressing doubt that party can bring claim as successor-ininterest of dissolved corporation).

Invocation of the Virginia

dissolved-corporations statute does not create standing for Gatti.
Therefore, because Gatti does not have standing in his individual
capacity

to

pursue

the

legal

rights

and

interests

of

TPI,

defendants’ motion to dismiss is due to be granted.
Gatti asserts Virginia law provides that “the properties and
affairs

of

a

corporation

whose

corporate

existence

has

been

terminated pursuant to [V.A. Code Ann. § 13.1.752(c)] shall pass
automatically to its directors as trustees in liquidation” and as
the sole shareholder, officer, and director he “has the power to

10

protect any right or claim that TPI had at the time of its
dissolution.”
proposition

(Doc. #28, p. 8.)
provides

that

the

The provision cited to for this
properties

and

affairs

of

a

corporation that has been dissolved for reasons set forth in
Virginia Code § 13.1-752 shall pass to “its directors as trustees
in liquidation.”

Id. § 13.1-752(c).

Plaintiff has not brought

this action in his capacity as trustee of TPI, he has brought it
in his individual capacity.
The Court finds that plaintiff does not have standing to bring
this action in his individual capacity.
Accordingly, it is now
ORDERED:
1.

Defendants’ Motion to Dismiss Amended Complaint (Doc.

#24) is GRANTED and the Amended Complaint (Doc. #23) is dismissed
without prejudice.
2.

Plaintiff shall have fourteen (14) days from the date of

this Opinion and Order to file a Second Amended Complaint.
DONE AND ORDERED at Fort Myers, Florida, this __17th__ day of
July, 2017.

Copies: Counsel of record

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