Burgess et al v. Vfinity LLC et al
Filing
85
OPINION AND ORDER granting in part and denying in part 65 Motion to Dismiss for Failure to State a Claim; granting in part and denying in part 66 Motion to dismiss for lack of jurisdiction. The motions are granted to the extent that the 64 Amended Complaint is dismissed without prejudice for the reasons stated in the Opinion and Order. Plaintiff may file a (second) amended complaint within 14 days of the Opinion and Order. Signed by Judge John E. Steele on 5/26/2017. (RKR)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
KEN
L.
BURGESS,
an
individual, SANDI BURGESS,
an individual, and LIGHTSHIP
ENTERPRISE,
a
Wyoming
corporation,
Plaintiffs,
v.
Case No: 2:17-cv-19-FtM-99MRM
VFINITY
LLC,
a
Florida
limited liability company,
VOYAGER HEALTH TECHNOLOGIES
CORP., ALEX ELIASHEVSKY, an
individual,
and
MURRAY
POLISCHUK, an individual,
Defendants.
OPINION AND ORDER
This matter comes before the Court on Defendants Vfinity LLC
and Alex Eliashevsky’s Motions to Dismiss Plaintiffs’ Amended
Complaint with Prejudice (Docs. ##65, 66) filed on March 27 and
28, 2017, in which defendant Murray Polischuk joined (Docs. ##71,
73).
Plaintiff filed a Memorandum in Opposition (Doc. #77) on May
1, 2017.
For the reasons set forth below, the motions are granted
without prejudice since the Amended Complaint is an impermissible
shotgun pleading, but denied to the extent defendants argue for
dismissal based on lack of subject-matter jurisdiction.
On
November
18,
2015,
plaintiffs
filed
a
thirteen-count
Complaint in the United States District Court for the Central
District of Utah (Doc. #1), alleging various state law claims based
on diversity jurisdiction.
The case was transferred to the Middle
District of Florida, Fort Myers Division, on January 11, 2017.
(Doc. #42.)
Prior to transfer the Utah District Court had entered
an Order to Show Cause (Doc. #40), finding that plaintiffs had
failed to plead domicile, and set forth the areas where the
Complaint was lacking in this regard.
Plaintiffs filed a response
in the District of Utah (Doc. #41) on January 5, 2017, but the
record does not show that the Utah District Court was satisfied
with
or
even
addressed
subject-matter
jurisdiction
prior
to
transfer.
Therefore, on March 7, 2017, this Court dismissed the
Complaint
for
lack
of
subject-matter
prejudice to filing an Amended Complaint.
jurisdiction
(Doc. #63.)
without
The Court
also noted in that Order that the Complaint was a shotgun pleading
and directed plaintiffs to correct this deficiency in the Amended
Complaint.
(Id. at 6.)
Plaintiffs filed a thirteen-count Amended
Complaint 1 (Doc. #64) on March 14, 2017.
1
The thirteen counts are: (1) breach of contract; (2)
declaratory relief; (3) estoppel; (4) conversion & unjust
enrichment;
(5)
interference
for
economic
interest;
(6)
defamation/slander; (7) successor liability and alter ego; (8)
negligent and/or intentional misrepresentation; (9) accounting,
(10) fraudulent transfer, (11) misappropriation, (12) injunctive
relief, and (13) breach of the implied covenant of good faith and
fair dealing.
- 2 -
Defendants
Vfinity
LLC,
Alex
Eliashevsky,
and
Murray
Polischuk move to dismiss 2, arguing that the Amended Complaint
still fails for lack of subject-matter jurisdiction, fails to state
a claim, and is a shotgun pleading.
I.
As
alleged
in
plaintiff’s
Amended
Complaint
(Doc.
#64),
defendant Voyager Health Technologies Corp. (Voyager) is a direct
selling, multi-level marketing company engaged in the business of
marketing
nutritional,
health,
and
personal
care
products
consumers through a network of independent associates.
11.)
¶
(Id. at ¶
Voyager became Vfinity on or about March 17, 2015.
5.)
Eliashevsky
and
Polischuk
are
members
of
to
(Id. at
Vfinity
–
Eliashevsky served as Vfinity’s manager and majority member and
Polischuk bore responsibility for the decisions of Vfinity.
(Id.
at ¶¶ 7, 8, 16.)
During the formation of Voyager, beginning around August
2010, plaintiffs entered into a written agreement with Voyager,
referred to in the Amended Complaint as the “Initial Agreement,”
whereby plaintiffs agreed to market Voyager’s products. 3
#64, ¶ 12.)
(Doc.
At all material times, plaintiffs did business
2
Defendant Voyager Health Technologies Corp. failed to appear
and a clerk’s default was entered on May 16, 2017. (Doc. #82.)
3
A copy of the Initial Agreement was not attached to the
Amended Complaint.
- 3 -
individually and/or as Lightship Enterprise, Inc.
(Id. at ¶ 3.)
The Initial Agreement entitled plaintiffs to certain guaranteed
compensation, bonuses, and other benefits during the development
phase and until Voyager launched.
(Id.)
Pursuant to the Initial
Agreement, plaintiffs provided valuable business development and
consulting
services
and
made
efforts
to
build
plaintiffs’
“downline” 4 sales organization to market Voyager’s products and
services, benefitting Voyager and the individual defendants.
at ¶ 13.)
Agreement,
(Id.
At Voyager’s request and in reliance on the Initial
plaintiffs
served
in
various
consulting,
administrative, and management positions with Voyager.
(Id. at ¶
14.)
Following
problems.
compensation
Voyager’s
As
a
to
result,
founding,
Voyager
plaintiffs,
Voyager
failed
including
began
and
experiencing
refused
bonuses,
to
pay
commissions,
overrides, and unpaid expenses, in breach of the Initial Agreement.
(Doc. #64, ¶ 15.)
In or about late 2013, without notice, Voyager
transferred substantially all its assets to Vfinity in an effort
to hinder, delay, or defraud it creditors and to distance itself
4
Generally,
in
multi-level
marketing,
independent
distributors oftentimes recruit a “downline” of independent
distributors who also build a consumer network base.
See
https://en.wikipedia.org/wiki/Multi-level_marketing (last visited
May 11, 2017).
- 4 -
from its troubled past, including its obligations to plaintiffs.
(Id. at ¶ 16.)
Shortly after the formation of Vfinity, Eliashevsky met with
plaintiffs
plaintiffs.
regarding
Vfinity’s
(Doc. #64, ¶ 18.)
unpaid
obligations
due
to
In order to induce plaintiffs to
continue providing services to Vfinity, including the preservation
of
plaintiffs’
represented
and
downline
personally
sales
organization,
promised
that
he
Eliashevsky
would
guarantee
Vfinity’s obligations to plaintiffs should Vfinity be unable to
pay them.
(Id.)
In reliance on these promises, plaintiffs
continued to work for Vfinity and provide business development
services, consultation, and marketing of Vfinity’s products.
at
¶
19.)
The
business
development
services
(Id.
provided
by
plaintiffs constitute proprietary and confidential business and
other trade secret information, which plaintiffs agreed to allow
defendants to use with a reasonable expectation of confidentiality
and compensation.
(Id. at ¶¶ 23, 24.)
Defendants have failed
and/or refused to return the trade secrets to plaintiffs, which
defendants continue to benefit from.
In
or
about
early
2014,
(Id. at ¶¶ 20, 21.)
plaintiffs
were
terminated
by
defendants without cause so that defendants could take plaintiffs’
trade
secrets
and
downline
sales
organization
without
paying
plaintiffs for the value of the trade secrets and without paying
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the compensation and other benefits due to plaintiffs.
(Doc. #64,
¶ 24.)
In or around January 2015, Vfinity developed a new Independent
Associate Agreement, referred to in the Amended Complaint as the
“Second Agreement.”
(Doc. #64, ¶ 27.)
Vfinity requested that
plaintiffs sign the Second Agreement, which plaintiffs initially
refused, contending that Vfinity remained obligated to pay them
prior outstanding compensation and benefits.
Vfinity
threatened
Agreement,
benefits,
Vfinity
as
plaintiffs
well
from
organization.
that
would
as
unless
plaintiffs
withhold
any
future
communicating
(Id. at ¶ 29.)
any
prior
(Id. at ¶ 28.)
sign
their
and
and
prohibit
downline
sales
On January 6, 2015, plaintiffs
executed the Second Agreement under economic duress. 5
30.)
Second
compensation
compensation,
with
the
(Id. at ¶
Vfinity has continued to fail and refuse to pay plaintiffs
compensation
Agreements.
and
benefits
owed
under
the
Initial
and
Second
(Id. at ¶ 31.)
On or about September 9, 2015, Vfinity sent plaintiffs a
Notice of Termination, falsely claiming that plaintiffs breached
the
Second
products.
Agreement
by
raiding
and
cross-solicitation
of
(Doc. #64, ¶ 32.)
5
A copy of the Second Agreement was not attached to the
Amended Complaint.
- 6 -
II.
A. Subject-Matter Jurisdiction
Defendants first argue that plaintiffs’ Amended Complaint
fails to sufficiently allege federal jurisdiction.
Upon review
of the jurisdictional allegations in the Amended Complaint (Doc.
#64, ¶¶ 1-8), the Court is satisfied that the citizenship of all
parties is properly alleged.
with
the
Polischuk.
citizenship
Defendants particularly take issue
allegations
with
respect
to
defendant
At paragraph 5, plaintiffs state that Polischuk is a
“citizen[] of the state of Florida,” yet at paragraph 8, plaintiffs
state that Polischuk “is an individual who is a citizen of Canada,
and resident of Florida.”
“An individual who is a dual citizen
of the United States and another nation is only a citizen of the
United States for the purposes of diversity jurisdiction under §
1332(a).”
Molinos Valle Del Cibao, C. por A. v. Lama, 633 F.3d
1330, 1341 (11th Cir. 2011).
The Court accepts the allegations
in the Amended Complaint that Polischuk is a citizen of Florida,
although this remains a “live” issue which may be subject to
discovery.
B. Dismissal as a Shotgun Pleading
Defendants
next
argue
that
the
Amended
Complaint
is
an
impermissible shotgun pleading and request that it be dismissed
with prejudice because plaintiffs were previously instructed by
the Court to address the deficiencies (Doc. #63) but failed to do
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so.
Defendants allege that because of the deficient pleading they
do not have adequate notice of the claims against them and the
grounds on which the claims rest so that they may frame a response.
In response, plaintiffs briefly state that they have satisfied the
pleading requirements, but ask that amendment be allowed instead
of dismissal.
The first 33 paragraphs of the Amended Complaint consist of
two sections entitled “parties, jurisdiction, and venue,” and
“general allegations.”
The remainder is organized into thirteen
counts, each containing the following introductory paragraph in
which each count adopts the allegations of all preceding counts:
“Plaintiffs incorporate and re-allege the foregoing paragraphs as
if fully set forth herein.”
The Amended Complaint also asserts
each of the thirteen claims against all four defendants without
specifying which of the defendants are responsible for which acts
or commissions, or which of the defendants the claim is brought
against.
Similarly, there are three named plaintiffs, but the
Amended Complaint does not identify which of the three named
plaintiffs is alleging which count.
The Amended Complaint also
does not allege how plaintiff Lightship Enterprises, Inc. had any
relationship with defendants.
The Eleventh Circuit Court of Appeals recently delineated the
“four rough types or categories of shotgun pleadings” that have
been filed since 1985:
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The most common type — by a long shot — is a complaint
containing multiple counts where each count adopts the
allegations of all preceding counts, causing each
successive count to carry all that came before and the
last count to be a combination of the entire complaint.
The next most common type, at least as far as our
published opinions on the subject reflect, is a
complaint that does not commit the mortal sin of realleging all preceding counts but is guilty of the venial
sin of being replete with conclusory, vague, and
immaterial facts not obviously connected to any
particular cause of action. The third type of shotgun
pleading is one that commits the sin of not separating
into a different count each cause of action or claim for
relief.
Fourth, and finally, there is the relatively
rare sin of asserting multiple claims against multiple
Defendants without specifying which of the Defendants
are responsible for which acts or omissions, or which of
the Defendants the claim is brought against.
Weiland v. Palm Beach Cnty. Sheriff’s Ofc., 792 F.3d 1313, 132021 (2015).
The Eleventh Circuit has also noted that, “[w]hile
plaintiffs have the responsibility of drafting complaints [that do
not constitute shotgun pleadings], defendants are not without a
duty of their own in this area. . . .
[A] defendant faced with a
shotgun pleading should move the court, pursuant to Rule 12(e), to
require the plaintiff to file a more definite statement.”
Id. at
1321 n.10.
The Court agrees that the Amended Complaint remains a shotgun
pleading as it commits two of the pleading sins by re-alleging all
preceding counts and asserting multiple claims against multiple
defendants
without
specifying
which
of
responsible for which acts or omissions.
the
defendants
are
The Court finds that
this is a case where a failure to identify the facts relevant to
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each count is particularly problematic due to the multiplicity of
counts and parties and because it is not clear that the factual
allegations made in all preceding paragraphs would be relevant to
each cause of action or each defendant.
Defendants have been sued
both in their corporate and individual capacities, yet the Court
cannot discern which counts are brought against which entity.
This makes it nearly impossible for each of the defendants to frame
a responsive pleading.
Therefore, plaintiffs’ Amended Complaint
is again due to be dismissed.
Complaint
without
The Court will dismiss the Amended
prejudice
and
allow
plaintiffs
another
opportunity to cure the pleading deficiencies.
C. Failure to State a Claim
In response to the defendants’ motions to dismiss for failure
to state a claim, plaintiffs request leave to replead their claims.
(Doc. #77, p. 3.)
The Court will allow plaintiffs to do so. 6
Accordingly, it is hereby
ORDERED AND ADJUDGED:
Defendants
Vfinity
LLC,
Alex
Eliashevsky,
and
Murray
Polischuk’s Motions to Dismiss Plaintiffs’ Amended Complaint with
Prejudice (Docs. ##65, 66) are GRANTED in part and DENIED in part.
6
Plaintiffs also argue in their Response (Doc. #77) that the
motions to dismiss should be denied because Federal Rule of Civil
Procedure 12(g)(2) prohibits the filing of successive Rule 12
motions to dismiss. This argument fails as the previous motions
to dismiss (Docs. ##56, 57) were denied as moot because an amended
complaint was filed. Federal Rule 12(g) does not apply.
- 10 -
The motions are granted to the extent that the Amended Complaint
(Doc.
#64)
is
dismissed
without
prejudice
since
the
Amended
Complaint is an impermissible shotgun pleading, but denied to the
extent defendants argue for dismissal based on lack of subjectmatter jurisdiction.
Plaintiffs may file an Amended Complaint
within FOURTEEN (14) DAYS of this Opinion and Order.
DONE and ORDERED at Fort Myers, Florida, this
of May, 2017.
Copies:
Counsel of Record
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26th
day
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