Kozma Investmentos, LTDA v. Duda et al

Filing 70

ORDER denying 58 Duda Defendants' Motion to Dismiss. This matter is STAYED pending the resolution of Kozma's appeal of the order denying recognition entered in the Enforcement Action. The Clerk is directed to add a stay flag to thi s case. Plaintiff shall provide the Court with status updates every 90 days, commencing June 26, 2018, and otherwise immediately inform the Court on the outcome of the appeal and its effect on this case. Geby Investments, LLC's Motion to Take Judicial Notice (Doc. 67 ) is DENIED without prejudice. Signed by Judge Sheri Polster Chappell on 3/29/2018. (LMF)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
KOZMA INVESTMENTOS, LTDA, a
foreign corporation,
Plaintiff,
v.

Case No: 2:17-cv-306-FtM-99CM

EDSON PEREIRA DUDA,
NATALINA SACCHI DUDA and
GEBY INVESTMENTS, LLC,
Defendants.
/
OPINION AND ORDER1
This matter comes before the Court on the Duda Defendants’ Motion to Dismiss
(Doc. 58) filed on February 5, 2018. Plaintiff filed a Response in Opposition (Doc. 62) on
February 20, 2018, and the Dudas field a Reply (Doc. 66). For the reasons set forth
below, the Motion is denied and this matter is stayed.
BACKGROUND
This case arose because of an alleged fraudulent transfer of real property located
in Collier County, Florida (the “Property”). Plaintiff seeks recovery of the Property, owned
and fraudulently transferred by Defendants Edson and Natalina Duda to Geby

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Investments, LLC in avoidance of a creditor’s (Kozma Investmentos, Ltda’s) claim,2
stemming from a $14 million foreign Arbitration Award (the Award) entered in Brazil.
Plaintiff is currently proceeding on an Amended Complaint (Doc. 33), alleging state law
claims, specifically two counts under the Florida Uniform Fraudulent Transfer Act, Fla.
Stat. §§ 726.105-106 (FUFTA).
On July 27, 2017, this Court entered an Opinion and Order denying Plaintiff’s
Motion to Remand, finding this Court has subject-matter jurisdiction over this case
because the Award falls under the Convention on the Recognition and Enforcement of
Foreign Arbitral Awards, also known as the New York Convention (the Convention).
Kozma Investmentos, LTDA v. Duda, 2017 WL 3193606 (M.D. Fla. July 27, 2017) (Kozma
I). On September 19, 2017, the Court entered an Opinion and Order denying Defendant
Geby’s Motion to Dismiss for failure to state a claim, finding in part that Kozma’s
allegations established that it has a “right to payment” as required under FUFTA. Kozma
Investmentos, LTDA v. Duda, 2017 WL 4155429 (M.D. Fla. Sept. 19, 2017) (Kozma II).
In so finding, the Court relied on the fact that an underlying enforcement action in State
Court brought by Plaintiff to gain recognition of the Award under the Florida Uniform Outof-Country Foreign Money Judgment Recognition Act, Fla. Stat. § 55.601 et seq. (the
“Enforcement Action”) was pending.3 Id. at * 3.

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The Arbitration Award was initially entered in favor of All Ore Minera, but was subsequently
transferred and assigned to Kozma. (Doc. 33, ¶¶ 22-24).
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The Court has taken judicial notice of the underlying enforcement action styled Kozma
Investmentos, LTDA vs. Edson Pereira Duda & Natalina Sacchi Duda, Case No. 2017–CA–
000936. See Kozma I, 2017 WL 3193606, n.5; Kozma II, 2017 WL 4155429, n.4. The Court will
continue to take judicial notice of these proceedings.

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The Dudas now move to dismiss the Amended Complaint for lack of personal
jurisdiction and failure to state a claim, arguing in part that since this Court issued its
decision in Kozma II, the State Court has issued an order denying recognition of the
Award in the Enforcement Action4. Therefore, the Dudas argue that Kozma no longer
has a “claim” or “right to payment” as required to state a claim under FUFTA. The Dudas
also argue that Kozma has failed to allege sufficient facts to establish personal jurisdiction
over the Dudas who are Brazilian citizens. In support, the Dudas have submitted the
Declaration of Defendant Natalina Sacchi Duda (the “Duda Declaration”). (Doc. 58-1).
The Court will first address the jurisdictional argument.
DISCUSSION
A. Personal Jurisdiction
Courts conduct a two-part analysis when determining personal jurisdiction over a
non-resident defendant. Cable/Home Communication Corp. v. Network Productions,
Inc., 902 F.2d 829, 855 (11th Cir.1990) (citations omitted). First, courts examine the
jurisdictional issue under the state long-arm statute. Id. That is, the defendant must
perform “some act by which it purposefully avails itself of the privilege of conducting
activities within the forum State, thus invoking the benefits and protections of its laws.”
Burger King v. Rudzewicz, 471 U.S. 462, 476 (1985) (quoting Hanson v. Denckla, 357
U.S. 235, 253 (1958)). Second, courts examine whether sufficient “minimum contacts”
exist to satisfy the Due Process Clause of the Fourteenth Amendment to ensure the
lawsuit does not offend “traditional notions of fair play and substantial justice.” Id. (citing
Int’l Shoe Co. v. Washington, 326 U.S. 310 (1945) (quoting Milliken v. Meyer, 311 U.S.

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Kozma has appealed the State Court’s decision in the Enforcement Action.

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457 (1940)) (other citations omitted). The 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). The Dudas assert that neither
component of this standard is satisfied in this case.
1. Florida Long-Arm Statute
Plaintiff relies upon subsection (1)(a)(1) and (1)(a)(3) of the Florida long-arm
statute related to specific jurisdiction, which permit the exercise of jurisdiction over actions
arising from the carrying on of a business venture in Florida, or owning, using, or holding
a mortgage or other lien on any real property within Florida. (Doc. 33, ¶ 12).
(a)

Fla. Stat. § 48.193(1)(a)(1): Business or Business Venture in
Florida

“In order to establish that a defendant is carrying on [a] business for the purposes
of the long-arm statute, the activities of the defendant must be considered collectively and
show a general course of business activity in the state for pecuniary benefit.” Horizon
Aggressive Growth, L.P. v. Rothstein–Kass, P.A., 421 F.3d 1162, 1167 (11th Cir. 2005)
(quoting Future Tech. Today, Inc. v. OSF Healthcare Sys., 218 F.3d 1247, 1249 (11th
Cir. 2000)). “[E]ngaging in a single act for profit can amount to a business venture,”
Labbee v. Harrington, 913 So. 2d 679, 683 (Fla. 3d DCA 2005) (citing Wm. E. Strasser
Constr. v. Linn, 97 So. 2d 458, 460 (Fla. 1957)), but not every gainful transaction involving
a Florida resident amounts to a business venture. See Walack v. Worldwide Machinery
Sales, Inc., 278 F. Supp. 2d 1358, 1366 (M.D. Fla. 2003). Some factors the Court must
consider include the “presence and operation of an office in Florida, [ ] the possession
and maintenance of a license to do business in Florida, the number of Florida clients

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served, and the percentage of overall revenue gleaned from Florida clients.” Horizon,
421 F.3d at 1167 (internal citations omitted).
Although cited in the Amended Complaint as a basis for personal jurisdiction,
Plaintiff does not argue in its brief why this subsection is satisfied. Plaintiff states in the
Amended Complaint that Geby Investments is a Florida limited liability company owned
by the Dudas, but Plaintiff does not allege that Geby Investments regularly conducts
business in Florida. Therefore, the Court easily finds that Plaintiff has not met its burden
to establish sufficient facts to make out a prima facie case of personal jurisdiction based
on a business or business venture in Florida. Plaintiff has submitted no facts or submitted
evidence showing that the activity of the Dudas show a general course of business activity
in Florida.
(b)

Fla. Stat. § 48.193(1)(a)(3): Owning Property in Florida

“By itself, ownership of property is insufficient to subject a nonresident defendant
to the jurisdiction of the courts of this state, unless the cause of action arose out of such
ownership.” Nichols v. Paulucci, 652 So.2d 389, 392 n.5 (Fla. 5th DCA 1995). See also
Dyck-O’Neal v. Rojas, 197 So. 3d 1200, 1203 (Fla. 5th DCA 2016) (noting that personal
jurisdiction was established because the amended complaint sufficiently pled that the
cause of action arose from ownership of real property in Florida).
Here, the Amended Complaint alleges that Dudas are residents and citizens of
Brazil and own, either directly or indirectly, Geby Investments, LLC. (Doc. 33, ¶¶ 4-5).
Geby is a Florida limited liability company with its principal place of business in Collier
County, Florida. (Id., ¶ 6). Plaintiff alleges that on May 30, 2013, the Dudas purchased
the Property. (Id., ¶ 25). On March 17, 2014, the Dudas transferred the Property to Geby,

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a company organized by the Dudas while the Arbitration Action was pending in Brazil.
(Id., ¶¶ 26-27).
To support dismissal for lack of personal jurisdiction, the Dudas have submitted
the Duda Declaration, in which Natalina Duda attests that her home address in in Brazil
and she does not do business in Florida or reside in Florida. (Doc. 58-1, ¶¶ 2-3). She
also states that the Dudas have no post office box or telephone number in Florida, but
maintain a checking account, which they primarily use while on vacation. (Id., ¶ 3). It
further states that the Dudas do not hold legal title to the Property; rather, Geby does.
(Id., ¶ 5). Since 2015, the Dudas have used the Property approximately four times per
year while vacationing in Florida for approximately 15 to 20 days each time. (Id., ¶ 7).
This Declaration shifts the burden back to plaintiff to produce evidence supporting
personal jurisdiction. United Tech. Corp. v. Mazer, 556 F.3d 1260, 1276 (11th Cir. 2009).
Plaintiff submitted the Warranty Deed, bill of sale, and closing statements for the purchase
and transfer of the Property, and the Dudas Interrogatory Responses wherein they admit
the transfer to Geby. (Doc. 62-1, Doc. 62-2, Doc. 62-3). The Court finds that Plaintiff has
satisfied its burden to show personal jurisdiction over the Dudas. The allegations in the
Amended Complaint that the Dudas fraudulently transferred the Property to Geby to
shelter the Property from the Arbitration Award, arose from the Dudas ownership of
property in Florida.
2. Due Process
In the specific jurisdiction context, due process requires that a defendant have
adequate notice of the suit, and be subject to the personal jurisdiction of the forum state.
World–Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291 (1980). The “fair warning”

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requirement is satisfied if defendant “purposefully directed his activities at the forum”, and
injuries resulted from those activities.” Madara v. Hall, 916 F.2d 1510, 1516 (11th Cir.
1990). Defendant’s “conduct and connection with the forum must be of a character that
he should reasonably anticipate being haled into court there.” Id. (citing Burger King
Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985)); World–Wide Volkswagen Corp., 444 U.S.
at 297). The Court “must determine whether sufficient minimum contacts exist between
the defendants and the forum state so as to satisfy ‘traditional notions of fair play and
substantial justice’ under the Due Process Clause of the Fourteenth Amendment.”
Sculptchair, Inc. v. Century Arts, Ltd., 94 F.3d 623, 626 (11th Cir. 1996) (citations
omitted). See also Int’l Shoe Co., 326 U.S. at 316.
Thus where the defendant ‘deliberately’ has engaged in significant activities
within a State, [ ], or has created ‘continuing obligations’ between himself
and residents of the forum, [ ], he manifestly has availed himself of the
privilege of conducting business there, and because his activities are
shielded by ‘the benefits and protections’ of the forum’s laws it is
presumptively not unreasonable to require him to submit to the burdens of
litigation in that forum as well.
Burger King Corp., 471 U.S. at 475–76 (internal citations omitted). Factors considered to
determine if the contacts comport with fair play and substantial justice “include the burden
on the defendant, the forum’s interest in adjudicating the dispute, the plaintiff’s interest in
obtaining convenient and effective relief and the judicial system’s interest in resolving the
dispute.” Licciardello v. Lovelady, 544 F.3d 1280, 1288 (11th Cir. 2008).
The Court further finds that exercising personal jurisdiction over the Dudas does
not offend due process. First, the Dudas purported contacts with Florida arose from the
causes of action alleged in Plaintiff's Amended Complaint.

Second, the Dudas

purposefully availed themselves of the privilege of conducting activities within Florida

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when they formed a Florida LLC to facilitate the ownership of real property in Florida.
Thus, the Dudas could reasonably anticipate being haled into Court here.
B. Failure to State a Claim
The Dudas argue that Plaintiff has failed to state a claim for fraudulent transfer
because Plaintiff does not have a right to payment under FUFTA as no Florida court has
entered an order recognizing the foreign judgment and recognition of the foreign judgment
has been denied in the underlying proceeding.
In Florida, a “creditor” who possesses a “claim” may seek a number of remedies
to prevent the fraudulent transfer of assets. Among the remedies are avoidance of the
transfer, attachment, an injunction, appointment of a receiver, and “any other relief the
circumstances may require.” Fla. Stat. § 726.108(1)(b). A transfer is fraudulent if made
“without receiving a reasonably equivalent value in exchange for the transfer or obligation
and the debtor was insolvent at that time or the debtor became insolvent as a result of
the transfer or obligation.” Fla. Stat. § 726.106(1). To utilize the protections of chapter
726, however, a plaintiff must show he or she has a “claim” which qualifies the party as a
“creditor.” See Fla. Stat. § 726.102(4)-(5). As defined in section 726.102, a “claim” is
broadly constructed and “means a right to payment, whether or not the right is reduced
to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured, or unsecured.” Fla. Stat. § 726.102(4).
The Supreme Court of Florida has found that to proceed under FUFTA, it is not
necessary that the creditor have obtained a judgment. See Friedman v. Heart Institute of
Port St. Lucie, Inc., 863 So. 2d 189, 192 (Fla. 2003). “Thus, as is universally accepted,
as well as settled in Florida, a ‘claim’ under the Act may be maintained even though

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‘contingent’ and not yet reduced to judgment.” Id. (citing Money v. Powell, 139 So. 2d
702, 703 (Fla. 2d DCA 1962) (“In this state contingent creditors and tort claimants are as
fully protected against fraudulent transfers as holders of absolute claims.”).
The Court understands and agrees with Plaintiff’s argument that FUFTA does not
require a judgment to maintain a cause of action. Plaintiff states that the ability to pursue
an action under FUFTA does not depend upon a present or immediate right to payment.
Although that may be the case, Plaintiff has neither pled, nor provided the Court with an
avenue by which it is entitled to payment from Defendants based upon the Arbitration
Award other than recognition by the Florida courts under the Florida Uniform Out-ofCountry Foreign Money Judgment Recognition Act, Fla. Stat. § 55.601 et seq. (Doc. 33,
¶ 21). And importantly, Kozma has now lost on that front in State Court. Therefore, the
Court finds that Plaintiff fails to plausibly allege that it currently has any right to payment
from the Arbitration Award.
Recognizing this possibility, Plaintiff states this case may be stayed pending
resolution of its pending appeal of the Enforcement Action, which, if resolved in Plaintiff’s
favor, would satisfy the “right to payment” requirement under FUFTA. (Doc. 62, p. 13).
The Dudas offer no opinion on whether a stay is appropriate. The Court notes that Florida
courts do not always stay the progression of a dependent FUFTA claim because often
the Act endows plaintiffs with “creditor” status even if the underlying claim has not been
reduced to a judgment. See Friedman, 863 So. 2d at 192-93. However, the Friedman
court noted that any motion to stay a dependent FUFTA claim “would be properly
addressed to the sound discretion of the trial court.” Id. at 193. Here, the Court will
exercise is discretion and deny dismissal of the Amended Complaint at this time and stay

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the proceedings pending the resolution of Kozma’s appeal of the order denying
recognition entered in the Enforcement Action. Plaintiff shall provide the Court with status
updates every 90 days and immediately inform the Court on the outcome of the appeal
and its effect on this case.
C. Judicial Notice
Finally, the Court considers the Motion for Judicial Notice filed by Geby in which
Geby requests that the Court take judicial notice of certain opinions entered by the
Brazilian Trial and Appellate Court of a parallel judicial proceeding seeking enforcement
of the Award. (Doc. 67). Plaintiff filed a Response in Opposition (Doc. 69) on March 28,
2018. Given the stay, the Court sees no reason to take judicial notice of the Brazilian
opinions at this time.
Accordingly, it is now ORDERED:
(1) Duda Defendants’ Motion to Dismiss (Doc. 58) is DENIED. This matter is
STAYED pending the resolution of Kozma’s appeal of the order denying recognition
entered in the Enforcement Action. The Clerk is directed to add a stay flag to this case.
(2) Plaintiff shall provide the Court with status updates every 90 days,
commencing June 26, 2018, and otherwise immediately inform the Court on the
outcome of the appeal and its effect on this case.
(3) Geby Investments, LLC’s Motion to Take Judicial Notice (Doc. 67) is DENIED
without prejudice.
DONE and ORDERED in Fort Myers, Florida this 29th day of March, 2018.

Copies: All Parties of Record

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