Roundtree v. TGM Malibu Lakes, LLC et al

Filing 24

OPINION and ORDER granting 18 defendants' motion to dismiss. Signed by Judge John E. Steele on 9/5/2018. (CMG)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
KIM ROUNDTREE,
Plaintiff,
v.

Case No:

2:18-cv-289-FtM-29CM

TGM MALIBU LAKES, LLC, TGM
ASSOCIATES, L.P., and TGM
CAR HOLDINGS I, LLC,
Defendants.

OPINION AND ORDER
This matter comes before the Court on review of defendants’
Motion to Dismiss (Doc. #18) filed on June 25, 2018.

Plaintiff

filed a Response in Opposition (Doc. #19) on July 9, 2018.

For

the reasons set forth below, the Court grants defendants’ Motion.
I.
Plaintiff Kim Roundtree (Plaintiff) filed an eight-count
Amended Complaint (Doc. #13) against defendants TGM Malibu Lakes,
LLC (Malibu), TGM Associates, L.P. (Associates), and TGM Car
Holdings, I, LLC (Holdings) (collectively, Defendants).

Plaintiff

asserts claims against Malibu for violation of the Fair Housing
Act, 42 U.S.C. § 3601 et seq. (Count I), violation of the Florida
Fair Housing Act, Fla. Stat. §§ 760.20-760.37 (Count II), violation
of the Florida Residential Landlord and Tenant Act, Fla. Stat. §
83.40 et seq. (Counts III, V, and VI), breach of lease (Count IV),

and negligence (Count VII). Plaintiff also asserts a claim against
Associates and Holdings for vicarious liability (Count VIII).
According to the Amended Complaint (Doc. #13): On or about
November 4, 2016, Plaintiff entered into a lease agreement with
Malibu for the rental of an apartment in Naples, Florida (the
Apartment).

(Id. ¶¶ 18-19.)

In June of 2017, Plaintiff observed

a dark substance around the Apartment’s air conditioning vents,
which she suspected to be mold.

(Id. ¶¶ 21-22.)

On June 18, 2017,

Plaintiff collected samples of the dark substance and sent them to
a laboratory for testing; the laboratory’s analysis indicated that
two strains of mold were present in the Apartment.

(Id. ¶¶ 22-

23.)
On July 8, 2017, Plaintiff notified Malibu of the mold’s
presence in the Apartment.

(Id. ¶ 24.)

Plaintiff informed Malibu

that the mold was especially harmful to Plaintiff because she
suffers

from

different

Lupus

and

apartment

Plaintiff’s
Apartment.

request

requested

without
and

that

mold.

failed

to

(Id. ¶¶ 25, 26, 28, 30.)

Malibu

(Id.)
remove

move

her

Malibu
the

mold

30.)

a

rejected
from

the

Plaintiff was then “forced

to vacate the Apartment to protect her health and safety.”
¶

to

(Id.

After Plaintiff vacated the Apartment, Malibu “made

unjustified demands

against Plaintiff’s security deposit” and

charged Plaintiff a $3,140.00 early termination fee.
This lawsuit followed.

2

(Id. ¶ 31.)

Defendants now move to dismiss Count VIII against Associates
and Holdings.

Defendants argue Plaintiff failed to plausibly

allege that Associates and Holdings are vicariously liable for the
actions of their subsidiary corporation, Malibu.
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.”

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).

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“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) (citations 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.”

Iqbal, 556

U.S. at 679.
III.
Count VIII is a claim against Associates and Holdings for
vicarious liability.

Specifically, it asserts that Associates and

Holdings “dominate and control the management of” Malibu, thus
making them “vicariously liable for the conduct of” Malibu.
#13, ¶ 74.)

(Doc.

Count VIII alleges that Associates and Holdings

dominate and control Malibu because (1) Defendants “are managed as
a single entity out of the same office in New York City”; (2)
Defendants

“share

the

TGM

name

as

part

of

a

singular

marketing/branding regime”; (3) Holdings is the “sole member” of
Malibu, and Associates is the “sole member” of Holdings; (4)
Associates’ general partner is an entity that shares the same
principal

address

as

Defendants;

operations “are not kept separate.”

4

and

(5)

Defendants’

(Id. ¶ 75.)

daily

Defendants

argue

Count

VIII

should

be

dismissed

because

Plaintiff has not plausibly alleged that Associates and Holdings
are vicariously liable for their subsidiary’s actions.

The Court

agrees.
Under Florida law, “[a] parent corporation and its whollyowned subsidiary are separate and distinct legal entities.”

Am.

Int'l Grp., Inc. v. Cornerstone Businesses, Inc., 872 So. 2d 333,
336 (Fla. 2d DCA 2004).

As separate legal entities, the “parent

corporation is not liable for torts committed by its subsidiary .
. . .”

Id.

To hold a parent company liable for its subsidiary’s

actions, a party must demonstrate “both that the [subsidiary] is
a ‘mere instrumentality’ or alter ego of the [parent], and that
the [parent] engaged in ‘improper conduct’ in the formation or use
of the [subsidiary].”

Bellairs v. Mohrmann, 716 So. 2d 320, 323

(Fla. 2d DCA 1998) (emphasis in original).
A subsidiary company is a mere instrumentality of its parent
corporation when the parent controls and dominates the subsidiary.
Church of Scientology of Cal. v. Blackman, 446 So. 2d 190, 192
(Fla. 4th DCA 1984).

Control and domination over a subsidiary

occurs when “the subservient corporation manifests no separate
corporate interest of its own and functions solely to achieve the
purposes of the dominant corporation.” Id. (citation and quotation
omitted).

A

parent’s

“ownership

of

all

of

the

stock

of

a

subsidiary” or its sharing “common officers and directors” with

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the subsidiary is insufficient to demonstrate such control and
domination.

Unijax, Inc. v. Factory Ins. Ass'n, 328 So. 2d 448,

454 (Fla. 1st DCA 1976).

Instead, control and domination is

evidenced by “direct intervention in the subsidiary's affairs” or
an “act of operation’ [over] the subsidiary's business . . . .”
Id. (internal quotation and citation omitted).
Improper conduct exists

when “the [subsidiary]

corporate

entity was organized or operated for an improper or fraudulent
purpose.”

Kanov v. Bitz, 660 So. 2d 1165, 1166 (Fla. 3d DCA 1995).

This is established by a showing that “the corporation was a mere
device or sham to accomplish some ulterior purpose . . . or [that]
the

[corporation’s]

purpose

is

to

evade

accomplish some fraud or illegal purpose.”

some

statute

or

to

Dania Jai-Alai Palace,

Inc. v. Sykes, 450 So. 2d 1114, 1117 (Fla. 1984).
In this case, Plaintiff has not plausibly alleged that Malibu
is a mere instrumentality of Associates and Holdings.
Plaintiff

asserts

that

Associates

and

Holdings

have

While
common

ownership of Malibu and that Defendants share the same office and
have similar names, that is insufficient to plausibly allege that
Associates and Holdings control and dominate Malibu.
328 So. 2d at 454.

See Unijax,

Plaintiff must additionally demonstrate that

Associates and Holdings directly intervened in Malibu’s affairs.
Id.

6

Plaintiff has also failed to plausibly allege that Associates
and Holdings engaged in “‘improper conduct’ in the formation or
use of” Malibu.

Bellairs, 716 So. 2d at 323.

That is, Plaintiff

has alleged no facts indicating that Malibu was formed as “a sham
to accomplish some ulterior purpose” or that it was created “to
accomplish some fraud or illegal purpose.”
1117.

Sykes, 450 So. 2d at

Count VIII is therefore dismissed without prejudice.

Accordingly, it is now
ORDERED:
1.

Defendant’s Motion to Dismiss (Doc. #18) is GRANTED and

Count VIII is dismissed without prejudice.
2.

Plaintiff may file a Second Amended Complaint within

FOURTEEN (14) DAYS of this Opinion and Order.
DONE AND ORDERED at Fort Myers, Florida, this 5th day of
September, 2018.

Copies: Counsel of record

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