Harris v. Jan
Filing
21
OPINION AND ORDER granting 12 Motion to Dismiss Counterclaims and Third-Party Claims. The 9 Counterclaims and construed third-party complaint are dismissed without prejudice to filing an Amended Answer, Affirmative Defenses, Counterclaims within 14 days of this Opinion and Order. Signed by Judge John E. Steele on 10/9/2018. (RKR)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
LARRY HARRIS, an individual,
Plaintiff/CounterDefendant,
v.
Case No:
2:18-cv-383-FtM-29MRM
HENRY JAN, an individual,
Defendant/Counter
-Plaintiff/Third
Party Plaintiff
JOHN DOE and JANE DOE,
Third Party Defendants.
OPINION AND ORDER
This matter comes before the Court on review of Plaintiff's
Motion to Dismiss Defendant's Counterclaims and Third-Party Claims
(Doc. #12) filed on July 26, 2018.
Defendant filed a Response
(Doc. #20) on September 17, 2018.
I.
Under Federal Rule of Civil Procedure 8(a)(2), a pleading
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
an
accusation.”
(citations
dismiss,
unadorned,
Ashcroft
omitted).
the
Court
v.
In
must
This requires
the-defendant-unlawfully-harmed-me
Iqbal,
556
deciding
accept
a
all
U.S.
Rule
662,
12(b)(6)
factual
678
(2009)
motion
allegations
in
to
a
complaint as true and take them in the light most favorable to
plaintiff.
Erickson v. Pardus, 551 U.S. 89 (2007).
II.
On June 4, 2018, plaintiff Larry Harris filed his Complaint
(Doc. #1) against Henry Jan for damages stemming from a breach of
a promissory note in the amount of $300,000.
Plaintiff alleges
that defendant agreed to repay the principal amount on July 3,
2017, with interest accruing on the unpaid balance at a rate of
12% per annum.
Plaintiff alleges that defendant made no payments,
and the Note provides for a default interest rate of 15% per annum.
Plaintiff seeks $391,701.37 as of May 31, 2018, with interest,
plus attorney fees.
In response, defendant filed an Answer and
Counterclaim (Doc. #9) which also purports to add a Jane Doe and
John Doe as third-party defendants.
Defendant does not present a
statement of subject-matter jurisdiction, however the Court notes
that two counts present a federal question.
2
For purposes of
review, the Court will assume that the Court has subject-matter
jurisdiction in this basis.
Defendant/Counter-plaintiff Jan alleges that he entered into
various
business
loan
arrangements
in
or
around
2010
with
plaintiff/counter-defendant Harris, through his company Healthcare
of Today, Inc.
Jan states that this business became insolvent and
he was unable to continue cash repayment for the business loan.
Jan alleges that Harris continued to harass him for repayment “even
though he had technically been paid in full” by taking stock that
secured the original notes, and Harris sought to have Jan ratify
the note and provide a personal guaranty.
signed
the
note
because
“of
the
(Doc. #9, ¶ 7.)
constant
threats,
Jan
calls
and
harassment” even though he believed the notes had been paid in
full.
(Id., ¶ 8.)
Jan continued to make payments “whenever
possible”, and Harris continued to demand money from Jan even after
Jan had paid back all the principal.
(Id., ¶ 11.)
Jan filed for bankruptcy protection, but Harris continued to
contact him even during its pendency.
The bankruptcy case was
dismissed, and Jan continued with payments.
Harris
demanded
that
he
violate
securities
Jan alleges that
laws
and
Jan’s
settlement with the SEC by arranging inside information “and to
illegally collect funds from a publicly traded company”.
16.)
(Id., ¶
Jan goes on to make allegations regarding an unidentified
CEO of an unnamed company for whom he arranged a meeting with
3
Harris, and Harris then threatened. Jan alleges that Harris stated
that he was hiring a detective to find Jan’s daughter to harass
her.
Jan alleges that Harris threatened to hire a detective
before, to be paid by his mother.
Jan alleges that Harris has
been recording their phone conversations without his consent. None
of these facts are incorporated into or referenced in any of the
counts.
Under the heading of “Joinder of Additional Defendants”, Jan
inserts that Jane Doe and John Doe have a significant role and
should be included.
Nothing further is stated, no factual basis
provided, and no counts stated. Therefore no Third-Party Complaint
is presented and it will be dismissed.
III.
Jan goes on to assert the following counterclaims: extortion,
wiretapping, violation of the automatic stay in Bankruptcy Court,
violations of Florida Usary Laws, two counts for RICO violations,
and unjust enrichment.
Harris seeks to dismiss the counterclaims
arguing that: (1) extortion is not an actionable civil claim; (2)
both Florida and federal laws have an exception allowing for the
recording of one’s own phone conversations; (3) the Court should
defer jurisdiction of an alleged violation of the automatic stay
to the Bankruptcy Court; (4) the usary claim fails to allege facts
of an interest rate exceeding the lawful rate of interest under
the relevant Florida Statute; (5) Jan fails to state a claim for
4
violations of RICO; and (6) that the claim for unjust enrichment
is deficient.
1. Extortion
As argued by Harris, there is no recognized private right of
action for extortion in Florida and specifically under Fla. Stat.
§ 836.05.
Miami Herald Pub. Co., Div. of Knight-Ridder Newspaper
v. Ferre, 636 F. Supp. 970, 976 (S.D. Fla. 1985).
Jan argues that
California law allows for a civil cause of action to recover
damages, which is true, and he is a resident of California.
See
Baker v. FirstCom Music, No. LACV168931VAPJPRX, 2017 WL 9510144,
at *12 (C.D. Cal. July 27, 2017) (“California has long recognized
a claim for civil extortion, relying on the definition of extortion
under criminal law to analyze such claims.”); Cal. Penal Code §
518(a).
Although Jan is a resident of California, the suit was filed
in Florida and the Promissory Note provides that Florida law
applies in case of a default.
(Doc. #1-1, p. 3.)
As California
law does not apply to the case, and the claim is not presented as
a claim under California law, the claim must be dismissed.
2. Wiretapping
Harris argues that the claim must be dismissed because both
Florida
law
and
federal
law
recognize
prohibition on recording communications.
an
exception
to
the
Once again, Jan argues
that California law provides protection if there was no consent.
5
Federal law provides a right to a civil cause of action under
18 U.S.C. § 2520, as does California and Florida.
Under the
California Statute, consent of all parties is indeed required to
record a conversation.
Florida
Statute,
as
Cal. Penal Code § 632(a).
long
as
the
intercept
is
not
Under the
disclosed
improperly, it does not apply to prohibit recording one’s own
conversation.
Lomelo v. Schultz, 422 So. 2d 1050, 1051 (Fla. 4th
DCA 1982); Fla. Stat. § 934.10(1).
As of 2006, California applies
the government interest test to out-of-state persons who record or
intercept calls made from or received in California.
Kearney v.
Salomon Smith Barney, Inc., 39 Cal. 4th 95, 122, 137 P.3d 914, 933
(Cal. 2006).
Jan may be asserting a claim under California law, but that
has not specifically been pled.
In fact, no statutory, common
law, or constitutional basis is referenced.
contained
in
Count
II,
that
Harris
admitted
Only one line is
to
record
phone
conversations without the consent of Jan, and no other context.
The motion to dismiss will be granted because the one line fails
to provide a short and plain statement for relief.
3. Automatic Stay Violation
As a preliminary matter, Count III also only alleges one line,
that Harris ignored bankruptcy laws by harassing him and trying to
collect money during his Chapter 13 case.
In his Response, Jan
provides that he filed a Chapter 7 case in California on February
6
27, 2012, and he would not object if the issue is better handled
by the Bankruptcy Court. Jan does not indicate in the Counterclaim
whether the issue was raised with the Bankruptcy Court, or under
what basis he may bring a stand-alone civil action for a violation
of 11 U.S.C. § 362.
The fact is, that any purported violation of
the automatic stay should be handled by the Court that imposed the
stay, i.e., the Bankruptcy Court.
See, e.g., Pereira v. First N.
Am. Nat. Bank, 223 B.R. 28, 31 (N.D. Ga. 1998).
This claim will
be dismissed without prejudice to proceeding in that court.
4. Usary Laws
Jan alleges that the “effective interest rate” is actually
greater than 18%, which violates Fla. Stat. § 687.03(3).
Jan
alleges that the only way he would owe “anywhere close to $300,000”
is if an interest rate in excess of 50%.
(Doc. #9, ¶ 33.)
The
Promissory Note provides for an interest rate of 12% on all unpaid
balances retroactive to January 1, 2016.
(Doc. #1-1, p. 3.)
In
case of default and the acceleration of the amount due, the Note
bears a rate of 15% percent per annum from the date of demand until
paid.
(Id., p. 2.)
Nowhere in the Note or the Complaint is Harris
seeking an interest rate in excess of 18%.
To the extent that Jan
is arguing that he has already overpaid in excess of an amount
equal to principal plus an interest rate in excess of 18 percent
per annum, the allegations are not clearly articulated and appear
7
to support an unjust enrichment claim, not a usary claim.
The
motion to dismiss will be granted.
5. RICO
Jan asserts two claims under the Racketeering Influenced and
Corrupt Organizations Act (RICO).
Jan asserts that the case
involves an “unlawful debt” as defined in 18 U.S.C. § 1961(6),
which is a debt “incurred or contracted in gambling activity” in
violation of laws relating to usury, and “which was incurred in
connection with the business of gambling”. Jan alleges that Harris
committed multiple related acts to collect usurious loans.
#9, ¶ 36.)
(Doc.
Under § 1962, “[i]t shall be unlawful for any person
employed by or associated with any enterprise engaged in, or the
activities of which affect, interstate or foreign commerce, to
conduct or participate, directly or indirectly, in the conduct of
such
enterprise's
affairs
through
a
pattern
activity or collection of unlawful debt.”
of
racketeering
18 U.S.C. § 1962(c).
There are no factual allegations that the debt incurred in
this case was as a result of a gambling debt.
It is in fact
admittedly based on a Note signed by Jan. (Doc. #9, ¶ 8.) Further,
there is no allegation that Harris is an enterprise, or what
specific racketeering activities in § 1961(a) are at issue.
The
motion
the
to
dismiss
will
be
granted
Counterclaims.
8
as
to
Count
V
of
In the other RICO claim, Count VI, Jan alleges a conspiracy
to violate 18 U.S.C. § 1962(c), through § 1962(d), with the
unidentified
third-parties.
To
establish
a
claim,
of
a
RICO
conspiracy, plaintiff must show that Harris agreed to the overall
objective of the conspiracy, or show that Harris agreed to commit
two predicate acts.
Am. Dental Ass'n v. Cigna Corp., 605 F.3d
1283, 1293 (11th Cir. 2010).
Jan makes only conclusory statements
with no factual support, and with no identified objective or
identified predicate acts.
Further, it is unclear what role the
third-parties played as the “Third-Party Complaint” contains no
allegations explaining their roles.
The motion to dismiss will be
granted.
6. Unjust Enrichment
To assert unjust enrichment, Jan must allege that a benefit
was conferred on Harris, it was voluntarily accepted and retained,
and that it would be inequitable for Harris to retain the benefit
without first paying the value to Jan.
Agritrade, LP v. Quercia,
No. 3D15-2392, 2017 WL 5760269, at *4 (Fla. 3d DCA Nov. 29, 2017),
review denied, No. SC17-2294, 2018 WL 1256501 (Fla. Mar. 12, 2018).
Jan again asserts a conspiracy and references some of the same
RICO language as in the previous counts.
otherwise provided.
No factual support is
The motion to dismiss will be denied.
Accordingly, it is now
ORDERED:
9
Plaintiff's Motion to Dismiss Defendant's Counterclaims and
Third-Party Claims (Doc. #12) is GRANTED.
The Counterclaim, and
Joinder of Additional Defendants (Doc. #9), construed as a thirdparty complaint, are dismissed without prejudice to filing an
Amended
Answer,
Affirmative
Defenses,
Counterclaims
within
FOURTEEN (14) DAYS of this Opinion and Order.
DONE AND ORDERED at Fort Myers, Florida, this
October, 2018.
Copies:
Parties of record
10
9th
day of
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