Doshi et al v. Cagle Road Land LLC et al

Filing 65

ORDER taking under advisement Defendants' Motion for Summary Judgment 42, and setting the matter for a hearing on the legal issues identified in the Order. The hearing is set for 2pm, Tuesday, October 22, 2019, before the Honorable Marcia Morales Howard. See Order for details. Signed by Judge Marcia Morales Howard on 10/11/2019. (MMG)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
JACKSONVILLE DIVISION
PARESH DOSHI and JITENDRA DOSHI,
Plaintiffs,
Case No. 3:17-cv-308-J-34JRK
vs.
MAHENDRA F. DOSHI, et al.,
Defendants.
/
ORDER
This CAUSE is before the Court on Defendants Mahendra F. Doshi, Mahesh
Doshi, and Ryan K. Burress’s Motion for Summary Judgment and Incorporated
Memorandum of Law (Doc. 42, Motion), filed March 8, 2019. Paresh Doshi and Jitendra
Doshi filed their Amended Complaint on March 13, 2018 (Doc. 20, Amended Complaint),
asserting claims of fraud, breach of fiduciary duty, and conspiracy against the Defendants
arising from a transfer of real estate.1 Plaintiffs have filed a response to Defendants’
Motion. See Plaintiffs’ Response in Opposition to Defendants’ Motion for Summary
Judgment (Doc. 46, Response), filed March 29, 2019. For the reasons stated below, the
Defendants’ Motion is TAKEN UNDER ADVISEMENT and the Court will schedule a
hearing on the matter.
Briefly described, the instant controversy arises out of the successive transfers of
a parcel of real property (the Property) between friends and relatives.2 As relevant here,

1

The Court notes that four of the five parties in this action share the same last name. For the sake of
clarity, the Court will refer to the individuals by their first and last names, or solely by their first names.
2
The Court sets forth a general overview of the facts here solely for the purposes of alerting the parties of

1

Jitendra Doshi and Mahesh Doshi3 initially acquired the Property at issue in 1994, through
an entity they shared, Doshi, Inc. (Doshi, Inc.). See Doc. 42-1 at 4-6, 17 (Property and
Business Entity Records); Doc. 42-6 at 5 (Affidavits). In 2006, Jitendra and Mahesh
transferred Doshi, Inc.’s interests (i.e., the Property) to D&D JAX, LLC (D&D JAX). See
Affidavits at 6; Property and Business Entity Records at 7-9, 18-22.
Then, in 2009, Jitendra and Mahesh transferred D&D JAX’s interests to Cagle
Road Land LLC (Cagle Road LLC). See Doc. 49 at 8, 9 (Mahesh Doshi Deposition);
Property and Business Entity Records at 10-11.4 At the time of the transfer, Paresh Doshi
and Mahendra Doshi5 were the sole members of Cagle Road LLC, each holding a fifty
percent interest in the entity. Doc. 42-4 at 24 (Jitendra Doshi Deposition); Paresh Doshi
Deposition at 19. During the time Cagle Road LLC held the Property, Mahesh performed
maintenance and oversight for the Property, and communicated with Paresh, Mahendra,
and Jitendra about the Property’s status. Mahesh Deposition at 10, 11, 13, 15. However,
Mahesh was not listed on any of the Cagle Road LLC documents as a member of the
business entity, or as a manager. Property and Business Entity Records at 24-25.
In 2013, at the recommendation of Mahesh, Paresh and Mahendra transferred the
entirety of their interests in Cagle Road LLC to CRLAG FLA, LLC (CRLAG) for $20,000.
See Doc. 42-2 at 14, 28 (Jitendra Doshi Interrogatory); Mahesh Doshi Deposition at 25;
Paresh Doshi Deposition at 23, 25-28, 40-41; Property and Business Entity Records at

the legal issues to be addressed at the upcoming hearing. The overview is not intended to represent the
Court’s findings of facts and is in no way dispositive.
3
It does not appear that Jitendra and Mahesh are related.
4
In referencing depositions, the Court will use the page numbers assigned by the Court’s CM/ECF
docketing system.
5
It does not appear that Paresh and Mahendra are related. However, Paresh is Jitendra’s cousin, and
Mahendra is Mahesh’s uncle. See Mahesh Doshi Deposition at 3; Doc. 42-5 at 12 (Paresh Doshi
Deposition).

2

29-30. In the document memorializing the transfer of interests between Cagle Road LLC
and CRLAG, Ryan Burress signed as the Manager on behalf of CRLAG, and Mahendra
and Paresh signed on behalf of Cagle Road LLC. See Property and Business Entity
Records at 29-30. Additionally, the transfer agreement indicated that upon the transfer,
“Mahendra Doshi and Paresh Doshi hereby resign from any and all offices which they
may hold in” Cagle Road LLC. Id. at 30. Plaintiffs contend that when Paresh and
Mahendra transferred their interests in Cagle Road LLC to CRLAG, the men did not know
that Mahesh was the sole member of the buying entity. See Jitendra Doshi Deposition at
37-38; Mahesh Doshi Deposition at 25-26; Paresh Doshi Deposition at 13-14. After
purchasing Cagle Road LLC’s interests from Paresh and Mahendra for $20,000, Mahesh
resold the Property for $775,000. See Mahesh Deposition at 32; Property and Business
Entity Records at 12.
As a result of the foregoing, Jitendra Doshi and Paresh Doshi, as individuals,
brought the instant action against Mahendra F. Doshi, Mahesh Doshi, and Ryan K.
Burress, as individuals, asserting various claims of fraud as well as breach of fiduciary
duty and civil conspiracy.

See generally Amended Complaint.6

The Defendants

subsequently filed their Motion, which is currently before the Court. Upon review of the
parties’ filings, the Court determines that a hearing is warranted to address whether
Paresh Doshi, or alternatively, Cagle Road LLC, is the proper party plaintiff in this action,
in addition to the other matters raised in the parties’ filings.7
6

Jitendra Doshi and Paresh Doshi are citizens of New York. Mahendra F. Doshi, Mahesh Doshi, and Ryan
K. Burress are all citizens of Florida. Likewise the amount in controversy in this matter exceeds $75,000.
See Amended Complaint at ¶¶ 2-7. Therefore, this Court exercises diversity jurisdiction over the matter.
See Keller v. Miami Herald Pub. Co., 778 F.2d 711, 714 (11th Cir. 1985) (citing Erie Railroad v. Tompkins,
304 U.S. 64, 78 (1938)); Allstate Ins. Co. v. Clohessy, 32 F. Supp. 2d 1328, 1330 (M.D. Fla. 1998). As
such, Florida law governs the resolution of the Plaintiffs’ claims.
7
As referenced above, this case involves several property transactions between multiple business entities

3

Paresh claims that he was injured when Cagle Road LLC transferred its interests
in the Property to CRLAG for $20,000, at the prompting of, and on the basis of
representations made by Mahesh. See Amended Complaint at ¶¶ 67, 74-75. At the time
of the transfer, however, while Paresh was a member of Cagle Road LLC, it was Cagle
Road LLC, and not Paresh, that owned the Property. See Property and Business Entity
Records at 10-11, 29-30. In this context, under Florida law damages resulting from
membership in an LLC may be brought directly in an individual suit
only if (1) there is a direct harm to the shareholder or member such that the
alleged injury does not flow subsequently from an initial harm to the
company and (2) there is a special injury to the shareholder or member that
is separate and distinct from those sustained by the other shareholders or
members.
Dinuro Investments, LLC v. Camacho, 141 So. 3d 731, 739–40 (Fla. 3d Dist. Ct. App.
2014). See also Mahoney v. Wells Fargo Bank, N.A., No. 8:19-cv-118-T-02SPF, 2019
WL 1901011, at *1 (M.D. Fla. Mar. 20, 2019) (“Under Florida law, a member of an LLC
may not bring a derivative claim in his or her individual name.”); Hudder v. City of Plant
City, No. 8:14-cv-1686-T-EAK-EAJ, 2014 WL 7005904, *1 (M.D. Fla. Dec. 10, 2014) (LLC
is real party in interest, rather than member of LLC); Home Title Co. of Maryland, Inc. v.
LaSalla, 257 So. 3d 640, 643 (Fla. 2d Dist. Ct. App. 2018) (“Generally, a . . . member of
an LLC may not maintain an action in his or her own right if the cause of action is derived
from the right of the . . . LLC to bring the action. In other words, if the injury is primarily
against the [LLC], or the [members] generally, then the cause of action is in the [LLC] and
the individual’s right to bring it is derived from the [LLC].”).

in which the parties have varying membership interests. It was not until the Court had an opportunity to
review the record developed for summary judgment that the interwoven nature of these different
transactions and business arrangements became fully evident to the Court, thereby raising the question of
whether either Cagle Road LLC or Paresh Doshi is a proper party plaintiff in this action.

4

Notably, Florida Statutes section 605.0110 provides that
(1) [a]ll property originally contributed to the limited liability company or
subsequently acquired by a limited liability company by purchase or other
method is limited liability company property.
(2) Property acquired with limited liability company funds is limited liability
company property. [And]
....
(4) A member of a limited liability company has no interest in any specific
limited liability company property.
FLA. STAT. ANN. § 605.0110. The statute further instructs
(1) [s]ubject to subsection (2), a member may maintain a direct action
against another member, a manager, or the limited liability company to
enforce the member's rights and otherwise protect the member's interests,
including rights and interests under the operating agreement or this chapter
or arising independently of the membership relationship.
(2) A member maintaining a direct action under this section must plead and
prove an actual or threatened injury that is not solely the result of an injury
suffered or threatened to be suffered by the limited liability company.
Id. at § 605.0801. Conversely,
[a] member may maintain a derivative action to enforce a right of a limited
liability company if:
(1) The member first makes a demand on the other members in a membermanaged limited liability company or the managers of a manager-managed
limited liability company requesting that the managers or other members
cause the company to take suitable action to enforce the right, and the
managers or other members do not take the action within a reasonable time,
not to exceed 90 days; or
(2) A demand under subsection (1) would be futile, or irreparable injury would
result to the company by waiting for the other members or the managers to
take action to enforce the right in accordance with subsection (1).
Id. at § 605.0802. In light of the foregoing, it appears that if any harm arising from the
transfer between Cagle Road LLC and CRLAG is properly attributed to Cagle Road LLC,
then Cagle Road LLC would be the proper plaintiff, as opposed to Paresh. See Hudder,

5

2014 WL 7005904 at *1 (“It is axiomatic that ‘[a]n action must be prosecuted in the name
of the real party in interest.”) (quoting FED R. OF CIV. PRO. 17 (Rule(s))).8
Accordingly, it is ORDERED:

This matter is set for a hearing regarding the

foregoing question of standing and identification of a proper plaintiff, in addition to the
other matters raised in the parties’ filings. The hearing will occur at 2 p.m., Tuesday,
October 22, 2019, before the Honorable Marcia Morales Howard, United States District
Judge, at the United States Courthouse, 300 N. Hogan Street, Courtroom No. 10B, Tenth
Floor, Jacksonville, FL.9
DONE AND ORDERED in Jacksonville, Florida this 11th day of October, 2019.

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Copies to:
Counsel of Record

8

Further complicating this analysis is that when Cagle Road LLC transferred its interests to CRLAG, Paresh
“transfer[ed] . . . one hundred percent (100%) of [his] membership interests of [Cagle Road LLC] . . . to the
Buyer,” CRLAG. Property and Business Entity Records at 29. Likewise “Paresh Doshi . . . resign[ed] from
any and all offices which [he held] in” Cagle Road LLC. Id. at 30.
9
All persons entering the courthouse must present photo identification to Court Security Officers. Although
cell phones, laptop computers, and similar electronic devices generally are not permitted in the building,
attorneys may bring those items with them upon presentation to Court Security Officers of a Florida Bar
card (presentation of the Duval County Courthouse Lawyer identification card will suffice) or Order of
Special admission pro hac vice. However, all cell phones must be turned off while in the courtroom.

6