Kelly v. Neal

Filing 15

ORDER denying 7 Defendant's motion to dismiss. Defendant must file an answer by 4/26/18. The parties remain under the deadlines in 12 the CMSO. Signed by Judge Timothy J. Corrigan on 4/5/2018. (SEJ)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
JACKSONVILLE DIVISION
LAURIE KELLY,
Plaintiff,
v.

Case No. 3:17-cv-01031-TJC-PDB

BRUCE NEAL,
Defendant.

ORDER
This case is before the Court on Defendant Bruce Neal’s Motion to
Dismiss. (Doc. 7). Plaintiff Laurie Kelly, who brought both breach-of-contract
and fraud claims following a series of allegedly broken oral promises (Doc. 2),
filed a response. (Doc. 13).
I. Background
Kelly alleges that at some unspecified time in the past, she and Neal
entered into a fiduciary relationship whereby Neal became her financial advisor
and oversaw her $2.1 million investment portfolio. (Doc. 2 ¶ 10). Sometime
later, Neal began asking Kelly to provide him with what ultimately became a
lengthy series of personal loans. (Id. ¶¶ 13–21). These loans, totaling
$682,103.55, were spent on goods and services such as personal training, condo

upgrades, a new car, and Neal’s children’s tuition. (Id. ¶ 20). The complaint then
alleges that “[w]ith each loan, Neal reassured Kelly that he would repay the full
amount owed plus interest when he was able. . . . From year to year, Neal
continued to make reassurances that he would pay back the debt, both orally
and through written communications.” (Id. ¶¶ 22, 24). On July 12, 2017, when
Kelly formally demanded repayment, Neal refused, prompting the present
action. (Id. ¶ 26).
In a two-count complaint, Kelly contends that: (1) each of the loans
represents discrete oral contracts, and (2) Neal used his knowledge of her
finances and position as a fiduciary to fraudulently induce reliance upon his
repeated promises to repay his debts. (Id. ¶ 28–44). For the breach-of-contract
claim, Neal counters that the oral promises were illusory because they lacked
consideration and failed to specify essential terms. (Doc. 7 at 4–8). On the fraud
claim, he argues that the complaint is impermissibly vague (Id. at 8–11). Neal
also raises a statute of limitations issue as to both counts. (Id. at 12–13).
II. Discussion
a. Breach of Contract
Neal argues that his promise to repay Kelly—to the extent any agreement
existed at all—was illusory and unenforceable because it failed to specify
essential terms, such as relevant dates and interest rates, and lacked
consideration. (Doc. 7 at 4–7). Under Florida law, oral and written contracts are
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subject to the same essential requirements: offer, acceptance, consideration,
and sufficient specification of essential terms. W.R. Townsend Contracting, Inc.
v. Jensen Civil Constr., Inc., 728 So.2d 297, 302 (Fla. 1st DCA 1999); Winter
Haven Citrus Growers Ass’n v. Campbell & Sons Fruit Co., 773 So.2d 96, 97
(Fla. 2d DCA 2000). “To state a cause of action for breach of an oral contract, a
plaintiff is required to allege facts that, if taken as true, demonstrate that the
parties mutually assented to a certain and definite proposition and left no
essential terms open.” W.R. Townsend Contr., Inc., 728 So. 2d at 300 (internal
citation omitted). Yet if nonessential terms remain open, an oral contract
remains enforceable. Id. at 302. “[W]hat constitutes an essential term of a
contract will vary widely according to the nature and complexity of each
transaction and must be evaluated on a case-specific basis.” ABC Liquors, Inc.
v. Centimark Corp., 967 So.2d 1053, 1056 (Fla. 5th DCA 2007).
The putative contract is not complex, involving merely a verbal promise
from Neal to repay Kelly when he was able. The complaint alleges verbal
conversations, as well as the existence of written records, that evince the
necessary contractual terms. See Doc. 2 ¶¶ 24–25 (illustrating that Kelly
provided money to Neal, who “continued to make reassurances that he would
pay back the debt. . . . [And] [i]n both oral and written communications over the
years, Neal repeatedly acknowledged the debt he owed.”). This is good enough.
See Great Am. Ins. Co. v. Pino Kaoba & Assoc., Inc., 08-FL-20847-CIV (S.D. Fla.
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2008) (determining that “notice pleading does not require detailed allegations
concerning the dates and specific terms of the alleged oral contract,” and that
“further information . . . as to specific terms of the alleged contracts may be
adduced during discovery.”).
Neal also argues that the agreement lacked consideration because it was
an “I will if I want to” type of promise. (Doc. 7 at 7). As Kelly alleges in the
complaint, however, Neal “assured Kelly that he would repay the full amount
owed plus interest when he was able.” (Doc. 2 ¶ 22) (emphasis added). “[S]imply
because a contract is unclear as to when payment must be made does not relieve
a party of an obligation to make payment.” 1 Independent Mortg. & Fin. v.
Deater, 814 So. 2d 1224, 1225 (Fla. 3d DCA 2002). Thus, as Kelly relays the
facts, Neal did not agree to pay back his debt at some indeterminate point in
the future; he instead created a condition upon which his repayment hinged.
(Doc. 2 ¶ 22). “This type of agreement creates only a conditional promise to pay
so that the creditor is not entitled to recover on the promise unless the promisor
is in fact able to pay the debt.” Hammond v. Bicknell, 379 So. 2d 680, 681 (Fla.
2d DCA 1980).
Although promises of repayment based on future contingencies are not
enforceable, “[c]ontracts providing for payment at an indefinite time in the
future are enforceable.” In re Ellsworth, 326 B.R. 867, 873 (Bankr. M.D. Fla.
2005). Moreover, “[w]here an agreement does not specify the time for payment
or provides for an indeterminate or indefinite time, the law implies that
payment will be made within a reasonable time.” Fla. Stat. § 672.309(2).
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Here, it is unclear if Neal could repay his debts. Whether this condition
was met is a fact-sensitive inquiry beyond the bounds of a Rule 12(b)(6) motion;
discovery will shed additional light on whether the oral contract is enforceable.
Ultimately, Kelly’s breach-of-contract claim—short and plain though it may
be—satisfies Rule 8(a)(2).
b. Fraud in Inducement
Neal posits that Kelly has not pled her fraud claim with sufficient
particularity to withstand a motion to dismiss under Rule 9(b). (Doc. 7 at 8–11).
Under this heightened pleading standard, a complaint that alleges fraud must
set forth with particularity the circumstances contextualizing the ostensibly
fraudulent statements. United States ex rel. Clausen v. Lab. Corp. of Am., 290
F.3d 1301, 1308 (11th Cir. 2002). Although Rule 9(b) applies to fraud claims, it
“must be read in conjunction with the notice pleading standard of Rule 8.
Particularity is sufficiently plead when the complaint alleges fraud with
sufficient particularity to permit the person charged with fraud to have a
reasonable opportunity to answer the complaint and adequate information to
frame a response.”2 Fleeger v. Wachovia Bank, 5:12-CV-294-Oc-32PRL at *8
Other circumstances may also relax the standard. For example, “Rule 9(b)’s
heightened pleading standard may be applied less stringently . . . when specific
factual information about the fraud is peculiarly within the defendant’s
knowledge or control.” United States ex rel. Prime v. Post, Buckley, Schuh &
Jernigan, Inc., 6:10-CV-1950-Orl-36DAB at *10 (M.D. Fla. 2012) (internal
citation omitted).
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(M.D. Fla. 2012) (internal citation omitted). To satisfy rule 9(b), the Eleventh
Circuit often requires complaints to outline the “who,” “what,” when,” and
“where” of what happened. Mizzaro v. Home Depot, Inc., 544 F.3d 1230, 1237
(11th Cir. 2008). Yet such specificity is not always necessary, as “[a]llegations
of date, time or place satisfy the Rule 9(b) requirement that the circumstances
of the alleged fraud must be pleaded with particularity, but alternative means
are also available to satisfy the rule.” Durham v. Bus. Mgt. Assocs., 847 F. 2d
1505 (11th Cir. 1988).
In this case, considering the simplicity of the fraud claim, the pecuniary
specificity that is alleged, and Neal’s likely knowledge of the relevant
circumstances, Neal possesses a “reasonable opportunity to answer the
complaint and adequate information to frame a response.” Fleeger, 5:12-CV294-Oc-32PRL at *8. Rule 9(b) is therefore satisfied, and Kelly’s temporal
omissions are not fatal to her complaint.
c. Statutes of Limitations
Neal also argues that the statutes of limitations on both claims have
expired. (Doc. 7 at 12–13). Neal has not shown the applicability of the statute
of limitations from the face of the complaint; therefore, the Court cannot dismiss
the complaint on statute of limitations grounds. He may raise the statute of
limitations as an affirmative defense in his answer.
Accordingly, it is hereby
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ORDERED:
1. Defendant Bruce Neal’s motion to dismiss (Doc. 7) is DENIED. No
later than April 26, 2018, Neal must file his answer.
2. The parties remain under the deadlines in the CMSO. (Doc. 12).
DONE AND ORDERED in Jacksonville, Florida the 5th day of April,
2018.

TIMOTHY J. CORRIGAN
United States District Judge

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Copies:
Counsel of record

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