Estate of Gregory V. Faull v. McAfee et al

Filing 96

ORDER adopting 94 REPORT AND RECOMMENDATIONS re 92 MOTION for leave to file Third Amended Complaint filed by Estate of Gregory V. Faull; denying leave to amend; dismissing complaint without prejudice; directing Clerk to close file. Signed by Judge Gregory A. Presnell on 5/15/2017. (ED)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
ESTATE OF GREGORY V. FAULL,
Plaintiff,
v.

Case No: 6:13-cv-1746-Orl-31KRS

JOHN MCAFEE,
Defendant.

ORDER
This matter comes before the Court on the Motion for Leave to File Third Amended
Complaint (Doc. 92) filed by the Plaintiff, the Estate of Gregory V. Faull (henceforth, the
“Estate”). On March 13, 2017, Magistrate Judge Spaulding filed a Report and Recommendation
(Doc. 94), recommending that the Court deny the motion as futile. The Estate objected to that
recommendation. (Doc. 95). Upon de novo review, for the reasons set forth below, the Court
approves and adopts the Report and Recommendation, which will be made a part of this order.
The motion for leave to amend will be denied, and the case will be dismissed without prejudice.
I.

Background

The Estate filed this suit on November 8, 2013, asserting inter alia that the Defendant,
John McAfee, had caused Gregory Faull to be murdered in Belize in November, 2012. (Doc. 1 at
3). One week later, the Estate was ordered to show cause why the matter should not be dismissed
for lack of subject matter jurisdiction. (Doc. 6). In response, the Estate filed its Amended
Complaint (Doc. 12). The Estate had serious difficulty obtaining service of process on McAfee,
finally accomplishing it on December 8, 2014. (Doc. 39). A clerk’s default was entered against
McAfee on January 27, 2014. (Doc. 41).

Subsequently, the Estate sought to demonstrate its entitlement to a default judgment as to
liability against McAfee. (Doc. 50). The matter was referred to Magistrate Judge Spaulding,
who determined that the allegations of the Amended Complaint were too vague and conclusory to
support the entry of such a judgment. (Doc. 51). The Estate then filed a Second Amended
Complaint (Doc. 57), asserting a single claim under Florida’s Wrongful Death Act, Fla.
Stat. §§ 768.16-.26. On May 28, 2016, the Estate obtained service of the Second Amended
Complaint upon McAfee. (Doc. 78). The Clerk then entered another default on June 21, 2016.
(Doc. 81).
On July 27, 2016, the Estate filed a motion seeking entry of default judgment against
McAfee. (Doc. 82). Magistrate Judge Spaulding issued a Report and Recommendation
regarding the motion, recommending that it be denied. (Doc. 83). She determined that the key
allegations regarding McAfee’s liability were asserted on the basis of “information and belief,” but
that the Estate had not provided factual support for those allegations, and therefore the Second
Amended Complaint failed to state a claim against him. (Doc. 83 at 13). On December 13,
2016, the Estate filed its objection to that Report and Recommendation. (Doc. 87). On January
12, 2017, the Court overruled the Estate’s objections and adopted the Report and
Recommendation. (Doc. 90).
A month passed with no activity in the case. On February 15, 2017 – more than three
years after this matter was originally filed – the Court ordered the Estate to show cause why the
matter should not be dismissed for failure to prosecute. (Doc. 91). The Estate responded that it
had become aware of additional information regarding McAfee, and that it believed that
information would cure the deficiencies in the Second Amended Complaint. (Doc. 92 at 2). To

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that end, the Estate filed the instant motion, seeking leave to file its third amended complaint.
(Doc. 92).
II.

Legal Standards
A.

Report and Recommendations

Pursuant to 28 U.S.C. §636(b)(1)(a), a district judge may designate a magistrate judge to
submit proposed findings of fact and recommendations for the disposition of various pretrial
motions, such as motions for summary judgment. Within fourteen days after beings served with a
copy of the report and recommendations, any party may serve and file written objections. 28
U.S.C. §636(b)(1). A judge of the court shall make a de novo determination of those portions of
the report or specified proposed findings or recommendations to which objection is made, and
may accept, reject, or modify, in whole or in part, the findings or recommendations of the
magistrate judge. 28 U.S.C. § 636(b)(1).
B.

Default Judgment

When a defendant has failed to plead or defend, a district court may enter judgment by
default. Fed.R.Civ.P. 55(b)(2). Because of our legal system’s “strong policy of determining
cases on their merits,” however, default judgments are generally disfavored. In re Worldwide
Web Sys., Inc., 328 F.3d 1291, 1295 (11th Cir. 2003). A defaulted defendant is deemed to admit
the plaintiff’s well-pleaded allegations of fact but is not held to admit facts that are not well
pleaded or to admit conclusions of law. Cotton v. Mass. Mut. Life Ins. Co., 402 F.3d 1267, 1278
(11th Cir. 2005). Entry of default judgment is only warranted when there is a sufficient basis in
the pleadings for the judgment entered. Surtain v. Hamlin Terrace Found., 789 F.3d 1239, 1244–
45 (11th Cir. 2015).

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III.

Analysis
As noted, the primary shortcoming of the Second Amended Complaint was that the key

factual allegations as to McAfee’s participation in Faull’s death were not well-pleaded. (Doc. 83
at 13). The Estate seeks to cure this problem in part by relying on statements from Cassian
Chavarria, made in a film documentary about McAfee. According to Chavarria’s statements in
the documentary, he was ordered by McAfee to transfer $5,000 of McAfee’s money into the bank
account of Eddie McKoy, shortly before Faull’s murder. Chavarria also said that, a few hours
after Faull had been murdered but before his body had been found, McKoy called Chavarria – in
the middle of the night – to be picked up from a spot about 600 feet from Faull’s house, which was
the scene of his murder. After news of the murder became public, Chavarria concluded that
McKoy had killed Faull, and that McAfee had paid him the $5,000 to do so. However, the
documentary also includes statements from McKoy denying that he received $5,000 from McAfee
and denying being paid to kill Faull. Thus, the evidence regarding the alleged transfer is disputed,
and the most important allegations for purposes of McAfee’s liability – that McKoy killed Faull,
and that McAfee paid him to do so – are not based on personal knowledge.
The proposed Third Amended Complaint also includes allegations that McAfee directed
one or more of three women – Amy Herbert, Samantha Vanegas, and Marcia Novelo – to distract
Faull so that McKoy could slip into his house. But as Judge Spaulding points out, the allegation
is based on a hearsay statement from Herbert. Herbert was originally a defendant in this matter,
and the Estate was unable to obtain service of process on her. There is no indication that the
Estate would be able to obtain this evidence in admissible form. Moreover the allegation does not
match Herbert’s statement, which is that one woman – Novelo – distracted Faull, not one or more
of Herbert, Vanegas, or Novelo, as the Estate proposes to allege in the Third Amended Complaint.

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Thus, the only new allegations in the Third Amended Complaint that have any evidentiary
support are that Chavarria wired $5,000 to McKoy’s account at McAfee’s request, and that
Chavarria picked McKoy up about 600 feet away from the murder scene a few hours after it
occurred. The Court agrees with Judge Spaulding that these additional allegations are insufficient
to plausibly allege that McKoy, assisted by one or more of three women, tortured and killed Faull
at McAfee’s behest. Because the amended complaint still fails to provide allegations that are
sufficient to establish liability, the amendment would be futile. In addition, as Judge Spaulding
notes, the Estate has not shown that, during the three years since this case was filed, it has been
able to obtain statements from individuals with personal knowledge or other evidence that would
support the most important allegations regarding McAfee’s liability. See Foman v. Davis, 371
U.S. 178, 182 (1962) (stating that leave to amend may be denied based on, inter alia, repeated
failure to cure deficiencies by amendments previously allowed, or futility of amendment). See
also Surtain, 789 F.3d at 1249 (affirming sua sponte dismissal with prejudice of discrimination
claim after denial of motion for default judgment, where plaintiff was on notice of deficiencies in
claim and repeatedly failed to cure).
The Estate disputes the contention that the allegations regarding McAfee’s liability lack
evidentiary support. (Doc. 95 at 6). It argues that its counsel has conducted a “very thorough
investigation” and should not be required to disclose “confidential attorney work product” at this
stage of the proceedings. (Doc. 95 at 7). The Court has not suggested that any such disclosure is
required. But as the Court has repeatedly informed the Plaintiff, a defaulting defendant only
admits well-pleaded allegations of the complaint. Cotton, 402 F.3d at 1278. In the absence of
evidentiary support (from whatever source), allegations based only on information and belief do
not satisfy this standard.

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The Estate takes issue with any implication that it has been dilatory in prosecuting the
instant case. The Court is well aware of the difficulties counsel for the Estate has faced, and
understands that the overwhelming majority (if not the entirety) of the delays in these proceedings
resulted from the Defendant’s conduct. Nevertheless, this case have been underway for more
than three years, and the central allegations as to the sole Defendant’s liability still lack
evidentiary support. Despite repeated prodding from the Court, the Plaintiff has not produced
such support or suggested an ability to obtain it in the near future – or ever, for that matter.
Under these circumstances, further amendment would be futile, and the case will be dismissed
without prejudice.
Accordingly, it is hereby
ORDERED that the Report and Recommendation (Doc. 92) is AFFIRMED and
ADOPTED and made a part of this order. And it is further
ORDERED that the Second Amended Complaint (Doc. 57) is DISMISSED WITHOUT
PREJUDICE. The Clerk is directed to close the file.
DONE and ORDERED in Chambers, Orlando, Florida on May 15, 2017.

Copies furnished to:
Counsel of Record
Unrepresented Party

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