Cross v. Point and Pay, LLC
Filing
31
ORDER granting in part and denying in part 13 motion to dismiss. Signed by Judge Carlos E. Mendoza on 3/31/2017. (KMS)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
DAVID CROSS,
Plaintiff,
v.
Case No: 6:16-cv-1182-Orl-41KRS
POINT AND PAY, LLC,
Defendant.
/
ORDER
THIS CAUSE is before the Court on Defendant’s Motion to Dismiss (Doc. 13) and
Plaintiff’s Response thereto (Doc. 21). As set forth below, the motion will be granted in part and
denied in part.
I.
BACKGROUND
Plaintiff alleges that Defendant is a money transmitter that processes online bill payments
for clients, including the City of St. Cloud (the “City”). (Compl., Doc. 1, ¶ 16). According to
Plaintiff, Defendant advertises its services via its clients, which Plaintiff alleges are acting as
Defendant’s agents. (Id. ¶¶ 19, 28, 32). As relevant here, Defendant is alleged to have advertised
that it would process online payments for $1.50 per $50. (Id. ¶ 46). Plaintiff was charged $6.00 for
his payment of $189.77, (id. ¶ 48); Plaintiff alleges that he should have only been charged $4.50
(arguing that the additional $1.50 could only be added for full $50 increments) or, alternatively,
$5.69 (arguing that the fee should have been pro-rated), (id. ¶¶ 50–51). Thus, Plaintiff alleges that
he was overcharged either $1.50 or $0.31, respectively. (Id.).
Plaintiff alleges claims for breach of contract (Count I), disgorgement and restitution
(Count II), unjust enrichment (Count III), and violations of the Florida Deceptive and Unfair Trade
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Practices Act (“FDUTPA”), Fla. Stat. § 501.201 et seq., (Counts IV and V). Defendant moves to
dismiss all claims for failure to state a claim.
II.
MOTION TO DISMISS STANDARD
“A pleading that states a claim for relief 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). Pursuant to
Federal Rule of Civil Procedure 12(b)(6), a party may move to dismiss a complaint for “failure
to state a claim upon which relief can be granted.” In determining whether to dismiss under Rule
12(b)(6), a court accepts the factual allegations in the complaint as true and construes them in a
light most favorable to the non-moving party. See United Techs. Corp. v. Mazer, 556 F.3d 1260,
1269 (11th Cir. 2009). Nonetheless, “the tenet that a court must accept as true all of the allegations
contained in a complaint is inapplicable to legal conclusions,” and “[t]hreadbare recitals of
the elements of a cause of action, supported by mere conclusory statements, do not suffice.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Furthermore, “[t]o survive a motion to dismiss,
a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that
is plausible on its face.’” Id. (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
“A claim has facial plausibility when the plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.
Generally, in deciding a motion to dismiss, “[t]he scope of the review must be limited to the four
corners of the complaint.” St. George v. Pinellas Cty., 285 F.3d 1334, 1337 (11th Cir. 2002).
III.
A.
ANALYSIS
Breach of Contract
Plaintiff alleges that Defendant made an offer to process Plaintiff’s online payment for
$1.50 per $50, which Plaintiff accepted, creating a contract between the parties. Plaintiff then
alleges that Defendant charged Plaintiff a higher price for the service, breaching the contract. For
purposes of this argument, Defendant assumes that it made an offer as alleged by Plaintiff, but
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Defendant argues that Plaintiff never actually accepted that offer. Instead, Defendant argues that
Plaintiff accepted the offer to pay a $6.00 processing fee for facilitating the payment of his $189.77
bill. In support of this argument, Defendant attaches an affidavit of its representative, averring that
the online bill pay service it provides for the City requires the payee to check a box agreeing to the
terms of the convenience fee after the payee is informed of the total fee. Defendant asks the Court
to accept Defendant’s evidence to contradict the allegations in Plaintiff’s Complaint. Defendant’s
argument is inappropriate at this stage in the litigation.
Defendant also argues that Plaintiff’s breach of contract claims should be dismissed
pursuant to Florida’s voluntary payment doctrine. “The voluntary payment doctrine provides that
‘where one makes a payment of any sum under a claim of right with knowledge of the facts, such
a payment is voluntary and cannot be recovered.’” Ruiz v. Brink’s Home Sec., Inc., 777 So. 2d
1062, 1064 (Fla. 2d DCA 2001) (quoting City of Miami v. Keton, 115 So. 2d 547, 551 (Fla. 1959)).
As with Defendant’s previous breach of contract argument, the Court cannot decide this issue at
the motion to dismiss stage. First, “the voluntary payment doctrine is an affirmative defense that
normally should not be considered on a motion to dismiss.” Schojan v. Papa John’s Int’l Inc., 34
F. Supp. 3d 1206, 1211 (M.D. Fla. 2014) (quotation omitted). Second, the application of the
voluntary payment doctrine requires a determination that Plaintiff had knowledge of the facts at
the time he made the payment. See Ruiz, 777 So. 2d at 1064. Plaintiff’s knowledge is an issue of
fact that cannot be resolved on a motion to dismiss.
Finally, Defendant appears to argue that Plaintiff alleges that the City, rather than
Defendant, engaged in the subject advertising. However, Plaintiff clearly alleges that the City was
acting on behalf of and as Defendant’s agent. (Doc. 1 ¶¶ 28–33). Accordingly, Plaintiff’s breach
of contract claim will not be dismissed at this time. 1
1
Plaintiff argues that the exception to the voluntary payment doctrine set forth in
section 725.04, Florida Statutes, applies here. For the same reasons the Court cannot determine
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B.
Restitution and Disgorgement and Unjust Enrichment
Plaintiff’s claims for unjust enrichment and restitution and disgorgement are premised on
Defendant’s alleged violation of section 560.204, Florida Statutes, which provides, in relevant
part:
Unless exempted, a person may not engage in, or in any manner
advertise that they engage in, the selling or issuing of payment
instruments or in the activity of a money transmitter, for
compensation, without first obtaining a license under this part. For
purposes of this section, “compensation” includes profit or loss on
the exchange of currency.
Fla. Stat. § 560.204(1). The parties agree that there is no private right of action for violations of
this statute. Instead, Plaintiff argues that section 560.204 renders any contract with an unlicensed
money transmitter illegal and void, and therefore, Plaintiff can maintain common law causes of
action for restitution and disgorgement and for unjust enrichment. There are two Eleventh Circuit
cases directly relevant to this discussion.
In Buell v. Direct General Insurance Agency, Inc., 267 F. App’x 907 (11th Cir. 2008), the
Eleventh Circuit examined whether the plaintiffs could bring common law claims for money had
and received and rescission of their insurance contracts on the theory that the defendants violated
certain Florida statutes by, inter alia, permitting insurance policies to be sold by unlicensed agents.
Id. at 908–09. As is the case here, the parties in Buell agreed that the statutory provisions at issue
did not provide a private right of action. Id. at 909. In addressing the same argument that Plaintiff
is advancing—that Florida common law provides individuals with the ability to recoup payments
made pursuant to an illegal contract because those contracts are unenforceable—the Buell court
held that if the illegality of such a contract is based on the violation of a statute, courts must look
whether the voluntary payment doctrine applies, it also cannot determine whether an exception
thereto applies, and because Plaintiff’s breach of contract claims are not being dismissed, it need
not address the argument at this time.
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to the language of the statute to determine whether “a statutory violation renders [the] contract[]
unenforceable.” Id. at 910. The statute at issue in Buell explicitly stated that any “insurance
contract which is otherwise valid and binding as between the parties thereto shall not be rendered
invalid by reason of having been solicited, handled, or procured by or through an unlicensed
agent.” Fla. Stat. § 626.141; Buell, 267 F. App’x at 910. Thus, the Buell court determined that the
alleged statutory violations did not render the underlying contracts unenforceable, and therefore,
the plaintiff could not bring a common law claim on the basis that the contracts were void.
State Farm Fire & Casualty Co. v. Silver Star Health & Rehab, 739 F.3d 579 (11th Cir.
2013) is the opposite side of the same coin. There, the plaintiff alleged that the defendant was not
a licensed health care clinic under Florida law. Id. at 582. Due to that fact, the plaintiff alleged that
the defendant was not entitled to obtain payment for health care services. Id. The plaintiff brought
an unjust enrichment claim to recoup payments it had made for such services. Id. As in Buell, the
licensing statute did not provide a private right of action, and the defendant argued that, therefore,
the plaintiff could not bring common law claims based on violations of the statute. Id. at 583.
While the Silver Star court did not cite Buell, it took the same approach. It examined the language
of the statute to determine, essentially, whether the underlying agreements and transactions were
void and unenforceable. Id. Unlike the licensing statute in Buell, the health care clinic statute
explicitly stated that “[a]ll charges or reimbursement claims made by or on behalf of a clinic that
is required to be licensed under this part, but that is not so licensed, or that is otherwise operating
in violation of this part, are unlawful charges, and therefore are noncompensable and
unenforceable.” Id. (quoting Fla. Stat. § 400.9935(3)). Thus, the court determined that the
defendants were not legally entitled to the underlying payments, and therefore, the plaintiff’s
common law claim for unjust enrichment could proceed, despite the fact that the underlying statute
did not provide a private right of action. Id. at 583–84.
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Recently, two district courts in the Southern District of Florida have examined these cases
in the context of the statute at issue here. The first is Pincus v. Speedpay, Inc., 161 F. Supp. 3d
1150 (S.D. Fla. 2015). In Pincus, the plaintiff brought common law claims of unjust enrichment
and money had and received based on, inter alia, violations of section 560.204. Id. at 1154. The
Pincus court discussed both Silver Star and Buell and determined that the two were irreconcilable;
it therefore chose to follow Silver Star—which did not explicitly state that courts should look at
the statute to determine whether an underlying contract was void—because it was a published
opinion as opposed to Buell, which was unpublished. Id. at 1155–56. Upon a motion for
reconsideration, Pincus also relied on a Florida District Court of Appeal case, Vista Designs, Inc.
v. Silverman, 774 So. 2d 884, 886 (Fla. 4th DCA 2001), and a Southern District of Florida case,
Fabricant v. Sears Roebuck, 202 F.R.D. 310, 320 (S.D. Fla. 2001), for the proposition that if the
law requires a license to conduct business, the contracts by the unlicensed to perform such business
are illegal and void. Id. at 1160. Thus, Pincus concluded that, per its reading of Florida law, all
contracts with unlicensed services providers in this context were illegal and void, and therefore,
the plaintiff could bring common law claims based on the illegal agreements. Id. at 1156, 1160.
In contrast, the court in Hucke v. Kubra Data Transfer Ltd., 160 F. Supp. 3d 1320 (S.D.
Fla. 2015), reviewed the same case law and reached the opposite conclusion. The Hucke court
determined that Silver Star and Buell could be reconciled, noting that, while Silver Star did not
explicitly state that it was examining the statute to determine whether the underlying agreement
was enforceable, it did so. Id. at 1324–25. Further, both the district court in Hucke and the
magistrate judge who issued the underlying Report and Recommendation (“R&R”) undertook a
thorough examination of Florida case law; that “case law suggest[ed] ‘that something more than
just the violation of a statute’” was required to bring a common law cause of action in this type of
situation. Id. at 1323–24 (quoting Hucke v. Kubra Data Transfer Ltd. (“Hucke R&R”), No. 1514232-CIV-ROSENBERG/LYNCH, 2015 WL 12085833, at *4 (S.D. Fla. Oct. 8, 2015)).
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Specifically, the court noted “that there must be some indication that the regulatory violation also
renders the underlying transaction void or otherwise creates grounds for private
restitution. . . . That is, some indication in the subject regulatory statute that opens the door to
pursuing either restitution or declaratory judgment.” Id. (quotation omitted).
Although the Court acknowledges that this is a murky area of law where intelligent minds
can, and obviously have, disagreed, it finds that the approach taken in Hucke better reconciles the
case law. As the Hucke court found, it appears to this Court that the Silver Star and Buell opinions
used the same approach—examining the underlying statute to determine whether the agreements
were enforceable. Those courts merely came to opposite conclusions because the statutes provided
opposite directives. Further, this Court agrees with the thorough analysis set forth in Magistrate
Judge Lynch’s R&R, which was adopted by the Hucke district court, that after reviewing Florida
case law as a whole, a trend appears: cases where common law claims of this type have been
allowed involve underlying statutes or regulations that provide either an implicit or explicit
indication that agreements made in violation of the statute are unenforceable. Hucke R&R, 2015
WL 12085833, at *4–6; see also, e.g., Vista Designs, 774 So. 2d at 887 (referring to the statute
that criminalizes the unlicensed practice of law as well as public policy concerns); Steinberg v.
Brickell Station Towers Inc., 625 So. 2d 848, 849 (Fla. 3d DCA 1993) (examining the underlying
statute to determine whether the contract that violated the statute was illegal and noting that the
statute contained explicit language prohibiting unlicensed persons from charging or receiving any
commission, bonus, or fee for performing tasks which require a license thereunder); Cooper v.
Paris, 413 So. 2d 772, 773 (Fla. 1st DCA 1982) (noting that “contracts of certain unlicensed
persons are unenforceable” but not going so far as to say that contracts with all unlicensed persons
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are unenforceable (emphasis added) (quotation omitted)). This view of the Florida case law also
reconciles with the approaches taken by the Eleventh Circuit in Silver Star and Buell. 2
Accordingly, the Court must look to section 560.204 to determine whether the statute
provides any indication—explicit or implicit—that contracts with a money transmitter who is not
properly licensed are void and illegal. It does not. The enforcement of section 560.204 is delegated
to the Office of Financial Regulation of the Financial Services Commission. See Fla. Stat. §§
560.105, 560.113, 560.114; see also Fla. Stat. § 560.103 (defining “office” as the “Office of
Financial Regulation” and “commission” as the “Financial Services Commission” for purposes of
Chapter 560). Further, “[t]he statute does not indicate that a violation of the licensing requirement
voids a transaction engaged in by the unlicensed Money Transmitter.” Hucke, 160 F. Supp. 3d at
1327. While the statute “refer[s] to possible restitution,” it is “only in the context of an
administrative enforcement action.” Id.; accord. Fla. Stat. § 560.113(3); see also Fla. Stat. §
560.116 (“Any person having reason to believe that a provision of this chapter is being violated,
has been violated, or is about to be violated, may file a complaint with the office setting forth the
details of the alleged violation.” (emphasis added)).
Because section 560.204 does not render agreements with money transmitters who are
unlicensed thereunder unenforceable, Plaintiff cannot bring common law causes of action for
2
The Court also notes that several of the cited cases discuss Murthy v. N. Sinha Corp., 644
So. 2d 983 (Fla. 1994). However, that case addresses the methodology courts should employ to
determine whether a private right of action exists under a statute, see generally id., as opposed to
the situation here, where the question is not whether there is a private right of action under section
560.204, but rather, whether Plaintiff can bring a common law claim based on the fact that the
contract was purportedly rendered void due to a violation of 560.204. And, while the Buell court
did rely on Murthy in part of its analysis, it did so only in reaching its conclusion that because the
statute at issue did not create a private right of action, courts should “not use the common law of
contracts to circumvent [such a] deliberate remedial limitation.” Buell, 267 F. App’x at 909.
Separate from that rationale, the Buell court determined that courts must examine the governing
statute to determine whether the underlying contracts are unenforceable. See id. at 910. It is the
second portion of the Buell opinion that the Court relies on here.
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restitution and disgorgement and unjust enrichment on the basis that Defendant was unlicensed. 3
Count II will be dismissed and, to the extent Count III is based on section 560.204, it will also be
dismissed.
Plaintiff also bases his unjust enrichment claim on the allegation that Defendant charged a
higher fee than it advertised. (Doc. 1 ¶ 87). Defendant argues that Plaintiff got the benefit of his
bargain and that he elected to pay the fully disclosed convenience fee. It would appear that this
unjust enrichment claim is an alternative to Plaintiff’s breach of contract claim, and Defendant’s
arguments are inappropriate at this stage of the litigation for the same reasons. The Court cannot
determine at this stage whether Plaintiff got the benefit of his bargain or what Plaintiff knew or
did not know.
C.
FDUTPA
Plaintiff brings two claims under FDUTPA. The first is based on Defendant’s alleged
deceptive and unfair practice of advertising a certain price and then charging customers a higher
price (Count IV). The second is based on Defendant’s alleged violations of sections 560.204 and
817.41, Florida Statutes, (Count V).
FDUTPA makes illegal “[u]nfair methods of competition, unconscionable acts or practices,
and unfair or deceptive acts or practices in the conduct of any trade or commerce.” Fla. Stat. §
501.204(1). An unfair practice has been defined as “one that offends established public policy and
one that is immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers.”
Samuels v. King Motor Co. of Fort Lauderdale, 782 So. 2d 489, 499 (Fla. 4th DCA 2001)
(quotation omitted). Deceptive and unfair practices also include violations of “[a]ny law, statute,
rule, regulation, or ordinance which proscribes unfair methods of competition, or unfair, deceptive,
or unconscionable acts or practices.” Fla. Stat. § 501.203(3)(c). Some federal courts in Florida
3
For purposes of this Order, the Court assumes, arguendo, that Defendant was unlicensed.
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have referred to FDUTPA claims based on the latter as “per se violations” because they are
explicitly provided for in the statute. See, e.g., Williams v. Delray Auto Mall, Inc., 916 F. Supp. 2d
1294, 1300 (S.D. Fla. 2013); Taviere v. Precision Motor Cars, Inc., No. 8:09-cv-467-T-TBM,
2010 WL 557347, at *4 (M.D. Fla. Feb. 12, 2010).
With regard to Plaintiff’s first FDUTPA claim, Defendant does not dispute that the alleged
practice of advertising one price and then deceiving a customer into paying a higher price would
constitute an unfair or deceptive practice in violation of FDUTPA. Instead, Defendant largely
reasserts its argument under the breach of contract section—that Plaintiff was aware of the full
amount of the fee before he entered any contract and before he paid the fee. Defendant elaborates
on this argument, asserting that because any contract that was entered explicitly contemplated a
$6.00 fee, which is what Plaintiff paid, he suffered no damages. As set forth above, this argument
requires the Court to engage in factual determinations, which is inappropriate on a motion to
dismiss.
As to Plaintiff’s second FDUTPA claim, Defendant argues that a violation of neither
section 560.204 nor section 817.41 could possibly constitute a per se violation of FDUTPA
because those sections do not proscribe unfair or deceptive trade practices. In relevant part, section
817.41 makes it “unlawful for any person to make or disseminate or cause to be made or
disseminated before the general public of the state, or any portion thereof, any misleading
advertisement.” Fla. Stat. § 817.41(1). Although Defendant includes section 817.41 in its argument
that Plaintiff has not alleged a per se violation of FDUTPA, its only support for that argument is
that it was unable to find a case where that section was used as a predicate for a FDUTPA claim.
The Court finds this argument unpersuasive. The type of activity proscribed by section 817.41—
misleading advertising—is precisely the type of unfair and deceptive trade practice that is
prohibited by FDUTPA. See, e.g., Third Party Verification, Inc. v. Signaturelink, Inc., 492 F. Supp.
2d 1314, 1323, 1327–28 (M.D. Fla. 2007) (determining that allegations regarding a misleading
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advertisement stated a claim under both the private right of action in § 817.41 and FDUTPA);
Izadi v. Machado (Gus) Ford, Inc., 550 So. 2d 1135, 1140–41 (Fla. 3d DCA 1989) (same). Thus,
Count V states a claim insofar as it alleges a violation of section 817.41.
Violations of section 560.204, on the other hand, cannot serve as a predicate for a FDUTPA
claim. Plaintiff does not address whether that statute proscribes unfair methods of competition, or
unfair, deceptive, or unconscionable acts or practices as is required for a statutory violation to
serve as the basis for a FDUTPA violation. Instead, Plaintiff argues that he is not alleging a per se
violation, but instead, that he is alleging a violation of FDUTPA based on Defendant’s illegal acts.
Plaintiff’s argument is unavailing. First, as noted above, the term “per se violation” is merely a
label that federal district courts in Florida have attributed to claims that are based on violations of
“law[s], statute[s], rule[s], regulation[s], or ordinance[s] which proscribe[] unfair methods of
competition, or unfair, deceptive, or unconscionable acts or practices,” as set forth in
section 501.203(3)(c). Thus, Plaintiff cannot circumvent the requirements of section 501.203(3)(c)
by merely labeling his claim as something else.
Further, Plaintiff argues that his claim is based not on violations of section 560.204 but,
instead, on Defendant’s efforts to “escap[e] the purview of extensive regulatory bodies and law.”
(Doc. 21 at 20). The Court commends Plaintiff for his creativity, but this argument is simply
another attempt to label a section 501.203(3)(c) FDUTPA claim as something else. Specifically,
section 560.204 requires regulatory licensing; therefore, “escaping” such regulations amounts to
violating that statutory provision. And, as Plaintiff seems to implicitly concede as he does not
argue otherwise, section 560.204 does not proscribe unfair methods of competition, or unfair,
deceptive, or unconscionable acts or practices. Therefore, it cannot serve as a basis for a FDUTPA
claim. Count V will be dismissed to the extent it relies on violations of section 560.204.
IV.
CONCLUSION
In accordance with the foregoing, it is ORDERED and ADJUDGED as follows:
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1. Defendant’s Motion to Dismiss (Doc. 13) is GRANTED in part.
2. Count II is DISMISSED with prejudice.
3. Count III is DISMISSED with prejudice insofar as it attempts to base an unjust
enrichment claim on alleged violations of section 560.204.
4. Count V is DISMISSED with prejudice insofar as it predicates a FDUTPA claim
on violations of section 560.204.
5. The motion is DENIED in all other respects.
DONE and ORDERED in Orlando, Florida on March 31, 2017.
Copies furnished to:
Counsel of Record
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