Club Exploria, LLC et al v. Aaronson, Austin, P.A. et al

Filing 156

ORDER denying 125 Plaintiffs' Motion for Reconsideration. Signed by Judge John Antoon II on 2/11/2020. (EK)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION

CLUB EXPLORIA, LLC and CLUB
EXPLORIA MANAGEMENT, LLC,
Plaintiffs,

v.

Case No: 6:18-cv-576-0rl-28DCI

AARONSON, AUSTIN, P.A. and
AUSTIN N. AARONSON,
Defendants.

ORDER
Plaintiffs seek relief from this Court's October 21, 2019 Order (Doc. 87) dismissing
their federal RICO claim with prejudice.

(Mot. Recons ., Doc. 125, filed December 24,

2019). Having considered Plaintiffs' motion, Defendants' Response (Doc. 137), the record,
and governing law, the Court denies Plaintiffs' motion for reconsideration.
I.

Background

This case began in 2018 when Plaintiffs filed a Complaint (Doc. 1) alleging six
counts under federal and state law. In March 2019, the Court entered an Order (Doc. 33)
granting in part and denying in part Defendants' Motion to Dismiss Complaint With
Prejudice (Doc. 18). Specifically, the Court dismissed Count V-a claim under Florida law
for misleading advertising-with prejudice; dismissed Count II (the federal civil RICO claim)
and Plaintiffs' prayer for declaratory relief without prejud ice; and otherwise denied the
motion. (See Doc. 33). As noted in that Order, a RICO "'pattern of racketeering activity'
requires at least two acts of racketeering activity," 18 U.S.C. § 1961 (5), and Plaintiffs

alleged mail fraud and wire fraud as RICO predicate acts in Count II, (Doc. 33 at 8) . The
Court concluded that Plaintiffs had not adequately alleged mail fraud, and the RICO count
was dismissed without prejudice and with leave to amend. (Doc. 33 at 9 & 18).
Plaintiffs then filed an Amended Complaint (Doc. 39) repleading the RICO claim .
This time, Plai ntiffs asserted wire fraud and "engaging in monetary transactions in property
derived from specified unlawful activity" under 18 U.S.C. § 1957 as the RICO predicate
acts. (Doc. 39 ,i 73) . In April 2019, Defendants again moved to dismiss, arguing in part
that in the RICO claim Plaintiffs had not pleaded that Defendants engaged "in a monetary
transaction in criminally derived property of a value greater than $10,000" as required for
a violation of 18 U.S.C. § 1957. (Doc. 41).

In response to that argument, Plaintiffs

maintained that in the Amended Complaint they did allege that Defendants had engaged
in at least one such transaction . (Pis.' Resp ., Doc. 46, at 7 (citing Am . Campi. ,i 80)).
In an October 21, 2019 Order (Doc. 87), the Court granted in part and denied in part
Defendants' second motion to dismiss; the RICO claim was dismissed with prejudice. The
Court rejected Plaintiffs' assertion that they had pleaded a transaction of greater than
$10,000; instead, the Court noted, Plai ntiffs had only alleged transactions that "exceeded
$10,000 in isolation or in the aggregate." (Doc. 87 at 4-5 (quoting Am. Campi. ,i 80)) .
Because the statute requires "a transaction" in excess of $10 ,000 rather than an
aggregation of transactions that exceeds $10 ,000 , the Court again found Plaintiffs' RICO
predicate act allegations lacking and dismissed Count II with prejudice. (kl at 5).
More than two months later, on December 24, 2019, Plaintiffs filed the Motion for
Reconsideration (Doc. 125) that is now before the Court. Plaintiffs assert that "[d]uring
discovery," they uncovered evidence of monetary transactions in excess of $10 ,000 , and

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they ask the Court to "reconsider and alter" its Order dismissing the RICO claim with
prejudice and allow them to again attempt to plead an actionable RICO count. (Doc. 125
at 1). Defendants oppose the motion. (Resp., Doc. 137).
II.

Discussion

The Order (Doc. 87) dismissing Plaintiffs' RICO claim with prejudice was an order
"that adjudicate[d] fewer than all the claims" in this case, and it "may be revised at any time
before the entry of a judgment adjudicating all the claims. " Fed. R. Civ. P. 54(b); see also
Fed. R. Civ. P. 60(b) advisory committee's note to 1946 amendment (noting that
"interlocutory judgments .. . are left subject to the complete power of the court rendering
them to afford such relief from them as justice requires") . But the standards for amendment
of a complaint-not mentioned in Plaintiff's motion-are also germane here.
Federal Rule of Civil Procedure 15(a)(1) allows a party to amend its pleading once
as a matter of course at the beginning of a case. Otherwise, to amend a pleading before
trial the pleader must have "the opposing party's written consent or the court's leave." Fed.
R. Civ. P. 15(a)(2). And although "[t]he court should freely give leave when justice so
requires," id., where, as here, a party seeks to amend after the deadline set in the Court's
scheduling order,1 the party must establish "good cause," see Fed. R. Civ. P. 16(b)(4); see
also Case Management and Scheduling Order, Doc. 25, at 5 (noting that deadlines "will
not be extended absent a showing of good cause"). "This good cause standard precludes
modification unless the schedule cannot 'be met despite the diligence of the party seeking
the extension ."' Sosa v. Airprint Sys., Inc. , 133 F.3d 1417, 1418 (11th Cir. 1998) (quoting

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The deadline for amendment of pleadings was August 6, 2018. (Doc. 25 at 1).

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Fed . R. Civ. P. 16 advisory committee's note). Grounds for denial of a motion to amend
include "undue delay, undue prejudice to the defendants, and futility of the amendment."
Abramson v. Gonzalez, 949 F.2d 1567, 1581 (11th Cir. 1992).
Plaintiffs have not established good cause for leave to amend. They did not act with
diligence in seeking relief from the Court's dismissal order; instead, they unduly delayed in
doing so. The original deadline for filing summary judgment motions in this case was
November 1, 2019. (See Case Management and Scheduling Order, Doc. 25, at 1). On
October 30, 2019-nine days after the Court dismissed the RICO claim with prejudice and
two days before the summary judgment deadline-Plaintiffs filed a motion to extend the
summary judgment deadline "pending resolution of ... four issues." (Doc. 93 at 1). Three
of those issues pertained to pending motions-two related to discovery and one a motion
to intervene filed by non-parties-and the fourth was described by Plaintiffs as "Plaintiffs'
evaluation of grounds for filing a motion for reconsideration of the Court's October 21
Order."

(lg._).

Plaintiffs explained that they were "contemplating filing a motion for

reconsideration" "based on the evidence uncovered during discovery." (lg._ at 7). The Court
granted that motion in part-extending the deadline for summary judgment motions to
December 6, 2019, and removing the case from the April 2020 trial calendar. (Order, Doc.
94). The Court did not extend the deadline "pending resolution" of the issues identified by
Plaintiffs.
Three days before the new summary judgment deadline, Plaintiffs again moved to
extend that deadline based on the same four issues identified in the October 30 motion .
(Mot. , Doc. 105). This time, Plaintiffs described the fourth issue as "Plaintiffs' impend ing
motion for reconsideration of the Courts' October 21 Order .. . that will be filed no later

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than December 13, 2019 ." (~ at 2). Plaintiffs stated in that motion that "Plaintiffs have
been evaluating evidence in support of a motion for reconsideration" and that "[i]f Plaintiffs
decide to file a motion for reconsideration, they will do so no later than December 13, 2019."
(~ at 3; see also id. at 7 (referring to "[i]n the event that Plaintiffs file a motion for
reconsideration" and stating that "Plaintiffs will file any such motion for consideration [sic]
no later than December 13, 2019").

The motion later reiterated that "Plaintiffs are

considering filing a motion for reconsideration based on the evidence uncovered during
months of discovery. " (~ at 6) . Plaintiffs requested that the summary judgment deadline
be extended "to allow Plaintiffs to file and receive a ruling on a motion for reconsideration."
(~ at 3).
On December 5, 2019, the Court granted in part Plaintiffs' second motion to extend
the summary judgment deadline. (Order, Doc. 109). The Court extended the deadline
until two weeks after rulings were issued on the motions identified in the first three of the
four "issues" identified by Plaintiffs; the Court did not extend the deadline pending the
potential filing of (and ruling on) a potential motion for reconsideration. (See id.). Plaintiffs'
promised filing date of December 13 came and went without a motion for reconsideration
being filed.
The assigned magistrate judge ruled on the last of the three pending issues on
December 18, 2019, and summary judgment motions were thus due on January 2, 2020.
On December 24, 2019, Plaintiffs filed their motion for reconsideration (Doc. 125). Both
sides filed summary judgment motions on January 2, 2020, (Docs. 126 & 129), and
Defendants responded to the motion for reconsideration on January 7, 2020, (Doc. 137).
In their motion for reconsideration, Plaintiffs vaguely refer to discovery disputes that

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lasted into December 2019-apparently attempting to create the impression that those
discovery disputes pertained to the discovery upon which their motion is based.

But

nowhere do Plaintiffs actually state this, and nowhere do Plaintiffs provide the date on
which they received the discovery relevant to their request for leave to amend . On the
other hand , Defendants assert that they provided the discovery on August 9-while the
issue of the adequacy of the pleading of a $10,000 transaction was pending before the
Court in Defendants' second motion to dismiss-yet Plaintiffs did not file their motion until
December 24, more than two months after the Court ruled on the motion to dismiss (and
at least two months after Plaintiffs began "contemplating" filing

a motion for

reconsideration) and more than four months after they apparently "discovered new
evidence." (See Docs . 137 & 137-1 ). As Defendants aptly note, Plaintiffs provide no
explanation for why they waited so long to seek "reconsideration" and leave to amend. 2
At this point, the parties have already filed their summary judgment motions after
the Court extended the deadline for doing so several times. Plaintiffs did not act diligently
in pursuing amendment, and repleading of the dismissed RICO claim at this point would
delay the case and be unfair to Defendants. Having not established good cause for their

2

Because the Court's Order (Doc. 87) was not a final judgment, the standards of
Federal Rules of Civil Procedure 59 and 60 are not controlling here; nevertheless, they are
instructive. Rule 59 provides that motions for a new trial or to alter or amend a judgment
"must be filed no later than 28 days after the entry of judgment." Fed. R. Civ. P. 59(b), (e) .
Plaintiffs' motion was filed more than sixty days after the October 21 Order. And Rule 60(b)
provides for relief from a final judgment for reasons including "newly discovered evidence
that, with reasonable diligence, could not have been discovered in time to move for a new
trial under Rule 59(b) ." Fed. R. Civ. P. 60(b)(2). Here, Plaintiffs rely on purported "new
evidence," but they had received that evidence long before they filed their motion . Plaintiffs
would not be entitled to relief under Rule 59 or Rule 60, and they are not entitled to it under
Rule 54(b) either.

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late request for leave to amend, Plaintiffs will not be granted relief from this Court's
dismissal of their RICO count.
Ill.

Conclusion

In accordance with the foregoing , it is ORDERED that Plaintiffs' Motion for
Reconsideration (Doc. 125) is DENIED.
DONE and ORDERED in Orlando, Florida, o_ feb-, ary
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Copies furnished to:
Counsel of Record

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