Saadi v. John Doe #1 et al

Filing 436

ORDER adopting in part 431 REPORT AND RECOMMENDATIONS re 420 MOTION To Extend Lis Pendens and 418 MOTION to Dismiss or Strike Amended Impleader Complaint filed by MILLC. The Court denies 434 Motion to file reply brief. Plaintiff is granted leave to file a second amended interpleader complaint by March 10, 2020. Signed by Judge Susan C. Bucklew on 2/18/2020. (JD)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
EDWARD T. SAADI,
Plaintiff,
v.

Case No. 8:07-cv-1976-T-24 MAP

PIERRE A. MAROUN, ET AL.,
Defendants.
___________________________/
ORDER
This cause comes before the Court on two motions: (1) Impleaded Defendant Maroun
International, LLC's (“MILLC”) Motion to Dismiss or Strike (Doc. No. 418), which Plaintiff
opposes (Doc. No. 419), and to which the parties filed reply briefs (Doc. No. 425, 430); and (2)
Plaintiff’s Motion to Extend Lis Pendens (Doc. No. 420), which MILLC opposes (Doc. No.
423), to which Plaintiff filed a reply brief (Doc. No. 429). These motions were referred to
Magistrate Judge Sneed, who issued a Report and Recommendation, in which she recommends:
(1) granting the motion to extend the lis pendens; (2) granting in part the motion to dismiss and
strike; and (3) allowing Plaintiff leave to amend. (Doc. No. 431).
All parties were furnished copies of the Report and Recommendation and were afforded
the opportunity to file objections pursuant to 28 U.S.C. § 636(b)(1). Plaintiff filed a partial
objection (Doc. No. 432), to which MILLC filed a response (Doc. No. 433). 1 Upon
consideration of the parties’ briefing of the motions, the Report and Recommendation, and upon
this Court's independent examination of the file, it is determined that the Report and
Recommendation should be adopted in part, as explained below.

1

Plaintiff seeks leave to file a reply brief. (Doc. No. 434). The Court finds that a reply is not
necessary and denies the motion.

I. Background
Plaintiff Edward Saadi obtained a judgment against Defendant Pierre Maroun in October
of 2009 for $90,000. Plaintiff has been attempting to collect on that judgment for over ten years.
Plaintiff contends that Maroun has fraudulently transferred funds to MILLC, which were used to
purchase a condominium. On November 7, 2018, Plaintiff filed a notice of lis pendens against
the condominium.
In early 2019, Plaintiff initiated proceedings supplementary, impleaded MILLC into this
action, and filed an interpleader complaint against MILLC. That interpleader complaint was
dismissed without prejudice, and Plaintiff was granted leave to file an amended interpleader
complaint. Plaintiff asserts four claims against MILLC in his amended interpleader complaint:
(1) Count I - fraudulent transfer pursuant to Florida Statute § 56.29(3)(b); 2 (2) Count II fraudulent transfer – actual fraud pursuant to Florida Statute § 726.101 et seq.; (3) Count III fraudulent transfer – constructive fraud pursuant to Florida Statute § 726.101 et seq.; and (4)
Count IV - alter ego/reverse piercing of MILLC’s corporate veil. (Doc. No. 416). In response,
MILLC filed the instant motion to dismiss or strike. Plaintiff has filed a motion to extend the lis
pendens on the condominium.
II. Motion to Extend Lis Pendens
Plaintiff asks the Court to extend the lis pendens on MILLC’s condominium. The
Magistrate Judge recommended granting the motion, and MILLC did not file an objection to that
recommendation. Accordingly, the Court grants the motion and will extend the lis pendens until
the conclusion of these supplementary proceedings.

2

In his response brief, Plaintiff acknowledges that his claim in Count I is brought pursuant to
Florida Statute § 56.29(3)(b). (Doc. No. 419, p. 9; Doc. No. 431, p. 12).
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III. Motion to Dismiss or Strike
MILLC moves the Court to dismiss Plaintiff’s amended interpleader complaint or to
strike certain portions of it. The Magistrate Judge recommended that the Court grant the motion
to the extent that the Court dismiss Count IV (alter ego/reverse piercing) without prejudice and
grant Plaintiff leave to amend. The Magistrate Judge also recommended striking Plaintiff’s
request for a money judgement, attorneys’ fees, and costs asserted in connection with Plaintiff’s
claim of fraudulent transfer pursuant to Florida Statute § 56.29(3)(b) (Count I). Additionally, the
Magistrate Judge recommended denying MILLC’s request to dismiss Plaintiff’s complaint based
on MILLC’s statute of limitations arguments, but she concluded that the limitations periods set
forth in Florida Statute § 726.110 apply to Plaintiff’s claims of fraudulent transfer brought in
Counts II and III pursuant to Florida Statute § 726.101 et seq. (known as Florida’s Uniform
Fraudulent Transfer Act, or “FUFTA”).
Plaintiff has objected to the Magistrate Judge’s Report and Recommendation on two
grounds: (1) he argues that the Magistrate Judge erred in concluding that the limitations periods
set forth in Florida Statute § 726.110 apply to his fraudulent transfer claims in Counts II and III
brought pursuant to FUFTA; and (2) he argues that his request for a money judgment asserted in
connection with his claim of fraudulent transfer brought in Count I pursuant to Florida Statute §
56.29(3)(b) should not be stricken. As explained below, the Court overrules Plaintiff’s objection
as to the limitations periods to be applied to his fraudulent transfer claims brought pursuant to
FUFTA, and the Court sustains his objection as to his contention that he may pursue a money
judgment in connection with his claim of fraudulent transfer pursuant to Florida Statute §
56.29(3)(b).

3

A. Limitations Period
Plaintiff argues that the Magistrate Judge erred in concluding that the limitations periods
set forth in Florida Statute § 726.110 apply to his fraudulent transfer claims in Counts II and III
brought pursuant to FUFTA (Florida Statute § 726.101 et seq.). In support of his contention,
Plaintiff cites to Biel Reo, LLC v. Barefoot Cottages Development Company, LLC, 156 So. 3d
506 (Fla. 1st DCA 2014).
In Biel Rio, the judgment creditor initiated proceedings supplementary in order to assert a
fraudulent transfer claim pursuant to Florida Statute § 56.29. 3 See id. at 509. The defendants
argued that FUFTA’s shorter limitations period applied to such a claim, and the trial court
agreed. See id. At 509-10. The appellate court rejected the defendants’ argument and reversed
the trial court, finding that claims asserted pursuant to Florida Statute § 56.29 could be brought
during the life of the judgment, and therefore, FUFTA’s shorter limitations period did not apply
to such claims. See id. at 510-11.
MILLC’s reliance on Biel Rio is misplaced for two reasons. First, Biel Rio, by its own
terms, addresses only claims brought pursuant to Florida Statute § 56.29, such as Plaintiff’s
claim in Count I of the interpleader complaint. The Magistrate Judge correctly found that
FUFTA’s shorter limitations period did not apply to that claim.
Second, the Biel Rio court specifically stated that it was not addressing the 2014
amendment to Florida Statute § 56.29(5), which addressed FUFTA claims. See id. at 509 n.3.
The 2014 amendment added the following language to Florida Statute § 56.29(5):
The court may entertain claims concerning the judgment debtor's
assets brought under chapter 726 and enter any order or judgment,
3

The judgment creditor brought its fraudulent transfer claim pursuant to Florida Statute §
56.29(6), which has since been renumbered and now appears at § 56.29(3)(b). See Biel Reo, 156
So. 3d at 510 n.5; Fla. Stat. § 56.29(3)(b) (effective 7/1/16).
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including a money judgment against any initial or subsequent
transferee, in connection therewith, irrespective of whether the
transferee has retained the property. Claims under chapter 726
[FUFTA] are subject to the provisions of chapter 726 and applicable
rules of civil procedure.
FL LEGIS 2014-182, 2014 Fla. Sess. Law Serv. Ch. 2014-182 (C.S.S.B. 828) (WEST). In the
instant case, the Magistrate Judge agreed with MILLC that this additional language supports the
contention that claims brought under FUFTA in proceedings supplementary are governed by
FUFTA’s shorter limitations periods set forth in Florida Statute § 726.110.
Accordingly, because this Court agrees that Biel Rio does not address claims brought
under FUFTA, the Court agrees with the Magistrate Judge’s conclusion that the shorter
limitations periods set forth in FUFTA apply to Plaintiff’s FUFTA claims in Counts II and III.
Therefore, the Court overrules Plaintiff’s objection to this portion of the Magistrate Judge’s
Report and Recommendation.
This Court finds it important to comment on an issue not raised by the parties. In Counts
II and III, Plaintiff simply states in his amended interpleader complaint that these claims are
brought pursuant to Florida Statute § 726.101 et seq. Count II is for actual fraud, so it is clear
that this claim is brought pursuant to Florida Statute § 726.105(1)(a). However, Count III is for
constructive fraud, and it is not clear whether this claim is brought pursuant to Florida Statute §
726.105(1)(b), Florida Statute § 726.106(1), or Florida Statute § 726.106(2). These different
provisions have different limitations periods under Florida Statute § 726.110, so the
identification of the specific provision upon which the claim of constructive fraud is being
brought is important. Therefore, when amending the interpleader complaint, Plaintiff is directed
to identify the specific provision of FUFTA that he is pursuing for each claim.

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B. Money Judgment
Next, Plaintiff argues that his request for a money judgment asserted in connection with
his claim of fraudulent transfer brought in Count I pursuant to Florida Statute § 56.29(3)(b)
should not be stricken. Florida Statute § 56.29 is not a model of clarity, and the case law has not
furnished sufficient clarification about the different provisions contained therein. The relevant
provisions are set forth below:
(1) When any judgment creditor holds an unsatisfied judgment . . .,
the judgment creditor may file a motion and an affidavit so stating,
. . . and thereupon the judgment creditor is entitled to these
proceedings supplementary to execution.
(2) . . . Upon filing of the motion and affidavits that property of the
judgment debtor, or any debt, or other obligation due to the
judgment debtor in the custody or control of any other person may
be applied to satisfy the judgment, then the court shall issue a Notice
to Appear. The Notice to Appear shall direct such person to file an
affidavit . . . stating why the property, debt, or other obligation
should not be applied to satisfy the judgment. . . .
(3)(a) When, within 1 year before the service of process on the
judgment debtor in the original proceeding or action, the judgment
debtor has had title to, or paid the purchase price of, any personal
property to which . . . any person on confidential terms with the
judgment debtor claims title and right of possession, the judgment
debtor has the burden of proof to establish that such transfer or gift
was not made to delay, hinder, or defraud creditors.
(b) When any gift, transfer, assignment or other conveyance of
personal property has been made or contrived by the judgment
debtor to delay, hinder, or defraud creditors, the court shall order the
gift, transfer, assignment or other conveyance to be void and direct
the sheriff to take the property to satisfy the execution. . . .
*

*

*

(6) The court may order any property of the judgment debtor, not
exempt from execution, or any property, debt, or other obligation
due to the judgment debtor, in the hands of or under the control of
any person subject to the Notice to Appear, to be levied upon and
applied toward the satisfaction of the judgment debt. The court may
enter any orders, judgments, or writs required to carry out the
purpose of this section, including those orders necessary or proper
to subject property or property rights of any judgment debtor to
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execution, and including entry of money judgments . . . against any
person to whom a Notice to Appear has been directed and over
whom the court obtained personal jurisdiction irrespective of
whether such person has retained the property, subject to applicable
principles of equity . . . .
*

*

*

(9) The court may entertain claims concerning the judgment debtor's
assets brought under chapter 726 [FUFTA] and enter any order or
judgment, including a money judgment against any initial or
subsequent transferee, in connection therewith, irrespective of
whether the transferee has retained the property. . . .
Fla. Stat. § 56.29.
MILLC argues that Plaintiff’s request for a money judgment in connection with his claim
under Florida Statute § 56.29(3)(b) should be stricken, because the only available remedy for
such a claim is the court voiding the transfer. In support of this argument, MILLC cites to the
case of In re: British American Insurance Company, Limited, 607 B.R. 753 (Bankr. S.D. Fla.
2019). The court in the British American case stated the following:
Subsection (3)(b) provides a narrowly tailored substantive claim
based in fraudulent transfer, independent of Florida's primary
fraudulent transfer statute contained in chapter 726 [FUFTA].
Where a judgment debtor has transferred personal property in an
effort to delay, hinder, or defraud creditors, the court may declare
the transfer void and direct the sheriff to take the property.
Subsection (3)(b) does not provide any basis for an award of money
damages.1 The relief is limited to avoiding transfers of personal
property, making the property available for satisfaction of the
judgment. Based on the text of the statute, the personal property
must be the same property that the judgment debtor transferred and
must be something identifiable that the sheriff may seize.
Id. at 757. In the footnote to the above quoted analysis, the court stated the following, in
pertinent part:
In a related matter, [the judgment creditor] argued that Fla. Stat. §
56.29(6) authorizes this Court to enter a money judgment based on
a claim under subsection (3)(b). This interpretation is contrary to the
text of section 56.29 taken as a whole. . . . The relief authorized in
subsection (6) is the relief that may be obtained from a proceeding
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relying on subsection (2). . . . In other words, the power to enter
money judgments under subsection (6) is limited to claims aimed at
recovery of property of the judgment debtor held by another and
property payable to the judgment debtor. The power to enter money
judgments under subsection (6) does not extend to relief sought
under subsection (3)(b). To the contrary, subsection (3)(b)
specifically limits the available relief to turnover of the fraudulently
transferred personal property to the sheriff.
Id. at 757 n.1.
This Court is not persuaded by the British American court’s analysis set forth above.
There is nothing in the text of Florida Statute § 56.29 that limits the power to enter money
judgments set forth in Florida Statute § 56.29(6) to claims other than those pursued under
Florida Statute § 56.29(3)(b). In fact, in his objection to the Magistrate Judge’s Report and
Recommendation, Plaintiff cites to a case in which the court entered money judgments in
connection with the creditor’s (Regions Bank) fraudulent transfer claims brought pursuant to
Florida Statute § 56.29(3). See In re McCuan, 603 B.R. 829, 848 & 848 n.113 (Bankr. M.D. Fla.
2019)(stating that the transfers were avoidable under Florida Statute § 56.29(3) and that the
transferred asserts were subject to execution to satisfy the debt; citing to both Florida Statute §
56.29(3) & (6)).
MILLC argues that the only reason that money judgments were entered in McCuan is
because money was the property that was fraudulently transferred, so a money judgment was
equivalent to voiding the transfer. However, in McCuan, the court considered entering a money
judgment against the debtor’s wife (who no longer had the money, as the account it was held in
had been closed and the money transferred yet again), but the court ultimately declined to do so
based on principles of equity and fairness, since the wife was an innocent bystander that never
really had any control over the account into which the money had been initially transferred. See

8

id. at 846-48. Had the McCuan court entered a money judgment against the debtor’s wife, the
court would not have simply been voiding the transfer, as the wife no longer had the money.
For the reasons stated above, and because Florida Statute § 56.29 should be liberally
construed, 4 the Court concludes that Plaintiff may seek a money judgment in connection with his
fraudulent transfer claim set forth in Count I. Accordingly, the Court sustains Plaintiff’s
objection on this issue.
IV. Conclusion
Based on the above, it is now ORDERED AND ADJUDGED that:
(1)

The Magistrate Judge's Report and Recommendation (Doc. No. 431) is adopted and

incorporated by reference in this Order of the Court, except to the extent that she recommends
striking Plaintiff’s request for a money judgment in Count I.
(2)

Plaintiff’s Motion to Extend Lis Pendens (Doc. No. 420) is GRANTED. The lis pendens

on the property at 500 N. Osceola Ave., Unit 102, Clearwater, FL 33755 (Doc. No. 368) is
extended until the conclusion of these proceedings supplementary.
(3)

MILLC’s Motion to Dismiss or Strike (Doc. No. 418) is GRANTED IN PART AND

DENIED IN PART: The motion is GRANTED to the extent that: (a) the Court strikes
Plaintiff’s demand for fees and costs against MILLC in Count I; and (b) the Court dismisses
Count IV without prejudice. Otherwise, the motion is DENIED.
(4)

Plaintiff is granted leave to file a second amended interpleader complaint by March 10,

2020.

4

“The statute governing proceedings supplementary is ‘equitable in nature and should
be liberally construed.’” Longo v. Associated Limousine Services, Inc., 236 So.3d 1115, 1118
(Fla. 4th DCA 2018)(quoting Mejia v. Ruiz, 985 So.2d 1109, 1112 (Fla. 3d DCA 2008)).
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DONE AND ORDERED at Tampa, Florida, this 18th day of February, 2020.

Copies to:
Counsel of Record
The Honorable Julie S. Sneed

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