BCJJ, LLC v. LeFevre et al

Filing 138

ORDER granting in part and denying in part 46 Motion to dismiss. Signed by Judge Elizabeth A. Kovachevich on 3/24/2010. (JM)

UNITED S T A T E S D I S T R I C T C O U R T MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION

BCIJ,

LLC,

Plaintiff,
v.

CASE NO.
LEFEVRE, etc.,

8:09-CV-551-T-17EAJ

THOMAS J.

et al.,
Defendants.

ORDER

This

cause

is before

the Court

on:

D k t . 46 D k t . 63

Motion to Dismiss Amended Complaint Response

(Berlin)

T h e A m e n d e d C o m p l a i n t in t h i s m u l t i p l e c l a i m , m u l t i p l e

d e f e n d a n t c a s e i n c l u d e s the f o l l o w i n g :

Count

I:

Violation of Interstate Land Sales Full

Disclosure Act,

15 U . S . C .

Sec.

1703(a)(2)

As to T h o m a s J. L e F e v r e , i n d i v i d u a l l y a n d as t r u s t e e of T h o m a s J. L e F e v r e L i v i n g Trust, T o m ' s F r i e n d s , LLC, T o m ' s S Corp., B a y o n n e I n v e s t m e n t s , LLC, B a y o n n e , LLC, E v a n B e r l i n , B e r l a n d I n v e s t m e n t s , LLC, B e r l i n L a w Firm,
P.A.

C o u n t II:

Violation of Section 10(b) of Securities Exchange Act of 1934 and SEC Rule 10b-5

All

Defendants

Case No. 8:09-CV-551-T-17EAJ

C o u n t III: V i o l a t i o n of F l o r i d a S e c u r i t i e s a n d
Investor Protection Act,
Fla. Stat.

Section 517.301,

All Defendants

Count IV:

Fraudulent Inducement

A s to L e F e v r e , i n d . , a n d as t r u s t e e of L e F e v r e L i v i n g T r u s t , T o m ' s Corp., T o m ' s F r i e n d s , LLC, B a y o n n e I n v e s t m e n t s , LLC,

Bayonne, LLC, E v a n Berlin, Berland Investments, LLC, and M &
I Marshall & Ilsley Bank

C o u n t V:

Negligent Misrepresentation

A s t o L e F e v r e , i n d . , a n d as t r u s t e e of L e F e v r e L i v i n g T r u s t , Tom's S Corp., Tom's Friends, Bayonne Investments, LLC, Bayonne, LLC, Evan Berlin, Berland Investments, LLC, and M & I Marshall & Ilsley Bank

C o u n t VI:

Aiding and Abetting Fraud
P.A. and M & I Marshall &

As to Berlin Law Firm,

Ilsley Bank

Count

VII:

Breach of Contract

As to LeFevre,

ind., and as t r u s t e e of L e F e v r e L i v i n g T r u s t

Count VIII:

Unjust Enrichment

As to LeFevre, ind., and as trustee of L e F e v r e L i v i n g Trust, T o m ' s Friends, T o m ' s S Corp., B a y o n n e I n v e s t m e n t s , LLC, Berland Investments, LLC, M & I Marshall & Ilsley Bank

C o u n t IX:

Civil Theft,

Sec.

772.11,

Fla.

Stat.

As to LeFevre,

ind., and as t r u s t e e of L e F e v r e L i v i n g T r u s t

Case No. 8:09-CV-551-T-17EAJ

Count X:

Legal Malpractice/Negligence
P.A.

As to Evan Berlin and Berlin Law Firm,

Count XI:

Florida Deceptive and U n f a i r T r a d e Practices
Act, Sec. 501.201, Fla. Stat.

A s to L e F e v r e , i n d . , a n d as t r u s t e e of L e F e v r e L i v i n g T r u s t , T o m ' s F r i e n d s , T o m ' s S C o r p . , B a y o n n e I n v e s t m e n t s , LLC,

Bayonne, LLC, E v a n Berlin, B e r l a n d I n v e s t m e n t s , L L C a n d
Berlin Law Firm, P.A.

C o u n t XII:

Equitable Lien
LLC, TT, LLC, and Bayonne, LLC

As to Bayonne Investments,

O n A p r i l 3, 2 0 0 6 ,

Plaintiff BCIJ,

LLC entered into a

Contract for Purchase and Sale with Bayonne Development, t h e p u r c h a s e of U n i t 2 4 1 in G r a n d e B a y C o n d o m i n i u m .

LLC for

O n M a r c h 24,

2 0 07, T h o m a s L e F e v r e , a c c o m p a n i e d b y E v a n B e r l i n , a p p r o a c h e d W i l l i a m T u r k i s h , m a n a g i n g m e m b e r of BCIJ, L L C to i n q u i r e w h e t h e r

B C I J w o u l d m a k e a $ 4 0 0 , 0 0 0 i n v e s t m e n t in B a y o n n e I n v e s t m e n t s , L L C

in e x c h a n g e for a d d i t i o n a l s e c u r i t y a n d an u p g r a d e to a m o r e e x p e n s i v e c o n d o m i n i u m u n i t in G r a n d e B a y C o n d o m i n i u m .
27, 2007, Plaintiff BCIJ, LLC closed on this investment

On M a r c h

transaction t h r o u g h which Plaintiff invested $400,000 in Bayonne
I n v e s t m e n t s , L L C t h r o u g h h i s p u r c h a s e of s e v e n I n v e s t m e n t U n i t s

in Bayonne Investments, LLC.

As security for the investment,

B C I J w a s p r o v i d e d w i t h an u p g r a d e to a m o r e e x p e n s i v e u n i t in

Grande Bay Condominium.

In the event the c o n d o m i n i u m upgrade did

n o t c o m e to f r u i t i o n , a n d as an a l t e r n a t i v e s e c u r i t y f o r B C I J ' s

investment, B C I J was p r o v i d e d w i t h m e m b e r s h i p u n i t s in TT, L L C and GLRS, LLC, b o t h of w h i c h o w n e d o t h e r real e s t a t e in Sarasota,
FL. Upon consummation of the investment transaction, the funds

Case No. 8 : 0 9 - C V - 5 5 1 - T - 1 7 E A J from BCIJ were wired from the Berlin Law Office's trust account

to Defendant M&I,

t h e o w n e r a n d h o l d e r of t h e m o r t g a g e o n B I ' s

development site, the Commercial Property.

Plaintiff BCIJ, LLC

alleges that in April, 2008, Plaintiff learned f r o m E v a n B e r l i n
that the investment transaction was a deliberately orchestrated
sham, in that LeFevre and LeFevre Trust were never authorized to

p l e d g e t h e i r m e m b e r s h i p u n i t s in G L R S ,

and the conditions The

required by TT's operating agreement were never satisfied.

s e c u r i t y p l e d g e d t o P l a i n t i f f B C I J as c o n s i d e r a t i o n f o r B C I J ' s i n v e s t m e n t in B a y o n n e I n v e s t m e n t s , L L C w a s c o m p l e t e l y d e f e c t i v e , r e s u l t i n g in a n a c o m p l e t e l y u n s e c u r e d o b l i g a t i o n t o B C I J b y
LeFevre and LeFevre Trust.

P l a i n t i f f ' s f a i l e d i n v e s t m e n t i n c l u d e d the f o l l o w i n g
documents, a t t a c h e d to t h e A m e n d e d C o m p l a i n t :

Exhibit A

Contract for Purchase and Sale

Of Unit 241, Residences at G r a n d e Bay,
A C o n d o m i n i u m , d a t e d A p r i l 3, 2006,
between BCIJ, LLC and B a y o n n e D e v e l o p m e n t , LLC;

Exhibit B

Purchase Agreement for Membership Interest
d a t e d M a r c h 27, 2 0 0 7 , b e t w e e n B C I J , L L C a n d T h o m a s J. L e F e v r e ,
O c t o b e r 8, 2 0 0 1 ; as Trustee

Of T h o m a s J. L e F e v r e L i v i n g T r u s t d a t e d

Exhibit C

Unanimous Consent of Members Tom's Friends, LLC

p e r m i t t i n g a s s i g n m e n t of s e v e n I n v e s t m e n t U n i t s in B a y o n n e I n v e s t m e n t s , L L C to BCIJ, L L C in e x c h a n g e f o r p a y m e n t Of $400,000, s i g n e d on M a r c h 26, 27, 2007;

Exhibit D

Assignment of Membership Interests, d a t e d March 27, 2007, b e t w e e n Tom's Friends,

Case No. 8 : 0 9 - C V - 5 5 1 - T - 1 7 E A J LLC and BCIJ,
Exhibit E

LLC;

A g r e e m e n t b e t w e e n T h o m a s J. L e F e v r e , as
T r u s t e e of T h o m a s J. L e F e v r e L i v i n g T r u s t d a t e d O c t o b e r 8, 2 0 0 1 , a n d / o r i t s s u c c e s s o r

and assigns, and BCIJ, LLC, a n d / o r its
successors and assigns,
Exhibit F

(undated);

S e c u r i t y A g r e e m e n t , b y T h o m a s J. L e F e v r e a n d
a s T r u s t e e o f t h e T h o m a s J. L e F e v r e L i v i n g T r u s t d a t e d O c t o b e r 8, 2 0 0 1 , ( " B o r r o w e r " ) i n favor of BCIJ, LLC ("Lender") executed on March 27, 2007;

Exhibit

G

C o l l a t e r a l A s s i g n m e n t of D i s t r i b u t i o n s A n d P r o f i t s b y T h o m a s J. L e F e v r e , I n d i v i d u a l l y a n d as T r u s t e e o f t h e T h o m a s J. L e F e v r e L i v i n g T r u s t d a t e d O c t o b e r 8, 2 0 0 1
("Borrower") and BCIJ, March 27, 2007; LLC ("Lender) dated

Exhibit H

C l o s i n g A g r e e m e n t , b e t w e e n T h o m a s J. L e F e v r e , as T r u s t e e o f T h o m a s J. L e F e v r e L i v i n g T r u s t d a t e d O c t o b e r 8, 2 0 0 1 , a n d B C I J , L L C ,

p u r s u a n t to P u r c h a s e A g r e e m e n t f o r M e m b e r s h i p
Interest ("Contract") Berlin Law Firm, P.A.

( " C l o s i n g Agent")

has b e e n r e q u e s t e d to

consummate the closing of the transaction involving the Contract;
Exhibit I

B a l a n c e Sheet,
o f M a r c h 27,

B a y o n n e I n v e s t m e n t s LLC, as

2007;

Exhibit

J

Appraisal Report of "The Bayonne Development"
d a t e d N o v e m b e r 10, 2 0 0 6 , t o K a r y n L. W i l d , V i c e P r e s i d e n t , Lending, M&I Bank; Commercial

Exhibit

K

M e m o r a n d u m of J o i n t D e v e l o p m e n t A g r e e m e n t , D a t e d O c t o b e r 12, 2 0 0 5 b e t w e e n B a y o n n e D e v e l o p m e n t LLC, a n d B a y o n n e I n v e s t m e n t s , LLC, p r e p a r e d b y E v a n B e r l i n , Esq., B e r l i n L a w Firm, a n d r e c o r d e d in S a r a s o t a C o u n t y
o n O c t o b e r 17, 2005;

Case No. 8:09-CV-551-T-17EAJ

Exhibit L

B a l a n c e S h e e t of B a y o n n e I n v e s t m e n t s , LLC,
A s o f M a y 3, 2 0 0 7 .

I.

Standard of Review

As the Supreme Court held in Bell A t l a n t i c v. Twombly, 12 7
S.Ct. 1955 (2007), a c o m p l a i n t must be d i s m i s s e d p u r s u a n t to r u l e

12(b)(6) of t h e F e d e r a l R u l e s of C i v i l P r o c e d u r e f o r f a i l u r e to s t a t e a c l a i m u p o n w h i c h r e l i e f c a n be g r a n t e d if it d o e s n o t

p l e a d "enough facts to state a claim for relief that is plausible
on its face." Id. at 1 9 7 4 ( r e j e c t i n g the t r a d i t i o n a l 12(b)(6)
standard set f o r t h i n C o n l e v v. Gibson, 355 U.S. 41, 45-46

(1957)).

T h e a l l e g a t i o n s in p l a i n t i f f ' s c o m p l a i n t a r e p r e s u m e d

t r u e at t h i s s t a g e a n d all r e a s o n a b l e f a c t u a l i n f e r e n c e s m u s t be c o n s t r u e d in p l a i n t i f f ' s favor. However, t h e C o u r t n e e d n o t

a c c e p t i n f e r e n c e s d r a w n b y p l a i n t i f f if s u c h i n f e r e n c e s a r e u n s u p p o r t e d b y t h e f a c t s s e t o u t in t h e c o m p l a i n t . Nor must the

Court accept legal conclusions cast in the form of factual allegations. T o s u r v i v e a m o t i o n to d i s m i s s , the factual

a l l e g a t i o n s in t h e c o m p l a i n t " m u s t be e n o u g h to r a i s e a r i g h t to
relief above the speculative level." Bell Atlantic,
1965.

1 2 7 S . C t . at

II.

Discussion

T h e c l a i m s a s s e r t e d a g a i n s t D e f e n d a n t s E v a n Berlin, B e r l i n
Law Firm, P.A., and Berland Investments, LLC are based on

a l l e g a t i o n s of:

1) o r a l s t a t e m e n t s ; 2) s t a t e m e n t s w i t h i n c o n d u c t as t o p r e p a r a t i o n of t h e

d o c u m e n t s ; 3) D e f e n d a n t s '

d o c u m e n t s w h i c h c a r r i e d o u t t h e t r a n s a c t i o n w i t h P l a i n t i f f ; 4)

d o c u m e n t s p r o v i d e d to P l a i n t i f f ,

including the appraisal and

Case No. 8 : 0 9 - C V - 5 5 1 - T - 1 7 E A J

f i n a n c i a l s t a t e m e n t s ; a n d 5) D e f e n d a n t s ' k n o w l e d g e at t h e
relevant time.

A.

Count

I

-

ILSA

D e f e n d a n t s a r g u e t h a t w h e n D e f e n d a n t is a l a w y e r o r l a w
firm, a n o m i s s i o n is i n s u f f i c i e n t to s u p p o r t a c l a i m f o r

misrepresentation; a plaintiff must allege an active
misrepresentation. F . 3 d 1194 Z i e m b a v. C a s c a d e I n t e r n a t i o n a l , Inc., 256

(llch Cir. 2 0 0 1 ) .

L a w y e r s a r e n o t r e q u i r e d to " t a t t l e "
lawyers

o n t h e i r c l i e n t s in t h e a b s e n c e of a d u t y to d i s c l o s e ;

h a v e p r i v i l e g e s not to disclose.
S t a r n e s & Holt,

B a r k e r v. H e n d e r s o n , Franklin,
Defendants argue

797 F . 2 d 4 9 0 (77th Cir. 1 9 8 6 ) .

that D e f e n d a n t s h a d no privity, no a t t o r n e y / c l i e n t r e l a t i o n s h i p , no f i d u c i a r y r e l a t i o n s h i p and no o t h e r s p e c i a l r e l a t i o n s h i p w i t h
Plaintiff which created a duty to disclose.

P l a i n t i f f r e s p o n d s t h a t the d o c u m e n t s p r e p a r e d a n d p r o v i d e d by D e f e n d a n t s B e r l i n a n d B e r l i n L a w Firm, P.A. c o n t a i n a c t i v e

m i s r e p r e s e n t a t i o n s as to the a u t h o r i t y a n d a p p r o v a l to t r a n s f e r M e m b e r s h i p U n i t s in TT, L L C a n d GLRS, LLC. Plaintiff argues that

ILSA applies because the transaction encompassed a solicitation, inducement, encouragement, a n d o f f e r to s e l l P l a i n t i f f a

c o n d o m i n i u m u n i t as p a r t of t h e s e c u r i t y a n d c o n s i d e r a t i o n f o r
the investment.

After consideration,
as to Count I.

the Court denies the Motion to Dismiss

Case N o . 8 : 0 9 - C V - 5 5 1 - T - 1 7 E A J

B.

Count II

- Sec.

10(b)

and Rule 10b-5

Defendants argue that Plaintiff does not allege an active

misrepresentation by Defendants,

and an o m i s s i o n is insufficient

D e f e n d a n t s a l s o a r g u e that P l a i n t i f f has not a l l e g e d s e c u r i t i e s
f r a u d w i t h p a r t i c u l a r i t y as r e q u i r e d b y R u l e 9(b). Defendants

f u r t h e r a r g u e t h e P l a i n t i f f h a s not a l l e g e d p a r t i c u l a r f a c t s

g i v i n g r i s e to a s t r o n g i n f e r e n c e that D e f e n d a n t s a c t e d in a
"severely reckless" manner.

After consideration,

the Court grants the Motion to Dismiss

as to C o u n t II, w i t h l e a v e to f i l e a n A m e n d e d C o m p l a i n t w i t h i n

fourteen days which alleges who made statements, what statements
w e r e made,
the

when the statements were made,
made.

and in what capacity

statements were

C.

Count III

- Sec.

517.301,

Fla.

Stat.

D e f e n d a n t s a r g u e t h a t t h i s c l a i m is i n s u f f i c i e n t f o r t h e
s a m e r e a s o n a s C o u n t II. Defendants further argue that

b u y e r / s e l l e r p r i v i t y is r e q u i r e d , a n d P l a i n t i f f d o e s n o t a l l e g e
privity between Plaintiff and Defendants.

P l a i n t i f f a r g u e s t h a t t h e s t a t u t e e x t e n d s l i a b i l i t y to "every director, the director, o f f i c e r , p a r t n e r , o r a g e n t " of t h e s e l l e r " i f partners or agent has personally 517.211(2),

officer,

p a r t i c i p a t e d o r a i d e d i n m a k i n g t h e s a l e . . . . " Sec.
Fla. Stat.

Case No. 8 : 0 9 - C V - 5 5 1 - T - 1 7 E A J

After consideration, as t o C o u n t III,

t h e C o u r t g r a n t s t h e M o t i o n to D i s m i s s

w i t h l e a v e to f i l e a n A m e n d e d C o m p l a i n t w i t h i n

f o u r t e e n days,

which alleges who made statements, what statements
and in what capacity

w e r e made, w h e n t h e s t a t e m e n t s w e r e made,
the statements were made.

D.

Count

IV

-

Fraudulent

Inducement

E.

Count V - Negligent Misrepresentation

Defendants argue that Plaintiff does not allege an active m i s r e p r e s e n t a t i o n b y B e r l i n o r Berland. Defendants also argue

that Plaintiff does not allege misrepresentation with particularity, as r e q u i r e d .

Plaintiff responds that Plaintiff has alleged the

p a r t i c i p a t i o n of t h e B e r l i n D e f e n d a n t s w i t h s u f f i c i e n t
particularity. Plaintiff argues that the documents prepared and P.A. contain

provided by Defendants Berlin and Berlin Law Firm,

misrepresentations concerning the authority and approval to

t r a n s f e r M e m b e r s h i p U n i t s in TT, L L C a n d G L R S , f u r t h e r a r g u e s t h a t B e r l i n L a w Firm,

LLC.

Plaintiff

P.A. p r o v i d e d t h e b a l a n c e

sheet containing misrepresentations and the allegedly inflated appraisal to Plaintiff. Plaintiff also argues that Defendants P.A. p r e p a r e d t h e J o i n t D e v e l o p m e n t

B e r l i n a n d B e r l i n L a w Firm,
Agreement.

Plaintiff further argues that when a lawyer or law firm

m a k e s a c t i v e r e p r e s e n t a t i o n s d i r e c t l y to a n i n v e s t o r , w h i l e h a v i n g h i s / i t s o w n p r o p e r t y i n t e r e s t in t h e s u b j e c t i n v e s t m e n t ,
t h e l a w y e r a n d l a w f i r m is n o t s h i e l d e d f r o m l i a b i l i t y . Plaintiff argues that Defendants are liable for material
omissions made in documents on which Defendants knew or should

Case No. 8 : 0 9 - C V - 5 5 1 - T - 1 7 E A J

h a v e k n o w n P l a i n t i f f w o u l d rely.

Walco,

Invs., Inc. v. T h e n e n ,

881 F.Supp.

1576, 1 5 8 1 - 8 3 (S.D. Fal. 1995).
547 F . 3 d 1055,

Plaintiff also
1063 (9ch Cir.

r e l i e s o n T h o m p s o n v. Paul,

2 0 0 8 ) ( w h e r e a t t o r n e y m a k e s r e p r e s e n t a t i o n s to p r o s p e c t i v e

p u r c h a s e r s of s e c u r i t i e s , a t t o r n e y m u s t tell the t r u t h a b o u t the securities; a t t o r n e y / c l i e n t r e l a t i o n s h i p w i t h s e l l e r not relevant) a n d ZC Ins. Co. v. Brooks, 847 S o . 2 d 547, 551 (Fla. 4th
disclosure must

DCA 2003)(where material information disclosed,

be full).

Plaintiff argues that the Berlin Defendants' active

s o l i c i t a t i o n of P l a i n t i f f r e q u i r e d full d i s c l o s u r e .

After consideration,

the Court grants the Motion to Dismiss

as to t h e f i n a n c i a l s t a t e m e n t s a n d a u t h o r i t y t o p l e d g e s h a r e s ,
with leave to amend because the current allegations do not meet

t h e r e q u i r e m e n t s of F e d . R . C i v . P . 9(b), w i t h l e a v e to f i l e a n A m e n d e d C o m p l a i n t w i t h i n f o u r t e e n days.
M o t i o n t o D i s m i s s as t o t h e a p p r a i s a l ,

The Court denies the
and directs Plaintiff to

file an Amended Complaint which states who provided the appraisal
to Plaintiff, at what time and in what circumstances.

F.

C o u n t VI

- Aiding and Abetting Fraud

Defendants argue the Court should decline to recognize the t o r t of a i d i n g a n d a b e t t i n g f r a u d , a n d t h a t P l a i n t i f f d o e s n o t
allege active misrepresentation or affirmative substantial

a s s i s t a n c e b y B e r l i n L a w Firm,

P.A.

Defendants further argue

that Plaintiff has not alleged substantial assistance with

particularity.

Defendants further argue that Plaintiff alleges

that the false representations were made by Defendant LeFevre and
the LeFevre Trust, not Defendants Berlin,
LLC.

Berlin Law Firm,

P.A.

and Berland Investments,

10

Case No. 8 : 0 9 - C V - 5 5 1 - T - 1 7 E A J

P l a i n t i f f a r g u e s t h a t D e f e n d a n t s ' r o l e in s o l i c i t i n g P l a i n t i f f ' s i n v e s t m e n t , a n d D e f e n d a n t s ' o w n e r s h i p i n v o l v e m e n t in t w o of t h e e n t i t i e s at t h e c e n t e r of t h e s c h e m e d i s t i n g u i s h t h e
f a c t s a l l e g e d i n t h e A m e n d e d C o m p l a i n t f r o m t h e t y p i c a l r o l e of

t r a n s a c t i o n a l c o u n s e l in p r e p a r i n g d o c u m e n t s a n d h o s t i n g a
closing.

After consideration,

the Court grants the Motion to Dismiss

as to t h e f i n a n c i a l s t a t e m e n t s a n d a u t h o r i t y t o p l e d g e s h a r e s ,

w i t h l e a v e to file an A m e n d e d C o m p l a i n t w i t h i n f o u r t e e n days
which includes allegations specifying active misrepresentations
and the substantial assistance provided by Defendants with particularity. T h e C o u r t d e n i e s t h e M o t i o n to D i s m i s s as to t h e

a p p r a i s a l , a n d d i r e c t s P l a i n t i f f to f i l e an A m e n d e d C o m p l a i n t
w h i c h i n c l u d e s f a c t u a l a l l e g a t i o n s as to w h e n a n d h o w t h e a p p r a i s a l w a s p r o v i d e d to P l a i n t i f f .

G.

Count VIII - Unjust Enrichment

D e f e n d a n t s a r g u e t h a t t h e r e w a s n o d i r e c t b e n e f i t to Defendants, b a s e d o n a l l e g a t i o n s in t h e E x h i b i t s a t t a c h e d to t h e

C o m p l a i n t , w h i c h c o n t r a d i c t the a l l e g a t i o n s of t h e C o m p l a i n t

Plaintiff responds that the Amended Complaint includes

a l l e g a t i o n s that: 1) B e r l a n d ' s m a n a g i n g member,

Berlin, p l a y e d a

d i r e c t a n d a c t i v e r o l e in s o l i c i t i n g P l a i n t i f f ' s i n v e s t m e n t ; 2)

Berlin and his law f i r m p r e p a r e d key documents c o n t a i n i n g the
c o r e m i s r e p r e s e n t a t i o n s , p r e s e n t e d t h e m to P l a i n t i f f , a n d facilitated the closing, i n c l u d i n g the u s e of B e r l i n ' s t r u s t

account; a n d Berlin, by v i r t u e of his o w n e r s h i p in b o t h B a y o n n e
Investments, LLC and TT, LLC, and the fact that he drafted the

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Case No. 8 : 0 9 - C V - 5 5 1 - T - 1 7 E A J

J o i n t D e v e l o p m e n t A g r e e m e n t , p o s s e s s e d d e t a i l e d k n o w l e d g e b o t h of
the property in which Plaintiff invested, as well as the entities

associated with the property.

P l a i n t i f f a r g u e s that,

under

F l o r i d a law, a c o m p a n y e m p l o y e e ' s k n o w l e d g e of the c o m p a n y ' s
c o n d i t i o n a n d o p e r a t i o n s as w e l l as h i s o r h e r r o l e i n t h e

u n d e r l y i n g t r a n s a c t i o n are factors to c o n s i d e r in d e t e r m i n i n g w h e t h e r an u n j u s t e n r i c h m e n t c l a i m m a y be s t a t e d a g a i n s t the
employee.
992 F.Supp.

S e e H u n t s m a n P a c k a g i n g Corp.
1439, 1446 (M.D. Fla. 1998).

v. K e r r y P a c k a g i n g Corp.,

The Court notes that Plaintiff alleges that Plaintiff's
$400,000 investment was transferred to Defendant M&I Bank. This

amount was paid to the seller,

LeFevre,

et al.,

as c o n s i d e r a t i o n

for the t r a n s f e r of t h e M e m b e r s h i p U n i t s , a n d t h e r e a f t e r
transferred. If t h e e n t i r e a m o u n t w a s t r a n s f e r r e d t o M & I B a n k ,

then no benefit was directly conferred on Defendants Berlin, B e r l i n L a w Firm, P.A. and Berland Investments, LLC.

A f t e r c o n s i d e r a t i o n , t h e C o u r t g r a n t s t h e M o t i o n to D i s m i s s .

H.

Count X - Legal M a l p r a c t i c e / N e g l i g e n c e

D e f e n d a n t s a r g u e that a c l a i m for l e g a l m a l p r a c t i c e m u s t

include the allegation of the employment of an attorney--privity.
Defendants argue that Florida law requires p r i v i t y of contract to e s t a b l i s h professional negligence against an attorney.
C o h e n a n d R o g o v i n v. O b e r o n I n v e s t m e n t , N.V.,

Angel,
(Fla.

512 S o . 2 d 192

1987).

Defendants argue that the allegations of the Complaint do

n o t m e e t t h e n a r r o w e x c e p t i o n p e r m i t t e d u n d e r F l o r i d a law.

D e f e n d a n t s f u r t h e r a r g u e that the a l l e g a t i o n of c o n s i d e r a t i o n is not a s u b s t i t u t e for privity. D e f e n d a n t s a r g u e t h a t the
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Case N o . 8 : 0 9 - C V - 5 5 1 - T - 1 7 E A J

a l l e g a t i o n t h a t P l a i n t i f f is a n a s s i g n e e o f D e f e n d a n t s ' a conclusory allegation,
assignable in Florida.

c l i e n t is

and legal malpractice claims are not
L a w O f f i c e o f D a v i d J. Stern, P . A . v.
(Fla.

Security National Servicing Corporation, 2007).

969 So.2d 962

Plaintiff has alleged Plaintiff was the intended beneficiary
o f t h e d o c u m e n t s p r e p a r e d to e f f e c t u a t e P l a i n t i f f ' s i n v e s t m e n t .

Plaintiff further argues that Defendants Berlin and Berlin Law Firm, P.A. directly solicited the investment, and Defendant

B e r l i n w a s a n i n v e s t o r in the s a m e d e v e l o p m e n t p r o j e c t a n d s t o o d
to p e r s o n a l l y g a i n f r o m P l a i n t i f f ' s i n v e s t m e n t .

P l a i n t i f f f u r t h e r a r g u e s that legal m a l p r a c t i c e c l a i m s a r e

a s s i g n a b l e w h e n b a s e d u p o n the n e g l i g e n t p u b l i c a t i o n of
i n f o r m a t i o n to t h i r d p a r t i e s .
v. Kaplan, 902 S o . 2 d 755,

See C o w a n L i e b o w i t z & L a t h a m , P.C.
761 (Fla. 2005) .

758-59,

After consideration,

the Court denies the Motion to Dismiss

d u e to t h e p r e s e n c e of f a c t u a l i s s u e s w h i c h m u s t be r e s o l v e d at a l a t e r s t a g e of t h i s l i t i g a t i o n .

I.

Count XI

- Sec.

501.201,

Fla.

Stat.

Defendants argue that this claim should be dismissed for the

s a m e r e a s o n as C o u n t I.

Defendants further argue that FDUPTA

d o e s not a p p l y to an a c t i o n i n v o l v i n g s e c u r i t i e s .

C r o w e 1 1 v.

Morgan S t a n l e y D e a n Witter Services Co., Inc. 87 F . S u p p . 2 d 1287
(S.D. Fla. 2000) .

P l a i n t i f f r e s p o n d s that F D U P T A a p p l i e s to r e a l e s t a t e
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Case No. 8 : 0 9 - C V - 5 5 1 - T - 1 7 E A J

transactions,

i n c l u d i n g those involving condominiums.
Inc., 4 3 1 F . S u p p . 2 d 1290, 1294

Zlotnick
(S.D. Fla.

v. P r e m i e r S a l e s G r o u p ,

2006); M e i t i s v. P a r k S q u a r e Enters.,
Fla. Jan. 21, 2 0 0 9 ) .

Inc., 2 0 0 9 WL 703273 (M.D.

P l a i n t i f f a r g u e s t h a t o t h e r c l a i m s in

addition to securities fraud are included in the Amended

Complaint.

After consideration,

the Court denies the Motion to Dismiss

as t o C o u n t XI.

Accordingly,

it is

ORDERED that the Motion to Dismiss is:

1) a s t o C o u n t I,

denied;

2) a s t o C o u n t II, g r a n t e d ,

with leave to amend within

f o u r t e e n days,
leave to amend,

as s t a t e d a b o v e ; 3) as to C o u n t III,
as s t a t e d a b o v e ; 4) a s t o C o u n t IV,

granted,

with

granted in

part and denied in part with leave to amend, more definite statement; denied in part,

and to include a

5) as t o C o u n t V, g r a n t e d i n p a r t a n d and to include a more

with leave to amend,

definite statement;
in part,

6)

as to C o u n t VI, g r a n t e d i n p a r t a n d d e n i e d

with leave to amend and to include a more definite 7) a s t o C o u n t V I I I ,
as to Count XI,

statement;
denied;

granted;
denied.

8) a s t o C o u n t X,

a n d 9)

DONE and ORDERED in Chambers,

in Tampa,

Florida on this

^-a^Tof March, 2 10. 0

C o p i e s to: All parties and counsel of record

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