White et al v. Grant Mason Holdings, Inc. et al
Filing
24
ORDER ATTACHED granting in part and denying in part 19 Motion to Dismiss and Motion for More Definite Statement. Plaintiffs shall file an amended complaint within fifteen (15) days and Defendants shall file their responses within fifteen (15) days of service. Signed by Judge Richard A. Lazzara on 4/28/2015. (CCB)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
ADAM R. WHITE and
JAMES NEWELL WHITE III,
Plaintiffs,
v.
CASE NO: 8:14-cv-2975-T-26MAP
IDEAGEAR, LLC, et al.,
Defendants.
/
ORDER
BEFORE THE COURT is Defendants, Grant Mason Holdings, Inc., Grant
Mason, LLC, Midwest Mail House, LLC, Media Solutions Team, LLC, Randal Pike,
Jessica Pike, Grant Mayfield, Darryl Mayfield, and Paul Freeman’s Omnibus Motion to
Dismiss the Amended Complaint or, in the Alternative, Require Plaintiffs to Provide a
More Definite Statement (Dkt. 19), and Plaintiffs’ Opposition (Dkt. 22). After careful
consideration of the allegations of the Amended Complaint (Dkt. 18), the applicable law,
and the entire file, the Court concludes the motion should be granted in part and denied in
part.
PERTINENT ALLEGATIONS
The amended complaint seeks relief against seven individuals and seven entities in
this action arising out of the sale of a print shop previously owned by the Plaintiffs. In
June 2003, Plaintiffs formed Ideagear, LLC, to own and operate a print shop.1 Plaintiff
owned and operated the print shop until June 10, 2014, when Ideagear, LLC, was sold to
Grant Mason Holdings, Inc., and Grant Mason LLC.2 The amended complaint alleges the
facts leading up to the purchase, and the events that occurred after the purchase.
The Plaintiffs signed a letter of intent presented by the sellers on April 22, 2014.3
Numerous misrepresentations were made by the individual Defendants, and Plaintiffs
were unaware that the initial down payment made on June 10, 2014, was borrowed in the
name of Ideagear, LLC.4 According to the amended complaint, the Defendants had
already defrauded owners of many other printing companies through a ponzi scheme
based on the representation that they intended to acquire many printing companies to
handle their large book of business.5 In reality, the assets of the printing companies were
taken, the credit of the printing companies was maxed out, the promises made to the
Plaintiffs, such as providing health insurance, were not kept, and the obligations were not
paid to the Plaintiffs as sellers, which left the Plaintiffs holding all the liabilities. Several
loans were obtained in the name of Ideagear, LLC, and the Defendants made no payments
1
See docket 18, para. 21.
2
See docket 18, para. 22.
3
See docket 18, paras. 43-45.
4
See docket 18, para. 67.
5
See docket 18, para. 24 and others.
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on the loans and used the borrowed funds for personal gain.6 Regions Bank is but one
lender and holds a first priority lien in all the assets of Ideagear, LLC. The Plaintiffs are
the personal guarantors on the loan.7 Defaults on the Regions Bank and numerous other
loans began occurring almost immediately after June 2014.8
In this motion to dismiss, five of the individuals and four of the entities request
dismissal of the entire complaint because they argue that it represents a shotgun pleading.
With respect to the individual counts, these Defendants contend that Count I fails to
allege fraud with particularity, Count II fails to state a claim for relief for RICO pursuant
to 18 U.S.C. § 1962, Count III for unjust enrichment fails to allege what benefit Plaintiffs
conferred on each of the Defendants, Count IV fails to allege which agreements of
several were breached and when the breaches occurred, Count V fatally alleges breach of
five separate agreements in one count, and Count VI fails to state a claim for conversion
on behalf of Ideagear, LLC, a third-party business entity. Finally, Defendants assert that
Plaintiffs have no standing to bring Count VIII for judicial liquidation of Ideagear, LLC.
STANDARD OF REVIEW
A motion for more definite statement under Federal Rule of Civil Procedure 12(e)
is properly directed toward a pleading that “is so vague or ambiguous” that the
6
See docket 18, paras. 92-100.
7
See docket 18, para. 109.
8
See docket 18, para. 104.
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responding party cannot form a response. See Anderson v. Dist. Bd. of Trs. of Cent. Fla.
Cmty. Coll., 77 F.3d 364, 366-67 (11th Cir. 1996). The notice pleading requirements of
Rule 8(a) are considered when evaluating a motion for more definite statement. See
Mitchell v. E-Z Way Towers, Inc., 269 F.2d 126, 132 (5th Cir. 1959) (instructing that Rule
12(e) should not be used to frustrate notice pleading policy).9 Generally, Rule 12(e) is
directed toward pleadings that lack “sufficient specificity to provide adequate notice.”
Barthelus v. G4S Gov’t Solutions, Inc., 752 F.3d 1309, 1313 n.6 (11th Cir. 2014) (quoting
Justice Stevens’ dissent in Twombly, 550 U.S. at 590 n.9).
A complaint sought to be dismissed pursuant to Federal Rule of Civil Procedure
12(b)(6), will survive the motion if it contains sufficient facts, which must be accepted as
true,10 to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S.
662, 678, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). Rule 8 does not
require detailed factual allegations, but the complaint must offer more than mere “labels
and conclusions” or “a formulaic recitation of the elements of a cause of action.” Iqbal,
556 U.S. at 678 (quoting Twombly, 550 U.S. at 555).
9
In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc),
the Eleventh Circuit adopted as binding precedent all former Fifth Circuit decisions
issued prior to October 1, 1981.
10
“At the motion to dismiss stage, all well-pleaded facts are accepted as true, and
the reasonable inferences therefrom are construed in the light most favorable to the
plaintiff.” Bryant v. Avado Brands, Inc., 187 F.3d 1271, 1273 n.1 (11th Cir. 1999).
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SHOTGUN PLEADING
Defendants use the two vehicles set forth above to urge this Court to require the
filing of a second amended complaint. On its own initiative, this Court previously
ordered the Plaintiffs to replead, partly because each count incorporated by reference “the
allegations of its predecessors, leading to a situation where most of the counts (i.e., all but
the first) contain irrelevant factual allegations and legal conclusions.”11 Beginning with
Count II and continuing through Count IX, Plaintiffs recite in the first paragraph of each
count, “Plaintiffs hereby restate, re-allege and incorporate the above paragraphs as if fully
set forth herein.”12 This practice requires the time-consuming sifting out of irrelevancies
in each count. Plaintiffs obviously did not heed this Court’s cautionary advice in its prior
order in this case.13 Accordingly, Plaintiffs must file another amended complaint.
COUNT I
Count I lists the five individual Defendants and two corporate Defendants sued for
fraudulent misrepresentation. Defendants asserts that the allegations are not specific
11
See docket 17 (quoting Strategic Income Fund, L.L.C. v. Spear, Leeds &
Kellogg Corp., 305 F.3d 1293, 1295 (11th Cir. 2002)).
12
See docket 18, paras. 144, 170, 179, 183, 187, 198, 202 & 206.
13
Plaintiffs’ assertion that the particularity of the facts in each count overcomes
the presumption that the wholesale incorporation of every preceding paragraph into each
count constitutes a shotgun pleading, is without merit. The Court finds that the facts
alleged within each count are not so specific as to negate the confusion caused by the
wholesale incorporation. The pleading in Natarajan v. Paul Revere Life Ins. Co., No.
8:04-cv-2612-T-17TGW, 2009 WL 1117405, at *4 (M.D. Fla. Apr. 24, 2009), is therefore
distinguishable from the amended complaint here.
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enough as to time, place, and substance, and that the allegations do not specify how the
representations were false and how they caused harm to Plaintiffs. Defendants’ reliance
on Bill Buck Chevrolet, Inc. v. GTE Fla., Inc., 54 F.Supp.2d 1127, 1136 (M.D. Fla.
1999), however, does not require a repleading to comply with the specificity requirement
for fraud. Defendants’ example with respect to the allegations against Paul Freeman,
likewise, does not require a repleading. The Court finds that Count I is sufficient to state
the elements of a cause of action for fraudulent misrepresentation. See Butler v. Yusem,
44 So.3d 102, 105 (Fla. 2010) (listing the four elements of fraudulent misrepresentation
as 1) a false statement of a material fact, 2) the representor’s knowledge that the statement
is false, 3) intention to induce another to act, and 4) consequent injury suffered by the
party acting in reliance). Thus, Count I, as it does not violate the shotgun pleading
requirement because it does not include a wholesale incorporation of all previous counts,
stands.
COUNTS II-IX
With Count II begins the wholesale incorporation of each preceding paragraph into
each count, continuing throughout the entire complaint. In the repleading of Count II for
RICO violations, Plaintiffs must describe, without the confusion caused by the shotgun
pleading, the enterprise. See Cesnik v. Edgewood Baptist Church, 88 F.3d 902, 910 (11th
Cir. 1996) (requiring plaintiff to replead claim under RICO to describe the enterprise).
Count III for unjust enrichment, together with all the following counts, must also be
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repleaded to rectify the lack of clarity caused by the inartful pleading. With respect to any
confusion regarding the agreements breached in Counts IV and V, Plaintiffs will have the
opportunity to replead those counts. Counts IV and V do not specifically refer to which
exhibit represents the employment agreement or agreements and the various other
agreements pled in each respective count, except for the fact that all of the previous
paragraphs of the amended complaint are incorporated therein. Plaintiffs must clearly
refer by exhibit which agreement or agreements are the subject of Counts IV and V.
Plaintiffs should also plead what constitutes the breach or breaches, i.e., the failure to pay
when due or whatever the breach may be. Count VI should be repleaded if Plaintiffs are
contending that the stock transfer constitutes the unauthorized act giving rise to a claim
for conversion brought by the Plaintiffs. Finally, Count VIII for judicial liquidation of
Ideagear, LLC, pursuant to section 605.0702, Florida Statutes, stands only if Plaintiffs are
members or managers of Ideagear, LLC. Fla.Stat., § 605.0702 (1)(b) (“In a proceeding
by a manager or member if it is established . . .”). Count VIII should allege in what
capacity Plaintiffs seek judicial liquidation.
It is therefore ORDERED AND ADJUDGED as follows:
1)
Defendants, Grant Mason Holdings, Inc., Grant Mason, LLC, Midwest Mail
House, LLC, Media Solutions Team, LLC, Randal Pike, Jessica Pike, Grant
Mayfield, Darryl Mayfield, and Paul Freeman’s Omnibus Motion to
Dismiss the Amended Complaint or, in the Alternative, Require Plaintiffs to
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Provide a More Definite Statement (Dkt. 19) is GRANTED in part and
DENIED in part.
2)
Plaintiffs shall be granted this second opportunity to replead the amended
complaint in accordance with this order within fifteen (15) days.
3)
Defendants shall file their responses within fifteen (15) days of service.
DONE AND ORDERED at Tampa, Florida, on April 28, 2015.
s/Richard A. Lazzara
RICHARD A. LAZZARA
UNITED STATES DISTRICT JUDGE
COPIES FURNISHED TO:
Counsel of Record
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