KELLY v. DAVIS et al

Filing 133

ORDER. Defendants Robert Davis Seaside Community Development Corporation, and Seaside Community Realty, Inc.'s Motion to Dismiss the First Amended Complaint (doc. 52 ) is GRANTED in part and DENIED in part as follows: The req uest for rescission in Count I and Count II shall be dismissed, and in all other respects the motion is DENIED. Defendant Doris Goldstein's Motion to Dismiss Plaintiff's First Amended Complaint (doc. 53 ) is GRANTED, with leave to amend wi thin 14 days. Defendants Emerald Coast Associates, Inc. and Dean Burgis's Motion to Dismiss the First Amended Complaint (doc. 54 ) is DENIED as MOOT. Defendants Seaside I Homeowners' Association, Inc. and Seaside TownCouncil, Inc.'s M otion to Dismiss Plaintiff's First Amended Complaint (doc. 55 ) is GRANTED as to Count VII and Count VIII, with leave to amend within 14 days, and DENIED as MOOT as to Bruce Noonan. The motion to strike is DENIED. Signed by CHIEF JUDGE M CASEY RODGERS on March 22, 2012. (pmc)

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UNITED STATES DISTRICT COURT FOR
THE NORTHERN DISTRICT OF FLORIDA
PENSACOLA DIVISION

BARBARA ANN KELLY,
Plaintiff,
v.

Case No. 3:10cv392-MCR/EMT

ROBERT DAVIS, et al.,
Defendants
_______________________________/
ORDER
Plaintiff Barbara Ann Kelly brought suit1 against several individuals, including Robert
Davis and Doris Goldstein; the Seaside Community Development Corporation (“SCDC”),
Seaside Community Realty, Inc. (“SCRI”); Seaside I Homeowners’ Association, Inc.
(“Seaside I”), and Town Council, Inc. (“Town Council”).2 Kelly’s claims arise out of her
purchase of an undeveloped lot of real estate in a subdivision purportedly annexed to
Seaside, Florida; she alleges that various documents governing the subdivision and its
annexation are invalid. In a lengthy First Amended Complaint (doc. 31), Kelly brings
counts of breach of contract, promissory estoppel, fraud in the inducement, negligent
misrepresentation, conspiracy, negligence, violation of Florida’s Deceptive and Unfair
Trade Practices Act (“FDUTPA”), Fla. Stat. § 501.201, et seq., violation of Florida’s
Consumer Collection Practices Act, Fla. Stat. § 559,72(9), and she seeks a declaratory
judgment regarding the validity of certain documents at issue, alleging that they have
1

Kelly alleges that this court has jurisdiction based on diversity: the plaintiff is a resident of the state
of Maryland, the defendants are residents of, or have their principal place of business in, Florida, and the
am ount in controversy exceeds $75,000, estim ated to be the dim inution in value of her land. See 28 U.S.C.
§ 1332.
2

Defendants Dean Burgis, Bruce Noonan, and Em erald Coast Associates, Inc. have been voluntarily
dism issed. (Docs. 75, 77).
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caused uncertainty regarding her ability to develop and convey her lot. She alleges that
her property has decreased in value in excess of $75,000, that she continues to incur
damages through wrongful property assessments, and that her ability to develop and
convey her property has been frustrated.3 Currently pending are several motions to
dismiss on multiple grounds. (See Docs. 52, 53, 54, 55). Having fully considered the
arguments of the parties, the court concludes that the motions are due to be granted in part
and denied in part as follows. The request for oral argument is denied at this time.
Davis, SCDC, SCRI, Seaside I, and Town Council argue that Kelly lacks standing.
The court disagrees at this juncture. Taking as true the allegations of the First Amended
Complaint, the court finds that Kelly has sufficiently alleged a property interest and an
injury that is traceable to the defendants. Kelly alleges she was injured in contract and that
the value of her property was diminished by fraud and conspiracy through acts and
omissions of Davis, SCDC, SCRI, Goldstein and others; she asserts injury from the Town
Council’s allegedly illegal collection of assessments; and she asserts her injury, the
diminution of value to her property, was a reasonably foreseeable consequence of
Seaside I’s alleged negligence with regard to the annexation. As to the declaratory
judgment count, the documents she challenges impact her property and according to their
terms and conditions, they run with the property and inure to the benefit of heirs and
successors. The court accepts these allegations as true for purposes of the motion to
dismiss, recognizing that standing is a threshold issue that can be raised at any time and
may be reasserted on a more complete record.
Seaside I and Town Council argue that Kelly has failed to allege facts sufficient to
establish jurisdiction on counts against them. Kelly has set forth general allegations that

3

In the First Am ended Com plaint, Kelly references several docum ents, notices, and Chapter 10 of
the W alton County Land Developm ent Code, but she did not attach them to the com plaint. They have been
attached as exhibits to the m otions to dism iss, and the court has reviewed them . A docum ent referenced in
the com plaint and “attached to a m otion to dism iss m ay be considered by the court without converting the
m otion into one for sum m ary judgm ent only if the attached docum ent is (1) central to the plaintiff's claim ; and
(2) undisputed.” Day v. Taylor, 400 F.3d 1272, 1276 (11th Cir. 2005) (citing Horsley v. Feldt, 304 F.3d 1125,
1134 (11th Cir. 2002)). In this context, a docum ent is undisputed if its authenticity has not been challenged.
Id. The plaintiff has not challenged the contents or authenticity of the docum ents.
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her property’s value has diminished in excess of $75.000 as the result of the improper
development of Seaside 15, the invalidity of the Seaside 15 Declaration, the invalidity of
the Seaside 15 Supplement, and the failure to properly annex Seaside 15. “Generally, it
must appear to a legal certainty that the claim is really for less than the jurisdictional
amount to justify dismissal.” Federated Mut. Ins. Co. v. McKinnon Motors, LLC, 329 F.3d
805, 807 (11th Cir. 2003) (internal marks omitted). However, “‘[i]n an action against
multiple unrelated defendants, a plaintiff relying on § 1332 must satisfy the
amount-in-controversy requirement with respect to each individual defendant, unless the
defendants may be held jointly liable to the plaintiff.’” Seguros Comercial America v. Hall,
115 F.Supp.2d 1371, 1376 (M.D. Fla. 2000) (quoting Jewell v. Grain Dealers Mutual Ins.,
290 F.2d 11, 13 (5th Cir.1961)4). Kelly has lumped together multiple actions as having
caused the diminution in value to her property, but there is no basis alleged for holding
Seaside I and the Town Council jointly liable with Davis and the other defendants, and
there is no independent basis supporting the requisite amount in controversy as to these
counts. Accordingly, the general allegation of amount in controversy is not sufficient for
the counts against Seaside I and the Town Council. Therefore, Count VII and Count VIII
will be dismissed with leave to amend.
The defendants assert that the plaintiff’s claims are barred by the applicable statute
of limitations.5 Kelly purchased Lot 13 of Subdivision 15 on March 24, 2004, and by that
date, all of the actions alleged and governing documents had been completed (with the
exception of the ongoing property assessments and collection efforts). However, Kelly has
asserted an equitable estoppel defense to the limitations bar based on letters and actions
of the defendants, which the court finds raise issues of fact that cannot be resolved absent

4

See Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc) (adopting the case
law of the form er Fifth Circuit developed before October 1, 1981, as precedent in this circuit).
5
The breach of contract claim is subject to a five-year statute of lim itations, Fla. Stat. § 95.11(2)(b);
rescission, negligence, fraud, conspiracy, and FDUTPA are subject to a four-year statute of lim itations, Fla.
Stat. § 95.11(3); and the consum er debt collection claim m ust be asserted within two years, Fla. Stat.
§559.77(4).

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a fully developed record.6 Moreover, the statute of limitations for the fraud-based claims
is subject to the discovery doctrine, and plaintiff asserts she did not discover the material
facts until 2010, which the court must accept as true in the context of a motion to dismiss.
Accordingly, the statute of limitations defense does not require dismissal at this stage of
the proceedings.
Davis, SCDC and SCRI argue that Kelly has failed to exhaust administrative
remedies, asserting that the challenged county actions or decisions are quasi-judicial in
nature, not legislative as Kelly has characterized them in the complaint. Kelly argues that
the purchase agreement characterized the Seaside Development as a "Planned Unit
Development," which is legislative in nature under the express terms of the Walton County
Code.

The court finds that more factual context is needed to determine how the

challenged documents and decisions are appropriately characterized under the county land
development code.7
The court agrees with SCDC’s assertion that Kelly has failed to adequately allege
grounds for the remedy of rescission for purposes of the breach of contract claim or
promissory estoppel. Placing the other party back in status quo is a prerequisite to
6

Equitable estoppel "com es into play only after the lim itations period has run and addresses itself
to the circum stances in which a party will be estopped from asserting the statute of lim itations as a defense
to an adm ittedly untim ely action because his conduct has induced another into forbearing suit within the
applicable lim itations period." Major League Baseball v. Morsani, 790 So. 2d 1071, 1079 (Fla. 2001). The
doctrine "presupposes an act of wrongdoing – such as fraud and concealm ent – that prejudices a party's
case" and that is "directly attributable to the opposing party's m isconduct." Fla. Dep't of Health and Rehab.
Servs. v. S.A.P., 835 So. 2d 1091, 1097 (Fla. 2002).
7

"A legislative action by a local governing body is one that results in the form ulation of a general rule
of policy. On the other hand, a quasi-judicial action results in the application of a general rule of policy." D.R.
Horton, Inc. v. Peyton, 959 So. 2d 390, 393 (Fla. 1st DCA 2007). The character of the hearing m ust be
considered to determ ine whether a decision is quasi-judicial or legislative. Id. (finding a com prehensive land
use plan to be legislative). Defendants cite Vanderbilt Shores Condo. Ass'n, Inc. v. Collier County, 891 So.
2d 583, 584 (Fla. 2nd DCA 2004), in which a claim for declaratory relief was dism issed for the failure to pursue
adm inistrative procedures before challenging the issuance of a building perm it: “A party m ust exhaust its
adm inistrative rem edies before challenging the issuance of a building perm it.” Id. But, the case at hand does
not challenge a building perm it, and the court finds that m ore facts are needed to understand the nature of
the claim and the challenged docum ents in this instance in order to determ ine whether adm inistrative
rem edies needed to be exhausted before bringing suit.

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rescission, and the right to rescind is subject to waiver if the party retains the benefits of
a contract after discovering the grounds to rescind. Mazzoni Farms, Inc. v. E.I. DuPont de
Nemours and Co., 761 So. 2d 306, 313 (Fla. 2000). Kelly has not alleged that she notified
the other party of a decision to rescind, that she offered to restore any benefits received
from the contract, or that a remedy at law is inadequate. See Capital Factors, Inc. v. Heller
Fin’l, Inc., 712 F. Supp. 908, 915 (S.D. Fla. 1989).
Davis, SCDC and SCRI argue that Kelly’s claims are precluded because the facts
on which she relies would have been matters of public record on or before March 24, 2004,
when Kelly purchased Lot 13, and the development decisions were approved by the
county. Although information in the public record that is obvious from a chain of title
examination is properly imputed to the purchaser of real estate, see M/I Schottenstein
Homes, Inc. v. Azam, 813 So. 2d 91, 95 (Fla. 2002), Kelly’s allegations are not the type of
straightforward matters of public record that a title examination necessarily would have
revealed.

See id. at 93-96 (finding that whether a cause of action for fraudulent

misrepresentation exists where the putatively misrepresented information is contained in
the public record is a question of fact that should not be resolved through a motion to
dismiss). Questions exist on this record regarding uncertainties in the public record, what
statements were made or omitted, and whether the purchaser’s reliance was justifiable
under the totality of the circumstances. Id. at 94.
Goldstein is not a proper party to the conspiracy count because it is well-established
that an employee cannot be a conspirator with her employer. See Lipsig v. Ramlawi, 760
So. 2d 170 (Fla. 3d DCA 2000); Rivers v. Dillards Dep’t Store, Inc., 698 So. 2d 1328, 1333
(Fla. 1st DCA 1997). The First Amended Complaint alleges that Goldstein was the
attorney for Davis, SCDC and SCRI and prepared some documents for them in that
capacity; Kelly does not allege any actions by Goldstein outside her employment nor does
she allege that Goldstein had some personal stake in the matters. Kelly argues in
opposition to the motion to dismiss that Goldstein has a personal stake, but there are no

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such allegations of fact in the First Amended Complaint. Accordingly, the conspiracy count
against Goldstein will be dismissed. Further, the court agrees that there is no basis for
including Goldstein in the declaratory judgment count because there is no allegation that
Goldstein has any interest in the validity of the documents with respect to which Kelly
seeks declaratory judgment.
In all other respects, the court concludes without discussion that the allegations of
the First Amended Complaint are sufficient to state a plausible claim. See Fed. R. Civ. P.
8(a)(2); see also Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1949 (2009).
Accordingly:
1.

Defendants Robert Davis Seaside Community Development Corporation, and

Seaside Community Realty, Inc.’s Motion to Dismiss the First Amended Complaint (doc.
52) is GRANTED in part and DENIED in part as follows: The request for rescission in
Count I and Count II shall be dismissed, and in all other respects the motion is DENIED.
2.

Defendant Doris Goldstein’s Motion to Dismiss Plaintiff’s First Amended

Complaint (doc. 53) is GRANTED, with leave to amend within 14 days.
3.

Defendants Emerald Coast Associates, Inc. and Dean Burgis’s Motion to

Dismiss the First Amended Complaint (doc. 54) is DENIED as MOOT.
4.

Defendants Seaside I Homeowners’ Association, Inc. and Seaside Town

Council, Inc.’s Motion to Dismiss Plaintiff’s First Amended Complaint (doc. 55) is
GRANTED as to Count VII and Count VIII, with leave to amend within 14 days, and
DENIED as MOOT as to Bruce Noonan. The motion to strike is DENIED.
DONE AND ORDERED on this 22nd day of March, 2012.

s/

M. Casey Rodgers

M. CASEY RODGERS
CHIEF UNITED STATES DISTRICT JUDGE

Case No. 3:10cv392/MCR/EMT