Lahtinen v. Liberty International Financial Services, Inc. et al
Filing
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ORDER granting in part and denying in part 14 Motion to Dismiss. The Order is granted as it pertains to Count III against Defendant Schuler only. In all other regards, the Motion is denied. Plaintiff shall have fourteen days to file an amended complaint, should she wish to do so. Please see Order for further details. Signed by Judge Robin S. Rosenbaum on 1/31/2014. (RSR)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 13-61766-CIV-ROSENBAUM/HUNT
DENISE M. LAHTINEN,
as personal representative of the
Estate of Raymond Jean Laliberte
and Beulah L. Laliberte,
Plaintiff,
v.
LIBERTY INTERNATIONAL FINANCIAL
SERVICES, INC., LIBERTY INTERNATIONAL
HOLDINGS CORPORATION,
CHRISTOPHER ANZALONE, and
JEFFREY SCHULER,
Defendants.
/
ORDER ON DEFENDANTS’ MOTION TO DISMISS
This matter is before the Court upon Defendants Liberty International Financial Services,
Inc., Liberty International Holdings Corporation, Christopher Anzalone, and Jeffrey Schuler’s
Motion to Dismiss [ECF No. 14]. The Court has considered all supporting and opposing filings and
the record in this case. For the reasons set forth below, the Court grants in part and denies in part
Defendants’ Motion to Dismiss.
I. Background1
Denise Lahtinen was appointed as a personal representative of the Estates of Raymond Jean
1
The facts set forth in this section are drawn from the Complaint. On a motion to dismiss,
the Court must accept as true the factual allegations in the complaint and must construe them in
the light most favorable to the plaintiff. Am. Dental Ass’n v. Cigna Corp., 605 F.3d 1283, 1288
(11th Cir. 2010) (citation omitted).
Laliberte and Beulah Laliberte upon their respective deaths. See ECF No. 1 at ¶¶ 1, 2, 11. Before
he died, Raymond Laliberte opened and maintained an investment account with Liberty International
Financial Services, Inc. (“LIFS”), under account number 1222. Id. at ¶ 10. At the time of Laliberte’s
death, account number 1222 had a value of $353,325.00. See id. at ¶ 12. Plaintiff instructed LIFS
and Defendant Christopher Anzalone, the president and chief operating officer of LIFS, to liquidate
the account. Id. at ¶14. After accounting for outstanding loans, fees, and costs, the account had a
balance of $190,904.74. See id. at ¶ 14.
On about June 8, 2012, in response to repeated requests by Plaintiff, Defendants issued a
check for $190,904.74. See id. at ¶ 15. When Plaintiff deposited the check, however, it was returned
for insufficient funds. See id. at ¶ 16. Thereafter, Plaintiff repeatedly attempted to collect the
monies from Defendants, but Defendants never provided it. See id. at ¶¶ 17-19.
Ultimately, on about February 5, 2013, the parties reached a settlement. See id. at ¶ 20. In
the settlement, Defendants admitted to the debt and conceded that they “may be liable to Lahtinen
and Laliberte for their action in violation of Federal and Florida Statutes and laws.” See id. at ¶ 21.
Among other remedies, the settlement agreement stated that Defendants would issue to Plaintiff
76,000 shares of restricted common stock in Liberty International Holding Company (“LIHC”). See
id. at ¶ 24. In the event that Defendants failed to issue the LIHC stock, Defendants agreed to pay
$5,000.00 per month until the full amount of the debt was satisfied. See id. The settlement
agreement also contained the following provision:
13.
[LIFS, Liberty International Holding Corporation (“LIHC”),]
and Anzalone hereby consent to the exclusive jurisdiction
and venue of the Courts of the Commonwealth of
Massachusetts for any disputes arising under this Agreement
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or the enforcement of its terms.
ECF No. 1-5 at ¶ 13.
Despite Defendants’ agreement to the terms of the settlement, Defendants failed to issue the
shares or to make the monthly payments. See id. at ¶ 25. As of August 14, 2013, when Plaintiff filed
the pending case in this District, Defendants had still failed to make a single payment. Id. The
Complaint asserts claims for breach of settlement agreement (Count I), constructive trust (Count II),
and conversion. Defendants seek to dismiss this action, alleging improper venue and failure to state
a claim.
II. Discussion
A. Motion to Dismiss for Improper Venue
Defendants argue that this matter must be dismissed for lack of venue2 pursuant to Rule
12(b)(3), Fed. R. Civ. P., based on a valid forum-selection clause contained in the settlement
agreement entered into by the parties. Title 28, United States Code, Section 1391 provides for venue
in diversity actions such as this one. Specifically, Section 1391(b)(1) states that a civil action
proceeding in diversity jurisdiction may be brought in “a judicial district in which any defendant
2
Defendants also move to dismiss for lack of jurisdiction based on the forum-selection
clause. The Eleventh Circuit has concluded, however, that “‘motions to dismiss based upon
forum-selection clauses ordinarily are not properly brought pursuant to Rule 12(b)(1) . . . because
the basis upon which the defendants seek dismissal — namely, that the agreement of the parties
prohibit[s] the plaintiff from bringing suit in the particular forum — is unrelated to the actual
basis of federal subject matter jurisdiction. . . .’ Instead, . . . a motion pursuant to Rule 12(b)(3)
is the proper vehicle to request dismissal of a complaint on the basis of a contractual choice of
forum.” Slater v. Energy Servs. Grp. Int’l, Inc., 634 F.3d 1326, 1332-33 (11th Cir. 2011)
(quoting Lipcon v. Underwriters at Lloyd’s, London, 148 F.3d 1285, 1289 (11th Cir. 1998)).
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resides, if all defendants are residents of the State in which the district is located[.]”
Here, the Complaint alleges diversity jurisdiction under 28 U.S.C. § 1332(a) and further
asserts that Plaintiff and the Estates that she represents all reside outside of Florida, all Defendants
reside in the Southern District of Florida, and the amount in controversy exceeds $75,000.00. See
ECF No. 1 at ¶¶ 3-9. Defendants do not contest any of these allegations. Because diversity
jurisdiction exists under these facts and all Defendants are alleged to reside in the Southern District
of Florida, by the terms of Section 1391(a)(1), venue is proper in the Southern District of Florida.
Therefore, venue here can be improper only if paragraph 13 of the settlement agreement
precludes it, as “[m]andatory forum-selection clauses are ‘presumptively valid and enforceable’
absent a ‘strong showing that enforcement would be unfair or unreasonable under the
circumstances.’” Slater, 634 F.3d at 1331 (citation omitted). This Court concludes that paragraph
13 of the settlement agreement does not limit Plaintiff from bringing this action in the Southern
District of Florida.
While it is true that the provision employs the phrase “exclusive jurisdiction and venue,”
significantly, paragraph 13 binds only LIFS, LIHC, and Anzalone to agree submit to the exclusive
jurisdiction and venue of the Courts of the Commonwealth of Massachusetts; it does not even
purport to limit Plaintiff’s choices in bringing this action. As a review of the settlement agreement
reveals, paragraph 13 is designed to allow Plaintiff, if she alone so chooses, to proceed against
Defendants LIFS, LIHC, and Anzalone in the Massachusetts courts, regardless of whether venue and
personal jurisdiction over these Defendants otherwise exists in the Massachusetts courts. But
nothing in the agreement requires Plaintiff to engage in legal process before the courts of
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Massachusetts. For this reason, and because venue in the Southern District of Florida is proper,
Defendants’ Motion to Dismiss for Improper Venue must be denied.
B. Motion to Dismiss for Failure to State a Claim
Rule 12(b)(6), Fed. R. Civ. P., governs motions to dismiss for failure to state a claim. That
rule provides, in relevant part,
(b)
How to Present Defenses. Every defense to a claim for relief
in any pleading must be asserted in the responsive pleading if
one is required. But a party may assert the following defenses
by motion:
(6)
failure to state a claim upon which relief can be
granted; . . . .
Id. The Court, therefore, considers the Federal Rules of Civil Procedure as they set forth the
requirements for stating a claim.
Rule 8(a)(2), Fed. R. Civ. P., demands that a pleading contain “a short and plain statement
of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). While a complaint
need not provide detailed factual allegations, the standard “requires more than labels and
conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Ashcroft
v. Iqbal, 556 U.S. 662, 679 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007));
see also Wilchombe v. TeeVee Toons, Inc., 555 F.3d 949, 958 (11th Cir. 2009); Corbitt v. Home
Depot U.S.A., Inc., 573 F.3d 1223, 1256 (11th Cir. 2009); Cobb v. State of Fla., 293 F. App’x 708,
709 (11th Cir. 2008); Watts v. Fla. Int’l Univ., 495 F.3d 1289, 1295 (11th Cir. 2007). “[N]aked
assertion[s]” bereft of “further factual enhancement” do not suffice. Twombly, 550 U.S. at 555, 557.
As the Supreme Court has explained, a complaint’s “factual allegations must be enough to raise a
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right to relief above the speculative level.” Id. at 555. “Moreover, the facts supporting the claim must
be ‘consistent with the allegations in the complaint.’” Wilchombe, 555 F.3d at 958 (quoting
Twombly, 550 U.S. at 562). On a motion to dismiss, the Court should accept the non-conclusory
allegations in the complaint as true and evaluate all plausible inferences derived from those facts in
favor of the plaintiff. See Hughes v. Lott, 350 F.3d 1157, 1159-60 (11th Cir. 2003) (internal citation
omitted); see also Cobb, 293 F. App’x at 709; Brown v. Budget Rent-A-Car Syst., Inc., 119 F.3d 922,
923 (11th Cir. 1997).
Courts therefore conduct a “two-pronged approach” when considering a motion to dismiss
under Rule 12(b)(6). Iqbal, 556 U.S. at 679. A court should first ask whether the pleading properly
asserts “well-pleaded factual allegations” or instead merely asserts “‘legal conclusions’ [that are] not
entitled to the assumption of truth.” Id. at 679-80 (quoting Twombly, 550 U.S. at 555). If the
complaint contains factual allegations that are well pled, the court should assume their veracity, and
then move to the next step and ask whether the factual allegations “plausibly give rise to an
entitlement to relief.” Id. at 679. Thus, where the pleading asserts non-conclusory, factual
allegations that, if true, would push the claim “across the line from conceivable to plausible,” the
motion to dismiss should be denied. Id. at 680 (quoting Twombly, 550 U.S. at 570) (quotation marks
omitted).
Here, Defendants make various arguments for dismissing the Complaint for failure to state
a claim. As explained below, no basis succeeds, and Defendants’ Motion to Dismiss for Failure to
State a Claim must be denied.
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1. Single Counts Alleged Against More Than One Defendant
Defendants first complain that the Complaint impermissibly “lump[s] together” various
Defendants in single counts. In this regard, Defendants challenge the Complaint’s assertion of
Count I for breach of settlement agreement against three Defendants — Anzalone, LIFS, and LIHC,3
and of Count III for conversion against two Defendants — Anzalone and Schuler. They claim that
this circumstance renders “it impossible for each separate and individual Defendant to be able to
properly and fully respond to the complaint.” ECF No. 14 at ¶ 3.
The Complaint belies Defendants’ concern. First, Defendants LIFS, LIHC, and Anzalone
all are signatories to the settlement agreement. Second, the Complaint specifies the various
commitments that Defendants LIFS, LIHC, and Anzalone made in the agreement and alleges who
breached them. For example, paragraph 22 of the Complaint asserts that LIFS, LIHC, and Anzalone
agreed to pay $5,000 to Plaintiff by February 5, 2013, and paragraph 23 avers that these same
Defendants did not make the required payment. The mere fact that all three Defendants are alleged
to have breached the settlement agreement in the same way does not require that Plaintiff plead a
separate count against each Defendant for exactly the same alleged breach. Third, even if Plaintiff
intended to plead the claims against the different Defendants in the alternative, Rule 8(d), Fed. R.
Civ. P., permits a party to “set out 2 or more statements of a claim or defense alternatively or
hypothetically, either in a single count . . . or in separate ones. . . .” In short, the Complaint
adequately puts Defendants on notice of the ways in which Plaintiff alleges each Defendant breached
3
Defendants contend that Defendant Schuler “should be dismissed with prejudice from
Count I.” ECF No. 14 at ¶ 12. But the Complaint does not assert Count I against Defendant
Schuler. Therefore, there is nothing in Count I to dismiss as it pertains to him.
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the settlement agreement.
Nor does Defendants’ objection to the conversion count fare any better. Count III, the
conversion count, claims that Defendants Anzalone and Schuler “converted the proceeds for their
own use and benefit.” ECF No. 1 at ¶ 48. As with the breach-of-settlement-agreement count, the
simple fact that the Complaint alleges that both Defendants Anzalone and Schuler participated in the
same challenged conduct does not somehow render the Complaint confusing or unclear as it regards
what Plaintiff claims Defendants Anzalone and Schuler did. Thus, Defendants’ objection on this
ground must be overruled.
2. Compliance With Rule 1.130, Fla. R. Civ. P.
Next, Defendants argue that the Court must dismiss the Complaint because Plaintiff did not
attach any documentation showing (1) that she was appointed as the personal representative of the
Estates of the Lalibertes, (2) that Raymond Laliberte opened an investment account with LIFS under
account number 1222, or (3) that demands were made of Defendants to liquidate Raymond
Laliberte’s LIFS account. See ECF No. 14 at ¶¶ 5-7. In support of this position, Defendants suggest
that Rule 1.130, Fla. R. Civ. P., requires the attachment of such documentation to the Complaint.
This Court need not determine whether that is, in fact, the case.4 Plaintiff brings this matter
4
While this Court does not opine on whether the alleged missing documentation is central
to this case, particularly in light of other attachments to the Complaint, the alleged centrality of
the missing documentation seems questionable. For example, the Complaint does append
Raymond Laliberte’s account statement dated November 15, 2010, for his LIFS account number
1222, see ECF No. 1-2, which would certainly tend to provide evidence that Laliberte, in fact,
opened account number 1222 with LIFS. Similarly, the Complaint attaches a copy of a check
that LIFS wrote to the Estate of Raymond J. Laliberte for $190,904.74, ECF No. 1-4, which
suggests that, at some point, Laliberte or his representative made a demand for liquidation upon
Defendants since, presumably, they did not decide on their own to write such a check to
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in diversity, so the Court applies federal law to procedural issues. McMahan v. Toto, 256 F.3d 1120,
1132 (11th Cir. 2001) (citing Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938)). As Rule 1.130 is a part
of Florida’s Rules of Civil Procedure, it is not applicable here. Instead, the Federal Rules of Civil
Procedure apply, and, while Rule 10(c), Fed. R. Civ. P., permits a plaintiff to attach “[a] copy of a
written instrument [to her pleading, thereby causing it to be] is a part of the pleading for all
purposes,” nothing in the rules requires that a plaintiff must do so. To the contrary, even assuming,
arguendo, that the allegedly missing documentation were critical to the case, in the Eleventh Circuit,
when a complaint lacks a central exhibit, the remedy is not dismissal; instead, the defendant may
supplement the record with the necessary documentation to allow the court to consider the
defendant’s motion challenging the complaint substantively. See, e.g., Bryant v. Avado Brands, Inc.,
187 F.3d 1271, 1280 n.16 (11th Cir. 1999) (noting that when a plaintiff files a complaint based on
a document but does not attach a copy of that document to the complaint, the defendant may
introduce the document to his motion attacking the complaint).
Moreover, Defendants’ Motion to Dismiss, which challenges the Complaint for not attaching
evidence of the allegations Plaintiff asserts, essentially seeks for the Court to require Plaintiff to
prove her case at the pleading stage. But Defendants have not filed a motion for summary judgment,
where a plaintiff must make some evidentiary showing to survive; they have filed a motion to
dismiss. And on a motion to dismiss, the Court must accept as true the factual allegations in the
complaint. Am. Dental Ass’n., 605 F.3d at 1288 (citation omitted). For all of these reasons,
dismissal is not appropriate simply because the Complaint does not have appended to it exhibits that
Laliberte’s Estate.
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Defendants desire.
3. Conversion
Finally, Defendants argue that this Court should dismiss Plaintiffs’ conversion claim because
“Plaintiffs do not plead that either Anzalone or Schuler took their funds with the intent to retain them
and never to return them to the Plaintiff.” See ECF No. 14 at ¶ 24. Under Florida, law, to establish
a claim for conversion of money, a plaintiff must show all of the following: (1) specific and
identifiable money is involved in the alleged offense; (2) the plaintiff enjoys an immediate right to
possess that money; (3) an unauthorized act has occurred that has deprived the plaintiff of that
money; and (4) the plaintiff has made a demand for return of the money, and the defendant has
refused to comply. United States v. Bailey, 288 F. Supp. 2d 1261, 1264-65 (M.D. Fla. 2003) aff’d
419 F.3d 1208 (11th Cir. 2005).
As to whether intent is a necessary element of conversion, as another court in this District
has noted, Florida courts are split on the question. See Small Bus. Admin. v. Echevarria, 864 F.
Supp. 1254, 1262 (S.D. Fla. 1994) (collecting cases on both sides of the issue and ultimately
concluding that intent is required). But see Bailey, 288 F. Supp. 2d at 1264 (holding that “[n]either
knowledge nor intent are required”). When a federal court sits in diversity and applies state law,
first, the court must consider any rulings of Florida’s Supreme Court. See Bailey v. Southern Pacific
Transp. Co., 613 F.2d 1385, 1388 (5th Cir.), cert. denied, 449 U.S. 836 (1980)). Where the highest
court in the state has rendered no decisions on point, however, this Court must follow the opinions
of Florida’s intermediate courts, unless it is “convinced that the highest court would decide
otherwise.” Id. (citing Commissioner v. Bosch, 387 U.S. 456, 465 (1967)).
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After careful consideration, this Court concludes that Florida’s Supreme Court would — and
has — determined that a plaintiff must prove intent in order to succeed on conversion. Accordingly,
intent is a necessary element of conversion. As the Third District Court of Appeal has explained,
“The essence of conversion . . . is not the possession of property by the wrongdoer, but rather such
possession in conjunction with a present intent on the part of the wrongdoer to deprive the person
entitled to possession of the property.” Brand v. Old Republic Nat’l Title Ins. Co., 797 So. 2d 643,
646 (Fla. 3d DCA 2001) (citing Senfeld v. Bank of Nova Scotia Trust Co. (Cayman) Ltd., 450 So.
2d 1157, 1161 (Fla. 3d DCA 1984); (Wilson Cypress Co. v. Logan, 162 So. 489, 490-91 (Fla. 1935))
(emphasis added). And Wilson Cypress, the case on which the Third Circuit relied in reaching this
determination, states, “A taking with intent to exercise an ownership inconsistent with the owner’s
right of possession is a conversion.” Wilson Cypress, 162 So. at 127 (emphasis added); see also
Quitman Naval Stores Co. v. Conway, 58 So. 840 (Fla. 1912) (“Where there is taking of chattels with
intent to exercise over them an ownership inconsistent with the real owner’s right of possession,
there is a conversion.”) (emphasis added). Moreover, the Florida Supreme Court has more recently
noted in dicta,
Intentional tort claims such as fraud, conversion, intentional
interference, civil theft, abuse of process, and other torts requiring
proof of intent generally remain viable either in the products liability
context or if the parties are in privity of contract. As noted by one
commentator, a rule barring recovery for economic loss “is not an
escape hatch from intentional commercial torts.”
Indem. Ins. Co. of N. Am. v. Am. Aviation, Inc., 891 So. 2d 532, 543 n.3 (Fla. 2004) (emphasis
added), overruled on other grounds by Tiara Condo. Ass’n, Inc. v. Marsh & McLennan Cos., Inc.,
110 So. 3d 399 (Fla. 2013). Based on the central role that Florida’s Supreme Court has recognized
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intent plays in a conversion claim, this Court concludes that intent is a necessary element of the
cause of action.
In this case, Plaintiff does not expressly allege that Defendants intended to convert the money
at issue to their own use. But that is not necessarily fatal to her Complaint. As previously discussed,
on a motion to dismiss, the Court must view the facts in the light most favorable to the non-moving
party. As to Defendant Anzalone, the allegations here allow for the reasonable inference that he
intended to convert the funds. In particular, the following allegations sufficiently demonstrate
Anzalone’s alleged intent: (1) Defendant Anzalone was the president and chief operating officer of
Defendant LIFS at all material times; (2) Plaintiff instructed LIFS and Anzalone to liquidate the
account; (3) LIFS issued an insufficient-funds check payable to the Estate of Raymond Laliberte; (4)
Plaintiff made repeated requests to LIFS and Anzalone for payment of the proceeds, and they ignored
the requests; (5) subsequently, Defendants LIFS and Anzalone advised Plaintiff that they required
additional time to pay and stated that they would make payment upon obtaining the funds from
another party; (6) instead of paying Plaintiff, Defendants Anzalone and Schuler converted the
proceeds for their own use and benefit; (7) Plaintiff and Defendants LIFS, LIHC, and Anzalone then
entered into a settlement agreement in which they admitted that they were indebted to Plaintiff for
the amount of the allegedly converted funds and that Plaintiff should receive all amounts owed to
her; and (8) Defendants LIFS, LIHC, and Anzalone did not comply with the terms of the settlement
agreement or otherwise pay Plaintiff. See ECF No.1. Because the Complaint reasonably can be
construed to allege that DefendantAnzalone intended to convert the disputed funds, dismissal for
failure to expressly allege Defendant Anzalone’s intent to convert is not warranted.
With respect to Defendant Schuler, however, the same is not true. Instead, the Complaint
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asserts with regard to Defendant Schuler specifically only that he was the director and vice president
of LIFS and that he converted the proceeds of the account for his own use and benefit. Id. The
allegation that Schuler converted the proceeds is a conclusory legal assertion and therefore is not
entitled to a presumption of truth. See Iqbal, 556 U.S. at 679 (2009) (citing Twombly, 550 U.S. at
555 (2007)). And the mere fact that Schuler served as the director and vice president of LIFS,
without more, does not allow for the inference that Schuler converted the funds in the account or that
he intended to do so. Accordingly, Defendants’ Motion to Dismiss must be granted with respect to
Count III as it pertains to Defendant Schuler.
III. Conclusion
For the foregoing reasons, it is ORDERED and ADJUDGED that Defendant’s Motion to
Dismiss ECF No.14 is GRANTED IN PART and DENIED IN PART, consistent with this Order.
Defendants’ Motion is GRANTED to the extent that Count III against Defendant Schuler is
dismissed. Plaintiff shall have fourteen days to file an amended complaint, should she wish to do
so.
DONE and ORDERED in Fort Lauderdale, Florida, this 31st day of January 2014.
ROBIN S. ROSENBAUM
Copies furnished to:
Counsel of Record
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