Malhotra v. Aggarwal

Filing 36

ORDER granting in part and denying in part 27 Defendant's Motion to Dismiss Plaintiff's Second Amended Complaint and Motion for Attorney's Fees. Signed by Judge Darrin P. Gayles on 3/6/2019. See attached document for full details. (isc)

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 1:17-cv-24407-GAYLES/OTAZO-REYES
SUSHIL MALHOTRA,
Plaintiff,
v.
SANJAY AGGARWAL,
Defendant.
____________________________/
ORDER
THIS CAUSE comes before the Court on Defendant’s Motion to Dismiss Plaintiff’s
Second Amended Complaint and Motion for Attorney’s Fees [ECF No. 27] (“Motion”). The
Court has carefully reviewed the submissions of the parties and the applicable law. For the
reasons that follow, the Motion is granted in part and denied in part.
I.

BACKGROUND
Plaintiff, Sushil Malhotra, filed suit in the Circuit Court of the Eleventh Judicial Circuit

in and for Miami-Dade County, Florida, on November 2, 2017 [ECF No. 1-1] against Defendant,
Sanjay Aggarwal, and the case was removed to this Court on the basis of diversity jurisdiction on
December 6, 2017. [ECF No. 1]. Plaintiff filed his first Amended Complaint on January 19,
2018. [ECF No. 12]. The Court granted Defendant’s Motion to Dismiss the First Amended
Complaint [ECF No. 13] on June 15, 2018, dismissing Plaintiff’s claim for unjust enrichment
with prejudice and his claims for civil theft and fraud without prejudice for failure to state a
claim. [ECF No 25]. Plaintiff filed the operative Second Amended Complaint on July 3, 2018,
repleading his claims for civil theft and fraud. [ECF. No. 26].
According to the Second Amended Complaint, on July 10, 2013, Plaintiff wired

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Defendant $500,000. [Id. ¶ 13]. Plaintiff claims the $500,000 was his personal property1 and
alleges that he wired the funds to Defendant because Defendant stated he was owed a salary due
to his business relationship with Kingfisher Airlines.2 [Id. ¶¶ 9, 14]. On the same day, Defendant
accepted the $500,000. [Id. ¶ 16].
In September 2016, upon a “review of accounting books and auditing,” Plaintiff learned
that the transfer was an “error.” [Id. ¶¶ 18–19]. Plaintiff claims that he notified Defendant of the
error and requested that Defendant return the funds. [Id. ¶ 20]. Defendant has not paid any
money to Plaintiff, and in July 2017, Plaintiff sent Defendant a Notice of Civil Theft Demand.
[Id. ¶¶ 35–36]. After waiting the statutory period, Plaintiff initiated this action.
II.

LEGAL STANDARD
In order for a complaint to withstand a motion to dismiss, it “must contain sufficient

factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007)). A claim is considered facially plausible when the court is able to draw a reasonable
inference that the defendant is liable based on the factual content pleaded by the plaintiff. Id. The
“plausibility standard” requires there be “more than sheer possibility that a defendant acted
unlawfully.” Id. A determination of a claim’s plausibility “is a context-specific task that requires
the reviewing court to draw on its judicial experiences and common sense.” Id. at 679. It is not
enough for a complaint to recite the statutory elements of a cause of action. Id. at 678.
Allegations within a complaint must be more than conclusory and must have a factual basis. Id.
at 679.
Reviewing a motion to dismiss, courts accept the allegations as presented in the
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Plaintiff also asserts that $500,000 was transferred to him by non-party, Vijay Mallya on July 8, 2013, before
transferring the funds to Defendant. [ECF No. 26 at ¶ 7]. No purpose was identified for this initial transfer.
As was an issue in the first Amended Complaint, here too, Plaintiff’s relationship to Kingfisher Airlines remains
unclear from the facts alleged. [ECF No. 26].

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complaint as true and view those facts “in the light most favorable to the plaintiff.” Hill v. White,
321 F.3d 1334, 1335 (11th Cir. 2003). The issue before the Court is “‘not whether [Plaintiff] will
ultimately prevail’ . . . but whether his complaint [is] sufficient to cross the federal court’s
threshold.” Skinner v. Switzer, 562 U.S. 521, 529–30 (2011) (quoting Scheuer v. Rhodes, 416
U.S. 232, 236 (1974)).
III.

DISCUSSION
A. Civil Theft
The Order on the Defendant’s prior Motion to Dismiss explained that:
To prevail on an action for civil theft, the plaintiff must prove that the defendant
(1) knowingly; (2) obtained or used, or endeavored to obtain or use, the plaintiff’s
property; (3) with felonious intent; (4) to deprive the plaintiff of its right to or a
benefit from the property or appropriate the property to the defendant’s own use
or to the use of a person not entitled to use the property.

[ECF No. 25 at 3] (quoting Howard v. Murray, 184 So. 3d 1155, 1167 n.24 (Fla. 1st DCA
2015)).
Plaintiff’s Second Amended Complaint, again, fails to allege that Defendant acted with
felonious intent. The Second Amended Complaint contains additional background information
relating to Plaintiff’s relationship with non-party Vijay Mallya and gives some information
relating to Defendant’s knowledge of such relationship. [ECF No. 26 at ¶¶ 5, 8]. Specifically,
Plaintiff alleges that “Defendant knew of Plaintiff and Vijay Mallya[’s] close relationship and
used this . . . as a way to gain Plaintiff’s trust and make Plaintiff believe [that] the funds came
from Vijay Mallya for the benefit[] of the Defendant.” [Id. at ¶ 28]. However, the core
allegations remain the same. Plaintiff re-alleges that the $500,000 is his property, he notified
Defendant that the transfer of funds was an error, Defendant has refused to return the money, and
the purpose of the transfer was later learned to be improper [Id. at ¶¶ 14, 17, 20]. Plaintiff’s
additional allegations do not sufficiently indicate that Defendant acted with the requisite intent to

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commit the tortious act alleged. Thus, Plaintiff’s Second Amended Complaint lacks sufficient
factual allegations from which the Court could “draw [a] reasonable inference” that Defendant
acted with felonious intent as required to be liable for civil theft. See Iqbal, 556 U.S. at 678.
Accordingly, the Motion is granted as to Count I.
B. Fraud
Defendant moves to dismiss Plaintiff’s claim of fraud, arguing that Plaintiff has failed to
plead his claim with the necessary specificity. When a plaintiff alleges fraud, it “must state with
particularity the circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b); see, e.g.,
Inman v. Am. Paramount Fin., 517 F. App’x 744, 748 (11th Cir. 2013). This heightened pleading
standard serves to “alert[] defendants to the ‘precise misconduct with which they are charged’
and protect[] defendants ‘against spurious charges of immoral and fraudulent behavior.’” Brooks
v. Blue Cross & Blue Shield of Fla., 116 F.3d 1364, 1370–71 (11th Cir. 1997). Here, Rule 9
requires that the complaint include: (1) the precise statements made by the parties, (2) the time
and location where statements were made and the identity of the person who made them, (3) the
content of the statements “and the manner in which they misled the plaintiff,” and (4) what the
defendant gained as a result of the fraudulent activity. See id. at 1371.
The Court previously indicated that Plaintiff’s claim did not meet this heightened
standard, because it was lacking sufficient factual allegations regarding “the substance, time, or
location of Defendant’s untruthful assertions.” [ECF No. 25 at 5]. Plaintiff’s Second Amended
Complaint provides additional dates and information regarding the circumstances surrounding
Defendant’s statements. Plaintiff alleges that in June and July of 2013 he was in regular
communication with Defendant relating to Kingfisher Airlines’ business strategies; on or about
July 8, 2013, Plaintiff received a $500,000 transfer from Vijay Mallya; and on July 10, 2013,
Plaintiff wired the $500,000 to Defendant. [ECF No. 26 at ¶ 6–7, 13]. It is clear from the

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Complaint that Plaintiff and Defendant communicated regarding the funds during these dates.
[Id. at ¶¶ 6–13]. Plaintiff also alleges that he wired Defendant the money because Defendant
insisted it was owed to him for back salary. [Id. at ¶¶ 9, 12, 15]. Accordingly, the Court finds that
Plaintiff has sufficiently alleged the facts necessary to support his claim for fraud. Therefore, the
Motion is denied as to Count II.
IV.

CONCLUSION
Based on the foregoing, it is ORDERED AND AJUDGED as follows:
1. Defendant’s Motion to Dismiss the Plaintiff’s Amended Complaint [ECF No. 13] is
GRANTED in part and DENIED in part;
2. Count I of Plaintiff’s Second Amended Complaint is DISMISSED without prejudice.
3. Defendant’s Motion with respect to Count II is DENIED.
4. Defendant’s Motion for Attorney’s Fees is denied.
5. The parties shall submit a joint proposed scheduling order indicating new trial dates
within 14 days of the date of this Order.
DONE AND ORDERED in Chambers at Miami, Florida, this 6th day of March, 2019.

________________________________
DARRIN P. GAYLES
UNITED STATES DISTRICT JUDGE

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