Catano v. Capuano et al
Filing
176
ORDER granting in part and denying in part 142 Defendant's Motion to Dismiss. Signed by Magistrate Judge Edwin G. Torres on 2/11/2020. See attached document for full details. (js02)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 18-20223-Civ-TORRES
ZORAIDA CATANO,
Plaintiff,
v.
PAULINE CAPUANO and
TRAVIS SCHIRATO,
Defendants.
______________________________________/
ORDER ON DEFENDANT’S MOTION TO DISMISS
This matter is before the Court on Pauline Capuano’s (“Defendant” or “Mrs.
Capuano”) motion to dismiss [D.E. 142] against Zoraida Catano (“Plaintiff”).
Plaintiff responded to Defendant’s motion on January 9, 2020 [D.E. 168] to which
Defendant replied on January 17, 2020.
motion is now ripe for disposition.
[D.E. 171-1].
Therefore, Defendant’s
After careful consideration of the motion,
response, reply, and relevant authority, and for the reasons discussed below,
Defendant’s motion is GRANTED in part and DENIED in part.1
On March 22, 2019, the parties consented to the jurisdiction of the
undersigned Magistrate Judge. [D.E. 84].
1
1
I.
BACKGROUND
In 2006, Mauricio Capuano (“Mr. Capuano”), as the sole shareholder,
incorporated his company, GSA Realty. [D.E. 1 at ¶¶ 10, 12]. A few months after
GSA Realty’s formation, the company purchased real property (the “Property”) in
Miami for $2,600,000.2 See id. at ¶ 11. In 2007, Mr. Capuano separated from his
wife, Mrs. Capuano, and remained estranged from her until his death in January
2014.
See id. at ¶ 13.
After the separation, Mr. Capuano began a romantic
relationship with Plaintiff, in Guatemala, which resulted in a daughter who was
born in November 2008.
In the meantime, Mrs. Capuano moved to the
Netherlands.
Several years later, in October 2013, Travis Schirato (“Mr. Schiarto”), Mrs.
Capuano’s nephew and a convicted felon, executed a purchase and sale agreement,
to sell GSA Realty’s Miami property to Laurinus Pierre and Michele Jean Gilles for
$2,300,000. At the time, Mr. Schirato held no position with GSA Realty nor did he
have any ownership interest in the company. A few months later, Mr. Capuano
died in Miami on January 2, 2014.
According to Mr. Capuano’s 2009 will –
submitted for probate in Guatemala – he devised half of his estate to Plaintiff and
the other half to his adult daughter, Graziela Capuano.3
After Mr. Capuano’s death, Plaintiff alleges that Defendants held a series of
telephone calls in which they discussed the pending sale of the Property, agreed to
2
The Property is located at 12901 Biscayne Bay Drive, Miami, Florida 33161.
3
Mr. Capuano executed the will five years prior to his death on August 7,
2009.
2
embezzle the proceeds from GSA Realty, and to conceal the embezzlement through
a series of transfers and financial transactions. Purporting to act on GSA Realty’s
behalf, Mr. Schirato, nearly three months after Mr. Capuano’s death, attended the
closing of the sale, receiving $300,000 on behalf of GSA Realty and obtaining a
promissory note from the buyers for $2,000,000, also payable to GSA Realty.
Immediately after the closing on March 25, 2014, Mr. Schirato transferred
the $300,000 from GSA Realty to himself or corporate entities under his control.
Mr. Schirato then transferred $114,000, out of the $300,000, to Mrs. Capuano who
then transferred those funds to a personal bank account in Guatemala. Plaintiff
believes that, thereafter, Mr. Schirato transferred $26,666.68 in interest payments
on the property to himself or his corporate entities. Subsequently, without any
authority to do so, Mr. Schirato advised the buyers, by letter, that servicing of the
loan was being transferred from GSA Realty to Mr. Schirato, individually. After the
buyers sent him another series of interest payments, totaling $40,000.02, Mr.
Schirato sent them another letter, stating that he had assigned the next thirty-six
payments to two individuals in New York.
A short time later, on August 20, 2014, Mr. Schirato executed a balloon note
endorsement and assignment of mortgage deed, in exchange for a substantial sum,
purporting to assign the note from GSA Realty to the individuals in New York.
Thereafter, Plaintiff alleges that Mrs. Capuano and Mr. Schirato persisted in
conspiring to hide the embezzled funds, with Mrs. Capuano making false
3
representations to the probate court and further impeding the recovery of estate
assets, continuously through the time of the filing of Plaintiff’s complaint.
II.
APPLICABLE PRINCIPLES AND LAW
In ruling on Defendant’s motion to dismiss, the Court takes the allegations in
the complaint as true and construes the allegations “in the light most favorable to
the [Plaintiff].” Rivell v. Private Health Care Systems, Inc., 520 F.3d 1308, 1309
(11th Cir. 2008) (citing Hoffman–Pugh v. Ramsey, 312 F.3d 1222, 1225 (11th Cir.
2002)). “When considering a motion to dismiss, all facts set forth in [Plaintiff’s]
complaint ‘are to be accepted as true and the court limits its consideration to the
pleadings and exhibits attached thereto.’” Grossman v. Nationsbank, N.A., 225 F.3d
1228, 1231 (11th Cir. 2000) (quoting GSW, Inc. v. Long Cnty., 999 F.2d 1508, 1510
(11th Cir. 1993)). A motion to dismiss under Rule 12(b)(6) “is granted only when
the movant demonstrates that the complaint has failed to include ‘enough facts to
state a claim to relief that is plausible on its face.’” Dusek v. JPMorgan Chase &
Co., 832 F.3d 1243, 1246 (11th Cir. 2016) (quoting Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007)).
“While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not
need detailed factual allegations, a plaintiff’s obligation to provide the grounds of
his entitle[ment] to relief requires more than labels and conclusions . . . .”
Twombly, 550 U.S. at 555 (internal citations and quotations omitted) (alteration in
original).
“To survive a motion to dismiss, a complaint must contain sufficient
factual matter . . . .” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A complaint does
4
not
suffice
“if
it
tenders
‘naked
assertion[s]’
devoid
of
‘further
factual
enhancement.’” Id. (quoting Twombly, 550 U.S. at 557) (alteration in original).
Factual content gives a claim facial plausibility. Id. “[A] court’s duty to liberally
construe a plaintiff’s complaint in the face of a motion to dismiss is not the
equivalent of a duty to re-write it for [the plaintiff].” Peterson v. Atlanta Hous.
Auth., 998 F.2d 904, 912 (11th Cir. 1993).
III.
ANALYSIS
On July 11, 2019, the Court granted in part and denied in part Defendant’s
motion for summary judgment. [D.E. 129]. In the interests of justice, the Court
dismissed Plaintiff’s federal RICO claims and gave Plaintiff leave to refile her
complaint to set forth any viable causes of action to pair with her conspiracy claim.
Plaintiff amended her complaint on August 15, 2019 [D.E. 138] and included claims
for civil theft, constructive fraud, conversion, breach of fiduciary duty, and
conspiracy. Defendant seeks to dismiss Plaintiff’s complaint because (1) the Court
lacks diversity jurisdiction, (2) the probate exception applies, (3) res judicata
precludes Plaintiff’s claims, (4) Plaintiff failed to state a claim for which relief can
be granted, and (5) the Court should abstain from exercising jurisdiction pursuant
to the Colorado River doctrine. We will address each argument in turn.
A.
Diversity Jurisdiction
Defendant’s leading argument is that the Court lacks subject matter
jurisdiction because, without any federal question, there is not complete diversity
between the parties.
Plaintiff alleges that she is a citizen of Columbia and a
5
resident of Guatemala whereas Defendant is “citizen of the United States, whose
last established domicile was the State of Florida.” [D.E. 138 at ¶¶ 2-3]. Defendant
takes issue with this allegation because Defendant is domiciled in the Netherlands,
not Florida. Defendant then reasons that subject matter jurisdiction does not exist
because, without a federal question presented, Plaintiff – as a citizen of Columbia
and a resident of Guatemala – cannot sue another alien in federal court.
See
Molinos Valle Del Cibao, C. por A. v. Lama, 633 F.3d 1330, 1340 (11th Cir. 2011)
(“[A]lienage jurisdiction prohibits an alien from suiting another alien in federal
court unless the suit includes U.S. citizens as plaintiffs and defendants.”). Because
Defendant is domiciled outside the United States with no intention of returning,
Defendant requests that this case be dismissed for lack of subject matter
jurisdiction.
We need not give much consideration to Defendant’s argument because
Defendant already presented it in November 2019 when requesting a motion to stay
discovery. The same reasoning applies now, as it did then, because Defendant’s
statements with respect her domicile is inconsistent with her prior statements in
this case. When Plaintiff filed her initial complaint in January 2018, she alleged
that Defendant was a resident of the Netherlands. [D.E. 1]. This is consistent with
Defendant’s representation in her motion to dismiss for lack of subject matter
jurisdiction.
However, when Defendant filed her answer to Plaintiff’s initial
complaint in January 2019, Defendant denied that she was domiciled in the
Netherlands.
[D.E. 54].
It is therefore uncertain as to where Defendant is
6
domiciled because she previously denied being domiciled in the Netherlands and
now claims the exact opposite in her motion to dismiss.
Given the lack of clarity on where Defendant is domiciled, the Court will not
dismiss Plaintiff’s complaint solely for a lack of subject matter jurisdiction because
it would be unwise and premature to make this determination until Defendant’s
domicile can be conclusively determined. Defendant’s argument is also unavailing
because – even if the parties are not completely diverse – a federal court has the
discretion to exercise supplemental jurisdiction over non-diverse state law claims
when the court dismissed those claims over which it had original jurisdiction.
See Smith v. City of Tallahassee, 2019 WL 5205969, at *4 (11th Cir. Oct. 16, 2019)
(“A federal court has supplemental jurisdiction over state law claims when they ‘are
so related to claims in the action within such original jurisdiction that they form
part of the same case or controversy under Article III of the United States
Constitution.”’) (quoting 28 U.S.C. § 1367(a)); Palmer v. Hospital Authority of
Randolph County, 22 F.3d 1559, 1567 (11th Cir. 1994). Therefore, Defendant’s
motion to dismiss for lack of diversity jurisdiction is DENIED because the Court
shall retain jurisdiction for now because of the time expended litigating this case,
judicial economy, convenience, fairness, and comity. See Smith, 2019 WL 5205969,
at *4 (“The court should consider ‘judicial economy, convenience, fairness, and
comity’ in exercising its supplemental jurisdiction.”) (quoting Rowe v. City of Fort
Lauderdale, 279 F.3d 1271, 1288 (11th Cir. 2002)).
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B.
The Probate Exception
Defendant’s second argument is that this case should be dismissed because
the probate exception applies.
Federal courts are courts of limited jurisdiction,
which possess only the power authorized by the Constitution and by statute. See
Kokkenon v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). Title 28 §
1332 provides for original jurisdiction over civil cases wherein the amount in
controversy exceeds $75,000 and the parties are citizens of different states. 28
U.S.C. § 1332. “Federal courts, however, have recognized an exception to federal
diversity jurisdiction in cases involving state probate matters.” Stuart v. Hatcher,
757 F. App’x 807, 809 (11th Cir. 2018). The probate exception is narrow, applying
only to cases that would require a federal court to (1) probate a will, (2) administer
an estate, or (3) “dispose of property that is in the custody of a state probate
court.” Marshall v. Marshall, 547 U.S. 293, 311–12 (2006); see also Stuart, 2018 WL
6329699, at *1. Federal courts are free to adjudicate probate or estate-related cases
that do not fall within the bounds of those three categories. See Marshall, 547 U.S.
at 312.
The
general
rule
in
determining
whether
a
claim
falls
under
the probate exception is whether a particular claim and the relief it seeks
to interfere with the property that is in the possession of a state probate
court. See Markham v. Allen, 326 U.S. 490, 494 (1946); see also Marshall, 547 U.S.
at 311 (“[W]e comprehend the ‘interference’ language in Markham as essentially a
reiteration of the general principle that, when one court is exercising in
8
rem jurisdiction over a res, a second court will not assume in rem jurisdiction over
the same res.”). District courts in the Eleventh Circuit have no jurisdiction over
actions seeking a valuation of estate assets, a transfer of property that is under
probate, or “a premature accounting of an estate still in probate.” Turton n v.
Turton, 644 F.2d 344, 348 (5th Cir. 1981); Mich. Tech Fund v. Century Nat’l Bank of
Broward, 680 F.2d 736, 741 (11th Cir. 1982).
On the other hand, federal courts can adjudicate claims relating to statecourt probate or estate cases so long as adjudicating the claim does not require the
federal court to interfere with the property under the control of the state court. See
Markham, 326 U.S. at 494 (“[W]hile a federal court may not exercise its jurisdiction
to disturb or affect the possession of property in the custody of a state court, it may
exercise its jurisdiction to adjudicate rights in such property where the final
judgment does not undertake to interfere with the state court’s possession save to
the extent that the state court is bound by the judgment to recognize the right
adjudicated by the federal court.”). As the Eleventh Circuit has explained:
[A] creditor may obtain a federal judgment that he has a valid claim
against the estate for one thousand dollars, or a devisee may obtain a
declaratory judgment that a probated will entitles him to twenty
percent of the net estate. What the federal court may not do, however,
is to order payment of the creditor’s thousand dollars, because that
would be an assumption of control over property under probate.
Similarly, the court may not find that the devisee’s twenty percent
share is worth $20,000, because it is the province of the probate court
to determine the dollar amount of the net estate after liquidating
assets and paying claims. Instead, the federal court is limited to
declaring the validity of the asserted claims, leaving the claimants to
assert their federal judgments as res judicata in the probate court.
Turton, 644 F.2d at 347 (emphasis added).
9
In determining whether a suit interferes with property controlled by a
probate court, federal courts “look past the plaintiff’s theory of relief and consider
the ‘effect a judgment would have on the jurisdiction of the probate court.’” Stuart,
2018 WL 6329699, at *1 (quoting Turton, 644 F.2d at 347). The central inquiry is
therefore whether a district court, “as a court of equity, can fashion the relief
granted so that the relief would be within [the court’s] jurisdiction and would not
interfere with the jurisdiction of the probate court.” Hudson v. Abercrombie, 682 F.
Supp. 1218, 1220 (N.D. Ga. 1987) (citing Waterman v. Canal-Louisiana Bank &
Trust Co., 215 U.S. 33, 45–47 (1909)).
Defendant argues that the probate exception applies in this case because
Plaintiff seeks damages for the Florida estate that is now in the custody of the
probate court. [D.E. 138 at ¶ 2] (“In bringing this action, Plaintiff seeks to return
the stolen shares, funds, and personal property, or the value of such items, to the
Estate, along with any applicable additional or special damages awarded by the
Court.”).
Defendant also claims that unlike, Plaintiff’s prior allegations, the
amended complaint now gives rise to the probate exception because the curator has
not completed the estate’s administration. This includes the final accounting and
the petition for discharge.
Therefore, until the estate proceedings conclude in
probate court, Defendant suggests that this lawsuit interferes with the same
property at issue and that this case must be dismissed.
This is the second time that Defendant has relied on the probate exception in
seeking to dismiss Plaintiff’s complaint. On January 9, 2019, Judge Scola rejected
10
Defendant’s argument that the probate exception applied for three reasons: (1) that
the complaint does not seek to probate or annul the decedent’s will, or otherwise
administer the estate, (2) that the claims presented do not seek to dispose of
property that is in the custody of the probate court, and (3) that the probate
exception does not apply to federal RICO claims. [D.E. 42]. There is no dispute
that the third exception is no longer at issue since Plaintiff refiled her complaint
with only state law claims. And it is equally clear that the first exception does not
apply because Plaintiff’s complaint does not seek to probate or interpret the
decedent’s will. The only issue is the second exception: whether the property in this
case is the same as the property in the custody of the probate court.
Defendant relies primarily on the district court’s decision in Fisher v. PNC
Bank N.A., 2019 WL 4697593, at *2 (S.D. Fla. Sept. 25, 2019).
In Fisher, the
plaintiff alleged that the defendant, PNC Bank, mishandled her deceased mother’s
bank account by either knowingly or negligently allowing the plaintiff’s brother to
steal from it. The plaintiff claimed that, before her mother had an account at PNC
Bank, the mother had an account at Royal Bank of Canada. This account, dating
back to the 1980s, included $150,000 of the plaintiff’s money. The mother then
transferred all the money in the Royal Bank account to the PNC Bank account.
The district court held that, in looking past the plaintiff’s theory of relief and
considering the effect of a judgment, it was evident that the plaintiff was
attempting to circumvent the normal probate process with a claim against PNC
Bank. The court also stated that the alleged theft occurred in a bank account that
11
the mother owned – as opposed to the plaintiff – and that there were no allegations
that the brother (i.e. the wrongdoer) completely depleted the funds from the
mother’s account. There were also no allegations that PNC Bank stole or enabled
the brother to steal all of the $150,000 from the mother’s account. The court then
dismissed the case and closed it, in part, because Plaintiff lacked standing. See
Fisher v. PNC Bank N.A., 2019 WL 4697593, at *2 (S.D. Fla. Sept. 25, 2019)
(“Plaintiff, who is not the personal representative of the estate, has no standing to
bring claims on behalf of the estate against the Defendants.”) (citing Tennyson v.
ASCAP, 477 F. App’x 608, 610-11 (11th Cir. 2012)). The court further reasoned that
the mother’s estate was already seeking relief against PNC Bank for malfeasance
and that “any ruling by this Court in this case would in fact implicate the ultimate
accounting of the estate, as any funds recovered from the litigation between the
estate and PNC Bank would be subject to distribution among the beneficiaries of
the estate.” Id. at *2. As such, the court granted PNC Bank’s motion to dismiss
because the probate exception applied.
Defendant claims that the same reasoning applies to the facts of this case
because Plaintiff has already filed an action against Defendant in probate court.
Defendant also contends that there are ongoing proceedings against Mr. Schirato
and that any funds recovered will be subject to distribution among the estate
beneficiaries.
Defendant then reasons that this will implicate the estate’s final
accounting and that, until the administration of the estate is complete, the estate
property remains under the control of the probate court. Accordingly, Defendant
12
claims that all of the property at issue is either in the custody of the probate court
or will be at the end of the proceedings against Mr. Schirato, and therefore the
probate exception applies to the facts of this case.
The question presented is whether the property that Plaintiff seeks (i.e. the
return of stolen shares, funds, and personal property) constitutes the same property
at issue in the probate court.
If so, then the probate exception applies and
Defendant’s motion to dismiss should be granted. But, if not, the property sought is
considered separate and the probate exception is inapplicable.
A case that better answers the question of whether a request for the return of
property to an estate implicates the probate exception is a district court’s decision in
Marcus v. Quattrocchi, 715 F. Supp. 2d 524, 534 (S.D.N.Y. 2010). There, a group of
beneficiaries filed claims of fraud and breach of fiduciary duty against a former
personal representative so that the latter would return property to a trust that was
in the possession of the defendant.
The district court rejected the defendant’s
argument that the probate exception applied because requests to return property –
as opposed to the disposition of property in a probate proceeding – does not fall
within the probate exception:
Requests to return property to an estate or trust, rather than to
dispose of property currently part of an estate or trust, do not fall
within the probate exception because the res at issue is not within the
probate court’s jurisdiction if it is was not part of the estate at the time
of the decedent’s death. See Capponi v. Murphy, 772 F. Supp. 2d 457,
466 (S.D.N.Y. 2009) (“Where a plaintiff seeks to recover assets
allegedly in a defendant’s possession so that they may be returned to
the estate, the probate exception does not apply.” (internal quotation
marks and brackets omitted)); Abercrombie v. Andrew Coll., 438 F.
Supp. 2d 243, 255–56 (S.D.N.Y. 2006) (finding that claim regarding
13
validity of property deed did “not ask the [c]ourt to decide how to
distribute any assets of [decedent’s] estate, but only to determine
whether additional assets . . . should be added to the estate, thus
making the probate exception inapplicable.”); cf. Groman v. Cola, 2007
WL 3340922, at *5-*6 (S.D.N.Y. Nov. 7, 2007) (finding that action
seeking to determine the true value of an asset possessed by the
decedent at death and sold as an estate asset fell within the probate
exception because the asset was part of the estate).
Marcus, 715 F. Supp. 2d at 534; see also Parks v. Kiewel, 2015 WL 7295457, at *4
(D. Kan. Nov. 18, 2015) (“[T]he disputed property was transferred out of Emily’s
estate either prior to or at the time of her death. As such, the requests to return the
property and set aside the transfers do not fall within the probate exception.”).
The same reasoning applies in this case because Plaintiff alleges that the
property she seeks is not in the Defendant’s control. See, e.g., Glickstein v. Sun
Bank/Miami, N.A., 922 F.2d 666, 673 (11th Cir. 1991), abrogated by Saxton v. ACF
Indus., Inc., 254 F.3d 959 (11th Cir. 2001) (rejecting the applicability of the probate
exception because “the assets at issue in this case are in the control of the
defendants rather than the probate court.”).
allegation because it is simply not true.
Defendant takes issue with this
But, given that Plaintiff’s factual
allegations must be accepted as true at the motion to dismiss stage, Defendant’s
argument is far from compelling. Defendant then suggests that, even if we accept
Plaintiff’s allegations as true, the probate exception still applies because any
property recovered in this case may be subject to distribution among the
beneficiaries of the estate. While that may be true, the relief Plaintiff seeks is
solely limited to the recovery of assets that Defendant allegedly stole. This case
does not seek, for example, a determination of how assets should be distributed. See
14
Abercrombie, 438 F. Supp. 2d at 256 (S.D.N.Y. 2006) (finding that the probate
exception does not apply because the “case does not ask the Court to decide how to
distribute any assets of Ms. Murphy's estate, but only to determine whether
additional assets, i.e., the Property, should be added to the estate, thus making the
probate exception inapplicable.”). Therefore, the relief sought does not in any way
interfere with the probate court proceedings because Plaintiff merely seeks the
return of assets that are in the Defendant’s possession.
See, e.g., Giardina v.
Fontana, 733 F.2d 1047, 1050–51 (2d Cir. 1984) (“The principal relief requested was
a declaratory judgment that the assignment was null and void and/or a rescission of
the assignment. This relief could be granted without in any way interfering with
the probate proceedings in Florida or the estate being administered.”).
Defendant then relies again on the holding in Fisher to argue that the assets
Plaintiff seeks would require an accounting of the decedent’s estate and interfere
with the probate court proceedings. Fisher is distinguishable, in part, because it
relied on a finding that the plaintiff lacked standing to bring claims on behalf of the
state against the defendants. Fisher is also not compelling because it only includes
a single sentence of analysis and fails to cite any relevant cases for the contention
that the mere accounting of an estate divests a federal court of jurisdiction if assets
are later distributed to the decedent’s beneficiaries.
In addition, the plaintiff in
Fisher and the estate in the underlying probate action sought the same relief
whereas, in this case, Plaintiff seeks relief primarily for Defendant’s actions prior to
15
her appearance as the personal representative of the estate.
Fisher is therefore
distinguishable in multiple ways and less relevant to the question presented.
A more persuasive case is the Eleventh Circuit’s decision in Michigan Tech
Fund v. Century Nat’l Bank, 680 F.2d 736, 741 (11th Cir. 1982), where the Court
allowed a suit against an estate that required a construction of a will.
More
specifically, the Court permitted the district court to entertain an action against a
decedent’s estate that sought a declaration that the will conveyed certain assets to
the plaintiffs. In narrowly construing the probate exception, the Court reasoned
that district courts have jurisdiction to interpret wills and to even resolve claims
against estates despite pending probate proceedings because “[c]onsideration of
[these] claim[s] . . . will not interfere with property under the state probate court’s
control.” Id. at 741.4
While the facts in Michigan Tech Fund are obviously distinguishable, the
case is instructive because it shows how narrowly the Eleventh Circuit construes
the probate exception.
Defendant advocates for a broad interpretation with an
argument that an accounting of the assets will one day interfere with the probate
court proceedings.
That is, Defendant suggests that a federal court lacks
jurisdiction because any property recovered will later require an accounting of the
assets in probate court and a decision on how those assets will be distributed to
beneficiaries.
The court also allowed the plaintiffs to assert a claim against the estate for
breach of a promise to make a will.
4
16
The problem with Defendant’s argument is that it fails to rely on any other
case to support her position and “the majority of the relevant jurisprudence holds
this request to constitute an equitable relief outside the scope of the probate
exception.” Tartak v. Del Palacio, 2010 WL 3960572, at *11 (D.P.R. Sept. 30, 2010);
see also Great West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204 (2002)
(“[E]quitable accounting does not seek any particular res or fund money”).
Defendant’s argument is also unpersuasive because it relies on matters that are
beyond the limits of this case. This action is merely concerned with assets that
Defendant purportedly stole in a conspiracy with Mr. Schirato. If Plaintiff prevails,
the probate court – not the undersigned – will determine how those assets will be
distributed. There is, in other words, no overlap between this case and the probate
court proceedings because the property Plaintiff seeks is entirely separate.
Defendant claims that the matters are related and that the probate exception
applies. We agree that the property Plaintiff seeks is, in some respects, related to
the estate but “the probate exception is narrow, and should not be used as an excuse
to decline to exercise jurisdiction over actions merely because they involve ‘probate
related matters.’” Marcus, 715 F. Supp. 2d at 531 (citing Marshall, 541 U.S. at
293).
Because this case merely seeks the return of property that is in the
Defendant’s possession and does not in any way interfere with the probate court
proceedings, the probate exception does not apply to the facts of this case and
Defendant’s motion to dismiss is DENIED.
17
C.
Res Judicata
Defendant’s third argument is that this case should be dismissed because of
res judicata. Defendant claims that the state probate matter includes the same
claims as this action, including the same parties and a final judgment on the merits.
While Mr. Schirato is not a party to the state case, Defendant contends that this is
inconsequential because the inclusion of an additional party does not defeat res
judicata. See Tharpe v. Nationstar Mortg., LLC, 2016 WL 7668478, at *4 (S.D. Fla.
Oct.
21,
2016)
(“[T]he exclusion of additional parties to either action does
not
remedy the preclusive effect of Plaintiff's and Nationstar's inclusion in both
actions.”). As such, Defendants requests that the Court dismiss every count in
Plaintiff’s complaint.
“Under res judicata, also known as claim preclusion, a final judgment on the
merits bars the parties to a prior action from re-litigating a cause of action that was
or could have been raised in that action.” In re Piper Aircraft Corp., 244 F.3d 1289,
1296 (11th Cir. 2001) (citing Allen v. McCurry, 449 U.S. 90, 94 (1980)). Federal
courts must apply the “res judicata principles of the law of the state whose decision
is set up as a bar to further litigation.” Kizzire v. Baptist Health System Inc., 441
F.3d 1306, 1308 (11th Cir. 2006). The elements under the doctrine are: (1) identity
of the things sued for; (2) identity of the cause of action; (3) identity of the parties
and (4) identity of the quality in the person for or against whom the claims are
made. Jenkins v. Lennar Corp., 972 So. 2d 1064, 1065 (Fla. 3d DCA 2008). “At all
times, the burden is on the party asserting res judicata . . . to show that the later-
18
filed suit is barred.” Ragsdale v. Rubbermaid, Inc. 193 F.3d 1235, 1238 (11th Cir.
1999).
However, res judicata extends only to “the facts and conditions as they
existed at the time the judgment was rendered, or more correctly speaking, at the
time the issues in the first action were made, and to the legal rights and relations of
the parties as fixed by the facts determined by that judgment.” Hialeah Race
Course, Inc. v. Gulfstream Park Racing Ass’n, 245 So. 2d 625, 628 (Fla. 1971).
“When other facts or conditions intervene before the second suit, furnishing a new
basis for the claims and defenses of the respective parties, the issues are no longer
the same and the former judgment cannot be pleaded in bar of the second
action.” Id.
Generally, res judicata “is an affirmative defense that should be raised under
Rule 8(c),” but “a party may raise a res judicata defense by motion rather than by
answer where the defense’s existence can be judged on the face of the
complaint.” Concordia v. Bendekovic, 693 F.2d 1073, 1075 (11th Cir. 1982).
Although analysis of a Rule 12(b)(6) motion is limited primarily to the face of the
complaint and the attachments thereto, a court may consider documents attached to
the motion to dismiss if they are referred to in the complaint and are central to a
plaintiff's claim. See Brooks v. Blue Cross and Blue Shield of Florida, Inc., 116 F.3d
1364, 1368–69 (11th Cir. 1997) (citation omitted). However, when a court considers
matters outside the pleadings,
the Rule
12(b)(6) motion
converts
into
a Rule
56 motion for summary judgment. See Garcia v. Copenhaver, Bell & Assocs., 104
19
F.3d 1256, 1266 n.11 (11th Cir.1997). The court must notify the parties and give
them ten days to submit “any relevant evidence and arguments in support or
opposition to the merits.” Id.(citation omitted).
Defendant’s motion fails, at the outset, because res judicata cannot be judged
on the face of Plaintiff’s complaint. Not to be deterred, Defendant then claims that
the cases are related because “they involved the same things being sued for here:
the Estate’s property generally and the GSA Property (and proceeds therefrom)
specifically.” [D.E. 149 at 9]. But, this representation, without any other evidence,
falls woefully short of the requirements for res judicata to apply because it is
entirely unclear how and to what extent this case is the same as the proceedings in
state court. The motion also fails because it omits any comparative examination of
the claims in the probate court with Plaintiff’s amended complaint. And making
matters worse, Defendant fails to present any authority that allows for a res
judicata defense to succeed when the items to be sued for (i.e. property) are only
generically related. That is, according to Defendant’s own arguments, the property
in the proceedings are not the same – they are only similar to the extent they each
relate to the return or administration of the decedent’s assets. Because Defendant
has failed to explain how the two cases include the same claims and this res
judicata defense cannot be adjudicated on the face of Plaintiff’s complaint,
Defendant’s motion to dismiss Plaintiff’s complaint is DENIED.
20
D.
Failure to State a Claim
(1) Civil Theft
Turning to Defendant’s next arguments that are premised on Plaintiff’s
failure to state a claim, Defendant argues that Plaintiff failed to serve a written
demand letter to support a claim for civil theft in count one.
Florida Statute
772.11 provides in relevant part the following:
Before filing an action for damages under this section, the person
claiming injury must make a written demand for $200 or the treble
damage amount of the person liable for damages under this section. If
the person to whom a written demand is made complies with such
demand within 30 days after receipt of the demand, that person shall
be given a written release from further civil liability for the specific act
of theft or exploitation by the person making the written demand.
Fla. Stat. § 772.11(1) (emphasis added); Korman v. Iglesias, 736 F. Supp. 261, 267
(S.D. Fla. 1990) (“[B]efore an action for civil theft is filed the plaintiff must make
written demand for payment upon the defendant, and allow 30 days for
payment.”). Defendant claims that, contrary to Plaintiff’s allegations, Plaintiff
made a written demand on August 22, 2019 after she filed her amended complaint
on August 15, 2019. Because Plaintiff failed to comply with the requirements of the
statute, Defendant concludes that Plaintiff’s civil theft claim should be dismissed.
Plaintiff concedes in her response that she did not strictly comply with
Florida law in giving Defendant notice of her civil theft claim because of the
deadline to amend her complaint.
Plaintiff argues, however, that notice was
provided and that the complaint includes the necessary allegations. [D.E. 138 at ¶
60] (“Pauline and Travis have been provided with notice and a demand for payment
21
in accordance with Section 772.11, Florida Statutes.”). Plaintiff therefore concludes
that any failure to strictly comply with Fla. Stat. § 772.11 is not grounds for
dismissal because Plaintiff has substantially complied with the statute.
We agree with Defendant that Plaintiff failed to strictly comply with Fla.
Stat. § 772.11. We disagree, however, that Plaintiff’s failure to serve a written
demand letter thirty days before filing her amended complaint is grounds for
dismissal of her civil theft claim. “[T]he demand requirement in the statute is not
substantive because it does not relate to the activities that give rise to the cause of
action itself.
It exists to ‘encourage negotiation and settlement prior to the
commencement of litigation.”’ Cont’l 332 Fund, LLC v. Albertelli, 317 F. Supp. 3d
1124, 1145 (M.D. Fla. 2018) (quoting In re Tadlock, 2010 WL 8320065, at *5 (Bankr.
M.D. Fla. Sept. 1, 2010)). That is why courts in our Circuit have enforced the
demand
requirement
leniently
and
routinely
denied
motions
to
dismiss
nonconforming claims. See, e.g., Inglis v. Wells Fargo Bank N.A., 2017 WL 637485,
at *7 (M.D. Fla. Feb. 16, 2017) (“Assuming this fails to strictly comply with the
requirement of Florida Statute § 772.11, the Court finds no prejudice to Wells Fargo
from the non-compliance.”); Deman Data Sys., LLC v. Schessel, 2014 WL 6751195,
at *23 (M.D. Fla. Dec. 1, 2014), amended on reconsideration, 2015 WL 58650 (M.D.
Fla. Jan. 5, 2015). Given the procedural posture of this case and the parties’
familiarity with the acts complained of, Plaintiff’s failure to strictly comply with the
pre-suit notice requirement is harmless and Defendant’s motion to dismiss for
Plaintiff’s failure to strictly comply with Fla. Stat. § 772.11 is DENIED.
22
Defendant also argues that Plaintiff’s civil theft claim should be dismissed
because it fails to include an allegation that Defendant acted with felonious intent.
To state a claim for civil theft under Florida law, a plaintiff must allege that a
defendant “(1) knowingly (2) obtained or used, or endeavored to obtain or use,
[plaintiff's] property with (3) ‘felonious intent’ (4) either temporarily or permanently
to (a) deprive [plaintiff] of [his] right to or a benefit from the property or appropriate
the property to [defendant’s] own use or to the use of any person not entitled to the
property.”
United Technologies Corp. v. Mazer, 556 F.3d 1260, 1270 (11th Cir.
2009) (citing Fla. Stat. §§ 772.11, 812.014); see also Almeida v. Amazon.com,
Inc., 456 F.3d 1316, 1326–27 (11th Cir. 2006); Gersh v. Cofman, 769 So. 2d 407, 409
(Fla. 4th DCA 2000) (“In order to establish an action for civil theft, the claimant
must prove the statutory elements of theft, as well as criminal intent.”).
Plaintiff’s response is that Defendant’s motion lacks merit because she
alleges that “Pauline and Travis intended to and did commit a pattern of illegal and
felonious acts in order to permanently deprive the Estate . . . to their own use.”
[D.E. 138 at ¶ 58]. Defendant complains that this allegation is too conclusory and
that it fails to identify any specific evidence to support a civil theft claim. We
disagree, however, that the civil theft claim should be dismissed for this reason
because the remaining allegations in the complaint show how Defendant committed
perjury, engaged in financial transactions to steal funds, and concealed her
activities in a conspiracy with Mr. Schirato. Therefore, while the sentence that
Defendant identifies is itself conclusory, the allegation of felonious intent is well-
23
supported when joined with the remaining allegations in Plaintiff’s complaint. As
such, Defendant’s motion to dismiss Plaintiff’s civil theft claim for failing to allege
felonious intent is DENIED.
Defendant’s final argument, as to count one, is that it should be dismissed
because it fails to allege an immediate right to possession. Defendant claims that
Plaintiff cannot allege an immediate right to possession because the assets are the
property of the Florida estate.
“Under Florida law, a plaintiff in an action for
conversion or civil theft must establish possession or an immediate right to
possession of the converted property at the time of the conversion.” United States v.
Bailey, 419 F.3d 1208, 1212 (11th Cir. 2005).5
Defendant’s argument is unpersuasive because, while Plaintiff has not
alleged that she had an immediate right to possession, she has shown that – as a
beneficiary of the decedent’s will – she was entitled to possession of half of the
estate’s assets at the time of the conversion. If Plaintiff had alleged that Defendant
converted the property prior to Mr. Capuano’s death, then Defendant would have a
more compelling argument that Plaintiff did not have a right to possession at the
time of the alleged conversion because Plaintiff’s interest would have been a mere
expectancy. See, e.g., Seropian v. Wachovia Bank, N.A., 2010 WL 2949658, at *3
(S.D. Fla. July 26, 2010) (dismissing plaintiffs’ civil theft claim because plaintiffs
alleged that the civil theft occurred in December of 2008 when the decedent was
The Florida common-law rule is in contrast to the “modern view of
conversion,” which allows for an action where the plaintiff has “some property
interest” in the allegedly converted goods. Bailey, 419 F.3d at 1214.
5
24
still living and therefore “[p]laintiffs allegations fail to meet the requirement that
[p]laintiffs had possession of the property or an immediate right to possession at the
time of the conversion.”); see also Balcor Property Management, Inc. v. Ahronovitz,
634 So. 2d 277, 280 (Fla. 4th DCA 1994) (finding that a mere expectancy cannot
form the basis for a civil theft claim). Because the estate’s assets are allegedly in
the Defendant’s possession and Plaintiff had a right to possess those assets at the
time of conversion, Plaintiff has presented a viable civil theft claim and Defendant’s
motion to dismiss count one is DENIED.
(2) Conversion
Defendant’s next argument is that Plaintiff’s conversion claim in count three
fails because Florida law requires a party that was previously in rightful possession
to demand a return of his or her party. Defendant claims that Plaintiff failed to
allege a return of her assets and that, according to Plaintiff’s own allegations, her
conversion claim cannot stand. Thus, Defendant concludes that Plaintiff’s failure to
allege a demand for the return of her property warrants dismissal of her conversion
claim.
Conversion is an unauthorized act that deprives a person of his property
permanently or for an indefinite time. See Marine Transp. Servs. Sea-Barge Group,
Inc. v. Python High Performance Marine Corp., 16 F.3d 1133, 1140 (11th Cir.
1994) (“In Florida, the tort of conversion is an unauthorized act which deprives
another of his property permanently for an indefinite time.”). “A conversion occurs
when a person who has a right to possession of property demands the property’s
25
return and the demand is not or cannot be met.” Id. Before a conversion can occur,
a party that was previously in rightful possession of another party’s funds must be
informed by the other party that: “1) continued possession of the funds is no longer
permitted; 2) a demand for return of the funds is necessary; and 3) the party
holding the funds must fail to comply with the demand.” Black Bus. Inv. Fund of
Cent. Fla., Inc. v. Fla. Dep’t of Econ. Opportunity, 178 So.3d 931, 937 (Fla. 1st DCA
2015).
Here, Defendant’s argument is well taken because there is no allegation in
the amended complaint where Plaintiff alleges that she made a demand for the
return of her assets. The only allegation that Plaintiff identifies is in paragraph
seventy-two of her complaint where she alleges that “[t]he Estate (and Zoraida, as
beneficiary) has thus been deprived of shares of GSA Realty and personal property
in an amount exceeding $2,000,000.00, with the final accounting of damages to be
determined at trial.” [D.E. 138 at ¶ 138]. But, this allegation is not a demand for
the return of assets. The facts of this case also do not fit within the exception to the
general rule where a demand for a return of assets may be omitted where the
demand would be futile.6 This exception is most commonly used when there are
intangible business interests. See, e.g., Joe Hand Promotions, Inc. v. Hart, 2012 WL
1289731, at *2 (S.D. Fla. Apr. 16, 2012) (“Since we are dealing the alleged wrongful
use of a
broadcast,
which cannot be returned once
wrongfully
shown,
a demand for return of the wrongfully converted property would be futile.”).
6
Plaintiff also never alleges that a demand would have been futile.
26
Because Plaintiff is missing an essential element of her conversion claim that can
be remedied in an amended complaint, Defendant’s motion to dismiss count three is
GRANTED without prejudice.
(3) Constructive Fraud
Count two of Plaintiff’s complaint alleges that Defendant committed
constructive fraud.
Defendant argues that this claim fails as a matter of law
because the amended complaint never alleges that the parties had a fiduciary
relationship.
Plaintiff merely alleges that “[b]y virtue of her position as the
estranged, but legally-recognized, wife of Mauricio, [Defendant] enjoyed a
confidential of fiduciary relationship with Mauricio, GSA Realty, and, subsequent to
Mauricio’s passing, the Estate.” [D.E. 138 at ¶64]. Defendant argues that this fails
to establish a fiduciary relationship because – even if accepted as true – the status
of an estranged wife does not make Defendant a fiduciary to the estate’s assets.
Defendant suggests that Plaintiff’s allegations are fatal to Plaintiff’s constructive
fraud claim because even “[i]n an arms length transaction . . . there is no duty
imposed on either party to act for the benefit or protection of the other party, or to
disclose facts that the other party could, by its own due diligence have discovered.”
Lanz v. Resolution Trust Corp. 764 F. Supp. 176, 179 (S.D. Fla 1991).
Plaintiff’s response is that her complaint meets all the requirements for a
constructive fraud claim because, after Mr. Capuano died, Defendant had a duty as
the estranged wife of the decedent to not interfere with the administration of the
estate. Plaintiff alleges, for instance, that Defendant exploited her position as Mr.
27
Capuano’s estranged wife to strip the estate of assets and to conceal her unlawful
activity. Plaintiff also argues that the question of whether a fiduciary relationship
exists is a fact-intensive inquiry and that the disposition of this claim is generally
inappropriate on a motion to dismiss.
See My Classified Ads, L.L.C. v. Greg
Welteroth Holding Inc., 2015 WL 1169857, at *9 (M.D. Fla. Mar. 13, 2015) (“The
determination of whether a fiduciary duty did in fact exist, and whether it was
based on an implied relationship or express relationship created by principal
agency relationship, is better suited for the summary judgment stage of the
proceedings.”) (citations omitted). Alternatively, even if the Court decides to
adjudicate this question on a motion to dismiss, Plaintiff claims that Defendant
was, at one point, the personal representative of the estate and that this position
created a fiduciary duty under Florida law. Because Defendant breached her duty
as a fiduciary in more ways than one, Plaintiff concludes that Defendant’s motion,
as to Plaintiff’s constructive fraud claim, lacks merit.
“Constructive fraud exists where a duty arising from a confidential or
fiduciary relationship has been abused, or where an unconscionable advantage has
been taken.
Florida courts have construed the term ‘fiduciary or confidential
relation’ as being very broad.” Linville v. Ginn Real Estate Co., LLC,697 F. Supp.
2d 1302, 1309 (M.D. Fla. 2010) (citation omitted). The Florida Supreme Court has
stated, for example, that the relation and duties involved need not be legal; instead,
“they may be moral, social, domestic, or personal.” Doe v. Evans, 814 So. 2d 370,
374 (Fla. 2002)). A fiduciary or confidential relationship exists where “confidence is
28
reposed by one party and a trust is accepted by the other, or where confidence has
been acquired and abused.” Id. Therefore, “[t]he term ‘fiduciary or confidential
relation’ is a very broad one.” Am. Honda Motor Co. v. Motorcycle Info. Network,
Inc., 390 F. Supp. 2d 1170, 1179 (M.D. Fla. 2005) (quoting Quinn v. Phipps, 113 So.
419, 420 (Fla. 1927)).
To state a claim for a breach of a fiduciary or confidential relationship, “a
party must allege some degree of dependency on one side and some degree of
undertaking on the other side to advise, counsel, and protect the weaker
party.” Watkins v. NCNB Nat. Bank of Fla., N.A., 622 So. 2d 1063, 1065 (Fla. 3d
DCA 1993) (quoting Bankest Imports, Inc. v. ISCA Corp., 717 F. Supp. 1537, 1541
(S.D. Fla. 1989)). “The fact that one party places trust or confidence in the other
does not create a confidential relationship in the absence of some recognition,
acceptance or undertaking of the duties of a fiduciary on the part of the other
party.” Lanz v. Resolution Trust Corp., 764 F. Supp. 176, 179 (S.D. Fla. 1991).
A cause of action for constructive fraud, however, does not require “induced
reliance,” nor does it “necessarily require the Defendant to gain an unfair
advantage.” Kapila v. Militzok, 2015 WL 7272761, at *5 (S.D. Fla. Nov. 18,
2015) (citing Levy v. Levy, 862 So. 2d 48, 53 (Fla. 3d DCA 2003)). Rather,
constructive fraud “may be based on a representation or concealment, or the fraud
may consist of taking an improper advantage of the fiduciary relationship at the
expense of the confiding party.” Beers v. Beers, 724 So. 2d 109, 116–17 (Fla. 5th
DCA 1998).
29
Importantly, a fiduciary relationship may be implied and “premised upon the
specific factual situation surrounding the transaction and the relationship of the
parties.” Doe, 814 So. 2d at 374 (quoting Capital Bank v. MVB, Inc., 644 So. 2d 515,
518 (Fla. 3d DCA 1994)). “Unless the relationship is formed through an express
agreement, whether a fiduciary relationship exists is necessarily fact-specific to a
particular case.” Hansen v. Premier Aviation Holdings, LLC, 2017 WL 8893119, at
*4 (S.D. Fla. Nov. 21, 2017). “‘Therefore a claim alleging the existence of a fiduciary
duty usually is not subject to dismissal under Rule 12(b)(6)’ because it ‘is often
impossible to say that [a] plaintiff will be unable to prove the existence of a
fiduciary relationship.’” Reuss v. Orlando Health, Inc., 140 F. Supp. 3d 1299, 1304
(M.D. Fla 2015) (quoting Childers v. N.Y. Presbyterian Hosp., 36 F. Supp. 3d 292,
300 (S.D.N.Y. 2014)).7
Plaintiff’s constructive fraud claim fails because it is unclear how Defendant
– as the estranged wife of the decedent – had a fiduciary relationship to protect the
estate’s assets. A fiduciary relationship is, by definition, a position of trust where
one is “subject to legal responsibility for harm flowing from a breach of fiduciary
duty imposed by the relationship.” Gracey v. Eaker, 837 So. 2d 348, 352 (Fla. 2002).
If Defendant was merely the estranged wife of Mr. Capuano, that would, if
anything, cut against a finding of a fiduciary relationship. Plaintiff also fails to rely
Unlike actual fraud, constructive fraud “does not require a showing of intent
or of a misrepresentation or concealment and thus a claim for constructive fraud
need only meet the liberal pleading requirements of Rule 8.” Linville v. Ginn Real
Estate Co., LLC, 697 F. Supp. 2d 1302, 1309 (M.D. Fla 2010) (citing Wilchombe v.
TeeVee Toons, Inc., 555 F.3d 949, 958–59 (11th Cir. 2009)).
7
30
on a single case where a court has determined that the mere status of a former
spouse gives rise to a fiduciary relationship. Because Plaintiff has failed to explain
or allege how Defendant – as a former spouse – entered into a fiduciary relationship
with the protection of Mr. Capuano’s estate, Plaintiff’s constructive fraud claim
lacks an essential element to remain viable.
To cure that problem, Plaintiff argues that a fiduciary relationship arose
because of Defendant’s appointment as the personal representative of the estate.
See Pearson v. Countrywide Home Loans, Inc., 2014 WL 978324, at *3 (M.D. Fla.
Mar. 12, 2014) (“Florida has recognized a number of fiduciary relationships,
including . . . personal representative to heirs and creditors”) (citations omitted).
There are at least two problems with Plaintiff’s argument. The first is that Plaintiff
never includes this allegation in her amended complaint in connection with her
constructive fraud claim. While Plaintiff mentions that the probate court, at one
point, appointed Defendant as personal representative of the estate, the
constructive fraud claim is only tied to Defendant’s former relationship with the
decedent.
See [D.E. 138 at ¶¶ 64-66].
Plaintiff never links Defendant’s
appointment as the personal representative of the estate with Plaintiff’s allegations
for constructive fraud. Because Plaintiff may not amend her complaint in response
to a motion to dismiss, this is a sufficient reason, by itself, to dismiss Plaintiff’s
constructive fraud claim. See Guerrero v. Target Corp., 889 F. Supp. 2d 1348, 1356
n.6 (S.D. Fla. 2012) (“[A] Plaintiff may not amend a complaint via a response to a
motion to dismiss.”) (citing Long v. Satz, 181 F.3d 1275, 1278–79 (11th Cir. 1999)).
31
A separate reason Plaintiff’s constructive fraud claim is defective is because
every allegation in the complaint includes acts that predated Defendant’s
appointment as the personal representative of Mr. Capuano’s estate. It is therefore
hard to fathom how Defendant breached a fiduciary relationship for her acts as the
personal representative of the estate when the acts complained of preceded her
appointment. And if there are acts that constitute a breach of Defendant’s fiduciary
responsibilities as the personal representative of the estate, Plaintiff has failed to
make those clear in her complaint and the Court is under no obligation to piece
together allegations to rescue Plaintiff’s claims.
For these reasons, Defendant’s
motion to dismiss count two is GRANTED with prejudice.8
See Servicios De
Almacen Fiscal Zona Franca Y Mandatos S.A. v. Ryder Int’l, Inc., 264 F. App’x 878,
881 (11th Cir. 2008) (“SAF alleged that Ryder had committed a constructive fraud.
Once again, a fiduciary relationship is required in order to succeed on such a
claim.”) (citing Levy v. Levy, 862 So. 2d 48, 53 (Fla. 3rd DCA 2003)
Plaintiff’s constructive fraud claim is granted with prejudice because, given
the procedural posture of this case, it is far too late for Plaintiff to develop new
theories of liability. It is also granted with prejudice because, if Plaintiff alleges
that a fiduciary relationship arose after Defendant was appointed as the personal
representative of the decedent’s estate, that may implicate the probate exception.
In other words, there is a credible argument that Plaintiff might be seeking relief
for a matter that is best reserved for the probate court because a personal
representative’s malfeasance relates, in some respects, to how an estate is
administered. We need not answer this question, however, for the reasons already
stated. We further clarify that the dismissal of Plaintiff’s claim with prejudice is
limited solely to this case and the Court’s federal jurisdiction. To the extent these
matters are raised in probate court, that is a different matter entirely.
8
32
(“Constructive fraud occurs
when
a
duty
under
a
confidential
or fiduciary relationship has been abused”)).9
(4) Breach of Fiduciary Duty
Count four of Plaintiff’s complaint includes many of the same allegations as
Plaintiff’s constructive fraud claim. Plaintiff argues, that – by virtue of Defendant’s
position as the estranged wife of Mr. Capuano – Defendant breached her fiduciary
duties to the estate.
“The elements of a claim for breach of fiduciary duty are: (1)
the existence of a fiduciary relationship; (2) breach of a duty owed by the fiduciary;
and (3) proximate cause.” Combe v. Flocar Inv. Grp. Corp., 977 F. Supp. 2d 1301,
1307 (S.D. Fla. 2013) (citing Gracey, 837 So. 2d at 353). While “[p]laintiff is not
required to prove the existence of a fiduciary relationship,” she “must allege that
one exists with sufficient plausibility.” Neelu Aviation, LLC v. Boca Aircraft Maint.,
LLC, 2019 WL 3532024, at *3 (S.D. Fla. Aug. 2, 2019) (citing Twombly, 550 U.S. at
555).
Count four is defective for the same reasons as the constructive fraud claim
because Plaintiff fails to allege how Defendant was a fiduciary merely because she
is the former wife of Mr. Capuano. Plaintiff also fails to make clear how the acts
Defendant seeks to dismiss Plaintiff’s conspiracy claim because every other
count fails to state a claim. See Allocco v. City of Coral Gables, 221 F. Supp. 2d
1317, 1360 (S.D. Fla. 2002), aff’d, 88 F. App’x 380 (11th Cir. 2003) (“Florida does not
recognize an independent action for conspiracy.”) (citing Churruca v. Miami Jai
Alai, Inc., 353 So. 2d 547, 550 (Fla. 1977); Hoch v. Rissman, Weisberg, Barrett, 742
So. 2d 451, 460 (Fla. 5th DCA 1999)). This argument is not viable because, for the
reasons already stated, count one includes the necessary allegations to state a claim
for civil theft. Because Plaintiff has at least one claim that has survived
Defendant’s motion to dismiss, Defendant’s motion to dismiss count five is
DENIED.
9
33
that Defendant committed, while she was the personal representative of the estate,
breached her fiduciary obligations. Because Plaintiff has not presented a fiduciary
relationship nor sufficient facts of how Defendant breached her responsibilities,
Defendant’s motion to dismiss count four is also GRANTED with prejudice.10
E.
The Colorado River Doctrine
Defendant’s final argument is that this case should be dismissed because of
the Colorado River doctrine. In Colorado River, the United States Supreme Court
held that a federal court could abstain from a case if (1) a parallel lawsuit is
proceeding in state court, and (2) the interests of wise judicial administration
demand abstention. Colorado River Water Conservation Dist. v. United States, 424
U.S. 800, 818–20 (1976)). If a court determines that a federal case before it and a
state court case are parallel, it must evaluate several factors to determine whether
abstention is appropriate. See Jackson-Platts v. Gen. Elec. Capital Corp., 727 F.3d
1127, 1141 (11th Cir. 2013).
In evaluating whether there is a parallel state action, a court should evaluate
the state case to determine if it involves “substantially the same parties and
substantially the same issues” as the case before it. Jackson–Platts, 727 F.3d at
1140. “There is no clear test for deciding whether two cases contain substantially
similar parties and issues.” Acosta v. James A. Gustino, P.A., 478 F. App’x 620, 622
(11th Cir. 2012). “[I]f there is any substantial doubt about whether two cases are
parallel the court should not abstain.”
Id.
Ultimately, federal courts have a
We dismiss count four with prejudice for the same reasons provided in the
dismissal of Plaintiff’s constructive fraud claim.
10
34
“virtually
unflagging
obligation
.
.
.
to
exercise
the
jurisdiction
given
them,” Colorado River, 424 U.S. at 817 (citation omitted), and “[t]he doctrine of
abstention . . . is an extraordinary and narrow exception to the duty of a District
Court to adjudicate a controversy properly before it[.]” Id. at 813; see also Moses H.
Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 28 (1983) (“[T]he decision to
invoke Colorado River necessarily contemplates that the federal court will have
nothing further to do in resolving any substantive part of the case.”).
When Defendant presented this argument in May 2018, the Court rejected it
because Defendant failed to show that this action was parallel to any other case.
[D.E. 42]. Defendant now argues, however, that circumstances have changed, and
that abstention is appropriate.
Defendant suggests that the cases are parallel
because they arise out of the same operative facts and involve the same parties.
However, we remain unconvinced that the Colorado River doctrine applies
because – while the cases are similar – they are not parallel. The probate court
involves issues where Plaintiff sued Defendant in her official capacity as the
personal representative of the estate for Defendant’s malfeasance in obtaining and
executing her position. By contrast, Plaintiff sued Defendant individually for her
participation in a conspiracy with Mr. Schirato to strip the decedent’s estate of
assets that occurred prior to and outside the context of the probate proceedings.
Defendant takes issue with this argument because Plaintiff could have raised
these conspiracy allegations in state court. But, “Colorado River analysis looks only
to those issues actually raised in the state case.”
35
Duncanson v. Wine & Canvas
Dev., LLC, 2015 WL 12838845, at *4 (M.D. Fla. June 24, 2015), Report and
Recommendation adopted, 2015 WL 12844947 (M.D. Fla. Sept. 25, 2015), amended
in part, 2015 WL 12838361 (M.D. Fla. Nov. 20, 2015) (emphasis added) (citing
Baskin v. Bath Twp. Bd. of Zoning Appeals, 15 F.3d 569, 572 (6th Cir. 1994) (“[I]n
deciding whether a state action is parallel for abstention purposes, the district court
must compare the issues in the federal action to the issues actually raised in the
state court action, not those that might have been raised.”) (emphasis added)). And
there has been no suggestion that Plaintiff has raised these allegations in state
court, in part, because Mr. Schirato’s involvement goes well beyond the
administration of the estate in probate court.
This also relates back to the
differences in the proceedings where this case is concerned with Defendant’s theft of
estate assets in a conspiracy with Mr. Schirato as opposed to the probate
proceedings relating to the administration of the decedent’s estate.
We therefore agree with Judge Scola’s earlier ruling where he denied
Defendant’s motion to dismiss because there is no parallel proceeding. [D.E. 42].
While there is obviously some overlap between the issues presented, Defendant has
not demonstrated that the Court would have “nothing further to do in resolving any
substantive part of th[is] case” if it invoked the Colorado River doctrine. Moses H.
Cone Mem’l Hosp., 460 U.S. at 28. In other words, Defendant has now shown that
the “state-court litigation will be an adequate vehicle for the complete and prompt
resolution of the issues between the parties.” Id. (stating that, “[i]f there is any
substantial doubt as to this, it would be a serious abuse of discretion to grant the
36
stay”). Accordingly, Defendant’s motion for the Court to invoke the Colorado River
doctrine is DENIED.
IV.
CONCLUSION
For the foregoing reasons, it is hereby ORDERED AND ADJUDGED that
Defendant’s motion to dismiss [D.E. 142] is GRANTED in part and DENIED in
part:
A. Defendant’s motion to dismiss count three (conversion) is GRANTED
without prejudice.
B. Defendant’s motion to dismiss counts two (constructive fraud) and four
(breach of fiduciary duty) is GRANTED with prejudice.
C. Defendant’s motion to dismiss counts one (civil theft) and five (conspiracy)
is DENIED.
D. Defendant’s motion to dismiss this case for a lack of diversity jurisdiction,
res judicata, and the Colorado River doctrine is DENIED.
E. Any amended complaint is due within fourteen (14) days from the date of
this Order.
DONE AND ORDERED in Chambers at Miami, Florida, this 11th day of
February, 2020.
/s/ Edwin G. Torres
EDWIN G. TORRES
United States Magistrate Judge
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