L&M Companies, Inc. v. Navilio

Filing 48

ORDER denying 34 Defendant's Motion to Dismiss. Signed by Judge Robin L. Rosenberg on 1/25/2016. (dzs)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 9:15-cv-81006-ROSENBERG/BRANNON
L & M COMPANIES, INC.,
Plaintiff,
v.
MICHAEL J. NAVILIO,
Defendant.
/
ORDER DENYING DEFENDANT’S MOTION TO DISMISS
THIS CAUSE is before the Court on Defendant’s Motion to Dismiss [DE 34]. The Court
has reviewed Plaintiff’s response [DE 38] and notes that Defendant failed to file a reply. The
Court has also reviewed the case file and is otherwise fully advised in the premises. For the
reasons set forth below, Defendant’s Motion to Dismiss [DE 34] is DENIED.
Plaintiff’s Complaint alleges that a company owned and controlled by Defendant violated
the Perishable Agricultural Commodities Act of 1930 (“PACA”) by failing to pay Plaintiff
approximately $30,000 for the sale of perishable produce, and by failing to maintain an adequate
trust balance as required by that statute and its associated regulations. See DE 1. Plaintiff seeks
the imposition of a constructive trust on Defendant’s personal residence, which Plaintiff
contends was purchased with PACA trust funds Defendant received from the company, at a time
when the company had a trust deficit. Id. at ¶ 24.
Defendant’s Motion to Dismiss argues that “[t]he issues in this case have already been
addressed in” UESUGI Farms, Inc., et al. v. Michael J. Navilio & Son, Inc., et al., case no. 15cv-01724 (N. D. Ill.), a lawsuit in which Defendant states Plaintiff “has thus far chosen not to

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intervene[.]” DE 34 at ¶ 1-2. Defendant alleges that the Illinois district court dismissed him from
that action because he presented evidence that, when he retired and sold his stock in the
company, he paid $200,000 to the company expressly for the purpose of satisfying the
company’s PACA obligations. Id. at ¶¶ 3, 6. He also alleges that, although he “did purchase a
property in 2014, he had previously sold a more expensive property (which funded the purchase
of his new homestead.)” Id. at ¶ 6. Defendant attaches five exhibits to his motion to dismiss,
which he alleges are documents that were filed in the Illinois action. Id. at ¶ 8. However, he does
not attach any orders or judgments entered in that action.
Although it contains no citations to authority, Defendant’s Motion to Dismiss appears to
be arguing that Plaintiff’s claims are barred by the doctrine of res judicata. 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). Defendant’s motion fails because the existence of this res judicata defense cannot be
judged on the face of the complaint. 1 See, e.g., Spartan Securities Group, Ltd. v. Cactus Drink
Sys., Inc., No. 8:08-cv-2323-T-26MAP, 2009 WL 1117361, *1 (M.D. Fla. Apr. 24, 2009).
Alternatively, to the extent Defendant’s Motion to Dismiss attempts to introduce matters outside
the pleadings and could therefore be considered a motion for summary judgment under Rule 56,
the motion also fails because the attached exhibits do not establish all of the required elements
for res judicata. See Concordia, 693 F.2d at 1075-76; State Farm Mut. Auto. Ins. Co. v. B & A
Diagnostic, Inc., 104 F. Supp. 3d 1366, 1374 (S.D. Fla. 2015).

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Although Plaintiff’s complaint does refer to a prior lawsuit, it has a different case number than the case cited in
Defendant’s motion to dismiss. See DE 34 at ¶ 1-2 (referring to Chicago Area I.B. of T. Health & Welfare Trust
Fund v. Michael J. Navilio & Sons, Inc., case no. 15-cv-04145).

Finally, to the extent Defendant disputes the source of the funds he used to purchase the
residence at issue, this is a factual dispute not appropriate for disposition on a motion to dismiss.
At this stage, the allegations of the complaint must be accepted as true. See generally Resnick v.
AvMed, Inc., 693 F.3d 1317, 1321 (11th Cir. 2012). Plaintiff’s complaint alleges, upon
information and belief, that Defendant used PACA trust funds to purchase the residence. See DE
1 at ¶ 24.
Accordingly, it is hereby ORDERED AND ADJUDGED that Defendant’s Motion to
Dismiss [DE 36] is DENIED.
DONE AND ORDERED in Chambers, Fort Pierce, Florida, this 25th day of January,
2016.
_______________________________
ROBIN L. ROSENBERG
UNITED STATES DISTRICT JUDGE

Copies furnished to:
Counsel of record

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