Kodsi v. Branch Banking and Trust Company

Filing 35

ORDER AND OPINION ON DEFENDANTS MOTION TO DISMISS COMPLAINT. ORDER LIFTING STAY and REOPENING CASE. Defendants 4 Motion to Dismiss is granted in part and denied in part. Answer to the Complaint due 3/2/2018. Signed by Judge Kenneth A. Marra on 2/12/2018. (kpe)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 15-CV-81053-MARRA
AMY KODSI, an individual
Plaintiff,
vs.
BRANCH BANKING AND TRUST COMPANY,
a North Carolina banking corporation,
Defendant.
_______________________________/
ORDER AND OPINION ON DEFENDANT’S MOTION TO DISMISS COMPLAINT
THIS CAUSE is before the Court upon Defendant Branch Banking and Trust
Company’s (“Defendant”) Motion to Dismiss Amy Kodsi’s (“Plaintiff”) Complaint With
Prejudice [DE 4]. Plaintiff’s claims arise from Defendant’s alleged improper use of the legal
system against her to collect a debt owed by her husband. Defendant asserts the affirmative
defense that those efforts fall within the scope of the “litigation privilege,” among other
arguments. Consequently, Defendant asserts that under Federal Rule of Civil Procedure 12(b)(6)
(“Rule 12(b)(6)”) the Complaint fails to state a claim upon which relief can be granted. The
Court has carefully considered all relevant documents, including the motion, response, and reply,
the parties’ responses to the Court’s Inquiry [DE Nos. 27 & 28], all relevant law, and is
otherwise fully advised in the premises.
I. Introduction
The facts as pled in the Complaint have already been set out in detail in the “Order
Staying Case Pending Ruling by the Florida Supreme Court” [DE 23] and is incorporated by
reference and not repeated here. In brief, Plaintiff’s husband owed a debt to Defendant and
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Defendant went to great lengths to collect the debt. Those efforts included freezing a bank
account belonging solely to Plaintiff allegedly without legal justification. The damage Plaintiff
experienced from those efforts to collect the debt forms the basis of her claims.
As a result of the damage Plaintiff experienced, she raises claims for: (I) wrongful
garnishment; (II) malicious prosecution; (III) abuse of process; and (IV) intentional interference
with business advantage [DE 1]. Defendant moves to dismiss all four counts based primarily on
the affirmative defense that its efforts to collect the debt were protected by the litigation
privilege.

Defendant also argues that Counts I and II should be dismissed based on the

affirmative defense of “advice of counsel.” Defendant further argues Counts I and II should be
dismissed because they are based on “misplaced legal conclusions.” Finally, Defendant seeks to
have Plaintiff’s prospective claim for punitive damages dismissed or stricken until the Court has
first determined whether a factual basis exists to support such a claim.
The parties fully briefed the issues and a hearing took place. The Court issued an order
staying the case until resolution of Fischer v. Debrincat, 169 So. 3d 1204 (Fla. Dist. Ct. App.
2015). The Florida Supreme Court granted review (SC15-1477, 2015 WL 5917884 (Fla. 2015))
because a split had developed between the Third and Fourth District Courts of Appeal with
regard to the scope of the litigation privilege.1 The Third District had found the litigation
privilege extended to claims for malicious prosecution. Wolfe v. Foreman, 128 So. 3d 67 (Fla.
In Levin, Middlebrooks, Mabie, Thomas, Mayes & Mitchell, P.A. v. U.S. Fire Ins. Co., 639 So.
2d 606, 607 (Fla. 1994) (“Levin”) “the Florida Supreme Court concluded that the litigation
privilege precluded all tort claims based on a party's conduct during the course of litigation,
holding that ‘any act occurring during the course of a judicial proceeding’ is entitled to absolute
immunity ‘so long as the act has some relation to the proceeding.’” Green Leaf Nursery, 341
F.3d at 1302 (quoting Levin, 639 So.2d at 608). In Debrincat, the Florida Supreme Court
clarified that the issue is where to draw the line between the competing interests of freedom from
malicious conduct and the ability to fully access the courts, with Florida law deferring to preexisting torts that would be eviscerated by extending the litigation privilege further. Debrincat,
217 So.3d at 70.
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Dist. Ct. App. 2013); while the Fourth District in Fischer v. Debrincat did not. Because the
applicability of the litigation privilege was directly at issue in this case, the Court stayed this
matter until the Florida Supreme Court could resolve the issue.
On February 9, 2017, the Florida Supreme Court resolved the conflict between the
District Courts of Appeal in Debrincat v. Fischer, 217 So.3d 68 (“Debrincat”), reh’g denied,
SC15-1477, 2017 WL 1713895 (May 3, 2017). The Florida Supreme Court found the litigation
privilege did not extend to a claim for malicious prosecution because to do so “would eviscerate
th[e] long-establish cause of action for malicious prosecution.” Id. at 70. The decision left no
doubt that the privilege did not extend to Count II of Plaintiff’s complaint. The decision did not
expressly discuss how and to what extent the privilege should apply to the other three causes of
action; all of which Defendant claimed were precluded by the privilege.
The Court issued an “Inquiry” to the parties informing them of the Debrincat decision
and asking them “if they contend that the three remaining claims (other than the claim for
malicious prosecution) are barred by the litigation privilege and the reasons for their positions”
[DE 24]. The parties responded and Defendant’s Motion to Dismiss is now ripe for adjudication.
II. Failure to State a Claim Standard
Under Rule 12(b)(6), a defendant may seek to have a claim dismissed when the
Complaint “fail[s] to state a claim upon which relief can be granted”. The requirements of Rule
12(b)(6) are intertwined with Fed. R. Civ. P. 8(a) (“Rule 8(a)”), which only requires “a short and
plain statement of the claims” that “will give the defendant fair notice of what the plaintiff's
claim is and the ground upon which it rests.” The Supreme Court has held that “[w]hile 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 entitlement to relief requires
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more than labels and conclusions, and a formulaic recitation of the elements of a cause of action
will not do. Factual allegations must be enough to raise a right to relief above the speculative
level.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citations and
quotations omitted).
“To survive a motion to dismiss, a complaint 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) (quotations and citations omitted). “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Id. Thus, “only a complaint that states a
plausible claim for relief survives a motion to dismiss.” Id. at 679.
This Court accepts as true all the allegations in the complaint and construes them in the
light most favorable to the plaintiff when ruling on a motion to dismiss. Jackson v. BellSouth
Telecomms., 372 F.3d 1250, 1262 (11th Cir. 2004) (“Jackson”). “[T]he threshold of sufficiency
to which a complaint is held at the motion-to-dismiss stage is ‘exceedingly low.’” United States
v. Baxter Int'l, Inc., 345 F.3d 866, 881 (11th Cir. 2003) (quoting In re Southeast Banking Corp.,
69 F.3d 1539, 1551 (11th Cir.1995)).
Defendant does not challenge the factual or legal sufficiently of the complaint per se but
rather relies on affirmative defenses as the basis of its motion to dismiss. “[N]ormally an
affirmative defense cannot be decided at the motion to dismiss stage.” Perlman v. Wells Fargo
Bank, N.A., 559 F. App'x 988, 994 (11th Cir. 2014). However, “Florida courts have also made it
abundantly clear that any affirmative defense, including the litigation privilege, may be
considered in resolving a motion to dismiss when ‘the complaint affirmatively and clearly shows

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the conclusive applicability’ of the defense to bar the action.” Jackson, 372 F.3d at 1277
(quoting Reisman v. Gen. Motors Corp., 845 F.2d 289, 291 (11th Cir. 1988).
III. Litigation Privilege
“Florida's litigation privilege affords absolute immunity for acts occurring during the
course of judicial proceedings.” Jackson, 372 F.3d at 1274-75. The privilege initially developed
to protect litigants and attorneys from liability for acts of defamation, but has since been
extended to cover all acts related to and occurring within judicial proceedings. Jackson, 372
F.3d at 1274-75 (citing Levin, 639 So.2d at 607–08); Echevarria, McCalla, Raymer, Barrett &
Frappier v. Cole, 950 So.2d 380, 384 (Fla. 2007) (holding Florida law provides complete
judicial immunity “to any act occurring during the course of a judicial proceeding ... so long as
the act has some relation to the proceeding.”).
In Levin, the Florida Supreme Court explained the scope and rationale of the privilege:
[A]bsolute immunity must be afforded to any act occurring during
the course of a judicial proceeding, regardless of whether the act
involves a defamatory statement or other tortious behavior ... so
long as the act has some relation to the proceeding. The rationale
behind the immunity afforded to defamatory statements is equally
applicable to other misconduct occurring during the course of a
judicial proceeding. Just as participants in litigation must be free to
engage in unhindered communication, so too must those
participants be free to use their best judgment in prosecuting or
defending a lawsuit without fear of having to defend their actions
in a subsequent civil action for misconduct.
639 So.2d at 608. Because this Court is Erie2-bound to apply Florida law in evaluating
the plaintiff’s state-law claims, Florida's litigation privilege applies to state-law claims
adjudicated in federal court. Zucker for BankUnited Fin. Corp. v. U.S. Specialty Ins. Co., 856
F.3d 1343, 1349 (11th Cir. 2017). Florida courts have made it clear that any affirmative defense,
including the litigation privilege, may be considered in resolving a motion to dismiss when “‘the
2

Erie R. Co. v. Tompkins, 304 U.S. 64, 78 (1938).

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complaint affirmatively and clearly shows the conclusive applicability’ of the defense to bar the
action.”•Reisman v. Gen. Motors Corp., 845 F.2d 289, 291 (11th Cir. 1988) (quoting Evans v.
Parker, 440 So.2d 640, 641 (Fla. Dist. Ct. App. 1983)); Jackson, 372 F.3d at 1277.
A. Count I – Wrongful Garnishment
The parties agree that “[u]nder Florida law, the tort of wrongful garnishment has the
same elements as the tort of malicious prosecution.” Barniv v. BankTrust, 579 F. App'x 719, 720
(11th Cir. 2014). The parties also agree that the reasoning of Debrincat leads to the conclusion
that the litigation privilege does not apply to claims for wrongful garnishment. Since the parties
are in agreement, Defendant’s motion to dismiss Count I for wrongful garnishment based on the
litigation privilege is denied.
B. Count II – Malicious Prosecution
The Court stayed this case pending the Debrincat decision, which held that “the litigation
privilege does not act as a bar to a malicious prosecution claim.” Debrincat, 217 So.3d at 70.
The Court must, consequently, deny Defendant’s motion to dismiss Count II for malicious
prosecution based on the affirmative defense of the litigation privilege.
C. Count III – Abuse of Process
Abuse of process involves the use of criminal or civil legal process against another
primarily to accomplish a purpose for which it was not designed. Cline v. Flagler Sales Corp.,
207 So. 2d 709, 711 (Fla. Dist. Ct. 1968). To state a claim for abuse of process under Florida
law, a plaintiff must allege (1) willful and intentional misuse of process for some wrongful or
unlawful object, or collateral purpose, and (2) that the act or acts constituting the misuse
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occurred after the process issued. Miami Herald Pub. Co., Div. of Knight-Ridder v. Ferre, 636
F. Supp. 970, 974-75 (S.D. Fla. 1985); Aulicino v. McBride, 2017 WL 1113475, at *3 (M.D. Fla.
2017); Blue Dolphin, Inc. v. United States, 666 F.Supp. 1538, 1541 (S.D. Fla. 1987) (to sustain
an abuse of process claim, “there must be some allegation that after suit has been legally filed,
the process of the Court had been improperly used”); see also Steinhilber v. Lamoree, 825
F.Supp. 1003, 1006 (S.D. Fla. 1992).
Count III asserts wrongs that occurred both as a result of the issuance of process, and the
improper use of process after it issued. As far as the issuance of the “First Premature Writ
and/or Second Premature Writ and the filing of the Frivolous Complaint,” those claims are more
properly addressed under Counts I and II, wrongful garnishment and malicious prosecution, and
they are not subject to the litigation privilege. As far as the allegations that BB&T made
improper use of process after it issued, those allegations are properly considered as claims for
abuse of process.3 See Compl. ¶ 83.
Defendant moves to dismiss this count arguing it is barred by the absolute immunity
provided by Florida’s litigation privilege. Plaintiff responds that the same reasoning the Florida
Supreme Court applied in Debrincat to find that a claim for malicious prosecution is not barred
by the litigation privilege should apply to a claim for abuse of process, because if the privilege
was applied, “it would eviscerate this long established cause of action.” DE 28 at 4. The Court
is not convinced. See, e.g., LatAm Investments, LLC v. Holland & Knight, LLP, 88 So.3d 240,

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The difference between the torts of malicious prosecution and abuse of process is that the tort of malicious
prosecution is concerned with maliciously causing process to issue, whereas the tort of abuse of process is concerned
with the improper use of process after it issues. Yoder v. Adriatico, 459 So.2d 449, 450 (Fla. Dist. Ct. App. 1984)
citing Nash v. Walker, 78 So.2d 685 (Fla. 1955); Cazares v. Church of Scientology of California, Inc., 444 So.2d
442 (Fla. Dist. Ct. App. 1983); Peckins v. Kaye, 443 So.2d 1025 (Fla. Dist. Ct. App. 1983); McMurray v. U-Haul
Co., 425 So.2d 1208 (Fla. Dist. Ct. App. 1983).

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243 (Fla. Dist. Ct. App. 2011) (“the application of the litigation privilege to a cause of action for
abuse of process does not eliminate that cause of action”).
A claimant may still pursue a claim for an abuse of process when the claim is based on
actions taken outside of a judicial proceeding or on actions that are taken during a judicial
proceeding but which are unrelated to the judicial proceeding. LatAm Investments, 88 So.3d at
243, citing Olson v. Johnson, 961 So.2d 356 (Fla. Dist. Ct. App. 2007); Montejo v. Martin Mem'l
Med. Ctr., Inc., 935 So.2d 1266 (Fla. Dist. Ct. App. 2006). In addition, in contrast to a claim for
malicious prosecution,4 a claim for abuse of process may be brought as a counterclaim in the
main action. Blue v. Weinstein, 381 So.2d 308, 310-311 (Fla. Dist. Ct. App. 1980). Therefore,
the Court rejects Plaintiff’s argument that an abuse of process claim would be eviscerated if it
was barred by the litigation privilege.
As far as the alleged acts that are properly asserted under a claim for Abuse of Process
(BB&T’s continued pursuit of its case as to the 8070 Account, the Investment Funds, and the
women’s jewelry in the safe deposit box), they must be dismissed as barred by the litigation
privilege. Defendant’s pursuit of its case clearly occurred during the course of a judicial
proceeding that had some relation to the instant proceeding. See Levin, 639 So. 2d at 608.
Accordingly, the Motion to Dismiss is granted in that the allegations in Count III that are
properly brought under an abuse of process theory are dismissed with prejudice due to the
application of the litigation privilege.

Malicious prosecution claims cannot be brought in a counterclaim in the original proceeding.
See Yoder v. Adriatico, 459 So.2d 449, 451 (Fla. Dist. Ct. App. 1984).
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D. Count IV - Intentional Interference With Business Advantage
In this final count, Plaintiff alleges that Defendant “intentionally and unjustifiably interfered
with Plaintiff’s business relationship with Bank of America, N.A. (“BOA”) by, among other
things, causing premature writs of garnishment to be issued, as well as threatening and
intimidating BOA to the point where it refused to comply with its obligation to disburse the
Investment Funds to Plaintiff as required (even in the face of applicable court orders).” Compl.
¶ 89. This claim alleges two acts of interference: (1) issuance of premature writs of garnishment,
and (2) maliciously threatening and intimidating BOA to not comply with its obligation to
disburse to Plaintiff her Funds.
As mentioned earlier, the parties have agreed that the wrongful writ of garnishment
allegations are not barred by the litigation privilege. The litigation privilege also does not bar
the second basis asserted to support this claim. Not all statements made outside of the formal
judicial process are subject to an absolute privilege. Fridovich v. Fridovich, 598 So.2d 65 (Fla.
1992). The rationale for the litigation privilege weakens the further away from formal court
proceedings the complained of conduct takes place. DelMonico v. Traynor, 116 So.3d 1205,
1214 (Fla. 2013) (“DelMonico”). As DelMonico explained “[i]n these more formalized judicial
settings, the presence of safeguards facilitates and promotes an unimpeded speaking
environment while protecting an individual from false or malicious statements for several
reasons;” while statements made outside the watchful eye of a court are more problematic. Id. at
1217. The focus of inquiry must be “whether the statement was made ‘in connection with’•or
‘in the course of’•an existing judicial proceeding.” Stucchio v. Tincher, 726 So.2d 372, 374
(Fla. Dist. Ct. App. 1999). In this case, the alleged out of court threat to BOA was not made in
connection with or in the course of an existing judicial proceeding, so the claim of intentional
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interference with business advantage based on Defendant’s alleged threats to BOA will not be
dismissed.
IV. Additional Arguments
I. Affirmative Defense of Advice of Counsel
Defendant seeks the dismissal of Count I (wrongful garnishment) and Count II
(malicious prosecution) based on the affirmative defense of “advice of counsel.” Inherent to the
defense is that defendant acted in good faith in the underlying proceedings. Toomey v. Tolin,
311 So. 2d 678, 681 (Fla. Dist. Ct. App. 1975). Plaintiff has made numerous allegations that
Defendant did not act in good faith in the underlying collection action. Compl. ¶¶ 32, 39, 44, 52,
67, 75. A Rule 12(b)(6) motion to dismiss is not the proper procedural device to probe the
truthfulness of Plaintiff’s factual allegations, and assertion of the affirmative defense of advice
of counsel is rejected at this stage of the proceedings.
II. Probable Cause
Defendant seeks dismissal of Count I (wrongful garnishment) and Count II (malicious
prosecution) arguing Plaintiff’s allegations regarding Defendant’s purported lack of probable
cause are based on misplaced legal conclusions and are therefore immaterial. The Court does
not agree. First, Defendant contends that because a presumption arises from the issuance of a
writ of garnishment that there was probable cause for the issuance of same, Count II (wrongful
garnishment) must be dismissed. The Court agrees with Plaintiff’s response that if this argument
was correct, then there would be no cause of action for wrongful garnishment as the issuance of
writ of garnishment is a necessary element of a claim for wrongful garnishment. Moreover, the
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presumption that a writ of garnishment was issued with probable cause is a rebuttable
presumption, which is rebutted by a showing that the writ was obtained by improper means.
Barniv v. BankTrust, 579 F.App’x 719, 721 (11th Cir. 2014) (recognizing that the presumption
may be rebutted by a showing that the writ was obtained by fraud, perjury, or other corrupt
means).
In this case, Plaintiff alleges that writs of garnishment were improperly and prematurely
obtained and thereafter, pursued when Defendant knew or should have known that it had no right
to do either. In particular, even after knowing that the funds which Defendant was seeking to
garnish did not belong to the judgment-debtor and in fact belonged to Plaintiff, Defendant
continued to seek the garnishment of same. When viewed in the light most favorable to
Plaintiff, the facts alleged and reasonable inferences derived therefrom clearly rebut any
presumption of probable cause. Id.
Moreover, Defendant’s motion to dismiss only takes issue with whether probable cause
existed to commence the action; it remains silent as to whether probable cause continued to exist
throughout the underlying proceeding. Plaintiff asserts Defendant acted tortuously in continuing
with the collection action against her when it became apparent it had no claim upon her assets.
Whether probable cause continued to exist throughout the underlying proceedings remains a
question of fact. Defendant’s motion to dismiss based on the argument that Plaintiff’s
allegations regarding probable cause are based on misplaced legal conclusions is denied.
III. Claim for Punitive Damages
In the Complaint, Plaintiff “requests that this Court reserve the right to award punitive
damages in accordance with § 768.72, Fla. Stat.” DE 1 at 19. Defendant seeks to have
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Plaintiff’s punitive damage “claim” stricken pursuant to Federal Rule of Civil Procedure 12(f)
because a “trial court is directed not to permit such a pleading until the court has first determined
whether a factual basis exists to support a claim for punitive damages.” Kraft Gen. Foods, Inc.
v. Rosenblum, 635 So. 2d 106, 110 (Fla. Dist. Ct. App. 1994).
Section 768.72 requires leave of court before pleading a request for punitive damages. See
Cohen v. Office Depot, Inc., 204 F.3d 1069, 1072 (11th Cir. 2000). However, the Eleventh
Circuit has held that the pleading rules set forth in Federal Rule of Civil Procedure 8(a)(3)
preempt § 768.72's requirement that a plaintiff must obtain leave from the court before including
a prayer for punitive damages. Id.; Porter v. Ogden, Newell & Welch, 241 F.3d 1334, 1340
(11th Cir. 2001). Moreover, Plaintiff does not assert a claim for punitive damages, she merely
“reserves” the right to raise such a claim. For these reasons the Court denies Defendant’s motion
to strike.
In addition, in the “Wherefore” paragraph, Plaintiff seeks compensatory damages,
prejudgment interest, post-judgment interest, attorneys’ fees, and costs. Defendant seeks
dismissal, pursuant to Federal Rule of Civil Procedure 9(g) (“Rule 9(g)”), of Plaintiffs' claims
for these “special damages,”5 contending that Plaintiff has failed to identify any basis for
attorneys’ fees, costs and prejudgment interest. Rule 9(g) requires that: “[i]f an item of special
damages is claimed, it must be specifically stated.” “The primary purpose of Rule 9(g)[,
however,] is one of notice, both to ‘inform defending parties as to the nature of the damages
claimed in order to avoid surprise; and to inform the court of the substance of the complaint.’”•
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“Special damages are those that do not necessarily result from the wrong or breach of contract complained of, or
which the law does not imply as a result of that injury . . .”•Land Title of Central Fla. LLC v. Jimenez, 946 So.2d
90, 93 (Fla. Dist. Ct. App. 2006). Lost profits generally are considered special damages under Florida law. Safeco
Title Insurance Co. v. Reynolds, 452 So.2d 45, 48 n.5 (Fla. Dist. Ct. App. 1984) citing Arcade Steam Laundry v.
Bass, 159 So.2d 915 (Fla. Dist. Ct. App. 1964); Mancil's Tractor Service, Inc. v. T&iK Construction, LLC, 2016 WL
7486707, at *2 (S.D. Fla. 2016).

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Landsman v. City of Vero Beach, 2015 WL 10960951, at *2 (S.D. Fla. 2015) citing Great Am.
Indem. Co. v. Brown, 307 F.2d 306, 308 (5th Cir. 1962). Plaintiff asserts plausible grounds for
these damages in her response to the motion to dismiss, and Plaintiff’s entitlement to such
damages will be addressed at a more appropriate time. Accordingly, none of Plaintiff’s damage
claims will be stricken or dismissed at this time.
CONCLUSION
Based on the foregoing, it is hereby
ORDERED AND ADJUDGED that the stay of this case is lifted and this matter is
reopened. Defendant’s Motion to Dismiss is granted in part and denied in part as elaborated
upon above. Defendant shall file an Answer to the Complaint on or before March 2, 2018.
DONE AND ORDERED in Chambers at West Palm Beach, Palm Beach County, Florida
this 12th day of February, 2018.

KENNETH A. MARRA
UNITED STATES DISTRICT JUDGE

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