Marsala v. Mayo et al

Filing 56

ORDER & REASONS granting 12 Motion to Dismiss for Failure to State a Claim. Party Scibmatt, LLC, A&S Recovery and Michael Gray dismissed. Signed by Judge Martin L.C. Feldman on 8/11/2014. (caa)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
CHARLES E. MARSALA

CIVIL ACTION

v.

NO. 13-6800

JERRY L. MAYO, ET AL.

SECTION "F"

ORDER AND REASONS
Before the Court is a motion to dismiss filed on behalf of
Michael Gray, A&S Recovery, and SCIBMATT, LLC.

For the reasons

that follow, the motion is GRANTED.
Background
The underlying facts of this case are more completely set
forth

in

this

Court's

rulings

litigation commenced in 2006.1

on

motions

in

prior,

related

This case arises out of the same

failed business venture.
In the late 1990s, Charles Marsala, his then-close friend,
Jerry Mayo, and an acquaintance, Jay Lanners, joined together to
invest in restaurant franchises through their company, Profitable
Dining, LLC.
capital

for

Marsala was the only one to invest $200,000 in
the

venture.

Facing

1

financial

difficulties,

Mayo

See Marsala v. Mayo, No. 06-3846, 2007 WL 3245434 (E.D.
La. Nov. 2, 2007) and Order and Reasons dated June 12, 2013, Rec.
Doc. 139 of Civil Action No. 06-3846, aff'd, 551 F. App'x 181 (5th
Cir. 2014).
1

ultimately withdrew from the venture in 2001, leaving Marsala and
Lanners as partners in Profitable Dining.

After the venture

failed, Marsala sued Mayo, Lanners, and Profitable Dining on July
21, 2006.
Marsala

alleged

fraud,

breach

of

fiduciary

duty,

and

contribution; he also sought to recover from Profitable Dining a
debt

allegedly

owed

pursuant

to

a

promissory

note.2

After

discovery, the defendants moved for summary judgment.3 On November
2, 2007, the Court granted in part and denied in part the motions;
summary judgment was granted in Lanners' and Mayo's favor on all of
Marsala’s claims except: (1) the claim that Lanners and Mayo
misrepresented their net worth to induce Marsala into signing
personal guarantees, and (2) the claim that Lanners and Mayo
breached their fiduciary duty to Marsala.4

Marsala v. Mayo, No.

06-3846, 2007 WL 3245434 (E.D. La. Nov. 2, 2007).
Just one month after the summary judgment ruling, the parties
reached a settlement.

After receiving Mayo's sworn financial

statement that his debts were greater than his assets, Marsala

2

Among the claims presented by the 2006 litigation,
Marsala alleged that Mayo and Lanners made pre-Operating Agreement
misrepresentations, failed to capitalize Profitable Dining
necessitating personal guarantees from Marsala, and failed to
inform Marsala about the Profitable Dining loan to A&S Recovery.
3

During the course of discovery, then-third-party witness
Michael Gray was deposed by Marsala.
4

The Court did not reach the merits of Lanners’
counterclaim against Marsala to collect an alleged debt.
2

voluntarily dismissed his remaining claims against Mayo; thus, the
Court

dismissed

the

claims

against

Mayo

without

prejudice,

"reserving plaintiff's right to reopen the case against Mr. Mayo in
the event it is discovered that the sworn financial statement...is
found to be inaccurate or there has been an unlawful transfer of
assets during the course of this action."

Marsala, Lanners, and

Profitable Dining jointly requested dismissal of all claims with
prejudice; the Court granted the request on January 23, 2008.
More than five years later, Marsala moved to reopen the 2006
litigation against Mayo, Lanners, and Profitable Dining pursuant to
Rule 60 of the Federal Rules of Civil Procedure, asserting that
Lanners committed fraud on the Court by providing false statements
in the “Statement of Uncontested Facts” with his motion for summary
judgment

and

that

Mayo

gave

Marsala

an

inaccurate

statement that induced Marsala to dismiss his claims.

financial

On June 12,

2013 the Court denied Marsala's motion to reopen as (among other
things) untimely. The Fifth Circuit affirmed the Court's ruling on
the basis of untimeliness.

See Marsala v. Mayo, 551 F. App'x 181

(5th Cir. 2014)(per curiam).
On December 30, 2013 Marsala, pro se, filed this lawsuit
against Mayo, Michael Gray, A&S Recovery, Jacksonville Dining
Concepts, and SCIBMATT, LLC.

In a lengthy complaint that overlaps

3

with his 2006 lawsuit,5 Marsala alleges that the $200,000 he
invested in 1998 and the $250,000 he loaned in 2001 to Profitable
Dining were transferred without his knowledge to SCIBMATT, LLC, A&S
Recovery, "and other companies owned by Jerry Mayo, Mike Gray, and
Jerry Gabet plus his funds ($65,000) directly paid to GE Finance in
2005 were used to pay for the FF&E in Jacksonville Dining Concepts'
Copeland Restaurant."6

Marsala purports to assert various claims,

including claims for securities fraud, conspiracy, fraudulent
concealment, unjust enrichment, and constructive trust.

Many if

not all of his allegations overlap with or derive from the 2006
litigation, "the Profitable Dining scheme"; he again charges that
Lanners and Mayo deceived him and duped him into investing money in
Profitable Dining, money which was then transferred to SCIBMATT and
A&S Recovery.7

Gray, A&S, and SCIBMATT8 now seek dismissal of

5

Marsala acknowledges the related nature of his 2006 case
and this one.
6

Marsala alleges:

Marsala (Tulane '82), Dr. Clark Warden (Tulane
'81), and Dr. Pete Avara were the victims of
an Affinity Fraud-Ponzi Scheme, titled the
"Jay and Jerry Business Plan", created by Mayo
and Lanners, benefitting, and facilitated by
Gabet and Gray; which relied on the Fraternal
Brotherhood, trust, and on-going friendships
between Lanners (LSU '83), Mayo (Tulane '79),
Gray (Tulane '83), Warden, and Marsala,
members of Delta Tau Delta Fraternity.
7

Marsala advances many allegations that contradict the
facts found by this Court when it ruled on summary judgment
motions, post-discovery, in the 2006 litigation. After the summary
4

Marsala's claims.
I.
A.
Rule 12(b)(6) of the Federal Rules of Civil Procedure allows
a party to move for dismissal of a complaint for failure to state
a claim upon which relief can be granted.

Such a motion is rarely

granted because it is viewed with disfavor.

See Lowrey v. Tex. A

& M Univ. Sys., 117 F.3d 242, 247 (5th Cir. 1997) (quoting Kaiser
Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d
1045, 1050 (5th Cir. 1982)).
Under Rule 8(a)(2) of the Federal Rules of Civil Procedure, a
pleading must contain a "short and plain statement of the claim
showing that the pleader is entitled to relief."

Ashcroft v.

Iqbal, 556 U.S. 662, 678-79 (2009)(citing Fed. R. Civ. P. 8).
"[T]he

pleading

'detailed

standard

factual

Rule

8

allegations,'

announces

but

it

does

demands

not
more

require
than

an

unadorned, the-defendant-unlawfully-harmed-me accusation." Id. at
678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)).
In considering a Rule 12(b)(6) motion, the Court “accepts ‘all

judgment motions were resolved, it is worth reiterating that
Marsala settled with Lanners, Profitable Dining, and Mayo; the
claims against them were ultimately dismissed with prejudice.
8

Marsala has voluntarily dismissed one of the other
defendants, Jerry Mayo, and the other two defendants, Jerry Gabet
and Jacksonville Dining Concepts, have been served but do not join
in this motion.
5

well-pleaded

facts

as

true,

favorable to the plaintiff.’”

viewing

them

in

the

light

most

See Martin K. Eby Constr. Co. v.

Dall. Area Rapid Transit, 369 F.3d 464 (5th Cir. 2004) (quoting
Jones v. Greninger, 188 F.3d 322, 324 (5th Cir. 1999)).

But, in

deciding whether dismissal is warranted, the Court will not accept
conclusory allegations in the complaint as true.
at 1050.

Kaiser, 677 F.2d

Indeed, the Court must first identify allegations that

are conclusory and, thus, not entitled to the assumption of truth.
Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). A corollary: legal
conclusions “must be supported by factual allegations.”
678.

Assuming

the

veracity

of

the

well-pleaded

Id. at
factual

allegations, the Court must then determine “whether they plausibly
give rise to an entitlement to relief.” Id. at 679.
“‘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.’” Gonzalez v. Kay, 577 F.3d
600, 603 (5th Cir. 2009)(quoting Iqbal, 556 U.S. at 678)(internal
quotation marks omitted).

“Factual allegations must be enough to

raise a right to relief above the speculative level, on the
assumption that all the allegations in the complaint are true (even
if doubtful in fact).”

Bell Atl. Corp. v. Twombly, 550 U.S. 544,

555 (2007) (citations and footnote 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

6

liable for the misconduct alleged.”

Iqbal, 556 U.S. at 678 (“The

plausibility standard is not akin to a ‘probability requirement,’
but it asks for more than a sheer possibility that a defendant has
acted

unlawfully.”).

This

is

a

“context-specific

task

that

requires the reviewing court to draw on its judicial experience and
common sense.”

Id. at 679.

“Where a complaint pleads facts that

are merely consistent with a defendant’s liability, it stops short
of the line between possibility and plausibility of entitlement to
relief.” Id. at 678 (internal quotations omitted) (citing Twombly,
550 U.S. at 557).
Finally, “[w]hen reviewing a motion to dismiss, a district
court ‘must consider the complaint in its entirety, as well as
other sources ordinarily examined when ruling on Rule 12(b)(6)
motions to dismiss, in particular, documents incorporated into the
complaint by reference, and matters of which a court may take
judicial notice.”

Funk v. Stryker Corp., 631 F.3d 777, 783 (5th

Cir. 2011)(quoting Tellabs, Inc. v. Makor Issues & Rights, Ltd.,
551 U.S. 308, 322 (2007)).
B.
Rule 9(b) of the Federal Rules of Civil Procedure imposes a
“heightened pleading standard” and provides that when alleging
fraud “a party must state with particularity the circumstances
constituting fraud or mistake....

Malice, intent, knowledge, and

other conditions of a person’s mind may be alleged generally.”

7

Fed. R. Civ. P. 9(b).

“Rule 9(b) is an exception to Rule 8(a)’s

simplified pleading that calls for a ‘short and plain statement of
the claim.’” U.S. ex rel. Grubbs v. Kanneganti, 565 F.3d 180, 185
(5th Cir. 2009).
Fifth

Circuit

“The particularity demanded by Rule 9(b)”, the
instructs,

“is

supplemental

to

the

Supreme

Court’s...interpretation of Rule 8(a) requiring ‘enough facts
[taken as true] to state a claim to relief that is plausible on its
face.’” Id. (citing Twombly, 550 U.S. at 570).
To satisfy Rule 9(b), a plaintiff must (1) specify the
statements alleged to be fraudulent, (2) identify the speaker or
author of the statements, (3) state when and where the statements
were made, and (4) state why the statements were fraudulent.
Hermann Holdings Ltd. v. Lucent Technologies, Inc., 302 F.3d 552,
564-65 (5th Cir. 2002)(citations omitted).

"At a minimum...a

plaintiff [must] set forth the 'who, what, when, where, and how' of
the alleged fraud."
Healthcare

Corp.,

United Sates ex rel. Thompson v. Columbia/HCA
125

F.3d

899,

903

(5th

Cir.

1997)(citation

omitted). The Fifth Circuit commands that Rule 9(b) be interpreted
strictly, id., but

instructs courts to be mindful that “Rule 9(b)

supplements but does not supplant Rule 8(a)’s notice pleading[;]
Rule 9(b) does not ‘reflect a subscription to fact pleading’ and
requires only ‘simple, concise, and direct’ allegations of the
‘circumstances constituting fraud,’ which after Twombly must make
relief plausible, not merely conceivable, when taken as true.”

8

Kanneganti,

565

realistically

F.3d

observe

at
that

185-86.
“Rule

Finally,
9(b)’s

the

Court

ultimate

must

meaning

is

context-specific, and thus there is no single construction of Rule
9(b) that applies in all contexts.”

Id. at 188.

II.
A.

Collateral Estoppel

Gray, A&S, and SCIBMATT contend that Marsala is precluded from
re-litigating issues relating to his fraud and promissory note
claims because those issues were previously resolved.

The Court

agrees.
The doctrine of collateral estoppel, or issue preclusion, bars
"'successive litigation of an issue of fact or law actually
litigated and resolved in a valid court determination essential to
the prior judgment,' even if the issue recurs in the context of a
different

claim."

(2008)(citation

Taylor

omitted).

v.

Sturgell,

The

Supreme

553

U.S.

Court's

880,

892

observations

regarding the purpose behind applying this doctrine ring true in
the context of this re-litigation:
By "preclud[ing] parties from contesting matters that
they have had a full and fair opportunity to litigate,"
th[is] doctrine[] protect[s] against 'the expense and
vexation attending multiple lawsuits, conserv[es]
judicial resources, and foster[s] reliance on judicial
action by minimizing the possibility of inconsistent
decisions."
Id.

(quoting Montana v. United States, 440 U.S. 147, 153-54

(1979)).

For issue preclusion to be appropriate, the party urging

9

its application must show:
(1) that the issue at stake [is] identical to the one
involved in the prior litigation;
(2) that the issue has been actually litigated in the
prior litigation; and
(3) that the determination of the issue in the prior
litigation has been a critical and necessary part of the
judgment in that earlier action.
Rabo Agrifinance, Inc. v. Terra XXI, Ltd., 583 F.3d 348, 353 (5th
Cir. 2009)(citation omitted).

Complete identity of the parties in

the two lawsuits need not be present, "so long as the party against
whom estoppel applies had a full and fair opportunity to litigate
the issues in that earlier action."

Id.

Although it is unclear precisely which claims Marsala seeks to
advance against which defendants, to the extent that Marsala seeks
to re-litigate those issues decided adversely to him in this
Court's November 2, 2007 Order and Reasons, he is barred from doing
so.

After extensively determining the facts of the case from the

summary judgment record, the Court found that Georgia law9 barred
several of Marsala's claims for fraud, including those based on
alleged pre-Operating Agreement misrepresentations and the alleged
failure to adequately capitalize Profitable Dining. The Court also
found that Marsala's allegations of fraud in connection with the
loan of his investment in Profitable Dining to A&S failed as a
matter

of

law

because

"Marsala

9

simply

does

not

dispute

the

The parties to the Profitable Dining Operating Agreement
chose Georgia law to apply to their agreement.
10

defendants' contention that the loan was repaid with interest [and]
Marsala fails to show how he was injured from the defendants'
failure to disclose [the loan]."

Likewise, the Court granted

summary judgment, dismissing Marsala's claim for repayment of loans
made to Profitable Dining that were secured by a promissory note.
To the extent that Marsala seeks to re-litigate issues already
decided after careful consideration of the extensive facts and
events in the 2006 litigation, he is barred from doing so.10

10

There is substantial, if not complete, overlap between
the allegations Marsala advanced in his 2006 lawsuit and the
lawsuit he now pursues.
To extract each and every issue that
Marsala seeks to re-litigate is a futile enterprise at best. In
fact, Marsala admits in his current complaint that, before filing
this second lawsuit, he reached out to Mayo, Lanners, Gray, and
Gabet to get information regarding the scope of their alleged fraud
and conspiracy. He has apparently been stewing since he settled
his claims against Lanners and Mayo. The defendants' observation
is worth noting in this regard:
Marsala states in the Complaint that he "has
tried to avoid a second lawsuit, but the
parties refuse to answer 2012 emails" or
"provide Marsala with answers to a few
questions." Complaint at 8.
That statement
puts a fine point on the impetus for the
instant Action: Although his claims have been
litigated fully and decided by this Court in
the 2006 Action, and by this Court and the
Fifth Circuit after he attempted to reopen the
matter five years later, Marsala refuses to
accept the judgments of the federal courts
regarding the events surrounding the failure
of Profitable Dining.
He has continued to
badger third parties for information and, when
he has not received the attention or
information he believes he deserves, he
employs vexatious litigation against those
parties.
11

Notably, the claims that survived summary judgment in that case
were later settled by the parties.

To the extent that they are

intertwined with the issues previously resolved, Marsala's fraud
and promissory note claims must be dismissed.
B.

Failure to State a Claim

Defendants also seek dismissal of Marsala's claims on the
ground that he has failed to state a plausible claim for relief.
The Court agrees.
1.

Fraud/Fraudulent Concealment

Defendants contend that Marsala has failed to plead facts with
sufficient

particularity

concealment.

to

state

a

claim

for

fraudulent

The Court agrees.

Georgia law11 defines fraudulent concealment as "[s]uppression
of

material

fact

which

Ga.

Code

communicate."

a

party

Ann.

§

is

under

23-2-53.

an

obligation

to

The

obligation

to

communicate may arise from the confidential relations of the
parties or from the particular circumstances of the case."

Id.

The same five elements that must be proved for fraud must be proved
for

fraudulent

concealment:

(1)

false

representation

by

the

defendant; (2) scienter; (3) intention to induce plaintiff to act
or refrain from acting; (4) justifiable reliance by plaintiff; and
(5) damage to plaintiff.

Hanlon v. Thornton, 462 S.E.2d 154, 156

11

Marsala contends that Georgia law applies; defendants
agree, but they also cite to Louisiana law, which they suggest is
not materially different. The Court applies Georgia law.
12

(Ga. App. 1995).
The common thread between the 2006 litigation and the present
is Marsala's allegation concerning the Profitable Dining "scheme,"
what he now calls "The Jay [Lanners] and Jerry [Mayo] Business
Plan."

As he alleged in the prior lawsuit, Marsala continues to

insist--notwithstanding that he settled his claims, which have been
dismissed with prejudice--that he was duped by Lanners and Mayo
into investing in Profitable Dining, and that they used his
investment

for

their

own

purposes,

including

transferring

or

loaning the money to other companies like A&S and SCIBMATT, and
that they, while concealing information, tricked him into signing
personal guarantees that resulted in him losing money.

He calls

the Jay and Jerry Business Plan a "Conspiracy of Securities Fraud,
Larceny, Theft by Conversion, Financial Institution Fraud, and
Fraudulent Transfer to Avoid Creditors, obtained by Fraudulent
Concealment,

and

violations

of

Sarbanes-Oxley

for

failure

provide annual reports per General Accounting Principles."

to

As to

defendants A&S, SCIBMATT, and Gray's involvement, however, the
allegations

are

inextricably

bound

to

his

true

gripe,

Profitable Dining "scheme," an issue already litigated:
Since 2005, Marsala has attempted to obtain the
information as to the transfers of his funds [that he
invested in Profitable Dining]. Mayo and Lanners have
fraudulently denied the transfer of Marsala's funds to
any of their companies.
Gray has supported Mayo and
Lanners['] efforts and Gabet claims he "[d]oes not
remember....[Marsala] subpoenaed the records of SCIBMATT
and A&S Recovery, but Gray refused to supply them,
13

the

falsely writing (mail fraud 18 USC 1961-1968) to Marsala
that there were no financial transactions between
SCIBMATT and Profitable Dining; and SCIBMATT and A&S's
dealings "were none of Marsala's business."...
Putting aside whether these issues have been previously litigated,
Marsala fails to satisfy the heightened Rule 9(b) pleading standard
applicable to fraud claims.

And putting aside the heightened

pleading requirement, nowhere in his lengthy complaint does Marsala
allege facts supporting the elements required to prove fraud
against

Gray,

A&S,

and

SCIBMATT;

he

has

not

alleged

facts

concerning false representations made with an intent to deceive,
let alone justifiable reliance or resulting damage.12
2.
Defendants

Breach of Fiduciary Duty
next

fiduciary duty claim.

urge

dismissal

of

Marsala's

breach

of

Marsala alleges that "Gray owed Marsala a

fiduciary responsibility in 2007 to provide information to Marsala
to determine what happened regarding Profitable Dining, SCIBMATT,
and A&S Recovery."

This is the sort of conclusory allegation that

fails to meet federal pleading standards.

Here, Marsala fails to

allege the origin of any fiduciary duty owed; he does not allege
that Gray, A&S, or SCIBMATT possessed any interest in Profitable

12

Marsala's allegation that Gray benefitted from and
facilitated Mayo's and Lanners' fraud fails to satisfy even the
pleading standard announced by Rule 8, which demands more than
defendant-unlawfully-harmed-me accusations. Marsala's sarcastic
observation that his "initial filling [sic] with over 500 pages of
evidence and explanation, plus the above should be more than
sufficient fact [sic] to establish" his claims, misses the mark.
14

Dining. Instead, he continues to suggest that somehow membership in
a college fraternity gives rise to a fiduciary duty.13

However,

"mere friendship and close fellowship, without more, do not create
a fiduciary relationship."
(Ga. App. 2001).

Smith v. Walden, 549 S.E.2d 750, 757

Marsala fails to state a claim for breach of

fiduciary duty.
3.

RICO-Mail Fraud

The defendants contend that Marsala's RICO claim must be
dismissed because he fails to allege facts supporting any of the
elements of mail fraud.

The Court agrees.

Marsala alleges that, relative to the prior litigation, "Gray
... refused to supply the Operating Agreement of SCIBMATT" and that
Gray's conduct in "falsely writing...to Marsala that there were no
financial transactions between SCIBMATT and Profitable Dining"
violated 18 U.S.C. §§ 1961-68 (the Racketeering Influenced and
Corrupt Organizations Act).14

Marsala attempts to allege the most

common of predicate acts, mail fraud.

"The elements of mail fraud

are (1) a scheme to defraud; (2) the use of the mails to execute

13

Marsala alleges that "[o]ver the years the Tulane Delts
had stayed close by spending Mardi Gras together, riding on the
Baccagator Float, taking adventure vacations, and spending Memorial
Day weekend at Gray's beachfront condo in Pensacola. The vacations
included team building activities such as mountain climbing, white
water rafting, and scuba diving."
14

Throughout his complaint, Marsala also alleges that
"Lanners referred to the group as the 'LA Mafia,' himself as 'The
Dictator,' and RICO applies."
15

the scheme; and (3) the specific intent on the part of the
defendant to defraud." United States v. Smith, 46 F. App'x 225, at
*2 (5th Cir. 2002). Simply alleging that a defendant used the mails
in connection with a fraudulent scheme is insufficient.

Martin v.

Magee, No. 10-2786, 2011 WL 5509000, at *4 (E.D. La. Nov. 3,
2011)(citation omitted). A plaintiff must allege "false pretenses,
representations or promises", as well as "reliance."

Id.

The defendants contend that Marsala fails to allege any of
these elements and that the mere use of the U.S. Postal Service,
not in furtherance of a fraudulent scheme but in refusing to comply
with a subpoena, does not suffice to plead the predicate act of
mail fraud.

The Court agrees.

Marsala has not pled facts to

support that Gray, A&S, or SCIBMATT intended to perpetrate a scheme
to defraud him.
4.

Conspiracy

Defendants also challenge Marsala's conspiracy allegations.
Marsala alleges that Gray participated in a conspiracy to commit
fraud and breach fiduciary duties by "spending Memorial Day weekend
with Gray and Mayo at Gray's condo in Florida, knowing that
[Marsala's] assets were in the process of being converted to
SCIBMATT but not telling him" and "failing to adequately capitalize
Profitable Dining, causing its default," and a litany of other
allegations focused on the time leading up to the formation of
Profitable Dining and through the January 2004 buy-out of Marsala's

16

interests by Lanners.
To recover damages based on a civil conspiracy, a
plaintiff must show that two or more persons combined
either to do some act which is a tort, or else to do some
lawful act by methods which constitute a tort.... [T]he
conspiracy of itself furnishes no cause of action. The
gist of the action...is not the conspiracy alleged, but
the tort committed against the plaintiff and the
resulting damage.
McIntee v. Deramus, 722 S.E.2d 377, 379 (Ga. App. 2012)(quotation
omitted).
The Court has already determined that Marsala has failed to
allege facts sufficient to state a claim for fraud or breach of
fiduciary

duty;

thus,

his

conspiracy

claim

likewise

fails.

Moreover, Marsala fails to allege facts that plausibly suggest that
there was an agreement among defendants to conspire to commit a
tort against him.
5.

Unjust Enrichment/Constructive Trust

The defendants also seek dismissal of Marsala's claim for
unjust enrichment (to the extent he alleges one) and his "claim"
for constructive trust. Marsala alleges that the funds he invested
in Profitable Dining "were used for the unjust enrichment of Mayo,
Lanners, and [now] Gray through their companies SCIBMATT, A&S
Recovery, and Jacksonville Dining Concepts entitling him to a
constructive trust."

A claim for unjust enrichment under Georgia

law is subject to a four-year limitations period.
228 S.E.2d 857, 860 (Ga. 1976).

Evans v. Evans,

The date of accrual for such a

claim is the "time when the plaintiff could first have maintained
17

his action to a successful result."

Engram v. Engram, 463 S.E.2d

12, 15 (Ga. 1995)(internal quotations marks and citations omitted).
Marsala alleges that he discovered in September 2007 (during
the course of discovery in the 2006 lawsuit) that "$160,000 of
Marsala's investment in Profitable Dining had been transferred
within hours of the investment to SCIBMATT."

He alleges that he

learned that funds he invested in Profitable Dining were loaned to
A&S by Lanners and Mayo.

Marsala's admits that he knew in

September 2007 of the transfer of funds from Profitable Dining to
A&S and/or SCIBMATT; this is when his unjust enrichment claim
accrued. Thus, any claim of unjust enrichment, which prescribed in
September 2011, is time-barred.
Georgia law provides that "[a] constructive trust is a trust
implied whenever the circumstances are such that the person holding
legal title to property, either from fraud or otherwise, cannot
enjoy the beneficial interest in the property without violating
some established principle of equity."

Ga. Code Ann. § 53-12-132.

Like conspiracy, a constructive trust "is not an independent cause
of action."

St. Paul Mercury Ins. Co. v. Meeks, 508 S.E.2d 646,

648 (Ga. 1998).

Instead, a constructive trust is "a remedial

device created by a court of equity to prevent unjust enrichment."
Jonas v. Jonas, 633 S.E.2d 544, 551 (Ga. App. 2006).
Because Marsala has not stated a plausible independent claim
for relief against defendants, his constructive trust theory of

18

recovery fails.
6.
Finally,

Conversion
defendants

contend

that,

to

the

extent

Marsala

attempts to allege a claim of conversion against them, any such
claim is time-barred.

Like unjust enrichment, Georgia law imposes

a four-year statute of limitations for claims of conversion.
Code. Ann. § 9-3-32.

Ga.

"A right of action for wrongful conversion

accrues on the date of the conversion."

Rigby v. Flue-Cured

Tobacco Co-Op, 755 S.E.2d 915, 924 (Ga. App. 2014). Again, Marsala
admits in his complaint that he knew in September 2007 that the
funds he invested in Profitable Dining were transferred to A&S or
SCIBMATT.15 At the latest, then, Marsala's claim for conversion
prescribed four years later in September 2011.

His claim for

conversion against Gray, A&S, and SCIBMATT must therefore be
dismissed.
Accordingly, the defendants' motion to dismiss is GRANTED, and
the plaintiff's claims against Gray, A&S, and SCIBMATT are hereby
dismissed with prejudice.
New Orleans, Louisiana, August 11, 2014

______________________________
MARTIN L. C. FELDMAN
UNITED STATES DISTRICT JUDGE

15

These same alleged facts are the only ones that would
seem to form a basis for his conversion claim.
19