Acheron Portfolio Tr. v. Mukamal

Decision Date24 September 2021
Docket Number18-CV-25099-MORE/STRAUSS
PartiesACHERON PORTFOLIO TRUST, AVERNUS PORTFOLIO TRUST, LORENZO TONTI 2006 TRUST, STYX PORTFOLIO TRUST, and ACHERON CAPITAL, LTD., Plaintiffs, v. BARRY MUKAMAL, as Trustee of the MUTUAL BENEFITS KEEP POLICY TRUST, Defendant.
CourtU.S. District Court — Southern District of Florida

REPORT AND RECOMMENDATION

Jared M. Strauss, United States Magistrate Judge

THIS MATTER comes before the Court upon Plaintiffs' Motion for Partial Summary Judgment and Incorporated Memorandum of Law (Plaintiffs' MSJ”) (DE 75), and Trustee's Motion for Final Summary Judgment on All Counts of Plaintiffs' Third Amended Complaint and Memorandum of Law (Defendant's MSJ”) (DE 77). The District Court has referred this case to me pursuant to 28 U.S.C § 636 and the Magistrate Judge Rules of the United States District Court for the Southern District of Florida to take all necessary and proper action as required by law, with respect to any and all pretrial matters (“Referral”).[1] (DE 117). I have reviewed the motions and all pertinent portions of the record.[2] For the reasons stated herein, I respectfully RECOMMEND that Plaintiffs' MSJ (DE 75) be DENIED and that Defendant's MSJ (DE 77) be GRANTED IN PART AND DENIED IN PART as discussed below.

BACKGROUND

As stated previously by this Court: [t]his case ensued when this Court denied Plaintiffs' Rule 60(b) motion in Sec. and Exch. Comm'n v. Mutual Benefits Corp. Case No. 04-60573-CIV-MORENO [(“Receivership Action”)][3] . . . and found [in that action] that Plaintiffs were not entitled to $2 million in restitution funds, which the Receiver in that case earmarked for the Trustee to use as a fee credit for the original Mutual Benefits fraud victims. Plaintiffs are purchasers of interests in viaticated life insurance policies, which the Defendant Barry Mukamal [(the Trustee)] oversees as the Trustee of the Mutual Benefits Keep Policy Trust [(the “Trust”)]. Plaintiffs are now suing the Trustee for breach of contract and breach of fiduciary obligations.” (DE 45 at 1) (granting in part and denying in part Defendant's motion to dismiss Plaintiffs' Second Amended Complaint; see also Acheron Portfolio Tr. v Mukamal as Tr. of Mut. Benefits Keep Pol'y Tr., No. 18-25099-CIV, 2020 WL 9671339, at *1 (S.D. Fla. July 14, 2020). Plaintiffs' operative complaint (“Third Amended Complaint”), filed on August 13, 2020, brings four counts: (1) Breach of Contract (March 2015 Agreement); (2) Breach of Fiduciary Duty; (3) Breach of Implied Fiduciary Duty; and (4) Breach of Contract (Trust Agreement). (DE 46). Before turning to the undisputed facts on which the parties' motions turn, however, I address the deficiencies in the parties' statements of material facts and responses to those statements of material facts.

I. The Statements of Material Facts and the Applicable Rules

In relevant part, Federal Rule of Civil Procedure 56(c) requires [a] party asserting that a fact cannot be or is genuinely disputed [to] support the assertion by [citing to appropriate record evidence]; or . . . [show] that the materials cited do not establish the absence or presence of a genuine dispute.” Fed.R.Civ.P. 56(c)(1)(A)-(B). “If a party . . . fails to properly address another party's assertion of fact as required by Rule 56(c), the court[, among other things, ] may: . . . consider the fact undisputed for purposes of the motion.” Fed.R.Civ.P 56(e). Additionally, Local Rule 56.1 requires statements of material facts to present the facts in separately numbered paragraphs, to limit each paragraph to a single material fact to the extent practicable and to reference sufficient evidentiary support for each assertion of fact. S.D. Fla. L.R. 56.1(b)(1)(B). Opponents challenging statements of material fact are to include citations to record evidence that are specific to the particular fact disputed. S.D. Fla. L.R. 56.1(b)(2)(C). “Any additional facts that an opponent contends are material to the motion for summary judgment shall be numbered and placed immediately after the opponent's response to the movant's Statement of Material Facts.” S.D. Fla. L.R. 56.1(b)(2)(D). “If an opponent's Statement of Material Facts includes additional facts, then the movant shall respond to each additional fact in a separately served Reply Statement of Material Facts.” S.D. Fla. L. R. 56.1(b)(3)(A). Furthermore, material facts, which the Court finds have proper evidentiary support, may be deemed admitted unless controverted by the other party in accordance with the rules. S.D. Fla. L.R. 56.1(c)-(d); see also Cargo Airport Servs. USA, LLC v. Transcarga Int'l Airways, C.A., Inc., No. 17-20768-CIV, 2017 WL 4898292, at *3 (S.D. Fla. Oct. 27, 2017) (Moreno, J.).

Here, there are several deficiencies with the parties' statements of material facts and responses. First, the parties include multiple facts in one paragraph. See, e.g., DE 74 at ¶¶6, 15, 18, 21, 22, 23; DE 76 at ¶¶1, 22, 29, 59 (consisting of multi-fact paragraphs that are disputed by the opposing party). Second, in opposing facts, Defendant does not consistently address all of the facts, which Plaintiffs assert. For example, Plaintiffs assert in ¶6 of their statement of material facts, among other things, that “approximately 2, 400 Keep Policies were transferred to the Trust” and that “more than 16, 000 investors (including Acheron) . . . held fractional investment interests in the Keep Policies [that were] transferred to the Trust.” (DE 74 at ¶6). Plaintiffs cite to the operative complaint, which states that “approximately 2, 400 Keep Policies were transferred to the Trust” and that “more than 16, 000 investors (including Acheron) . . . held fractional investment interests in the Keep Policies [that were] transferred to the Trust.” (DE 46 at ¶22). Plaintiffs also cite to Defendant's answer, where Defendant admitted these facts. (DE 47 at ¶22). Defendant, however, responds to Plaintiffs' assertion in ¶6 by stating: “DISPUTED” and then by arguing that Plaintiffs' citations to the operative complaint and answer “make no reference to the Keep Policies or ‘related assets' having ‘been owned by the Receivership Entities.' (DE 90 at ¶6). Yet, Defendant fails to address the other facts, which he had previously admitted. Indeed, Defendant neither admits these facts nor cites evidentiary support for disputing these facts.

Third, Plaintiffs fail to offer controverting evidence when disputing some of the facts asserted by Defendant. For example, Plaintiffs merely say “disputed” without explanation or evidentiary support with respect to Defendant's assertion that ‘Keep Policy Investors' were understood to mean the Victim Investors who were victims of the MBC scheme and who purchased interests from the Receivership Entities” (DE 76 at ¶12). (DE 92 at ¶12).[4] Accordingly, the Court deems facts admitted where Defendant provides sufficient evidentiary support for his assertion, and Plaintiffs fail to provide controverting evidence to support disputing the assertion. Fed.R.Civ.P. 56(e); S.D. Fla. L.R. 56.1(c)-(d); Cargo Airport Servs. USA, LLC, 2017 WL 4898292 at *3.

Fourth, there are unnecessary disputes relating to distinctions between Plaintiffs Acheron Portfolio Trust, Avernus Portfolio Trust, Lorenzo Tonti 2006 Trust and Styx Portfolio Trust (the Plaintiff Trusts” or the “Acheron Trusts”) and Plaintiff Acheron Capital, Ltd. (Acheron Capital). Despite Plaintiffs knowing that Defendant challenged that the Plaintiff Trusts were signatories to the March 2015 Agreement in the Arbitration Action, [5] Plaintiffs did not clearly differentiate between the Plaintiff Trusts and Plaintiff Acheron Capital in their statement of material facts. (DE 74 at 1) (defining Acheron Capital and the Plaintiff Trusts “collectively and individually” as Plaintiffs or “Acheron”).[6] Therefore, Defendant disputes several of Plaintiffs' facts, in part, by stating that Plaintiffs . . . lumped each of the five Plaintiffs together.” (DE 90 at ¶¶13, 15, 16, 17, 18). On the other hand, Defendant does not affirmatively admit, even where possible, that any of these facts are undisputed as to the Plaintiff Trusts. For example, Plaintiffs assert in ¶13 of their statement of material facts that “the Trustee has made bulk sales to Acheron every few months to buy interests in Keep Policies ....” (DE 74 at ¶13) (emphasis added).

Plaintiffs support their assertion in ¶13, in part, by citing to ¶27 of the operative complaint and Defendant's answer. (DE 74 at ¶13). In answering the operative complaint, Defendant expressly stated “that offers to buy interests in Keep Policies were made to Acheron every few months.” (DE 47 at ¶27) (emphasis added). Yet, Defendant responds to Plaintiffs' statement of material facts by essentially stating: “DISPUTED because Plaintiffs have lumped each of the five Plaintiffs together . . .” followed by Trustee does not dispute that the Trust has sold interests in certain policies to certain of the Acheron Trusts from time to time pursuant to the APAs between them.” (DE 90 at ¶13) (emphasis added). Although Plaintiffs could have set out more distinctly their assertions as to the individual Plaintiffs in this case, by not affirmatively admitting undisputed facts where clearly possible, Defendant has also improperly increased the Court's burden in determining the undisputed facts. See Chavez v. Sec'y Fla. Dep't of Corr., 647 F.3d 1057, 1061 (11th Cir. 2011) (noting that “making district courts dig through volumes of documents . . . shift[s] the burden from [parties] to the courts).

Fifth Defendant has failed to reply to the additional facts that Plaintiffs included in their response to Defendant's statement of material facts. (DE 92 at 9). Local Rule 56.1(b)(3)(A) directs a movant to respond...

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