Axa Equitable Life Ins. Co. v. Infinity Financial Group, LLC

• Decision Date: 31 March 2009
• Docket Number: Case No. 08-80611-CIV.
• Citation: 608 F.Supp.2d 1349
• Parties: AXA EQUITABLE LIFE INSURANCE COMPANY, Plaintiff, v. INFINITY FINANCIAL GROUP, LLC, et al., Defendants.
• Court: U.S. District Court — Southern District of Florida

608 F.Supp.2d 1349

AXA EQUITABLE LIFE INSURANCE COMPANY, Plaintiff, v. INFINITY FINANCIAL GROUP, LLC, et al., Defendants.

Case No. 08-80611-CIV.

United States District Court, S.D. Florida.

March 31, 2009.

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Gary John Guzzi, Akerman Senterfitt, Miami, FL, John N. Bolus, Michael D. Mulvaney, Christopher C. Frost, Maynard Cooper & Gale, Birmingham, AL, for Plaintiff.

Ira Gutt, Behar, Gutt & Glazer, P.A., Aventura, FL, Lawrence Phillip Ingram, Jessica Kirkwood Alley, Ryan C. Hasanbasic, Phelps Dunbar, Tampa, FL, for Defendants Infinity Financial Group, LLC, Steven Brasner, Infinity Wealth Advisors, LLC, Infinity Boynton Beach, LLC, Infinity Wealth and Investments, LLC, Infinity Wealth and Insurance LLC, Infinity Wealth and Tax LLC, and Infinity Wealth and Marketing LLC.

Charles Germain Geitner, Broad & Cassel, Tampa, FL, Kelly B. Holbrook, Broad & Cassel, Tampa, FL, Zachary Adam Harrington, Broad & Cassel, Tampa, FL, for Defendants Kevin H. Bechtel, Gary Richardson, and Life Brokerage Equity Group, Inc.

Mitchell Reid Bloomberg, Natalie Jessica Carlos, Neil Preseton Linden, Adorno & Yoss LLP, Miami, FL, for Defendant The Harlan Altman Insurance Trust Dated September 1, 2006, Kristine M. Neuhauser, The Carol Scioline 2006 Life Insurance Trust dated December 19, 2006, and NatCity Trust Company of Delaware.

Jonathan Galler, Matthew Henry Triggs, Proskauer Rose, Boca Raton, FL, for Defendant The Geoffrey Glass 2007-1 Insurance Trust dated Jan. 1, 2007, The Walter Glass 2006 Insurance Trust dated September 1, 2006, and The Geoffrey Glass 2007-2 Insurance Trust dated January 1, 2007.

Stephanie Reed Traband, Jones Walker, Miami, FL, for Defendant Harlan Altman.

James D. Sallah, Sallah & Cox LLC, Joshua Arnold Katz, Klein & Sallah LLC, Boca Raton, FL, for Defendant Carol Sciolino.

Geoffrey Glass, Chicago, IL, pro se.

Walter Glass, Chicago, IL, pro se.

Scott Barry Newman, Holland & Knight, West Palm Beach, FL, for Defendant Greatbanc Trust Company.

ORDER DENYING DEFENDANTS' MOTION TO DISMISS

DANIEL T.K. HURLEY, District Judge.

THIS CAUSE comes before the court upon the motion of defendants Harlan Altman Trust Dated September 1, 2006, Walter Glass 2006 Insurance Trust Dated September 1, 2006, Carol Sciolino 2006 Life Insurance Trust Dated December 16, 2006, Kristine M. Neuhauser and NatCity Trust Company of Delaware (the "Delaware Trust Defendants") to dismiss the complaint [DE # 56]. For the reasons given below, the court will deny defendants' motion.

BACKGROUND

This is a suit for rescission of several insurance policies pursuant to the Florida Insurance Code, and alleging claims of fraud and negligence. The complaint alleges that the defendants collaborated in a scheme to recruit elderly applicants for life insurance policies with large face amounts. According to the complaint, the policies were never meant to be retained by the insured or their family members; rather, from the outset the policies insuring the lives of the applicants were to be paid for and held by outside investors, in violation of state law. The complaint alleges that this was accomplished by making material misrepresentations to the issuer of the policies, plaintiff Axa Equitable Life Insurance Co., and by creating trusts to hold the insurance policies in order to disguise the policies' true ownership. Three of those trusts were organized in Delaware, and their trustees are citizens of Delaware as well. They comprise the group of defendants who filed the instant motion to dismiss.

JURISDICTION

This court has jurisdiction over the subject matter pursuant to 28 U.S.C. § 1332. Venue is proper in this court pursuant to 28 U.S.C. § 1391(a)(2) because a substantial part of the events giving rise to plaintiff's claim occurred in the Southern District of Florida.

DISCUSSION

A. Standard on Motion to Dismiss

Granting a motion to dismiss is appropriate when a complaint contains simply "a formulaic recitation of the elements of a cause of action." See Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). To survive a motion to dismiss, a complaint must contain factual allegations that "raise a reasonable expectation that discovery will reveal evidence" in support of the claim and that plausibly suggest relief is appropriate. Id. On a motion to dismiss, the complaint is construed in the light most favorable to the non-moving party, and all facts alleged by the non-moving party are accepted as true. See Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984); Wright v. Newsome, 795 F.2d 964, 967 (11th Cir. 1986). The threshold is "exceedingly low" for a complaint to survive a motion to dismiss for failure to state a claim upon which relief can be granted. See Ancata v. Prison Health Servs., Inc., 769 F.2d 700, 703 (11th Cir.1985). Regardless of the alleged facts, a court may dismiss a complaint on a dispositive issue of law. See Marshall County Bd. Of Educ. v. Marshall County Gas Dist., 992 F.2d 1171, 1174 (11th Cir.1993).

B. Defendants' Motion to Dismiss

1. Personal Jurisdiction

The Delaware Trust Defendants first argue that they must be dismissed from this action because the court lacks personal jurisdiction over them.

When sitting in diversity, a federal court must undertake a two-step process in determining whether personal jurisdiction exists. The court must determine whether: (1) jurisdiction over the defendant is conferred by the state long-arm statute; and, if so, whether (2) the exercise of jurisdiction would not violate the Due Process Clause of the Fourteenth Amendment. See United Technologies Corp. v. Mazer, 556 F.3d 1260, 1274 (11th Cir. 2009).

A Florida court has specific personal jurisdiction over a non-resident of Florida to determine a cause of action arising from the non-resident's commission of a tortious act in Florida. See Fla. Stat. § 48.193(1)(b). The Florida Supreme Court has held that, for purposes of the long-arm statute, a non-resident may commit a tortious act in Florida "through the nonresident defendant's telephonic, electronic, or written communications into Florida." Wendt v. Horowitz, 822 So.2d 1252, 1260 (Fla.2002). Federal courts, including the Eleventh Circuit Court of Appeals, have acknowledged and applied the Florida Supreme Court's holding in Wendt. See Internet Solutions Corp. v. Marshall, 557 F.3d 1293, 1296 (11th Cir. 2009); Horizon Aggressive Growth, L.P. v. Rothstein-Kass, P.A., 421 F.3d 1162, 1168 (11th Cir.2005).

Kristine M. Neuhauser, formerly an employee of NatCity Trust Company of Delaware, the trustee of the three Delaware Trusts, submitted an affidavit stating that no telephonic, written, or electronic communications were transmitted to anyone in Florida in relation to the three life insurance policies housed by the trusts. Neuhauser Aff. ¶ 6. This affidavit evidence in opposition to personal jurisdiction shifts the burden back to the plaintiff to produce evidence in favor of jurisdiction. See Mazer, 556 F.3d at 1274, 1277; Meier ex rel. Meier v. Sun Int'l Hotels, Ltd., 288 F.3d 1264, 1268 (11th Cir.2002).

Here, the court concludes plaintiff has not met its burden in this regard. One of the insureds, Carol Sciolino, is a resident of Boynton Beach, Florida. Sciolino submitted a sworn statement describing her recruitment by Brasner, and her understanding that the premiums were to be financed by third parties, and that she would immediately assign the policy to a third party in exchange for a fee. See DE 96-3. But neither the Sciolino statement, nor any other evidence submitted by plaintiff, identifies any specific communications made between the Delaware Trust Defendants and any person or entity in Florida. Thus plaintiff has not rebutted the evidence submitted by the Delaware Trust Defendants, in the form of the Neuhauser affidavit, that there were no such communications.

However, this is not the end of the analysis. Plaintiff has also alleged that the Delaware Trust Defendants are liable for engaging in a civil conspiracy with the other defendants in the case. See Am. Compl. ¶ 125-132. Florida law construes the state's long-arm statute to reach all of the alleged participants in a civil conspiracy, at least one act in furtherance of which is committed in Florida. See Machtinger v. Inertial Airline Services, Inc., 937 So.2d 730, 734-36 (Fla. 3d DCA 2006); Wilcox v. Stout, 637 So.2d 335, 336 (Fla. 2d DCA 1994). Florida courts may exercise personal jurisdiction over parties to a Florida civil conspiracy even if the alleged civil conspirator otherwise has no connection to the state. See Mazer, 556 F.3d at 1281-82.

In this case, the complaint as a whole describes a large conspiracy to fraudulently cause plaintiff to issue several life insurance policies based on material misinformation. The majority of the defendants, including Brasner, Kevin H. Bechtel, and Gary Richardson, and at least two of the insured, Harlan Altman and Carol Sciolino, are alleged to be citizens of Florida. See Am. Compl. ¶ 11, 12, 18, 21. The entities controlled by Brasner are also alleged to be Florida residents. See id. ¶ 6-9. One of the insurance policies alleged to be fraudulently obtained was issued to Sciolino at her residence in Florida. See DE # 96-5. Thus, the complaint as a whole sufficiently alleges that the defendants formed a civil conspiracy, at least some acts in furtherance of which were carried out in Florida. Florida's long-arm statute therefore reaches all participants in that conspiracy, even those not otherwise connected to Florida, such as the Delaware Trust Defendants. Cf. Arch Aluminum & Glass Co. v. Haney, 964 So.2d 228, 234-35 (Fla. 4th DCA 2007) (finding personal jurisdiction not supported because "the tort did not occur in Florida, and neither did the conspiracy") (emphasis added).

The court is further satisfied that exercise of personal jurisdiction over the Delaware Trust Defendant...