Burger v. Hartley, Case No. 11–62037–CIV.

• Court: United States District Courts. 11th Circuit. United States District Courts. 11th Circuit. Southern District of Florida
• Writing for the Court: JAMES I. COHN
• Citation: 896 F.Supp.2d 1157
• Parties: Edward BURGER, as Trustee of the 2009 Hubbard Family Trust, a New Mexico trust, et al., Plaintiffs, v. John HARTLEY, et al., Defendants.
• Docket Number: Case No. 11–62037–CIV.
• Decision Date: 12 September 2012

896 F.Supp.2d 1157

Edward BURGER, as Trustee of the 2009 Hubbard Family Trust, a New Mexico trust, et al., Plaintiffs,
v.
John HARTLEY, et al., Defendants.

Case No. 11–62037–CIV.

United States District Court,
S.D. Florida.

Sept. 12, 2012.

[896 F.Supp.2d 1161]

Isaac Jaime Mitrani, Loren Harley Cohen, Mitrani, Rynor, Adamsky & Toland, P.A., Miami Beach, FL, for Plaintiffs.

John Hartley, pro se.

ORDER GRANTING PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT AS TO DEFENDANT JOHN HARTLEY; DENYING DEFENDANT JOHN HARTLEY'S CROSS MOTION FOR DISMISSAL OF AMENDED COMPLAINT
JAMES I. COHN, District Judge.

THIS CAUSE is before the Court upon Plaintiffs' Motion for Summary Judgment as to Defendant John Hartley [DE 184] (“Motion for Summary Judgment”) and Defendant Hartley's Cross Motion for Dismissal of the Amended Complaint [DE 209] ¹ (“Motion to Dismiss”) (collectively “Motions”). The Court has carefully considered the Motions, Plaintiffs' Reply In Support of Their Motion for Summary Judgment as to Defendant John Hartley [DE 200], Plaintiffs' Response to Defendant Hartley's Counter Motion for Dismissal of the Amended Complaint [DE 201], “Defendant Hartley's Response to Plaintiffs' Motion to Strike Defendant Hartley's Affidavit,² Plaintiffs' Motion for Leave to Reply, and Plaintiffs' Reply to Defendant Hartley's Contention that Plaintiffs Have No Cause of Action Against Him and Their Claim is Doomed to Fail” [DE 215], which the Court construes as a reply in support of Mr. Hartley's Motion to Dismiss, the record in the case, and is otherwise advised in the premises.

I. BACKGROUND

On September 16, 2011, Plaintiffs Edward Burger, as trustee of the 2009 Hubbard Family Trust, Praefectus Capital, LLC, Albert Angelo, Jr., Craig Angelo, Robert Masterson, Dan Meadows, and Jerry Bayles (collectively “Plaintiffs”) filed suit against Defendants John Hartley (“Hartley”), John A. Mattera (“Mattera”), Bradford van Siclen (“van Siclen”), John Ray Arnold (“Arnold”), Praetorian G. Power II, LLC (“Praetorian”), G. Power II (“G. Power”), First American Service Transmittals, Inc. (“FAST”), and Praetorian Fund, Ltd. (“Praetorian Fund”) (collectively “Defendants”). Complaint [DE 1] ³. Plaintiffs filed an Amended Complaint on

[896 F.Supp.2d 1162]

October 28, 2011. Amended Complaint [DE 19]. In the Amended Complaint, Plaintiffs bring suit under Section 10(b) of the Securities and Exchange Act of 1934 for rescission, and alternatively, to recover substantial damages from Defendants related to $4.525 million Plaintiffs invested to acquire shares in Praetorian and/or G. Power, based on false representations that such interests would provide indirect ownership of Series A Preferred shares in Fisker Automotive Inc. (“Fisker”). Am. Compl. ¶ 1. After making the investment, Plaintiffs never received the closing documents reflecting their shares in Praetorian. Id. Plaintiffs later learned that Mattera, Praetorian, and G. Power did not own any shares in Fisker. Id. Plaintiffs allege that Defendants Arnold and FAST, the escrow agents chosen by the other Defendants, participated in these securities violations by disbursing Plaintiffs' moneys, without Plaintiffs' permission, to some or all of the other Defendants, while Plaintiffs were waiting for the closing. Id.

The Amended Complaint alleges that Mr. Hartley was a founding partner and member of Defendant Praetorian Fund, id. ¶ 22, and that along with Defendants Mattera, van Siclen, G. Power, and Praetorian Fund, “caused various documents to be prepared to promote the sale of shares in the LLC entity which would own the Fisker shares.” Id. ¶ 42. Plaintiffs allege that a Private Placement Memorandum and subscription documents provided to the Plaintiffs prior to their investments “represented that G. Power already owned $20 million in shares of Fisker.” Id. ¶¶ 43, 48 (emphasis in original). Plaintiffs contend that as a director of Defendant Praetorian Fund, Mr. Hartley made misrepresentations contained in these documents and he participated in the scheme to deceive the Plaintiffs. Id. ¶ 49. Furthermore, the Amended Complaint contends that in early January 2011, Mr. Hartley and van Siclen met with a trustee of the Plaintiff 2009 Hubbard Family Trust, and discussed the investment, representing what a great investment it was. Id. ¶¶ 83, 84. Plaintiffs allege that Mr. Hartley continued to cover up the fact that G. Power did not own any shares in Fisker. Id. ¶¶ 109–10. Plaintiffs bring claims against Mr. Hartley for violation of Section 10(b) and 10b(5)(a), (b), and (c) of the Securities Exchange Act of 1934 (Count I); fraud (rescission) (Count II); fraud (damages) (Count III); conspiracy (Count IX); and civil theft in violation of Florida Statute § 772.11 (Count X). Plaintiffs have now moved for summary judgment against Mr. Hartley. Mr. Hartley opposes the Motion for Summary Judgment and has cross-moved to dismiss the Amended Complaint.

II. DISCUSSION A. Legal Standard.

The Court may grant summary judgment “if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c). The movant “bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). To discharge this burden, the movant must demonstrate a lack of evidence supporting the nonmoving party's case. Id. at 325, 106 S.Ct. 2548.

After the movant has met its burden under Rule 56(c), the burden of production shifts to the nonmoving party who “must do more than simply show that there is some metaphysical doubt as to the material

[896 F.Supp.2d 1163]

facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The non-moving party “may not rely merely on allegations or denials in its own pleading,” but instead must come forward with “specific facts showing a genuine issue for trial.” Fed.R.Civ.P. 56(e); Matsushita, 475 U.S. at 587, 106 S.Ct. 1348.

As long as the non-moving party has had an ample opportunity to conduct discovery, it must come forward with affirmative evidence to support its claim. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). “A mere ‘scintilla’ of evidence supporting the opposing party's position will not suffice; there must be enough of a showing that the jury could reasonably find for that party.” Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir.1990). If the evidence advanced by the non-moving party “is merely colorable, or is not significantly probative, summary judgment may be granted.” Anderson, 477 U.S. at 249–50, 106 S.Ct. 2505 (citations omitted).

B. Personal Jurisdiction.

Before addressing the substance of the Motion for Summary Judgment, the Court must first determine whether this Court has personal jurisdiction over Mr. Hartley. In his Motion to Dismiss, which also serves as his response to Plaintiffs' Motion for Summary Judgment, Mr. Hartley has written, as he has on all his pleadings in this matter: “[w]ithout prejudice to my contentions that the Court has no jurisdiction over me and in any event that service has not been properly effected.” Motion to Dismiss at 1. As the Court discussed in its April 16, 2012 Order Denying Motion to Reset Deadlines, Request for Status Conference and Setting Deadline for Plaintiffs to Move for Default Against Defendant John Hartley [DE 133] (“April 16, 2012 Order”), the Turks and Caicos is a signatory to the Hague Convention and it appears to the Court that Mr. Hartley was served in accordance with the Hague Convention. April 16, 2012 Order at 2. Thus, the Court must only resolve whether it has personal jurisdiction over Mr. Hartley.

The United States Supreme Court has held that “[b]ecause the requirement of personal jurisdiction represents first of all an individual right, it can, like other such rights, be waived.” Ins. Corp. of Ir., Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 703, 102 S.Ct. 2099, 72 L.Ed.2d 492 (1982). Moreover, “under Rule 12(h), Federal Rules of Civil Procedure, ‘[a] defense of lack of jurisdiction over the person ... is waived’ if not timely raised in the answer or a responsive pleading.” Id. at 705, 102 S.Ct. 2099. Here, Mr. Hartley asserted in his first responsive pleading in this matter that he was responding to the Complaint “without prejudice to any jurisdictional defences that I may have.” Answer [DE 152] ¶ 1. Construing Mr. Hartley's pro se Answer liberally as the Court must, the Court declines to find that Mr. Hartley has waived the issue of the Court's personal jurisdiction over him and consented to jurisdiction. Nonetheless, for the reasons, discussed below, the Court finds that Mr. Hartley is properly subject to the personal jurisdiction of this Court.

The Florida Supreme Court has held that to determine whether a court has personal jurisdiction over a nonresident defendant, the court must first determine whether the complaint alleges sufficient jurisdictional facts to bring the action within the Florida Long Arm Statute, Fla. Stat. § 48.193. Venetian Salami Co. v. Parthenais, 554 So.2d 499, 502 (Fla.1989). Next, the Court must analyze whether sufficient “minimum contacts” exist to satisfy due process. Id. The Florida Long Arm Statute, Fla. Stat. § 48.193, provides that

[896 F.Supp.2d 1164]

“[a]ny person, whether or not a citizen or resident of this state, who personally or through an agent does any of the acts enumerated in this subsection thereby submits himself or herself and, if he or she is a natural person, his or her personal representative to the jurisdiction of the courts of this state for any cause of action arising from the doing of any of the” acts...