Butterworth v. Quick & Reilly, Inc.

• Decision Date: 02 April 1998
• Docket Number: No. 96-1310-CIV-T-17-B.,96-1310-CIV-T-17-B.
• Citation: 998 F.Supp. 1404
• Parties: Nellie BUTTERWORTH, Plaintiff, v. QUICK & REILLY, INC., Defendant.
• Court: U.S. District Court — Middle District of Florida

998 F.Supp. 1404

Nellie BUTTERWORTH, Plaintiff, v. QUICK & REILLY, INC., Defendant.

No. 96-1310-CIV-T-17-B.

United States District Court, M.D. Florida, Tampa Division.

April 2, 1998.

COPYRIGHT MATERIAL OMITTED

Joel A. Goodman, Kalju Nekvasil, Stephen Craig Krosschell, Goodman & Nekvasil, P.A., Safety Harbor, FL, Mark J. Heise, Michael A. Hanzman, Michael E. Criden, Hanzman, Criden, Korge & Chaykin, P.A., Miami, FL, for Nellie Butterworth, plaintiff.

Nancy A. Copperthwaite, Bennett Falk, Morgan, Lewis & Bockius, Miami, FL, for Quick & Reilly, Inc., defendant.

ORDER ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT AND PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT

KOVACHEVICH, Chief Judge.

This cause comes before the Court on a motion for summary judgment, with attachments, (Docket No. 57), and with exhibits (Docket No. 60), filed by Defendant, QUICK & REILLY, INC. Plaintiff, NELLIE BUTTERWORTH, filed a responsive memorandum, with attachments (Docket No. 86), a statement of disputed facts relating to Defendant's motion for summary judgment (Docket No. 87), and the depositions (with exhibits) of Tina Pirillo (Docket No. 88), Don Saxon (Docket No. 89), Edward F. Waterbury (Docket No. 90), Nancy Allen Wood (Docket No. 91), Nellie Butterworth (Docket No. 92), Geraldine S. Harrison (Docket No. 93), Luciano Moschetta (Docket No. 94), and Mary Elizabeth O'Hern (Docket No. 95). Plaintiff, NELLIE BUTTERWORTH, thereafter filed a motion for partial summary judgment (Docket No. 97) and a statement of undisputed facts (Docket No. 96). Defendant, QUICK & REILLY, INC., filed a responsive memorandum, with attachments (Docket No. 101) and a statement of disputed facts in opposition to plaintiff's motion for summary judgment (Docket No. 102).

I. BACKGROUND

Plaintiff brings this case alleging that Defendant failed to register its St. Petersburg branch office, as required under Section 517.12(5) of the Florida Securities and Investor Protection Act, and, as a result, violated such act, as well as for various common law claims. The Plaintiff's complaint contains five causes of action. The complaint stems from the Defendant's alleged failure to report an address change for its St. Petersburg branch office that relocated from 5th Avenue North to 22nd Avenue North in October of 1992.

Plaintiff's counts are as follows: First, that Defendant violated the Florida Securities Act because it conducted business at its St. Petersburg branch office and other locations without registering these locations with the Florida Department of Banking and Finance (hereinafter "Department") pursuant to Section 517.12(5). That alternatively, Defendant violated Sections 517.12(11) and 517.12(13) of said act by failing to amend the registered addresses of these branch offices or by conducting business at branch office locations whose registrations had expired when Defendant failed to supply the branch office address information which the Department required. Plaintiff also alleges a violation of Section 517.301(1)(a)(2) of said act because Defendant conducted business at Florida branch offices in violation of Florida registration requirements and failed to disclose its non-compliance with these registration requirements. Second, that Defendant breached its contract with Plaintiff by violating Sections 517.12 and 517.301 of the Florida Securities Act, Rule 3E-600.004(3)(c) and other administrative rules in the course of purchasing and selling securities for Plaintiff. Third, that by opening its doors to the public, Defendant falsely represented to Plaintiff that it had complied with all applicable laws and that its branch offices were properly in compliance with Florida branch office registration requirements, including Sections 517.12, 517.12(11), and 517.12(13) of the Florida Securities Act, as well as Rule 3E-600.004(3)(c) and other administrative rules. That as a result of this false misrepresentation, Defendant fraudulently induced Plaintiff to do business with Defendant. Fourth, that because Defendant did not register its branch offices and failed to disclose this fact to Plaintiff, Defendant breached its fiduciary obligation to Plaintiff. Fifth, that Defendant breached its duty of care to Plaintiff by failing to comply with the registration requirement of the Florida Securities Act. That Defendant's failure to disclose this information to the Plaintiff and its false representations constitute negligent misrepresentation.

Defendant moved for summary judgment against Plaintiff on four grounds. First, that the Florida Department of Banking and Finance has expressly and specifically ruled that the failure to file an amended address does not result in a branch office being unregistered. Second, if Defendant did violate any statute, it only violated Section 517.12(13) which does not entitle Plaintiff to any damages because it is administrative in nature. Third, Defendant has substantially complied with the requirements of Chapter 517 and, therefore, is not liable to Plaintiff for the failure to file an amendment for the St. Petersburg branch office. Fourth, that there is no private cause of action available to enforce the Department's rule regarding address changes of brokerage firm branch offices. Defendant also alleges that it is entitled to summary judgment on the common law claims for these same reasons, and because Plaintiff cannot show any way in which the Defendant's failure to file a change of address caused Plaintiff any damages.

Plaintiff thereafter filed a motion for partial summary judgment on the issue of liability under the Florida Security Act and for her breach of contract claim. Plaintiff claims that she is entitled to summary judgment on the liability issue under the Florida Security Act for several reasons. First, that the branch office licensing statute must be interpreted in conformity with all other location licensing statutes in Florida, which uniformly provide that location licenses are not unilaterally transferable. Second, that Defendant's branch office on 22nd Avenue North in St. Petersburg was not registered because its physical presence was not formally and precisely recorded on the Department's official branch office registration records. Third, that Defendant's theory permits dealers to move their locations anywhere in the state without permission, and it is inconsistent with the common law that location licenses are not unilaterally transferable. Fourth that Section 517.12(13) merely specifies a method to accomplish a branch office transfer, and does not address whether a branch office remains registered if this method if not followed. Fifth, that this Court must defer to the Department's ruling that investors are entitled to relief for any violation of Section 517.12, including the violations of Sections 517.12(11) and 517.12(13) which Defendant committed. Lastly, that the substantial compliance doctrine does not apply to Defendant's failure to file necessary registration documentation, and Defendant's filings with the Department established a pattern of substantial non-compliance. Plaintiff also contends that she is entitled to summary judgment for liability on her breach of contract claim because Defendant's failure to register resulted in its contract with Plaintiff being void and that Defendant violated the branch office registration laws which were automatically incorporated into this contract.

II. STANDARD OF REVIEW

This circuit clearly holds that summary judgment should only be entered when the moving party has sustained its burden of showing the absence of a genuine issue as to any material fact when all the evidence is viewed in the light most favorable to the nonmoving party. See Sweat v. Miller Brewing Co., 708 F.2d 655, 656 (11th Cir.1983). All doubts as to the existence of a genuine issue of material fact must be resolved against the moving party. See Hayden v. First Nat'l Bank of Mt. Pleasant, 595 F.2d 994, 996-97 (5th Cir.1979) (citing Hawkins v. Frick-Reid Supply Corp., 154 F.2d 88, 89-90 (5th Cir.1946)). Any material factual disputes will preclude summary judgment.

The U.S. Supreme Court held in Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986), as follows:

In our view the plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial. Id. at 322.

In addition the Supreme Court stated, "Rule 56(e) therefore, requires the nonmoving party to go beyond the pleadings and by her own affidavits, or by the `depositions, answers to interrogatories, and admissions on file,' designate `specific facts showing that there is a genuine issue for trial.'" Id. at 324. Although factual disputes preclude summary judgment, the "mere possibility that factual disputes may exist, without more, is not sufficient to overcome a convincing presentation by the moving party." Quinn v. Syracuse Model Neighborhood Corp., 613 F.2d 438, 445 (2nd Cir.1980). Additionally, summary judgment is warranted against a party who fails to make a showing sufficient to establish existence of an essential element upon which that party will bear the burden of proof at trial. See Boim v. National Data Products, Inc., 932 F.Supp. 1402, 1404 (M.D.Fla.1996) (citing Celotex, 477 U.S. at 322).

III. DISCUSSION

A. Claims Under the Florida Securities and Investor Protection Act

Defendant contends that this Court should grant its motion for summary judgment, and deny the Plaintiff's motion for partial summary judgment, because Defendant's failure to file a timely address change for its St. Petersburg branch office, with the Department under the Florida Securities and Investor Protection Act, does not constitute the Defendant conducting business at an unregistered branch...