Combe v. Flocar Inv. Grp. Corp.

• Decision Date: 09 October 2013
• Docket Number: Case No. 1:13–cv–22727–UU.
• Citation: 977 F.Supp.2d 1301
• Parties: Bernard COMBE, et al., Plaintiffs, v. FLOCAR INVESTMENT GROUP CORP., et al., Defendant.
• Court: U.S. District Court — Southern District of Florida

977 F.Supp.2d 1301

Bernard COMBE, et al., Plaintiffs,

v.FLOCAR INVESTMENT GROUP CORP., et al., Defendant.

Case No. 1:13–cv–22727–UU.

United States District Court,

S.D. Florida.

Oct. 9, 2013.

Gary Dean Farmer, Jr., Hinshaw & Culbertson LLP, Fort Lauderdale, FL, for Plaintiffs.

Paul A. McKenna, Paul A. McKenna, Coral Gables, FL, for Defendant.

ORDER ON DEFENDANT'S MOTION TO DISMISS

URSULA UNGARO, District Judge.

THIS CAUSE is before the Court upon Defendants' Motion to Dismiss Plaintiff's Complaint, D.E. 17, filed on August 30, 2013. Plaintiff filed his Response, D.E. 22, on September 26, 2013. The time for filing a reply brief has passed. Therefore, this Motion is now ripe for disposition.

THE COURT has considered the Motion and the pertinent portions of the record and is otherwise fully advised in the premises. Defendants argue that the Complaint should be dismissed in its entirety for failure to join indispensable parties, and also asserts various grounds for dismissing each individual count. For the reasons set for below, the Court denies Defendants' Motion with respect to all but one count of the Complaint.

BACKGROUND

This suit concerns allegations of repeated real-estate fraud. Plaintiffs Bernard and Sylvie Combe are residents of Nice, France. D.E. 1 ¶¶ 4–5. Defendant Flocar Investment Group Corp. (“Flocar”) is a Florida corporation with its principal place of business in Miami, Florida. Id. ¶ 6. Resco International LLC (“Resco”) is a Florida limited liability company with its principal place of business in Miami, Florida. Id. ¶ 7. Finance Industry Corporation (“Finance Industry”) is a Delaware corporation with its principal place of business in Miami, Florida—however, Plaintiffs allege that Finance Industry fraudulently holds itself out as a Florida corporation licensed to do business in this state. Id. ¶ 8. Defendant FIG Management (“FIG”) is a Florida limited liability company which its principal place of business in Miami, Florida. Id. ¶ 9. Defendant Delma Koessler is a resident of Florida and a licensed real estate broker. Id. ¶ 10. Defendant Robert Koessler is also a resident of Florida. Id. ¶ 11. According to Plaintiffs, the Koessler Defendants are the owners of Flocar, the managing members Resco and FIG, and the sole shareholders of Finance Industry. They are, in other words, the orchestrators of the fraudulent scheme alleged in the Complaint.

Plaintiffs are French citizens who sought to invest their savings in American real estate. Id. ¶ 12. Plaintiffs allege that the Koessler Defendants, through the various entities under their ownership and control, perpetrated a scheme that involved purported sales of real property, conflicts of interest, undisclosed mortgages, and unrecorded deeds on properties that the Koessler Defendants owned and induced Plaintiffs to buy. Id. ¶ 13. Plaintiffs allege that once they purchased the subject properties, Defendants, through FIG, collected thousands of dollars in rent money for over a year, without ever delivering said money to Plaintiffs. Id. ¶ 14. Plaintiffs first contacted the Koessler Defendants in 2011 and, over the course of 2012, Plaintiffs signed purchase contracts for four different properties through Flocar. Id. ¶¶ 15–17. Plaintiffs eventually sent over $600,000 to Flocar, Resco, and Finance Industry. Id. ¶ 20.

The Complaint extensively details the facts underlying each real estate transaction, which the Court will briefly summarize. In April or May of 2012, Plaintiffs paid approximately $145,000 for the purchase of the property at 18452 Heather Road, Fort Meyers, FL from Resco, with Flocar acting as broker. Id. ¶ 21. Neither Flocar, nor Resco, nor the Koesslers ever disclosed to Plaintiff that in 2010 Resco, through its principals, the Koesslers, had recorded a mortgage on the property in favor of another party for $42,500. Id. ¶ 24. When the deed was finally recorded nearly a year later, Defendants only recorded a quitclaim deed, rather than the warranty deed Plaintiffs had expected. Id. ¶ 26.

In September 2012, Plaintiffs entered into a contract to purchase the property 8967 SW 225 Street, Cutler Bay, FL from Resco, with Flocar as agent, paying approximately $158,000 for the property. Id. ¶ 27. Again, only a quitclaim deed was ever recorded. Id. ¶ 28. In April 2012, Plaintiff Bernard Combe purportedly purchased property at 22079 SW 92 Place, Miami, FL from Finance Industry, with Flocar acting as agent, paying approximately $190,000. Id. ¶ 29. Defendants never delivered a deed to Plaintiff, and no such deed has been recorded. Id. ¶ 33. Moreover, eleven days prior to the purported sale, Finance Industry recorded a mortgage on that same property in favor of another party for $62,500, and failed to disclose that mortgage. Id. ¶¶ 35–36. In August 2012, Plaintiffs entered into a contract for a property at 21943 SW 88 Path, Miami, FL, paying approximately $158,000. Id. ¶¶ 38–39. Rather than closing on that sale, Flocar insisted that the money could be used for purchase of an equivalent property in the same subdivision—no such purchase has been made to date. Id. ¶ 40.

Defendants had an understanding with Plaintiffs pursuant to which Defendants' property management entity, FIG, would be responsible for leasing the property to tenants, collecting rent, and taking care of maintenance. Id. ¶ 41. FIG has collected taxes and insurance premiums from Plaintiffs for the subject properties, and has collected rent for the properties. Id. ¶ 42. Plaintiff allege that FIG has sent Plaintiffs account statements showing rents being collected that are lower than previously agreed to, and several questionable expenses deducted by FIG. Id. 143. Furthermore, to date, Plaintiff has yet to receive one cent of the rental income that FIG claims to have collected. Id. 144.

LEGAL STANDARD

In order to state a claim, Federal Rule of Civil Procedure 8(a)(2) requires only “a short and plain statement of the claim showing that the pleader is entitled to relief.” While a court, at this stage of the litigation, must consider the allegations contained in the plaintiff's complaint as true, this rule “is inapplicable to legal conclusions.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). In addition, the complaint's allegations must include “more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Id. (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). Thus, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. (citing Twombly, 550 U.S. at 555, 127 S.Ct. 1955).

In practice, to survive a motion to dismiss, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim for relief that is plausible on its face.’ ” Id. (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id. The plausibility standard requires more than a sheer possibility that a defendant has acted unlawfully. Id. 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. Determining whether a complaint states a plausible claim for relief is a context-specific undertaking that requires the court to draw on its judicial experience and common sense. Id. at 679, 129 S.Ct. 1937.

DISCUSSION

A. Plaintiff did not fail to join indispensable parties

Defendants move to dismiss the Complaint in its entirety for failure to join the “settlement/escrow agents” supposedly associated with the subject real-estate transactions. Defendants list these supposed agents in their Motion, but they are nowhere mentioned in the Complaint. Nor do Plaintiffs' claims depend in any way on the actions or inactions of these supposed agents. Each count alleges some injurious action or inaction by one or more of the named Defendants themselves, and not absent third-parties. Federal Rule of Civil Procedure 19(a) makes mandatory the joinder of certain parties. A party must be joined if, “in that person's absence, the court cannot accord complete relief among existing parties,” Fed.R.Civ.P. 19(a)(1)(A), or “that person claims an interest relating to the subject of the action is so situated that disposing of the action in the person's absence may” work a prejudice on an absent or named party, Fed.R.Civ.P. 19(a)(1)(B). Defendants have not explained why the court cannot accord complete relief among the parties in these supposed agents' absence. Nor do Defendants suggest that these absent parties claim a legitimate interest in the real-estate transactions that are the subject of this action. This basis for the Motion is therefore rejected.

B. Fraud-based counts

Plaintiffs brings against various Defendants two counts of fraud in the inducement (Counts I and IV), two counts of fraudulent misrepresentation (Counts III and VI), and one count of civil conspiracy to, inter alia, commit fraud (Count XV). Defendants move to dismiss these counts for failure to plead fraud with the level of particularity required by Federal Rule of Civil Procedure 9(b). Pursuant to that rule, “a party must state with particularity the circumstances constituting fraud or mistake.” Fed.R.Civ.P. 9(b). To satisfyRule 9(b), a plaintiff must establish the who, what, when, where, and how of a fraud. See Mizarro v. Home Depot, Inc., 544 F.3d 1230, 1237 (11th Cir.2008). But the application of Rule 9(b) is not intended to abrogate the concept of notice pleading. See Ziemba v. Cascade Int'l, Inc., 256 F.3d 1194, 1202 (11th Cir.2001). Rather, the purpose of the heightened pleading standard for fraud is to give the defendant notice of the claims brought against it, to protect the defendant from harm to its...