Cont'l 332 Fund, LLC v. David Albertelli, Albertelli Constr. Inc., Case No: 2:17-cv-41-FtM-38MRM
| Decision Date | 13 February 2018 |
| Docket Number | Case No: 2:17-cv-41-FtM-38MRM |
| Parties | CONTINENTAL 332 FUND, LLC, CONTINENTAL 298 FUND LLC, CONTINENTAL 306 FUND LLC, CONTINENTAL 326 FUND LLC, CONTINENTAL 347 FUND LLC, CONTINENTAL 355 FUND LLC, CONTINENTAL 342 FUND LLC, and CONTINENTAL 245 FUND LLC, Plaintiffs, v. DAVID ALBERTELLI, ALBERTELLI CONSTRUCTION INC., GEORGE ALBERTELLI, WESTCORE CONSTRUCTION, LLC, NATIONAL FRAMING, LLC, MFDC, LLC, TEAM CCR, LLC, BROOK KOZLOWSKI, JOHN SALAT, KEVIN BURKE, ANGELO EQUIZABAL, BRAV021, LLC, KERRY HELTZEL, AMY BUTLER, US CONSTRUCTION TRUST, FOUNDATION MANAGEMENT, LLC, KMM CONSTRUCTION, LLC, and WESTCORE CONSTRUCTION, L.L.C., Defendants. |
| Court | U.S. District Court — Middle District of Florida |
This matter comes before the Court on nine motions to dismiss filed by Defendants David Albertelli (Doc. 80); Albertelli Construction, Inc. ("ACI") (Doc. 81); George Albertelli(Doc. 82); Amy Butler (Doc. 83); Brook Kozlowski (Doc. 84); Kevin Burke (Doc. 85); John Salat (Doc. 86); Kerry Heltzel (Doc. 87); and Foundation Management, LLC, KIMM Construction, LLC, MFDC, LLC, National Framing, LLC, Team CCR, LLC, US Construction Trust, Westcore Construction, LLC (Del.) ("Westcore I") and Westcore Construction L.L.C. (Nev.) ("Westcore II")2 (Doc. 88). Plaintiffs' have filed an Omnibus Response (Doc. 97). This matter is ripe for review.
The 130-page Second Amended Complaint alleges that Defendants, a group of interrelated individuals and companies, perpetrated a pattern of fraud and other acts on apartment construction projects around the country. (Docs. 49; 49-1). Plaintiffs are single-purpose entities that fund apartment complex construction projects. (Doc. 49 at ¶¶ 15-24, 3 n. 1). They allege Defendants George Albertelli and his son David Albertelli (collectively, the "Albertellis") provided bribes to an official from Plaintiffs' parent company to secure inside information and $202,696,588.38 in construction contracts. (Doc. 49 at ¶¶ 50, 78-79, 86, 116 - 123). Each Plaintiff contracted with either ACI or Westcore to build eight apartment complexes in five states:
After the contracts were executed, Defendants allegedly engaged in coordinated schemes to enrich the Albertellis. (Doc. 49 at ¶¶ 128-229). On this basis, the Second Amended Complaint lodges counts ranging from the Racketeer Influenced and Corrupt Organizations Act ("RICO") to professional negligence. (Doc. 49). Defendants move to dismiss arguing the Second Amended Complaint violates Federal Rule of Civil Procedure 8(a) and 9(b). (Docs. 80, 81, 82, 83, 84, 85, 86, 87, 88).
Federal Rule of Civil Procedure 8(a)(2) states that a pleading must contain a short and plain statement of a claim showing that the pleader may have relief. Rule 8(a)(2)'s purpose is to "give the defendant fair notice of what the claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal punctuation omitted). "Each allegation must be simple, concise, and direct." Fed. R. Civ. P. 8(d)(1).
Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 1371 (11th Cir. 1997) (internal quotations omitted). Allegations relating to "[m]alice, intent, knowledge, and other conditions of a person's mind may be alleged generally." Id.
Rule 9(b) "serves an important purpose in fraud actions by alerting defendants to the precise misconduct with which they are charged and protecting defendants against spurious charges of immoral and fraudulent behavior." Id. at 1370-71 (internal quotations omitted). Although it imposes a heightened pleading standard, the Eleventh Circuit has cautioned that "Rule 9(b) must not be read to abrogate [R]ule 8 . . . and a court considering a motion to dismiss for failure to plead fraud with particularity should always be careful to harmonize the directives of [R]ule 9(b) with the broader policy of notice pleading." Friedlander v. Nims, 755 F.2d 810, 813 (11th Cir. 1985). Courts have found requisite particularity in a pleading that lacked specifics but presented sufficient description to apprise defendants of the allegations against them. See Seville Indus. Mach. Corp. v. Southmost Mach. Corp., 742 F.2d 786, 791 (3d Cir. 1984) (); see also Brooks, 116 F.3d at 1371 (). Though "[i]t is certainly true that allegations of date, place or time [are traditional indicia of particularity] . . . nothing in the rule requires them." Seville Indus. Mach. Corp., 742 F.2d at 791.
Under Federal Rule of Civil Procedure 12(b)(6), a court may dismiss a pleading for failure to state a claim upon which relief can be granted. The Twombly-lqbal plausibility standard guides such dismissals. This standard requires a plaintiff to allege sufficient facts "to raise a reasonable expectation that discovery will reveal evidence" to support a claim. Twombly, 550 U.S. at 556. The court must accept all factual allegations in a plaintiff's complaint as true and take them in the light most favorable to the plaintiff. Pielage v. McConnell, 516 F.3d 1282, 1284 (11th Cir. 2008). This acceptance is limited to well-pleaded factual allegations. La Grasta v. First Union Sec., Inc., 358 F.3d 840, 845 (11th Cir. 2004). Alleging "the-defendant-unlawfully harmed me" is insufficient. Iqbal, 556 U.S. at 677. "Nor does a complaint suffice if it tenders naked assertions devoid of further factual enhancement." Id. (internal modifications omitted).
Defendants argue that nearly all the forty-four counts in the Second Amended Complaint should be dismissed. Some arguments apply to more than one count. The Court will address each.
Count 1 alleges that Defendants violated the RICO Act by perpetrating several schemes to defraud Plaintiffs on construction projects across the country. (Doc. 49 at ¶¶ 62-236). Counts 2 and 3 incorporate the entire pleading with Count 1 to allegeDefendants conspired to violate Florida's RICO Act and did so. (Doc. 49 at ¶¶ 237-57). Defendants argue these counts should be dismissed because they do not satisfy Rules 8(a) or 9(b). The Court agrees.
First, the 76 pages of allegations to support Count 1 do not constitute short or plain statements under Rule 8(a)(2). Although Count 1's allegations are complex, Plaintiff must still satisfy the pleading requirements. "While a complaint containing RICO claims is often required to be somewhat lengthier than other complaints, the assertion of RICO claims does not in itself excuse a plaintiff from satisfying the requirements of Rule 8(a)(2) and Rule 8[(d)(1)]." Thomas v. Am. Tobacco Co., 173 F.R.D. 546, 547 (M.D. Ga. 1997).
Second, Count 1's allegations are redundant and confusing. In 257 paragraphs, the allegations to support Count 1 appear twice in the body of the pleading and at least twice more in Count 1. (Doc. 49 at ¶¶ 1-14, 48-61, 63-67, 68-115, 128-217, 223-229). Count 1 alleges out of chronological order over ten fraudulent schemes on eight construction sites across the country. Complicating matters, Plaintiff pleads different levels of specificity.
Third, and perhaps most confusing, the RICO allegations switch vantage points between the actions of select parties and the broadly-described "schemes" perpetrated by the Defendants. (Doc. 49 at ¶¶ 88-115, 128-217). This structure convolutes Count I to a point of near unreadability. This unreadability breaks with Rule 8(a)(2)'s command for a "simple, concise, and direct" pleading. See Kleinschmidt v. Liberty Mut. Ins. Co., 142 F.R.D. 502, 504 (S.D. Fla. 1992) ().
For these reasons, Count 1 must be dismissed. And because Counts 2 and 3 incorporate the allegations of Count 1, the Court dismisses them too.4
Next, Defendants allege that several counts should be dismissed as improper shotgun pleadings. They are correct. Generally, shotgun pleadings "are those that incorporate every antecedent allegation by reference into each subsequent claim for relief or affirmative defense." Wagner v. First Horizon Pharm. Corp., 464 F.3d 1273, 1279 (11th Cir. 2006). The result is that the last count eventually constitutes a combination of the other counts incorporated in it. See Weiland v. Palm Beach County Sheriff's Office, 792 F.3d 1313 (...
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