Francois v. Hatami
| Decision Date | 30 September 2021 |
| Docket Number | Civil Action No. 21-22528-Civ-Scola |
| Citation | 565 F.Supp.3d 1259 |
| Parties | Charite FRANCOIS, Plaintiff, v. Mazyer HATAMI and others, Defendants. |
| Court | U.S. District Court — Southern District of Florida |
Frank Wolland, North Miami, FL, for Plaintiff.
Eduardo Francisco Rodriguez, Efr Law Firm, Alexander Fernandez Fox, Alexander F. Fox, P.A., Coral Gables, FL, for Defendants Mazyer Hatami, ATM Shipping Corp.
Order on Motion to Dismiss
This matter is before the Court on the Defendants’ motion to dismiss. (ECF No. 13.) The Plaintiff filed a response, opposing the motion and requesting leave to amend should the Court grant the motion. (ECF No. 16.) The Defendants filed a reply brief in support of their motion. (ECF No. 21.) After careful consideration of the parties’ briefs and the relevant legal authorities, the Court grants the Defendants’ motion to dismiss. (ECF No. 13 .)
Around the end of May 2016, Mazyer Hatami offered to sell a vessel to Charite Francois. (ECF No. 1-1 at ¶ 10.) Francois wanted a vessel to do business between Florida and Haiti. (ECF No. 1-1 at ¶ 31.) Hatami provided Francois with information about and access to the vessel, and he gained Francois's trust through frequent meetings and discussions. (Id. at ¶¶ 9, 13.) Hatami made representations to Francois about the vessel's condition, operability, and title, as well as his intentions to perform additional work on the vessel. (Id. at ¶ 10.)
On May 31, 2016, Hatami and ATM Shipping Corp. (a now-dissolved corporation that was owned and controlled by Hatami) entered into a contract for the sale of the vessel, the M/V Hope II. ) Francois paid $180,000 and promised to later pay an additional $70,000—a total purchase price of $250,000. (Id. ) Almost a year later, the agreement was orally modified. (Id. at ¶ 12.) The parties agreed to reduce the sale price to $240,000, due to the Defendants’ failure to perform repairs, and the parties agreed that Francois would pay another $15,000 immediately and pay the remaining balance at a rate of $2,000 a month. (Id. ) It appears that this oral agreement was reduced to writing on May 31, 2017 (the "Addendum"). (ECF No. 13-2.)
The original contract stated that the M/V Hope II was sold without any warranty and "as is, where is," although ATM Shipping promised to deliver the vessel with "all mechanical systems running[.]" However, the Addendum superseded the previous contract and reiterated that the M/V Hope II was sold "as is, where is," with no warranties. (ECF No. 13-2.) The Addendum added that ATM Shipping had no responsibility to make any repairs to the vessel or render any services to it. (Id. )
While some figuratively muse that a boat is no more than a hole in the water, Francois alleges that the vessel he bought was "essentially worthless." (ECF No. 1-1 at ¶ 43.) Nearly four years later, Francois filed a lawsuit in Florida state court against three defendants (Hatami, ATM Shipping, and an unnamed John Doe), alleging eight claims: (1) fraud in the inducement, (2) violation of Florida Stat. 895.03 ("Florida RICO"), (3) violation of Florida Stat. 772.103 (the Civil Remedies for Criminal Practices Act), (4) violation of 18 U.S.C. §§ 1961 et seq. ("RICO"), (5) conspiracy to commit fraud, (6) unjust enrichment, (7) money had and received, and (8) recission for mutual mistake. (See ECF No. 1-1.) The Defendants removed the action to federal court in July 2021 and filed the instant motion to dismiss on August 6, 2021.
When considering a motion to dismiss under Rule 12(b)(6), the Court must accept all of the complaint's allegations as true, construing them in the light most favorable to the plaintiff. See Pielage v. McConnell , 516 F.3d 1282, 1284 (11th Cir. 2008). A pleading need only contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). But the plaintiff must nevertheless articulate "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "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." Ashcroft v. Iqbal , 556 U.S. 662, 678–79, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. Thus, a pleading that offers mere "labels and conclusions" or "a formulaic recitation of the elements of a cause of action" will not survive dismissal. Id.
In applying the Supreme Court's directives in Twombly and Iqbal , the Eleventh Circuit has provided the following guidance:
In considering a motion to dismiss, a court should (1) eliminate any allegations in the complaint that are merely legal conclusions; and (2) where there are well-pleaded factual allegations, assume their veracity and then determine whether they plausibly give rise to an entitlement to relief. Further, courts may infer from the factual allegations in the complaint obvious alternative explanation[s], which suggest lawful conduct rather than the unlawful conduct the plaintiff would ask the court to infer.
Kivisto v. Miller, Canfield, Paddock & Stone, PLC , 413 F. App'x 136, 138 (11th Cir. 2011) (citations omitted). "This is a stricter standard than the Supreme Court described in Conley v. Gibson , 355 U.S. 41, 45–46 [78 S.Ct. 99, 2 L.Ed.2d 80] (1957) [.]’ " Mukamal v. Bakes , 378 F. App'x 890, 896 (11th Cir. 2010).
Where a cause of action sounds in fraud or mistake, Rule 9(b) must also be satisfied. Under Rule 9(b), "a party must state with particularity the circumstances constituting fraud or mistake," although "conditions of a person's mind," such as malice, intent, and knowledge, "may be alleged generally." Fed. R. Civ. P. 9(b). "The ‘particularity’ requirement 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." W. Coast Roofing & Waterproofing, Inc. v. Johns Manville, Inc. , 287 F. App'x 81, 86 (11th Cir. 2008) (citations omitted). Thus, the Rule's "particularity" requirement is not satisfied by "conclusory allegations that certain statements were fraudulent; it requires that a complaint plead facts giving rise to an inference of fraud." Id. To meet this standard, the complaint needs to identify the precise statements, documents, or misrepresentations made; the time and place of, and the persons responsible for, the alleged statements; the content and way the statements misled the plaintiff; and what the defendant gained through the alleged fraud. See id.
With these standards in mind, the Court turns to the Plaintiff's complaint to see whether the claims are sufficiently alleged to withstand dismissal.
The Plaintiff alleged claims under 18 U.S.C. §§ 1961 et seq. , Florida Stat. 895.03, and Florida Stat. 772.03 (the "RICO Claims"). To sufficiently allege a RICO claim, a plaintiff must plead "(1) that the defendant (2) through the commission of two or more acts (3) constituting a ‘pattern’ (4) of ‘racketeering activity’ (5) directly or indirectly invests in, or maintains an interest in, or participates in (6) an ‘enterprise’ (7) the activities of which affect interstate or foreign commerce."
McCulloch v. PNC Bank Inc. , 298 F.3d 1217, 1225 (11th Cir. 2002) (citing 18 U.S.C. §§ 1962(a) - (c) ).1
Jackson , 372 F.3d at 1264. Francois only alleges one predicate act—that the Defendants "defrauded the Plaintiff" and took his money "under false pretenses ... without following through with their obligations under the purchase agreements" in connection with the sale of the M/V Hope II. (ECF No. 1-1 at ¶¶ 20, 26, 34.) Francois asserts that he pled a second predicate act, gesturing to a vague allegation that the Defendants "purported to sell vessels, vehicles, and marine services ... and abscond[ed] with the purchaser's money" on other unspecified occasions. (Id. ) Francois promises that discovery will "uncover[ ]" and "reveal" further details and additional predicate acts. (ECF No. 16 at 5–6 & n.1.) However, "RICO should be a vehicle to right a wrong, not to find one." Delfrate v. Letts , No. 95-185-CIV-T-17, 1996 WL 420880, at *21 (M.D. Fla. Mar. 25, 1996) (cleaned up). Without alleging the "who, when, where, how, and why" of multiple predicate acts, a defendant has no notice of the claims against it and RICO is turned into a fishing pole rather than a tool for "fighting crime." Id. at *14 ; Sedima v. Imrex Co. , 473 U.S. 479, 498, 105 S.Ct. 3275, 87 L.Ed.2d 346 (1985).
Second, Francois's RICO Claims further fail because he does not allege a "continuing" racketeering activity. See Jackson , 372 F.3d at 1264. The "continuity" requirement can be alleged as either "open-ended continuity" or "closed-ended continuity." Id. at 1265 (citing H.J. Inc. v. Northwestern Bell Tel. Co. , 492 U.S. 229, 241–42, 109 S.Ct. 2893, 106 L.Ed.2d 195 (1989) ). "Open-ended continuity" exists where the alleged racketeering acts have a "specific threat of repetition extending indefinitely into the future" or are otherwise the defendants’ "regular way of doing business," while "closed-ended continuity" exists where the alleged acts extended over a "substantial period of time." Jackson , 372 F.3d at...
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