Freeman v. First Union Nat., No. 02-11559.

CourtUnited States Courts of Appeals. United States Court of Appeals (11th Circuit)
Writing for the CourtPer Curiam
Citation329 F.3d 1231
PartiesLewis B. FREEMAN, as Receiver of Unique Gems Int'l Corp., Lucy Martinez, individually and on behalf of all others similarly situated, Plaintiffs-Appellants, v. FIRST UNION NATIONAL, a National Banking Association f.k.a. First Union National Bank of Florida, N.A., Defendant-Appellee, Hector Ponte, an individual, Defendant.
Decision Date07 May 2003
Docket NumberNo. 02-11559.

Page 1231

329 F.3d 1231
Lewis B. FREEMAN, as Receiver of Unique Gems Int'l Corp., Lucy Martinez, individually and on behalf of all others similarly situated, Plaintiffs-Appellants,
v.
FIRST UNION NATIONAL, a National Banking Association f.k.a. First Union National Bank of Florida, N.A., Defendant-Appellee,
Hector Ponte, an individual, Defendant.
No. 02-11559.
United States Court of Appeals, Eleventh Circuit.
May 7, 2003.

Page 1232

Patrice A. Talisman, Hersch & Talisman, P.A., Carol Cox Berk, Mishan, Sloto, Hoffman & Greenberg, Miami, FL, for Plaintiffs-Appellants.

Elliot H. Scherker, Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A., Miami, FL, for Defendant-Appellee.

Appeal from the United States District Court for the Southern District of Florida.

Before BARKETT and KRAVITCH, Circuit Judges, and FULLAM*, District Judge.

PER CURIAM:


Lewis B. Freeman, court-appointed receiver for Unique Gems International Corp. ("Unique Gems"), and Lucy Martinez, class representative of Unique Gems' creditors ("the Creditor Plaintiffs"), appeal the district court's dismissal of their claims against First Union National Bank ("First Union") for its alleged participation in a fraudulent Ponzi scheme perpetrated by the principals of Unique Gems. The district court dismissed, with prejudice, Freeman and the Creditor Plaintiffs' jointly-filed aiding and abetting a fraudulent transfer claim for failure to state a cause of action under Florida law. The court similarly dismissed Freeman's individually asserted negligence claim for lack of standing. On appeal, Freeman and the Creditor Plaintiffs argue (1) that the Florida courts would recognize their aiding and abetting claim as a valid cause of action and (2) that the district court should have granted their motion to amend the complaint to cure any standing deficiencies concerning the negligence count. Because we are unsure of whether Florida law contemplates a cause of action for aiding and abetting a fraudulent transfer, we certify the question to the Florida Supreme Court. In addition, we reverse the district court's denial of the Creditor Plaintiffs' motion to amend because their proposed modification would cure the standing deficiency.

I. AIDING AND ABETTING A FRAUDULENT TRANSFER UNDER FLORIDA STATE LAW

The jointly-filed aiding and abetting claim is problematic because the lower Florida courts have not expressly approved such a cause of action1 and the Florida Supreme Court has not yet examined this question. We decide novel questions of state law "the way it appears the state's highest court would." Ernie Haire Ford, Inc. v. Ford Motor Co., 260 F.3d 1285, 1290 (11th Cir.2001). "Where the state's highest court has not spoken to an issue, a federal court `must adhere to the decisions of the state's intermediate appellate courts absent some persuasive indication that the state's highest court would decide the issue otherwise.'" Id. (quoting Insurance Co. of North America v. Lexow, 937 F.2d 569, 571 (11th Cir.1991)). A lack of explicit Florida case law on an issue does not absolve us of our duty "to decide what the state courts would hold if faced with it." Arceneaux v. Texaco, Inc., 623 F.2d 924, 926 (5th Cir.1980)2 (citations

Page 1233

omitted). "The issue is not resolved merely by a determination that it has not yet arisen." Id. But under Florida law, we may certify a question on the law of the state if the case turns upon it and there are no clear controlling Florida Supreme Court precedents. See Fla. Const. art. V, § 3(b)(6); Fla. Stat. § 25.031 (2002).

The district court concluded that the Florida Supreme Court would not recognize a cause of action for aiding and abetting fraudulent transfers, noting a dearth of case law supporting such a claim. It noted that Florida's Uniform Fraudulent Transfer Act ("FUFTA"), Fla. Stat. §§ 726.101 et seq. (2002), provisions defining fraudulent transfers3 are similar to 11 U.S.C. § 548 of the Bankruptcy Code. See In re Venice-Oxford Assocs., 236 B.R. 820, 834 (Bankr.M.D.Fla.1999). Based on this similarity, the district court surmised that FUFTA, like the fraudulent transfer provision of the Bankruptcy Code, is not a source of liability; rather, it only allows creditors to set aside fraudulent transfers made to transferees under a theory of cancellation. This interpretation has received some support from Florida's Fourth District Court of Appeals, which has explained that:

[a] fraudulent conveyance action is simply another creditors' remedy. It is either an action by a creditor against a transferee directed against a particular transaction, which, if declared fraudulent, is set aside thus leaving the creditor free to pursue the asset, or it is an action against a transferee who has received an asset by means of a fraudulent conveyance and should be required to either return the asset or pay for the asset.

Yusem v. South Florida Water Mgmt. Dist., 770 So.2d 746, 749 (Fla.Dist.Ct.App. 4th Dist.2000) (reversing judgment...

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34 practice notes
  • Bravo v. U.S., No. 06-13052.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (11th Circuit)
    • July 2, 2008
    ...Florida's intermediate courts when the Florida Supreme Court has spoken on the issue—as it has in Loftin. Freeman v. First Union Nat'l, 329 F.3d 1231, 1232 (11th Cir. 2003). The majority opinion departs from our precedent in Freeman by failing to regard Loftin as binding and controlling Flo......
  • U.S. v. Sensient Colors, Inc., Civil Action No. 07-1275.
    • United States
    • U.S. District Court — District of New Jersey
    • July 22, 2009
    ...(Id.) In doing so, Sensient cites authority from the Eleventh Circuit and the District of Minnesota. See Freeman v. First Union Nat'l, 329 F.3d 1231, 1234 (11th Cir. 2003) ("[W]hen the district court denies the plaintiff leave to amend due to futility, we review the denial de novo beca......
  • Eberhard v. Marcu, Docket No. 06-4536-cv.
    • United States
    • U.S. Court of Appeals — Second Circuit
    • June 20, 2008
    ...a federally appointed receiver does not federalize the law employed to attack the transaction. See, e.g., Freeman v. First Union Nat'l, 329 F.3d 1231, 1233-34 (11th Cir.2003) (certifying to Supreme Court of Florida the question of whether Florida law supports a claim by plaintiffs, includin......
  • Jackson-Platts v. Gen. Elec. Capital Corp., No. 11–14379.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (11th Circuit)
    • August 22, 2013
    ...conceded at oral argument, GE could have removed this hypothetical UFTA action without any question. See Freeman v. First Union Nat'l, 329 F.3d 1231, 1233–34 (11th Cir.2003) (certifying Florida UFTA question to Florida Supreme Court because district court exercised diversity jurisdiction). ......
  • Request a trial to view additional results
34 cases
  • Bravo v. U.S., No. 06-13052.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (11th Circuit)
    • July 2, 2008
    ...Florida's intermediate courts when the Florida Supreme Court has spoken on the issue—as it has in Loftin. Freeman v. First Union Nat'l, 329 F.3d 1231, 1232 (11th Cir. 2003). The majority opinion departs from our precedent in Freeman by failing to regard Loftin as binding and controlling Flo......
  • U.S. v. Sensient Colors, Inc., Civil Action No. 07-1275.
    • United States
    • U.S. District Court — District of New Jersey
    • July 22, 2009
    ...(Id.) In doing so, Sensient cites authority from the Eleventh Circuit and the District of Minnesota. See Freeman v. First Union Nat'l, 329 F.3d 1231, 1234 (11th Cir. 2003) ("[W]hen the district court denies the plaintiff leave to amend due to futility, we review the denial de novo beca......
  • Eberhard v. Marcu, Docket No. 06-4536-cv.
    • United States
    • U.S. Court of Appeals — Second Circuit
    • June 20, 2008
    ...a federally appointed receiver does not federalize the law employed to attack the transaction. See, e.g., Freeman v. First Union Nat'l, 329 F.3d 1231, 1233-34 (11th Cir.2003) (certifying to Supreme Court of Florida the question of whether Florida law supports a claim by plaintiffs, includin......
  • Jackson-Platts v. Gen. Elec. Capital Corp., No. 11–14379.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (11th Circuit)
    • August 22, 2013
    ...conceded at oral argument, GE could have removed this hypothetical UFTA action without any question. See Freeman v. First Union Nat'l, 329 F.3d 1231, 1233–34 (11th Cir.2003) (certifying Florida UFTA question to Florida Supreme Court because district court exercised diversity jurisdiction). ......
  • Request a trial to view additional results

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