ORDER ON MOTIONS TO DISMISS COMPLAINT [DE 31, 33]
Before the Court for decision are (1) the Motion to Dismiss filed by Defendants Decision One Debt Relief, LLC ("Decision One"), John Sandoval, Jesse Ross, Mario Chavoyo, and Matthew Frank (collectively "the Decision One Defendants"), DE 33, and (2) the Motion to Dismiss filed by Defendants Veritas Legal Plan, Inc. ("Veritas"), Angelo Anzalone, Sara Anzalone, Victor Castaldo, and Dwayne Smith (collectively "the Veritas Defendants"). DE 31. The presiding District Judge referred these motions to the undersigned. DE 47. The parties subsequently consented, pursuant to 28 U.S.C. § 636(c), to have the undersigned enter a final Order, rather than a Report and Recommendation. DE 59.
The Court has reviewed the Motions, the Plaintiff's Responses, and the Defendants' Replies. The Court also conducted oral argument on January 16, 2019. This matter is ripe for decision.
For the reasons stated below, it is ORDERED that the Veritas Defendants' Motion to Dismiss is GRANTED WITHOUT PREJUDICE. It is further ORDERED that the Decision One Defendants' Motion is DENIED in PART and GRANTED in PART WITHOUT PREJUDICE. Plaintiff is granted leave to amend the Complaint on or before March 8, 2019.
On August 10, 2018, Plaintiff filed a six-count Complaint alleging the following:
| Tortious Interference with Contract |
| Conspiracy to Tortuously Interfere With |
| Decision One Debt Relief, LLC |
| Decision One Debt Relief, LLC |
The Decision One Defendants and the Vertitas Defendants have moved to dismiss the claims against them.1
1. Motion to Dismiss Standard A pleading in a civil action must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). To satisfy the Rule 8 pleading requirements, a claim must provide the defendant fair notice of plaintiff's claim and the grounds upon which it rests. See Swierkiewicz v. Sorema N. A., 534 U. S. 506, 512 (2002). While a claim"does not need detailed factual allegations," it must provide "more than labels and conclusions" or "a formulaic recitation of the elements of a cause of action." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007); see Ashcroft v. Iqbal, 556 U. S. 662, 678 (2009) (explaining that the Rule 8(a)(2) pleading standard "demands more than an unadorned, the defendant-unlawfully-harmed-me accusation"). Nor can a claim rest on "'naked assertion[s]' devoid of 'further factual enhancement.'" Iqbal, 556 U. S. at 678 (quoting Twombly, 550 U. S. at 557 (alteration in original)).
On a motion to dismiss under Rule 12(b)(6), the Court must view the well-pled factual allegations in the Complaint in the light most favorable to the non-moving party. Dusek v. JPMorgan Chase & Co., 832 F.3d 1243, 1246 (11th Cir. 2016). Viewed in that manner, the factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact). Twombly, 550 U. S. at 555 (citations omitted). The Supreme Court has emphasized that "[t]o survive a motion to dismiss a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Id. (quoting Twombly, 550 U. S. at 570). In addition, "courts may infer from factual allegations in the complaint obvious alternative explanations, which suggest lawful conduct rather than the unlawful conduct that plaintiff would ask the court to infer." Am. Dental Assoc. v. Cigna Corp., 605 F. 3d 1283, 1290 (11th Cir. 2010)(citing Iqbal, 556 U. S. at 682). "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.'" Iqbal, 556 U. S. at 678 (quoting Twombly, 550 U. S. at 557). When evaluating a motion to dismiss under Rule 12(b)(6):
[A] court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.
Iqbal, 556 U. S. at 679. Factually unsupported allegations based "on information and belief" are not entitled to the assumption of truth. See Scott v. Experian Info. Sols., Inc., 2018 WL 3360754, at *6 (S.D. Fla. June 29, 2018) (J. Altonaga) ("Conclusory allegations made upon information and belief are not entitled to a presumption of truth, and allegations stated upon information and belief that do not contain any factual support fail to meet the Twombly standard.").
2. Heightened Pleading Standard for Fraud under Rule 9(b) In addition to the usual notice pleading standard under Rule 8, allegations of fraud require a plaintiff to state "with particularity the circumstances constituting the fraud." Mizzaro v. Home Depot, Inc., 544 F.3d 1230, 1237 (11th Cir. 2008). The Eleventh Circuit has interpreted this requirement to mean that the complaint must set forth (1) precisely what statements or omissions were made in which documents or oral representations; (2) the time and place of each such statement and the person responsible for making (or, in the case of omissions, not making) them; (3) the content of such statements and the manner in which they misled the plaintiff; and (4) what the defendant obtained as a consequence of the fraud. FindWhat Investor Group v. FindWhat.com, 658 F.3d 1282, 1296 (11th Cir. 2011) (noting that while Rule 9(b) requires the circumstances of the fraud to be pled with particularity, "[m]alice, intent, knowledge, and other conditions of a person's mind may be alleged generally"). Here, because Funding Metrics' theory of RICO and tortious interference with contract is based on the defendants allegedly defrauding the merchants, Rule 9(b) applies to Counts 1-4. See American Bancard, LLC v. East Payment Solutions, Inc., No. 18-80681-CIV, 2018 WL 3708462 at *4 (S.D. Fla. Aug. 3, 2018) (J. Bloom)(Rule 9(b) applies to RICO claim based on fraud); Medimport S.R.L. v. Cabreja, 929 F. Supp. 2d 1302, 1320 (S.D. Fla. 2013)(J. Otazo-Reyes)(Rule 9(b) applies to tortious interference claim).
Count One of the Complaint alleges a violation of 18 U.S.C. § 1962(c) as incorporated by 18 U.S.C. § 1964(c). Section 1962(c) states in pertinent part:
It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt.
Count Two alleges a violation of Florida Statutes § 895.03(3), which provides in pertinent part:
It is unlawful for any person employed by, or associated with, any enterprise to conduct or participate, directly or indirectly, in such enterprise through a pattern of racketeering activity or the collection of an unlawful debt.
The sole textual difference between these statutes is that the federal law requires a nexus to interstate or foreign commerce. At oral argument, the parties agreed that the claims under the Florida RICO statute are to be evaluated using the same standards as the federal RICO claims.
The elements of a civil RICO claim under § 1962(c) are (1) the existence of an enterprise, (2) that the enterprise affected interstate commerce, (3) that the defendants were employed by or associated with the enterprise, (4) that the defendants participated in the conduct of the affairs of the enterprise (5) that the affairs of the enterprise were conducted through a pattern of racketeering activity, (6) that the plaintiff suffered damages, and (7) that the defendant was both the but-for and proximate cause of the damages. See Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479, 496 (1985); Holmes v. Securities Investor Protection Corp., 503 U.S. 258, 268 (1992); Ray v. Spirit Airlines, 836 F.3d 1340, 1348 (11th Cir. 2016). A defendant must have "knowingly committed, or aided and abetted in committing, at least two acts of racketeering activity." 11th Circuit Pattern Jury Instruction (Criminal) O75.1. "Knowingly" means "that an act was done voluntarily and intentionally and not because of a mistake or by accident." 11th Cir. Pattern Jury Instruction (Criminal) B9.1A. To "aid and abet" a person must intentionally associate with, or participate in,a crime as a willful participant. Merely being present or knowing about the crime is insufficient. 11th Cir. Pattern Jury Instruction (Criminal) S7. To act "willfully" means "that the act was committed voluntarily and purposely, with the intent to do something the law forbids; that is, with the bad purpose to disobey or disregard the law." 11th Cir. Pattern Jury Instruction (Criminal) B9.1A.
To "participate in the conduct of" the enterprise, a defendant must have some role in managing or operating the enterprise. Reves v. Ernst & Young, 507 U.S. 170, 179 (1993)("RICO liability is not limited to those with primary responsibility for...
