O'Halloran v. First Union National Bank of Fl.
| Decision Date | 26 April 2002 |
| Docket Number | No. 8:01-CV-1779-T-17EAJ.,8:01-CV-1779-T-17EAJ. |
| Citation | 205 F.Supp.2d 1296 |
| Parties | Kevin O'HALLORAN, as Chapter 11 Trustee for Greater Ministries International, Inc. et al.; and William C. Smith, an individual, and John Tingue, an individual, suing on behalf of themselves and all persons similarly situated, Plaintiffs, v. FIRST UNION NATIONAL BANK OF FLORIDA, Defendant. |
| Court | U.S. District Court — Middle District of Florida |
Michael C. Addison, Addison & Delano, P.A., Tampa, FL, J. Michael Rediker, Haskell, Slaughter, Young & Rediker, LLC, Birmingham, AL, for Plaintiffs.
Nancy J. Faggianelli, Thomas P. Barber, Carlton Fields, P.A., Tampa, FL Gary Lee Sasso, J. Andrew Meyer, Carlton Fields, P.A., St. Petersburg, FL, for Defendants.
THIS CAUSE is before the Court on Defendant's Motion to Dismiss First Amended Complaint and Memorandum in support thereof (Dkt. Nos. 19-20); Plaintiff's Response to Defendant's Motion to Dismiss the First Amended Complaint (Dkt. No. 24); and Plaintiff's First Amended Complaint (Dkt. No. 16).
This suit arises out of a Ponzi scheme that was operated under the guise of Greater Ministries International Church (Greater Ministries). Representatives of Greater Ministries and Greater Ministries International Incorporated operated and marketed a "double-your-money" scheme called the "Faith Promises Program." During this time, Greater Ministries used First Union National Bank (Defendant) as a major depository and source of financial services while operating the Ponzi scheme. Eventually, the Ponzi scheme swindled more than fifteen thousand victims out of an estimated five hundred million dollars. Many of the principals of Greater Ministries, including its cofounders Gerald and Betty Payne, Don Hall, and David Whitfield were convicted in this Court for a variety of federal offenses.
In August of 1999, Greater Ministries was put into receivership, and the federal receiver initiated an involuntary bankruptcy case against Greater Ministries. Then, on September 24, 1999, Plaintiff Kevin O'Halloran (Plaintiff O'Halloran) was appointed trustee of the bankruptcy estates of Greater Ministries.
On August 24, 2001, Plaintiff O'Halloran and Plaintiffs William C. Smith and John Tingue (Investors or Individual Plaintiffs) filed suit against Defendant in the Thirteenth Judicial Circuit, in and for Hillsborough County, which was subsequently removed to this Court on September 17, 2001. Plaintiffs then filed an amended complaint on November 28, 2001, asserting causes of action against Defendant for aiding and abetting crimes and torts; assisting breach of fiduciary duties; breach of Duties to Warn and to Control; and Negligence. Defendant now moves to dismiss Plaintiffs' complaint on the grounds that it violates Rule 8 of the Federal Rule of Civil Procedure; that Plaintiff O'Halloran does not have standing to bring the cause of action against Defendant; and that Plaintiffs have failed to state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure.
In ruling on a motion to dismiss, the court should not dismiss a complaint unless it appears beyond doubt that the plaintiff can prove no set of facts that would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 56-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). In considering a motion to dismiss, the court must take all material allegations of the complaint as true and liberally construe those allegations in favor of the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974). However, a plaintiff may not merely "label" claims to survive a motion to dismiss. Blumel v. Mylander, 919 F.Supp. 423, 425 (M.D.Fla.1996). When, on the basis of a dispositive issue of law, no construction of the factual allegation will support the cause of action, dismissal of the complaint is appropriate. Executive 100, Inc. v. Martin County, 922 F.2d 1536 (11th Cir.1991).
Defendant first argues that this Court should dismiss Plaintiffs' complaint on the grounds that it fails to meet the pleading requirements set forth in Rule 8 of the Federal Rules of Civil Procedure.
To comply with Rule 8 of the Federal Rules of Civil Procedure, at a minimum, the complaint must provide a "short and plain statement of the claim" that "will give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests." Conley, 355 U.S. at 47, 78 S.Ct. 99 (quoting Fed.R.Civ.P. 8(a)(2)). Although their complaint is a bit lengthy, Plaintiffs have complied with Rule 8 by alleging facts that put Defendant on fair notice of what their claims against Defendant are. "To comply with fair notice, a complaint should at least allege in general terms the acts, customs, practices, policies of the defendant in a manner sufficient to allow an informed response." Desai v. Tire Kingdom, Inc., 944 F.Supp. 876, 879 (M.D.Fla.1996) (citing Cummings v. Palm Beach County, 642 F.Supp. 248, 249 (S.D.Fla.1986)). Accordingly, Plaintiffs' complaint alleges those acts, practices, and policies that Defendant committed and puts Defendant on notice of the causes of action that Plaintiffs assert against it.
Additionally, the Court notes that, even if it were to find that Plaintiffs' complaint was a "shot gun pleading" or failed to comply with Rule 8, the proper remedy would be to allow Plaintiffs to amend their complaint or to strike those portions that the Court found did not comply with the Federal Rules of Civil Procedure, not the harsh sanction of dismissal. See Cesnik v. Edgewood Baptist Church, 88 F.3d 902, 905 (11th Cir.1996) (); McHenry v. Renne, 84 F.3d 1172, 1178-1179 (9th Cir.1996) (). Because the Court finds that Plaintiffs' complaint complies with Rule 8 of the Federal Rules of Civil Procedure, Defendant's motion must be denied as to this point.
Standing is a preliminary jurisdictional matter and whether a plaintiff has standing is always a threshold inquiry. E.F. Hutton, Inc. v. Hadley, 901 F.2d 979, 983 (11th Cir.1990). The Court must accept all of the allegations of the complaint as true and disregard the plaintiff's likelihood of success on the merits of his or her claim. Id. at 984.
To analyze whether a plaintiff has standing in a particular case, the United States Supreme Court formulated a "two-component framework consisting of `irreducible' constitutional requirements and prudential considerations." Id. (citing Valley Forge Christian College v. Americans United for Separation of Church & State, 454 U.S. 464, 472, 102 S.Ct. 752, 70 L.Ed.2d 700 (1982)). First, the party asserting standing must have suffered actual injury or show the imminence of such injury. Id. (citing Valley Forge, 454 U.S. at 472, 102 S.Ct. 752). Next, the injury must be fairly traceable to the alleged unlawful conduct. Id. (citing Valley Forge, 454 U.S. at 472, 102 S.Ct. 752). Finally, the plaintiff must demonstrate that the requested relief will likely redress the injury. Id. (citing Valley Forge, 454 U.S. at 472, 102 S.Ct. 752).
After the plaintiff has satisfied these constitutional requirements, the Court must inquire as to whether there are prudential considerations that may restrain the Court from hearing the case. Id. (citing Fed. Deposit Ins. Corp. v. Morley, 867 F.2d 1381, 1386 (11th Cir.1989)). The Supreme Court recognizes three considerations that discourage judicial action, despite a party's satisfaction of the constitutional prerequisites for standing: "1) assertion of a third party's rights, 2) allegation of a generalized grievance rather than an injury particular to the litigant, and 3) assertion of an injury outside the zone of interests of the statute or constitutional provision." Id. at 985 (citing Valley Forge, 454 U.S. at 474-475, 102 S.Ct. 752).
Defendant argues that Plaintiff O'Halloran, as trustee for Greater Ministries, does not have standing to bring suit against Defendant because Greater Ministries' own fraud was responsible for the alleged losses for which Plaintiff O'Halloran seeks to recover. Plaintiffs argue that Gerald Payne (Payne) was responsible for the losses that Plaintiffs seek to recover; therefore, his actions are not attributed to Greater Ministries, and Plaintiff O'Halloran has standing to sue.
The Court finds that Feltman v. Prudential Bache Securities, 122 B.R. 466, 470 (S.D.Fla.1990), is persuasive in determining that Plaintiff O'Halloran does not have standing to bring suit against Defendant for the alleged losses that he seeks to recover. In Feltman, the Chapter 11 trustee and unsecured creditors of two sham corporations filed suit against the principal officer and president (the defendant officer) of the corporations who defrauded investors out of millions; and the defendant officer's broker, bank, and accountant for negligence and participation in breach of fiduciary duty. 122 B.R. at 469. The plaintiffs' claims stemmed from the defendant officer's embezzlement scheme, in which he incorporated two corporations under the guise of using them to provide financial services to clients. Id. In their allegations, the plaintiffs claimed that the bank where the defendant officer established the bank accountants for the corporations was aware of "suspicious withdrawals and deposits" and that it "accepted forged endorsements," in furtherance of the defendant officer's embezzlement scheme. Id. at 470.
All of the defendants, except the defendant officer, moved to dismiss the complaint on the grounds that the trustee lacked standing to bring suit against them. Id. The United States District Court for the Southern District of Florida agreed, stating that,
[T]he...
To continue reading
Request your trial
-
In re Chira
...the weaker party. See Lanz v. Resolution Trust Corp., 764 F.Supp. 176, 179 (S.D.Fla. 1991); O'Halloran v. First Union National Bank of Florida, 205 F.Supp.2d 1296, 1301 (M.D.Fla.2002), aff'd 350 F.3d 1197 (11th Cir.2003). Moreover, evidence that one party placed trust or confidence in the o......
-
In re Meridian Asset Management, Inc.
...the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests." O'Halloran v. First Union Nat'l Bank of Florida, 205 F.Supp.2d 1296, 1299 (M.D.Fla.2002) (citing Conley v. Gibson, 355, U.S. 41, 47, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)) also see Bankr......