Joseph v. Bernstein
| Decision Date | 19 August 2014 |
| Docket Number | CASE NO. 13-24355-CIV-ALTONAGA |
| Court | U.S. District Court — Southern District of Florida |
| Parties | JOEL D. JOSEPH, Plaintiff, v. RICHARD S. BERNSTEIN, et al., Defendants. |
On April 28, 2014, Plaintiff, Joel D. Joseph ("Plaintiff"), filed a First Amended Complaint . . . ("Amended Complaint") [ECF No. 29], asserting claims under the Racketeer Influenced and Corrupt Organizations Act ("RICO" or the "RICO Act"), 18 U.S.C. section 1961 et seq., and the Florida Unfair Insurance Trade Practices Act ("FUITPA"), Florida Statute section 626.951 et seq., in addition to claims of elder abuse and fraud. Defendants, Richard S. Bernstein ("Bernstein") and Richard S. Bernstein and Associates, Inc. ("Bernstein, Inc.") (collectively, the "Bernstein Defendants"); and American General Life Insurance Companies LLC ("American Insurance"), American International Group, Inc. ("American Group"), and American General Assurance Company, Inc. ("American Assurance") (collectively, the "American Companies"); filed a Consolidated Motion to Dismiss . . . ("Motion") [ECF No. 33]. The Court has carefully considered the Motion, Plaintiff's Opposition . . . ("Response") [ECF No. 35], Defendants' Consolidated Reply . . . ("Reply") [ECF No. 38], and applicable law. For the reasons that follow, the Motion is granted.
On November 15, 1993, then-72-year-old Harold Joseph ("Harold") purchased a life insurance policy from Defendants. (See Am. Compl. ¶¶ 9-10). At the time, Harold was suffering from Alzheimer's disease. (See id. ¶ 10). The Bernstein Defendants are Florida insurance brokers (see id. ¶¶ 4-5); American Assurance is an Illinois corporation (see id. ¶ 6); American Insurance is a Delaware limited liability company (see id. ¶ 7); and American Group is a Delaware corporation (see id. ¶ 8). The face amount of the insurance policy was originally $3,261,392.00, and is now $2,086,044. (See id. ¶ 11). Plaintiff, along with his sisters, is a beneficiary of the policy, and the sisters have assigned their claims concerning this case to Plaintiff. (See id. ¶ 12). Plaintiff is also a trustee of the life insurance trust that owns the life insurance policy. (See id.).
According to Plaintiff, Bernstein knew Harold was vulnerable to persuasion, but Bernstein "convinced, pressured, cajoled and conned Harold Joseph into buying a life insurance policy that he did not understand." (Id. ¶ 13). Harold understood the policy would pay his beneficiaries upon his death, but this was not the case, as the policy does not pay anything until Harold and his wife both pass away. (See id. ¶ 14). Harold also did not understand the policy would never pay off if either he or his wife lived to be over 100. (See id. ¶ 16). Plaintiff alleges Bernstein held himself out as a friend to Harold, but he was not truly a friend; Bernstein was only interested in earning a very large commission (more than $100,000) from the sale of the policy. (See id. ¶¶ 17-18).
On the basis of these and other factual allegations, Plaintiff attempts to state several claims for relief — the first two of which are not based on the above allegations. The First Cause of Action (Count I), titled "For Violations of Sections 1962(c) and (d) of RICO," does notincorporate any of the previous paragraphs of the pleading, instead resting exclusively on Plaintiff's allegations he has been harmed by Defendants' alleged racketeering activity. . Plaintiff alleges Defendants "have engaged in a pattern of racketeering activity . . . by committing and/or aiding and abetting at least two such acts of racketeering activity within the past 10 years." (Id. ¶ 25 (alteration added)). Plaintiff claims Defendants conspired to commit an assortment of criminal activities, including securities fraud. (See id. ¶¶ 23-43). According to Plaintiff, these activities "were acts of criminal fraud meant to manipulate the capital positions and earnings of financial companies around the world." (Id. ¶ 34). Plaintiff claims Defendants' financial transactions led to the federal government's seizure of American Group, injuring Plaintiff and leaving him unable to sell Harold's life insurance policy. (See id. ¶¶ 44-47).
In his Second Cause of Action (Count II), titled "Violations of Sections 1962(a) and (d) of RICO," Plaintiff "seeks to recover actual and treble damages based on defendant's [sic] violations of [sections] 1962(a) and (d) of RICO." (Id. ¶ 48 (alteration added)). Count II does not incorporate any of the Amended Complaint's previous paragraphs, but Plaintiff claims Defendants' violations of the RICO Act, which he links to "the above-described pattern of racketeering activity," resulted in Plaintiff's injury — his inability to sell the policy. (Id. ¶¶ 49-50).
The Third Cause of Action (Count III), titled "Violations of the Unfair Insurance Trade Practices Act," does not incorporate any of the Amended Complaint's previous paragraphs and states the Florida Insurance Code, Florida Statute section 624.155, provides a civil remedy for violations of sections of the insurance law, including section 626.9541. (Id. 10, ¶ 53). The FUITPA, at section 626.9541, makes illegal "unfair methods of competition and unfair ordeceptive acts of [sic] practices." (Id. ¶ 54). Plaintiff alleges Defendants violated the FUITPA by misrepresenting to Harold that his children would receive a payment upon his death, and by failing to explain the policy would be worthless if he or his wife survived past the age of 100. . Plaintiff claims he has been injured by the misrepresentations and violations of law because the policy cannot be sold now and because despite Harold's passing, the beneficiaries have not been paid. (See id. ¶ 57).
The Fourth Cause of Action (Count IV), titled, "Elder Abuse in Violation of Florida Social Welfare Law," does not incorporate any of the pleading's preceding paragraphs. (Id. 11-12). Plaintiff alleges: (Id. ¶ 58 (quoting FLA. STAT. § 415.1111 (alterations added))). Plaintiff alleges Harold was a vulnerable adult, and Defendants abused, neglected, and exploited him by selling him a policy he did not understand nor want. (See id. ¶¶ 59-60). Plaintiff has suffered damages as a result of Defendants' abuse, neglect, and exploitation. (See id. ¶ 62).
The Fifth Cause of Action (Count V), titled "Common Law Fraud Against All Defendants," does not incorporate any of the Amended Complaint's preceding paragraphs. (See id. 12-13). Plaintiff alleges Bernstein misrepresented to Harold that his children would receive the policy's benefits upon his death, and Harold relied on these misrepresentations. . Plaintiff states Bernstein is an agent of Bernstein, Inc. and the American Companies, "and all [D]efendants are liable under agency principles." (Id. ¶ 64 (alteration added)). Plaintiff alleges Defendants intended to deceive Harold, and both Harold and Plaintiff were harmed by the misrepresentation. (See id. ¶¶ 66-67).
Plaintiff previously attempted to plead the claims stated in Counts III, IV, and V in his initial Complaint (see Complaint [ECF No. 1]), which the Court dismissed for various pleading deficiencies and for failure to state a claim (see April 21, 2014 Order ("April 21 Order") [ECF No. 28]).1 Plaintiff's Amended Complaint essentially re-pleads the same failed counts, and adds two new RICO claims. (See generally Am. Compl.). Defendants move to dismiss the Amended Complaint in its entirety for failure to state a claim, as well as a variety of other reasons. (See generally Mot.). The Court addresses the relevant arguments below.
Several rules governing the sufficiency of pleading are at issue.
Federal Rule of Civil Procedure 12(b)(6)
Under Rule 12(b)(6), "[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.'" Ashcrof v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)) (alteration added)). Although this pleading standard "does not require 'detailed factual allegations,' . . . it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Id. (quoting Twombly, 550 U.S. at 555). Pleadings must contain "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555. Indeed, "only a complaint that states a plausible claim for relief survives a motion to dismiss." Iqbal, 556 U.S. at 679 (citing Twombly, 550 U.S. at 556). To meet this "plausibility standard," a plaintiff must "plead[] factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. at 678 (alteration added) (citing Twombly, 550 U.S. at 556). "The mere possibility the defendant actedunlawfully is insufficient to survive a motion to dismiss." Sinaltrainal v. Coca-Cola Co., 578 F.3d 1252, 1261 (11th Cir. 2009) (citing Iqbal, 556 U.S. at 678).
When reviewing a motion to dismiss, a court must construe the complaint in the light most favorable to the plaintiff and take the factual allegations therein as true. See Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 1369 (11th Cir. 1997). Pro se pleadings in particular are construed liberally. See Boxer X v. Harris, 437 F.3d 1107, 1110 (11th Cir. 2006).
A complaint is adequate if it contains "a short and plain statement of the claim showing that the pleader is entitled to relief." FED. R. CIV. P. 8(a)(2). When a complaint...
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