Kodsi v. Branch Banking & Trust Co.
| Decision Date | 12 February 2018 |
| Docket Number | CASE NO. 15-CV-81053-MARRA |
| Parties | AMY KODSI, an individual Plaintiff, v. BRANCH BANKING AND TRUST COMPANY, a North Carolina banking corporation, Defendant. |
| Court | U.S. District Court — Southern District of Florida |
THIS CAUSE is before the Court upon Defendant Branch Banking and Trust Company's ("Defendant") Motion to Dismiss Amy Kodsi's ("Plaintiff") Complaint With Prejudice [DE 4]. Plaintiff's claims arise from Defendant's alleged improper use of the legal system against her to collect a debt owed by her husband. Defendant asserts the affirmative defense that those efforts fall within the scope of the "litigation privilege," among other arguments. Consequently, Defendant asserts that under Federal Rule of Civil Procedure 12(b)(6) ("Rule 12(b)(6)") the Complaint fails to state a claim upon which relief can be granted. The Court has carefully considered all relevant documents, including the motion, response, and reply, the parties' responses to the Court's Inquiry [DE Nos. 27 & 28], all relevant law, and is otherwise fully advised in the premises.
The facts as pled in the Complaint have already been set out in detail in the "Order Staying Case Pending Ruling by the Florida Supreme Court" [DE 23] and is incorporated by reference and not repeated here. In brief, Plaintiff's husband owed a debt to Defendant and Defendant went to great lengths to collect the debt. Those efforts included freezing a bank account belonging solely to Plaintiff allegedly without legal justification. The damage Plaintiff experienced from those efforts to collect the debt forms the basis of her claims.
As a result of the damage Plaintiff experienced, she raises claims for: (I) wrongful garnishment; (II) malicious prosecution; (III) abuse of process; and (IV) intentional interference with business advantage [DE 1]. Defendant moves to dismiss all four counts based primarily on the affirmative defense that its efforts to collect the debt were protected by the litigation privilege. Defendant also argues that Counts I and II should be dismissed based on the affirmative defense of "advice of counsel." Defendant further argues Counts I and II should be dismissed because they are based on "misplaced legal conclusions." Finally, Defendant seeks to have Plaintiff's prospective claim for punitive damages dismissed or stricken until the Court has first determined whether a factual basis exists to support such a claim.
The parties fully briefed the issues and a hearing took place. The Court issued an order staying the case until resolution of Fischer v. Debrincat, 169 So. 3d 1204 (Fla. Dist. Ct. App. 2015). The Florida Supreme Court granted review (SC15-1477, 2015 WL 5917884 (Fla. 2015)) because a split had developed between the Third and Fourth District Courts of Appeal with regard to the scope of the litigation privilege.1 The Third District had found the litigation privilege extended to claims for malicious prosecution. Wolfe v. Foreman, 128 So. 3d 67 (Fla.Dist. Ct. App. 2013); while the Fourth District in Fischer v. Debrincat did not. Because the applicability of the litigation privilege was directly at issue in this case, the Court stayed this matter until the Florida Supreme Court could resolve the issue.
On February 9, 2017, the Florida Supreme Court resolved the conflict between the District Courts of Appeal in Debrincat v. Fischer, 217 So.3d 68 ("Debrincat"), reh'g denied, SC15-1477, 2017 WL 1713895 (May 3, 2017). The Florida Supreme Court found the litigation privilege did not extend to a claim for malicious prosecution because to do so "would eviscerate th[e] long-establish cause of action for malicious prosecution." Id. at 70. The decision left no doubt that the privilege did not extend to Count II of Plaintiff's complaint. The decision did not expressly discuss how and to what extent the privilege should apply to the other three causes of action; all of which Defendant claimed were precluded by the privilege.
The Court issued an "Inquiry" to the parties informing them of the Debrincat decision and asking them "if they contend that the three remaining claims (other than the claim for malicious prosecution) are barred by the litigation privilege and the reasons for their positions" [DE 24]. The parties responded and Defendant's Motion to Dismiss is now ripe for adjudication.
Under Rule 12(b)(6), a defendant may seek to have a claim dismissed when the Complaint "fail[s] to state a claim upon which relief can be granted". The requirements of Rule 12(b)(6) are intertwined with Fed. R. Civ. P. 8(a) ("Rule 8(a)"), which only requires "a short and plain statement of the claims" that "will give the defendant fair notice of what the plaintiff's claim is and the ground upon which it rests." The Supreme Court has held that Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citations and quotations omitted).
"To 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." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quotations and citations omitted). "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." Id. Thus, "only a complaint that states a plausible claim for relief survives a motion to dismiss." Id. at 679.
This Court accepts as true all the allegations in the complaint and construes them in the light most favorable to the plaintiff when ruling on a motion to dismiss. Jackson v. BellSouth Telecomms., 372 F.3d 1250, 1262 (11th Cir. 2004) ("Jackson"). "[T]he threshold of sufficiency to which a complaint is held at the motion-to-dismiss stage is 'exceedingly low.'" United States v. Baxter Int'l, Inc., 345 F.3d 866, 881 (11th Cir. 2003) (quoting In re Southeast Banking Corp., 69 F.3d 1539, 1551 (11th Cir.1995)).
Defendant does not challenge the factual or legal sufficiently of the complaint per se but rather relies on affirmative defenses as the basis of its motion to dismiss. "[N]ormally an affirmative defense cannot be decided at the motion to dismiss stage." Perlman v. Wells Fargo Bank, N.A., 559 F. App'x 988, 994 (11th Cir. 2014). However, "Florida courts have also made it abundantly clear that any affirmative defense, including the litigation privilege, may be considered in resolving a motion to dismiss when of the defense to bar the action." Jackson, 372 F.3d at 1277 (quoting Reisman v. Gen. Motors Corp., 845 F.2d 289, 291 (11th Cir. 1988).
"Florida's litigation privilege affords absolute immunity for acts occurring during the course of judicial proceedings." Jackson, 372 F.3d at 1274-75. The privilege initially developed to protect litigants and attorneys from liability for acts of defamation, but has since been extended to cover all acts related to and occurring within judicial proceedings. Jackson, 372 F.3d at 1274-75 (citing Levin, 639 So.2d at 607-08); Echevarria, McCalla, Raymer, Barrett & Frappier v. Cole, 950 So.2d 380, 384 (Fla. 2007) ().
In Levin, the Florida Supreme Court explained the scope and rationale of the privilege:
[A]bsolute immunity must be afforded to any act occurring during the course of a judicial proceeding, regardless of whether the act involves a defamatory statement or other tortious behavior ... so long as the act has some relation to the proceeding. The rationale behind the immunity afforded to defamatory statements is equally applicable to other misconduct occurring during the course of a judicial proceeding. Just as participants in litigation must be free to engage in unhindered communication, so too must those participants be free to use their best judgment in prosecuting or defending a lawsuit without fear of having to defend their actions in a subsequent civil action for misconduct.
639 So.2d at 608. Because this Court is Erie2-bound to apply Florida law in evaluating the plaintiff's state-law claims, Florida's litigation privilege applies to state-law claims adjudicated in federal court. Zucker for BankUnited Fin. Corp. v. U.S. Specialty Ins. Co., 856 F.3d 1343, 1349 (11th Cir. 2017). Florida courts have made it clear that any affirmative defense, including the litigation privilege, may be considered in resolving a motion to dismiss when "'thecomplaint affirmatively and clearly shows the conclusive applicability' of the defense to bar the action." Reisman v. Gen. Motors Corp., 845 F.2d 289, 291 (11th Cir. 1988) (quoting Evans v. Parker, 440 So.2d 640, 641 (Fla. Dist. Ct. App. 1983)); Jackson, 372 F.3d at 1277.
The parties agree that "[u]nder Florida law, the tort of wrongful garnishment has the same elements as the tort of malicious prosecution." Barniv v. BankTrust, 579 F. App'x 719, 720 (11th Cir. 2014). The parties also agree that the reasoning of Debrincat leads to the conclusion that the litigation privilege does not apply to claims for wrongful garnishment. Since the parties are in agreement, Defendant's motion to dismiss Count I for wrongful garnishment based on the litigation privilege is denied.
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