Llano Funding Grp., LLC v. Cassidy
| Decision Date | 05 August 2015 |
| Docket Number | Case No. 14-CIV-62863-BLOOM/Valle |
| Court | U.S. District Court — Southern District of Florida |
| Parties | LLANO FUNDING GROUP, LLC, Plaintiff, v. PAUL R. CASSIDY Defendant |
THIS CAUSE is before the Court upon Defendant, Paul R. Cassidy's Motion to Dismiss, ECF No. [15] ("Motion"). The Court has reviewed the Motion, all supporting and opposing filings, the record and this case, and is otherwise fully advised. For the reasons that follow, the Motion is granted in part and denied in part.
Plaintiff Llano Funding Group, LLC (hereinafter, "Plaintiff"), brings claims of professional negligence and negligent misrepresentation against Defendant Paul R. Cassidy (hereinafter, "Defendant") for the improper, incorrect, and overvalued property appraisal he conducted. Amended Complaint, ECF No. [11] at ¶¶ 7-19. Defendant moves to dismiss Plaintiff's Amended Complaint and request for attorney's fees pursuant to Fed. R. Civ. P. 12(b)(6). Motion, ECF No. [15].
At some unknown point in time, Defendant prepared an appraisal (the "Appraisal") for real property located at 3360 NE 13th Avenue, Pompano Beach, Florida (the "Subject Property"). Am. Compl., ECF No. [11] at ¶ 7. O'Brien Financial Group, Inc., ("O'Brien"), themortgage lender for Subject Property, relied on the Appraisal to approve a mortgage for $285,000. Id. at ¶¶ 8-9. Plaintiff alleges that, in reality, the property was worth substantially less than the value set forth in the Appraisal and that Defendant had actual knowledge of the gross inaccuracy. Id. at ¶ 10-11. According to Plaintiff, if Defendant had accurately valued the property, O'Brien "would not have approved and funded said loan." Id. at ¶ 12. The Subject Property was foreclosed upon on November 14, 2012. Id. at ¶ 14. Due to the inaccurate Appraisal and overvalued property, O'Brien "received no funds from the foreclosure and the balance of the loan remains due and owing." Id. at ¶ 15.
Plaintiff contends that, in preparing the inaccurate Appraisal, Defendant violated the Uniform Standards of Professional Appraisal Practice ("USPAP") by "select[ing] and us[ing] comparable sales that are not locationally, physically, and functionally the most similar to the subject property and the comparable sales," and "used inordinate adjustments for differences between the subject property and comparable sales that do not reflect the market's reaction to such differences, or fail[ed] to make proper adjustments when clearly necessary." Id. at ¶ 23. Thus, Plaintiff contends that Defendant "was most likely intentionally and knowingly trying to support an inflated value, but at a minimum [was] gross[ly] incompeten[t]." Id. at ¶ 24.
According to the Amended Complaint, Plaintiff is the current owner and holder of the balance of the loan and is the "successor in interest of both the equitable and legal interest of the underlying obligation and the appraisal upon which this action is based," and did not discover the errors in the Appraisal until February 25, 2014 when it conducted an "initial quality control review." Id. at ¶ 16-18.
Based on these facts, Plaintiff commenced this action on December 17, 2014, asserting claims for professional negligence (Count I) and negligent misrepresentation (Count II). See id.at ¶¶ 26-35. Both Counts contain the same allegations, stating that Defendant committed professional negligence and negligent misrepresentation by: (i) failing to provide appraisals and appraisal services that were prepared by appraisers with the experience and competence necessary to provide a competent and accurate appraisal, (ii) failing to provide appraisals and appraisal services that complied with USPAP and other applicable state and federal statutes and regulations, and (iii) failing to provide appraisals and appraisal services that complied with standards applicable to the appraisal and appraisal industry. Id. at ¶¶ 28, 33. Consequently, Plaintiff alleges actual damages of $230,020.83, as well as actual and punitive damages for Defendant's actions in failing to comply with industry standards, as well as state and federal statutes constituting negligence. Id. at ¶¶ 29-30, 34-35. On May 26, 2015, Defendant filed the instant Motion seeking dismissal. Motion, ECF No. [15].
Under Federal Rule of Civil Procedure 12(b)(6), a motion to dismiss lies for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). 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 complaint must provide the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests. Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512 (2002). While the complaint "does not need detailed factual allegations," Rule 8 requires "more than labels and conclusions" and "a formulaic recitation of the elements of a cause of action will not do." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007); see Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (). Nor can a complaint 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)). 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); see also Am. Dental Assoc. v. Cigna Corp., 605 F.3d 1283, 1288-90 (11th Cir. 2010).
When reviewing a motion to dismiss, a court, as a general rule, must accept the plaintiff's allegations as true and evaluate all plausible inferences derived from those facts in favor of the plaintiff. See Chaparro v. Carnival Corp., 693 F.3d 1333, 1337 (11th Cir. 2012); Iqbal, 556 U.S. at 678. "At a minimum, notice pleading requires that a complaint contain inferential allegations from which [the court] can identify each of the material elements necessary to sustain a recovery under some viable legal theory." Wilchombe v. TeeVee Toons, Inc., 555 F.3d 949, 960 (11th Cir. 2009) (quoting Snow v. DirecTV, Inc., 450 F.3d 1314, 1320 (11th Cir. 2006)).
Defendant moves to dismiss Plaintiff's Amended Complaint for the following reasons: (1) Plaintiff fails to state a claim for professional negligence, (2) Plaintiff fails to state a claim for negligent misrepresentation, (3) Plaintiff's negligent misrepresentation claim fails to satisfy the heightened pleading requirement of Rule 9(b), and (4) Plaintiff's claims are barred by the two-year state of limitations. Motion, ECF No. [15] at ¶¶ 1-4. Defendant also moves for dismissal of Plaintiff's request for attorney's fees. Id. at 10-11. The Court addresses these arguments in turn.
To state a claim for professional negligence, Plaintiff must allege: (1) existence of a legal duty, (2) breach of the duty, (3) proximate causation, and (4) actual loss. Curd v. MosaicFertilizer, 39 So. 3d 1216, 1227 (Fla. 2010); Trinidad & Tobago Unit Trust Corp. v. CB Richard Ellis, Inc., 280 F.R.D. 676, 678 (S.D. Fla. 2012) (citation omitted). The duty of care in a professional negligence claim generally exists between parties who are in privity of contract with one another. See, e.g., Baskerville-Donovan Engineers, Inc. v. Pensacola Executive House Condo. Ass'n, Inc., 581 So. 2d 1301, 1303 (Fla. 1991) (citing Angel, Cohen & Rogovin v. Oberon Inv., N.V., 512 So. 2d 192 (Fla. 1987)) ("Clearly, privity between the parties may create a duty of care providing the basis for recovery in negligence."). However, if a duty of care is established through other avenues, then lack of privity does not foreclose liability. See Baskerville-Donovan, 581 So. 2d at 1303 (citing First Florida Bank, N.A. v. Max Mitchell & Co., 558 So. 2d 9 (Fla. 1990)).
Defendant contends that there is no proof of the assignment or Plaintiff's interest in the alleged loan and, therefore, "there are no alleged facts to support the element of any 'duty' owed by the Defendant to the Plaintiff." Mot., ECF No. [15] at 5. With regard to the assignment and duty, Plaintiff only states that it is a successor in interest to the original lender, is the current owner and holder of the balance of the loan, and is the "successor in interest of both the equitable and legal interest of the underlying obligation and the appraisal upon which this action is based." Am. Compl., ECF No. [11] at ¶ 16-17. In order to survive dismissal pursuant to Fed. R. Civ. P. 12(b)(6), Plaintiff must plead sufficient facts to demonstrate a duty. Here, the duty Plaintiff relies on is Defendant's obligations regarding the Appraisal. Thus, any purported duty to Plaintiff necessarily stems from an assignment of O'Brien's interest. Plaintiff fails to indicate the nature of the assignment.
Defendant's argument in this respect is, in essence, one of standing, questioning whether Plaintiff has the authority to bring this action as the real party in interest. Nevertheless, thisCourt cannot create a duty where a plausible allegation of one is lacking. "The validity of an assignment is important for the purpose of determining 'whether an action should be dismissed.'" Univ. Creek Associates, II, Ltd. v. Boston Am. Fin. Grp., Inc., 100 F. Supp. 2d 1337, 1339 (S.D. Fla. 1998) (citing 6A Charles A. Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1545 (2d ed. 1990)). "[T]he court must determine (1) exactly what has been assigned to make certain that the plaintiff-assignee is the real party in interest, and (2) that a valid assignment has been made." Id. Specifically, "[w]here a question is raised as to the...
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