Gatti v. Goodman et al

RESPONSE in Opposition re MOTION for leave to file to File Third Amended Complaint and Memorandum of Law in Support

M.D. Fla.November 21, 2017

UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF FLORIDA FT. MYERS DIVISION LOU GATTI, CASE NO.: 2:16-cv-00728-JES-CM Plaintiff, v. HELEN F. GOODMAN, CLIFF GOODMAN & TWIN PALMS RESORT, LLC Defendants. / DEFENDANTS’ RESPONSE IN OPPOSITION TO PLAINTIFFS’ MOTION TO FILE THIRD AMENDED COMPLAINT AND INCORPORATED MEMORANDUM OF LAW Defendants Helen F. Goodman, Cliff Goodman (collectively the “Goodmans”), and Twin Palms Resort, LLC (collectively “Defendants”), by and through their undersigned counsel and pursuant to Federal Rules of Civil Procedure 1, 12(b)(6), and 16(b)(4), oppose Plaintiffs’ Motion for Leave to File Verified Third Amended Complaint to add three counts (“Motion for Leave”) [DE 59] because the new claims are on their face time-barred by the statute of limitations, and therefore the amendments would be futile. I. INTRODUCTION A. PROPERTY AT ISSUE This Motion for Leave represents Plaintiffs’ fourth iteration of a complaint for quiet title, specific performance and damages, against the title and deed holding owners of real property, a multi-acre fish camp located in Glades County, Florida (hereinafter referred to as the “Property”). The Property is owned by Defendant Twin Palms Resort, LLC, which, in turn, is owned by Defendant Helen Goodman. 2AC ¶¶ 2(i), 11, 17, 23. Plaintiffs Twin Palms Inc., a dissolved Case 2:16-cv-00728-JES-CM Document 62 Filed 11/21/17 Page 1 of 9 PageID 1482 Gatti v. Goodman Case No.: 2:16-cv-00728-JES-CM Defendants’ Response in Opposition to Motion for Leave 2 Virginia corporation, and Lou Gatti as Trustee and President of Twin Palms, Inc. (“Gatti”) (hereinafter referred to collectively as “Plaintiff”), are attempting to obtain the title to that Property from Mrs. Helen Goodman, an elderly widow and Twin Palms Resort, LLC’s manager, through various causes of action. B. PROCEDURAL HISTORY The first complaint was filed in August 2016. The parties prepared a Joint Case Management Report in November 2016, wherein they agreed that January 9, 2017, would be the last date to amend the pleading. [DE 18] In December 2016, the Court entered an Order establishing January 9, 2017 as the deadline for amending pleadings. [DE 25] Nevertheless, this Court granted Plaintiff two additional opportunities to amend his complaints. Defendants’ motion to dismiss the second amended complaint has been pending since August 2017. The instant Motion for Leave seeks permission to file a fourth complaint that would raise three new causes of action against Defendants: Fraud by Omission (Count 6), Negligent Breach of Fiduciary Duty (Count 7), and Intentional Breach of Fiduciary Duty (Count 8). See Proposed Verified Third Amended Complaint, Document 59-1 (hereinafter “3AC”). Each of the proposed amendments allege that the Defendants have engaged in a “nefarious scheme” since 1993 to live on the property rent-free and retain the property’s profits for themselves, rather than to manage the property in Plaintiff’s interest. 3AC e.g., ¶¶80, 86, 88, 94. Importantly, none of the proposed counts in the Third Amended Complaint are based upon newly discovered “facts”. The new counts are efforts to create causes of action from the same basic allegations that have appeared in each complaint, to wit: Case 2:16-cv-00728-JES-CM Document 62 Filed 11/21/17 Page 2 of 9 PageID 1483 Gatti v. Goodman Case No.: 2:16-cv-00728-JES-CM Defendants’ Response in Opposition to Motion for Leave 3 That Gatti paid the Goodmans all of the money due for the purchase of the Property pursuant to the terms of the Sales Contract, and then allowed them to live on the property rent free and collect its revenue (2AC ¶ 18); that Gatti visited the property over 50 times since the 1989 purchase (2AC ¶ 21); that Gatti and the Goodmans had multiple conversations where the Goodmans confirmed that Gatti owns the Property (2AC ¶ 23); that when Gatti saw that the Goodmans were marketing the Property for sale, without his permission (2AC ¶¶ 26, 27), he sent letters to the Goodmans in 2016 in an effort to get them to adhere to the terms of the 1989 contract. 2AC ¶ 28. Gatti then filed the lawsuit in 2016 to force the Goodmans to transfer the title to him and for damages. (2AC ¶ 29). The Third Amended Complaint retains all of those earlier allegations but adds allegations that the Goodmans concealed their wrongdoings, which, Gatti asserts, resulted in a tolling of the statutes of limitations. (3AC ¶¶ 32, 37.) Gatti complains that the Goodmans fully intended to breach the Sales Contract, and lulled Gatti into a false sense of security by fraudulently concealing their wrongdoing. 3AC ¶ 36. Gatti alleges he did not discover the treachery until shortly before he sent his letters to the Goodmans in 2016. 3AC ¶ 37. Plaintiff has tacitly acknowledged his claims cannot survive Defendants’ pending motion to dismiss the Second Amended Complaint, based upon the statutes of limitation and the statutes of frauds; he has therefore attempted to set forth claims for damages that do not concern the ownership of the real property and the transfer of the deed to it, but for alleged breaches of duty owed to Gatti. However, these new counts are also barred by the statutes of limitations. Defendants oppose the Motion for Leave because the amendments would be futile and because they violate Rules 1 and 16 of the Federal Rules of Civil Procedure. Case 2:16-cv-00728-JES-CM Document 62 Filed 11/21/17 Page 3 of 9 PageID 1484 Gatti v. Goodman Case No.: 2:16-cv-00728-JES-CM Defendants’ Response in Opposition to Motion for Leave 4 II. INCORPORATED MEMORANDUM OF LAW A. NO GOOD CAUSE SHOWN FOR AMENDMENT While the granting of an opportunity to amend is within the district court’s discretion, a “motion to amend filed after the deadline established by the Case Management and Scheduling Order, as in this case, will only be granted upon a showing of good cause under Rule 16(b)(4).” Connectus LLC v. Ampush Media, Inc. Case No. 8:15-cv-2778-T-33JSS, 2017 WL 275944 *4 (M.D. Fla. Jan. 20, 2017) (citations omitted). An untimely motion to amend a pleading is “distinctly disfavored” under Local Rule 3.05(c)(2)(E) of this District. Id. “In order ‘[t]o show good cause, a party must establish that, despite its diligence, the deadline could not be met.’” Id. (citations omitted). There is no good cause for these amendments. The allegations upon which the new counts are based were present since the first complaint - there are no newly discovered facts. Gatti has always alleged that he was “induced” into allowing the Goodmans to live on their Property and retain its proceeds - for 28 years. 2AC ¶ 66. The only difference in the new counts is the allegation that the Goodmans concealed their scheme to live there and retain the proceeds of the Camp for the past 28 years. 3AC ¶ 38. In addition, this Third Amended Complaint, filed while Defendants’ motion to dismiss the Second Amended Complaint is pending, violates Rule 1’s directive that the rules of civil procedure “should be construed, administered, and employed by the court and the parties to secure the just, speedy, and inexpensive determination of every action and proceeding.” Plaintiff had ample opportunity to bring his claims over the last two decades. Defendants have been harmed by Plaintiff’s unsupported and unjust pursuit of these claims 28 years after the parties entered into a Case 2:16-cv-00728-JES-CM Document 62 Filed 11/21/17 Page 4 of 9 PageID 1485 Gatti v. Goodman Case No.: 2:16-cv-00728-JES-CM Defendants’ Response in Opposition to Motion for Leave 5 real estate transaction. Plaintiff’s Motion for Leave is another expensive and meritless abuse of Rule 1. B. AMENDMENTS FUTILE DUE TO STATUTE OF LIMITATIONS “Statutes of limitations which are found and approved in all systems of enlightened jurisprudence, represent a pervasive legislative judgment that it is unjust to fail to put the adversary on notice to defend within a specified period of time and … [t]hey protect defendants and the courts from having to deal with cases in which the search for truth may be seriously impaired by the loss of evidence, whether by the death or disappearance of witnesses … or otherwise. U.S. v. Kubrick, 444 U.S. 111, 117 100 S.Ct. 352, 356-57 (1975) (internal citations and quotations omitted).1 They are not mere technicalities. But see Motion for Leave ¶ 9. Breach of oral contract claims are governed by a four-year statute of limitations. Fla. Stat. § 95.11(3)(k). Negligence actions are also governed by a four-year statute of limitations. Fla. Stat. § 95.11 (3)(a). Counts seven and eight allege breach of fiduciary duty (negligent and intentional). Both are based upon alleged oral agreements to manage the Property and account for its proceeds. The statute of limitations on a breach of contract claim happens when the breach occurs, not when it is discovered; there is no delayed discovery rule applicable to such claims. Beck v. Lazard Freres & Co., LLC, 175 F.3d 913, 914 (11th Cir. 1999) (citing Federal Ins. Co. v. Southwest Florida Retirement Center, Inc., 707 So.2d 1119, 1122 (Fla. 1998)) (affirming district 1 Mrs. Goodman is 85 years old. Her son, Cliff Goodman is 60. Floyd Goodman, who is about 63 years old, was also a party to the original Sales Contract, has moved to an assisted living facility in Virginia. Thus, the concerns addressed by statutes of limitations are very present here. Case 2:16-cv-00728-JES-CM Document 62 Filed 11/21/17 Page 5 of 9 PageID 1486 Gatti v. Goodman Case No.: 2:16-cv-00728-JES-CM Defendants’ Response in Opposition to Motion for Leave 6 court’s dismissal of complaint based upon statute of limitations, for claim of breach of duty of care). The agreement and corresponding duty allegedly dates back to 1993, when the Goodmans took over the management of their Property and allegedly agreed to account to Gatti for its proceeds. Gatti claims that the Defendants came up with their “nefarious scheme” to defraud Gatti in 1993. 3AC ¶ 90. Plaintiff attempts to avoid the effect of the statute of limitations by asserting that the breaches are continual and on-going and thus immune from the statute of limitations. 3AC ¶¶ 32, 37. The effort is unavailing because, as a matter of law, the damage to Gatti occurred in 1993 when the Goodman’s allegedly decided that they would never transfer title to him, and would keep all of the Property’s proceeds for themselves. Accordingly, the proposed counts seven and eight for breach of fiduciary duty would be futile and barred by the statute of limitations. C. STATUTE OF REPOSE BARS FRAUD CLAIMS TOO Count six, Fraud by Omission, is governed by a four-year statute of limitations. Fla. Stat. § 95.11(3)(j). Again, Plaintiff attempts to avoid the effect of the statute of limitations by alleging that the fraudulent acts were on-going and/or concealed from him. Motion for Leave at ¶9. A statute of repose provides an opportunity to bring a claim after the statute of limitations has expired. The absolute period of repose on a fraud claim is twelve years. A statute of repose bars a suit after a specified time that is based solely on the actions of the defendant that gave rise to the claim. As a result, the time constraints of a statute of repose are wholly unrelated to when a plaintiff suffers or discovers an actual injury. Nat'l Auto Serv. Centers, Inc. v. F/R 550, LLC, 192 So.3d 498, 510 (Fla. 2d DCA 2016), reh'g denied (May 25, 2016), review denied sub nom. F/R 550, LLC v. Nat. Auto Serv. Centers, Inc., No. SC16-1045, 2016 WL 6299565 (Fla. Oct. 27, 2016)(citations omitted) (emphasis added). Case 2:16-cv-00728-JES-CM Document 62 Filed 11/21/17 Page 6 of 9 PageID 1487 Gatti v. Goodman Case No.: 2:16-cv-00728-JES-CM Defendants’ Response in Opposition to Motion for Leave 7 Consistent with their function, statutes of repose are understood to set “an outer limit beyond which [claims] may not be instituted.” Hess v. Philip Morris USA, Inc., 175 So.3d 687, 695 (Fla. 2015). As such, they are generally regarded as establishing an absolute bar to the filing of any claim after the expiration of the repose period and as being immune to the efforts of claimants to avoid it. Nat'l Auto Serv. Centers, Inc. v. F/R 550, LLC, 192 So.3d at 510 (citing May v. Ill. Nat'l Ins. Co., 771 So.2d 1143, 1156 (Fla. 2000) (describing nonclaim statute in the probate code as a statute of repose and as creating “a self-executing, absolute immunity to claims”); Sabal Chase Homeowners Ass'n v. Walt Disney World Co., 726 So.2d 796, 798 (Fla. 3d DCA 1999) (holding that statute of repose was not subject to tolling provision applicable to statute of limitations because, among other reasons, it would “ignore[ ] fundamental distinctions between ordinary statutes of limitations and statutes of repose”)). Relevant to this action, Florida’s statute of repose on a fraud claim is twelve years. Fla. Stat. § 95.031(2)(a). Section 95.031(2)(a) states: An action founded upon fraud under s. 95.11(3), including constructive fraud, must be begun within the period prescribed in this chapter, with the period running from the time the facts giving rise to the cause of action were discovered or should have been discovered with the exercise of due diligence, instead of running from any date prescribed elsewhere in s. 95.11(3), but in any event an action for fraud under s. 95.11(3) must be begun within 12 years after the date of the commission of the alleged fraud, regardless of the date the fraud was or should have been discovered. (Emphasis added.) The statute of repose runs from “the date of the commission of the alleged fraud,” not when the cause of action for fraud accrued. If the “commission of the alleged fraud” does not take place within the statute of repose period, then the fraud claim is extinguished. There is no tolling Case 2:16-cv-00728-JES-CM Document 62 Filed 11/21/17 Page 7 of 9 PageID 1488 Gatti v. Goodman Case No.: 2:16-cv-00728-JES-CM Defendants’ Response in Opposition to Motion for Leave 8 provision for the fraud statute of repose. Hess v. Philip Morris USA, Inc., 175 So.3d 687, 696 (Fla. 2015), reh'g denied (Sept. 25, 2015). Plaintiff cannot make out a fraud claim because he has clearly and definitively alleged that the “fraud” began in 1993, when Defendants came up with their nefarious scheme to live on their Property and continue to operate it and keep its proceeds, rather than account for the proceeds. Because Plaintiff has clearly alleged that the scheme to defraud him began in 1993, the Statute of Repose required him to bring his action not later than 2005. He is eleven years too late. Therefore, the Motion for Leave should be denied in its entirety. CONCLUSION Defendants respectfully request this Court deny Plaintiff’s Motion for Leave to amend his complaint, as the new counts are barred by the applicable statutes of limitations and repose. Moreover, Defendants respectfully request that this action be dismissed in its entirety, as all of the counts contained in the pending Second Amended Complaint are barred by the relevant statute of limitations or repose, or fail to state a claim upon which relief can be granted due to the Statute of Frauds. Dated this 21st day of November 2017. Respectfully submitted: WARD DAMON POSNER PHETERSON & BLEAU Attorneys for Defendants 4420 Beacon Circle West Palm Beach, Florida 33407 Ph: 561.842.3000 • Fax: 561.842.3626 By: /s/Sally Still Sally Still, Esquire Florida Bar No. 904414 WARD DAMON POSNER PHETERSON & BLEAU Case 2:16-cv-00728-JES-CM Document 62 Filed 11/21/17 Page 8 of 9 PageID 1489 Gatti v. Goodman Case No.: 2:16-cv-00728-JES-CM Defendants’ Response in Opposition to Motion for Leave 9 Attorneys for Defendants 4420 Beacon Circle West Palm Beach, Florida 33407 Ph: 561.842.3000 Fax: 561.842.3626 Primary: sstill@warddamon.com Secondary:litservice@warddamon.com khushower@warddamon.com CERTIFICATE OF SERVICE I HEREBY CERTIFY that on November 21, 2017, a true copy of the foregoing was filed with the Clerk of Court using the CM/ECF system which will send a notice of electronic filing to all counsel or parties of record on the Service List below. /s/Sally Still Sally Still, Esquire Florida Bar No. 904414 SERVICE LIST C. Wade Bowden, Esq., B.C.S. FBN: 090735 Attorney for Plaintiff Greenberg Traurig, P.A. 777 S. Flagler Drive, Suite 300E West Palm Beach, FL 33401 bowdenw@gtlaw.com chalkleyt@gtlaw.com flservice@gtlaw.com Brandon S. Leon, Esq. FBN: 0091525 Attorney for Plaintiff Greenberg Traurig, P.A. 777 S. Flagler Drive, Suite 300E West Palm Beach, FL 33401 leonb@gtlaw.com chalkleyt@gtlaw.com flservice@gtlaw.com Case 2:16-cv-00728-JES-CM Document 62 Filed 11/21/17 Page 9 of 9 PageID 1490