Randall et al v. Offplan Millionaire AG et al

MOTION to dismiss for lack of jurisdiction and failure to state a claim

M.D. Fla.August 17, 2018

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA NICHOLAS J. RANDALL and FAN FENG, Plaintiffs, vs. CASE NO. 6:17-cv-2103-Orl-31TBS OFFPLAN MILLIONAIRE AG, CAPINVEST LLC, JOACHIM OLIVER NEDELA, STEPHEN JORDAN QUAYLE, CARL DHIR, CRESCENT REAL ESTATE MANAGEMENT, INC., DANIEL J. DORAN, JR. and LUCRETIA L. DORAN, Defendants. _____________________________________________/ MOTION TO DISMISS PLAINTIFFS’ AMENDED COMPLAINT Defendant Joachim Oliver Nedela (“Mr. Nedela”), without submitting himself to the jurisdiction of the Court, moves to dismiss the Complaint and Demand for Jury Trial [ECF No. 17] (the “Amended Complaint”) for (1) lack of personal jurisdiction and (2) failure to state a claim upon which relief can be granted. See Fed. R. Civ. P. 12(b)(2), (6). INTRODUCTION The Amended Complaint unsuccessfully tries to impose liability on Mr. Nedela for a purported scheme to defraud Plaintiffs Nicholas Randall and Fan Feng, despite that Mr. Nedela—a Swiss resident who has never met or communicated with Plaintiffs—did absolutely nothing that could be considered illegal or subject him to this Court’s jurisdiction. According to the Amended Complaint, Defendants worked together to “induce” Plaintiffs to purchase properties in the United States and pay Defendants to handle the purchases and thereafter manage the properties. Based on these allegations, Plaintiffs assert claims for RICO and RICO conspiracy against all Defendants, including Mr. Nedela. Case 6:17-cv-02103-GAP-TBS Document 56 Filed 08/17/18 Page 1 of 21 PageID 497 2 Although Plaintiffs’ pleading contains more than 300 paragraphs of allegations and spans nearly 100 pages, Mr. Nedela’s alleged conduct in the scheme appears in merely six paragraphs—all of which repeat the same inconsequential (and inaccurate) acts. But the alleged conduct cannot subject Mr. Nedela to personal jurisdiction or liability because Mr. Nedela’s only relationship and involvement with the other Defendants was as a result of purely administrative services that his company, CO-Handelszentrum GmbH (“CO- Handelszentrum”), was hired to provide to Defendant Offplan. Indeed, Offplan hired CO- Handelszentrum to provide formation, registration, and administrative services to it, much like countless companies do here in the United States with entities like CT Corporation, a registered agent and corporate compliance company. While Plaintiffs try to portray Mr. Nedela as having some role in the purported RICO scheme, even a cursory reading of the Amended Complaint reveals that this is not the case. Simply put, Plaintiffs cast too wide a net in including Mr. Nedela as a defendant in this case. Thus, the claims against Mr. Nedela must be dismissed because there is no personal jurisdiction over Mr. Nedela and Plaintiffs cannot state any valid claim against Mr. Nedela. ARGUMENT I. THERE IS NO PERSONAL JURISDICTION OVER MR. NEDELA. “A plaintiff seeking the exercise of personal jurisdiction over a nonresident defendant bears the initial burden of alleging in the complaint sufficient facts to make out a prima facie case of jurisdiction.” United Techs. Corp. v. Mazer, 556 F.3d 1260, 1274 (11th Cir. 2009). The defendant can either contest the legal sufficiency of the jurisdictional allegations in the complaint or submit evidence refuting those jurisdictional allegations. Id. “Where [] the Case 6:17-cv-02103-GAP-TBS Document 56 Filed 08/17/18 Page 2 of 21 PageID 498 3 defendant challenges jurisdiction by submitting affidavit evidence in support of its position, the burden traditionally shifts back to the plaintiff to produce evidence supporting jurisdiction.” Id. The Court will consider factual statements denying allegations of the complaint in its jurisdictional analysis where those statements are based on personal knowledge. Id. at 1277. To determine whether personal jurisdiction over a nonresident defendant exists, the Court must engage in a two-prong inquiry. First, the Court must determine whether the nonresident defendant’s contacts fall within the ambit of Florida’s long-arm statute. Madara v. Hall, 916 F.2d 1510, 1514 (11th Cir. 1990). Second, the Court must analyze whether sufficient minimum contacts exist between the nonresident and Florida to satisfy due process requirements. Id. 1 In this case, Plaintiffs fail to meet their initial burden of alleging in the Amended Complaint sufficient facts to satisfy either prong of the analysis. A. The allegations in the Amended Complaint do not satisfy Florida’s long- arm statute. Florida’s long-arm statute, section 48.193, sets forth the basis for the exercise of general and specific personal jurisdiction over a nonresident. With respect to general personal jurisdiction, the long-arm statute provides that “[a] defendant who is engaged in substantial and not isolated activity within this state . . . is subject to the jurisdiction of the courts of this state. . . .” Fla. Stat. § 48.193(2). Alternatively, a court can exercise “specific personal jurisdiction” over a defendant for a cause of action arising from specific acts committed by the defendant in the State of Florida. Fla. Stat. § 48.193(1)(a). “[T]he long-arm statute must be 1 “RICO does not authorize international service of process and, as such, cannot be the basis for the assertion of personal jurisdiction over a corporation or individual served abroad.” Blixseth v. Disilvestri, No. 11-22459-CIV, 2013 WL 12063940, at *7 (S.D. Fla. Jan. 31, 2013). Thus, a RICO plaintiff must instead rely on Florida’s long- arm statute. Id. Case 6:17-cv-02103-GAP-TBS Document 56 Filed 08/17/18 Page 3 of 21 PageID 499 4 strictly construed, and any doubts about the applicability of the statute are resolved in favor of the defendant and against a conclusion that personal jurisdiction exists.” Blixseth, 2013 WL 12063940 at *8. 1. There is no General Personal Jurisdiction over Mr. Nedela. The Court cannot exercise general personal jurisdiction over Mr. Nedela because he is not “at home” (i.e., domiciled) in Florida. See Goodyear v. Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846, 2853-54, 2857 (2011) (holding that general personal jurisdiction should be asserted only where there is a sense of “home”). Here, as Plaintiffs acknowledge, Mr. Nedela resides in Switzerland. See Am. Compl. ¶ 12. 2. There is no Specific Personal Jurisdiction over Mr. Nedela. Plaintiffs allege they have jurisdiction over Defendants based on the commission of mail and wire fraud. Id. ¶ 22.2 Under section 48.193(1)(a)(2) of Florida’s long-arm statute, a person who commits a tortious act in Florida “submits himself to the jurisdiction of the courts of [Florida] for any cause of action arising from the act.” Greentree Fin. Grp., Inc. v. Long Fortune Valley Tourism, 824 F. Supp. 2d 1363, 1367 (S.D. Fla. 2011). In this case, however, there is no specific jurisdiction under section 48.193(1)(a)(2) over Mr. Nedela for at least five reasons: (1) Plaintiffs fail to state any cause of action against Mr. Nedela; (2) there is no cause of action that arises from Mr. Nedela’s conduct; (3) Mr. Nedela’s alleged conduct did not cause any alleged injury in Florida; (4) Plaintiffs do not (and 2 Plaintiffs do not cite any section of Florida’s long-arm statute, simply alleging that “[t]his Court has personal jurisdiction over Defendants because they conspired or have been willing participants in an enterprise engaged in a pattern of racketeering activity in violation of RICO, through acts indictable under 18 U.S.C. § 1341 (mail fraud) and 18 U.S.C. § 1342 (wire fraud).” Id. ¶ 22. Case 6:17-cv-02103-GAP-TBS Document 56 Filed 08/17/18 Page 4 of 21 PageID 500 5 cannot) allege that Mr. Nedela committed a substantial aspect of the alleged tort in Florida; and (5) Plaintiffs have not sufficiently alleged any agency relationship such that another defendant’s conduct in Florida could be imputed to Mr. Nedela. a. Failure to State a Claim First, as discussed in Section II, infra, Plaintiffs fail to state a claim against Mr. Nedela. On this basis alone, the Court lacks personal jurisdiction over Mr. Nedela. See Wendt v. Horowitz, 822 So. 2d 1252, 1260 (Fla. 2002) (where complaint fails to adequately allege a tortious act, there can be no jurisdiction under section 48.193(1)(a)(2)). b. No Claim Arising out of Mr. Nedela’s Alleged Conduct (No Connexity) Second, even if Plaintiffs had pleaded a claim against Mr. Nedela––which they have not—the claims do not arise from Mr. Nedela’s alleged conduct. Here, the only allegations regarding any conduct by Mr. Nedela relate to documents he allegedly signed and mailed. Although “making telephonic, electronic, or written communications” can constitute a tortious act under section 48.193(1)(a)(2), “the tort alleged [must] arise from such communications.” Koch v. Royal Wine Merchants, Ltd., 847 F. Supp. 2d 1370, 1379 (S.D. Fla. 2012). Thus, there must be some “connexity” between the out-of-state communications and the cause of action, such that “the communications into Florida [are] tortious in and of themselves.” Shaunnessey v. Monteris Med., Inc., 554 F. Supp. 2d 1321, 1330 (M.D. Fla. 2008); Rogers v. Nacchio, No. 05-60667-CIV, 2006 WL 7997562, at *6 (S.D. Fla. June 6, 2006). Here, Plaintiffs have failed to allege a single telephonic, electronic, or written communication by Mr. Nedela from which any of the claims arise. “In contrast to the plenitude of facts about the [alleged] fraudulent scheme,” and alleged statements made by the other Case 6:17-cv-02103-GAP-TBS Document 56 Filed 08/17/18 Page 5 of 21 PageID 501 6 Defendants, the Amended Complaint “exhibits a paucity of detail regarding [] activities” by Mr. Nedela. See Koch, 847. F. Supp. 2d at 1379. In fact, Plaintiffs do not allege they received any communications directly from Mr. Nedela (nor could they). See Aff. of Joachim Oliver Nedela, attached as Exhibit A (“Affidavit”) ¶ 40. The only specific facts attributed to Mr. Nedela are: • Nedela executed corporate documents for Capinvest • Nedela, as Director of Prime Asset, signed a deed and other documents relating to Randall’s purchase of the Riverdale Units (“the Riverdale Signed Documents”) “knowing that these would be delivered to Randall as fraudulent evidence” • Nedela sent the Riverdale Signed Documents from Switzerland to Port St. Lucie, Florida, where they were received by Capinvest via Dan Doran • Nedela “hired, authorized, and/or ratified” Jordan, Dhir, and Doran to “operate the fraudulent investing model” Am. Compl. ¶¶ 121, 250(b), 266.3 But these acts are not tortious “in and of themselves.” For example, there are no allegations showing how the execution of corporate documents for Capinvest or the alleged hiring of individuals constitutes tortious conduct. Similarly, there are no factual allegations that at the time Mr. Nedela executed the Riverdale Signed Documents, he was aware they were incorrect. In fact, the evidence undermines any suggestion that Mr. Nedela’s alleged acts were 3 In addition to these scant allegations of specific conduct, Plaintiffs make conclusory statements that Mr. Nedela “created the infrastructure for the RICO Enterprise” and brought the other Defendants “into the fold.” Am. Compl. ¶ 254. These statements are factually inaccurate, see Aff. ¶¶ 36–37, 41, and are insufficient to establish personal jurisdiction because they are not supported by any detailed information. See Julian v. Exlites Holdings Int’l, Inc., No. 8:16-CV-2774-T-36AEP, 2017 WL 2930916, at *5 (M.D. Fla. July 10, 2017) (holding that “vague and conclusory allegations [] are insufficient to present a prima facie case of personal jurisdiction”). Case 6:17-cv-02103-GAP-TBS Document 56 Filed 08/17/18 Page 6 of 21 PageID 502 7 tortious. As set forth in his Affidavit, Mr. Nedela’s involvement with Offplan and its related entities was simply the result of Offplan’s engagement of CO-Handelszentrum, a Swiss company of which Mr. Nedela is 50% owner. Aff. ¶¶ 23–25, 36–37, 39, 49. CO- Handelszentrum is a company that specializes in Swiss company formation, registration, and administration. Id. ¶ 24. It incorporates and administers Swiss companies for international corporate groups and private individuals, much like similar companies in the United States (e.g., CT Corporation). See id. CO-Handelszentrum was engaged in 2006 to incorporate Offplan and provide other administrative services, including: • Provision of Nominee Shareholders and local nominal directors • Provision of registered office • Maintenance of accounting records and monthly MIS reporting • Opening of Swiss Bank Account • Submission of tax returns • Liaison with appointed auditors • Act as Secretary and Registrar of Offplan Id. ¶¶ 25–26, 28–29, Ex. A at 1.4 CO-Handelszentrum’s provision of nominee shareholders and local nominal directors is routinely requested by individuals or entities outside of Switzerland who wish to form a Swiss company because, under Swiss law, every Swiss company must have at least one director who is a resident of Switzerland and is authorized to sign on behalf of the company. Id. ¶¶ 30, 44. For this reason, CO-Handelszentrum provided Mr. Nedela to serve as local 4 In exchange for these services, Jordan agreed to pay fees, including, for example, task related fees, incorporation fees, notary fees, and commercial registration fees. Id. ¶ 35. Other than these fees, some which were ultimately not paid, Mr. Nedela received no financial gains from Offplan or interest in its business or any of its alleged activities. Id. Case 6:17-cv-02103-GAP-TBS Document 56 Filed 08/17/18 Page 7 of 21 PageID 503 8 nominal director of Offplan.5 Id. ¶¶ 29–30, 44. Any actions taken by Mr. Nedela relating to any of the Defendant entities were solely in the context of the administrative services being rendered by CO-Handelszentrum.6 Id. ¶¶ 36, 45, 46. For instance, Mr. Nedela executed the Riverdale Signed Documents––at the direction of Carl Dhir––because he was local nominal director of Offplan and an authorized signatory. Id. ¶ 45. Mr. Nedela was not, however, involved in the day-to-day operations of Offplan or any of its related companies. Id. ¶¶ 39, 49. Nor was Mr. Nedela aware of any alleged fraudulent conduct by those entities (including that any of the purported transfers were invalid). Id. ¶¶ 38, 47. Likewise, Mr. Nedela has never “hired” any of the other individual defendants or had any relationship with any of them other than as part of his responsibilities with CO-Handelszentrum. Id. ¶ 41. In addition, Mr. Nedela never spoke to Plaintiffs and had no knowledge regarding their communications with the other Defendants relating to these properties or any representations made to them. Id. ¶ 40. Accordingly, because none of Mr. Nedela’s conduct is tortious, the requisite connexity is missing and there is no specific jurisdiction. c. No Injury in Florida Third, to satisfy section 48.193(1)(a)(2) of the Florida long-arm statute, the alleged tort must cause injury in Florida. L.O.T.I. Grp. Prods. v. Lund, 907 F. Supp. 1528, 1532 (S.D. Fla. 5 In this capacity, Mr. Nedela served as President of the Board of Directors of Offplan. Aff. ¶ 31. Contrary to the allegations in the Amended Complaint, he never served as CEO or any other executive or officer position of Offplan or any of its related entities. Id. 6 For example, while Plaintiffs allege Mr. Nedela “founded” Offplan, Am. Compl. ¶ 254(a), the reality is that Offplan was incorporated by Co-Handelszentrum, through Mr. Nedela, as part of the administrative services being offered by Co-Handelszentrum. See Aff. ¶ 37. Case 6:17-cv-02103-GAP-TBS Document 56 Filed 08/17/18 Page 8 of 21 PageID 504 9 1995). Here, the Amended Complaint does not allege that Mr. Nedela’s conduct caused any injury in Florida. To be sure, not only do the Plaintiffs reside outside of Florida (in China and the United Kingdom), see Am. Compl. ¶¶ 6–7, but the Riverdale Units––the only properties with which the Amended Complaint specifically associates Mr. Nedela––are not located in Florida. See id. ¶ 113. d. No Substantial Aspect of Alleged Tort Committed in Florida Fourth, assuming arguendo that Mr. Nedela did engage in some form of tortious activity, Florida’s long-arm statute still does not apply because “[f]or personal jurisdiction to attach under the ‘tortious activity’ provision . . . the plaintiff must demonstrate that the non- resident defendant committed a substantial aspect of the alleged tort in Florida.” Rogers, 2006 WL 7997562, at *6 (noting plaintiff could satisfy this test if he had alleged defendants were aware that their allegedly tortious communications would reach Florida and that individuals in Florida would rely on them); Musiker v. Projectavision, Inc., 960 F. Supp. 292, 296 (S.D. Fla. 1997) (holding that misrepresentations over the phone were not committed in Florida where defendant was not located in Florida during the majority of the calls). Plaintiffs cannot allege that a substantial aspect of the alleged torts was committed in Florida for a number of reasons. Initially, it is impossible for Plaintiffs to allege that Mr. Nedela believed anyone in Florida would rely (to their detriment) on the documents he signed or sent. As the Amended Complaint states, Plaintiffs reside in China and the United Kingdom. Am. Compl. ¶¶ 6–7. Additionally, Mr. Nedela was in Switzerland when he executed and mailed the allegedly fraudulent documents. Thus, other than Plaintiffs’ allegation that Mr. Nedela mailed the Riverdale Signed Documents to Florida, every aspect of Mr. Nedela’s Case 6:17-cv-02103-GAP-TBS Document 56 Filed 08/17/18 Page 9 of 21 PageID 505 10 allegedly tortious conduct took place outside of the state. See L.O.T.I., 907 F. Supp. 1528 at 1532 (“isolated contact does not rise to the level of ‘substantial part’ of the tortious activities”). e. No Pleading of Agency Finally, Plaintiffs have not sufficiently alleged any agency relationship, such that another Defendant’s conduct in Florida could be imputed to Mr. Nedela. Indeed, other than a few conclusory allegations, Plaintiffs have not pleaded “(1) acknowledgment by [Mr. Nedela] that [any of the Defendants] w[ould] act for him; (2) acceptance of the undertaking [by any Defendant]; [or] (3) control by [Mr. Nedela] over [any Defendant’s] actions and day-to-day activities.” PYCSA Panama, S.A. v. Tensar Earth Tech., Inc., 625 F. Supp. 2d 1198, 1252 (S.D. Fla. 2008). In addition, although Plaintiffs allege that Mr. Nedela “owns” and is a director of Offplan, the alleged conduct of Offplan or any of its related entities cannot be imputed to Mr. Nedela for purposes of jurisdiction.7 “[U]nder Florida’s long-arm statute, agents are subject to personal jurisdiction in Florida only if they transact business on their own behalf in the state, and not just the business of the corporation.” Blixseth, 2013 WL 12063940, *8. In other words, a court cannot “exercise personal jurisdiction over [the foreign defendant], a non-resident agent, based on [the other defendants’] alleged contacts with Florida.” Id. In sum, for each of the five reasons stated above, the Court lacks personal jurisdiction over Mr. Nedela.8 7 Plaintiffs also allege Mr. Nedela signed the Riverdale Signed Documents “as Director of Prime Asset.” Am. Compl. ¶ 121 (emphasis in original). 8 Although there are some instances where a court can impose jurisdiction over a foreign defendant under a conspiracy-liability theory, “a plaintiff must at least make out a colorable, factually supported claim of the Case 6:17-cv-02103-GAP-TBS Document 56 Filed 08/17/18 Page 10 of 21 PageID 506 11 C. The exercise of jurisdiction over Mr. Nedela would not comport with due process. Even if Mr. Nedela did fall within the ambits of Florida’s long-arm statute––which he does not––exercising jurisdiction over him would not comport with due process. “[T]he determination of whether the assertion of personal jurisdiction over a nonresident defendant comports with due process is itself a two-prong inquiry.” Madara, 916 F.2d at 1515–16. First, a court must decide whether the defendant has established “minimum contacts” with Florida. Id. at 1516. Second, the court must decide whether the exercise of personal jurisdiction would offend “traditional notions of fair play and substantial justice.” Id. 1. Mr. Nedela does not have minimum contacts with Florida. “There are three considerations under the due process clause: (1) purposeful availment of the forum state; (2) the cause of action arises out of the activities of which you purposefully availed yourself, i.e., the contacts must proximately result from actions by the defendant himself that create a ‘substantial connection’ with the forum state, and (3) reasonable foreseeability that a defendant should reasonably anticipate being haled into court there.” Future Tech. Today, Inc. v. OSF Healthcare Sys., 218 F.3d 1247, 1250–51 (11th Cir. 2000). “Determining minimum contacts requires an examination of the “quality and nature” of the nonresident defendant’s activity.” L.O.T.I., 907 F. Supp. at 1533. Importantly, “‘the unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State . . . it is essential in each case that there conspiracy’s existence.” Maale v. Kirchgessner, No. 08-80131-CIV, 2010 WL 11506095, at *4 (S.D. Fla. May 27, 2010). As discussed in Section II.B, infra, the Amended Complaint does not contain any allegations to support that Mr. Nedela agreed to, or participated in, a conspiracy. Case 6:17-cv-02103-GAP-TBS Document 56 Filed 08/17/18 Page 11 of 21 PageID 507 12 be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.’” Madera, 916 F.2d at 1516 (quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958)). “This requirement assures that a defendant will not be haled into a jurisdiction as a result of random, fortuitous, or attenuated contacts, . . . or because of the unilateral activity of a third person.” Id. “Although the concept of foreseeability is not irrelevant to this analysis, the kind of foreseeability critical to the proper exercise of personal jurisdiction is not the ability to see that the acts of third persons may affect the forum, but rather that the defendant’s own purposeful acts will have some effect in the forum.” Id. at 1516–17 (emphasis in original). In this case, there is simply no evidence supporting any of the prongs of the due process analysis. It is undisputed that Mr. Nedela is a resident of Switzerland. See Am. Compl. ¶ 8; Aff. ¶ 3. He has never resided in Florida (or anywhere else in the United States) and has never owned property in Florida. Id. ¶¶ 11, 17, 19. He has never had a Florida driver’s license, bank account or voter’s registration or engaged in any personal business in Florida. Id. ¶¶ 4–20. In fact, he has visited Florida only one time, 38 years ago when he was 8 years old. Id. ¶ 21. These limited contacts with Florida do not establish that Mr. Nedela purposefully availed himself of Florida or that Mr. Nedela could anticipate being haled into court in Florida. In addition, Plaintiffs’ claims do not arise out of any activities by Mr. Nedela in Florida. Although the Amended Complaint lists certain alleged acts that purportedly illustrate that “Defendants have sufficient minimum contacts with the United States, and this District in particular,” only one of those acts mentions Mr. Nedela––namely, that “Nedela and Dhir executed and delivered deeds, contracts, and other documents concerning the Subject Case 6:17-cv-02103-GAP-TBS Document 56 Filed 08/17/18 Page 12 of 21 PageID 508 13 Properties to Crescent and/or Dan Doran in Florida.” Am. Compl. ¶¶ 23, 23(d). But as the Amended Complaint also alleges, Mr. Nedela executed those documents in Switzerland and merely mailed them to Florida. Id. ¶ 266. Such conduct clearly does not create any substantial connection with the forum. See Future Tech., 218 F. 3d at 1251 (single telephone call into Florida did not provide substantial connection to Florida); Green v. USF&G Corp., 772 F. Supp. 1258, 1262 (S.D. Fla. 1991) (holding that phone call to Florida did not provide minimum contacts with the state). Thus, Mr. Nedela does not have minimum contacts with Florida. 2. The exercise of jurisdiction over Mr. Nedela would offend the traditional notions of fair play and substantial justice. Even if Plaintiffs had shown that Mr. Nedela “purposefully established minimum contacts”—which they did not—jurisdiction over Mr. Nedela would not comport with “fair play and substantial justice.” Madara, 916 F.2d at 1517. The relevant factors for this determination include “the burden on the defendant in defending the lawsuit, the forum state’s interest in adjudicating the dispute, the plaintiff’s interest in obtaining convenient and effective relief, the interstate judicial system’s interest in obtaining the most efficient resolution of controversies and the shared interest of the states in furthering fundamental substantive social policies.” Id. Here, Mr. Nedela would be greatly burdened if forced to defend this lawsuit in Florida as Mr. Nedela is a Swiss resident, who does not conduct business in Florida, and has rarely even visited the state. See Aff. ¶¶ 3, 4–10, 22. Florida has little to no interest in adjudicating the lawsuit because neither of the Plaintiffs reside in Florida and the majority of the parties involved in the case are located outside of the United States. See Am. Compl. ¶¶ 6–18. In Case 6:17-cv-02103-GAP-TBS Document 56 Filed 08/17/18 Page 13 of 21 PageID 509 14 addition, the only properties related in any way to Nedela’s alleged conduct are located in Illinois, not Florida. See id. ¶ 113. II. THE AMENDED COMPLAINT FAILS TO STATE A CLAIM AGAINST MR. NEDELA. The Amended Complaint asserts four counts against all of the defendants, including Nedela: (1) Count I for a violation of the federal RICO statute; (2) Count II for a violation of the Florida RICO Act; (3) Count III for conspiracy to commit RICO under 18 U.S.C. § 1962(d); and (4) Count IV for conspiracy to commit RICO under the Florida RICO Act. “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). In addition, “[w]hen a plaintiff asserts RICO and RICO conspiracy claims, the court must look at the underlying allegations of racketeering predicates to determine the nature of the alleged wrongdoing. When the underlying allegations assert claims that are akin to fraud, the heightened pleading standards of Rule 9(b) apply to the RICO claims.” Miccosukee Tribe of Indians of Fla. v. Cypress, 814 F.3d 1202, 1212 (11th Cir. 2015). A. Count I fails to state a RICO claim against Mr. Nedela because it does not allege that Mr. Nedela participated in a RICO enterprise. In Count I, Plaintiffs seek to assert a RICO violation under section 1962(c). Section 1962(c) makes it unlawful “to conduct or participate, directly or indirectly, in the conduct of [an] enterprise [that affects interstate commerce] through a pattern of racketeering activity.” Rep. of Panama v. BCCI Holdings (Luxembourg) S.A., 119 F.3d 935, 948-949 (11th Cir. 1997). Thus, among the elements that a plaintiff must allege to state a claim under section 1962(c) is that the defendant “participated . . . in the conduct of the affairs of the enterprise” U.S. v. Case 6:17-cv-02103-GAP-TBS Document 56 Filed 08/17/18 Page 14 of 21 PageID 510 15 Starrett, 55 F.3d 1525, 1541 (11th Cir. 1995). In order to participate in the conduct the enterprise’s affairs, “one must participate in the operation or management of the enterprise itself.” Reves v. Ernst & Young, 507 U.S. 170, 185 (1993). While the requisite participation is not limited to those with “primary responsibility for the enterprise’s affairs,” a defendant “must [have] some part in directing the enterprise’s affairs” Id. at 179. The plaintiff must therefore allege concrete facts “demonstrating ‘affirmative and deliberate participation’ by each defendant . . . by ‘knowingly implement[ing] and ma[king] decisions’ concerning the alleged racketeering activity pattern.” Sterling Nat'l Mortg. Co. v. Infinite Title Sols., LLC, No. 10-22147-CIV, 2011 WL 13220625, at *5 (S.D. Fla. Mar. 3, 2011), report and recommendation adopted sub nom. 2011 WL 1222168 (S.D. Fla. Mar. 31, 2011). In an attempt to show Mr. Nedela’s participation in the enterprise, Plaintiffs allege he “created the infrastructure for the RICO Enterprise and brought many of the other Defendants into the fold.” Am. Compl. ¶ 254. In support of this allegation, Plaintiffs assert that Mr. Nedela “founded and owns Offplan”; “created . . . Capinvest”; “executed corporate documents for Capinvest”; “hired, authorized and/or ratified Jordan, Dhir, and Dan Doran to operate the fraudulent investing model”; and “execut[ed] the Riverdale Signed Documents,” which he mailed “knowing that these would be delivered to Randall as fraudulent evidence of the transfer of title.” Id. But these allegations fall short of establishing that Mr. Nedela “affirmatively and deliberately” operated, managed, or directed the affairs of the enterprise because (1) they allege entirely innocuous, normal activity unassociated with the racketeering Case 6:17-cv-02103-GAP-TBS Document 56 Filed 08/17/18 Page 15 of 21 PageID 511 16 activity and/or (2) they are conclusorily pleaded, failing to establish how Mr. Nedela even knew of the fraud.9 First, the allegations that Mr. Nedela created and owns Offplan, created Capinvest, signed corporate documents for Capinvest, and/or hired some of the Defendants to work for Offplan or Capinvest do not show how Nedela played a part in directing the affairs of the alleged enterprise to defraud Plaintiffs. Indeed, these facts establish nothing more than that Mr. Nedela performed certain acts within the normal scope of his duties as the alleged “President” or “Director” of Offplan. As the Supreme Court has stated, “liability depends on showing that the defendants conducted or participated in the conduct of the ‘enterprise’ affairs,’ not just their own affairs.” Reves, 507 U.S. at 185 (emphasis in original). Second, the allegations that Mr. Nedela “execut[ed] the Riverdale Signed Documents” and mailed them “knowing that these would be delivered to Randall as fraudulent evidence of the transfer of title” also fail to sufficiently establish his participation. Nowhere in the Amended Complaint do Plaintiffs identify how Mr. Nedela knew—at the time he signed or mailed the documents—that they allegedly contained fraudulent misrepresentations. Thus, the Court cannot accept as true that Mr. Nedela knew he was signing purportedly fraudulent deeds. Comcast of S. Fla. II, Inc. v. Best Cable Supply, Inc., No. 07-22335-CIV, 2008 WL 190584, at *7-8 (S.D. Fla. Jan. 22, 2008) (“As a general rule, conclusory allegations and unwarranted deductions of fact are not admitted as true in a motion to dismiss.”). What remains then is that 9 Although beyond the scope of this section of the Motion, the allegations are also untrue. As discussed above, the incorporation of Offplan was one of the services for which Co-Handelszentrum was engaged. Aff. ¶¶ 26, 27. Mr. Nedela’s only reason for creating Offplan was to fulfill Co-Handelszentrum’s contractual duties. Id. Likewise, Mr. Nedela has never “hired” any of the other individual defendants. Id. ¶ 41. Case 6:17-cv-02103-GAP-TBS Document 56 Filed 08/17/18 Page 16 of 21 PageID 512 17 Mr. Nedela, on behalf of Prime Asset, allegedly signed documents relating to the sale of the Riverdale Units. But as Plaintiffs alleged, “Prime Asset was in the business of . . . assisting individuals with real estate investing.” Am. Compl. ¶ 9. Under Plaintiffs’ own allegations then, Mr. Nedela was merely conducting the regular activity of Prime Asset. That does not mean that Mr. Nedela participated in the conduct of the affairs of the enterprise. See Sterling, 2011 WL 13220625, at *10 (“[P]roviding important services to a racketeering enterprise is not the same as directing the affairs of an enterprise”); see also Danny Lynn Elec. & Plumbing, LLC v. Veolia ES Solid Waste Se., Inc., No. 2:09CV192-MHT, 2011 WL 2893629, at *3 (M.D. Ala. July 19, 2011) (finding insufficient allegations of participation because “misrepresentations in invoices and letters sent to the defendants’ customers, and published on the defendants’ websites” were made in an attempt to “increase the profits of the corporations,” which is what corporations “normally do”; plaintiffs failed to allege any conduct by the defendants “that fall outside the normal business of the . . . corporations”). B. Count III fails to state a RICO conspiracy claim against Mr. Nedela because (a) the underlying RICO claim fails and (b) the Amended Complaint fails to adequately plead an agreement. In Count III, Plaintiffs assert a claim under section 1962(d) of the federal RICO statute. Am. Compl. ¶¶ 294–302. Section 1962(d) makes it unlawful for any person to conspire to violate sections 1962(a), (b), or (c). As a preliminary matter, because Plaintiffs’ substantive RICO claim fails (as shown above), the conspiracy claim under section 1962(d) necessarily fails as well. Regions Bank v. Kaplan, No. 8:12-CV-1837-T-17MAP, 2015 WL 1456706 *5 (M.D. Fla. Mar. 30, 2015) (“Where a plaintiff fails to state a substantive RICO claim, and the conspiracy count adds no additional allegations, the conspiracy claim necessarily fails.”). Case 6:17-cv-02103-GAP-TBS Document 56 Filed 08/17/18 Page 17 of 21 PageID 513 18 Count III also fails, however, because Plaintiffs have failed to adequately allege a conspiratorial agreement. A plaintiff can establish a conspiratorial agreement by showing that either (1) the defendant agreed to the overall objective of the conspiracy; or (2) the defendant agreed to personally commit two predicate acts. Rep. of Panama, 119 F.3d at 950. Where the alleged RICO conspiracy is based on predicate acts of mail or wire fraud—as here—the allegations must comply not only with the plausibility criteria articulated in Twombly and Iqbal, but also with Rule 9(b)’s heightened pleading standard. Miccosukee, 814 F.3d at 1212; see also Ambrosia Coal & Constr. Co. v. Pages Morales, 482 F.3d 1309, 1316–17 (11th Cir. 2007) (holding that civil RICO claims, which are “essentially a certain breed of fraud claims, must be pled with an increased level of specificity” under Rule 9(b)). Paragraph 298 of the Amended Complaint attempts (unsuccessfully) to establish the first type of agreement by alleging that “Defendants” (collectively) agreed to the “overall objective” of the alleged scheme “to increase profits by defrauding clients.”10 According to Plaintiffs, “Defendants” (again, collectively) “understood and agreed that a member of their conspiracy would commit at least two predicate racketeering acts” and that as part of the scheme “a Defendant” (who Plaintiffs do not identify) or “Defendants” (once more, collectively) “would ask investors, including Randall specifically, to send money, via wire transfer to pay for Subject Properties. . . based on false information and deceptive or misleading representations by certain Defendants.” Id. ¶¶ 299, 300. 10 There is no allegation that Mr. Nedela agreed to personally commit two predicate acts. Case 6:17-cv-02103-GAP-TBS Document 56 Filed 08/17/18 Page 18 of 21 PageID 514 19 These allegations—which are the only allegations of any purported agreement in the 100-page Amended Complaint—fail to describe, with any specificity whatsoever, the purported agreement to conspire. See Ambrosia, 482 F.3d at 1316–17. To be sure, the allegations do not identify which Defendants agreed with which other Defendants, the dates when those agreements were reached, how the agreements were entered into, or the terms of those agreements. See Pupke v. McCabe, No. 13-80860-CIV, 2014 WL 12621479, at *3 (S.D. Fla. Jan. 30, 2014); See In re Managed Care Litig., No. 00-1334-MD, 2009 WL 812257, at *4–5 (S.D. Fla. Mar. 26, 2009) (dismissing RICO conspiracy claim where plaintiff failed to provide “any specific factual allegations regarding exactly how and when Defendants agreed to violate RICO through mail and wire fraud”). The RICO conspiracy claim also fails as to Mr. Nedela, however, because the Amended Complaint fails to allege that Nedela, in particular, agreed to the overall objective of the purported conspiracy. While an agreement to an overall objective may be inferred, the plaintiff must plead “circumstance[s] pointing toward a meeting of the minds.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557 (2007). There must be facts alleged that would indicate that the defendant was a “willing participant” in the conspiracy. O’Malley v. O’Neill, 887 F.2d 1557, 1559 (11th Cir. 1989). This is not the case for Mr. Nedela. Plaintiffs’ allegations that Mr. Nedela owned and/or created Offplan and Capinvest do not show that he was a willing participant in a scheme to defraud Randall. In fact, owning and/or creating entities is entirely lawful action that does not establish an agreement to commit fraud. Jackson v. BellSouth Telecomms., 372 F.3d 1250, 1269 (11th Cir. 2004) (“[W]hat is required to support a claim of RICO conspiracy is that plaintiffs allege an illegal agreement to Case 6:17-cv-02103-GAP-TBS Document 56 Filed 08/17/18 Page 19 of 21 PageID 515 20 violate a substantive provision of the RICO statute . . .To be guilty of conspiracy, . . . parties must have agreed to commit an act that is itself illegal—parties cannot be found guilty of conspiring to commit an act that is not itself against the law.”) (emphasis added).11 The allegation that Mr. Nedela “hired, authorized, or ratified” Jordan, Dhir, and Doran “to operate” the fraud also fails because it is entirely conclusory. There is no factual allegation that Mr. Nedela gave Jordan, Dhir or Doran any instructions regarding the alleged fraud, what actions Mr. Nedela allegedly authorized each of Jordon, Dhir, and Doran to take, or what actions Mr. Nedela supposedly ratified and how those actions were ratified. Finally, Plaintiffs’ allegation that Mr. Nedela executed the Riverdale Signed Documents “knowing” that they would be delivered as “fraudulent evidence” is similarly insufficient and entirely conclusory. The Amended Complaint simply fails to identify any facts showing how Mr. Nedela knew, at the time he signed those documents, that they were fraudulent or that they would be delivered by the other defendants to Plaintiffs in order to defraud Plaintiffs. CONCLUSION For the reasons herein, the Amended Complaint against Mr. Nedela should be dismissed with prejudice. 12 11 Plaintiffs’ allegation that Mr. Nedela executed “corporate documents” for Capinvest also fails to establish a conspiratorial agreement for this same reason. 12 Because Plaintiffs’ claims under the federal RICO statute are insufficient, the claims under Florida’s RICO Statute (Counts II and IV) should also be dismissed. See Jackson, 372 F.3d at 1263-64 (“Because Florida courts often look to the Federal RICO decisions for guidance in interpreting and applying the act, the analysis we apply to the plaintiffs federal RICO claims is equally applicable to their state RICO claims.”). Case 6:17-cv-02103-GAP-TBS Document 56 Filed 08/17/18 Page 20 of 21 PageID 516 21 Respectfully submitted, HOLLAND & KNIGHT LLP Attorneys for Defendant 701 Brickell Avenue, Suite 3300 Miami, Florida 33131 (305) 374-8500 (telephone) (305) 789-7799 (facsimile) s/Jesus E. Cuza Jesus E. Cuza Fla. Bar No.: 428991 jesus.cuza@hklaw.com Rebecca J. Canamero Fla. Bar. No.: 86424 rebecca.canamero@hklaw.com CERTIFICATE OF SERVICE I hereby certify that on August 17, 2018, a true and correct copy of this document was served by electronic notice made by the CM/ECF filing system to all counsel of record. s/Jesus E. Cuza Jesus E. Cuza #59383152_v1 Case 6:17-cv-02103-GAP-TBS Document 56 Filed 08/17/18 Page 21 of 21 PageID 517