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Kodsi v. Branch Banking and Trust Co.

United States District Court, S.D. Florida

February 12, 2018

AMY KODSI, an individual Plaintiff,
BRANCH BANKING AND TRUST COMPANY, a North Carolina banking corporation, Defendant.



         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.

         I. Introduction

         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.

         II. Failure to State a Claim Standard

         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 “[w]hile a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level.” 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 Fed.Appx. 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 ‘the complaint affirmatively and clearly shows the conclusive applicability' 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).

         III. Litigation Privilege

         “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) (holding Florida law provides complete ...

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