United States District Court, M.D. Florida, Tampa Division
C. BUCKLEW United States District Judge.
cause comes before the Court on Defendants' Motion to
Dismiss. (Doc. No. 12). Plaintiffs oppose the motion. (Doc.
No. 16). As explained below, the motion is granted in part
and denied in part.
Standard of Review
deciding a motion to dismiss, the district court is required
to view the complaint in the light most favorable to the
plaintiff. See Murphy v. Federal Deposit Ins. Corp.,
208 F.3d 959, 962 (11th Cir. 2000)(citing Kirby v.
Siegelman, 195 F.3d 1285, 1289 (11th Cir. 1999)). The
Federal Rules of Civil Procedure do not require a claimant to
set out in detail the facts upon which he bases his claim.
Instead, Rule 8(a)(2) requires a short and plain statement of
the claim showing that the pleader is entitled to relief in
order to give the defendant fair notice of what the claim is
and the grounds upon which it rests. See Bell Atlantic
Corp. v. Twombly, 550 U.S. 544, 555 (2007)(citation
omitted). As such, a plaintiff is required to allege
“more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action will not
do.” Id. (citation omitted). While the Court
must assume that all of the allegations in the complaint are
true, dismissal is appropriate if the allegations do not
“raise [the plaintiff's] right to relief above the
speculative level.” Id. (citation omitted).
The standard on a 12(b)(6) motion is not whether the
plaintiff will ultimately prevail in his or her theories, but
whether the allegations are sufficient to allow the plaintiff
to conduct discovery in an attempt to prove the allegations.
See Jackam v. Hospital Corp. of Am. Mideast, Ltd.,
800 F.2d 1577, 1579 (11th Cir. 1986).
allege the following in their amended complaint (Doc. No. 9):
Plaintiff John Bruce McNider (“Mr. McNider”) owns
Plaintiff McNider Marine, LLC (“McNider Marine”).
McNider Marine is in the business of selling and repairing
boats. Plaintiffs owed Wells Fargo approximately $334, 000.
Cain & Daniels (“C&D”) provides debt
settlement services, and Defendants Robert Kolodner and Max
Lora appear to be employees of C&D. Lora sent
Plaintiffs an Engagement Letter with the title:
“SAVE ABOUT HALF ON YOUR
SETTLEMENT.” (Doc. No. 1-2). The
Engagement Letter stated that C&D is a debt settlement
company that attempts to reduce a debtor's debts and that
“[s]ettlements are generally reached within 2
weeks.” (Doc. No. 1-2). The Engagement Letter further
provided: “If we are unable to secure a satisfactory
settlement (for our client), there is
NO CHARGE.” (Doc. No. 1-2). At the
bottom of the Engagement Letter, C&D states:
“Your Debt Will Be Cut To About
Half!” (Doc. No. 1-2). Plaintiffs allege that
Kolodner directed, controlled, and/or approved this
advertisement, and Lora orally reiterated to Mr. McNider that
the Wells Fargo debt would be reduced to about half.
sent Plaintiffs a proposed Agreement for Services
(“Agreement”) along with the Engagement
Letter. In the Agreement, C&D states:
“All funds for the agreed settlement including any fees
for Cain & Daniels will not exceed Sixty Percent
(60%) of the plaintiff's claim unless
authorized by [McNider Marine].” (Doc. No. 1-2). The
Agreement further provides that when payment schedules are
arranged, a one-time fee of 8% will apply for claims over
$50, 001. Finally, the Agreement states in bold and
underlined font: “There will be no ($0.00)
cost to the Debtor if a settlement has not been reached
between the parties.” (Doc. No. 1-2).
January 25, 2017, McNider Marine and C&D executed the
Agreement. Additionally, on January 25, 2017, Mr. McNider
executed a Power of Attorney in favor of C&D to allow
C&D to negotiate creditors' claims and obtain
reasonable settlements on his behalf. Months thereafter, C&D
proposed to Plaintiffs a payment plan for the entire $334,
000 debt. The payment plan consisted of 60 monthly payments
of $3, 000, plus a $154, 000 balloon payment.
McNider told Lora that he could not make the negotiated
payments and that this proposal was inconsistent with the
promise to cut the Wells Fargo debt to about half. Lora
responded that this was the best that he could do and that
Mr. McNider would have to take it. However, if Mr. McNider
accepted the proposal, Plaintiffs would still have to pay the
entire $334, 000 debt, plus pay a 8% fee to C&D (equaling
$26, 720). C&D agreed to discount the $26, 720 fee to
$21, 200. However, accepting this deal would have put
Plaintiffs into bankruptcy.
would not take no for an answer and told Wells Fargo that
their payment plan proposal was accepted. Plaintiffs claim
that this proposal had no regard for Plaintiffs'
interests, and Defendants attempted to bind Plaintiffs to a
settlement that Defendants knew or should have known that
Plaintiffs could not afford.
two weeks later, Lora contacted Mr. McNider asking for a $20,
000 down payment. Mr. McNider told Lora that he did not have
that kind of money, and Lora responded that he needed a $9,
000 down payment. C&D already had $6, 200 from Plaintiffs
as a retainer for an unrelated matter that was resolved
before C&D performed any work, so Plaintiffs asked that
the $6, 200 be returned. Lora said that the $6, 200 would be
kept as a partial payment of C&D's fee.
McNider asked to see the settlement agreement with Wells
Fargo, and Lora became defensive. Mr. McNider later learned
that the $9, 000 “down payment” that Lora was
demanding was not going towards the Wells Fargo debt, but
instead, it was a payment towards C&D's fees.
Plaintiffs contend that not only did Lora lie about the
“down payment, ” but Lora also lied about
discounting C&D's fee to $21, 200. Instead, Lora was
really only offering to discount the $26, 720 fee to $26, 200
(consisting of the $20, 000 “down payment” plus
the $6, 200 unearned retainer in the unrelated matter). Had
C&D actually reduced Plaintiffs' debt to half,
Plaintiffs would owe Wells Fargo $167, 000 and C&D $26,
720, resulting in a net savings to Plaintiffs of $140, 280.
C&D sent Mr. McNider an agreement titled,
“Defendant Order of Payment” with the legal
caption of Wells Fargo v. McNider Marine, which
indicated that a settlement had been reached between Wells
Fargo and C&D acting as Mr. McNider's representative.
The agreement required Plaintiffs to make an initial
settlement payment of $12, 000 to C&D. However, this was
a misrepresentation, as some or all of the $12, 000 was going
to be kept by C&D as payment of its fee.
result of the above, Plaintiffs filed suit against
Defendants. The complaint was filed based on diversity
subject matter jurisdiction as Plaintiffs are citizens of
Alabama and Defendants are citizens of Florida.
amended complaint, Plaintiffs assert four claims. Plaintiffs
assert the following three claims against all three
defendants: (1) violation of Florida's Deceptive and
Unfair Trade Practices Act; (2) violation of Alabama's
Deceptive Trade Practices Act; and (3) fraudulent inducement.
Additionally, McNider Marine asserts a breach of contract
claim against C&D. In response, Defendants filed the
instant motion to dismiss.
Motion to Dismiss
filed a poorly drafted motion to dismiss that simply spews
various arguments with very little analysis or connection to
the specific facts of this case. Accordingly, the Court will
attempt to address Defendants' arguments below.