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McNider Marine, LLC v. Cain & Daniels, Inc.

United States District Court, M.D. Florida, Tampa Division

March 19, 2018



          SUSAN C. BUCKLEW United States District Judge.

         This 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.

         I. Standard of Review

         In 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).

         II. Background

         Plaintiffs 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.

         Defendant Cain & Daniels (“C&D”) provides debt settlement services, and Defendants Robert Kolodner and Max Lora appear to be employees of C&D.[1] Lora sent Plaintiffs an Engagement Letter[2] 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.

         Lora sent Plaintiffs a proposed Agreement for Services (“Agreement”) along with the Engagement Letter.[3] 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).

         On 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.[4] 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.

         Mr. 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.

         Lora 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.

         About 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.

         Mr. 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.

         Thereafter, 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.

         As a 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.

         In the 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.

         III. Motion to Dismiss

         Defendants 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.

         A. Pleading ...

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