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LLC v. Albertelli

United States District Court, M.D. Florida, Fort Myers Division

August 2, 2018

CONTINENTAL 332 FUND, LLC, CONTINENTAL 298 FUND LLC, CONTINENTAL 306 FUND LLC, CONTINENTAL 326 FUND LLC, CONTINENTAL 347 FUND LLC, CONTINENTAL 355 FUND LLC, CONTINENTAL 342 FUND LLC and CONTINENTAL 245 FUND LLC, Plaintiffs,
v.
DAVID ALBERTELLI, ALBERTELLI CONSTRUCTION INC., WESTCORE CONSTRUCTION, LLC, NATIONAL FRAMING, LLC, MFDC, LLC, TEAM CCR, LLC, BROOK KOZLOWSKI, JOHN SALAT, KEVIN BURKE, KERRY HELTZEL, AMY BUTLER, U.S. CONSTRUCTION TRUST, FOUNDATION MANAGEMENT, LLC, KMM CONSTRUCTION, LLC, WESTCORE CONSTRUCTION, L.L.C. and GEORGE ALBERTELLI, Defendants.

          OPINION AND ORDER [1]

          SHERIPOLSTER CHAPPELL UNITED STATES DISTRICT JUDGE

         This matter comes before the Court on Defendants' Joint Motion to Permit Interlocutory Appeal and Stay (Docs. 151) filed on June 21, 2018.[2] Plaintiffs responded on July 5, 2018. (Doc. 153). The matter is therefore ripe for review.

         This is a dispute over an effort to pursue an interlocutory appeal of denied motions to dismiss in an ongoing civil fraud case. The details of the case have been meticulously laid out in an earlier Opinion and Order. (Doc. 144). Only the salient facts will be set forth here. Plaintiffs are funds created to bankroll apartment construction projects around the country. (Doc. 117 at ¶¶ 16(a)-(h)). Defendants are a group of interrelated individuals and corporations that undertook various roles associated with the construction of Plaintiffs' apartment complexes. (Doc. 117 at ¶¶ 1-15, 18-33). Plaintiffs allege Defendants perpetrated a wide-ranging fraudulent scheme upon them over a period of six years on multiple construction projects. (Doc. 117 at ¶¶ 1-15, 44(a)-(h)).

         That experience led some of the Plaintiffs to sue some of the Defendants in January 2017. (Doc. 1). After multiple amendments and the addition of the entire panoply of current Defendants, Plaintiffs filed a twenty-one count Third Amended Complaint in March 2018. (Doc. 117). Count 1 of the Third Amended Complaint alleges Defendants are liable for violations of the Federal Racketeering Influenced and Corrupt Practices Act (the "RICO Act") (Doc. 117 at ¶¶ 50-271). Although the RICO Act includes four different causes of action under subsections of 18 U.S.C. § 1962, Count 1 did not specify the subsections upon which it was lodged. Defendants seized on this omission and moved to dismiss, arguing Count 1 was a shotgun pleading because it involved: (1) multiple Plaintiffs, (2) multiple Defendants, and (3) alleged violations of multiple unspecified subsections of the RICO Act. (Docs. 130; 135; 136; 137, 138). The Court found it was not necessary for Count 1 to be split into claims involving individual Plaintiffs because the interests of clarity were advanced by joining them in a single claim based on an alleged pattern of behavior. (Doc. 144 at 19). It further found Count 1 did not need to be split into claims involving individual Defendants because it adequately alleged the actions each party allegedly undertook. (Doc. 144 at 19). Finally, the Court found it was not necessary for Count 1 to specifically state the RICO subsections upon which it was based because Defendants were provided adequate notice of the claims against them and the grounds upon which each claim rests.[3] (Doc. 144 at 16-17). Now, Defendants move for interlocutory appeal of that decision. (Doc. 151).

         LEGAL STANDARD

         Interlocutory review is generally looked upon as "bad policy" because of its piecemeal effect on cases. McFarlin v. Conseco Servs., LLC, 381 F.3d 1251, 1259 (11th Cir. 2004). That said, under 28 U.S.C. § 1292(b), a "district court may permit an interlocutory appeal when the order at issue (1) involves a controlling question of law upon which there is (2) a substantial ground for difference of opinion, and (3) when immediate appeal from the order may materially advance the ultimate termination of the litigation. In re Yormak, No. 2:17-CV-73-FTM-38, 2017 WL 2645601, at *2 (M.D. Fla. June 19, 2017), appeal dismissed, No. 17-13239-FF, 2017 WL 4857438 (11th Cir. Sept. 13, 2017). "The movant seeking interlocutory appeal bears the burden of showing that all § 1292(b) requirements are satisfied and that the case is one of the rare exceptions in which the court should exercise judicial discretion to grant the remedy." In re Cmty. Health Sys., Inc., No. 15-CV-222-KOB, 2017 WL 604334, at *2 (N.D. Ala. Feb. 15, 2017). "[I]f any elements are not satisfied, the Court must deny interlocutory review." In re Yormak, 2017 WL 2645601, at *2; see also Inetianbor v. CashCall, Inc., No. 13-60066-CIV, 2016 WL 4249938, at *2 (S.D. Fla. Jan. 26, 2016).

         DISCUSSION

         A. Interlocutory Appeal

         1. Controlling Question of Law

         To meet the first element for interlocutory appeal, the movant must demonstrate there is a question of law, and it is controlling. See McFarlin v. Conseco Servs., LLC, 381 F.3d 1251, 1259 (11th Cir. 2004). A controlling question of law pertains to "the meaning of a statutory or constitutional provision, regulation, or common law doctrine." Id. at 1258. In other words, a controlling question of law is an issue of "pure law" that can be decided "quickly and cleanly without having to study the record." Id. The question must also "be stated at a high enough level of abstraction to lift the question out of the details of the evidence or facts of a particular case and give it general relevance to other cases in the same area of law." Id. at 1259. By contrast, "[t]he antithesis of a proper § 1292(b) appeal is one that turns on whether there is a genuine issue of fact or whether the district court properly applied settled law to the facts or evidence of a particular case." Id. at 1259.

         Against that backdrop, Defendants' proposed controlling question of law is "[w]hether Plaintiffs have adequately plead[ed] a RICO claim against all sixteen Defendants." (Doc. 151 at 3). That, however, is plainly an issue that turns on whether the Court "properly applied settled law to the facts or evidence of a particular case." See Id. Consequently, that question does not provide grounds for appeal.

         When read charitably, though, the substance of Defendant's Motion can be interpreted to propose another controlling question of law: "what constitutes sufficient notice to the Defendants for the purposes of avoiding the label of shotgun pleading?" (Doc. 151 at 5). The Eleventh Circuit refers to "[c]omplaints that violate either Rule 8(a)(2) or Rule 10(b), or both ... as 'shotgun pleadings.'" Weiland v. Palm Beach Cty. Sheriff's Office, 792 F.3d 1313, 1320 (11th Cir. 2015). Thus, meaning and interpretation of that designation is an issue of pure law. Thus, it satisfies the first element necessary for interlocutory appeal.

         2. Substantial Ground for Difference of Opinion

         If a controlling question of law exists, the appellant must next demonstrate the existence of a substantial ground for difference of opinion. Flaum v. Doctor's Assocs., Inc., No. 16-61198-CIV, 2016 WL 8677304, at *2 (S.D. Fla. Oct. 27, 2016). To do this, the appellant must show "a legal issue is (1) difficult and of first impression, (2) the district courts of the controlling circuit are split as to the issue, or (3) the circuits are split on the issue." Id. "[M]erely showing that the order for which appeal is sought presents a difficult ruling, or demonstrating a lack of authority ...


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