FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND
DISPOSITION THEREOF IF FILED
from the Circuit Court for Orange County, Renee A. Roche,
H. Simmons, Deborah I. Mitchell, and Andrew S. Ballentine, of
de Beaubien, Simmons, Knight, Mantzaris & Neal, LLP,
Orlando, for Appellant.
R. Gilchrist, of Allen, Dyer, Doppelt & Gilchrist, P.A.,
Orlando, for Appellee.
David Wishinsky, appeals the trial court's dismissal of
his three count fifth amended complaint with prejudice
alleging direct causes of action against Appellee, Rashid
Choufani, for constructive fraud (count I), fraud (count II),
and breach of contract (count III). We reverse the dismissal
of count I because Appellant sufficiently alleged a direct
cause of action for constructive fraud premised on the breach
of statutory fiduciary duties. We affirm the dismissal of
counts II and III without further discussion.
and Appellee were both members of E-Brands Restaurants, LLC
("E-Brands"), and Appellee was also the Chairman,
CEO and Chief Manager. While Appellee was still the Chairman,
CEO and Chief Manager of E-Brands, he formed another entity
named La Dolbe, LLC ("La Dolbe"), for the purpose
of owning and operating a restaurant. In count I of
Appellant's fifth amended complaint, Appellant alleged
that Appellee committed constructive fraud by breaching the
fiduciary duties of loyalty, care, and good faith and fair
dealing through the diversion of E-Brands's corporate
assets to fund La Dolbe's business venture, in which
Appellee had an interest, without giving Appellant an
opportunity to vote as required by E-Brands's operating
agreement. Appellant further alleged that this self-dealing
and denial of his right to vote on various transactions with
La Dolbe caused his investment in E-Brands to lose its value.
argues that dismissal of count I was proper because Appellant
alleged an injury only to E-Brands, and therefore
Appellant's sole remedy is a derivative action on behalf
"an action may be brought directly only if (1) there is
a direct harm to the shareholder or member such that the
alleged injury does not flow subsequently from an initial
harm to the company and (2) there is a
special injury to the shareholder or member that is separate
and distinct from those sustained by the other shareholders
or members." Dinuro Invs., LLC v. Camacho, 141
So.3d 731, 739-40 (Fla. 3d DCA 2014) (citation omitted).
While Appellant has not sufficiently alleged direct harm and
a special injury, there is an exception to this rule. "A
shareholder or member need not satisfy this two-prong test
when there is a separate duty owed by the defendant(s) to the
individual plaintiff under contractual or statutory
mandates." Id. at 740 (citation omitted).
a manager owes the statutory duties of loyalty, care, and
good faith and fair dealing to the members of an LLC.
See §§ 608.4225(1)(a)-(c), 608.4226,
608.4228(1)(b)2, Fla. Stat. (2010). Appellant's constructive
fraud action sufficiently alleges the breach of these duties.
See Hirchert Family Tr. v. Hirchert, 65 So.3d 548,
552 (Fla. 5th DCA 2011) ("[A] breach of fiduciary duty
is 'constructive fraud.'"); accord White v.
Consol. Planning, Inc., 603 S.E.2d 147, 156 ( N.C. Ct.
App. 2004) ("To survive a motion to dismiss, a cause of
action for constructive fraud must allege (1) a relationship
of trust and confidence, (2) that the defendant took
advantage of that position of trust in order to benefit
himself, and (3) that plaintiff was, as a result, injured.
. . . The primary difference between pleading a
claim for constructive fraud and one for breach of fiduciary
duty is the constructive fraud requirement that the defendant
benefit himself." (citations omitted)).
based on the four corners of the fifth amended complaint, we
conclude that count I sufficiently alleges a direct cause of
action against Appellee pursuant to the special duty
statutory exception. We therefore reverse and remand as to
that claim, and otherwise affirm.
in part; REVERSED in part; and REMANDED.
EISNAUGLE, GROSSHANS and ...