United States District Court, M.D. Florida, Fort Myers Division
ORDER AND OPINION
E. STEELE, SENIOR UNITED STATES DISTRICT JUDGE
matter comes before the Court on the defendants’ Motion
for Reconsideration (Doc. #116) filed on August 9, 2019. The
defendants seek reconsideration of this Court’s July
25, 2019 Order and Opinion (Doc. #111) denying the
defendants’ motion to dismiss. In the alternative, the
defendants request the Court amend the July 25th order to
include a certificate for interlocutory appeal. Plaintiff
filed a Response (Doc. #121) on August 22, 2019. For the
reasons that follow, the motion is denied.
A. The Parties
to the Third Amended Complaint, plaintiff Skypoint Advisors,
LLC is a Florida limited liability company by and through its
members, which include Dennis Dreni. (Doc. #93, p. 1.)
Defendant 3 Amigos Productions, LLC is a Nevada limited
liability company with three managing members: (1) defendant
BlackburnSteele, LLC, a Nevada limited liability company; (2)
defendant Issa Zaroui, a citizen of New York; and (3)
non-party Chad Pittman, a citizen of Virginia. (Id.
pp. 1-2.) Finally, defendant Mark Crawford is the sole
managing member of defendant BlackburnSteele. (Id.
to plaintiff, the defendants, individually and acting in
concert, began soliciting plaintiff’s member Dreni in
November 2016 to invest in the production of a proposed film
entitled “Lazarat Burning.” (Id. pp.
4-5.) From November 2016 until January 2017, the defendants
made representations to Dreni regarding the film’s
production, financing, and potential profits. (Id.
pp. 5-25.) In early 2017, plaintiff and defendant 3 Amigos
entered into a “Film Financing Agreement, ” with
plaintiff agreeing to loan $50, 000 as an investment in the
project. (Id. p. 27; Doc. #93-1, p. 52.) Per the
terms of the agreement, plaintiff elected to receive a
proportional share of the film’s profits rather than
interest on the $50, 000. (Doc. #93-1, p. 53.) The agreement
contained a distribution schedule and stated the
distributions constituted “securities” exempt
from federal registration requirements. (Id. p. 54.)
Finally, the agreement contained a choice of law provision
construing the agreement under Florida law, and a
forum-selection clause listing “any court in the State
of Florida” as having jurisdiction over the matter.
(Id. p. 55.)
after entering into the agreement, plaintiff “developed
significant concerns” related to the project and
demanded a refund of its money. (Doc. #93, p. 31.) The
defendants refused to return plaintiff’s investment and
plaintiff initiated this action in May 2018. (Id. p.
32; Doc. #1.)
January 2019, plaintiff filed its Second Amended Complaint
alleging a claim under Section 10(b) of the Securities
Exchange Act of 1934, as well as various Florida and common
law claims. (Doc. #52, pp. 12-26.) The defendants filed a
motion to dismiss (Doc. #56), which the Court granted in part
and denied in part. (Doc. #92.) The Court found the Section
10(b) claim failed to meet the heightened pleading
requirements of Rule 9(b) of the Federal Rules of Civil
Procedure and the Private Securities Litigation Reform Act of
1995 (“PSLRA”), and the Court lacked subject
matter jurisdiction for the remaining claims. (Doc. #92, pp.
14-15.) As this was the third version of the complaint filed,
the Court granted plaintiff one final opportunity to amend
and cure the pleading and jurisdictional deficiencies.
(Id. pp. 10, 14, 15.)
April 30, 2019, plaintiff filed its Third Amended Complaint
alleging the following six claims: (1) violation of Section
10(b) of the Securities Exchange Act and Rule 10b-5
promulgated thereunder; (2) violation of Florida’s
Securities and Investor Protection Act, § 517.011 et.
seq., Fla. Stat.; (3) common law fraud; (4) violation of
Florida’s Deceptive and Unfair Trade Practices Act,
§ 501.201 et. seq., Fla. Stat.; (5) breach of contract;
and (6) breach of fiduciary duty. (Doc. #93, pp. 32-47.) The
first four claims are alleged against all the defendants,
while the fifth and sixth claims are alleged only against
defendant 3 Amigos. (Id.) Plaintiff claims damages
of over $90, 000. (Id. p. 27.)
21, 2019, the defendants filed another motion to dismiss.
(Doc. #96.) The motion sought dismissal on a variety of
grounds, but specifically argued the Section 10(b) claim
should be dismissed for (1) failing to satisfy the heightened
pleading requirements of the PSLRA and Rule 9(b), and (2)
failing to state a claim upon which relief can be granted.
(Id. pp. 11-17.) On July 25, 2019, the Court denied
the motion. (Doc. #111.) Regarding the Section 10(b) claim,
the Court found the Third Amended Complaint met the
heightened pleading requirements of Rule 9(b) and the PSLRA,
and alleged sufficient facts to state a claim. (Id.
August 9, 2019, the defendants filed the motion for
reconsideration now before the Court. (Doc. #116.) The motion
requests the Court reconsider its prior Order and Opinion
denying the motion to dismiss, asserting the Court “was
in error regarding the law to be applied, the application of
the law to the allegations of the [Third Amended Complaint]
or in fully understanding or addressing Defendants’
arguments.” (Id. p. 6.) Alternatively, if
reconsideration shall be denied, the defendants request the
Court certify its prior Order and Opinion for immediate
interlocutory appeal. (Id. p. 19.) The Court will
address each of these arguments in turn.
Legal Standard for Reconsideration
non-final order may be revised at any time before the entry
of a final judgment. Fed.R.Civ.P. 54(b). The decision to
grant a motion for reconsideration is within the sound
discretion of the trial court, Region 8 Forest Serv.
Timber Purchasers Council v. Alcock, 993 F.2d 800, 806
(11th Cir. 1993), and courts have delineated three major
grounds justifying reconsideration: “(1) an intervening
change in controlling law; (2) the availability of new
evidence; [and] (3) the need to correct clear error or
prevent manifest injustice, ” Sussman v. Salem,
Saxon & Nielsen, P.A., 153 F.R.D. 689, 694 (M.D.
Fla. 1994) (citation omitted). Additionally, appropriate
circumstances for reconsideration include situations in which
“the Court has obviously misapprehended a party’s
position, or the facts, or mistakenly has decided an issue
not presented for determination.” United
States v. Halifax Hosp. Med. Ctr., 2013 WL
6284765, *1 (M.D. Fla. Dec. 4, 2013).
reconsideration of a court’s order “is an
extraordinary remedy and a power to be ‘used sparingly,
’” Santamaria v. Carrington Mortg. Servs.,
LLC, 2019 WL 3537150, *2 (M.D. Fla. July 10, 2019)
(citation omitted), with the burden “upon the movant to
establish the extraordinary circumstances supporting
reconsideration, ” Mannings v. Sch. Bd. of
Hillsborough Cty., Fla., 149 F.R.D. 235, 235 (M.D. Fla.
1993). The motion “must demonstrate why the court
should reconsider its past decision and set forth facts or
law of a strongly convincing nature to induce the court to
reverse its prior decision.” Santamaria, 2019
WL 3537150, *2 (citation omitted).
Relevant Factual Allegations from the Third Amended
defendants’ motion for reconsideration focuses on the
Court’s ruling regarding the Section 10(b) claim in the
Third Amended Complaint. Section 10(b) of the Securities
Exchange Act makes it unlawful for any person to “use
or employ, in connection with the purchase or sale of any
security . . . any manipulative or deceptive device or
contrivance in contravention of such rules and regulations as
the Commission may prescribe as necessary or appropriate in
the public interest or for the protection of
investors.” 15 U.S.C. § 78j(b). SEC Rule
10b–5 implements this provision by making it unlawful
to, inter alia, “make any untrue statement of
a material fact or to omit to state a material fact necessary
in order to make the statements made, in the light of the
circumstances under which they were made, not
misleading.” 17 C.F.R. § 240.10b–5(b). The
Supreme Court has “implied a private cause of action
from the text and purpose of § 10(b).” Matrixx
Initiatives, Inc. v. Siracusano, 563 U.S. 27, 37 (2011)
Third Amended Complaint’s Section 10(b) claim accuses
the defendants of making fraudulent statements to induce
plaintiff to invest in a film project. (Doc. #93, pp. 32-36.)
The Third Amended Complaint lists the following as examples
of the misrepresentations made by the defendants:
(a) that the Project was almost contractually fully funded
due to almost two years’ worth of work by Defendants[;]
. . .
(b) that Skypoint’s then proposed $50, 000.00
investment was the final investment needed to complete the
budget for the Project, describing Skypoint’s then
proposed $50, 000.00 investment as contingent in that the
expenditure thereof may not be necessary for the completion
of the Project, and that Skypoint was the final investor
accepted for the Project[;]
. . .
(c) mischaracterized Skypoint’s then proposed $50,
000.00 investment as de minimus in light of the investment
funds already collected for the Project and presented 3
Amigos’s proposed acceptance of Skypoint’s $50,
000.00 investment as doing a favor for Skypoint[;]
. . .
(d) that all of the production work for the Project was
. . .
(e) that Crawford, Zaroui, and Pittman already personally
invested at least $30, 000.00 each to the Project[;]
. . .
(f) that DigitAlb, a prominent Albanian media company,
already invested approximately $400, 000.00 into the
. . .
(g) that 3 Amigos had existing contracts with distribution
companies Karo Films, the largest Russian firm of its kind in
the Russian region, and Fantastic Film International
regarding distribution of the ...