United States District Court, M.D. Florida, Jacksonville Division
MORALES HOWARD UNITED SLATES DISTRICT JUDGE.
CAUSE is before the Court on Defendants
Mahendra F. Doshi, Mahesh Doshi, and Ryan K. Burress's
Motion for Summary Judgment and Incorporated Memorandum of
Law (Doc. 42, Motion), filed March 8, 2019. Paresh Doshi and
Jitendra Doshi filed their Amended Complaint on March 13,
2018 (Doc. 20, Amended Complaint), asserting claims of fraud,
breach of fiduciary duty, and conspiracy against the
Defendants arising from a transfer of real
estate. Plaintiffs have filed a response to
Defendants' Motion. See Plaintiffs' Response
in Opposition to Defendants' Motion for Summary Judgment
(Doc. 46, Response), filed March 29, 2019. For the reasons
stated below, the Defendants' Motion is TAKEN
UNDER ADVISEMENT and the Court will schedule a
hearing on the matter.
described, the instant controversy arises out of the
successive transfers of a parcel of real property (the
Property) between friends and relatives. As relevant here,
Jitendra Doshi and Mahesh Doshi initially acquired the Property
at issue in 1994, through an entity they shared, Doshi, Inc.
(Doshi, Inc.). See Doc. 42-1 at 4-6, 17 (Property
and Business Entity Records); Doc. 42-6 at 5 (Affidavits). In
2006, Jitendra and Mahesh transferred Doshi, Inc.'s
interests (i.e., the Property) to D&D JAX, LLC (D&D
JAX). See Affidavits at 6; Property and Business
Entity Records at 7-9, 18-22.
in 2009, Jitendra and Mahesh transferred D&D JAX's
interests to Cagle Road Land LLC (Cagle Road LLC).
See Doc. 49 at 8, 9 (Mahesh Doshi Deposition);
Property and Business Entity Records at 10-11. At the time of
the transfer, Paresh Doshi and Mahendra Doshi were the sole
members of Cagle Road LLC, each holding a fifty percent
interest in the entity. Doc. 42-4 at 24 (Jitendra Doshi
Deposition); Paresh Doshi Deposition at 19. During the time
Cagle Road LLC held the Property, Mahesh performed
maintenance and oversight for the Property, and communicated
with Paresh, Mahendra, and Jitendra about the Property's
status. Mahesh Deposition at 10, 11, 13, 15. However, Mahesh
was not listed on any of the Cagle Road LLC documents as a
member of the business entity, or as a manager. Property and
Business Entity Records at 24-25.
2013, at the recommendation of Mahesh, Paresh and Mahendra
transferred the entirety of their interests in Cagle Road LLC
to CRLAG FLA, LLC (CRLAG) for $20, 000. See Doc.
42-2 at 14, 28 (Jitendra Doshi Interrogatory); Mahesh Doshi
Deposition at 25; Paresh Doshi Deposition at 23, 25-28,
40-41; Property and Business Entity Records at 29-30. In the
document memorializing the transfer of interests between
Cagle Road LLC and CRLAG, Ryan Burress signed as the Manager
on behalf of CRLAG, and Mahendra and Paresh signed on behalf
of Cagle Road LLC. See Property and Business Entity
Records at 29-30. Additionally, the transfer agreement
indicated that upon the transfer, “Mahendra Doshi and
Paresh Doshi hereby resign from any and all offices which
they may hold in” Cagle Road LLC. Id. at 30.
Plaintiffs contend that when Paresh and Mahendra transferred
their interests in Cagle Road LLC to CRLAG, the men did not
know that Mahesh was the sole member of the buying entity.
See Jitendra Doshi Deposition at 37-38; Mahesh Doshi
Deposition at 25-26; Paresh Doshi Deposition at 13-14. After
purchasing Cagle Road LLC's interests from Paresh and
Mahendra for $20, 000, Mahesh resold the Property for $775,
000. See Mahesh Deposition at 32; Property and
Business Entity Records at 12.
result of the foregoing, Jitendra Doshi and Paresh Doshi, as
individuals, brought the instant action against Mahendra F.
Doshi, Mahesh Doshi, and Ryan K. Burress, as individuals,
asserting various claims of fraud as well as breach of
fiduciary duty and civil conspiracy. See generally
Amended Complaint. The Defendants subsequently filed their
Motion, which is currently before the Court. Upon review of
the parties' filings, the Court determines that a hearing
is warranted to address whether Paresh Doshi, or
alternatively, Cagle Road LLC, is the proper party plaintiff
in this action, in addition to the other matters raised in
the parties' filings.
claims that he was injured when Cagle Road LLC transferred
its interests in the Property to CRLAG for $20, 000, at the
prompting of, and on the basis of representations made by
Mahesh. See Amended Complaint at ¶¶ 67,
74-75. At the time of the transfer, however, while Paresh was
a member of Cagle Road LLC, it was Cagle Road LLC, and not
Paresh, that owned the Property. See Property and
Business Entity Records at 10-11, 29-30. In this context,
under Florida law damages resulting from membership in an LLC
may be brought directly in an individual suit
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 Investments, LLC v. Camacho, 141 So.3d 731,
739-40 (Fla. 3d Dist. Ct. App. 2014). See also Mahoney v.
Wells Fargo Bank, N.A., No. 8:19-cv-118-T-02SPF, 2019 WL
1901011, at *1 (M.D. Fla. Mar. 20, 2019) (“Under
Florida law, a member of an LLC may not bring a derivative
claim in his or her individual name.”); Hudder v.
City of Plant City, No. 8:14-cv-1686-T-EAK-EAJ, 2014 WL
7005904, *1 (M.D. Fla. Dec. 10, 2014) (LLC is real party in
interest, rather than member of LLC); Home Title Co. of
Maryland, Inc. v. LaSalla, 257 So.3d 640, 643 (Fla. 2d
Dist. Ct. App. 2018) (“Generally, a . . . member of an
LLC may not maintain an action in his or her own right if the
cause of action is derived from the right of the . . . LLC to
bring the action. In other words, if the injury is primarily
against the [LLC], or the [members] generally, then the cause
of action is in the [LLC] and the individual's right to
bring it is derived from the [LLC].”).
Notably, Florida Statutes section 605.0110 provides that
(1) [a]ll property originally contributed to the limited
liability company or subsequently acquired by a limited
liability company by purchase or other method is limited
liability company property.
(2) Property acquired with limited liability company funds is
limited liability company property. [And]
(4) A member of a limited liability company has no interest
in any specific limited ...