United States District Court, S.D. Florida
ORDER ON MOTION TO DISMISS
BLOOM, UNITED STATES DISTRICT JUDGE.
CAUSE is before the Court upon Defendants TLO, Inc.
(“PaymentCloud”) and Shawn Silver's
(“Silver”) (together, “Defendants”)
Motion to Dismiss, ECF No.  (“Motion”).
Plaintiff Merchant One, Inc. (“Merchant One” or
“Plaintiff”) filed a Response, ECF No. 
(“Response”), to which Defendants filed a Reply,
ECF No.  (“Reply”). The Court has carefully
considered the Motion, the Response and Reply, the record in
this case and the applicable law, and is otherwise fully
advised in the premises. For the reasons set forth below, the
Motion is granted.
case arises as a result of alleged breaches of a contract and
related fraud perpetrated by Defendants. Merchant One is
engaged in the business of providing credit card processing
sales and services to merchants across the United States.
PaymentCloud is also engaged in the business of providing
credit card processing sales and services. Silver is the
owner and chief executive officer of PaymentCloud and
maintains the daily corporate control of PaymentCloud. Silver
was also the owner of National Bank Services, LLC
(“NBS”), an entity he sold prior to forming
PaymentCloud. In the Complaint, ECF No. , Merchant One
alleges that it and PaymentCloud are independent sales
organizations that have contracts with payment processors and
vendors to provide sales and servicing to merchant accounts.
In addition, both Merchant One and PaymentCloud have
contracts with other independent sales organizations to
access processing contracts with other industry members that
focus on different market segments or which may have a
favorable price structure.
November 23, 2013, Merchant One entered a non-exclusive
merchant referral agreement with NBS, ECF No. [1-1]
(“Agreement”), pursuant to which Merchant One
referred various merchant-clients to NBS in order to market
merchant accounts considered higher risk. Merchant One's
compensation for the accounts referred to NBS consisted of
monthly residual income calculated as a percentage of monthly
revenue to NBS from the referred merchant accounts. The
Agreement provides the applicable terms for calculation and
payment of Merchant One's compensation.
2015, Silver sold NBS. As part of the purchase, the purchaser
iPayment, Inc. continued to be responsible for Merchant
One's portion of the residual compensation on accounts
previously referred to NBS. In addition, Merchant One
continued an ongoing referral relationship with Silver. In or
around February, 2016, Silver informed Merchant One that all
new merchant accounts should be referred to PaymentCloud,
which Merchant One did, even though Merchant One and
PaymentCloud never entered into a new written contract.
Instead, Merchant One alleges that it and PaymentCloud agreed
to abide by the same terms in the Agreement between Merchant
One and NBS, with an agreed adjustment to commission
percentages. PaymentCloud provided monthly residual
reporting, identifying each referred merchant account, the
agreed-to profit percentage and other payment information,
some of which Merchant One now contends was falsified.
Merchant One further alleges that PaymentCloud/Silver
materially altered topline revenue and underpaid Merchant One
based on the misrepresented amounts, improperly calculated
Merchant One's referral fee based on understated merchant
income, misreported expenses that also did not comply with
the terms of the agreement between Merchant One and
PaymentCloud, and deducted improper amounts from income
earned from customers referred by Merchant One.
Merchant One reported its discovery of what it contends are
fraudulent underpayments to PaymentCloud in October, 2018,
PaymentCloud stopped reporting and making residual payments,
and continued to withhold residuals in breach of the
parties' contractual relationship.
result of PaymentCloud's alleged actions, Merchant One
asserts nine claims against Defendants for breach of contract
(Count 1), breach of implied covenant of good faith and fair
dealing (Count 2), fraud (Count 3), suppression and
concealment (Count 4), conversion (Count 5), violation of the
Florida Deceptive and Unfair Trade Practices Act
(“FDUTPA”), Fla. Stat. 501.201, et seq.
(Count 6), unjust enrichment (Count 7), conspiracy (Count 8),
and detrimental reliance/promissory estoppel/quantum meruit
(Count 9). In the Motion, Defendants seek dismissal of the
Complaint pursuant to Rule 12(b)(6) of the Federal Rules of
of the Federal Rules requires that a pleading contain
“a short and plain statement of the claim showing that
the pleader is entitled to relief.” Fed.R.Civ.P.
8(a)(2). Although a complaint “does not need detailed
factual allegations, ” it must provide “more than
labels and conclusions, and a formulaic recitation of the
elements of a cause of action will not do.” Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007); see
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (explaining
that Rule 8(a)(2)'s pleading standard “demands more
than an unadorned, the-defendant-unlawfully-harmed-me
accusation”). In the same vein, a complaint may not
rest on “‘naked assertion[s]' devoid of
‘further factual enhancement.'”
Iqbal, 556 U.S. at 678 (quoting Twombly,
550 U.S. at 557 (alteration in original)). “Factual
allegations must be enough to raise a right to relief above
the speculative level.” Twombly, 550 U.S. at
555. These elements are required to survive a motion brought
under Rule 12(b)(6) of the Federal Rules of Civil Procedure,
which requests dismissal for failure to state a claim upon
which relief can be granted.
reviewing a motion under Rule 12(b)(6), a court, as a general
rule, must accept the plaintiff's allegations as true and
evaluate all plausible inferences derived from those facts in
favor of the plaintiff. Miccosukee Tribe of Indians of
Fla. v. S. Everglades Restoration Alliance, 304 F.3d
1076, 1084 (11th Cir. 2002); AXA Equitable Life Ins. Co.
v. Infinity Fin. Grp., LLC, 608 F.Supp.2d 1349, 1353
(S.D. Fla. 2009). However, this tenet does not apply to legal
conclusions, and courts “are not bound to accept as
true a legal conclusion couched as a factual
allegation.” Twombly, 550 U.S. at 555; see
Iqbal, 556 U.S. at 678; Thaeter v. Palm Beach Cty.
Sheriff's Office, 449 F.3d 1342, 1352 (11th Cir.
2006). A court considering a Rule 12(b) motion is generally
limited to the facts contained in the complaint and attached
exhibits, including documents referred to in the complaint
that are central to the claim. Wilchombe v. TeeVee Toons,
Inc., 555 F.3d 949, 959 (11th Cir. 2009); see also
Maxcess, Inc. v. Lucent Techs., Inc., 433 F.3d 1337,
1340 (11th Cir. 2005) (“[A] document outside the four
corners of the complaint may still be considered if it is
central to the plaintiff's claims and is undisputed in
terms of authenticity.”) (citing Horsley v.
Feldt, 304 F.3d 1125, 1135 (11th Cir. 2002)).
Motion, Defendants argue first that the Complaint is an
impermissible shotgun pleading. Upon review, the Court
Eleventh Circuit has repeatedly and unequivocally condemned
shotgun pleadings as a waste of judicial resources.
“Shotgun pleadings, whether filed by plaintiffs or
defendants, exact an intolerable toll on the trial
court's docket, lead to unnecessary and unchanneled
discovery, and impose unwarranted expense on the litigants,
the court and the court's para-judicial personnel and
resources. Moreover, justice is delayed for the litigants who
are ‘standing in line,' waiting for their cases to
be heard.” Jackson v. Bank of Am., N.A., 898
F.3d 1348, 1356-57 (11th Cir. 2018) (quoting Cramer v.
Fla., 117 F.3d 1258, 1263 (11th Cir. 1997)). Overall,
shotgun pleadings fail to make the connection between
“the substantive count and the factual predicates . . .
[such that] courts cannot perform their gatekeeping function
with regard to the averments of [the claim].”
Wagner v. First Horizon Pharm. Corp., 464 F.3d 1273,
1279-80 (11th Cir. 2006).
Plaintiff's contentions to the contrary, the Complaint
here is a shotgun pleading that does not conform to federal
Though the groupings cannot be too finely drawn, we have
identified four rough types or categories of shotgun
pleadings. The most common type-by a long shot-is a complaint
containing multiple counts where each count adopts the
allegations of all preceding counts, causing each successive
count to carry all that came before and the last count to be
a combination of the entire complaint. The next most common
type, at least as far as our published opinions on the
subject reflect, is a complaint that does not commit the
mortal sin of re-alleging all preceding counts but is guilty
of the venial sin of being replete with conclusory, vague,
and immaterial facts not obviously connected to any
particular cause of action. The third type of shotgun
pleading is one that commits the sin of not separating into a
different count each cause of action or claim for relief.
Fourth, and finally, there is the relatively rare sin of
asserting multiple claims against multiple defendants without
specifying which of the defendants are responsible for which
acts or omissions, or which of the defendants the claim is
brought against. The unifying characteristic of all types of
shotgun pleadings is that they fail to one degree or another,
and in one way or another, to give the defendants adequate
notice of the claims against them and the grounds upon which
each claim rests.
Weiland v. Palm Beach Cty. Sheriff's Office, 792
F.3d 1313, 1321-23 (11th Cir. 2015) (footnotes omitted). The
Complaint in this case is noteworthy in that it qualifies
under each of the four categories of shotgun pleading.
each of the nine counts asserted begins with the same
sentence reincorporating all preceding allegations into each
subsequent count. See ECF No.  ¶¶ 46,
52, 57, 63, 69, 73, 77, 82, 88. Such reincorporation of all
preceding counts is confusing, especially where Plaintiff
attempts to plead certain claims in the alternative, such as
breach of contract and unjust enrichment. Second, the
Complaint contains numerous general allegations regarding the
payment processing industry and Merchant One's efforts to
cross-reference payments involving PaymentCloud in detail,
which are not material to stating Merchant One's claims
nor are they connected to any particular cause of action.
Third, Count 9, in which Plaintiff purports to assert a cause
of action for detrimental reliance/promissory
estoppel/quantum meruit, lumps together distinct causes of
action with different elements. See Morse, LLC v. United
Wisc. Life Ins. Co., 356 F.Supp.2d 1296, 1300 (S.D. Fla.
2005) (“A cause of action for promissory estoppel
contains three elements: that the plaintiff detrimentally
relied on the defendant's promise, that the defendant
reasonably should have expected the promise to induce
reliance in the form of action or forbearance by the
plaintiff, and that injustice can only be avoided by
enforcement of the promise.”) (citation omitted);
Merle Wood & Assocs., Inc. v. Trinity Yachts,
LLC, 714 F.3d 1234, 1237 (11th Cir. 2013)
(“Florida law prescribes four elements for quantum
meruit and unjust enrichment claims. First, the plaintiff
must have conferred a benefit on the defendant. Second, the
defendant must have knowledge of the benefit. Third, the
defendant must have accepted or retained the benefit
conferred. Fourth, the circumstances must be such that it
would be inequitable for the defendant to retain the benefit
without paying fair value for it.”) (internal citations
and quotations omitted). Fourth, all counts are asserted against
both Defendants; however, other than the general allegation
that Silver was acting in his individual capacity and as a
representative of PaymentCloud, the Complaint contains no
other allegations delineating each Defendant's alleged
such, despite Plaintiff's explanations to the contrary,
the Complaint constitutes an impermissible shotgun pleading.
Especially where a party is represented by counsel, it is not
the Court's duty to expend precious time and resources in
attempting to decipher a pleading that can be clarified by
more conscientious drafting. The Complaint is therefore due
to be dismissed upon this ground alone.
Remaining substantive arguments
to the extent that Plaintiff's claims are discernible,
Defendants have raised substantive challenges to the causes
of action asserted. In the interests of efficiency and