Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alsd-1_04-cv-00279/USCOURTS-alsd-1_04-cv-00279-0/pdf.json

Nature of Suit Code: 370
Nature of Suit: Other Fraud
Cause of Action: 28:1332 Diversity-Fraud

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1

 Uter’s Motion to Dismiss also moved, in the alternative, that the Court require Peacock to

submit a more definite statement of the Fourth Counterclaim. The Court has already held (Doc. 125)

that the Fourth Counterclaim is sufficiently particular as to satisfy the requirements of Fed.R.Civ.P.

9(b). 

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

MARION UTER, et al., )

)

Plaintiff, )

)

vs. ) Civil Case No.: 1:04-279-BH-C

)

LINDA PEACOCK, et al., )

)

Defendant, )

ORDER

This matteris before the Court on Plaintiff/Counterclaim Defendant Marion Uter’s Motion (Doc.

123) to Dismiss.1 Defendant/Counterclaim Plaintiff Peacock, pursuant to the Court’s Order (Doc. 125)

of June 8, 2005, has filed an Objection (Doc. 136) to Uter’s Motion to Dismiss. Upon examination of

these pleadings and all relevant evidence submitted therewith, the Court finds that Plaintiff/Counterclaim

Defendant Marion Uter’s Motion (Doc. 123) to Dismiss is due to be DENIED.

RELEVANT FACTS

Uter’s Original Complaint

MarionUter originally filed his Complaint against Peacock in the Circuit Court ofBaldwinCounty

on March 10, 2004, alleging Breach of Contract and Fraud. The action was removed to this Court on

April 28, 2004. Uter’s claims revolve around a contract entered into between Uter and Peacock to

dissolve their business relationships. (Doc. 1, Compl., ¶ 5). The Agreement was executed on July 10,

Case 1:04-cv-00279-BH-C Document 144 Filed 07/07/05 Page 1 of 6
2

 Peacock claims she paid Uter $60,000 in the form of a cashier’s check and the remaining

$40,000 was credited towards what Uter owed Peacock under their 2001 Divorce Settlement

Agreement. (Doc. 139, Br. Opp. Mot. Dismiss, p. 9).

2003 and provided for certain obligations to be performed by both parties in order to equitably distribute

the interests and assets of their various business ventures. Id. Peacock answered the Complaint in May

2004, denying any wrongdoing. (See Doc. 2, Answer).

In May 2005, this Court permitted Peacock to amend her answer and submit four counterclaims

against Uter. (Doc. 88, Second Am. Answer and Countercl.). The second of these counterclaims also

names Uter’ssons, Colin and Paul, as defendants. Id. at ¶ 32. At this time, Uter only seeks to dismiss the

Fourth Counterclaim.

Peacock’s Fourth Counterclaim

Peacock’s FourthCounterclaimdeals withanalleged March20,2002transactioninwhichMarion

Uter supposedly sold a 15% stock interest in what istermed in this matter as the “Floragon Companies.”

Id. at ¶ 39. In consideration for the stock in Floragon, Peacock allegedly paid Uter a sum of $100,000.2

Id. at ¶ 41. Peacock now makes several assertions regarding this transaction. First, she claims that Uter

grosslymisrepresented the financial condition of Floragon and that she relied on thesemisrepresentations

to her detriment. Id. at ¶ 40. Peacock also submitsthat despite demand,she never received any stock or

membership certificates evidencing the 15% interest she supposedly purchased, nor has she received any

return on her investment. Id. at ¶ 43. Finally, Peacock alleges that the interests she purchased from Uter

are worthless. Id. at ¶ 44. 

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3

 In suits where federal jurisdiction is based solely on diversity of citizenship, state-law governs

statute of limitations questions. See Bernard Schoninger Shopping Centers, Ltd. v. J.P.S.

Elastomerics, Corp., 102 F.3d 1173, 1177 (11th Cir. 1997); see also Reisman v. General Motors

Corp., 845 F.2d 289, 291 (11th Cir. 1988)(“Except in matters governed by the federal Constitution or

Motion to Dismiss

Standard of Review

For the Court to grant a motionto dismiss, the movant must demonstrate “beyond a doubt that the

plaintiff can prove no set of facts in support of her claim that would entitle her to relief.” Foster v.

Savannah Communication, 2005 WL 1491442 (11thCir. 2005) (quotingConley v. Gibson, 355 U.S.

41, 45-56 (1957); Fed.R.Civ.P. 12(b)(6)). 

Statute of Limitations

Typically, a defendant must plead a statute oflimitations defenseas anaffirmative defense. Id.; See

Fed.R.Civ.P. 8(c). However, it may also be presented in a “motion to dismiss for failure to state a claim

for which relief can be granted under Fed.R.Civ.P. 12(b)(6), when failure to comply with the statute of

limitations is plain on the face of the complaint.” Id. (citing AVCO Corp. v. Precision Air Parts, Inc.,

676 F.2d 494, 495 (11th Cir.1982)).

Inthe instant case, Uter assertsthat Peacock’s FourthCounterclaim should be dismissed because

it does notfallwithinAlabama’stwo yearstatuteoflimitationforfraud claims. (Doc. 124, Uter’s Br. Supp.

Mot. Dismiss, p. 2). Peacock’s counterclaim, on its face, alleges March 20, 2002 as the date on which

she and Uter contracted for the sale of the Floragon stock. (Second Am. Answer and Countercl., ¶ 39).

However, the Counterclaim was not properly filed until over three years later, May 13, 2005. Id. 

The Alabama Supreme Court has held, “a compulsory counterclaim is not subject to the defense

of [statute of] limitations.”3 See Exxon Corp. v. Dep’t of Conservation and Natural Resources, 859

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by acts of Congress, federal courts in diversity cases must apply the law of the forum state, including its

statute of limitations.”)

So.2d 1096,1102(Ala.2002); Romar Development Co. v. Gulf View Management Corp., 644 So.2d

462, 470-73 (Ala. 1994). In the instant case, Peacock claims that the Fourth Counterclaim is compulsory,

therefore immune from Uter’s statute of limitations attack. (Br. Opp. Mot. Dismiss, p. 4)

Compulsory Counterclaims

Compulsory counterclaims “arise out ofthe transactionor occurrence that is the subject matter of

the opposing party's claim.” Fed.R.Civ.P. 13(a). The Eleventh Circuit has held that “a claim arises out of

the same transaction or occurrence if there is a ‘logical relationship’ between the claims.” Constr.

Aggregates, Ltd. v. Forest Commodities Corp., 147 F.3d 1334, 1337 n.6 (11th Cir. 1998)(citing

Republic Health Corp. v. Lifemark Hosps. of Florida, Inc., 755 F.2d 1453, 1455 (11th Cir. 1985)).

Peacock submits that the Fourth Counterclaim alleging fraudulent behavior by Uter regarding the March

20, 2002 Floragonstock sale is so logically related to Uter’s Complaint against herfor breachof contract

and fraud regarding the July 10, 2003 Agreement so as to satisfy this standard. (Br. Opp. Mot. Dismiss

at 12). The Court disagrees. Peacock’s attempt to logically relate the two claims is tenuous at best. 

Peacock points to Uter’s deposition in which he states that he was not paid $100,000 for the

Floragon stock transaction. Id. When further questioned as to the purpose for the $60,000 check he

received fromPeacock, he stated, “it went to PCUBuildersto pay bills on Ms. Peacock’s house.” (Dep.

ofMarionUter, Vol. 3, p. 12). Peacock further notes that Uter’s Complaint states that Peacock’s house

isthe center of the accounting dispute and that no sale should be allowed until the funds canbe accounted

for as provided intheir contract of July 10, 2003. (Br. Opp. Mot. Dismiss at 13). According to Peacock,

this is the logical relationship binding the Floragon transaction of March 20, 2002 to Uter’s Complaint

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regarding the contract of July 10, 2003. Id. The claims brought by Uter in his complaint for Fraud and

Breach of Contract are based on a separate and distinct contract and set of circumstances than is

Peacock’s counterclaim asserting Fraud in the Floragon stock sale a year earlier. The Court finds that

Peacock’s Fourth Counterclaim, therefore, does not meet the standard of being compulsory and, thus, is

not entirely immune from Alabama’s statute of limitations. 

Permissive Counterclaims

A permissive counterclaim is one that is not arising out of the transaction or occurrence that is the

subject matter of the opposing party’s claim. Fed.R.Civ.P. 13(a). Though not provided the same

protection from the statute of limitations as compulsory counterclaims, Alabama law states that a

defendant’s permissive counterclaim may be brought, despite the expiration of the statute of limitations,

“where it was a legal subsisting claim at the time the right of action accrued to the plaintiff on the claim in

the action.”§6-8-84, Ala.Code 1975; Romar at 644 So.2d 473 (Ala.Code 1975, §6-8-84 applies only

to permissive counterclaims). “Under this section, a counterclaim is not time-barred if it was a legally

subsisting claimat the time the claimant’s right of action accrued, even though it would have beenuntimely

as judged from the date that the counterclaimwasfiled.” Turner v. Deutz-Allis Credit Corp., 544 So.2d

840, 844 (Ala. 1988). 

Though untimelywhenfiled, it is clearthat Peacock’s counterclaimwaslegally subsisting at the time

Uter’s right of action accrued. Uter’s cause ofactionaccrued whenPeacock allegedly breached the July

10, 2003 Agreement or when he became aware of her purported fraudulent behavior. Based on Uter’s

own Complaint, this occurred sometime in late September or early October of 2003, when Uter became

aware of Peacock’s suspension of the audit on LMUI, LLC and LMM, LLC. Even if the statute of

limitations began to run onPeacock’s cause of actionat the earliest possible date of March 20, 2002, she

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stillhad a legally subsisting claiminthe fallof2003. Therefore, pursuant to Ala. Code 1975, §6-8-84, the

Court finds that Peacock’s Fourth Counterclaim is not barred byAlabama’stwo yearstatute of limitation

for fraud actions. Uter’s Motion (Doc. 123) to Dismiss is due to be DENIED. 

CONCLUSION

Based uponthe above rationale, this Court holdsthat Defendant/CounterclaimPlaintiffPeacock’s

FourthCounterclaimispermissive ratherthancompulsory. Nevertheless, Alabama law permits her to bring

this counterclaim beyond the designated two year statute of limitations for fraud claims. Therefore,

Plaintiff/Counterclaim Defendant Uter’s Motion (Doc. 123) to Dismiss is hereby DENIED.

So ORDERED this 6th day of July, 2005.

s/ W. B. Hand

SENIOR DISTRICT JUDGE

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