### F I LE D U. S . COURT OF AP PE ALS E LEVE NTH CI RCUI T M A Y 07, 2003 T HOM AS K. KAHN C L E RK [ P UB L I S H] I N THE UN I TE D STATE S C OU RT OF APPE ALS F O R T H E E L E V E N T H C IR C U IT

________________________ N o. 02- 11559

________________________ D. C . Do c k e tNo . 0 0 - 0 2 0 1 3 - C V- UU B L E W I S B . F R E E M A N , a s R e c e iv e ro f

U n iq u e G e m s I n t'l C o rp ., L U C Y M A R T I N E Z , i n d i v i d u al l y an d o n b eh al f o f al l o th er si m i l arl y s itu a te d , P la in tif f s - A p p e lla n ts , v ersu s F I R S T U N I O N N A T I O N A L , a N a t i ona l B a nki ng A s s o c ia tio n f

.k .a . F ir s t U n io n N a tio n a l B a n k o f F lo r id a , N .A ., D e f

e n d a n t- A p p e lle e , H E C T O R P O N T E , a n in d iv id u a l, D e f e n d a n t.

_____________________ A pp ea l fr om the U ni t ed S t at es D i stri ctC ou rt f orthe S outhe r n D i s tr i c tof F l or i da

_________________________ ( M ay 7, 2003)Honora

ble J ohn Fullam, United States District Judge f or the Ea stern District of Pennsylvania, * sitti ngby designation. 2 B ef ore B A R K E T T and K R A V IT C H , C i rc ui tJudg es , and F U L L A M , D i stri ct * Judg e. P E R C U R I A M: L ew i s B . F re em an, court -app oi nt ed re ce i ver f or U ni qu e G em s I nt ernat i on al C o rp . (“ U n i q u e G em s”), an d L u cy M art i n ez, cl ass rep resen t at i v e o f U n i q u e G em s’ c r e d ito r s ( “th e C r e d ito rP la in tif f s ” ) , a p p e a l th e d is tr ic t c o u r t’s d is m is s a l o f th e ir cl ai m s a gai nstF i rs tU ni on N at i on al B ank (“ F i rs tU ni on ”) for i t s a l l eged pa r t i c i pa t i on i n a f

r a udul e ntP onz i s c he m e pe rpe tr a t e d by the pr i nc i pa l s of U ni que G e m s . T he di s tr i c tc our tdi s m i s s e d, w i th pr e j udi c e , F r e e m a n a nd the C r e di t or P la in tif f s ’ jo in tly
- f

ile d a id in g a n d a b e ttin g a f r a u d u le n t tr a n s f

e rc la im f

o rf a ilu r e to state a ca u se o f a ctio n u n d er F lo rid a law . T h e c o u rt sim il ar ly d ism isse d F re em an ’s i nd i vi du al l y a ss er t ed negl i gence cl ai m for l ac k o f s t andi ng . O n app ea l , F re em an a n d th e C r e d ito rP la in tif f s a r g u e ( 1 ) th a t th e F lo r id a c o u r ts w o u ld r e c o g n iz e th e ir ai di ng and abet t i ng cl ai m as a val i d cause of ac t i on and (2) thatthe di stri ctcourt s houl d ha ve gr a nt e d the i rm ot i on t o a m e nd the c om pl a i ntt o c ur e a ny s t a ndi ng defi ci enci es concerni ng the negl i gence count . B ec ause w e a re un sure of w hether F l or i da l a w c ont e m pl a t e s a c a us e of a c t i on f ora i di ng a nd a be t t i ng a f r a udul e nt tr a n s f e r , we c e r t i f

y th e q u e s t i o n t o th e F l o r i d a S u p r e m e C o u r t . I n a d d i t i o n , weThe issue is cur rently pendingbefore the F lorida Second D istrict Court of Appeals in Freeman 1 v. Dea n Witter Rey

nolds, Inc., Case N o. 2D01-4195, 4202. 3 r e ve r s e the di s tr i c tc our t ’ s de ni a l of the C r e di t orP l a i nt i f

f s ’ m ot i on t o a m e nd b e c a u s e th e irp r o p o s e d m o d if ic a tio n w o u ld c u r e th e s ta n d in g d e f ic ie n c y .

I . A I D I N G A N D A BETTI N G A FR A U D U LEN T TR A N SFER U N D ER F L OR I DA S T AT E L AW T he j oi nt l y- fi l ed ai di ng and abet t i ng cl ai m i s probl em at i c bec ause the l ow er F l or i da c our t s ha ve note xpr e s s l y a ppr ove d s uc h a c a us e of a c t i on a nd the F l or i da

1 S upr e m e C our tha s noty e te xa m i ne d thi s que s t i on. W e de c i de nove l que s t i ons of
s t a t e l a w “ the w a y i ta ppe a r s the s t a t e ’ s hi ghe s tc our tw oul d. ” E r ni e H a i r e F or d, In c. v . F o rd M o to r C o ., 2 6 0 F .3 d 1 2 8 5 , 1 2 9 0 (1 1 th C ir. 2 0 0 1 ). “W h er e th e s tate’s hi ghe s tc our tha s nots poke n t o a n i s s ue , a f e de r a l c our t‘ m us ta dhe r e t o the de c i s i ons of

the s t a t e ’ s i nt e r m e di a t e a ppe l l a t e c our t s a bs e nts om e pe r s ua s i ve in d ic a tio n th a t th e s ta te ’s h ig h e s t c o u r t w o u ld d e c id e th e is s u e o th e r w is e .’” I d . (quo t i ng Insura nce C o. of N orth A m er i ca v. L exow , 93 7 F . 2d 56 9, 57 1 (11 th C i r. 1991) ) . A l a c k of

e xpl i c i tF l or i da c a s e l a w on a n i s s ue doe s nota bs ol ve us of our duty “ t o de c i de w ha tthe s t a t e c our t s w oul d hol d i f f a c e d w i th i t . ” A r c e ne a ux v.In B onner v . Ci ty of Pric ha rd , 6 61 F .2 d 1 20 6, 12 09 (1 1th Cir . 1 98 1) (en b anc ), theEl e venth 2 Circuit adopted as bindingprec edent all Fifth Circuit decisions hande d down prior to the c lose of business on September 30, 1981. Th ere le va

nt p or tio ns of F UF TAprov idethat: 3 (1) A transfer madeor oblig ation incurre d by a debtor is fraudulent as to a creditor, whether the creditor' s claim arosebefore or a fter thetransfer wa s made or theobligation was incur red, if thedebtor madethe transf er or incurre d the obligation: (a) With actual intent to hinder, delay, or def raud a ny cre ditor of the debtor ; F la . St at. § 72 6. 10 5 ( 20 02 ); (1 ) Atrans fer m a deor

ob lig atio n in c ur

re d b y a debto r i s f

ra ud ulent a s to a

c re dit or wh os e claim arose bef

ore thetransfer wa s made or theobligation was incurred if the debtor made the transfer or incur red theobligation without receivinga re asonably equivalent valuein e xch ang efo r t

hetrans fer o r obli g atio n a nd thedebto r w a s in so lvent at th at ti me or the debtor bec ame insolvent as a result of the tra

nsfer or oblig ation. (2) A transfer madeby

a debtor is fraudulent as to a creditor whose c laim arose be fore the transf er w as madeif the transf

er w as madeto an insider for an ante cedent debt, the debtor wa s insolvent at that time, and the insider had reasona ble ca use to believethat the debto r w a s in so lvent. Fla. Stat. § 726.106 (2002) . 4 T e x a c o , I n c ., 6 2 3 F .2 d 9 2 4 , 9 2 6 ( 5 th C ir . 1 9 8 0 ) ( c ita tio n s o m itte d ) . “T h e is s u e is 2
no tre sol ved m er el y by adet erm i nat i on thati thas notye tar i se n. ” I d. B utun der F l or i da l a w , w e m a y c e r t i f y a que s t i on on the l a w of the s t a t e i f

the c a s e tur ns upon i tand t here ar e no cl ea r c on trol l i ng F l ori da S up re m e C ou rtprec edent s. S ee F l a. C on st . ar t . V , § 3 (b)( 6); F l a. S t at . § 2 5. 03 1 (20 02 ). T he di s tr i c tc our tc onc l ude d tha tthe F l or i da S upr e m e C our tw oul d not
r e c ogni z e a c a us e of

a c t i on f ora i di ng a nd a be t t i ng f

r a udul e nttr a ns f

e r s , not i ng a dear th o f c as e l aw supp ort i ng such a c l ai m . Itno t ed thatF l ori da’ s U ni form F ra ud ul entT ra nsfe r A ct(“ F U F T A ”) , F l a. S t at . §§ 72 6. 10 1 etse q. (200 2), pr ovi s i ons de f

i ni ng f r a udul e nttr a ns f

e r s a r e s i m i l a rt o 11 U . S . C . § 548 of the 3F la . St at. § 72 6. 10 8 ( 20 02 ) p ro vide s th efo llo wingreme die s o f c re dit or s: 4 (1) ... (a) Avoidanceof the tra nsfer or oblig ation to the extent necessar y to satisfy the 5 B ankrup t cy C od e. S ee In re V eni ce -O xford A ss ocs. , 23 6 B . R . 82 0, 83 4 (B ankr. M. D. F l a . 1 9 9 9 ) . B a s e d o n th i s s i m i l a r i ty , th e d i s tr i c tc o u r ts u r m i s e d th a tF UF T A, l i ke the f r a udul e nttr a ns f

e rpr ovi s i on of

the B a nkrupt c y C ode , i s nota s our c e of lia b ility ; r a th e r , it o n ly a llo w s c r e d ito r s to s e t a s id e f r a u d u le n t tr a n s f

e r s m a d e to tr a n s f e r e e s u n d e ra th e o r y o f

c a n c e l l a t i o n . Th i s i n t e rp r e t a t i o n h a s r e c e i v e d s o me s u p p o r t f r o m F lo r id a ’s F o u r th D is tr ic t C o u r t o f A p p e a ls , w h ic h h a s e x p la in e d th a t: [ a ] f r a u d u le n t c o n v e y a n c e a c tio n is s im p ly a n o th e rc r e d ito r s ’ r e m e d y . I t is ei ther a n act i on by a c re di t or agai nsta tra nsfe re e di re ct ed agai nsta par t i cul ar tr a ns a c t i on, w hi c h, i f

de c l a r e d f

r a udul e nt , i s s e ta s i de thus l e a vi ng the c r e di t orf r e e t o pur s ue the a s s e t , ori ti s a n a c t i on a ga i ns ta tr a ns f e r e e w ho ha s r e c e i ve d a n a s s e tby m e a ns of a f r a udul e ntc onve y a nc e a nd s houl d be r e q u ir e d to e ith e rr e tu r n th e a s s e t o rp a y f o rth e a s s e t. Y u s e m v . S o u th F lo r id a W a te rM g m t. D is t., 7 7 0 S o . 2 d 7 4 6 , 7 4 9 ( F la . D is t. C t. A pp. 4th D i s t . 2000) ( r e ve r s i ng j udgm e ntunde ra F U F T A a c t i on a ga i ns ta de bt or for hi s f ai l ure t o p ay a pri or j ud gm entam ou nt ). H ow ever , despi t e the si m i l ar i t i es no t ed by the di stri ctcourt , F U F T A di ff er s fr om the bank rupt cy m od el i n sever al i m po rt antre spec t s. W hi l e the B ankrup t cy C ode l i m i t s r e m e di e s t o the r e c ove r y of the tr a ns f

e r r e d pr ope r ty ori t s va l ue , 11 U . S . C . § 5 50 (a ) ( 20 01 ), F U F T A cl ea rl y provi des a dd i t i on al l y f or “ any other r el i ef th e ci rcu m st an ces m ay req u i re. ” F l a. S t at . § 7 2 6 . 1 0 8 (2 0 0 2 ). T h i s cat ch al l p h rase 4c re dit or' s c laim; (b) An attachment or other provisional remedy ag ainst the asset tra

nsfer red or oth e r p ropert

y of thetrans fere ein ac c orda nc ewi th a

pp lic a blelaw; (c ) S ub je c t to a pp lic a bleprinc ipl e s o f e quity

and in ac c orda

nc ewi th a

pp lic a ble rule s o f c ivi l proc e dure : 1. An injunction ag ainst further dispositi on by

the debtor or

a tra nsferee, or bo th, of thea sset trans ferre d o r o f o ther p ropert y ; 2. Appointment of a re ceiver to take c harg e of theasset tra nsfer red or of other property

of the tra nsferee; or 3. Any other re lief the c ircumstance s may require . F la . St at.§ 72 6. 11 1 re a ds : 5 Unless displace d by the provisions of ss. 726.101-726.112, the princ iples of law and equity, including thelaw merchant a nd the law relatingto principal and ag ent, estoppel, lac hes, fraud, misrepresentation, duress, coercion, mistake, ins olv e nc y , o r o ther v a lid atin gor inv a lid atin gc a

us e , s uppleme nt t

ho se provisions. 6 grant s the courtbroad equ i t abl e pow er s. S ee Invo F l ori da, Inc. v. S om er se t V e ntur e r , I nc . , 751 S o. 2d 1263, 1267 ( F l a . D i s t . C t . A pp. 3d D i s t . 2000) ( not i ng thatthe court ’ s e qu i t abl e pow er s a re m ore e xt ensi ve than w hati s a vai l abl e und era b r e a c h o f

c o n tr a c t a c tio n ) . R e m e d ie s u n d e rF U F T A a r e , th e r e f o r e , n o t lim ite d to s e ttin g a s id e a tr a n s f

e ro rf o r c in g d is g o r g e m e n t. S e e H a n s a r d C o n s tr . C o rp . v . R ite A i d of F l or i da , I nc . , 783 S o. 2d 307, 308 ( F l a . D i s t . C t . A pp. 4th D i s t . 2001) ( h o ld in g th a t F U F T A ’s c a tc h a ll p h r a s e a llo w s p la in tif f s to s e e k m o n e y d a m a g e s ) . In addi t i on , F U F T A un am bi gu ou sl y s t at es thatal l com m on l aw re m edi es s u p p le m e n t its a p p lic a tio n . S e e I n v o , 7 5 1 S o . 2 d a t 1 2 6 7 ( c itin g F la . S ta t. § 5 726. 111 ( 2002) ) . T oge the rthe s e pr ovi s i ons s ugge s ttha tF l or i da ’ s f r a udul e nt tr a n s f e rla w s a r e m u c h le s s c ir c u m s c r ib e d o u ts id e th e b a n k ru p tc y c o n te x t. A n d in7

c ontr a s tt o the di s tr i c tc our t ’ s i nt e rpr e t a t i on, F l or i da ’ s T hi r d D i s tr i c tC our tof A ppe a l s ha s tr e a t e d a n a c t i on f orf r a udul e nttr a ns f

e ra s a t or t . S e e i d. a t1265. B e c a u s e o f

th e c o n f lic tin g g u id a n c e f

r o m th e in te r m e d ia te a p p e lla te c o u r ts on the nature of F U F T A , i t s r em edi es , and i t s r el at i on shi p t o t he B ankrup t cy C od e, w e f in d it d if f ic u lt to p r e d ic t h o w th e F lo r id a S u p r e m e C o u r t w o u ld d e c id e th is i s s ue . W e , the r e f

or e , c onc l ude tha tthi s c a s e i nvol ve s una ns w e r e d que s t i ons of st at e l aw thatar e det erm i nat i ve of thi s app ea l and, havi ng foun d n o cl ea r, c ontr ol l i ng pr e c e de nti n the de c i s i ons of the s t a t e ’ s hi ghe s tc our t , w e c e r t i f y the fo l l o w i n g q u est i o n o f l aw t o th e S u p rem e C o u rto f F l o ri d a fo r i n stru ct i o n s: U nde rF l or i da l a w , i s the r e a c a us e of a c t i on f ora i di ng a nd a be t t i ng a fr audu l enttra nsfe r w hen t he al l eged ai der- abett or i s nota tra nsfe re e? O u rp a r t i c u l a rp h r a s i n g o f th e q u e s t i o n i s n o ti n t e n d e d t o l i mi tth e Fl o r i d a Su p r e me C our t ’ s i nqui r y , a nd a ny a s s i s t a nc e the c our tm a y of f e r , s houl d i tde c i de t o a c c e pt th is c e r tif

ic a tio n , is a p p r e c ia te d . T h e e n tir e r e c o r d in th is c a s e , to g e th e rw ith copi es of the bri ef

s, shal l be tra nsm i t t ed herew i th t o t he S up re m e C ou rtof F l ori da. II. D IS M IS S A L O F T H E N E G L IG E N C E C L A IM

F OR L AC K O F S T AN DI NG A . S t andard of R evi ew W e r evi ew de no vo the di sm i ss al of a c om pl ai ntfor l ac k o f s t andi ng . S ee P iazz a v . E b sc o In d u s., 2 7 3 F .3 d 1 3 4 1 , 1 3 4 5 (1 1 th C ir. 2 0 0 1 ). A d istrict co u rt’s8

rul i ng on l e a ve t o a m e nd i s r e vi e w e d f ora bus e of

di s c r e t i on. B ur ge rK i ng C orp. v. W ea ver, 16 9 F . 3d 13 10 , 13 15 (11t h C i r. 19 99 ). H ow ever , w hen t he di stri ctcourt de ni e s the pl a i nt i f

f l e a ve t o a m e nd due t o f ut i l i ty , w e r e vi e w the de ni a l de novo b e c a u s e it is c o n c lu d in g th a t a s a m a tte ro f la w a n a m e n d e d c o m p la in t “w o u ld
ne c e s s a r i l y f

a i l . ” S t . C ha r l e s F oods , I nc . v. A m e r i c a ’ s F a vor i t e C hi c ke n C o. , 198 F . 3d 81 5, 82 2 (11 th C i r. 19 99 ). B . S t a ndi ng F re em an and t he C re di t or P l ai nt i ff s j oi nt l y f

i l ed the S ec on d A m ended C om pl a i nta ti s s ue i n thi s c a s e . H ow e ve r , C ountV I of tha tc om pl a i nt , w hi c h the d is tr ic t c o u r t d is m is s e d f o rla c k o f

s ta n d in g , a lle g e d c o m m o n la w n e g lig e n c e “a s to the r e c e i ve ronl y a ga i ns tF i r s tU ni on onl y . ” T hus , i n C ountV I , F r e e m a n a l one a s s e r t e d tha tF i r s tU ni on ne gl i ge nt l y f a c i l i t a t e d the c ont i nue d ope r a t i on of the P on zi sc hem e, even aft eri tkn ew or shou l d h ave kno w n t hatthe bu si ness w as i l l eg al . T h e d i stri ctco u rtco n cl u d ed th at , as th e receiver fo r U n i q u e G em s, F re em an hel d n o p ow ert o p ursue c l ai m s on b ehal f of the com pany’ s c re di t ors. In re spon se t o t he di stri ctcourt ’ s f i nd i ng thatF re em an l ac ked st andi ng , bo th F re em an a n d th e C r e d ito rP la in tif f s s o u g h t le a v e to a m e n d th e c o m p la in t to c u r e th e d e f e c t. T h e d is tr ic t c o u r t d e n ie d th e irm o tio n to a m e n d , h o ld in g th a t n o c u r e w a s p o s s ib le .9

W e a gr e e w i th the di s tr i c tc our ttha tF r e e m a n, a s r e c e i ve r , c oul d not
s uc c e s s f ul l y a m e nd a s t o the ne gl i ge nc e c l a i m . H ow e ve r , w e a l s o a gr e e w i th the C r e di t orP l a i nt i f

f s tha tthe y s houl d ha ve be e n gi ve n the oppor tuni ty t o c ur e the
s t a ndi ng de f

e c ta s t o a ny c l a i m the y m a y ha ve on be ha l f of M s . M a r t i ne z a nd the
c l a s s o f c r e d i t o r s h a r m e d b y Un i q u e Ge m s ’ P o n z i s c h e m e . Ac c o r d i n g l y , we co n cl u d e th atth e d i stri ctco u rterred i n d en yi n g as fu t i l e th e C red i t o r P l ai n t i ffs’
m ot i on t o am end t he com pl ai nt . S ee S t . C harl es F oo ds, 19 8 F . 3d at82 2. W e, th e r e f o r e , R EVER SE w i th i ns truc t i ons tha tthe C r e di t orP l a i nt i f f s be gr a nt e d l e a ve t o am end C ou ntV I of the com pl ai nt . W e AF F I RM th e d is tr ic t c o u r t’s d e n ia l w ith
r e ga r d t o F r e e m a n. III. CONCL US I ON B as ed on the foregoi ng , w e AF F I RM in p a r t, R EVER SE i n pa r t , a nd RE MAND i n pa r tthe ne gl i ge nc e c l a i m t o the di s tr i c tc our tf orpr oc e e di ngs c o n s is te n t w ith th is o p in io n . Q U ESTI O N C ER TI FI ED t o th e Fl o r i d a Su p r e me C o u rto n ai d i n g an d ab et t i n g l i ab i l i ty.