Court Opinion

ID: 3059096
Source: CourtListenerOpinion
Date Created: 2015-10-14 00:30:50.265292+00
Date Added: 2024-06-11T12:44:53.771068
License: Public Domain

[DO NOT PUBLISH]

               IN THE UNITED STATES COURT OF APPEALS

                         FOR THE ELEVENTH CIRCUIT

                          ________________________          FILED
                                                   U.S. COURT OF APPEALS
                                No. 11-10023         ELEVENTH CIRCUIT
                                                      OCTOBER 27, 2011
                            Non-Argument Calendar
                          ________________________        JOHN LEY
                                                           CLERK

                     D. C. Docket No. 4:10-cv-10007-KMM

CENTENNIAL BANK,
a foreign corporation,

                                                                 Plaintiff -
                                                          Cross Defendant -
                                                                 Appellee,

ANTHONY SAUTA,
individuals, et al.,

                                                      Third Party Plaintiffs,

                                       versus

THE NOAH GROUP, LLC,
a Florida limited liability company,

                                                     Defendant - Appellant,

JOSEPH CANNOVA,
an individual,

                                                               Defendant -
                                                           Cross Claimant -
                                                                 Appellant,
ANTHONY SAUTA,
an individual,
RONALD J. COSTELLO,
an individual,
R. REGINALD HYDE,
an individual,
JOHN M. REYNOLDS,
an individual,

                                                               Defendants -
                                                         Counter Claimants -
                                                           Cross Claimants -
                                                                 Appellants,

GEORGE P. IRISH
individuals,
et al.,

                                                                Defendants -
                                                          Cross Defendants -
                                                                 Appellees,

TIMOTHY KOENIG,

                                                       Third Party Defendant.
                      ________________________

               Appeal from the United States District Court
                   for the Southern District of Florida
                     _________________________

                           (October 27, 2011)

Before TJOFLAT, CARNES, and ANDERSON, Circuit Judges.

PER CURIAM:

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       Joseph Cannova, Anthony Sauta, Ronald J. Costello, R. Reginald Hyde, and

John M. Reynolds (collectively, “Cross-Claimants”) appeal the district court’s

dismissal under Fed. R. Civ. P. 12(b)(6) and Fed. R. Civ. P. 9(b) for failing to

allege fraud with particularity against George P. Irish and Sandra K. Irish. We

affirm.

       In the fall-out from a foreclosure, Cross-Claimants filed a cross-complaint

against the Irishes, alleging two counts of fraud. Cross-Claimants appeal the

ultimate dismissal only of Count II, in which they argued that George P. Irish

defrauded Cross-Claimants into signing a $428,571.43 promissory note and

second mortgage against real property in Key West, Florida, which Cross-

Claimants had previously purchased from the Irishes.1 The district court dismissed

Count II without prejudice because it did not “identify (1) what false or fraudulent

statements were made that resulted in Cross-Claimant’s detrimental reliance, (2)

when these statements were made, and (3) the content of these statements.”

       Cross-Claimants filed an amended complaint that alleged that George P.

Irish had “misrepresented to the Cross-Claimants that he was entitled to the

promissory note and mortgage as an advance payment of profits on an investment

       1
               Cross-Claimants do not appeal the dismissal of the first count of fraud or a third
count that was added in the amended complaint, and therefore those appeals are waived.
DeYoung v. Schofield, 609 F.3d 1260, 1282 n.21 (11th Cir. 2010).

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of monies in Florida by the Cross-Claimants” and that this misrepresentation

resulted in an invalid “promissory note and mortgage [being] recorded” against the

Key West property “on or about March 28, 2006.” The district court again

dismissed Count II, this time with prejudice, because it did “not state with

particularity what statements were made to induce Cross-Claimants to execute a

note and mortgage in favor of the [Irishes], [did] not state the time and place of

any statements or who made the statements, and [did] not state the manner in

which any statements misled the Cross-Claimants.”

      We review de novo a dismissal under Rule 12(b)(6). Ziemba v. Cascade

Int’l, Inc., 256 F.3d 1194, 1199 (11th Cir. 2001). “The allegations in the

complaint must be taken as true and construed in the light most favorable to the

plaintiff.” Hoffman-Pugh v. Ramsey, 312 F.3d 1222, 1225 (11th Cir. 2002).

      Rule 9(b) requires that “[i]n alleging fraud or mistake, a party must state

with particularity the circumstances constituting fraud or mistake. Malice, intent,

knowledge, and other conditions of a person’s mind may be alleged generally.”

FED. R. CIV. P. 9(b). This court has explained that Rule 9(b) “is satisfied if the

complaint sets forth (1) precisely what statements were made in what documents

or oral representations or what omissions were made, and (2) the time and place of

each such statement and the person responsible for making (or, in the case of

                                          4
omissions, not making) same, and (3) the content of such statements and the

manner in which they misled the plaintiff, and (4) what the defendants obtained as

a consequence of the fraud.” Ziemba, 256 F.3d at 1202 (quotations omitted).

      In the current case, Cross-Claimants’ amended cross-complaint falls short of

satisfying Rule 9(b). While they are correct in stating that the amended cross-

complaint did include the content of the allegedly fraudulent statements and who

made them, it still did not include where the fraudulent statements were made or

how they were communicated (orally or in which documents). It also did not

include when the statements were made. The amended cross-complaint did say

that the result of the fraudulent statements was that a promissory note and second

mortgage were recorded “on or about March 28, 2006,” but that information does

not indicate when the allegedly fraudulent statements themselves were made.

      Courts should be aware that “application of Rule 9(b) . . . must not abrogate

the concept of notice pleading,” but the “particularity rule serves an important

purpose in fraud actions by alerting defendants to the precise misconduct with

which they are charged and protecting defendants against spurious charges of

immoral and fraudulent behavior.” Durham v. Bus. Mgmt. Assocs., 847 F.2d

1505, 1511-12 (11th Cir. 1988) (quotations omitted). Where a complaint does not

set out the time, location, or method of communication of allegedly fraudulent

                                          5
statements, it does not satisfy Rule 9(b). See Cooper v. Blue Cross & Blue Shield

of Fla., 19 F.3d 562, 567 (11th Cir. 1994) (“[P]leading must include facts as to

time, place, and substance of the defendant’s alleged fraud.”); Ziemba, 256 F.3d at

1202.

        AFFIRMED.2

        2
             Cross-Claimants’ request for oral arguments is DENIED.

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