Court Opinion

ID: 9364302
Source: CourtListenerOpinion
Date Created: 2023-01-18 21:00:59.380253+00
Date Added: 2024-06-11T17:15:37.033108
License: Public Domain

USCA11 Case: 21-11392     Document: 47-1      Date Filed: 01/18/2023    Page: 1 of 10

                                                     [DO NOT PUBLISH]
                                     In the
                 United States Court of Appeals
                          For the Eleventh Circuit

                            ____________________

                                  No. 21-11392
                            Non-Argument Calendar
                            ____________________

        SOHO OCEAN RESORT TRS, LLC,
        A Delaware limited liability company,
                                                        Plaintiff-Appellant,
        versus
        DANIEL RUTOIS,
        an individual,
        KGA MANAGEMENT GROUP, LLC,
                                                    Defendants-Appellees.
                            ____________________

                   Appeal from the United States District Court
                       for the Southern District of Florida
USCA11 Case: 21-11392           Document: 47-1        Date Filed: 01/18/2023   Page: 2 of 10

        2                            Opinion of the Court                21-11392

                            D.C. Docket No. 0:19-cv-61335-AHS
                                 ____________________

        Before WILSON, LUCK, and ANDERSON, Circuit Judges.
        PER CURIAM:
               Soho Ocean Resort TRS, LLC appeals the district court’s or-
        der dismissing its claims for tortious interference. We reverse.

            FACTUAL BACKGROUND AND PROCEDURAL HISTORY 1

               This case arises from a contract between Soho and the 4111
        South Ocean Drive Condominium Association, Inc. Soho entered
        the contract to operate and manage the Hyde Resort—a ho-
        tel/condo resort governed by the condo association in Hollywood,
        Florida—soon after the resort began experiencing a number of
        problems. Under the contract, Soho also manages and operates the
        only rental program sanctioned by the resort for its units. Daniel
        Rutois is an owner of a condo in the resort who operates a compet-
        ing rental program through KGA Management Group, LLC.
               A few months after Soho began managing the resort, the
        condo association scheduled a member vote to terminate several
        of its major contracts, including Soho’s. The vote failed. The
        condo association rescheduled the vote to accommodate its

        1
            The facts are taken as alleged in the operative complaint.
USCA11 Case: 21-11392      Document: 47-1      Date Filed: 01/18/2023     Page: 3 of 10

        21-11392               Opinion of the Court                         3

        members who wanted to vote electronically, but that vote also
        failed. A third vote was set for three months later.
               Before the third vote, Rutois set about campaigning against
        Soho’s contract. Rutois’s efforts included e-mails, flyers, in-person
        conversations, and beachside marketing to the resort’s unit own-
        ers, residents, and guests. The third vote resulted in the termina-
        tion of Soho’s contract.
               In the operative complaint, Soho sued Rutois and KGA for
        tortious interference. Soho’s claims against Rutois included one
        count for tortious interference with a contract (Count I) and an-
        other for tortious interference with a business relationship (Count
        II). Soho’s claim against KGA was for tortious interference with a
        contract (Count III). Count I was based on Rutois’s efforts to ter-
        minate Soho’s contract. Counts II and III were based on various
        things Rutois and KGA were doing in the meantime to undermine
        Soho’s relationships with the resort’s employees, unit owners, and
        guests.
                Rutois and KGA moved to dismiss Soho’s complaint on the
        ground that Soho failed to allege a cause of action for tortious in-
        terference under any count. Specifically, they argued that Soho
        failed to allege the prima facie elements of tortious interference as
        to Count I, that it failed to allege damages as to Count II, that Ru-
        tois enjoyed a qualified privilege against tortious interference as to
        Counts I and II, and that KGA’s conduct didn’t give rise to tortious
USCA11 Case: 21-11392         Document: 47-1        Date Filed: 01/18/2023         Page: 4 of 10

        4                          Opinion of the Court                      21-11392

        interference as to Count III. The district court granted the motion
        and dismissed all counts with prejudice. 2
                               STANDARD OF REVIEW

               We review de novo a dismissal pursuant to Federal Rule of
        Civil Procedure 12(b)(6) for failure to state a claim. Leib v. Hills-
        borough Cnty. Pub. Transp. Comm’n, 558 F.3d 1301, 1305 (11th
        Cir. 2009).
                                       DISCUSSION

                The threshold for surviving a motion to dismiss for failure
        to state a claim under rule 12(b)(6) is a low one. Quality Foods de
        Centro Am., S.A. v. Latin Am. Agribusiness Dev. Corp., S.A., 711
        F.2d 989, 995 (11th Cir. 1983). A plaintiff must plead only enough
        facts, all of which are accepted as true, to state a claim to relief that
        is plausible on its face. Bell Atl. Corp. v. Twombly, 550 U.S. 544,
        556, 570 (2007). In other words, a plaintiff must provide the

        2
           On appeal, we determined that the operative complaint didn’t allege the
        identity and citizenship of each member of Soho and KGA at the time suit was
        filed. We remanded the case to the district court for the limited purpose of
        determining the citizenship of the parties to establish whether diversity juris-
        diction existed. The district court found that, when the suit was filed, Soho’s
        sole member was MHI LLC, whose sole member was MHI Inc., a Maryland
        corporation with its principal place of business in Virginia; that KGA’s sole
        member was Sara Peremolnik, a Florida citizen; and that Rutois was a Florida
        citizen. Based on these findings, we find that the parties were completely di-
        verse, so we have jurisdiction to hear this appeal.
USCA11 Case: 21-11392      Document: 47-1      Date Filed: 01/18/2023      Page: 5 of 10

        21-11392                Opinion of the Court                         5

        grounds for his entitlement to relief but needn’t include detailed
        factual allegations. Id. at 555. Overall, a complaint must “give the
        defendant fair notice of what the claim is and the grounds upon
        which it rests.” Id. (alteration omitted).
               We conclude that Soho met this low threshold. Soho’s op-
        erative complaint provided all that Rutois and KGA needed to give
        them fair notice of Soho’s claims and their grounds.
                Under Florida law, to state a claim for tortious interference
        with a contract, a plaintiff must allege four elements: (1) the exist-
        ence of a contract, (2) the defendant’s knowledge thereof, (3) the
        defendant’s intentional and unjustified procurement of a breach
        thereof; and (4) damages. Sun Life Assurance Co. of Canada v. Im-
        perial Prem. Fin., LLC, 904 F.3d 1197, 1215 (11th Cir. 2018). Simi-
        larly, to state a claim for tortious interference with a business rela-
        tionship, a plaintiff must allege four elements: (1) the existence of
        a business relationship, (2) the defendant’s knowledge thereof;
        (3) the defendant’s intentional and unjustified interference there-
        with; and (4) damages. Ethan Allen, Inc. v. Georgetown Manor,
        Inc., 647 So. 2d 812, 814 (Fla. 1994). Soho’s operative complaint
        alleged facts that, if taken as true, established each element of its
        claims against Rutois and KGA sufficiently for pleading purposes.
                                   A.     Count I

               As to Count I, Soho alleged that Rutois made false state-
        ments to the resort’s unit owners, residents, and guests with the
        intent to induce the condo association, through its owners, to
USCA11 Case: 21-11392       Document: 47-1      Date Filed: 01/18/2023      Page: 6 of 10

        6                       Opinion of the Court                  21-11392

        terminate its contractual agreement with Soho. These statements
        included that Soho may start charging a resort and parking fee to
        unit owners’ friends and family; that Soho cannot be trusted as the
        manager to hire financial auditors, engineers, and counsel for the
        Hyde Resort; that Soho had a conflict of interest; that Soho ex-
        tended an illegal bribe to unit owners; and that Soho engaged in
        discriminatory conduct, is racist, and underestimates the intelli-
        gence of Hispanic people.
               The district court, focusing on the third element (the defend-
        ant’s intentional and unjustified procurement of a breach), found
        that “[t]he problem with each of these allegations is the same: the
        [second] amended complaint does not allege that Rutois actually
        made any of these statements.” This was the same problem we
        found in Duty Free Americas, Inc. v. Estée Lauder Cos. See 797
        F.3d 1248, 1281 (11th Cir. 2015) (“As we see it, the problem with
        each of these allegations is the same: the complaint does not allege
        that Estée Lauder actually made any of these statements.”). There,
        the plaintiff indeed failed to allege that the defendant made any
        statements at all that directly supported the plaintiff’s claims. Id. at
        1281. Instead, the plaintiff asked the court to infer the requisite in-
        tent from various benign communications between the parties. Id.
        In stark contrast, Soho not only alleged that Rutois made these
        statements; he provided details about the contents of the state-
        ments, how the statements were communicated, to whom the
        statements were directed, and the dates the statements were made.
        We find these allegations more than adequate at the pleading stage.
USCA11 Case: 21-11392      Document: 47-1      Date Filed: 01/18/2023      Page: 7 of 10

        21-11392                Opinion of the Court                         7

               The district court found that it was “[m]ore telling” that
        “Soho[] fail[ed] to attach a single exhibit showcasing the statements
        purportedly written by Rutois, including the alleged e-mail,” which
        was “not even incorporated by reference in the” operative com-
        plaint. But this is not a proper ground for dismissal because the
        Federal Rules of Civil Procedure permit, but don’t require, the at-
        tachment of relevant exhibits to the complaint. See Fed. R. Civ. P.
        10(c).
               Finally, the district court found that Rutois had the requisite
        financial interest in the condo association, as its president, to in-
        voke the affirmative defense of privilege. “Generally, the existence
        of an affirmative defense will not support a motion to dismiss.
        Nevertheless, a complaint may be dismissed under Rule 12(b)(6)
        when its own allegations indicate the existence of an affirmative
        defense, so long as the defense clearly appears on the face of the
        complaint.” Quiller v. Barclays Am./Credit, 727 F.2d 1067, 1069
        (11th Cir. 1984). Because no allegation in Soho’s operative com-
        plaint indicated that Rutois had any relationship at all with the
        condo association, this exception doesn’t apply. As such, the af-
        firmative defense of privilege is unavailable at this stage of the pro-
        ceedings. More factual development is necessary to establish
        whether Rutois’s alleged actions were taken in his capacity as an
        agent of the condo association, in his capacity as an agent of Soho’s
        competitor, or in his personal capacity.
USCA11 Case: 21-11392       Document: 47-1      Date Filed: 01/18/2023      Page: 8 of 10

        8                       Opinion of the Court                  21-11392

                                   B.     Count II

                As to Count II, Soho alleged that Rutois engaged in conduct
        designed to interfere with Soho’s business relationships with its
        employees at the Hyde Resort. Specifically, Soho alleged that Ru-
        tois told Soho’s employees that they must follow his orders and
        directives or face the consequences; that he was rude to and made
        unreasonable demands of Soho’s employees; that he denigrated
        Soho’s employees by speaking to them in a condescending, mali-
        cious, humiliating, or threatening manner, to include continually
        threatening Soho’s employees with loss of employment; that he
        constantly bullied valet staff; that he threatened to terminate the
        resort’s valet parking manager’s employment; that he encouraged
        other unit owners at the Hyde Resort to similarly threaten Soho’s
        staff; and that he once called local law enforcement officers on
        members of the staff. Soho alleged that as a direct and proximate
        result of Rutois’s improper conduct, Soho lost trained staff and suf-
        fered income loss.
                 The district court found these allegations to be “vague” and
        “insufficient to state a claim for tortious interference that is plausi-
        ble on its face.” We disagree. Soho alleged a legitimate business
        relationship—namely, its employment relationship with members
        of its staff. See Florida Power & Light Co. v. Fleitas, 488 So. 2d 148,
        152 (Fla. 3d DCA 1986) (“Intentional interference with a contrac-
        tual employment relationship—even one, as here, which is termi-
        nable at will—is actionable in Florida.”). It alleged that Rutois
        knew of the relationship and intentionally and unjustifiably
USCA11 Case: 21-11392      Document: 47-1      Date Filed: 01/18/2023      Page: 9 of 10

        21-11392                Opinion of the Court                         9

        interfered with it. And it alleged that the relationship was damaged
        when employees resigned as a result of Rutois’s actions. Nothing
        more is needed at the pleading stage. Rule 8’s pleading standards
        do not support the district court’s finding that Soho is required, at
        this time, to “name[] any of the employees Rutois reportedly inter-
        fered with” or to attach any supporting documentation to the op-
        erative complaint. These details will emerge in discovery.
                                  C.      Count III

                As to Count III, Soho alleged that KGA set up shop on resort
        premises and proceeded to engage in various marketing practices
        and activities targeting unit owners whom they knew to be partic-
        ipants of the Soho rental program, with the intent of inducing them
        to participate in KGA’s competing rental program. This is a closer
        call than in Count I against Rutois, whose alleged actions leave lit-
        tle doubt regarding their propriety. But Soho alleged that KGA vi-
        olated various industry norms and resort policies by operating an
        unsanctioned competitor to Soho within the resort, by comman-
        deering Soho’s resources and employees for its benefit, by adver-
        tising artificially lower rates, by using proprietary and trademarked
        resort materials without authorization, and by hiring an employee
        to solicit unit owners to participate in its rental program. “‘[W]hen
        there is room for different views’ about the propriety of a defend-
        ant’s interference with a plaintiff’s business relationships,” as there
        is here, “‘the determination of whether the interference was im-
        proper or not is ordinarily left to the jury.’” Duty Free Ams., 797
        F.3d at 1280 (quoting Mfg. Rsch. Corp. v. Greenlee Tool Co., 693
USCA11 Case: 21-11392     Document: 47-1     Date Filed: 01/18/2023   Page: 10 of 10

        10                    Opinion of the Court                21-11392

        F.2d 1037, 1040 (11th Cir. 1982)). We therefore find that Soho’s
        allegations are sufficient to pass the pleading threshold.
                                 CONCLUSION

               Because Soho has met the low bar of notice pleading, we
        reverse the district court’s order dismissing its claims and remand
        for further proceedings consistent with this opinion.
              REVERSED AND REMANDED.