Centennial Bank v. The Noah Group, LLC, et al

FILED
U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
OCTOBER 27, 2011
JOHN LEY
CLERK
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 11-10023
Non-Argument Calendar
________________________
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,

-- 1 of 6 --

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:
2

-- 2 of 6 --

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. The district court dismissed1
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
Cross-Claimants do not appeal the dismissal of the first count of fraud or a third1
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).
3

-- 3 of 6 --

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

-- 4 of 6 --

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

-- 5 of 6 --

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
Cross-Claimants’ request for oral arguments is DENIED.2
6

-- 6 of 6 --