Rule 9(b) Requires Particularized Pleading of Reliance for Florida Fraud-Based Claims (Including Aiding-and-Abetting and Conspiracy)

Introduction

In Sharon McTurk v. Lottery.com, Inc. (11th Cir. Aug. 6, 2026) (unpublished), Sharon McTurk and several entities she controlled (Rutherford Enterprises, LLC; SJB Solutions, LLC; Astra Supply Chain, LLC) alleged they were defrauded out of approximately $1.9 million in funds supposedly intended for Lottery.com. They sued Lottery.com and its CEO, Matthew McGahan, asserting four fraud-based causes of action under Florida law: fraudulent misrepresentation, negligent misrepresentation, aiding and abetting fraud, and conspiracy to commit fraud.

The key dispute on appeal was not whether the allegations described suspicious conduct, but whether the complaint pleaded the fraud—especially reliance—with the level of detail required by Federal Rule of Civil Procedure 9(b).

Summary of the Opinion

The Eleventh Circuit affirmed dismissal with prejudice. The court held that all four claims “sound in fraud” and therefore must satisfy Rule 9(b)’s particularity requirement. The plaintiffs’ reliance allegations were deemed conclusory and “threadbare,” failing to explain how the challenged letter actually misled them into sending additional money. Because reliance is an essential component of the direct fraud claims and is embedded in the underlying fraud for the derivative theories (aiding-and-abetting and conspiracy), the reliance-pleading defect was fatal across the board.

The court also noted two reinforcing deficiencies: (1) the letter promised shares to SMRF Holdings, LLC (not a plaintiff), and (2) the defendants were not alleged to have communicated with any plaintiff. Finally, dismissal with prejudice was upheld because plaintiffs neither amended as of right nor sought leave to amend.

Analysis

Precedents Cited

  • Wildes v. BitConnect Int'l PLC, 25 F.4th 1341 (11th Cir. 2022): Cited for the standard of review on a motion to dismiss (de novo; accept facts as true; construe in plaintiff’s favor). The panel used this baseline to emphasize that even crediting the allegations, Rule 9(b) imposes a heightened pleading burden.
  • Otto Candies, LLC v. Citigroup Inc., 137 F.4th 1158 (11th Cir. 2025): The opinion leans heavily on this case for two propositions: (1) fraud-derivative claims (like aiding-and-abetting fraud) must be pleaded with particularity under Rule 9(b), and (2) “bare” allegations of reliance are insufficient—especially where “but for” causation is not concretely alleged.
  • Am. United Life Ins. Co. v. Martinez, 480 F.3d 1043 (11th Cir. 2007): Cited for the rule that when a conspiracy claim alleges an agreement to commit fraud, the fraudulent act must be pleaded with specificity—importing Rule 9(b) rigor into conspiracy-to-defraud pleading.
  • Wilding v. DNC Servs. Corp., 941 F.3d 1116 (11th Cir. 2019): Quoted (via Otto Candies) for the principle that a “bare allegation of reliance” without detail does not satisfy Rule 9(b). This case supplies the rhetorical benchmark against which the complaint’s reliance allegations were measured—and found wanting.
  • Omnipol, A.S. v. Multinational Def. Servs., LLC, 32 F.4th 1298 (11th Cir. 2022) and Mizzaro v. Home Depot, Inc., 544 F.3d 1230 (11th Cir. 2008): Cited for the canonical Rule 9(b) formulation—the “who, what, when, where, and how” of the fraud.
  • Tello v. Dean Witter Reynolds, Inc., 494 F.3d 956 (11th Cir. 2007): Used (via Mizzaro) for the requirement that a fraud complaint set out “the manner in which” statements misled the plaintiff—an especially important point when the alleged defect is reliance.
  • Butler v. Yusem, 44 So. 3d 102 (Fla. 2010) and Simon v. Celebration Co., 883 So. 2d 826 (Fla. 5th DCA 2004): Cited for Florida-law elements, specifically that fraudulent misrepresentation and negligent misrepresentation require, at minimum, actual reliance.
  • Chang v. JPMorgan Chase Bank, N.A., 845 F.3d 1087 (11th Cir. 2017) and Raimi v. Furlong, 702 So. 2d 1273 (Fla. 3d DCA 1997): Cited to show that aiding-and-abetting fraud and conspiracy to commit fraud depend on the underlying fraud—so if the underlying fraud is inadequately pleaded (here, reliance), the derivative claims collapse too.
  • Humana, Inc. v. Castillo, 728 So. 2d 261 (Fla. 2d DCA 1999): Quoted (via Otto Candies) for the Florida reliance standard framed as “but for the alleged misrepresentation or nondisclosure, the party would not have entered [into] the transaction.”
  • Wagner v. Daewoo Heavy Indus. Am. Corp., 314 F.3d 541 (11th Cir. 2002) (en banc): Cited to uphold dismissal with prejudice where a counseled plaintiff neither amended nor sought leave to amend; district courts need not sua sponte grant leave to amend in that circumstance.

Legal Reasoning

The court’s reasoning proceeded in three linked steps:

  1. All asserted theories triggered Rule 9(b). Because each cause of action “sounds in fraud,” Rule 9(b)’s heightened pleading standard applied not only to fraudulent misrepresentation but also to negligent misrepresentation (as pleaded here) and to the derivative theories (aiding-and-abetting fraud and conspiracy).
  2. Reliance is indispensable under Florida law. The panel underscored that actual reliance is a required element of both fraudulent and negligent misrepresentation under Florida law (Butler v. Yusem; Simon v. Celebration Co.), and is functionally required for the derivative claims because those claims presuppose a sufficiently pleaded underlying fraud (Chang v. JPMorgan Chase Bank, N.A.; Raimi v. Furlong).
  3. The complaint did not plead reliance with particularity. The plaintiffs alleged, in essence, that “the letter worked as intended” and that they “relied on the letter” to send more money. The court held those statements were precisely the kind of conclusory “bare allegation[s] of reliance” Rule 9(b) forbids (Otto Candies, LLC v. Citigroup Inc. quoting Wilding v. DNC Servs. Corp.). The complaint failed to allege the “how” of the misleading effect—i.e., “the manner in which” the letter misled them (Tello v. Dean Witter Reynolds, Inc. via Mizzaro v. Home Depot, Inc.).

The opinion also identified concrete informational gaps that mattered under Rule 9(b)’s “who/what/when/where/how” framework (Omnipol, A.S. v. Multinational Def. Servs., LLC; Mizzaro v. Home Depot, Inc.):

  • “How” the letter was presented and understood: the complaint did not explain how the letter (with its caveats about “services,” Nasdaq listing rules, SEC requirements, and board/committee approval) was communicated to and interpreted by McTurk in a way that induced funding.
  • “What” funds moved after the letter: which plaintiff entities transferred money, in what amounts, and via what mechanism.
  • “How” Lottery.com received the funds from Farah: the complaint did not trace the path from plaintiffs to Farah to Lottery.com.
  • Standing/alignment problem: the letter promised shares to SMRF Holdings, LLC (not a plaintiff), and defendants were not alleged to have communicated with any plaintiff—undercutting the plausibility and specificity of reliance by the named plaintiffs.

On remedy, the panel relied on Wagner v. Daewoo Heavy Indus. Am. Corp. to affirm dismissal with prejudice: where represented plaintiffs do not amend as of right or seek leave to amend, the district court is not required to offer amendment sua sponte.

Impact

Although unpublished, the decision reinforces a recurring Eleventh Circuit theme: when Florida fraud-based claims are litigated in federal court, Rule 9(b) scrutiny will often turn on reliance allegations, not merely on whether a misleading statement is identified.

Practical implications for future pleadings include:

  • Reliance must be “transactional” and concrete: plaintiffs should plead who made each transfer, the timing and amounts, and why the alleged misstatement changed the decision to transfer funds (the “but for” link referenced through Humana, Inc. v. Castillo).
  • Derivative fraud claims are not an escape hatch: aiding-and-abetting and conspiracy claims will fail if the complaint does not particularize the underlying fraud (including reliance) with Rule 9(b) detail.
  • Pleading discipline matters procedurally: failure to amend or seek leave can convert a curable pleading defect into a case-ending dismissal with prejudice under Wagner v. Daewoo Heavy Indus. Am. Corp..

Complex Concepts Simplified

  • Rule 9(b) “particularity”: fraud must be pled with specifics—typically the “who, what, when, where, and how”—rather than general accusations.
  • Reliance: the plaintiff must have actually been influenced by the misstatement; under the Florida formulation quoted here, the plaintiff must plausibly allege that but for the misstatement, they would not have entered the transaction.
  • Aiding and abetting fraud: a claim that a defendant substantially assisted someone else’s fraud. It depends on an adequately pleaded underlying fraud.
  • Conspiracy to commit fraud: a claim that parties agreed to commit fraud. If the fraud is not pleaded with specificity, the conspiracy claim fails with it.
  • Dismissal with prejudice: the case is dismissed finally (not re-filed in the same court) because the plaintiff did not properly pursue amendment opportunities.

Conclusion

The central doctrinal takeaway is straightforward: in the Eleventh Circuit, when fraud-based claims governed by Florida law are brought in federal court, Rule 9(b) requires plaintiffs to plead reliance with detail—not merely to assert that they “relied” on a statement. A complaint must explain the mechanism of deception (how the statement misled), identify the specific transactions that followed (who paid what and when), and plausibly connect the statement to the decision to pay (the “but for” link). Failure to do so defeats not only direct misrepresentation claims but also aiding-and-abetting and conspiracy theories that depend on the same inadequately pleaded fraud.