SWEETWATER INVESTORS v. SWEETWATER APARTMENTS LOAN

gue that Deupree is distinguishable because in that case the "special relationship" between the purchasers and the developer gave rise to the developer's duty to disclose. 522 So. 2d at 245-46 (The developer "stood in a special relationship to his purchasers, who had no knowledge of the[] impediments [regarding the difficulty of obtaining a submerged land lease], but who relied upon him; therefore, [the developer] had an obligation to disclose his knowledge of those impediments at the time he took their money." (emphasis omitted)); (Defs. Mem. of Law 7-8.) Here, Defendants argue that there is not a similar relationship so as to trigger a duty of disclosure. Because this argument is raised for the first time in a reply brief, it need not be addressed. See Lovett v. Ray, 327 F.3d 1181, 1182 (11th Cir. 2003) (declining to consider an argument raised for the first time in a reply brief). It is notable, however, that as in Deupree, Plaintiff alleges a lack of knowledge. Namely, Plaintiff avers that it "did not have knowledge of the terms of the agreement" between Regions Bank and Sweetwater Apartments Loan and "did not otherwise have access [to] said agreement to review prior to entering into the Agreement. . . ." (Am. Compl. ¶ 33.)

Defendants' second argument assumes that Plaintiff's fraud claims are tied not only to an alleged "promise to supply documents" listed in Schedule 1 to the Agreement, but also to an alleged promise to supply documents not specified in Schedule 1. (Defs. Mem. of Law 7; see Am. Compl ¶ 12 (quoting Schedule 1 and explaining that the "Loan File" is defined in the Agreement to include all of the documents listed in Schedule 1).) Defendants argue that Plaintiff could not have reasonably relied on the latter promise because it was made, if at all, prior to the execution of the Agreement and is contradicted by the Agreement. (Defs. Mem. of Law 9 (citing Agreement, § 1.01(e).) Defendants rely upon, among other cases, Birmingham News Co. v. Horn, 901 So. 2d 27 (Ala. 2004), for the legal principle that "`fraud or misrepresentation cannot be predicated upon a verbal statement made before execution of a written contract when a provision in that contract contradicts the verbal statement.'" Id. at 61 (quoting Tyler v. Equitable Life Assurance Soc. of the U.S., 512 So. 2d 55, 57 (Ala. 1987)). (Defs. Mem. of Law 10.)

Defendants represent that the Agreement provides: "It is expressly agreed and understood that Seller is not providing all documents provided to Seller by Regions. Upon written request by Buyer to Seller, Seller shall make written request to Regions for authorization to provide Seller documents specifically requested by Buyer not provided as part of this Agreement." Again, the Agreement is not part of the record.

Plaintiff responds that "Defendants' argument goes to the issue of reliance and whether a plaintiff can reasonably rely on a statement which is contrary to the statement in the contract." (Pl. Mem. of Law 10-11.) However, Plaintiff does not directly answer whether its fraud claims encompass misrepresentations or concealment concerning Defendants' authority to deliver documents not listed in Schedule 1. It merely asserts generally that the fraud counts "go to" Defendants' representations and concealment of facts "concerning their authority and ability to perform as a whole." (Pl. Mem. of Law 11.)

Like Plaintiff's arguments in its brief, the allegations in the Amended Complaint also do not clarify Plaintiff's position. Some of the allegations would seem to indicate that Plaintiff's claims do not extend to documents outside of those listed in Schedule 1. For example, Plaintiff refers to the documents listed in Schedule 1 as the "Loan File," and alleges that "Defendants have failed or refused to transfer the Loan and the Loan File to Plaintiff. . . ." (Am. Compl. ¶¶ 12, 16.) An ambiguity, however, is created by subsequent paragraphs, in particular ¶ 20, where Plaintiff refers to Mr. Knell's alleged misrepresentation that Sweetwater Apartments Loan "had full ownership of the [L]oan and Loan Documents." (Am. Compl. ¶ 20 (emphasis added); see also Am. Compl. ¶¶ 22, 26, 28, 29, 32, 34 (referring interchangeably to "Loan Documents," "Loan File" and "documents associated with the Loan").) Plaintiff does not define "Loan Documents," and it is unclear whether the phrase "Loan Documents" is synonymous with the phrase "Loan File" or whether the phrase encompasses something more. Without further clarification from Plaintiff and without a copy of the Agreement, the ambiguities cannot be resolved.

Although clarity would have been preferred as to whether the fraud claims encompass representations or omissions pertaining to Defendants' authority to deliver documents not listed in Schedule 1, it is unnecessary to stake out those parameters at this time. Three observations are noted.

First, as discussed above, the fraud claims are going forward as pertains to representations and omissions of fact with respect to Defendants' authority to deliver the Schedule 1 documents ( i.e., the Loan File) to the Plaintiff. The parties will, thus, be engaging in discovery as to these claims. No argument has been made that discovery relevant to the scope of the fraud claims will present an undue burden or inequity on the parties. Second, discovery likely will provide clarification as to the facts. The legal issues raised by Defendants, including whether the Agreement expressly contradicts a pre-contractual representation, then can be decided based upon a developed evidentiary record, rather than on unclear allegations. And, it could be that Defendants' argument made here is rendered moot based upon that evidence. Third, Plaintiff alleges that the pertinent documents pertaining to the Loan are within the exclusive control of Defendants, and Defendants have not refuted that contention. ( See, e.g., Am. Compl. ¶ 33; Pl. Mem. of Law 3, 11.) Given that representation, the better course is to deny the Rule 12(b)(6) motion and to permit the structure of the fraud claims to evolve through the discovery process. See, e.g., Peters v. Amoco Oil Co., 57 F. Supp. 2d 1268, 1281 (M.D. Ala. 1999) (denying a motion to dismiss a fraudulent concealment claim where the plaintiffs "sufficiently pled that information [was] within the exclusive control of the [d]efendants," and permitting discovery).

V. CONCLUSION

Based on the foregoing, Plaintiff Sweetwater Investors, LLC's breach-of-contract claim against Mr. Knell and SIMA fails, but the fraud claims against all Defendants survive the present motion to dismiss. Accordingly, it is ORDERED that Defendants' Motion to Dismiss the Amended Complaint (Doc. # 21) is GRANTED as to the breach-of-contract claim in Count One against Mr. Knell and SIMA, and DENIED as to the fraud claims in Counts Two and Three.

DONE this 24th day of November, 2010.

A copy of this checklist is available at the website for the USCA, 11th Circuit at www.ca11.uscourts.gov Effective on April 9, 2006, the new fee to file an appeal will increase from $255.00 to $455.00. CIVIL APPEALS JURISDICTION CHECKLIST 1. Appealable Orders : Courts of Appeals have jurisdiction conferred and strictly limited by statute: (a) Appeals from final orders pursuant to 28 U.S.C. § 1291: Only final orders and judgments of district courts, or final orders of bankruptcy courts which have been appealed to and fully resolved by a district court under 28 U.S.C. § 158, generally are appealable. A final decision is one that "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." Pitney Bowes, Inc. v. Mestre, 701 F.2d 1365, 1368 (11th Cir. 1983). A magistrate judge's report and recommendation is not final and appealable until judgment thereon is entered by a district court judge. 28 U.S.C. § 636(c). (b) In cases involving multiple parties or multiple claims, a judgment as to fewer than all parties or all claims is not a final, appealable decision unless the district court has certified the judgment for immediate review under Fed.R.Civ.P. 54(b). Williams v. Bishop, 732 F.2d 885, 885-86 (11th Cir. 1984). A judgment which resolves all issues except matters, such as attorneys' fees and costs, that are collateral to the merits, is immediately appealable. Budinich v. Becton Dickinson Co., 486 U.S. 196, 201, 108 S.Ct. 1717, 1721-22, 100 L.Ed.2d 178 (1988); LaChance v. Duffy's Draft House, Inc., 146 F.3d 832, 837 (11th Cir. 1998). (c) Appeals pursuant to 28 U.S.C. § 1292(a): Appeals are permitted from orders "granting, continuing, modifying, refusing or dissolving injunctions or refusing to dissolve or modify injunctions . . ." and from "[i]nterlocutory decrees . . . determining the rights and liabilities of parties to admiralty cases in which appeals from final decrees are allowed." Interlocutory appeals from orders denying temporary restraining orders are not permitted. (d) Appeals pursuant to 28 U.S.C. § 1292(b) and Fed.R.App.P. 5: The certification specified in 28 U.S.C. § 1292(b) must be obtained before a petition for permission to appeal is filed in the Court of Appeals. The district court's denial of a motion for certification is not itself appealable. (e) Appeals pursuant to judicially created exceptions to the finality rule: Limited exceptions are discussed in cases including, but not limited to: Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546, 69 S.Ct. 1221, 1225-26, 93 L.Ed. 1528 (1949); Atlantic Fed. Sav. Loan Ass'n v. Blythe Eastman Paine Webber, Inc., 890 F.2d 371, 376 (11th Cir. 1989); Gillespie v. United States Steel Corp., 379 U.S. 148, 157, 85 S.Ct. 308, 312, 13 L.Ed.2d 199 (1964). Rev.: 4/04 2. Time for Filing : The timely filing of a notice of appeal is mandatory and jurisdictional. Rinaldo v. Corbett, 256 F.3d 1276, 1278 (11th Cir. 2001). In civil cases, Fed.R.App.P. 4(a) and (c) set the following time limits: (a) Fed.R.App.P. 4(a)(1): A notice of appeal in compliance with the requirements set forth in Fed.R.App.P. 3 must be filed in the district court within 30 days after the entry of the order or judgment appealed from. However, if the United States or an officer or agency thereof is a party, the notice of appeal must be filed in the district court within 60 days after such entry. THE NOTICE MUST BE RECEIVED AND FILED IN THE DISTRICT COURT NO LATER THAN THE LAST DAY OF THE APPEAL PERIOD — no additional days are provided for mailing. Special filing provisions for inmates are discussed below. (b) Fed.R.App.P. 4(a)(3): "If one party timely files a notice of appeal, any other party may file a notice of appeal within 14 days after the date when the first notice was filed, or within the time otherwise prescribed by this Rule 4(a), whichever period ends later." (c) Fed.R.App.P. 4(a)(4): If any party makes a timely motion in the district court under the Federal Rules of Civil Procedure of a type specified in this rule, the time for appeal for all parties runs from the date of entry of the order disposing of the last such timely filed motion. (d) Fed.R.App.P. 4(a)(5) and 4(a)(6): Under certain limited circumstances, the district court may extend the time to file a notice of appeal. Under Rule 4(a)(5), the time may be extended if a motion for an extension is filed within 30 days after expiration of the time otherwise provided to file a notice of appeal, upon a showing of excusable neglect or good cause. Under Rule 4(a)(6), the time may be extended if the district court finds upon motion that a party did not timely receive notice of the entry of the judgment or order, and that no party would be prejudiced by an extension. (e) Fed.R.App.P. 4(c): If an inmate confined to an institution files a notice of appeal in either a civil case or a criminal case, the notice of appeal is timely if it is deposited in the institution's internal mail system on or before the last day for filing. Timely filing may be shown by a declaration in compliance with 28 U.S.C. § 1746 or a notarized statement, either of which must set forth the date of deposit and state that first-class postage has been prepaid. 3. Format of the notice of appeal : Form 1, Appendix of Forms to the Federal Rules of Appellate Procedure, is a suitable format. See also Fed.R.App.P. 3(c). A pro se notice of appeal must be signed by the appellant. 4. Effect of a notice of appeal : A district court loses jurisdiction (authority) to act after the filing of a timely notice of appeal, except for actions in aid of appellate jurisdiction or to rule on a timely motion of the type specified in Fed.R.App.P. 4(a)(4).