The Bedtow Group II, LLC v. Martin B. Ungerleider ( 2017 )

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 16-10213
Non-Argument Calendar
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D.C. Docket No. 9:15-cv-80255-KLR
THE BEDTOW GROUP II, LLC,
California limited liability company,
Plaintiff - Appellant,
versus
MARTIN B. UNGERLEIDER,
an individual,
PAULA S. UNGERLEIDER,
an individual,
MICHAEL LANDA,
as Trustee of the William W. Landa 11/30/07
Long Term Irrevocable Trust Dated 11/30/2007,
DOES 1-20,
Defendants - Appellees.
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Appeal from the United States District Court
for the Southern District of Florida
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(April 6, 2017)
Before JORDAN, ROSENBAUM, and EDMONDSON, Circuit Judges.
PER CURIAM:
In this state-law case, the Bedtow Group II, LLC (“Bedtow”) appeals the
district court’s dismissal of its complaint against Defendants Martin Ungerleider,
Paula Ungerleider, and against Michael Landa, as trustee of William W. Landa’s
irrevocable trust. This appeal arises from the sale of three already-existing life
insurance policies to Bedtow on the secondary life-settlements market. Bedtow
filed this civil action seeking damages and declaratory relief against Defendants.
No reversible error has been shown; we affirm.
In April 2010, Bedtow entered into a purchase and sale agreement with each
Defendant whereby Bedtow agreed to purchase existing life insurance policies on
the lives of Martin Ungerleider, Paula Ungerleider, and William W. Landa. In
May 2010 -- in accordance with the purchase and sale agreements -- Bedtow paid
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Defendants the agreed-upon purchase prices in exchange for Bedtow’s becoming
the owner and beneficiary of the policies. Bedtow then assumed responsibility for
making all applicable premium payments to the pertinent insurance carriers to keep
the policies in force.
Bedtow alleges that its decision to purchase the policies was made in
reliance on representations made by Defendants about the insureds’ life
expectancies. In late 2013, Bedtow -- in anticipation of reselling the policies --
ordered new life expectancy reports on the Ungerleiders and on William W. Landa.
Bedtow says it then first discovered that Defendants had falsely represented the
insureds’ life expectancies.
In February 2015, Bedtow filed this civil action against Defendants. In its
complaint, Bedtow contends that Defendants -- through their agents Dennis Gilbert
and Michael Krupin (“Agents”) -- provided false information to Bedtow for the
sale of the policies. In particular, Bedtow contends that the Agents misrepresented
the life expectancies of the Ungerleiders and of William W. Landa and
misrepresented the insurance carrier rating for the Landa policy. Bedtow asserted
claims for declaratory relief, rescission of the purchase and sale agreements, unjust
enrichment, fraudulent inducement, and negligent misrepresentation.
The district court granted Defendants’ motions to dismiss. The district court
concluded that Bedtow’s claims for rescission, unjust enrichment, fraudulent
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inducement, and negligent misrepresentation were time-barred under Florida’s
statute of limitations. The district court also dismissed Bedtow’s declaratory relief
claims, concluding that Bedtow was precluded from voiding a contract based on its
own alleged violation of Florida law. 1 The district court later denied Bedtow’s
post-judgment motion for reconsideration and for leave to file an amended
complaint. This appeal followed.
I.
We review de novo the district court’s grant of a motion to dismiss,
accepting the allegations in the complaint as true and construing them in the light
most favorable to the plaintiff. Hill v. White, 321 F.3d 1334, 1335 (11th Cir.
2003). Dismissal of a complaint on statute-of-limitations grounds, pursuant to Fed.
R. Civ. P. 12(b)(6), is appropriate only where it is “apparent from the face of the
complaint” that the claim is time-barred. La Grasta v. First Union Sec., Inc., 358
F.3d 840, 845 (11th Cir. 2004).
On appeal, Bedtow contends that the district court erred in dismissing its
claims as time-barred. Under Florida law, Bedtow’s claims for rescission, unjust
1
On appeal, Bedtow raises no challenge to the district court’s dismissal of its claims for
declaratory relief. Those claims are thus deemed abandoned. See Sapuppo v. Allstate Floridian
Ins. Co., 739 F.3d 678, 680 (11th Cir. 2014).
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enrichment, fraudulent inducement, and negligent misrepresentation had to be
brought within four years of the accrual of the claim. See Fla. Stat. § 95.11(3)(a),
(j), (l), (p) (establishing a four-year time limit for filing actions “founded on
negligence,” actions “founded on fraud,” actions “to rescind a contract,” and all
actions “not specifically provided for in these statutes”). The statute of limitations
begins running “from the time the cause of action accrues.” Fla. Stat. § 95.031.
Generally speaking, “[a] cause of action accrues when the last element constituting
the cause of action occurs.” Id. § 95.031(a).
Under Florida’s “delayed discovery rule,” however, the running of the
statute of limitations for certain claims -- including fraud-based claims -- may be
postponed until “the facts giving rise to the cause of action were discovered or
should have been discovered with the exercise of due diligence.” Fla. Stat. §
95.031(2)(a); see also Davis v. Monahan, 832 So. 2d 708, 709-10 (Fla. 2002)
(Florida’s delayed discovery doctrine applies only to claims of fraud, products
liability, professional and medical malpractice, and intentional torts based on
abuse).
Bedtow argues that, under Florida’s “delayed discovery rule,” the four-year
statute of limitations did not begin running until late 2013, when Bedtow first
discovered Defendants’ alleged misrepresentations. We disagree.
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Although Bedtow may have lacked some expertise in the life-settlements
market, the allegations in the complaint evidence that Bedtow understood when it
purchased the life insurance policies that the projected life expectancy of the
insured was a “key element” to determining the fair market value of a life
insurance policy. Bedtow’s allegations also demonstrate that Bedtow understood
-- given the importance of the life expectancy projections -- that the due diligence
process associated with purchasing life insurance policies on the life-settlements
market included necessarily obtaining life expectancy reports for the insured. This
practice is demonstrated both by Bedtow’s description that “[i]n the normal course
of due diligence, prospective purchasers ordered life expectancy reports” for the
Ungerleiders and for William W. Landa, and by Bedtow’s own conduct in ordering
life expectancy reports for the insureds in anticipation of reselling the policies.
On appeal, Bedtow does not dispute that it understood the importance of the
life-expectancy projections when it purchased the policies or dispute that
reasonable due diligence required obtaining life expectancy reports for the
insureds. Bedtow contends, instead, that it relied on the Agents’
misrepresentations about the life expectancies of the Ungerleiders and of William
W. Landa. Florida law makes clear, however, that “[i]n the civil context, a party
who relies on a misrepresentation must show that it exercised some diligence in
investigating the misrepresentation, unless it is shown that the fraudulent party had
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exclusive or superior knowledge, or prevented further investigation.” Adams v.
Prestressed Sys. Indus., 625 So. 2d 895, 897 (Fla. Dist. Ct. App. 1993). Bedtow
makes no allegation that Defendants had “exclusive or superior knowledge” or
otherwise prevented Bedtow from conducting its own investigation. Bedtow was
thus still required to conduct independent investigation of the representations made
by Defendants’ Agents.
Based on the allegations in the complaint, had Bedtow ordered its own life
expectancy reports -- as did the other potential purchasers -- it would have
discovered the alleged misrepresentations about the insureds’ life expectancies. In
addition, current insurance carrier ratings were ascertainable through publicly
available sources. Instead of conducting its own investigation of the pertinent
facts, however, Bedtow relied solely on representations made by the Agents on
behalf of Defendants. This reliance does not -- as a matter of Florida law -- excuse
Bedtow’s failure to exercise due diligence. See id. Because Bedtow “should have
. . . discovered with the exercise of due diligence” the alleged misrepresentations
before it purchased the policies, Florida’s delayed discovery rule does not act to
postpone the accrual of Bedtow’s causes of action.
The four-year statute of limitations thus began to run, at the latest, in May
2010 when Bedtow made payment and obtained ownership of the life insurance
policies. Because it is “apparent from the face of the complaint” that Bedtow’s
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claims -- filed more than four years later -- were untimely, the district court
dismissed properly Bedtow’s claims for rescission, unjust enrichment, fraudulent
inducement, and negligent misrepresentation as barred by the statute of
limitations. 2 See La Grasta, 358 F.3d at 845.
II.
After the district court dismissed with prejudice Bedtow’s complaint,
Bedtow filed a motion for reconsideration under Fed. R. Civ. P. 59(e) and for leave
to amend its complaint. Bedtow sought to add allegations that the Agents acted as
“undisclosed dual agents” for both Bedtow and Defendants and that Bedtow had
relied on the Agents to conduct due diligence.
We review for abuse of discretion a district court’s denial of a Rule 59(e)
motion. Lamonica v. Safe Hurricane Shutters, Inc., 711 F.3d 1299, 1317 (11th Cir.
2013).
A Rule 59(e) motion for reconsideration may be granted based only on
newly-discovered evidence or to correct manifest errors of law or fact. In re
Kellogg, 197 F.3d 1116, 1119 (11th Cir. 1999). Rule 59(e) motions may not be
2
Because we conclude that Bedtow’s claims were dismissed properly as barred by the applicable
statute of limitations, we need not address the district court’s second independent ground for
dismissing Bedtow’s fraudulent inducements claims: as barred by the integration clause of the
purchase and sales agreements.
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used to “relitigate old matters, raise argument or present evidence that should have
been raised prior to the entry of judgment.” Michael Linet, Inc. v. Vill. of
Wellington, 408 F.3d 757, 763 (11th Cir. 2005).
The district court abused no discretion in denying Bedtow’s motion for
reconsideration and for leave to amend its complaint. Bedtow’s motion relied on
no newly-discovered evidence and demonstrated no manifest error of law or fact in
the district court’s order of dismissal. Instead, the allegations Bedtow sought to
add to the complaint -- about the Agents’ alleged dual agency -- were based on
information Bedtow concedes was already known to it before it filed its original
complaint. Because Bedtow could have presented this evidence before entry of the
judgment -- and chose not to -- it is precluded from doing so post-judgment
pursuant to Rule 59(e).
AFFIRMED.
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