Lenbro Holding Inc. v. Simon Falic ( 2013 )

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 12-11789
Non-Argument Calendar
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D.C. Docket No. 1:11-cv-22799-JLK
LENBRO HOLDING INC.,
llllllllllllllllllllllllllllllllllllllll Plaintiff-Appellant,
versus
SIMON FALIC,
llllllllllllllllllllllllllllllllllllllll Defendant-Appellee.
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Appeal from the United States District Court
for the Southern District of Florida
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(January 16, 2013)
Before CARNES, WILSON and BLACK, Circuit Judges.
PER CURIAM:
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Lenbro Holding, Inc. (Lenbro) appeals the district court’s dismissal of its
Amended Complaint with prejudice for failure to state a claim, pursuant to Federal
Rule of Civil Procedure 12(b)(6). Lenbro asserts the district court erred in: (1)
finding as a matter of law that the Personal Guaranty and Consulting Agreements
could not be read together to satisfy the statute of frauds because they were
executed eight days apart, (2) refusing to consider allegations in the Amended
Complaint as to the parties’ intent on the basis such allegations were conclusory,
and (3) refusing to consider allegations in the Amended Complaint as to the
parties’ intent on the basis those allegations constituted inadmissible parol
evidence. After review, 1 we reverse and remand for further proceedings.
I. BACKGROUND
On September 30, 2005, Lenbro entered into Consulting Agreements with
two corporations owned by Simon Falic (Falic) and his two brothers, Leon Falic
and Jerome Falic. Both Consulting Agreements were signed by Leon Falic on
behalf of the two corporations, Urban Decay Cosmetics, LLC (Urban Decay) and
Christian Lacroix SNC (Lacroix), respectively. Under the Consulting Agreements,
Lacroix and Urban Decay each agreed to pay $4,000,000.00 to Lenbro over several
quarterly installments. Lenbro alleges that on September 22, 2005, eight days prior
to the execution of the Consulting Agreements, Falic signed a Personal Guaranty in
1
We review the dismissal of Lenbro’s Amended Complaint for failure to state a claim
pursuant to Rule 12(b)(6) de novo. See Rosenberg v. Gould, 554 F.3d 962, 965 (11th Cir. 2009).
2
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which he personally assumed liability for the payment of the consulting fees to
Lenbro under the terms of the two Consulting Agreements.
On November 3, 2011, Lenbro filed an Amended Complaint against Falic
seeking $7,775,000.00 in damages for breach of contract under the Personal
Guaranty. On March 1, 2012, the district court granted Falic’s motion to dismiss
with prejudice, finding the Personal Guaranty failed to satisfy the statute of frauds.
Lenbro timely appeals the dismissal.
II. DISCUSSION
A. Whether the Personal Guaranty and Consulting Agreements could be read
together
Lenbro first contends the district court erred by finding the Personal
Guaranty and Consulting Agreements could not be read together to establish
consideration satisfying the statute of frauds because they were executed eight days
apart. Lenbro argues the Personal Guaranty was executed in connection with the
Consulting Agreements, thus alleviating the necessity of finding independent
consideration.
In Florida, a guaranty executed independently of the principal contract must
be supported by separate consideration. Texaco, Inc. v. Giltak Corp., 492 So. 2d
812, 814 (Fla. 1st DCA 1986). Florida courts have carved out a limited exception
to this rule where the principal and guaranty contracts are executed as part of the
same transaction. See id.; see also von Dunser v. Se. First Nat’l Bank of Miami,
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367 So. 2d 1094, 1095 (Fla. 3d DCA 1979). However, Florida courts have limited
this exception to apply only where the principal and guaranty contracts are, or
should have been, executed at the same time. See Texaco, 492 So. 2d at 814
(noting personal guaranty was executed “[a]t about the same time” as the primary
contract); Barnett Bank of S. Fla., N.A. v. University Gynecological Assocs., Inc.,
638 So. 2d 595, 595 (Fla. 4th DCA 1994) (finding guaranty executed two months
after original contract needed no additional consideration where guaranty was “a
condition of the making of the original loan” and was supposed to have been
executed “at the same time” as the original agreement); Gordon v. Corporate Ins.
Services, Inc., 374 So. 2d 603, 604 (Fla. 3rd DCA 1979) (“Where . . . the guaranty
is entered into at the time of the creation of the principal obligation . . . the same
consideration for the principal debt suffices for the contract of guaranty.”).
The Consulting Agreements and the Personal Guaranty were not executed at
the same time, as Lenbro admits the Personal Guaranty was signed eight days prior
to the contract. Moreover, Lenbro has not alleged the Personal Guaranty and
Consulting Agreements were supposed to have been executed at the same time.
Therefore, the district court did not err in finding that, as a matter of law, the
Personal Guaranty and Consulting Agreements could not be read together to
establish consideration satisfying the statute of frauds because they were executed
eight days apart.
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B. Whether the allegations in the Amended Complaint were conclusory
Lenbro contends the district court erred in refusing to consider the
allegations in the Amended Complaint as to the parties’ state of mind on the basis
that such allegations were “conclusory” and therefore not entitled to a presumption
of truth. Following the Supreme Court’s approach in Ashcroft v. Iqbal, 129 S. Ct.
1937, 1949 (2009), the Eleventh Circuit has suggested that, when considering a
motion to dismiss, courts: “(1) eliminate any allegations in the complaint that are
merely legal conclusions; and (2) where there are well-pleaded factual allegations,
assume their veracity and then determine whether they plausibly give rise to an
entitlement to relief.” Am. Dental Ass'n v. Cigna Corp., 605 F.3d 1283, 1290 (11th
Cir. 2010) (quotations omitted). Allegations entitled to no assumption of truth
include “[l]egal conclusions without adequate factual support” or “[f]ormulaic
recitations of the elements of a claim.” Mamani v. Berzain, 654 F.3d 1148, 1153
(11th Cir. 2011).
In its Amended Complaint, Lenbro alleged it “insisted that Simon Falic
personally guarantee to pay the consulting fees provided for in those agreements
and made clear that it would not enter into the Consulting Agreements without
such a personal guarantee from Mr. Falic.” This allegation as to the parties’ intent
is not a mere legal conclusion, nor is it a formulaic recitation of the elements of a
claim. Instead, this allegation is factual, providing support for Lenbro’s contention
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that the Personal Guaranty and Consulting Agreements were inseparable parts of
the same transaction. Therefore, the district court erred in determining these
allegations were conclusory, and the allegations should be entitled to a
presumption of truth for the purposes of a motion to dismiss.
C. Whether parol evidence should be considered
Lenbro argues the district court erred by refusing to consider parol evidence
as to the parties’ understandings of the Personal Guaranty as a prerequisite to the
execution of the underlying contract. Under Florida law, parol evidence is
admissible to prove the elements of an agreement where a writing fails to contain
the elements of a complete contract. Indus., Invs. & Agencies (Bahamas), Ltd. v.
Panelfab Int’l Corp., 529 F.2d 1203, 1211 (5th Cir. 1976).2 Specifically, “[p]arol[]
evidence is . . . admissible to show the consideration for an agreement where none
appears therein.” Id.; see also Ungerleider v. Gordon, 214 F.3d 1279, 1284 (11th
Cir. 2000).
The Personal Guaranty failed to contain the elements of a complete contract,
as it lacked consideration and failed to identify the party to whom Falic was
personally liable. Pursuant to Florida law, the district court was permitted to
2
In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), this
Court adopted as binding precedent all decisions of the former Fifth Circuit handed down prior
to close of business on September 30, 1981.
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determine whether the missing terms could be supplied by parol evidence. Thus,
the district court erred in not considering such parol evidence.
Additionally, although the Personal Guaranty and the Consulting Agreement
cannot be construed together to establish consideration, Lenbro has alleged
sufficient facts that the Personal Guaranty was supported by independent
consideration. Under Florida law, “[a] promise, no matter how slight, qualifies as
consideration if the promisor agrees to do something that he or she is not already
obligated to do.” Palm Lake Partners II, LLC v. C & C Powerline, Inc., 38 So. 3d
844, 851 n.10 (Fla. 1st DCA 2010) (quotations omitted). Mutually binding
promises can provide consideration for one another and give rise to an enforceable
contract. See Bhim v. Rent-A-Center, Inc., 655 F. Supp. 2d 1307, 1312 (S.D. Fla.
2009) (applying Florida law); Redington Grand, LLP v. Level 10 Props., LLC, 22
So. 3d 604, 608 (Fla. 2d DCA 2009).
Lenbro alleged in its Amended Complaint that it would not enter into the
Consulting Agreements without a personal guaranty from Falic. Because Falic,
through the express terms of the Personal Guaranty, agreed to do something he was
not already obligated to do, i.e. guaranty the subsequent Consulting Agreements,
sufficient consideration has been shown as to Falic. Similarly, because Lenbro,
through parol evidence, agreed to do something it was not already obligated to do,
i.e. enter into the Consulting Agreement, sufficient consideration has been shown
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as to Lenbro. These two mutually binding promises constitute a sufficient
allegation of consideration for the Personal Guaranty.
III. CONCLUSION
The district court did not err in concluding the Personal Guaranty and
Consulting Agreements could not be read together to establish consideration.
However, because Lenbro’s Amended Complaint alleged sufficient facts that the
Personal Guaranty was supported by independent consideration, we reverse the
district court’s grant of Falic’s motion to dismiss for failure to state a claim, and
remand for further proceedings.
REVERSED and REMANDED.
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