Umbrella Investment Group, LLC v. Wolters K ( 2020 )

Case: 20-30078 Document: 00515540252 Page: 1 Date Filed: 08/25/2020
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
August 25, 2020
No. 20-30078 Lyle W. Cayce
Summary Calendar Clerk
Umbrella Investment Group, L.L.C.;
Lawrence Q. Robertson; Micco D. Johnson;
Jarmarritt Alexis; Eugene Pierre Steib;
Valvenia R. Joseph; Leonard Robertson, III;
Gregory Williams; Detrell Edmonds,
Plaintiffs—Appellants,
versus
Wolters Kluwer Financial Services, Incorporated,
Defendant—Appellee.
Appeal from the United States District Court
for the Eastern District of Louisiana
USDC No. 2:19-CV-2156
Before Jolly, Jones, and Southwick, Circuit Judges.
Per Curiam:
Umbrella Investment Group, L.L.C., and certain of its board members
(collectively, “UIG”) appeal the dismissal of their complaint for failure to
state a claim, contending that UIG has stated claims for fraud and detrimental
reliance. We disagree and thus AFFIRM the district court’s judgment.
Case: 20-30078 Document: 00515540252 Page: 2 Date Filed: 08/25/2020
No. 20-30078
In November 2014, Umbrella Investment Group, L.L.C., obtained a
loan from Pedestal Bank, which the investors guaranteed, to pay for property
to build a sports bar. When the loan came up for renewal, the bank informed
the company that the property was in a special flood hazard area and required
flood insurance. The company was unable to afford flood insurance, and the
bank foreclosed on the property.
Thereafter, UIG sued Wolters Kluwer Financial Services, Inc.
(“Wolters Kluwer”). According to UIG, at the time of the loan, Wolters
Kluwer provided the plaintiffs and Pedestal Bank “written certification that
the property subject to the loan was not in a flood hazard area that required
flood insurance under FEMA regulations pursuant to the Flood Disaster
Protection Act of 1973.” Further, the plaintiffs maintained “on information
and belief” that Wolters Kluwer “knew that the property was in a flood
hazard area and deliberately, fraudulently, and falsely failed to disclose this
information.”
In the district court, Wolters Kluwer moved to dismiss the case under
Federal Rule of Civil Procedure 12(b)(6), contending that the plaintiffs failed
to state a claim by alleging fraud without the specificity required by Rule 9(b).
UIG responded that its “Complaint spells out the specific and particular
details of the circumstances and related facts of the fraud claim.” The
district court granted the 12(b)(6) motion and then rendered judgment in
favor of Wolters Kluwer while stating that “all claims in the above-captioned
matter are DISMISSED WITHOUT PREJUDICE.” UIG timely
appealed.
To start, Wolters Kluwer denies that we have jurisdiction over this
appeal. Because “the district court granted a Rule 12(b)(6) motion and
dismissed the claims without prejudice,” Wolters Kluwer contends, “the
district court made no ruling on the merits and the without prejudice
2
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No. 20-30078
dismissal is not a final judgment.” The conclusion pressed is that, without a
final judgment, appellate jurisdiction under 28 U.S.C. § 1291 is lacking here.
We disagree. The district court entered judgment dismissing “all
claims in the above-captioned matter,” and a judgment dismissing all claims
is a judgment dismissing an action. As one court has explained, “[t]he
dismissal of an action – whether with or without prejudice – is final and
appealable.” Ciralsky v. C.I.A., 355 F.3d 661, 666 (D.C. Cir. 2004).
Alternatively, the judgment should be read that way because, as another court
stated, it “looks both ways.” Hoskins v. Poelstra, 320 F.3d 761, 764 (7th Cir.
2003). In Hoskins, similar to this case, the district court dismissed a
“complaint” “without prejudice,” ordinarily a nonfinal decision, while
issuing a “final” judgment in the defendants’ favor under Rule 58. Id. at 763.
To avert traps for the unwary in ambiguous cases, we treat the court’s
decision/judgment on “all claims” as final and appealable.
This conclusion is undisturbed by our court’s non-precedential opin-
ion in King/Morocco v. Banner of N.O., L.L.C., 786 F. App’x 27 (5th Cir.
2019), which Wolters Kluwer cites. According to that opinion, “an appeal
from grant of a motion to dismiss without prejudice to refile . . . is not a final
judgment because ‘the district court did not adjudicate or dispose of any sub-
stantive issues on the merits.’” Id. (quoting Telles v. City of El Paso, 164 F.
App’x 492, 495 (5th Cir. 2006) (unpublished)). 1 Whatever the merit of the
internally quoted principle, though, it cannot be applied, as King/Morocco
1
Telles is not only non-precedential, but also clearly distinct. It involved “an appeal
from a denial of a motion without prejudice to refile.” 164 F. App’x 492, 495 (5th Cir.
2006) (emphasis added). Such a decision is likely to be “tentative, informal or incomplete”
and thus unappealable under Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546,
69 S. Ct. 1221, 1225 (1949), as well noted in Telles, 164 F. App’x at 495. Cohen is also cited
in King/Morocco, but there its only work is to announce a general principle not clearly
applicable to the case at hand. See 786 F. App’x at 28.
3
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applies it, out of line with the Supreme Court’s holding in United States v.
Wallace & Tiernan Co. In that case, the fact “[t]hat the dismissal was without
prejudice to filing another suit [did] not make the cause unappealable, for de-
nial of relief and dismissal of the case ended this suit so far as the District
Court was concerned.” 336 U.S. 793, 794 n.1, 69 S. Ct. 824, 825 n.1 (1949).
In this case, too, the district court denied relief, dismissed the case, and
ended this suit so far as the court was concerned. Under Wallace, such dis-
position is final and appealable.
On appeal, the central question is whether the district court erred in
ruling that UIG failed to state a claim for fraud. Reviewing de novo, we ac-
cept “all well pleaded facts as true and view[ ] those facts in the light most
favorable to the plaintiff.” Toy v. Holder, 714 F.3d 881, 883 (5th Cir. 2013)
(quoting Bustos v. Martini Club, Inc., 599 F.3d 458, 461 (5th Cir. 2010)). Still,
we agree with the district court.
“In alleging fraud or mistake, a party must state with particularity the
circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b). Of
course, as UIG notes, “[m]alice, intent, knowledge, and other conditions of
a person’s mind may be alleged generally.” Id. Moreover, “[i]f the facts
pleaded in a complaint are peculiarly within the opposing party’s knowledge,
fraud pleadings may be based on information and belief.” Tuchman v. DSC
Commc’ns Corp., 14 F.3d 1061, 1068 (5th Cir. 1994). All the same, “this
luxury ‘must not be mistaken for license to base claims of fraud on
speculation and conclusory allegations.’” Id. (quoting Wexner v. First
Manhattan Co., 902 F.2d 169, 172 (2d Cir.1990)).
In this case, the only relevant fact that UIG has alleged beyond what
little it alleges “on information and belief” is that Wolters Kluwer provided
“written certification that the property subject to the loan was not in a flood
hazard area that required flood insurance under FEMA regulations pursuant
4
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No. 20-30078
to the Flood Disaster Protection Act of 1973.” That fact alone can ground
nothing more than speculation as to the cause of the error, and therefore,
UIG has failed to state a claim for fraud.
A similar fate meets the rest of the appeal. UIG contends that the
district court should have allowed it to amend its fraud claim and that it has
stated a claim for detrimental reliance under Louisiana law. Neither issue
was presented to the district court, 2 however, and neither will be considered
first on appeal. 3 See Kirschbaum v. Reliant Energy, Inc., 526 F.3d 243, 257 (5th
Cir. 2008).
Finding no error in the district court’s judgment, we AFFIRM.
2
For a contrasting example, see the only case cited by UIG, in which the plaintiffs
“asked the court [in their opposition to the defendant’s motion to dismiss] to grant them
leave to amend in the event that the complaint failed to ‘comply with the federal rules.’”
Firestone v. Firestone, 76 F.3d 1205, 1208 (D.C. Cir. 1996).
3
In a future order, to alleviate any possible confusion, a district judge might, in his
discretion, invite a party to replead within 14 days.
5