Barbee v. Amerant Bank, Nat'l Ass'n (In re Luna Devs. Grp., LLC)

618 B.R. 595

IN RE: LUNA DEVELOPMENTS GROUP, LLC, Debtor.

Alan Barbee, as Liquidating Trustee, Plaintiff,

v.Amerant Bank, National Association, Defendant.

Case No. 19-11169-SMG

Adv. No. 19-1742-SMG

United States Bankruptcy Court, S.D. Florida.

Signed July 14, 2020

Robert C. Furr, Esq, Jason S. Rigoli, Esq., Boca Raton, FL, Jordi Guso, Esq., Paul Steven Singerman, Esq, Miami, FL, for Plaintiff.

Peter H Levitt, Esq, Miami, FL, for Defendant.

ORDER GRANTING MOTION TO DISMISS AND DENYING MOTION TO AMEND COMPLAINT

Scott M. Grossman, Judge, United States Bankruptcy Court

Under Florida's Uniform Fraudulent Transfer Act ("FUFTA"),¹ property encumbered by a valid lien is not an "asset" that can be fraudulently transferred. Yet in this adversary proceeding, the plaintiff seeks to avoid the creation of a pledged bank account established to receive and hold $5 million in proceeds already encumbered by a valid lien, as well as the later transfer of those proceeds to pay down a cross-collateralized loan. Because the transfers were of assets encumbered by a valid lien, no "assets" were transferred under FUFTA, and therefore there are no transfers to avoid. The plaintiff also seeks to hold the defendant bank liable for aiding and abetting an alleged breach of fiduciary duty by the debtor's principal. But the plaintiff fails to plausibly allege any breaches of fiduciary duty, let alone that the bank had actual knowledge or rendered substantial assistance in the commission of this alleged tort. In fact, the allegations show only that the bank acted in its own financial interest and in accordance with its own legal and contractual rights. Accordingly, for the reasons discussed in detail below, the complaint will be dismissed.

Finally, although specifically given the opportunity to amend its complaint to address the defendant's arguments in its motion to dismiss, the plaintiff elected to amend only to bolster allegations of standing and to add a request for attorneys' fees. The plaintiff failed to add any additional allegations regarding the legal or factual bases for the fraudulent transfer or aiding and abetting claims, but purported to reserve the right to amend further in response to this Court's ruling. As discussed in more detail below, however, because the complaint fails to state a claim regardless of the plaintiff's standing, the Court need not adjudicate the standing argument. And, because legal issues are dispositive here, any further amendment of the complaint would prove futile. Accordingly, the motion to amend will also be denied. And because the motion to amend will be denied, dismissal of the complaint will be with prejudice.

I. Overview.

Plaintiff Alan Barbee, as Liquidating Trustee for Luna Developments Group, LLC,² has sued Amerant Bank, N.A.³ to avoid and recover as alleged fraudulent transfers the creation of a pledged bank account to receive and hold cross-collateralized sale proceeds, and then the subsequent transfer of funds from that account to pay down the cross-collateralized obligations of an affiliated entity.⁴ Luna also asserted a claim against Amerant for alleged aiding and abetting breach of fiduciary duty by Luna's principal, Juan Arcila.

Amerant moved to dismiss the Complaint for failure to state a claim upon which relief may be granted,⁵ asserting five principal arguments. First, Amerant argues that there were no avoidable transfers because the alleged transfers were not of "assets" (as that term is defined in FUFTA), as the assets allegedly transferred were at all times encumbered by valid liens. Second, Amerant argues that Luna's action is really a veiled attempt to seek avoidance of the cross-collateral lien created in 2007, but that a claim to avoid that transfer is barred by the statute of repose because it was created well more than four years before Luna's petition date. Third, Amerant argues that a receiver excused from turnover lacks standing to assert these claims, and any claim the receiver could otherwise assert is barred by the statute of repose. Fourth, Amerant argues that Luna provided reasonably equivalent value in exchange for the transfers. And lastly, Amerant argues the Complaint fails to plausibly allege a claim for aiding and abetting breach of fiduciary duty.

In response, Luna contends that Amerant released its original cross-collateral lien and that the creation of the new pledged account therefore was a transfer subject to avoidance. Luna then argues that Mr. Barbee, as a receiver excused from turnover, has standing (and therefore his claims are not time-barred) because he has been granted the rights, powers, and duties of a debtor-in-possession and is bringing these claims in that capacity. Next, Luna asserts that the issue of reasonably equivalent value is a question of fact that cannot be resolved on a motion to dismiss. And finally, Luna argues that it adequately pleaded knowledge and substantial assistance with respect to its aiding and abetting breach of fiduciary claims.

Although Luna contends its Complaint plausibly stated claims for relief as pleaded, Luna also moved for leave to amend the Complaint to bolster allegations that the claims are being asserted on behalf of Luna, as a debtor-in-possession. The proposed amended complaint also adds a request for attorneys' fees and costs pursuant to Florida Statute § 56.29(9). Other than to bolster allegations of standing and to add a request for attorneys' fees and costs, the proposed amended complaint contains no new material allegations.

Upon consideration of the Complaint, the Motion to Dismiss, the Response in Opposition⁶ (the "Response"), the Motion for Leave to File First Amended Complaint⁷ (the "Motion to Amend"), the proposed First Amended Complaint attached thereto (the "Amended Complaint"), the Memorandum in Opposition to Plaintiff's Motion to Amend ,⁸ and the Reply Memorandum in Support of the Motion to Dismiss ,⁹ the Court will grant Amerant's Motion to Dismiss, dismiss the Complaint with prejudice, and deny the Motion to Amend for the reasons discussed below.

II. A Complaint Must Plausibly State a Claim for Relief.

To avoid dismissal, a complaint must state a claim for relief that is "plausible on its face."¹⁰ The plaintiff must plead sufficient facts – which the court must accept as true at this stage¹¹ – to allow the court "to draw the reasonable inference"¹² of a defendant's liability. But allegations containing only " ‘labels and conclusions’ or ‘a formalistic recitation of the elements of a cause of action,"¹³ and "conclusory allegations, unwarranted deductions of fact or legal conclusions masquerading as facts,"¹⁴ will not suffice. If the "well-pleaded facts do not permit the court to infer more than the mere possibility" of liability, the complaint must be dismissed.¹⁵

In determining whether the well-pleaded facts state a claim for relief, the court generally may only consider the complaint and documents attached thereto.¹⁶ The court must then determine, based on "judicial experience and common sense," whether the well-pleaded facts in the complaint present a plausible claim for relief.¹⁷ But if the complaint's allegations fail to "nudge" the claims "across the line from conceivable to plausible," the court must dismiss the complaint.¹⁸

III. Facts.¹⁹

A. The Luna Loan.

Juan Arcila and Carlos Mahecha, through various entities, solicited investments to purchase and develop real property in South Florida.²⁰ They formed Luna in September 2006,²¹ to purchase four rental apartment buildings in Hollywood, Florida (the "Luna Property") that Luna intended to convert to condominium units.²² To finance this purchase, Luna borrowed $17.64 million (the "Luna Loan") from Amerant on November 29, 2006,²³ and gave Amerant a promissory note, along with a mortgage and security agreement encumbering the Luna Property (the "Luna Mortgage"), to secure the debt.²⁴ By November 1, 2007, Luna had converted a portion of the Luna Property into condominium units and made loan payments to Amerant, resulting in a partial release of the Luna Mortgage.²⁵ As of November 2007, Luna had repaid approximately $7 million of the Luna Loan.²⁶

B. Luna's Assets are Cross Collateralized to Secure BHQ's Financing.

About a year after forming Luna, Mr. Arcila and Mr. Mahecha formed another real estate development company – Bal Harbour Quarzo, LLC ("BHQ") – to buy and develop three properties in Bal Harbour, Florida (the "BHQ Properties"). As with the Luna Property, they also sought and obtained financing from Amerant for this project. As a condition of that financing, Amerant required the Luna Loan and the new BHQ loan to be cross-collateralized and cross-defaulted.²⁷

On or about December 12, 2007, Amerant loaned BHQ $15.5 million (the "BHQ Loan")²⁸ to finance a portion of BHQ's acquisition of the BHQ Properties.²⁹ In connection with the BHQ Loan, Luna, BHQ, and Amerant executed a Cross-Collateral and Cross-Default Agreement (the "2007 Cross Collateral Agreement").³⁰ The 2007 Cross Collateral Agreement provided for the Luna security documents and collateral securing the Luna Loan to also secure the BHQ Loan, and for the BHQ security documents and collateral securing the BHQ Loan to also secure the Luna Loan.³¹ Luna also executed a Collateral Assignment of Sales Contracts and Sales Proceeds ("Sales Proceeds Assignment")³² in connection with the new BHQ Loan, which provided that Amerant would grant partial releases of its liens on the Luna Property to permit the sale of individual units, on the terms set forth in the Sales Proceeds Assignment.³³ Luna received no consideration in exchange for the liens it granted to Amerant under the 2007 Cross Collateral Agreement and the Sales Proceeds Assignment.³⁴

C. The 2013 Loan Modifications.

Sometime during 2013, both Luna and BHQ became wholly-owned subsidiaries of Synergy Capital Group Holdings, LLC ("Synergy"), an entity owned and controlled by Mr. Arcila and Mr. Mahecha.³⁵ On July 30, 2013, Luna, BHQ, and...