Oil Com Uganda v. Van Tonder

OIL COM UGANDA and ISLAM EDHA ABDALLAH NAHDI, Plaintiffs, v. ESTATE OF BRUWER WESSEL VAN TONDER, Defendant.

No. 2:21-cv-916-JES-NPM

United States District Court, M.D. Florida, Fort Myers Division

February 28, 2022

OPINION AND ORDER

JOHN E. STEELE SENIOR UNITED STATES DISTRICT JUDGE

This matter comes before the Court on plaintiffs' Motion for Preliminary Injunction (Doc. #9), to which defendant responded (Doc. #14). For the reasons set forth, the motion is DENIED.

I.

The following facts, taken from plaintiffs' motion, serve as the basis for the request for preliminary relief:^[1] On January 18, 2013, plaintiff Oil Com Uganda (OCU), plaintiff Islam Edha Abdallah Nahdi (Nahdi) (collectively, plaintiffs), and decedent Bruwer Wessel Van Tonder (Mr. Van Tonder) executed a Shareholders Agreement related to the ownership of Algae-X International Corporation (AXI).^[2] (Doc. #9, ¶ 9; Doc. #9-2.) Nahdi signed the agreement on behalf of himself and OCU. (Doc #9-2, p. 3.) Nahdi was named President and a director of AXI Mr. Van Tonder was named CEO and a director of AXI. (Doc. #9, ¶ 12.) It is undisputed that, on August 1, 2013, the ownership structure of AXI was the following: 51% to OCU, 9% to Nahdi, and 40% to Mr. Van Tonder. (Id. ¶¶ 14-15; Doc. #13, ¶¶ 14-15.)

A. Actions taken by Mr. Van Tonder

Plaintiffs allege that “between 2016 and 2017, Mr. Van Tonder represented to OCU and NAHDI that Chase Bank was requiring NAHDI's name to be removed from the AXI corporate bank accounts because he is a foreign national and because he is Muslim, ” and that OCU and Nahdi needed to be removed “from public corporate records and as a signatory to the bank account so Chase Bank would continue doing business with AXI.” (Doc. #9, ¶¶ 18-19.) Plaintiffs agreed to be removed from the bank account and public records, but understood that they would maintain their same ownership interest in AXI. (Id. ¶¶ 22, 24.)

On October 1, 2017, Mr. Van Tonder executed a Unanimous Written Consent of the Board of Directors of AXI International (“Written Consent”), allegedly without Nahdi's knowledge, which removed Nahdi from the board of directors and terminated Nadhi's power in the company. (Id. ¶ 25; Doc. #9-12.) The Written Consent authorized Mr. Van Tonder and Michael Campbell (Campbell), Secretary of AXI, ^[3] to “take any and all necessary actions to effectuate this resolution.” (Doc. #9-12). Although there is a signature from Nahdi on the Written Consent, plaintiffs state that the signature is a forgery. (Doc. #9, ¶ 26.) Plaintiffs allege that after the Written Consent was executed, Mr. Van Tonder “caused a new corporate book to be created, ” “removed the original share certificates, ” and “had a brand new share certificate issued showing newly issued 200, 000 shares (full ownership) of AXI to him alone.” (Id. ¶ 30.)

From 2013 when the parties purchased AXI until 2018, plaintiffs transferred approximately $5.95 million USD to Mr. Van Tonder's personal bank account for investment into AXI. (Id. ¶¶ 33-34.) According to plaintiffs, Mr. Van Tonder did not invest the money into AXI and, as they later learned, instead used the money for personal expenses. (Id. ¶ 38.)

B. Mr. Van Tonder's Death

On September 26, 2021, Mr. Van Tonder committed suicide. (Id. ¶ 42.) Relevant to this case, Mr. Van Tonder's will provided:

In the case of my death, I wish the following:

That Islam Edha Abdallah Nahdi inherit AXI International Corporation on the following conditions.

-That my spouse, Michelle Marie Van Tonder, must be paid 2 million dollars.

-AXI International must pay her a salary of $120, 000.00 every year for a total of five years including healthcare.

-My home on, 3371 Brantley Oaks Drive, Fort Myers Florida, 33905, must be paid off in full between Islam Edha Abdallah and my loan account in AXI International Corporation.

-The Mercedes G 63AMG will go to my spouse, Michelle Marie Van Tonder.

-Whenever AXI International gets sold, 10% of purchase price is to be paid to my spouse, Michelle Marie Van Tonder.

(Doc. #9-16, p. 7.) The will was signed on March 11, 2020 and witnessed by Campbell and Camille Henry, another person associated with AXI. (Id. pp. 5-7.) On December 10, 2021, the will was admitted to the Lee County Circuit Court Probate Division, and Michelle Marie Van Tonder (Mrs. Van Tonder) was appointed as personal representative of the Estate. (Doc. #9-16.)^[4]

On January 3, 2022, Mrs. Van Tonder executed a shareholder's resolution, as personal representative of the Estate, which appointed Mrs. Van Tonder as president of AXI. (Doc. #9-19.) On January 20, 2022, plaintiffs executed a similar resolution, naming Nahdi president and asserting OCU and Nahdi's 60% ownership interest in AXI. (Doc. #14-1, pp. 4-5.) Plaintiffs' counsel sent the resolution to Ronald Nisonson (Nisonson), corporate counsel for AXI, and instructed Nisonson that Mrs. Van Tonder's resolution “should have no effect whatsoever.” (Id. p. 3.) On January 21, 2022, Nisonson sent Nadhi's resolution to Mrs. Van Tonder's counsel. (Id. p. 2.) Nisonson informed Mrs. Van Tonder's counsel that he instructed Campbell to revoke Mrs. Van Tonder's resolution and enforce Nahdi's resolution. (Id.)

On February 4, 2022, Mrs. Van Tonder's counsel sent Nisonson an email, which purported to terminate Nisonson's representation of AXI and instructed him to preserve ESI. (Doc. #16-1.) On February 11, 2022, Mrs. Van Tonder's counsel sent Campbell a notice of termination of his employment with AXI based on Campbell's: (1) refusal to recognize Mrs. Van Tonder's authority; (2) ignoring his past sworn statements and prior acknowledgements; and (3) unilaterally recognizing and taking direction for a third party. (Doc. #16-2.)

C. Current Litigation

Plaintiffs initiated this action on December 7, 2021 (Doc. #1) and filed the operative Amended Complaint on December 11, 2021 (Doc. #5). Plaintiffs assert eight counts against the Estate of Bruwer Wessel Van Tonder (the Estate): (1) fraud; (2) breach of fiduciary duty; (3) conversion; (4) constructive trust; (5) unjust enrichment; (6) accounting; (7) permanent injunction; and (8) declaratory judgment. (Doc. #5.)

The Estate filed a waiver of service on January 24, 2022. (Doc. #8.) The next day, plaintiffs filed the pending Motion.^[5](Doc. #9.)^[6] On February 4, 2022, the Estate answered the Amended Complaint and responded to the Motion. (Docs. ## 13, 14.)

Given the parties' filings, the Court ordered plaintiffs: (i) to provide briefing on whether the probate exception applied to this Court's jurisdiction; and (ii) to provide a proposed order for the preliminary injunction. (Doc. #15.) The Court also afforded the Estate the opportunity to respond to plaintiffs' filing. (Id.) Plaintiffs filed the requested documents. (Doc. #16.) The Estate filed no response, and the time for filing a response has passed.

II.

Federal courts “have a ‘virtually unflagging obligation ... to exercise the jurisdiction given them.'” Ambrosia Coal & Constr. Co. v. Pages Morales, 368 F.3d 1320, 1328 (11th Cir. 2004) (quoting Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 817 (1976)). One exception to this rule “is that a federal court may not exercise diversity jurisdiction over state probate matters.” Fisher v. PNC Bank, N.A., 2 F.4th 1352, 1356 (11th Cir. 2021). This so-called “probate exception” is narrow and applies to cases that require a federal court to: (1) probate or annul a will; (2) administer a decedent's estate; or (3) dispose of property that is in the custody of the state probate court. Id. (citing Marshall v. Marshall, 547 U.S. 293, 311 (2006); Markham v. Allen, 326 U.S. 490, 494 (1946)). “The exception does not ‘bar federal courts from adjudicating matters outside those confines and otherwise within federal jurisdiction.'” Stuart v. Hatcher, 757 Fed.Appx. 807, 809 (11th Cir. 2018) (quoting Marshall, 547 U.S. at 311).

“The general rule in determining whether a claim falls under the probate exception is whether a particular claim and the relief it seeks [] interfere with the property that is in the possession of a state probate court.” Catano v. Capuano, No. 18-20223-CIV, 2020 WL 639406, at *3 (S.D. Fla. Feb. 11, 2020) (citing Markham, 326 U.S. at 494) (emphasis in original). “District courts in the Eleventh Circuit have no jurisdiction over actions seeking a valuation of estate assets, a transfer of property that is under probate, or a premature accounting of an estate still in probate.” Id. (citations omitted). On the other hand, “federal courts can adjudicate claims relating to state-court probate or estate cases so long as adjudicating the claim does not require the federal court to interfere with the property under the control of the state court.” Id. (citing Markham, 326 U.S. at 494). For example, “‘a creditor may obtain a federal judgment that he has a valid claim against the estate for one thousand dollars ... What the federal court may not do, however, is to order payment of the creditor's thousand dollars, because that would be an assumption of control over property under probate.'” Id. (quoting Turton v. Turton, 644 F.2d 344, 348 (5th Cir. 1981) (“the federal court is limited to declaring the validity of the asserted claims, leaving the claimants to assert their federal judgments as res judicata in the probate court”)). The ultimate “question under this most mysterious and esoteric branch of the law of federal jurisdiction is what a lawsuit would require a district court to do.” Fisher, 2 F.4th at 1356 (quotation omitted).

Based on the information available so far, ^[7] the Court is satisfied that the probate exception at least does not apply to plaintiffs' claims for fraud (Count I) and breach of fiduciary duty (Count II). These claims...