Flatirons Bank v. the Alan W. Steinberg Limited Partnership
15-1396
| Fla. Dist. Ct. App. | Dec 6, 2017Background
- Flatirons Bank (Colorado) discovered in 2010 that its former chairman Mark Yost had embezzled about $3.845 million by creating bogus lines of credit.
- On January 20, 2009, $1,000,000 of those funds was routed through Yost-controlled entities and ultimately wired from the Yost Partnership (managed in Colorado) to Steinberg (a New York limited partnership with principal place of business in Florida).
- Flatirons sued Steinberg in Florida (filed Feb. 1, 2013) asserting unjust enrichment, Colorado civil-theft (rights in stolen property), and conversion claims; the trial court dismissed the statutory and conversion claims and, after a bench trial, entered judgment for Steinberg on unjust enrichment and held Flatirons’s unjust-enrichment claim time-barred by Florida’s 4‑year statute of limitations.
- Trial-court findings (upheld by the majority): Steinberg had no relationship with Flatirons, received the $1,000,000 in good faith without knowledge the funds were stolen, had actually suffered net losses from its Yost investments, and had paid adequate consideration to the Yost Partnership for prior investments.
- Flatirons appealed, arguing Colorado law should govern the civil‑theft claim (conflict‑of‑laws significant‑relationships test), and that its unjust‑enrichment claim was timely under the delayed‑discovery doctrine (or alternatively tolled).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Applicability of Colorado civil‑theft statute (rights in stolen property) in Florida forum | Colorado has the most significant relationship (theft and injury occurred in Colorado) so Colorado §18‑4‑405 applies | No nexus to Colorado for Steinberg; Florida forum may apply its own statutes since Steinberg’s receipt occurred in Florida | Affirmed dismissal: Florida court may refuse to apply another state’s statutory cause where complaint alleges no conduct by defendant in that other state; no basis shown to apply Colorado statute |
| Unjust enrichment — elements (benefit, knowledge, voluntary acceptance, inequity) | Steinberg received a $1,000,000 benefit traceable to Flatirons, had knowledge of the transfer and later knew it was tainted, and it would be inequitable to keep the funds | Steinberg received funds in good faith, lacked knowledge the funds were stolen, paid consideration historically to Yost Partnership, and suffered net loss overall; no direct benefit conferred by Flatirons | Affirmed for Steinberg on credibility/fact findings: trial court’s findings that Steinberg received funds in good faith and no direct benefit was conferred are supported by competent, substantial evidence |
| Statute of limitations on unjust enrichment (4‑year rule; delayed discovery) | Claim is founded on fraud; delayed‑discovery defers accrual until Flatirons discovered (Aug 2010 / Mar 2012) so suit filed within allowable time; alternatively equitable tolling applies | Cause accrued when Steinberg received the funds (Jan 20, 2009); suit filed Feb 1, 2013 is more than 4 years later; delayed discovery doctrine does not extend unjust enrichment per controlling precedent | Affirmed: unjust enrichment accrued on date defendant received the benefit, barred by Fla. 4‑year limitations; delayed‑discovery doctrine inapplicable to extend unjust‑enrichment claim per controlling Florida authority |
| Dismissal of statutory conversion claim (Colorado civil theft vs. Florida law choice) | (Related to first issue) The court should perform Bishop significant‑relationships test before dismissing Colorado statutory claim | Trial court properly dismissed because Flatirons’ complaint lacked allegations showing Steinberg engaged in conduct in Colorado or otherwise subjected to Colorado statutory cause | Affirmed: trial court’s dismissal stands; appellate majority rejects applying Bishop here given lack of allegations tying Steinberg to Colorado and the availability of Florida statutory remedy |
Key Cases Cited
- Bishop v. Florida Specialty Paint Co., 389 So. 2d 999 (Fla. 1980) (adopts Restatement (Second) significant‑relationships test for choice‑of‑law in torts)
- Hertz Corp. v. Piccolo, 453 So. 2d 12 (Fla. 1984) (clarifies when choice‑of‑law analysis is required for substantive issues)
- Davis v. Monahan, 832 So. 2d 708 (Fla. 2002) (limits use of delayed‑discovery doctrine to certain causes; court holds delayed discovery inapplicable to unjust enrichment claims)
- Reimbursement Recovery, Inc. v. Indian River Mem’l Hosp., Inc., 22 So. 3d 679 (Fla. 4th DCA 2009) (standard on reviewing trial‑court factual findings for competent, substantial evidence)
- E & M Marine Corp. v. First Union Nat’l Bank, 783 So. 2d 311 (Fla. 3d DCA 2001) (discusses knowledge/authorization elements in restitution/unjust‑enrichment context)
- Extraordinary Title Servs., LLC v. Fla. Power & Light Co., 1 So. 3d 400 (Fla. 3d DCA 2009) (elements of unjust enrichment)
- Beltran, M.D. v. Vincent P. Miraglia, M.D., P.A., 125 So. 3d 855 (Fla. 4th DCA 2013) (limitations accrual for unjust enrichment claims)
- Miami Beach First Nat’l Bank v. Edgerly, 121 So. 2d 417 (Fla. 1960) (applies delayed‑discovery principles to recovery from innocent third parties)