Landmark Funding, Inc. v. Chaluts
213 So. 3d 1078
| Fla. Dist. Ct. App. | 2017Background
- Landmark Funding, Inc. brought a member's derivative action on behalf of Naples Syndications, LLC, alleging it was a member at the time of suit and at the time of the alleged misconduct under the Florida LLC Act.
- The trial court dismissed the complaint for lack of standing, concluding Landmark was judicially estopped from asserting membership based on inconsistent statements by Landmark’s principal in earlier proceedings.
- The trial court relied on documents from a bankruptcy and prior lawsuits, treating them as impliedly incorporated into Landmark's complaint.
- Landmark appealed, arguing the dismissal was improper because the court considered materials beyond the four corners of the verified complaint and attachments.
- The Second District reviewed de novo whether dismissal was appropriate and whether judicial estoppel barred Landmark’s asserted standing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to bring derivative suit under Fla. Stat. § 605.0803 | Landmark alleged ultimate facts showing it was a member when suit filed and when misconduct occurred. | Landmark lacks standing based on prior inconsistent statements by its principal. | Complaint sufficiently pleaded standing; dismissal on standing was improper at motion-to-dismiss stage. |
| Use of external documents on motion to dismiss (implied incorporation) | Court should be limited to four corners of complaint and attachments; prior records not incorporated. | Prior proceedings' records are impliedly incorporated and may be considered. | Implied incorporation did not apply; trial court erred by considering those records on dismissal. |
| Application of judicial estoppel based on prior inconsistent positions | Prior inconsistent statements do not control where pleadings adequately allege standing; judicial estoppel requires additional elements. | Judicial estoppel bars Landmark from asserting membership due to earlier statements. | Judicial estoppel was not established at dismissal stage—trial court failed to find required elements (identity, success in prior position, prejudice). Resolution premature; may be raised later via summary judgment. |
| Proper procedural vehicle to resolve estoppel/standing disputes | Facts pled control at dismissal; summary judgment is appropriate to resolve disputed facts and defenses like estoppel. | Dismissal was proper because documentary record showed inconsistency. | Determination on estoppel/standing was premature on motions to dismiss; summary judgment may properly resolve factual disputes. |
Key Cases Cited
- Mortgage Elec. Registration Sys., Inc. v. Azize, 965 So. 2d 151 (Fla. 2d DCA 2007) (motion to dismiss reviewed de novo)
- McWhirter, Reeves, McGothlin, Davidson, Rief & Bakas, P.A. v. Weiss, 704 So. 2d 214 (Fla. 2d DCA 1998) (motions to dismiss test legal sufficiency and are confined to complaint)
- Neapolitan Enters., LLC v. City of Naples, 185 So. 3d 585 (Fla. 2d DCA 2016) (court limited to four corners of complaint and incorporated attachments on dismissal)
- Dingle v. Dellinger, 134 So. 3d 484 (Fla. 5th DCA 2014) (complaint pleading ultimate facts can establish standing)
- Save Homosassa River All., Inc. v. Citrus Cty., 2 So. 3d 329 (Fla. 5th DCA 2008) (requirement that complaint allege ultimate facts showing standing)
- Veal v. Voyager Prop. & Cas. Ins. Co., 51 So. 3d 1246 (Fla. 2d DCA 2011) (implied incorporation where complaint relied on prior agreement for standing)
- One Call Prop. Servs., Inc. v. Sec. First Ins. Co., 165 So. 3d 749 (Fla. 4th DCA 2015) (implied incorporation appropriate where complaint references and bases standing on an external policy)
- Blumberg v. USAA Cas. Ins. Co., 790 So. 2d 1061 (Fla. 2001) (elements and application of judicial estoppel)
- Grau v. Provident Life & Accident Ins. Co., 899 So. 2d 396 (Fla. 4th DCA 2005) (judicial estoppel requires identity of parties or an exception, and proof of success and prejudice)