Larry Wireman v. Park National Corporation
20-14096
| 11th Cir. | Jul 20, 2021Background
- Larry and Judy Wireman borrowed tens of millions from Vision Bank (2006–2011); Vision Bank’s interest was later acquired by SE Property Holdings after a 2012 merger.
- The Wiremans defaulted; in 2018 SE Property Holdings and Larry executed four modified promissory notes: SE Property Holdings waived about $13,000,000 in default interest/late fees if Larry paid principal, accrued interest, attorneys’ fees, and collection costs by April 30, 2018.
- In March 2018 the Wiremans paid nearly $5 million that included over $1 million in “unspecified fees”; SE Property Holdings later demanded additional attorneys’ fees, including a percentage-based collection fee charged by affiliate Southeast Property Solutions; the Wiremans allege they paid these fees under duress to preserve the waiver.
- The Wiremans sued SE Property Holdings, Southeast Property Solutions, and Park National (parent) in 2019 asserting breach of contract, fraud, unjust enrichment, and civil conspiracy (and a breach of fiduciary duty claim they did not appeal).
- The district court dismissed all claims for failure to state a claim and concluded Judy lacked standing; it dismissed Judy’s claims with prejudice. On appeal, the Eleventh Circuit affirmed dismissal of Larry’s claims but remanded to direct dismissal of Judy’s claims without prejudice (standing is jurisdictional).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract — parties to notes (Park National & Southeast Prop. Solutions) | Wireman: release language and affiliation make Park National & Southeast Prop. Solutions liable under the notes | Defs: only parties named in the promissory notes (Larry and SE Property Holdings); affiliates/releases do not make them parties | Court: Park National and Southeast Prop. Solutions were not parties to the notes; no breach by nonparties |
| Breach of contract — entitlement to fees (SE Property Holdings) | Wireman: SEPH sought/accepted unspecified fees and a percentage collection fee not authorized by the contract; payment was under duress | SEPH: notes expressly required payment of principal, accrued interest, "all attorneys’ fees and costs" and collection costs; Wireman pleaded no facts showing fees exceeded amounts authorized or costs of collection | Court: Wireman failed to plausibly allege SEPH breached the modification; payments fit within contract terms; duress theory rejected |
| Fraud (Rule 9(b) particularity) | Wireman: defendants misrepresented/failed to disclose fees; facts supporting fraud largely within defendants’ control | Defs: plaintiffs’ allegations lack particularity about who, when, what, where; Rule 9(b) must be satisfied | Court: Dismissed fraud claim for failure to plead who made misrepresentations, when, and specifics; no basis to relax Rule 9(b) |
| Unjust enrichment | Wireman: may plead unjust enrichment alongside breach (Rule 8 permits inconsistent claims) | Defs: an express, undisputed contract governs; unjust enrichment unavailable where an enforceable contract exists | Court: Claim barred under Alabama law because an express contract existed and was not disputed |
| Civil conspiracy | Wireman: conspiracy survives because fraud alleged | Defs: conspiracy requires underlying tort; without a viable tort there is no conspiracy | Court: Dismissed conspiracy because underlying tort claims (fraud, etc.) failed |
| Judy’s standing | Judy: joined claims with Larry | Defs: Judy not a party to promissory notes and not an intended third-party beneficiary | Court: Judy lacked standing; dismissal for lack of subject-matter jurisdiction must be without prejudice — remanded to reenter dismissal without prejudice |
Key Cases Cited
- Am. Dental Ass’n v. Cigna Corp., 605 F.3d 1283 (11th Cir. 2010) (standards for Rule 12(b)(6) review)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading must contain factual matter to state a plausible claim)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard)
- Lab Corp. of Am. v. United States ex rel. Clausen, 290 F.3d 1301 (11th Cir. 2002) (Rule 9(b) particularity and when relaxation is permitted)
- Bradley v. Franklin Collection Serv., Inc., 739 F.3d 606 (11th Cir. 2014) (discussed percentage-based collection fees under FDCPA context)
- Shaffer v. Regions Fin. Corp., 29 So. 3d 872 (Ala. 2009) (elements of breach of contract under Alabama law)
- Ligon Furniture Co., Inc. v. O.M. Hughes Ins. Co., 551 So. 2d 283 (Ala. 1989) (nonparty to contract cannot be held to its terms)
- State ex rel. Riley v. Lorillard Tobacco Co., Inc., 1 So. 3d 1 (Ala. 2008) (contract interpretation and giving effect to plain language)
- Univalor Tr., SA v. Columbia Petroleum, LLC, 315 F.R.D. 374 (S.D. Ala. 2016) (unjust enrichment unavailable where express contract governs)
- Blackmon v. Renasant Bank, 232 So. 3d 224 (Ala. 2017) (noting unjust-enrichment doctrine barred by express contract)
- Cone Corp. v. Fla. Dep’t of Transp., 921 F.2d 1190 (11th Cir. 1991) (standing dismissal treated as jurisdictional)
- Stalley ex rel. U.S. v. Orlando Reg’l Healthcare Sys., Inc., 524 F.3d 1229 (11th Cir. 2008) (dismissal for lack of subject-matter jurisdiction should be without prejudice)
- Willis v. Parker, 814 So. 2d 857 (Ala. 2001) (civil conspiracy requires an underlying tort)