Ostrowski v. Ostrowski, 3:23-cv-30018

Background

In 2006 Jane Ostrowski purchased a Florida cooperative unit (Apartment 126) and Michael paid her $33,000 for what he alleges was a one‑third interest; Jane told Michael the three brothers would own it jointly and title would pass on her death.
In July 2015 Jane, then infirm, signed an Assignment making Jane and William joint tenants with right of survivorship; the Assignment was recorded in Palm Beach County and notarized by a relative.
Jane later became incapacitated and died in 2020; William served as personal representative of her estate. Michael learned of the recorded Assignment only after Jane's death and filed suit in January 2023.
Michael sued William in state court (removed to federal court on diversity) for conversion, breach of fiduciary duty, misrepresentation, and rescission, alleging William misled or took advantage of Jane to secure the Assignment.
William moved to dismiss under Rule 12(b)(6) (statute of limitations), Rule 9(b) (fraud pleading), and Rule 12(b)(7)/19 (failure to join Villas on the Ocean No. 1 as a necessary party); the court considered the recorded Assignment on the 12(b)(6) issue.
The court denied the motion to dismiss in full and directed a scheduling conference.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether claims are time‑barred (statute of limitations)	Michael says discovery rule applies because he lacked reason to know of injury in 2015; he sued within three years of learning of the Assignment.	William says the recorded Assignment was publicly available in 2015, so the claims accrued then and are untimely.	Court: Denied dismissal; plaintiff plausibly alleges he did not and reasonably could not know of the injury in 2015 so discovery rule may apply; accrual is fact question.
Sufficiency of fraud/misrepresentation pleading under Rule 9(b)	Michael alleges on July 28, 2015 William misrepresented his intentions or exploited Jane's incapacity; alleges who, what, when, where and supporting facts on belief.	William contends the fraud allegations are too vague and do not meet Rule 9(b).	Court: Denied dismissal; allegations (including date, place, actor, and supporting factual basis) satisfy Rule 9(b) to permit discovery.
Standing to assert breach of fiduciary duty / misrepresentation on behalf of estate	Michael invokes Mass. Gen. Laws ch. 230 § 5 as an interested heir able to enforce estate claims when personal representative is adverse.	William argues Michael lacks standing because no probate appointment was made (relying on Heavey).	Court: Denied dismissal; plaintiff plausibly alleges an interest in real property and that William, as personal representative and defendant, is unable to pursue the claim—statute permits action by interested heir for real property claims.
Whether Villas on the Ocean No. 1 is a necessary/indispensable party under Rule 19	Michael seeks rescission; says a judgment can be fashioned without joining Villas because rescission would revert title to the estate and Villas' rights remain unchanged.	William argues Villas must be joined because the Assignment contains Villas' consent clause and its bylaws restrict transfers—rescission could implicate Villas' rights.	Court: Denied dismissal; William failed to carry burden to show Villas is necessary under Rule 19(a); relief can be granted and Villas' interests would not be defeated by proceeding without it.

Key Cases Cited

Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading must contain factual matter showing plausible claim)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard)
Watterson v. Page, 987 F.2d 1 (1st Cir. 1993) (exceptions for considering documents not in complaint on Rule 12(b)(6))
United States v. San Juan Bay Marina, 239 F.3d 400 (1st Cir. 2001) (Rule 19 two‑part inquiry for necessary and indispensable parties)
Heavey v. Maloof, 901 N.E.2d 665 (Mass. 2009) (limits on heir/legatee suits under ch. 230 § 5 without formal appointment—but court distinguishes real property claims)
Taygeta Corp. v. Varian Assocs., Inc., 763 N.E.2d 1053 (Mass. 2002) (discussing accrual and discovery rule for tort claims)
Rodi v. Southern New England School of Law, 389 F.3d 5 (1st Cir. 2004) (Rule 9(b) and fraud pleading standards)