P&M Corporate Finance, LLC v. Law Offices of David J. Stern, P.A.
0:15-cv-60736
S.D. Fla.Mar 16, 2016Background
- PMCF (Michigan LLC) provided investment-banking services to LODJS under a June 11, 2007 letter agreement that included an indemnity for attorneys’ fees and related costs arising from PMCF’s engagement.
- The Transaction closed January 15, 2010 when Chardan 2008 China Acquisition Corp. (renamed DJSP Enterprises, Inc.) acquired LODJS’s non-legal operations.
- After the closing, LODJS was investigated by the Florida Attorney General and wound down operations; Chardan later sued multiple parties, including PMCF, alleging losses from the Transaction.
- PMCF obtained summary judgment in the Chardan suit and now seeks indemnification from defendants for attorneys’ fees and costs and also pleads fraudulent transfer and tortious interference claims against various defendants.
- Defendants moved to dismiss PMCF’s Third Amended Complaint primarily as an impermissible shotgun pleading that fails to give adequate notice and improperly incorporates prior allegations into each count.
- The Court dismissed the Third Amended Complaint without prejudice for shotgun pleading, giving PMCF 30 days to file a cured amended complaint and instructing the Clerk to close the case.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Third Amended Complaint complies with Rules 8(a) and 10(b) | The complaint identifies which claims correspond to which defendants and is sufficiently specific | The complaint is a shotgun pleading: each count incorporates all prior allegations, burying relevant facts and giving inadequate notice | Dismissed: the complaint is a shotgun pleading that violates Rules 8 and 10(b); dismissal without prejudice and 30 days to amend |
| Whether incorporation-by-reference of prior counts suffices to plead distinct claims | Incorporation is acceptable because counts and targeted defendants are identified | Incorporation causes immaterial and irrelevant allegations to be included in later counts, forcing sifting | Court agreed with defendants: wholesale incorporation produced confusion and irrelevant material in counts |
| Whether defendants need more particularized factual pleading to respond | PMCF contends identified targets allow defendants to answer | Defendants contend they cannot discern which allegations support which claims against them | Court agreed with defendants; pleading failed to give adequate notice |
| Whether dismissal should be with or without prejudice | PMCF implicitly argues leave to amend should be permitted | Defendants asked for dismissal due to pleading defects; may have sought dismissal with prejudice in alternative | Court dismissed without prejudice and granted 30 days to amend |
Key Cases Cited
- Anderson v. Dist. Bd. of Trs. of Ctr. Fla. Cmty. Coll., 77 F.3d 364 (11th Cir. 1996) (defines shotgun pleading and requires claims give fair notice)
- Magluta v. Samples, 256 F.3d 1282 (11th Cir. 2001) (criticizes shotgun pleadings and their burden on courts)
- Strategic Income Fund, L.L.C. v. Spear, Leeds & Kellogg Corp., 305 F.3d 1293 (11th Cir. 2002) (discusses history of shotgun pleading problems)
- Weiland v. Palm Beach Cty. Sheriff’s Office, 792 F.3d 1313 (11th Cir. 2015) (identifies common types of shotgun pleadings and holding they fail to give adequate notice)
- Wagner v. First Horizon Pharm. Corp., 464 F.3d 1273 (11th Cir. 2006) (explains shotgun pleadings waste judicial resources and hinder efficient case management)