ORDER
After conducting a review of the pleadings, files, and records in this case and the Findings, Conclusions, and Recommendations of the United States Magistrate Judge in accordance with 28 U.S.C. § 636(b)(1), I am of the opinion that the Findings, Conclusions, and Recommendations of the Magistrate Judge are correct, and they are hereby accepted as the findings of the Court. Defendant Yolanda Suarez’s motion to dismiss [13] is denied in part and granted in part.
REPORT AND RECOMMENDATION
Defendant Yolanda Suarez (“Suarez”) has moved to dismiss (Motion to Dismiss, Doc. 13) the First Amended Complaint Against Yolanda Suarez (“Complaint,” Doc. 12) pursuant to Fed. R. Civ. P. 12(b)(6). Suarez’s primary contention is that Florida law, and not Texas law, should control the claims made by the Receiver Ralph S. Janvey and the Official Stanford Investors Committee (collectively, “Plaintiffs”). According to Suarez, under Florida law the Plaintiffs’ claims warrant dismissal because they fail to meet
I. Background
Plaintiffs’ action against Suarez arises out of the Securities and Exchange Commission’s (the ‘SEC’) ongoing securities fraud action against R. Allen Stanford, his associates, and various entities under Stanford’s control (the ‘Stanford Defendants’). As part of that litigation, this Court appointed a receiver (the ‘Receiver’) and authorized him to commence any actions necessary to recover assets of the Receivership Estate.
Janvey v. Alguire,
A. The Parties
The parties to this case are:
1. Ralph S. Janvey (“Plaintiff Janvey”), the Court-Appointed Receiver. Plaintiff Janvey was appointed by the Court as Receiver of the Receivership Estate stemming from Stanford. The Court vested Janvey with “the full power of an equity receiver under common law as well as .... [authorization] to immediately take and have complete and exclusive control, possession, and custody of the Receivership Estate and to any assets traceable to assets owned by the Receivership Estate. Receivership Order at 3-4. The Court further instructed Janvey to “[e]ollect, marshal, and take custody, control, and possession of all the funds, accounts, mail, and other assets of, or in the possession or under the control of, the Receivership Estate, or assets traceable to assets owned or controlled by the Receivership Estate, wherever situated.” Id. at 4. He was also instructed to file “such actions or proceedings to impose a constructive trust, obtain possession, and/or recover judgment with respect to persons or entities who received assets or records traceable to the Receivership Estate.” Id. at 5.
2. The Official Stanford Investors Committee (“Plaintiff OSIC”). Plaintiff OSIC was created by the Court’s Order of Aug. 10, 2010 (Doc. 1149) (“OSIC Order”) in Stanford. It is an organization composed of “individual Stanford investors or attorneys representing Stanford investors.” Order of Sept. 24, 2012 (Doc. 33) (“IMG Order”) at 3, in Janvey v. IMG Worldwide, Inc., Civil Action No. 3:11-CV-0117-N (N.D. Tex., filed Jan. 18, 2011) (citing OSIC Order at 3-4). Here, as in IMG Worldwide, “[the] OSIC seeks to prosecute this action, with the consent of the Receiver, in order to obtain funds for the benefit of the Receivership Estate.” IMG Order at 3.
3. Yolanda Suarez. Defendant Suarez “was the Chief of Staff of Stanford Financial Group Company and was the Secretary and a member of the board of directors for Stanford Group Holdings, Inc.” Complaint (Doc. 12, ¶ 3). At the time of Plaintiffs’ Complaint, Suarez resided in Miami, Florida. Id. (Doc. 12, ¶ 15).
B. Allegations in the Complaint
The Plaintiffs seek disgorgement of Certificate of Deposit (“CD”) proceeds that
II. Choosing the Applicable Law to Apply
Before deciding which state’s substantive law should control the issues raised by the parties here, “the Court must first determine which choice-of-law rules should be applied.” In re Soporex, Inc.,
Suarez urges application of Florida law, whereby Florida’s Uniform Fraudulent Transfer Act (“FUFTA”) would control Plaintiffs’ claims concerning fraudulent transfer and attorneys’ fees, and other applicable Florida law would control Plaintiffs’ unjust enrichment claim. Motion to Dismiss (Doc. 13 at 5). In support of this contention, Suarez submits that “the alleged fraudulent transfers were made by Stanford Financial Group Company, a Florida entity, to Ms. Suarez, a Florida resident, in Florida. The parties’ business relationship was centered in Florida.” Id. (Doc. 13 at 5). Suarez offers no other factual information why Florida law should control. She supports her legal argument by citing to a recent order in which Judge Godbey applied Florida law to a conversion claim in a proceeding involving Plaintiff Janvey and the Stanford Parties. Id. (Doc. 13 at 5 (citing “Reeves-Stanford Order” at Doc. 22 pp. 21-22, in Janvey v. Reeves-Stanford, Civil Action No. 3:09-cv-02151-N-BL (N.D. Tex., filed Nov. 18, 2011))). The remainder of Suarez’s Motion to Dismiss analyzes the alleged deficiencies in the Plaintiffs’ Complaint under Florida law.
Plaintiffs urge the Court to apply Texas law to their claims. Plaintiffs’ Response (Doc. 14, ¶¶ 6-7). Plaintiffs support their position by citing to a recent opinion of this Court where it observed that the Texas Uniform Fraudulent Transfer Act (“TUFTA”) “effectively has become law of the case” in a proceeding involving Plaintiff Janvey’s claims against former employees of the Stanford Parties. Id. (Doc. 14, ¶ 6 (quoting Janvey v. Alguire,
At the onset, it is notable that the pleading standards concerning claims for fraudulent transfers and unjust enrichment are substantially the same under either Florida or Texas law, and application of either state’s law would reach the same result. However, Texas and Florida law depart in their treatment of attorneys’ fees, and treatment of statutes of limitations and equitable tolling for claims pertaining to unjust enrichment. Accordingly, the issue of which state’s law to apply warrants this Court’s attention.
As noted by both parties, Texas courts utilize the “most significant relationship” test to determine which state’s law applies to a particular substantive issue. See Coghlan v. Wellcraft Marine Corp.,
Absent such sufficient information, “the failure to provide adequate proof of choice of law ... results in a presumption that the law of the foreign jurisdiction is identical to the law of Texas.” Alguire,
Plaintiffs’ attempted invocation of the “law of the case” doctrine is similarly unpersuasive — namely because the doctrine does not apply to the circumstances here. Under the law of the case doctrine, “a decision of a legal issue or issues by an appellate court establishes the ‘law of the case’ and must be followed in all subsequent proceedings in the same case in the trial court or on a later appeal.... ” United States v. Vahlco Corp.,
Suarez submits a mere two sentences to factually support her position that Florida law should govern the substantive issues in dispute. See Motion to Dismiss (Doc. 13 at 5). This attempt to demonstrate that another state’s law should apply arguably proceeds a step further than the arguments presented to the Court in Alguire,
III. The Complaint Complies with Rules 12(b)(6) and 8(a)
Suarez argues the complaint is deficient under Rules 12(b)(6) and 8(a). While it is not controlling under the law of the case doctrine, Alguire addressed similar arguments and provides excellent guidance here. See Alguire,
A Rule 12(b)(6) Standard
In Alguire, the Court summarized the Rule 12(b)(6) standard:
When faced with a Rule 12(b)(6) motion to dismiss, the Court must determine whether the plaintiff has asserted a legally sufficient claim for relief. Blackburn v. City of Marshall,42 F.3d 925 , 931 (5th Cir.1995). According to the Supreme Court, a viable complaint must include “enough facts to state a claim to relief that is plausible on its face,” i.e., “enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of [the claim or element].” Bell Atl. Corp. v. Twombly,550 U.S. 544 , 556, 570,127 S.Ct. 1955 ,167 L.Ed.2d 929 (2007); see also Ashcroft v. Iqbal,556 U.S. 662 ,129 S.Ct. 1937 , 1949-50,173 L.Ed.2d 868 (2009). A plaintiff is required to provide “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly,550 U.S. at 555 ,127 S.Ct. 1955 . “Factual allegations must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Id. (internal citations omitted)....
In ruling on a Rule 12(b)(6) motion, a court generally limits its review to the face of the pleadings, accepting as true all well-pleaded facts and viewing them in the light most favorable to the plaintiff. Spivey v. Robertson,197 F.3d 772 , 774 (5th Cir.1999).
Alguire,
B. The TUFTA Claim Satisñes Rule 12(b)(6)
The Complaint sufficiently identifies TUFTA as the “applicable fraudulent transfer law.” Complaint (Doc. 12, ¶ 42) (“under applicable fraudulent transfer law.... See, e.g., Tex. Bus. & Com.Code Ann. § 24.013 (Vernon 2009).”); see generally Tex. Bus. & Com.Code Ann. § 24.001 et seq.; see also Alguire,
The Court has explained that TUFTA operates to void certain fraudulent “transfers,” which the statute defines in relevant part as “every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with an asset or an interest in an asset, and includes payment of money.” Tex. Bus. & Com.Code § 24.002(12). TUFTA considers several types of transfers to be fraudulent. See id. §§ 24.005(a) (three types); 24.006 (two types).
Alguire,
Here, as in Alguire, one of Plaintiffs’ claims concerns fraudulent transfers under section 24.005(a)(1) because they allege “Stanford Parties made the payments to Suarez with actual intent to hinder, delay, or defraud Stanford’s creditors.” Complaint (Doc. 12, ¶ 37); see id. at 671 (quoting nearly identical language from the Plaintiffs’ Alguire Complaint). Regarding this “actual fraud” section of TUFTA, Alguire went on to explain that
Section 24.005(a)(1) provides that a transfer “is fraudulent as to a creditor, whether the. creditor’s claim arose before or within a reasonable time after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation ... with actual intent to hinder, delay, or defraud any creditor of the debtor.” “In determining [a debtor’s] actual intent,” courts may consider, “among other factors!,] ... whether ... the value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred” and if “the debtor was insolvent or became insolvent shortly after the transfer was made or the obligation was incurred.” Tex. Bus. & Com.Code § 24.005(b)(8) & (b)(9). Notably, TUFTA considers a debtor to be insolvent “if the sum of the debtor’s debts is greater than all of the debtor’s assets at a fair valuation.” Id. § 24.003(a).
The Fifth Circuit considers a Ponzi scheme to be, “ ‘as a matter of law, insolvent from its inception.’ ” [Janvey v.] Alguire, 647 F.3d [585] at 597 [(5th Cir.2011) ] (quoting Warfield v. Byron,436 F.3d 551 , 559 (5th Cir.2006)); see also Quilling v. Schonsky,247 Fed.Appx. 583 , 586 (5th Cir.2007) (citation omitted). The Receiver therefore may establish fraudulent intent by showing that the Stanford enterprise operated as a Ponzi scheme. See Warfield,436 F.3d at 558 (“The Receiver’s proof that [the debtors] operated as a Ponzi scheme established] the fraudulent intent behind transfers made by [the Receivership entities].” (citing Scholes v. Lehmann,56 F.3d 750 , 757 (7th Cir.1995))); see also Donell v. Kowell,533 F.3d 762 , 770 (9th Cir.2008) (“[T]he mere existence of a Ponzi scheme is sufficient to establish actual intent to defraud.”) (citations and internal quotation marks omitted) (alteration in original)....
For defendants facing a section 24.005(a)(1) “actual intent” claim, TUF-TA provides a statutory defense if the defendants “took in good faith and for a reasonably equivalent value.” Tex. Bus. & Com.Code § 24.009(a). A transferee invoking this defense has the burden to show both objective good faith and the exchange of reasonably equivalent value. See, e.g., Hahn v. Love,321 S.W.3d 517 , 526 (Tex.App.-Houston [1st Dist.] 2009, pet. denied) (citations omitted). The transferee’s knowledge is irrelevant to determining whether transfers were made with an intent to defraud. See, e.g., Schonsky,247 Fed.Appx. at 586 . Nor does it matter that the transferee no longer possesses the funds giving rise to the TUFTA claim. A TUFTA plaintiff seeks to recover “judgment for the value of the asset transferred,” Tex. Bus. & Com.Code § 24.009(b), not the specific asset itself, which in many cases left the defendant’s possession long ago. Thus, spending Ponzi scheme proceeds does not shield a recipient of fraudulently-transferred funds from liability. See, e.g., Donell,533 F.3d at 776 & n. 9 (noting, in case where a receiver brought an UFTA claim against a recipient of Ponzi scheme funds, that disgorgement may occur “years after the money has been received and spent” and that such a result is “yet another common tragic result of a Ponzi scheme”).
Id. at 672-73 (footnotes omitted).
As in Alguire, Plaintiffs here also state a claim for an actual intent fraudulent transfer. They allege that the Stanford Parties operated a Ponzi scheme, pleading the actual-intent-to-defraud element necessary to state a claim under section 24.005(a)(1). See Complaint (Doc. 12, ¶ 37); see also Alguire,
Plaintiffs also state a claim for constructive fraudulent transfer. Section 24.006 of TUFTA applies to constructive fraudulent transfer claims. See, e.g., In re Soza,
As stated above, Plaintiffs alleged that the Stanford Parties operated a Ponzi scheme, see Complaint (Doc. 12, ¶ 37), which the Fifth Circuit considers “as a matter of law, insolvent from its inception.’ ” Alguire,
in return. Plaintiffs need do no more.”). C. By Satisfying Rule 12(b)(6), Plaintiffs’ TUFTA Claims also Satisfy Rule 8(a)(2)
Suarez objects to the Complaint for failing to comply with Rule 8(a)(2), which requires a complaint to make “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). Suarez attacks the Complaint on the basis that “Plaintiffs’ bare, unsupported allegations are neither well-pleaded, nor plausible,” and that the Complaint “fails to provide ‘fair notice of what the claim is and the grounds upon which it rests.’ ” Motion to Dismiss (Doc. 13 at 9). However, as described above, Plaintiffs bring TUFTA claims that satisfy Rule 12(b)(6); they thereby also satisfy Rule 8(a)(2). See Alguire,
As an additional point worth addressing, Suarez challenges Plaintiffs’ Complaint as being deficient under Florida’s interpretation of its fraudulent transfer laws because “a plaintiff must show that he or she has a ‘claim’ which qualifies the party as a ‘creditor.’ ” Motion to Dismiss (Doc. 13 at 9) (quoting In re Wiand, No. 8:05-CV-1856 T-27-MSS,
In Janvey v. Democratic Senatorial Campaign Comm., Inc.,
While standing is not contested here, Democratic Senatorial Campaign estab
Applying these definitions to the allegations in the Complaint, Suarez’s assertion that Plaintiffs have failed “to plead the requisite ‘debtor,’ ‘creditor[,]’ and ‘claim’ elements of a FUFTA [or TUFTA] claim” must fail.
D. Plaintiffs state a claim for the equitable remedy of unjust enrichment under Texas law
In Alguire, this Court also considered a motion to dismiss a claim for relief based on the doctrine of unjust enrichment. See Alguire,
“Unjust enrichment is an equitable principle holding that one who receives benefits unjustly should make restitution for those benefits,” regardless of whether the defendant engaged in wrongdoing. Texas Integrated Conveyor Sys., Inc. v. Innovative Conveyor Concepts, Inc.,300 S.W.3d 348 , 367 (Tex.App.-Dallas 2009, pet. denied) (citations omitted). “Unjust enrichment occurs when the person sought to be charged has wrongfully secured a benefit or has passively received one which it would be unconscionable to retain.” Id. (citation omitted). “A party may recover under the unjust enrichment theory when one person has obtained a benefit from another by fraud, duress, or the taking of an undue advantage.” Heldenfels Bros. v. City of Corpus Christi,832 S.W.2d 39 , 41 (Tex.1992) (citations omitted).
Alguire,
The Court’s explanation went on to discuss a possible conflict among Texas courts concerning the recognition of an unjust enrichment claim as an independent cause of action or whether a plaintiff must instead rely on an equitable common law claim for money had and received. Id. at 673-74. After examining Texas authority on both sides of the supposed split, the Court concluded that both claims were substantively identical, and it held “[r]egardless of whether Texas law allows an ‘unjust enrichment’ claim or requires pleading a claim for money had and received, the Receiver states claims under either ‘applicable law.’ ” Id. at 674. The Court based its conclusion on the concept that Receiver Janvey’s claims, taken together, alleged “the Employee Defendants obtained a benefit from the Stanford Defendants’ scheme that equity dictates they cannot retain justly.” Id. at 675.
Just as in Alguire, Plaintiffs here present an alternative claim that they are entitled to “to disgorgement of the CD Proceeds ... pursuant to the doctrine of unjust enrichment under applicable law.” Complaint (Doc. 12, ¶ 46). In other similarity to Alguire, this claim is also brought against a former employee of the Stanford Defendants who is alleged to have acted in “furthering the Ponzi scheme and helping it endure____” Id. (Doc. 12, ¶ 41). Like the defendants in Alguire, Suarez is confronted with an allegation that she received compensation in the form of CD proceeds that stemmed from funds contributed by defrauded investors. Compare Complaint (Doc. 12, ¶ 38) (alleging “[t]he Stanford Parties were running a Ponzi scheme and paid Suarez with funds taken from unwitting SIB CD investors.”), with Alguire,
In sum, these contentions “allege that [Suarez] obtained a benefit from the Stanford Defendants’ scheme that equity dictates [she] cannot retain justly.” See Alguire,
IY. The Complaint Complies With Rule 9(b)
Suarez contends that Plaintiffs’ fraudulent transfer and unjust enrichment claims are subject to Fed. R. Civ. P. 9(b), and fail to comply with the heightened pleading requirements under that rule. Motion to Dismiss (Doc. 13 at 6). Suarez relies on Florida law in support of her position but in doing so she fails to direct the Court’s attention to any controlling Fifth Circuit case law in support of her legal argument.
Regarding the applicability of Rule 9(b) to fraudulent transfer claims under TUFTA, once again Suarez’s position bears many similarities to the stance taken by the Alguire defendants. There, the court stated that
The [defendants] provide no controlling Fifth Circuit authority that applies a heightened pleading requirement to TUFTA claims. The issue appears to be an open question in the Fifth and some other circuits. See, e.g., Biliouris,559 F.Supp.2d at 736 (noting that the Fifth Circuit has not addressed the effect of Rule 9(b) on TUFTA claims (citing Quilling v. Stark,2006 WL 1683442 , at *5 (N.D.Tex.2006) (Lindsay, J.))); Wing v. Horn,2009 WL 2843342 , at *3 (D.Utah 2009) (noting that “[t]he applicability of Rule 9(b) to UFTA claims [was] an issue of first impression in the Tenth Circuit”). The courts that have considered the matter have arrived at different conclusions, often by drawing a distinction between intentional and constructive fraudulent transfer claims. See, e.g., Kranz v. Koenig,240 F.R.D. 453 , 455-56 (D.Minn.2007) (collecting cases).
“[T]he Court can find no principled reason for applying Rule 9’s pleading requirements to ... the Receiver’s fraudulent transfer claims” for the same reasons given by the Wing Court. Wing,2009 WL 2843342 , at *5. In the fraudulent transfer context
[t]here is no allegation that the [defendant committed any act of fraud; indeed, the defendant’s conduct is simply not an element of the Receiver’s claim. Furthermore, the Court finds that the distinction between intentional fraudulent transfer and constructive fraudulent transfer claims drawn by other courts addressing the applicability of Rule 9 to fraudulent transfer cases is not helpful in Ponzi scheme cases in which “actual intent” can be inferred by virtue of the transferor’s insolvency as a matter of law. Finally, the Court finds that this inference of fraudulent intent applies to all transfers from a Ponzi scheme, regardless of the defendant’s characterization of them as ordinary business transactions.
Id.
This conclusion comports with a fairly recent Northern District of Texas TUF-TA case. See GE Capital Commercial, Inc. v. Wright & Wright, Inc.,2009 WL 5173954 , at *10 (N.D.Tex.2009) (Lindsay, J.) (“[Plaintiffs have] not alleged fraud against Plains Capital or Moving Defendants, which is the contemplation of Rule 9(b). Plaintiffs have merely alleged that Moving Defendants were the recipient of funds fraudulently obtained. Nothing in the complaint or record indicates that Moving Defendants committed any fraudulent act that caused the funds to be transferred.”) (emphasis in original). Indeed, it aligns with several recent cases involving other states’ UFTAs. Accordingly, the Receiver’s TUF-TA claim need not satisfy Rule 9(b).
[assuming, as the Court must that the factual allegations in the [Plaintiffs’] Complaint are true: The Stanford Defendants operated a Ponzi scheme that [Suarez] furthered. Because the scheme had few, if any, business components untouched by the sale of fraudulent investment vehicles, [Suarez] necessarily received compensation in the form of funds derived from unsuspecting investors’ cash infusions into the Ponzi scheme. This makes [Suarez’s] compensation assets that are potentially traceable to the Receivership Estate. [Plaintiffs] assert[] that [Suarez] therefore holds and controls — or previously disposed of — proceeds that are traceable to the Receivership Estate. And, [Plaintiffs] identify the specific amount of CD Proceeds related compensation [Suarez allegedly received, and have therefore] apprised [Suarez] of a sufficiently “substantial amount of particularized information about [their] claim in order to enable [Suarez] to understand it and effectively prepare a responsive pleading and an overall defense of the action [ ].” 5A Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 1296 at 39 (3d ed.2004).
Id. (footnotes omitted). Therefore, here as in Alguire, the Court should deny Suarez’s Rule 9(b) challenge to Plaintiffs’ TUFTA claims presented in the Complaint.
Alguire is also dispositive of Suarez’s contention that Plaintiffs’ unjust enrichment claims should be dismissed under Rule 9(b). Suarez objects that Plaintiffs’ “Complaint contains no facts supporting any of [the elements of a fraudulent transfer claim under Florida law].” Motion to Dismiss (Doc. 13 at 9). In Alguire, the Court stated that an unjust enrichment claim does not depend upon a defendant
having engaged in fraudulent conduct and instead focuses simply on whether [Defendant] received a benefit that would be unconscionable to retain. Texas Integrated [Conveyor Sys., Inc. v. Innovative Conveyor Concepts, Inc.], 300 S.W.3d [348], 367 [ (Tex.App.-Dallas 2009, pet. denied)] Even if Rule 9(b) applies to the unjust enrichment claim, [Plaintiffs’] Complaint adequately states facts alleging the “who, what, when, where, why, and how” supporting [Plaintiffs’] belief that allowing [Defendant] to retain the identified forms of CD Proceeds would constitute the “obtaining] of a benefit from another by ... the taking of an undue advantage.” Heldenfels Bros. [Inc. v. City of Corpus Christi], 832 S.W.2d [39], 41 [(Tex. 1992)].
V. Timeliness of the Complaint Under the Relevant Statutes of Limitations
Relying on Florida law, Suarez seeks dismissal of Plaintiffs’ fraudulent transfer and unjust enrichment claims as either time-barred or partially time-barred. Motion to Dismiss (Doc. 13 at 10-13). Suarez fixes her attention on the date of December 17, 2010 for purposes of her argument, and both sides agree that is the date this action was filed. Motion to Dismiss (Doc. 13 at 12); Plaintiffs’ Response (Doc. 14, ¶ 20). Other relevant dates for the Court to consider are February 16, 2009, the date Plaintiff Janvey was appointed as Receiver, and August 10, 2010, the date Plaintiff OSIC was formed. See Plaintiffs’ Response (Doc. 14, ¶ 20). Although Suarez again relies on Florida law to support her position, she has yet to provide sufficient information (as discussed above) to demonstrate the applicability of Florida law. Hence, her limitations arguments will be addressed under Texas law and Fifth Circuit jurisprudence, bearing in mind the substantial similarities between TUFTA and FUFTA. When applying Texas substantive law, as the aforementioned presumption here requires, “there is no question ... that Texas courts would apply their own state’s statute of limitations.” Nationwide Bi-Weekly Admin., Inc. v. Belo Corp.,
Within the Fifth Circuit, it is well-settled that “[a] statute of limitations may support dismissal under Rule 12(b)(6) where it is evident from the plaintiffs pleadings that the action is barred and the pleadings fail to raise some basis for tolling or the like.” Jones v. Alcoa, Inc.,
For reasons explained in greater detail below, it is necessary to analyze the limitations periods for Plaintiffs’ actual and constructive fraudulent transfer claims separately. In general terms, however, the thrust of Suarez’s argument is that “fraudulent transfer claims must be brought within four years from the date of the transfer or such claims are extinguished and no longer exist.” Motion to Dismiss (Doc. 13 at 10). Because Plaintiffs allege that some transfers were made to Suarez prior to December 17, 2006, in Suarez’s view these transfers (totaling $433,500.00) are completely time-barred as falling outside of FUFTA’s four-year limitations period. Id. (Doc. 13 at 11). Further, because the face of Plaintiffs’ Complaint categorizes and groups certain transfers within approximate date ranges — i.e., claiming Suarez received $898,951.19 in CD proceeds from her own CDs at unspecified times between December 12, 2003 and December 29, 2008— Suarez argues that these transfer group
A. The actual intent fraudulent transfer claim is timely under TUFTA’s one-year discovery rule
Suarez recognizes that actual intent fraudulent transfer claims are subject to a one-year discovery period, which she believes began to run on February 16, 2009, the date Plaintiff Janvey was appointed as Receiver. Motion to Dismiss (Doc. 13 at 12). In Suarez’s view, “Stanford’s books and records clearly show the existence of such transfers and the Plaintiffs cannot plausibly argue that they could not have reasonably discovered the transfers before February 15, 2010.” Id. (Doc. 13 at 12). As a result, according to Suarez “the Complaint is devoid of factual allegations necessary to demonstrate that Plaintiffs’ fraudulent transfer claims are not time-barred.” ' Id. (Doc. 13 at 13).
Suarez’s argument to dismiss Plaintiffs’ actual intent fraudulent transfer claim is foreclosed by Janvey v. Democratic Senatorial Campaign Comm., Inc.,
Under TUFTA, a fraudulent-transfer claim is “extinguished” if not brought “within four years after the transfer was made ... or, if later, within one year after the transfer ... was or could reasonably have been discovered by the claimant.” Tex. Bus. & Com.Code § 24.010(a)(1). With respect to the latter portion of the statute, the discovery rule, Texas courts of appeals have held that section 24.010(a)(1) requires that a fraudulent-transfer claim be filed within one year of when the fraudulent nature of the transfer was or reasonably could have been discovered. See, e.g., Duran v. Henderson,71 S.W.3d 833 , 839 (Tex.App.[-Texarkana] 2002, [pet. denied]). In other words, “[when] all the elements of the cause of action for fraud are discovered or should have been discovered,” the cause of action will accrue. See Freitag v. McGhie,133 Wash.2d 816 ,947 P.2d 1186 , 1190 (1997) (interpreting Washington’s UFTA); accord Duran,71 S.W.3d at 839 ; see also Tex. Bus. & Com.Code § 24.012 (“[TUFTA] shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of [TUF-TA] among states enacting it ”) (emphasis added). Therefore, under Texas appeals — courts decisions, the limitations period does not begin to run upon the discovery of the transfer alone. Instead, a claim under section 24.005(a)(1) of TUFTA has been held to accrue only when- the claimant discovers or reasonably could have discovered the fraudulent nature of the conveyance. See Duran,71 S.W.3d at 839 . As the Duran court explained, “[t]he discovery rule provides that a claim for fraud does not accrue, and thus the limitation period does not begin to run, until the fraud is discovered, or in the exercise of reasonable diligence should have been discovered.” Id. (emphasis added). Nor isthis unique to TUFTA; rather, the majority of jurisdictions that have addressed the issue have similarly interpreted the same UFTA provision. For example, in State Farm Mutual Automobile Insurance Co. v. Cordua, the court surveyed cases interpreting UFTA’s discovery rule — including Duran v. Henderson — and concluded that “the majority of other jurisdictions have consistently held that the one-year savings provision does not begin to accrue until the creditor discovers or could have reasonably discovered the nature of the fraudulent transfer.” 884 F.Supp.2d 301 , 307 (E.D.Pa.2011).
Id. at 194-95 (emphasis in original and footnote omitted). Based upon the above authorities, the court made an Erie guess “that the Texas Supreme Court would conclude that section 24.010(a)(1) of TUFTA requires that a fraudulent-transfer claim must be filed within one year after the fraudulent nature of the transfer is discovered or reasonably could have been discovered.” Id. at 195.
The face of the Complaint alleges Plaintiff Janvey was able to discover the transfers at issue only “after R. Allen Stanford and his accomplices were removed from control of the Stanford entities and after a time-consuming and extensive review of thousands upon thousands of paper and electronic documents relating to the Stanford entities.” Complaint (Doc. 12, ¶¶ 7 & 44). They also pleaded that Plaintiff OSIC “could not have been aware of any of the transactions involving CD Proceeds paid to Suarez until after its formation on August 10, 2010, at the earliest.” Id. (Doc. 12, ¶ 44). Plaintiffs state the Stanford Defendants took steps to conceal their fraud and “SIB’s accountants reverse-engineered the Bank’s financial statements to reflect investment income that SIB did not actually earn.” Id. (Doc. 12, ¶¶ 25-26). Plaintiffs conclude by pleading “the discovery rule and equitable tolling principles apply to any applicable limitations period.” (Doc. 12, ¶ 44).
According to Democratic Senatorial Campaign, mere access to available information cannot support Suarez’s argument that Plaintiffs reasonably could have discovered the fraudulent transfers — thus triggering the discovery period — particularly when the information rises to the complexity present in this case. See Democratic Senatorial Campaign,
Therefore, Plaintiffs actual intent fraudulent transfer claim should not be dismissed as either time-barred or partially time-barred because the face of the Complaint demonstrates compliance with the one-year discovery rule of section 24.010(a)(1).
B. Portions of Plaintiffs constructive fraud claim are untimely under TUFTA
Plaintiffs’ constructive fraud claim brought under Tex. Bus. & Com.Code Ann. § 24.006(a) — that Suarez received CD proceeds while the Stanford Parties were insolvent and did not provide reasonably equivalent value in return — is another matter. Importantly, Democratic Senatorial Campaign did not address claims for
Section 24.010(a)(2) of TUFTA expressly references constructive fraud claims brought under section 24.006(a), and states that such an action is extinguished unless it is brought “within four years after the transfer was made or the obligation was incurred.” Tex. Bus. & Com.Code Ann. § 24.010(a)(2). Unlike the preceding subsection (a)(1), which only references actual intent fraud claims brought under section 24.005(a)(1), section 24.010(a)(2) does not include a one-year discovery rule. See id. In comparing these two subsections of section 24.010, one Texas court of appeals has concluded “[f|or the latter type of transfers [in section 24.010(a)(2) that applies to constructive fraud claims], the legislature provided no discovery rule.” Johnston v. Crook,
It is therefore apparent that Plaintiffs’ pleading of facts to invoke the discovery rule has no application to their constructive fraud claim under TUFTA’s statute of limitations. See, e.g., State Farm Mut. Auto. Ins. Co. v. Cordua,
Suarez identifies specific transfers totaling $433,500.00 where Plaintiffs list dates of transfer occurring prior to December 17, 2006. Motion to Dismiss (Doc. 13 at 11). The specified sums include nine transfers categorized as “Regular Earnings” in the amount of $12,500.00 each; one transfer categorized as “Quarterly Bonus” in the amount of $300,000.00; and seven transfers categorized as “Other Toronto Dominion Wires” in varied amounts. Id. (Doc. 13 at 11). On the face of Plaintiffs’ Complaint, the dates listed for these transfers support Suarez’s affirmative defense of limitations because they occurred outside of the four-year limitations period for a constructive fraud claim under TUF-TA. See Tex. Bus. & Com.Code Ann. § 24.010(a)(2). Therefore, these specified transfers are each time-barred, and should be extinguished only with respect to Plaintiffs’ constructive fraud claim.
In addition, as noted above, Plaintiffs group certain transfers together and assign those groups date ranges representing periods where multiple transfers oc
A final point bears discussion because Plaintiffs also plead “equitable tolling principles apply to any applicable limitations period.” Complaint (Doc. 12, ¶ 44). Plaintiffs’ Complaint cites two cases to support their theory of equitable tolling. Id. (Doc. 12, ¶ 44) (citing Wing v. Kendrick, No. 08-CV-01002,
This Court is aware of equitable tolling principles' — such as the common law doctrine of adverse domination — that may act to toll a statute of limitations. See Janvey v. Democratic Senatorial Campaign Comm.,
At best, it is unclear whether equitable tolling principles would apply to TUFTA’s limitations period for actual intent fraud claims under section 24.010(a)(1), see Democratic Senatorial Campaign Comm.,
C. Plaintiffs’ unjust enrichment claim is timely
Finally, Suarez contends Plaintiffs’ unjust enrichment claims are also subject to a four-year limitations period under Florida law. Motion to Dismiss (Doc. 13 at 12). According to her, “[t]his limitations period has no equitable tolling or delayed discovery feature [and] the claim accrues when the benefit is conferred.” Id. (Doc. 13 at 12) (citing Steinberg v. A Analyst Ltd., No. 04-60898-CIV,
Plaintiffs counter that Texas applies a two-year limitations period for unjust enrichment claims. Plaintiffs’ Response (Doc. 14, IT 21) (citing Mayo v. Hartford Life Ins. Co.,
According to the Texas Supreme Court, “absent application of the discovery rule ... a two-year statute would bar [a] claim for unjust enrichment.” HECI Exploration Co. v. Neel,
“Texas follows the ‘legal injury’ test, under which ‘[a] cause of action generally accrues, and the statute of limitations begins to run, when facts come into existence that authorize a claimant to seek a judicial remedy.’ ” Mayo,
Texas’s two-year limitations period applies to Plaintiffs’ unjust enrichment claim, and the face of their Complaint demonstrates that the claim did not accrue until sometime after Plaintiff Janvey’s appointment as Receiver on February 16, 2009. Though determining exactly when an unjust enrichment claim accrued is a question for a fact finder to decide, see USPPS, Ltd. v. Avery Dennison Corp.,
As a result, Plaintiffs’ unjust enrichment claim does not warrant dismissal because the face of the Complaint demonstrates it was brought within the applicable limitations period and Plaintiffs’ have further pleaded sufficient facts to demonstrate that Texas’s discovery rule applies.
VI. Plaintiff’s Claim for Attorney’s Fees is Not Ripe for Resolution
Under TUFTA, a court may award the prevailing party attorneys’ fees and costs. Tex. B us. & Com.Code Ann. § 24.013. The parties are in agreement that there is no such provision under FUFTA. See Plaintiffs’ Response (Doc. 14 at 3-4 n. 3). As noted throughout this report, Suarez has not provided the Court with sufficient information to warrant application of Florida law. Therefore, in assuming that Texas law is applicable, Plaintiffs’ claim for attorneys’ fees is an available form of recovery in Texas and pleaded in their Complaint. That claim should not be dismissed at this time.
VII. Conclusion
Plaintiffs have sufficiently pleaded claims upon which relief can be granted pursuant to Fed. R. Civ. P. 8(a)(2), 9(b), and 12(b)(6). Further, Suarez has not established from the face of the Complaint that Plaintiffs’ actual intent fraud claim under TUFTA and unjust enrichment claim are either time-barred or partially time-barred. Therefore, the Court should deny Suarez’s Motion to Dismiss these claims and Plaintiffs should not be required to replead same.
However, Suarez has established from the face of the Complaint that portions of Plaintiffs’ claim for constructive fraudulent transfers under TUFTA are time-barred or partially time-barred as falling outside of TUFTA’s four-year limitations period. Plaintiffs’ Complaint fails to establish a basis for applying equitable tolling to the limitations period under TUFTA’s section 24.010(a)(2), which governs section 24.006(a) claims, and therefore Plaintiffs’ allegations of constructively fraudulent transfers occurring prior to December 17, 2006, should be dismissed as time-barred. In accordance with the relief Suarez seeks, Plaintiffs should be afforded the opportunity to amend their Complaint to allege transfers under the groupings “CD Proceeds from Suarez’s CDs,” “Expenses,” and “Other Pay” to reflect only the amounts Suarez allegedly received after December 17, 2006.
IT IS, THEREFORE, RECOMMENDED that the United States district judge deny Defendant’s Motion to Dismiss in part and grant it in part.
A copy of this report and recommendation shall be served on all parties in the manner provided by law. Any party who objects to any part of this report and recommendation must file specific written
The clerk shall deliver a copy of this report and recommendation to all counsel of record by first class mail or electronic means.
Date August 26, 2013.
. Plaintiffs present three variations on the allegation that Suarez did not provide reasonably equivalent value for the sums she received: "Suarez either performed no services for the CD Proceeds she received; performed services that did not constitute reasonably equivalent value in exchange for the CD Proceeds she received; or performed only services that were in furtherance of the Ponzi scheme, which cannot be reasonably equivalent value as a matter of law.” Complaint (Doc. 12, ¶ 5).
. Plaintiffs also should not be required to replead because the "elements” of each cause of action are present, well-pleaded, and give Suarez adequate notice to prepare her defense. See Alguire,
. The definitions of the terms "claim,” "creditor,” "debtor,” and "person” are identical under both TUFTA and FUFTA. Compare Tex. Bus. & Com.Code Ann. § 24.002 (West 2013), with Fla. Stat. Ann. § 726.102 (West 2013).
. As an illustration of the uniformity among the states enacting UFTA, application of Florida law would likely render the same result. See Perlman v. Five Corners Investors I, LLC,
. On the contrary, if Florida law and Florida federal courts’ interpretation of FUFTA applied, resolving whether equitable tolling applied to a constructive fraud claim would be more certain because courts there have found the doctrine inapplicable. See, e.g., Steinberg v. A Analyst Ltd.., No. 04-60898-CIV,
. In fact, Plaintiffs fail to cite to section 24.010(a)(2) altogether. Plaintiff's responsive brief correctly identifies that section 24.006(a) controls their constructive fraud claim when discussing the relevant pleading standards. See Plaintiff's Response (Doc. 14, ¶¶ 15-16). Their limitations argument contends only for the application of section 24.010(a)(1), which by its own language refers to section 24.005(a)(1) and not section 24.006(a). See Plaintiff’s Response (Doc. 14, ¶¶ 19-22).
. Deferring the accrual of a limitations period is distinct from tolling a limitations period once it has commenced. See S.V. v. R.V.,