The opinion
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
MARVIN I. KAPLAN,
Plaintiff,
v. Case No: 8:17-cv-2701-CEH-CPT
REGIONS BANK,
Defendant.
ORDER
This cause comes before the Court upon Defendant’s Motion for Summary
Judgment (Doc. 180), Plaintiff’s Motion for Partial Summary Judgment (Doc. 183),
and the associated responses and reply (Docs. 188, 189, 196). Both motions are ripe
for the Court’s review. Upon careful consideration, the Court will grant Defendant’s
Motion for Summary Judgment and deny Plaintiff’s Motion for Partial Summary
Judgment.
I. BACKGROUND AND FACTS
A. The Underlying Lawsuit and the “Investment Deals”
This malicious prosecution action stems from a case in the Middle District of
Florida styled Regions Bank v. Kaplan, et al., No. 8:12-cv-01837-EAK-MAP (M.D.
Fla.) (“Kaplan I”), in which Regions sued Kaplan and several of his companies for,
inter alia, fraudulent concealment, civil conspiracy, conversion, and aiding and
abetting.1 Doc. 113 ¶¶ 1, 48, 57. Regions initially brought its claims against several of
Kaplan’s companies and claimed that his fraudulent transactions led to significant
account overdrafts. Id. ¶ 48. Regions later amended its complaint to include several
other Kaplan-controlled companies as defendants and increased the damages sought.
Doc. 181-5 at 7. After further investigation, litigation, and discovery, Regions filed a
Second Amended Complaint and added claims against Kaplan individually (the
“Tort Claims”). Doc. 181-17; Doc. 192-1. Kaplan now sues Regions for malicious
prosecution based on those claims, asserting that they were wrongly brought against
him. Doc. 113.
The underlying case involved numerous individuals, entities, banks,
investment deals, and allegations of “check-kiting.”2 Kaplan controlled four entities
with Regions accounts: R1A Palms, LLC; Triple Net Exchange, LLC; MK
Investing, LLC; and BNK Smith, LLC. Doc. 181-4; Doc. 181-1 ¶ 7. Around 2008, he
began to invest with a company called Smith Advertising and Associates, Inc.
(“SAA”), operated by Gary and Todd Smith. Doc. 181-1 ¶¶ 15–22. The “investment
deals” operated as follows: Kaplan would make a short-term loan to SAA, so that
1 The Court has determined the facts, which are undisputed unless otherwise noted, based
on the parties’ submissions, including the Joint Statement of Undisputed Facts (Doc. 187),
declarations, depositions, filings and orders in Kaplan I, and other evidence in the record.
2 Check-kiting is “[t]he illegal practice of writing a check against a bank account with
insufficient funds to cover the check, in the hope that the funds from a previously deposited
check will reach the account before the bank debits the amount of the outstanding check.”
CHECK-KITING, Black's Law Dictionary (11th ed. 2019). In other words, “check kiting,
at root, is a plan designed to separate the bank from its money by tricking it into inflating
bank balances and honoring checks drawn against accounts with insufficient funds. In
essence, a check kite allows the schemers to trick the banks into giving them interest-free
loans.” United States v. Yoon, 128 F.3d 515, 522 (7th Cir. 1997).
SAA could take advantage of purported time-sensitive vendor discounts. Id. ¶ 21.
SAA would then swiftly repay the loan, splitting the discount amount with Kaplan
as interest. Id. ¶ 23. Between 2008 and 2011, Kaplan and SAA successfully
completed hundreds of similar transactions. Id. ¶ 24.
These investment opportunities were completely fraudulent, as there were no
vendors or vendor discounts, and SAA was nothing more than a Ponzi scheme
designed to earn money for the company, its principals, and others associated with
the scam. Id. ¶ 75. The fraud was eventually uncovered, and numerous individuals
were criminally prosecuted, including SAA’s principals. Id. at 3–4. Kaplan was not
prosecuted, however, and the Kaplan I Court found, after a bench trial, that he had
no actual knowledge that SAA was a fraudulent company or that the investment
deals were part of a check-kiting scheme. Id. ¶¶ 97, 111, 114, 120, 122.
B. The Bundled Deals and the Scheme’s Collapse
The Tort Claims focused on a series of deals from just a single week. Doc.
181-1 ¶¶ 44–75. SAA primarily used its Bridgeview Bank Group (“BBG”) account
for the relevant deals. Id. ¶ 16. Between January 19, 2012, and January 24, 2012,
Kaplan agreed to four “bundled deals” with SAA. Id. ¶ 44. SAA told him that,
although the deals were larger than previous ones, it hoped to take advantage of the
same vendor discounts and needed short-term bridge loans to do so. Doc. 181-7 ¶ 72.
SAA asked Kaplan to wire funds from his various Regions bank accounts to its BBG
account, at which point SAA would ship repayment checks to Kaplan the same day.
Id. ¶¶ 73–74.
The deals initially went as planned. As part of the First Deal, SAA shipped
checks and promissory notes to Kaplan on January 19, to arrive on January 20. Doc.
181-1 ¶ 45. On the morning of January 20, Kaplan initiated transfers of $400,000 and
$1,600,000 from his BNK and TNE Regions accounts to his R1A Regions account.
Id. Later that morning, he wired $9,700,000 to SAA’s BBG account. Id. Kaplan
received the First Deal checks and deposited a total of $10,061,375 into his various
Regions accounts that day. Id.
The other deals were similarly structured, but the scheme began to unravel. Id.
¶¶ 46–75. On January 24, Smith and Kaplan agreed to a Fourth Deal, pursuant to
which Kaplan wired $2,000,000 to SAA. Id. ¶ 51. That morning, however, Kaplan
learned that Regions had not credited the Second Deal Checks to him. Id. ¶ 53. He
contacted Regions about these deposits, and a representative informed him that a
hold had been placed on the Second Deal Checks. Id. ¶¶ 53–54. Kaplan called Todd
Smith and informed him that the Third Deal could not proceed due to the bank hold.
Id. ¶ 55. In hopes of completing the transaction, Smith sent Regions a falsified
screenshot showing a positive balance in SAA’s account, when in fact the account
had a negative balance. Id. ¶ 56. Regions informed Kaplan that the screenshot would
not be sufficient to release the hold on the Second Deal Checks. Id. ¶ 57. The same
day, Kaplan received the Third Deal checks. Id. ¶ 58. Smith called Kaplan and
suggested that he put a stop payment on the Second Deal checks in place of a wire
transfer and deposit the Third Deal checks. Id. ¶ 59. Smith later changed his mind
and told Kaplan not to deposit the Third Deal checks due to issues with SAA’s
account. Id. ¶ 60.
On January 25, Regions advised Kaplan that the First Deal Checks had been
returned unpaid. Id. ¶ 65. When Kaplan contacted SAA, he was told that BBG had
frozen all of SAA’s accounts. Id. ¶ 66. SAA then sent Kaplan $10,550,000 worth of
checks by air courier drawn on a Wells Fargo Bank (“WFB”) account, which Kaplan
deposited. Id. ¶ 66. On the same day, Kaplan met with three Regions officers, who
asked him why SAA sent him checks instead of wire transfers. Doc. 181-55 at 21:17–
22:19; 24:11–22. Kaplan replied that it was because “we leverage the float.” Id.
According to a Regions employee, Kaplan also stated that “Smith Advertising was
adamant [on] taking advantage of the float.” Id. at 55:17–25.
On January 26 and 27, Regions provided Kaplan with written notice of
dishonor of the First and Second Deal checks. Doc. 181-1 ¶¶ 70–71. A few days later,
Regions notified Kaplan that the replacement checks had been dishonored. Id. ¶ 72.
When the dust finally settled, nearly $33 million of checks had been returned,
resulting in over $9 million of overdrafts in Regions accounts. Doc. 180 at 2.
C. Regions’ Initial Complaint and Subsequent Investigation
Litigation began almost immediately. On January 30, 2012, Regions sued
several Kaplan-controlled entities to recoup lost funds. Doc. 181-3. Wells Fargo
Bank was also named in the suit, as Regions sought the imposition of a constructive
trust upon funds held in a Kaplan-controlled WFB account. Id. In February, Kaplan
agreed to return the funds, which he had diverted to his WFB account the week the
scheme collapsed. Doc. 181-4. In August 2012, Regions then amended its complaint
to include several other Kaplan entities and clarified the amount of overdrafts. Doc.
181-5 at 7; Doc. 181-12 at 4–5. At this point, the Tort Claims against Kaplan still had
not been filed. Id.
As the lawsuit proceeded, Regions collected evidence about the scheme
through discovery, responsive pleadings, and counterclaims/crossclaims filed by the
Defendants. For example, in March 2012, Regions subpoenaed SAA’s account
records from BBG. Doc. 181-6 ¶ 6. And in Kaplan’s crossclaim against BBG, he
described the flow of funds between the Kaplan entities and SAA. Doc. 181-7 ¶¶ 65–
106. He accused BBG of being a “direct and knowing participant[] in the scheme
with knowledge of the activities and directly participating in the fraud by actively
transferring money between accounts, floating checks to facilitate the fraud and by
inducing investors to wire funds by manipulating and false statements.” Id. ¶ 40.
Kaplan also stated in response to an interrogatory that the transactions “clearly
would have appeared to any experienced bank to be a check kiting operation.” Doc.
181-9 at 2.
Regions continued its investigation, as its SVP and Assistant General Counsel
Shayla Fletcher described in deposition testimony. See Doc. 181-11. Fletcher noted
that, before filing the Tort Claims against Kaplan, she reviewed case law and factual
findings with outside counsel and Regions’ employees. Id. at 72:22–73:10; 79:23–
81:1, 84:1–12; 86:3–6. Fletcher stated that Kaplan’s pleadings and discovery
documents were also reviewed. Id. at 76:21–77:16. David S. Garbett, lead outside
counsel to Regions in Kaplan I, was also involved in the investigation. Doc. 192-1.
He conducted a review of SAA’s account records, Kaplan’s bank statements and
wire transfer records, Kaplan’s pleadings, relevant case law, and other evidence. Id.
at 1–4. Regions also later deposed Kaplan for several days, and Garbett regularly
discussed the progress of the case with Regions’ in-house counsel. Id. at 5–7.
D. Regions Adds the Tort Claims Against Kaplan and the Case Proceeds
to Trial
In November 2013, nearly two years after filing its initial complaint, Regions
filed a Second Amended Complaint which included claims against Kaplan
individually for fraudulent concealment, civil conspiracy, conversion, and aiding and
abetting. Doc. 181-17. The Second Amended Complaint alleged that Kaplan, his
companies, and SAA engaged in a “massive kiting scheme” using Kaplan’s accounts
at Regions and SAA’s account at BBG. Id. ¶¶ 10–11. In the lead-up to trial, expert
witnesses retained by Kaplan and Regions agreed that the transactions were
consistent with a check-kiting scheme. Docs. 181-12, 181-13. Kaplan’s expert opined
that the primary purpose of SAA’s account was to write bad checks, found evidence
of kiting, and admitted at a deposition that leveraging the float supported knowledge
of kiting. Doc. 181-13 at 2–10; Doc. 181-14 at 251:11–258:8.
Additionally, several dispositive motions were decided. First, Kaplan’s motion
to dismiss was denied. Doc. 181-19. His motion for summary judgment was also
denied, except as to the conversion and aiding and abetting conversion counts, which
were dismissed. Doc. 181-28. A bench trial was held before United States District
Judge Elizabeth A. Kovachevich on the remaining claims, and after a month of trial,
Judge Kovachevich ruled in favor of Kaplan on all counts. See Doc. 181-1. Kaplan
prevailed at trial because the Court found that he: (1) had no actual knowledge of
SAA’s Ponzi scheme, or that the deals were illegitimate; (2) did not know SAA’s
account balance; (3) had completed many similar transactions without issue; and (4)
was not the only individual with deposits in SAA’s account. Doc. 181-1 at ¶¶ 97–
102.
E. Present Action and Procedural History
Kaplan filed the present action in November 2017, accusing Regions of
malicious prosecution and abuse of process. Doc. 1 ¶¶ 67–87. The Court dismissed
the abuse of process claim in August 2018. Doc. 37 at 10. The case was then stayed
pending Regions’ appeal of Kaplan I. Doc. 77. It was reopened in November 2021
after the Eleventh Circuit affirmed the trial court’s findings in Kaplan I. Doc. 169-1.
Kaplan now brings a single count of malicious prosecution against Regions, claiming
that the Tort Claims were brought without probable cause and with malice, and
seeking compensation for reputational damage, emotional pain, and mental anguish,
in addition to legal costs. Doc. 113 ¶¶ 69–76.
II. LEGAL STANDARD
Summary judgment is appropriate when the pleadings, depositions, answers to
interrogatories, and admissions on file, along with any affidavits, show there is no
genuine issue as to any material fact and that the moving party is entitled to
judgment as a matter of law. Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S.
317, 322 (1986). The moving party bears the initial burden of stating the basis for its
motion and identifying those portions of the record demonstrating the absence of
genuine issues of material fact. Celotex, 477 U.S. at 323; Hickson Corp. v. N. Crossarm
Co., 357 F.3d 1256, 1259–60 (11th Cir. 2004). That burden is discharged if the
moving party can show the court that there is “an absence of evidence to support the
nonmoving party’s case.” Celotex, 477 U.S. at 325.
When the moving party has discharged its burden, the nonmoving party must
then designate specific facts showing that there is a genuine issue of material
fact. Id. at 324. Issues of fact are “genuine only if a reasonable jury, considering the
evidence present, could find for the nonmoving party,” and a fact is “material” if it
may affect the outcome of the suit under governing law. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248–49 (1986). In determining whether a genuine issue of
material fact exists, the court must consider all the evidence in the light most
favorable to the nonmoving party. Celotex, 477 U.S. at 323. However, a party cannot
defeat summary judgment by relying on conclusory allegations. See Hill v. Oil Dri
Corp. of Ga., 198 Fed. App’x. 852, 858 (11th Cir. 2006). Summary judgment should
be granted only if “the record taken as a whole could not lead a rational trier of fact
to find for the non-moving party.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 586 (1986). “The court need consider only the cited materials, but it may
consider other materials in the record.” Fed. R. Civ. P. 56(c)(3).
The standard of review for cross-motions for summary judgment does not
differ from the standard applied when only one party files a motion, but simply
requires a determination of whether either of the parties deserves judgment as a
matter of law on the undisputed facts. Am. Bankers Ins. Grp. v. United States, 408 F.3d
1328, 1331 (11th Cir. 2005). The Eleventh Circuit has explained that cross-motions
for summary judgment will not, in themselves, warrant a grant of summary
judgment unless one of the parties is entitled to judgment as a matter of law on facts
that are not genuinely disputed. United States v. Oakley, 744 F.2d 1553, 1555 (11th
Cir. 1984) (quoting Bricklayers Int’l Union, Local 15 v. Stuart Plastering Co., 512 F.2d
1017 (5th Cir. 1975)). Cross-motions may, however, be probative of the absence of a
factual dispute where they reflect general agreement by the parties as to the
controlling legal theories and material facts. Id. at 1555–56.
III. ANALYSIS
A. Defendant’s Motion for Summary Judgment
Regions seeks summary judgment, arguing that it had probable cause to bring
the Tort Claims. Doc. 180. Kaplan responds that Regions’ motion must be denied
based on the findings in Kaplan I, and that he is entitled to summary judgment on
each of the six elements of malicious prosecution, except for damages, which are in
dispute and should go to trial. Doc. 188 at 1–2; Doc. 183 at 3. Regions replies that,
because Kaplan fails to establish a triable issue regarding the absence of probable
cause, his claim must be dismissed. Doc. 196 at 1–2.
At the outset, the Court notes that Kaplan does not specifically challenge
Regions’ factual allegations in his pleadings. Doc. 188. Instead, he claims that the
material facts of the underlying action were decided by the Kaplan I Court, and that
Regions is wrongly attempting to relitigate those claims. Id. at 3. Kaplan also argues
that the Ponzi scheme and check-kiting allegations are one and the same, that
Regions had no evidence of his actual knowledge of the fraud, and that Regions’
investigation was fatally deficient. Id. at 4–15. Further, he maintains that Regions
improperly ignored an exculpatory FBI report—a contention that the Court
addresses infra. These arguments are unpersuasive.3 In fact, based on the legal
standard for malicious prosecution, Regions’ investigation and its evidence for the
Tort Claims are integral to the question of probable cause, because the analysis is
based on whether Regions had “a reasonable belief, based on the facts and
circumstances known to [it], in the validity of the claim[s].” DeMartini v Town of Gulf
Stream, 942 F.3d 1277, 1309 (11th Cir. 2019).
Under Florida law, a claim for malicious prosecution requires a plaintiff to
establish each of the following six elements: that (1) an original criminal or civil
3 Kaplan makes virtually identical arguments in his motion for partial summary judgment.
Doc. 183.
judicial proceeding against the plaintiff was commenced or continued; (2) the
defendant was the legal cause of the proceeding against the plaintiff; (3) the
termination of the proceeding constituted a bona fide termination in favor of the
plaintiff; (4) there was an absence of probable cause for the proceeding; (5) there was
malice on the part of the defendant, and (6) the plaintiff suffered damage as a result
of the proceeding. Alamo Rent-A-Car v. Mancusi, 632 So.2d 1352, 1354 (Fla 1994); see
also DeMartini, 942 F.3d at 1309 (listing elements). “The failure of a plaintiff to
establish any one of these six elements is fatal to a claim of malicious
prosecution.” Alamo, 632 So.2d at 1354.
The first three elements are uncontested here, and because the Court
concludes that Kaplan cannot establish a genuine issue of material fact as to probable
cause, the Court limits its inquiry to this issue. To show that it had probable cause,
Regions need only establish that it had “a reasonable belief, based on the facts and
circumstances known to [it], in the validity of the claim[s].” DeMartini, 942 F.3d at
1301 (quoting Mee Indus. v. Dow Chem. Co., 608 F.3d 1202, 1211, 1218 (11th Cir.
2010). “The standard for establishing probable cause in a civil action is extremely
low and easily satisfied.” Gill v. Kostroff, 82 F. Supp. 2d 1354, 1364 (M.D. Fla. 2000).
Whether probable cause exists is generally determined based on the facts known by
the defendant at the time the underlying action was initiated, not some later point in
time. See United States v. Irurzun, 631 F.2d 60, 62 (5th Cir. 1980). And denial of
summary judgment in the underlying litigation, “while not conclusively proving
probable cause, is a strong indication of a substantial case.” Wright v. Yurko, 446
So.2d 1162, 1167 (Fla. 5th DCA 1984).
Throughout its filings, Regions supports the decision to bring the Tort Claims
by citing to numerous sources of evidence. These include: (1) account records of the
involved parties; (2) Kaplan’s deposition testimony; (3) Kaplan’s admission to
Regions that he and SAA were leveraging the float; (4) Kaplan’s descriptions of the
deals in his counterclaims and crossclaims; and (5) the comprehensive legal and
factual investigation Regions conducted.
i. Regions Had Probable Cause to Bring Claims for Fraudulent
Concealment and Aiding and Abetting Fraudulent Concealment
Against Kaplan
The Court begins by analyzing each of the counts that survived summary
judgment in Kaplan I: Fraudulent Concealment, Aiding and Abetting Fraudulent
Concealment, and Civil Conspiracy. Doc. 181-28 at 20–35. These claims will be
addressed first, because a denial of summary judgment, while not dispositive as to
the issue of probable cause, is “a strong indication of a substantial case.” Wright, 446
So.2d at 1166.
A claim for fraudulent concealment requires a plaintiff to establish that the
defendant (a) breached a duty to disclose a material fact; (b) knew or should have
known that disclosure would induce plaintiff’s actions; and (c) that the plaintiff
detrimentally relied on the misinformation. Hess v. Philip Morris USA, Inc., 175 So.3d
687, 691 (Fla. 2015).
Regions asserts that its fraudulent concealment claim was supported by
probable cause and that no reasonable jury could find otherwise. Doc. 180 at 30.
Regions also argues that Kaplan knew of the ongoing check-kiting. Id. In support of
this point, Regions contends that Kaplan knew SAA lacked sufficient funds to
prepay vendors, but was still somehow able to issue repayment checks to him on the
same day the loan money was sent. Id. It also argues that Kaplan admitted to
leveraging the float, and never actually obtained verification from SAA that its
account had sufficient funds before depositing the NSF checks. Id. Regions also cites
Florida caselaw that supported their belief that Kaplan owed Regions a duty to
disclose based on his advanced knowledge of banking and use of artifice or trick. Id.
at 30 n.8. Finally, Regions notes that check-kiting can constitute a special
circumstance imposing a duty of disclosure under Florida law. See Barnett Bank v.
Hooper, 498 So.2d 923 (Fla. 1986).
The Kaplan I Court denied Kaplan’s motion for summary judgment as to the
fraudulent concealment count. Doc. 181-28 at 33–34. It noted that summary
judgment was denied to Kaplan’s companies on the same claim, and that Kaplan
acted as their authorized agent in carrying out the relevant transactions. Id. at 34.
The Kaplan I Court found that an “[i]ntent to defraud can be based on circumstantial
evidence,” and that Kaplan testified in deposition that “when the accounts were
opened, [he] advised Regions that there would be many check deposits and many
wire transfers, but did not provide any facts as to the ‘deals’ [he] entered into with
SAA/Smiths.” Id. at 30.
Based on the undisputed factual record, no reasonable jury could find that
Regions lacked probable cause to bring the fraudulent concealment claim. Regions
conducted an extensive investigation following the discovery of the overdrafts,
through which it discovered the check-kiting. Doc. 192-1. Furthermore, as
corroborated by Regions’ expert witnesses, SAA’s bank account records clearly
indicated that the deals were part of a check-kiting scheme. Doc. 181-12. The fact
that the trial court ruled in Kaplan’s favor based on his lack of actual knowledge of
the fraud does not establish an absence of probable cause to bring the claim, as
Kaplan attempts to argue. Doc. 183 at 15; Doc. 188 at 1–2. To the contrary, based on
the evidentiary record, Regions clearly meets the low standard needed to show that it
had a reasonable belief in the validity of the claim. Thus, no reasonable jury could
find that Regions lacked probable cause to bring a claim for fraudulent concealment.
Regions relies on largely the same facts to argue that it had probable cause to
bring an aiding and abetting fraudulent concealment claim. Doc. 180 at 8–9, 31. A
claim of aiding and abetting fraud requires proof of three elements: “(1) the existence
of an underlying fraud; (2) that the defendant had knowledge of the fraud; and (3)
that the defendant provided substantial assistance to advance the commission of the
fraud.” Sun Life Assurance Co. of Canada v. Imperial Premium Fin., LLC, 904 F.3d 1197,
1214 (11th Cir. 2018).
The Kaplan I Court denied summary judgment on this count as well. Doc.
181-28 at 34; Doc. 181-29. And as already mentioned, Regions conducted an
extensive investigation into the check-kiting scheme, supported by outside counsel as
well as Regions’ personnel. Through this investigation, it acquired sufficient facts to
form a reasonable belief that: (1) there was an underlying fraud—the check-kiting
scheme; (2) Kaplan had knowledge of it, as supported by his statements about
“leveraging the float,” his substantial profits, and his control of the Kaplan entities;
and (3) that he provided substantial assistance to advance the commission of the
fraud by orchestrating the account transfers. See Doc. 192-1. These facts mirror the
elements of the offense. Considering the evidentiary record, there is no genuine
dispute that Regions had probable cause to bring this claim.
ii. Regions Had Probable Cause to Bring a Civil Conspiracy Claim
Against Kaplan.
Regions’ third claim was for civil conspiracy. Doc. 113 ¶ 57. A civil
conspiracy claim requires a plaintiff to show that (1) a defendant entered into an
agreement (2) to perform an unlawful act or lawful act by unlawful means and (3)
committed an overt act in pursuance of the conspiracy (4) causing damages to
plaintiff. Charles v. Fla. Foreclosure Placement Ctr., LLC, 988 So.2d 1157, 1160 (Fla.
Dist. Ct. App. 2008). Regions argues that its evidence supported a claim of civil
conspiracy on the grounds that Kaplan worked in unison with SAA to facilitate the
check-kiting scheme, including when SAA used an edited screenshot to try and
induce Regions to provide availability on the Second Deal checks. Doc. 181-30 at 32.
Regions also notes that Kaplan and SAA communicated in the aftermath of the kite
collapse and that Kaplan deposited more than $10 million in replacement checks that
turned out to be worthless. Id.
In its order denying summary judgment on this count, the Kaplan I Court
found that a civil conspiracy may be established by circumstantial evidence. Doc.
181-29 at 3–4. It also noted that there was no dispute that Kaplan formed the entities
involved, agreed to each of the deals, deposited checks to the accounts of each entity,
and personally initiated the outgoing wire transfers. Id. at 4. Based on this, as well as
the fact that Kaplan and his companies participated in these “investments” to profit
on the short-term loans, the Court found that a reasonable jury could find in favor of
Regions.
On the undisputed evidentiary record presented here, including the Kaplan I
Court’s order denying summary judgment, as well as the previously discussed
evidence of Regions’ investigation and factual support for the claims (Docs. 181-11,
192-1), Kaplan has failed to establish a genuine issue of material fact as to the
probable cause element for this claim. Thus, Regions is entitled to summary
judgment.
iii. Regions Had Probable Cause to Bring Conversion and Aiding and
Abetting Conversion Claims Against Kaplan.
Under Florida law, the elements of conversion are “(1) an act of dominion
wrongfully asserted; (2) over another's property; and (3) inconsistent with his
ownership therein.” Special Purpose v. Prime One, 125 F. Supp. 2d 1093, 1099–1100
(S.D. Fla. 2000) (citing Warshall v. Price, 629 So.2d 903, 904 (Fla. 1993)). The
elements necessary to sustain an aiding and abetting claim are: “(1) an underlying
violation on the part of the primary wrongdoer; (2) knowledge of the underlying
violation by the alleged aider and abetter; and (3) the rendering of substantial
assistance in committing the wrongdoing by the alleged aider and abettor.” Lawrence
v. Bank of Am., N.A., 455 Fed.Appx. 904, 906 (11th Cir. 2012) (citations omitted).
Regions argues that it reasonably believed the check-kiting scheme, which
Kaplan and his entities facilitated, was an act of dominion wrongfully asserted over
Regions’ funds, inconsistent with Kaplan’s right to them. Doc. 180 at 33–34. Regions
also relies on caselaw holding that knowingly presenting worthless checks can
qualify as conversion, and that provisionally-credited funds on checks constitute
bank property. Id. Additionally, Regions argues that it believed the funds were
specifically identifiable at the time of filing. Id.
On the conversion and aiding and abetting conversion counts, the Kaplan I
Court granted summary judgment for Kaplan. Doc. 181-28 at 25–27, 34. However,
nothing in the Kaplan I Court’s order suggests that Regions lacked probable cause.
Instead, Kaplan prevailed on strictly technical grounds. Id. at 27. First, the Kaplan I
Court found that the accounts at issue were “demand deposit accounts, not special
accounts.” Id. Further, the order provides that: “[a]lthough the alleged conversion
claim relates to specific checks, there is no specific and identifiable money associated
with the claim. As Defendants’ authorized agent, Defendant Kaplan was authorized
to place the payment orders for Defendants. There was no unauthorized act which
deprived Regions of the funds.” Id. at 27.
On the record before this Court, Regions had a “reasonable belief, based on
the facts and circumstances known to [it],” that the conversion claims were valid.
DeMartini, 942 F.3d at 1301. Regions argues that it believed Kaplan’s NSF checks
qualified as specific and identifiable funds, and that the check-kiting scheme was a
fraud that resulted in significant monetary loss to Regions. Doc. 180 at 33–34.
Kaplan does not challenge this version of the facts or present any evidence showing
that Regions lacked probable cause. Kaplan merely relies on the order of the Kaplan I
Court. Consequently, although the conversion claims were defeated at summary
judgment, the record shows that Regions had a reasonable belief that they were
valid. Thus, the Court finds that Regions has met the “extremely low” standard for
probable cause, and that no reasonable jury could find that Regions lacked probable
cause to bring the claims. Gill, 82 F. Supp. 2d at 1364.
iv. Kaplan’s FBI Report Does Not Show that Regions Lacked Probable
Cause
Finally, the Court will address Kaplan’s claims that an FBI affidavit filed in
the criminal action against Todd Smith and Gary Smith (Doc. 184-6) proves that
Regions lacked probable cause. Doc. 188 at 10–11; Doc. 183 at 9–15. Kaplan argues
that, assuming Regions had probable cause to file the Tort Claims, it was lost as soon
as Regions received this document. Id. at 10. In describing the affidavit, Kaplan is
correct that it states he was unaware of the Ponzi scheme and even names him as a
“victim of [the] offense.” Doc. 184-6 at 6. However, it does not prove or even
support a finding that Regions lacked probable cause.
The affidavit was filed in support of a criminal complaint against SAA’s
principals and focuses on their Ponzi scheme. Id. at 2–14. However, as Regions
points out, the Tort Claims were based on check-kiting, not the Ponzi scheme. See
Doc. 181-17 ¶¶ 10–41. The Kaplan I Court also reiterated in its summary judgment
order that the underlying wrong alleged in the case was check-kiting, not a Ponzi
scheme. Doc. 181-29 at 4. Thus, Kaplan’s arguments regarding the affidavit do not
create a genuine issue of material fact as to whether Regions had probable cause to
bring the Tort Claims, which were based on check-kiting.
B. Kaplan’s Motion for Partial Summary Judgment
Kaplan seeks summary judgment as to all the elements of his malicious
prosecution claim except for damages, which he argues should proceed to trial. Doc.
183 at 8–17. The Court has carefully reviewed the arguments made by Kaplan in his
Motion for Partial Summary Judgment and associated filings, which are
substantively identical to his responses to Regions’ Motion. Because Regions had
probable cause to assert the Tort Claims in Kaplan I, which were based on check-
kiting, Kaplan cannot establish a claim for malicious prosecution. Thus, Kaplan is
not entitled to partial summary judgment. As previously discussed in this order, the
Court will grant summary judgment in favor of Regions as no genuine issue of
material fact exists as to the presence of probable cause for its Tort Claims against
Kaplan in Kaplan I. Thus, Kaplan’s Motion for Partial Summary Judgment is due to
be denied.4
4 A Daubert motion is also pending in this matter. See Doc. 182. However, given the Court’s
threshold ruling on the probable cause element, the Court need not address the motion,
which seeks to exclude Plaintiff’s economic damages expert.
IV. CONCLUSION
Accordingly, itis ORDERED as follows:
1. Regions Bank’s Motion for Final Summary Judgment, (Doc. 180), is
GRANTED.
2. Marvin I. Kaplan’s Motion for Partial Summary Judgment and
Incorporated Memorandum of Law, (Doc. 183), is DENIED.
3. The Clerk is directed to enter Judgment in favor of Defendant Regions
Bank and against Plaintiff Marvin I. Kaplan. The Clerk is further directed
to terminate any pending motions and deadlines and CLOSE this case.
DONE and ORDERED in Tampa, Florida on March 23, 2023.
Chae sas Cuda as Wana A gl ell □□
Charlene Edwards Honeywell
United States District Judge
Copies furnished to:
Counsel of Record
Unrepresented Parties