Noboa v. Castillo

United States District Court

for the

Southern District of Florida

Luis Noboa, Plaintiff, )

)

v. ) Civil Action No. 21-23952-Civ-Scola

)

Luis Miguel Castillo and others, )

Defendants. )

Order Granting in Part Motion to Dismiss

This matter is before the Court on the motion to dismiss presented by

Defendants Central America Bottling Corporation (“CBC”), Tesalia Springs

Company, S.A. (“Tesalia”), CBC Peruana S.A.C. (“CBC Peru”), and Luis Miguel

Castillo. (ECF No. 23.) For the reasons below, the Court grants the motion as to

Defendants Tesalia and CBC Peru but denies the motion as to Defendants CBC

and Luis Miguel Castillo.

1. Background

This case begins in 2017 when Defendant Luis Miguel Castillo reached out

to Plaintiff Luis Noboa—then a Babson College board member—to discuss his

son’s application to Babson. (Comp. ¶¶ 31-32, ECF No. 1-2.)

At the time, both men were involved in the beverage industry. Mr. Noboa

was pursuing a project to expand Diageo PLC’s activities (“Diageo”) in Ecuador

with the president of its Latin America division. (Id. ¶¶ 18-21, 30.) In parallel,

Mr. Castillo was CBC’s President and Chairman and a director of CBC Peru. (Id.

¶ 26.) By way of reference, Diageo owns over 200 liquor brands globally

including Johnnie Walker, Captain Morgan, and Baileys. (Id. ¶¶ 14-15.) In turn,

CBC is a multinational bottling/distribution company that works with the likes

of PepsiCo in dozens of Latin American countries. (Id. ¶ 22.) It owns Defendants

CBC Peru and Tesalia, which operates in Ecuador. (Id. ¶¶ 23, 73.)

Naturally, the pair’s Babson talks gave way to business. At a meeting on

November 9, 2017, Mr. Noboa says he and Mr. Castillo—on behalf of CBC—

orally agreed to a 50-50 joint venture to expand Diageo’s products in Ecuador.

(Id. ¶ 36.) Under the venture, “Mr. Noboa would supply his labor, experience,

and skills, as well as utilize his contacts at Diageo [Latin America], to secure the

rights to purchase, market, sell, and distribute Diageo Products.” (Id. ¶ 37.) In

exchange, CBC would use its “capital, infrastructure, and capabilities to sell and

distribute the Diageo Products in Ecuador.” (Id. ¶ 38.)

Soon after, Diageo expressed to Mr. Noboa its interest in expanding into

Peru and Colombia as well. (Compl. ¶ 42.) As such, in January 2018, Mr. Noboa

says he and Mr. Castillo—again on behalf of CBC—agreed to expand the joint

venture’s scope to all Latin American markets where CBC had a presence,

including Peru. (Id. ¶ 44.) This, Mr. Noboa says, was the genesis of the “LatAm

JV.” With it in place, Mr. Noboa “engaged in frequent negotiations in Miami,

Florida with Diageo regarding the Latin American market . . . [and] held

weekly video conference calls with different Diageo LAC executives in Latin

America and CBC executives in 2018.” (Id. ¶ 45.)

In March 2018, Mr. Noboa facilitated a meeting in Miami with Diageo and

Mr. Castillo where he says Mr. Castillo “confirmed the existence and scope of the

LatAm JV and tried to speed up the possible rights to sell spirits in Ecuador.”

(Id. ¶ 48.) The discussions also included talks about Peru and other markets

where CBC operated. (Id.) In April 2018, Diageo’s affiliate in Peru signed a

distribution agreement with CBC Peru. (Id. ¶ 60.) Diageo also signed a

distribution with Tesalia in Ecuador. (Id. ¶ 75.)

When Mr. Noboa went to collect payment on the Peru distribution

agreement, Mr. Castillo turned him down and said that he would be procuring

the dissolution of “what had been done with Mr. Noboa.” (Id. ¶ 85.) As a result,

Mr. Noboa now sues Tesalia and CBC Peru for unjust enrichment (Counts III

and IV, respectively). He also sues CBC for breach of duty (Count I), a

dissolution and accounting of the joint venture (Count II), fraud (Count V—also

alleged against Mr. Castillo), and negligent misrepresentation (Count VI).

2. Discussion

The Defendants move to dismiss Mr. Noboa’s claims under Federal Rules

of Civil Procedure 12(b)(2) and 12(b)(6). They argue that: (1) the Court lacks

personal jurisdiction over Counts III and IV against CBC Peru and Tesalia,

(2) the remaining counts are barred by the statute of frauds, and (3) Counts V

and VI are not supported by sufficient allegations of knowledge and intent.

A. Personal jurisdiction under 12(b)(2)

“A plaintiff seeking the exercise of personal jurisdiction over a nonresident

defendant bears the initial burden of alleging in the complaint sufficient facts to

make out a prima facie case of jurisdiction.” United Techs. Corp. v. Mazer, 556

F.3d 1260, 1274 (11th Cir. 2009). “A federal court sitting in diversity undertakes

a two-step inquiry in determining whether personal jurisdiction exists: the

exercise of jurisdiction must (1) be appropriate under the state long-arm statute

and (2) not violate the Due Process Clause of the Fourteenth Amendment to the

United States Constitution.” United Techs. Corp. v. Mazer, 556 F.3d 1260, 1274

(11th Cir. 2009).

Mr. Noboa says the Court has specific personal jurisdiction over CBC Peru

and Tesalia, two foreign corporations, pursuant to the following portions of

Florida’s long-arm statute:

(1)(a) A person, whether or not a citizen or resident of this state,

who personally or through an agent does any of the acts enumerated

in this subsection thereby submits himself or herself and, if he or

she is a natural person, his or her personal representative to the

jurisdiction of the courts of this state for any cause of action arising

from any of the following acts:

1. Operating, conducting, engaging in, or carrying on a business or

business venture in this state or having an office or agency in this

state.

2. Committing a tortious act within this state.

[ . . . ]

7. Breaching a contract in this state by failing to perform acts

required by the contract to be performed in this state.

Fla. Stat. §§ 48.193(1)(a)1, 2, 7. However, Mr. Noboa does not sufficiently

establish CBC Peru’s and Tesalia’s contacts with Florida.

Mr. Noboa submits no affidavits or other evidence to substantiate his

arguments concerning personal jurisdiction. He instead relies on his allegations

in the complaint. (See Opp. 14-16, ECF No. 26.) By those allegations, CBC Peru’s

and Tesalia’s purported contacts with Florida boil down to the Miami-based

communications Mr. Noboa says he facilitated with Mr. Castillos and Oscar

Arroyo, CBC’s general counsel. (See, e.g., Compl. ¶ 48; Opp. 16.) To Mr. Noboa,

Messrs. Castillo and Arroyo represented CBC, CBC Peru, and Tesalia in all

discussions. (Compl. ¶¶ 28-29.) By his logic, CBC Peru and Tesalia were always

“in the room” whenever Mr. Castillos and/or Mr. Arroyo were, and therefore,

CBC’s contacts with Florida were also CBC Peru’s and Tesalia’s.

But Mr. Noboa does not provide sufficient facts in his complaint to back

this notion. For example, Mr. Noboa leaves unanswered the question of what

role, if any, Messrs. Castillo and Arroyo had on Tesalia’s board. And he pleads

nothing concerning CBC’s ownership stake in CBC Peru and/or Tesalia, or how

CBC exercises control over them. The closest he comes is a conclusory assertion

that “CBC operates via subsidiaries and/or related companies that it controls,

including Tesalia and CBC Peru[,]” (Id. ¶ 23) which he pairs with the assertion

that “CBC and its subsidiaries and/or affiliates have overlapping management

and personnel.” (Id. ¶ 24.) Mr. Noboa leaves the Court without more. Therefore,

the Court does not have a sufficient factual basis to conclude that these two

agents of CBC must also be considered agents of CBC Peru and Tesalia as Mr.

Noboa suggests. Indeed, CBC Peru and Tesalia challenge that very assertion in

their briefing on the motion to dismiss. (Reply 10, ECF No. 29.)

Absent a substantiated connection between either Defendant and Florida,

Mr. Noboa fails to make a prima facie case of personal jurisdiction over CBC

Peru and Tesalia. Cf. Walden v. Fiore, 571 U.S. 277, 285 (2014) (“the plaintiff

cannot be the only link between the defendant[s] and the forum.”); Lopatine v.

Finlink, Inc., No. 21-20987-CIV, 2021 WL 3129933, at *4 (S.D. Fla. July 23,

2021) (Scola, J.) (“For a defendant to have the minimum contacts necessary to

create specific jurisdiction, the defendant must have a sufficient relationship

with the forum State. This relationship must arise out of contacts that the

defendant himself creates with the forum State . . . The Due Process analysis,

therefore, looks at a defendant’s contacts with the forum State itself, not the

defendant’s contacts with persons who reside there.”) (cleaned up).

Accordingly, the Court dismisses Counts III and IV without prejudice. The

Court grants Mr. Noboa two weeks from the date of this order to amend his

complaint in respect of the jurisdictional matters concerning Counts III and IV.

B. Sufficiency of claims under Rule 12(b)(6)

Pursuant to Rule 12(b)(6), the Defendants say Mr. Noboa fails to state

claims for which relief can be granted because of: (1) the statute of frauds, and

(2) his purported failure to plead fraud and negligent misrepresentation

sufficiently.

When considering a motion to dismiss under Rule 12(b)(6), the Court must

accept all of the complaint’s allegations as true, construing them in the light

most favorable to the plaintiff. Pielage v. McConnell, 516 F.3d 1282, 1284 (11th

Cir. 2008). Under Federal Rule of Civil Procedure 8, a pleading need only contain

“a short and plain statement of the claim showing that the pleader is entitled to

relief.” Fed. R. Civ. P. 8(a)(2). The plaintiff must nevertheless articulate “enough

facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v.

Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the

plaintiff pleads factual content that allows the court to draw the reasonable

inference that the defendant is liable for the misconduct alleged.” Ashcroft v.

Iqbal, 129 S. Ct. 1937, 1949 (2009). “Threadbare recitals of the elements of a

cause of action, supported by mere conclusory statements, do not suffice.” Id.

Thus, a pleading that offers mere “labels and conclusions” or “a formulaic

recitation of the elements of a cause of action” will not survive dismissal. Id.

(1) Statute of frauds

“Under well-settled Florida law, the statute of frauds bars the enforcement

of a[n] [unwritten] contract when the parties intended and contemplated that

performance of the agreement would take longer than one year.” Dwight v. Tobin,

947 F.2d 455, 459 (11th Cir. 1991); see also Fla. Stat. § 725.01. Thus, the joint

venture’s validity turns on the statute of frauds, and the concrete question

before the court is whether the joint venture’s full performance, as intended by

the parties, would have been impossible in less than one year. See OJ Commerce,

LLC v. Ashley Furniture Industries, Inc., 359 F. Supp. 3d 1163, 1172 (S.D. Fla.

2018) (Altonaga, J.).

Problematically, though, the parties differ on what qualifies as full

performance. While the Defendants assert that Mr. Noboa could not have

“‘obtain[ed], maintain[ed], and nurture[d]’ the Diageo distribution contracts” in

one year (Mot. 8 (quoting Compl. ¶ 39)), Mr. Noboa defends that his performance

was to “obtain, maintain, and nurture the joint venture’s relationship with

Diageo.” (Opp. 6 n.1 (quoting Compl. ¶ 39.)) Focusing on the relationship aspect,

Mr. Noboa suggests his performance was intended to be “merely for purposes of

obtaining those [distribution] rights . . . [and] that CBC would actually be the

one to market, sell, and distribute the products.” (See Opp. 6 n.1.)

The parties’ divergence on what full performance was intended to consist

of requires the Court to make factual findings that it is not equipped to make at

this juncture. Indeed, “[c]ourts in this district have held that the intent of the

parties is a factual inquiry which makes a determination of the applicability of

the statute of frauds improper on a motion to dismiss.” Hughes v. Priderock Cap.

Partners, LLC, No. 18-80110-CIV, 2018 WL 3699348, at *2 (S.D. Fla. May 31,

2018) (Reinhart, Mag. J.) (collecting cases). To recall, neither party has

submitted affidavits and the Court must construe all reasonable inferences in

favor of Mr. Noboa at this stage. Sundius v. DHB Indus., Inc., No. 07-61060-CIV,

2008 WL 11399641, at *5 (S.D. Fla. Jan. 9, 2008) (McAliley, Mag. J.).

As such, the question of whether the statute of frauds bars Mr. Noboa’s

suit is best left for a later stage of this litigation. The Defendants’ motion as to

the statute of frauds is denied.

(2) Sufficiency of allegations for fraud and negligent misrepresentation

Next, the Defendants argue that Mr. Noboa’s claims for fraud and

negligent misrepresentation (Counts V and VI) fail because he does not

adequately plead their knowledge and intent elements.

To state a claim for fraud against CBC and Mr. Castillo, Mr. Noboa must

sufficiently plead four elements: (1) a false statement concerning a material fact,

(2) the representor’s knowledge that the statement is false, (3) an intent to cause

him to rely on that statement, and (4) an injury to himself. Brown v.

CitiMortgage, Inc., No. 14-24696-CIV-KING, 2015 WL 13776922, at *4 (S.D. Fla.

Aug. 27, 2015) (Torres, Mag. J.).

To state a claim for negligent misrepresentation against CBC, Mr. Noboa

must sufficiently plead: (1) the misrepresentation of a material fact that CBC

believed to be true but which was in fact false, (2) that CBC should have known

the representation was false, (3) that CBC intended to induce him to rely on the

misrepresentation, and (4) an injury resulting to him after he justifiably relied on

the misrepresentation. E.g., Specialty Marine & Indus. Supplies, Inc. v. Venus, 66

So. 3d 306, 309 (Fla. 4th DCA 2011).

Where a cause of action sounds in fraud, the plaintiff must satisfy Federal

Rule of Civil Procedure 9(b) in addition to the more relaxed standard of Rule 8.

Under Rule 9(b), “a party must state with particularity the circumstances

constituting fraud or mistake,” but “conditions of a person’s mind,” such as

malice, intent, and knowledge, may be alleged generally. Fed. R. Civ. P. 9(b). To

meet this standard, the complaint must identify the precise misrepresentations;

the time and place of, and the persons responsible for, the alleged statements;

the content and manner in which the statements misled the plaintiff; and what

the defendant gained through the alleged fraud. W. Coast Roofing &

Waterproofing, Inc. v. Johns Manville, Inc., 287 Fed. App’x 81, 86 (11th Cir.

2008). The Court finds that Mr. Noboa’s allegations do so.

Again, the Defendants only dispute the sufficiency of the allegations of the

knowledge and intent elements of Mr. Noboa’s claims (see Mot. 16), which he

need only plead generally. Although Mr. Noboa’s conclusory allegations as to the

Defendants’ knowledge and intent (Compl. ¶¶ 137-38) do not alone suffice to

meet that requirement, Mr. Noboa pleads facts to substantiate them. For

example, Mr. Noboa says that at a specific meeting, “Mr. Castillo confirmed the

existence and scope of the LatAm JV.” (Id. ¶ 48.) He also says that “Mr. Castillo

readily agreed that the joint venture included Latin American countries where

CBC had operations and specifically Peru.” (Id. ¶ 58.) Mr. Noboa further avers

that once he successfully facilitated a distribution agreement between CBC and

Diageo for Peru on the basis of Mr. Castillo’s representations, Mr. Castillo

decided to abandon the Peru project and refused to split any Peru-related profits

with him. (Id. ¶ 85.)

Accepting these allegations as true and construing them in the light most

favorable to Mr. Noboa, the Court finds that his allegations give rise to

reasonable inferences of knowledge and intent that make his claims plausible.

The Court also notes that it is the law of this Circuit that Rule 9(b)’s heightened

pleading standard may be relaxed in instances such as these where the facts of

the alleged fraud are peculiarly within the Defendants’ knowledge. See Hill v.

Morehouse Med. Assocs., Inc., No. 02-14429, 2003 WL 22019936, at *3 (11th Cir.

Aug. 15, 2003).

Accordingly, the Court denies the Defendant’s motion with respect to

Counts V and VI.

3. Conclusion

For the foregoing reasons, the Court partially grants the Defendants’

motion to dismiss. (ECF No. 23.) Counts III and IV are dismissed without

prejudice. Mr. Noboa may file an amended complaint to address with the

jurisdictional matters in respect of Counts III and IV discussed herein no later

than July 1, 2022. All other counts remain operative.

Done and ordered in Miami, Florida, on June 17, 2022.

(Robert N. [4 Jr.

United States District Judge