F & W Lawn Care and Landscaping, Inc. v. Cozart

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF FLORIDA

FORT MYERS DIVISION

F & W LAWN CARE AND

LANDSCAPING, INC., an

Illinois corporation,

Plaintiff and Counter

Defendant,

v. Case No: 2:23-cv-549-JES-KCD

ROBERT A. COZART,

Defendant and Counter

Claimant.

OPINION AND ORDER

This matter comes before the Court on Defendant Robert A.

Cozart’s (“Robert” or “Defendant”) Motion to Dismiss (Doc. #46)

filed on September 27, 2024. Plaintiff F & W Lawn Care &

Landscaping, Inc. (“F&W” or “Plaintiff”) filed a Response in

Opposition (Doc. #47) on October 8, 2024. Defendant filed a Reply

(Doc. #51) with leave of the Court on October 29, 2024. Plaintiff

filed a Sur-Reply (Doc. #58) with leave of Court on November 7,

2024. Defendant seeks to have Count I of Plaintiff’s four-count

Complaint dismissed for failure to state a claim.

For the reasons set forth below, the motion is DENIED.

I.

The relevant material facts alleged in the Complaint (Doc.

# 1) are summarized as follows: F&W is a family-owned Illinois

landscaping corporation. Tina Cozart (“Tina”), Defendant’s ex-

wife, worked as F&W’s office manager from 2006 until 2015.

Beginning in 2008, Tina engaged in a scheme of fraudulently using

F&W’s credit cards for her own personal gain, accumulating over

$1.5 million in charges and cash advances. Once the scheme was

uncovered in 2015, Tina’s employment with F&W was terminated.

A few months later, Robert was laid off from his job. Robert

soon secured another in Alameda County, California, where Tina and

Robert moved sometime between late 2015 and early 2016.

In August 2016, federal prosecutors in Illinois filed a

twelve-count criminal indictment against Tina, charging her with

fraud and tax violations. Robert was not charged. In May 2017,

while Tina’s criminal prosecution was pending, F&W filed a civil

suit against Tina and Robert in state court in McLean County,

Illinois (the “Illinois Case”).

In June 2017, Tina pleaded guilty to a fraud charge and a tax

charge. In December 2017, Tina was sentenced to 42 months

imprisonment plus three years of supervised release and was ordered

to pay F&W just over $1.4 million in restitution. In February

2018, Tina began serving her prison sentence at the Dublin

Correctional Facility in California.

At the time of Tina’s sentencing, Tina and Robert had been

living in California for almost two years. Under California

community property law, Tina had a 50% interest in all their

assets, notwithstanding any titled ownership in Robert’s name.

F&W alleges that immediately after Tina was sentenced, she and

Robert embarked on a scheme to place their combined assets beyond

F&W’s reach. The alleged scheme had many parts, but the most

important component was obtaining a sham divorce that would make

Robert the sole owner of all their community property.

In July 2018, Robert filed a pro se petition for divorce in

state court in Alameda County, California (the “California Divorce

Case”).

Tina was released to a halfway house in California in August

2019, after serving eighteen months.

On September 20, 2019, Tina and Robert executed a marital

settlement agreement (“MSA”). Pursuant to the MSA, Tina assigned

her entire 50% interest in certain “Identified Assets” to Robert

(the “MSA Transfer”). The Identified Assets consisted of: (a) all

personal property in Robert’s possession and control, including

furniture, furnishings, jewelry, and other items; (b) a 2010 Jeep

Wrangler; (c) a State Farm life insurance policy; (d) a Charles

Schwab IRA account; and (e) a Tesla 401(k) account. In exchange,

Tina received the personal property in her possession. F&W alleges

that through the MSA Transfer, Robert received roughly $650,000 in

assets, while Tina received $500 in assets.

In February 2020 the judge in the California Divorce Case

entered a judgment of dissolution, which incorporated the MSA.

After the marriage was dissolved, Robert left California and

eventually took up residency in Florida. While the date Robert

became a Florida resident is disputed, it was clearly after the

February 2020 resolution of the California Divorce Case.

In October 2020, F&W obtained a judgment for $1.467 million

against Tina in the Illinois Case. Apparently three counts remain

pending against Robert in that case, but the Illinois state court

dismissed a fraudulent transfer claim against him for lack of

personal jurisdiction. Accordingly, F&W filed the instant federal

case, alleging in Count I that the MSA Transfer to Robert was a

voidable transfer under California law.

Robert now moves to dismiss Count I for failure to state a

claim upon which relief may be granted.

II.

Under Federal Rule of Civil Procedure 8(a)(2), a complaint

must contain a “short and plain statement of the claim showing

that the pleader is entitled to relief.” Fed. R. Civ. P.

8(a)(2). This obligation “requires more than labels and

conclusions, and a formulaic recitation of the elements of a cause

of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544,

555 (2007) (citation omitted). To survive dismissal, the factual

allegations must be “plausible” and “must be enough to raise a

right to relief above the speculative level.” Id. at 555; see

also Edwards v. Prime Inc., 602 F.3d 1276, 1291 (11th Cir.

2010). This requires “more than an unadorned, the-defendant-

unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S.

662, 678 (2009) (citations omitted). A claim is facially plausible

“when the plaintiff pleads factual content that allows the court

to draw the reasonable inference that the defendant is liable for

the misconduct alleged.” Iqbal, 556 U.S. at 678.

In deciding a Rule 12(b)(6) motion, a district court may

consider the factual allegations in the complaint and exhibits

attached to the complaint. MSP Recovery Claims, Series LLC v.

Metro. Gen. Ins. Co., 40 F.4th 1295, 1303 (11th Cir. 2022)

(citation omitted); Grossman v. Nationsbank, N.A., 225 F.3d 1228,

1231 (11th Cir. 2000). A court may also consider evidence outside

the complaint if it satisfies the incorporation-by-reference

doctrine or is properly subject to judicial notice. Tellabs, Inc.

v. Makor Issues & Rts., Ltd., 551 U.S. 308, 322 (2007); Swinford

v. Santos, 121 F.4th 179, 187 (11th Cir. 2024). Under the

incorporation-by-reference doctrine, extrinsic material

referenced in the operative complaint and attached to a motion to

dismiss may be considered if it is central to the plaintiff’s claim

and its authenticity is not challenged. Horsley v. Feldt, 304

F.3d 1125, 1134 (11th Cir. 2002); Jackson v. City of Atlanta,

Georgia, 97 F.4th 1343, 1350 (11th Cir. 2024). A court may also

consider exhibits not mentioned in nor attached to a complaint

under the same standard. Maxcess, Inc. v. Lucent Techs., Inc.,

433 F.3d 1337, 1340 n.3 (11th Cir. 2005).

A court must accept all factual allegations in the complaint

as true and take them in the light most favorable to the plaintiff,

Erickson v. Pardus, 551 U.S. 89 (2007), but “[l]egal conclusions

without adequate factual support are entitled to no assumption of

truth,” Mamani v. Berzain, 654 F.3d 1148, 1153 (11th Cir. 2011)

(citations omitted). “Threadbare recitals of the elements of a

cause of action, supported by mere conclusory statements, do not

suffice.” Iqbal, 556 U.S. at 678. “Factual allegations that are

merely consistent with a defendant’s liability fall short of being

facially plausible.” Chaparro v. Carnival Corp., 693 F.3d 1333,

1337 (11th Cir. 2012) (citations omitted). Thus, a court engages

in a two-step approach: “When there are well-pleaded factual

allegations, a court should assume their veracity and then

determine whether they plausibly give rise to an entitlement to

relief.” Iqbal, 556 U.S. at 679.

III.

F&W’s current federal Complaint sets out four counts against

Robert, but only Count I is the subject of this motion to dismiss.

Count I sets forth a claim for “AVOIDANCE AND RECOVERY OF AVOIDABLE

TRANSFERS: The MSA Transfer (CA CIVIL §3439 et seq. and California

Common Law).” (Doc. #1, p. 30.) Count I alleges that Tina effected

the MSA Transfer to hinder, delay and defraud her creditors,

including F&W, and that she was insolvent at the time of the

transfer. F&W alleges that the MSA Transfer was both actually and

constructively fraudulent. F&W further asserts that it is entitled

to void the MSA Transfer to Robert under the California Uniform

Voidable Transfer Act and to recover the transfer’s value, i.e.

50% of the value of the Identified Assets. F&W also asserts that

under California common law, it is entitled to the same relief, as

well as to compensatory and punitive damages. (Doc. #1, ¶¶ 118-

128.)

A. California Uniform Voidable Transactions Act

Since Count I purports to set forth a claim under California

law, the Court looks to California law for the elements of the

cause of action.

California has a long history of allowing creditors to bring

an action in equity to reach assets that a debtor has conveyed to

a third party. California has also had various statutory

frameworks addressing voidable transfers. The California Uniform

Fraudulent Transfer Act (“UFTA”) was enacted in 1986, and with

minor changes, was retitled in 2016 as the Uniform Voidable

Transactions Act (“UVTA”). See MACH-1 RSMH, LLC v. Darras, 324

Cal. Rptr. 3d 160, 167–68 (Ct. App. 2024).

As it applies to an existing creditor such as F&W, a transfer

may be voidable either because of actual fraud or constructive

fraud. Mejia v. Reed, 74 P.3d 166, 168 (Cal. 2003). A transfer

of an asset by a debtor is voidable if the debtor made the transfer

“[w]ith actual intent to hinder, delay, or defraud any creditor of

the debtor.” Cal. Civ. Code § 3439.04(a)(1). The UVTA lists

eleven non-exclusive characteristics or “badges of fraud” to help

determine a debtor’s actual intent. Id. § 3439.04(b).

A transfer of an asset by a debtor may also be voidable if

there was constructive fraud. A transfer is constructively

fraudulent under the UVTA where a debtor makes the transfer

[w]ithout receiving a reasonably equivalent value in

exchange for the transfer . . . and the debtor either:

(A) [w]as engaged or was about to engage in a business

or a transaction for which the remaining assets of the

debtor were unreasonably small in relation to the

business or transaction[; or] (B) [i]ntended to incur,

or believed or reasonably should have believed that the

debtor would incur, debts beyond the debtor's ability to

pay as they became due.

Id. § 3439.04(a)(2). Additionally, a transfer is constructively

fraudulent when a debtor makes a transfer “without receiving a

reasonably equivalent value in exchange . . . and the debtor was

insolvent at that time or . . . became insolvent as a result of

the transfer . . . .” Id. § 3439.05(a).

A successful creditor may obtain a variety of statutory

remedies, including voiding the transfer of assets, attachment of

assets, and an array of equitable relief. Id. § 3439.07(a)-(d).

A creditor may also supplement the UVTA’s remedies with any others

available at law or in equity. Id. § 3439.12. This includes a

common law claim for fraudulent transfer, which allows recovery of

consequential and punitive damages. Berger v. Varum, 248 Cal.

Rptr. 3d 51 (Ct. App. 2019).

Of particular relevance here, for a fraudulent transfer to

take place, there must be a “transfer” of an “asset” as defined in

the UVTA. Fid. Nat’l Title Ins. Co. v. Schroeder, 101 Cal. Rptr.

3d 854, 858 (Ct. App. 2009).1

“Transfer” is broadly defined under the UVTA as “every

mode . . . of disposing of or parting with an asset or an interest

in an asset . . . .” Cal. Civ. Code § 3439.01(m). The California

Supreme Court has noted that “[o]n its face, the U[V]TA applies to

all transfers” and has concluded “that when a couple enters into

a marital settlement agreement to divide their property in a

dissolution action, that agreement can be challenged as an

avoidable transaction under the UVTA.” Bijan Boutiques, LLC v.

Isong, 324 Cal. Rptr. 3d 390, 395 (Ct. App. 2024) (citing Mejia,

74 P.3d at 170). It is clear that the MSA Transfer between Tina

and Robert was a “transfer” within the UVTA’s meaning.

“[A]sset” is broadly defined under the UVTA to mean the

“property of a debtor,” but that definition contains two relevant

exceptions. An asset does not include property (1) “to the extent

1 In addition, a potentially voidable transfer may be challenged

only by one who is injured by the transfer. Schroeder, 101 Cal.

Rptr. 3d at 862 (“injury-in-fact is an essential element of a claim

under the U[V]TA”). “It cannot be said that a creditor has been

injured unless the transfer puts beyond [her] reach property [she]

otherwise would be able to subject to the payment of [her] debt.’”

Id. at 859. This injury requirement is built into the UVTA’s

express terms. Id. at 862.

it is encumbered by a valid lien,” or (2) “to the extent it is

generally exempt under nonbankruptcy law.” Cal. Civ. Code §

3439.01(a). In short, there can be no voidable transfer if a

creditor could not have reached an asset in the first place.

B. Robert’s Ground For Dismissal

Robert’s motion to dismiss argues that the Identified Assets

are exempt under California law and therefore cannot be the subject

of an UVTA action. (Doc. #46, pp. 1–2.) Relying solely on

California law, his motion asserts that each Identifiable Asset is

exempt from F&W’s reach either completely or partially. (Id. at

6–7.) In particular, Robert asserts that California law exempts

the IRA and 401(k) “retirement” accounts, which form the “lion’s

share” of the alleged voidable transfer. (Id. at 8.) In a

footnote, Robert avers that the result would be no different under

the laws of Florida or Illinois. (Id. at 9 n.1.) Since “[e]xempt

property is categorically excluded from the definition of an asset

that can be the subject of a fraudulent transfer action,” Robert

seeks a dismissal with prejudice. (Id. at 9.)

Not surprisingly, F&W opposes the motion. (Doc. #47.) F&W

asserts that while the Court will eventually need to determine

whether California or Florida exemption laws apply, now is not the

proper time. Rather, F&W asserts that the motion must be denied

because Robert has included multiple facts outside the four corners

of the Complaint that cannot be considered by the Court. (Doc.

#47, pp. 1–2.) F&W argues further that even if those facts were

considered, the motion would fail because Robert’s view of

California exemption law is simply wrong as to the alleged

retirement funds, and the allegations in the Complaint do not bring

either of the two major assets within the actual California

exemption. (Id. at 2–3, 12–16.)

* * * * *

Under California law, a transfer of property which is fully

exempt cannot be voided since the creditor could never have reached

that property. A transfer of property which is exempt up to a

certain dollar limit is voidable only if the debt exceeds the

exempted amount, and then only to the amount in excess of the

exemption. California law also recognizes, however, “that all

exemptions are subject to exceptions.” Schroeder, 101 Cal. Rptr.

3d 854, 862 n.7 (Ct. App. 2009) (citing West’s Ann. Cal. Civ. Code

§ 3439.01, legislative committee’s comments to 1986 Addition).

The Complaint does not provide a basis to determine which, if

any, of the Identified Assets are exempt or the amount of the

applicable exemptions. Nothing else that the Court may properly

consider establishes that all portions of all Identified Assets

cannot be an “asset” within the UVTA’s meaning. Therefore,

applying California law, the motion to dismiss is due to be denied.

IV.

In his Reply Brief, (Doc. #51), Robert argues for the first

time that Florida law, not California law, determines whether the

assets are exempt. This is so, he asserts, because he is and was

a Florida resident when this federal case was filed and during

prior “iterations” of the Illinois Case. Robert asserts that he

“made a legal mistake in arguing that California law defined [the]

exempt property.” (Id. at 3.) He now argues that the IRA and

401(k) accounts and the State Farm life insurance policy are fully

exempt, without limitations, under Florida law. (Id. at 1-2, 4.)

Thus, Robert argues, the fraudulent transfer claim is barred under

the rule that exempt property cannot be the subject of a fraudulent

transfer. (Id. at 2, 4.) Without the retirement accounts and the

life insurance policy, Robert argues further, the value of the

remaining Identified Assets falls below the $75,000 jurisdictional

threshold. (Id. at 4.)2

A. “Governing Law” Under California UVTA

The UVTA contains a section describing the “governing law”

for voidable transfer claims. This section provides that “[a]

claim . . . is governed by the local law of the jurisdiction

[where] the debtor is located when the transfer is made . . . .”

Cal. Civ. Code § 3439.10(b). An individual debtor’s location is

determined by their “principal residence.” Id. at § 3439.10(a)(1).

2 This argument is a non-starter. Even if the value of the claim

in Count I were reduced to near zero, the Court would retain

jurisdiction since the alleged values of the claims in Counts II–

IV suffice under 28 U.S.C. § 1332.

The time that a “transfer is made” depends on the nature of the

item being transferred. Id. § 3439.06(a)–(d).

In this case the debtor is Tina, and the transfer was made no

later than when the California court incorporated the MSA into the

divorce judgment on or about September 20, 2019. (Doc. #1, ¶ 58.)

The Complaint alleges that at that time, Tina’s principal residence

was in California. Thus, California law would direct that

California laws of exemption apply in this case.

B. Choice-of-Law Principles

Robert’s belated argument requires the Court to at least begin

assessing the choice-of-law issue(s) in this case. Unless federal

constitutional or statutory law provides otherwise, Travelers

Prop. Cas. Co. of Am. v. Talcon Group LLC, 88 F.4th 1371, 1377 n.4

(11th Cir. 2023), a federal court sitting in diversity must apply

the substantive law of the forum state, including its choice-of-

law rules. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487,

496 (1941); Calderon v. Sixt Rent a Car, LLC, 114 F.4th 1190, 1200

(11th Cir. 2024).

The question of which state’s substantive law applies is a

question of law. American Family Life Assur. Co. v. United States

Fire Co., 885 F.2d 826, 830 (11th Cir. 1989); Schippers v. United

States, 715 F.3d 879, 888 (11th Cir. 2013). A district court may

determine the governing law at the dismissal stage of the

proceedings. Sun Life Assurance Co. of Canada v. Imperial Premium

Fin., LLC, 904 F.3d 1197, 1209 (11th Cir. 2018). F&W has invoked

diversity jurisdiction, this Court sits within Florida, and no

federal provisions preclude the Court’s application of Florida

choice-of-law rules.

Under Florida law, a court need not resolve a choice-of-law

dispute if there is a “false conflict,” i.e., if the laws of

different, interested states point to the same outcome on an issue.

In re January 2021 Short Squeeze Trading Litig., 76 F.4th 1335,

1346 (11th Cir. 2023). If there is a conflict, “the court must

characterize the legal issue and determine whether it sounds in

torts, contracts, property law, etc. Once it has characterized the

legal issue, it determines the choice of law rule that the forum

state applies to that particular type of issue.” Grupo Televisa,

S.A. v. Telemundo Communications Group, Inc., 485 F.3d 1233, 1240

(11th Cir. 2007).

A “court makes a separate choice of law determination with

respect to each particular issue under consideration.” Trumpet

Vine Investments, N.V. v. Union Capital Partners I, Inc., 92 F.3d

1110, 1115 (11th Cir. 1996). “[D]ifferent substantive issues in

a single case may have to be resolved under the laws of different

states where the choices influencing decisions differ.” Foster v.

United States, 768 F.2d 1278, 1281 (11th Cir. 1985).

Florida resolves choice-of-law questions involving torts

through the “most significant relationship” test of the

Restatement (Second) of Conflict of Laws. Grupo Televisa, 485

F.3d at 1240, citing Bishop v. Florida Specialty Paint Co., 389

So.2d 999, 1001 (Fla. 1980). For choice-of-law questions in

contract cases, Florida applies the rule of lex loci contractus.

Calderon v. Sixt Rent a Car, LLC, 114 F.4th 1190, 1200 (11th Cir.

2024) (citing Goodman v. Olsen, 305 So. 2d 753, 755 (Fla. 1974)).

(1) Issue in Dispute

The motion to dismiss addresses only F&W’s claim challenging

the MSA Transfer as a voidable transfer. The Court must determine

whether the exemption laws of California or Florida apply in order

to assess whether the Complaint states a claim upon which relief

may be granted. In other words, are the elements of this cause of

action determined by the law of the jurisdiction where the

transferee and transferor resided and where the transfer occurred

or by the law of the jurisdiction to which the transferee

thereafter relocated?

(2) Actual Conflict

The parties do not dispute the existence of an actual conflict

between the laws of California and Florida on this issue. The

laws of both states differ on the applicability and extent of many

relevant exemptions.3 Thus, there is an actual conflict of laws

3 For example, as to the cash value of an insurance policy,

California law exempts $13,975 for each spouse, Cal. Code Civ. P.

§ 704.100, whereas Florida law exempts the entire amount, Fla.

Stat. § 222.14. As to a vehicle, California law exempts up to

on the issue now before the Court.

(3) Characterization of Claim

While it seems intuitive that a fraudulent transfer claim

would sound in tort, that has not been the experience in Florida.

Brown v. Nova Info. Sys., Inc., 903 So. 2d 968, 969 (Fla. 5th DCA

2005) (holding that conspiracy to violate FUFTA is not a “tort

giving rise to long-arm jurisdiction,” and noting that fraudulent

transfers have been held not to be “tort[s] for purposes of

establishing personal jurisdiction”); Clement v. Lipson, 999 So.

2d 1072, 1076 (Fla. 5th DCA 2008) (same); Edwards v. Airline

Support Group, Inc., 138 So. 3d 1209, 1211 (Fla. 4th DCA 2014)

(same). The Court therefore applies Florida choice-of-law

principles for both contracts and torts, which ultimately leads to

the same result.

C. Application of Florida Choice-of-Law Principles

Robert’s only basis to assert that Florida law governs the

definition of exempt property is that he was a resident of Florida

when (1) the instant federal suit was filed against him, and (2)

the prior fraudulent transfer claim was brought against him in the

Illinois Case. The latter argument is demonstrably wrong. Robert

$7,500, Cal. Code Civ. P. § 704.010, whereas Florida law only

exempts $5,000, Fla. Stat. § 222.25(1). As to retirement accounts,

Robert concedes that California provides a “qualified” exemption

but argues that Florida provides an “unlimited” exemption. (Doc.

#51, p. 5 (citing Fla. Stat. § 222.21(2)(a)).

and Tina were residents of California when the complaint in the

Illinois Case was filed in May 2017 and amended in April 2019,

(Doc. #1, ¶ 52); they established residency in Florida no earlier

than 2020. Robert was a resident of Florida when this federal

lawsuit was filed in 2023, and while that may be important to some

issues, it is not significant to the issue presently before the

Court.

The exemptions at issue belong to Tina, the transferor, not

Robert, the transferee. The transfer was “made” in California,

regardless of whether it occurred when the MSA was executed on

September 20, 2019, or incorporated into the dissolution judgment

on February 26, 2020. Nothing that Robert did thereafter can

affect Tina’s exemptions. Nothing in the Complaint or the

arguments of Robert’s counsel suggests that Tina’s exemptions are

defined by Florida law. But even when focusing solely on Robert’s

conduct, regardless of whether Florida choice-of-law rules for

contract or tort actions are applied, the extensive contacts with

California make clear that California law governs the present

issue.

The MSA was negotiated, executed, and performed in

California. Tina and Robert were residents of California before

and during the negotiation and execution of the MSA. The place

where the conduct causing injury to F&W took place was California,

where the MSA Transfer occurred. California has a paramount

interest here, as Tina and Robert utilized its state court system

to initiate and further the allegedly voidable transfer “through

[the] MSA,” and California recognizes that such “transfer[s] ...

can be avoided.” In re Beverly, 374 B.R. 221, 233 (B.A.P. 9th

Cir. 2007), aff’d in relevant part, dismissed in part, 551 F.3d

1092 (9th Cir. 2008). That a transferee moves to another state

after a transfer occurs can neither enlarge nor diminish the scope

of an exemption.

As discussed above, applying California law, as directed by

Florida choice-of-law principles, results in a finding that the

Complaint plausibly states a cause of action.

Accordingly, it is now

ORDERED :

Defendant Robert A. Cozart’s Motion to Dismiss (Doc. #46) is

DENIED.

DONE AND ORDERED at Fort Myers, Florida, this 23rd day of

December 2024,

ox

: le hy ) Z. A, Gob

adi EF. STEELE

SHNIOR UNITED STATES DISTRICT JUDGE

Copies: Parties of record

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