Soho Ocean Resort TRS, LLC v. Daniel Rutois

USCA11 Case: 21-11392 Document: 47-1 Date Filed: 01/18/2023 Page: 1 of 10

[DO NOT PUBLISH]

In the

United States Court of Appeals

For the Eleventh Circuit

____________________

No. 21-11392

Non-Argument Calendar

____________________

SOHO OCEAN RESORT TRS, LLC,

A Delaware limited liability company,

Plaintiff-Appellant,

versus

DANIEL RUTOIS,

an individual,

KGA MANAGEMENT GROUP, LLC,

Defendants-Appellees.

____________________

Appeal from the United States District Court

for the Southern District of Florida

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2 Opinion of the Court 21-11392

D.C. Docket No. 0:19-cv-61335-AHS

____________________

Before WILSON, LUCK, and ANDERSON, Circuit Judges.

PER CURIAM:

Soho Ocean Resort TRS, LLC appeals the district court’s or-

der dismissing its claims for tortious interference. We reverse.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY 1

This case arises from a contract between Soho and the 4111

South Ocean Drive Condominium Association, Inc. Soho entered

the contract to operate and manage the Hyde Resort—a ho-

tel/condo resort governed by the condo association in Hollywood,

Florida—soon after the resort began experiencing a number of

problems. Under the contract, Soho also manages and operates the

only rental program sanctioned by the resort for its units. Daniel

Rutois is an owner of a condo in the resort who operates a compet-

ing rental program through KGA Management Group, LLC.

A few months after Soho began managing the resort, the

condo association scheduled a member vote to terminate several

of its major contracts, including Soho’s. The vote failed. The

condo association rescheduled the vote to accommodate its

1

The facts are taken as alleged in the operative complaint.

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21-11392 Opinion of the Court 3

members who wanted to vote electronically, but that vote also

failed. A third vote was set for three months later.

Before the third vote, Rutois set about campaigning against

Soho’s contract. Rutois’s efforts included e-mails, flyers, in-person

conversations, and beachside marketing to the resort’s unit own-

ers, residents, and guests. The third vote resulted in the termina-

tion of Soho’s contract.

In the operative complaint, Soho sued Rutois and KGA for

tortious interference. Soho’s claims against Rutois included one

count for tortious interference with a contract (Count I) and an-

other for tortious interference with a business relationship (Count

II). Soho’s claim against KGA was for tortious interference with a

contract (Count III). Count I was based on Rutois’s efforts to ter-

minate Soho’s contract. Counts II and III were based on various

things Rutois and KGA were doing in the meantime to undermine

Soho’s relationships with the resort’s employees, unit owners, and

guests.

Rutois and KGA moved to dismiss Soho’s complaint on the

ground that Soho failed to allege a cause of action for tortious in-

terference under any count. Specifically, they argued that Soho

failed to allege the prima facie elements of tortious interference as

to Count I, that it failed to allege damages as to Count II, that Ru-

tois enjoyed a qualified privilege against tortious interference as to

Counts I and II, and that KGA’s conduct didn’t give rise to tortious

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4 Opinion of the Court 21-11392

interference as to Count III. The district court granted the motion

and dismissed all counts with prejudice. 2

STANDARD OF REVIEW

We review de novo a dismissal pursuant to Federal Rule of

Civil Procedure 12(b)(6) for failure to state a claim. Leib v. Hills-

borough Cnty. Pub. Transp. Comm’n, 558 F.3d 1301, 1305 (11th

Cir. 2009).

DISCUSSION

The threshold for surviving a motion to dismiss for failure

to state a claim under rule 12(b)(6) is a low one. Quality Foods de

Centro Am., S.A. v. Latin Am. Agribusiness Dev. Corp., S.A., 711

F.2d 989, 995 (11th Cir. 1983). A plaintiff must plead only enough

facts, all of which are accepted as true, to state a claim to relief that

is plausible on its face. Bell Atl. Corp. v. Twombly, 550 U.S. 544,

556, 570 (2007). In other words, a plaintiff must provide the

2

On appeal, we determined that the operative complaint didn’t allege the

identity and citizenship of each member of Soho and KGA at the time suit was

filed. We remanded the case to the district court for the limited purpose of

determining the citizenship of the parties to establish whether diversity juris-

diction existed. The district court found that, when the suit was filed, Soho’s

sole member was MHI LLC, whose sole member was MHI Inc., a Maryland

corporation with its principal place of business in Virginia; that KGA’s sole

member was Sara Peremolnik, a Florida citizen; and that Rutois was a Florida

citizen. Based on these findings, we find that the parties were completely di-

verse, so we have jurisdiction to hear this appeal.

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21-11392 Opinion of the Court 5

grounds for his entitlement to relief but needn’t include detailed

factual allegations. Id. at 555. Overall, a complaint must “give the

defendant fair notice of what the claim is and the grounds upon

which it rests.” Id. (alteration omitted).

We conclude that Soho met this low threshold. Soho’s op-

erative complaint provided all that Rutois and KGA needed to give

them fair notice of Soho’s claims and their grounds.

Under Florida law, to state a claim for tortious interference

with a contract, a plaintiff must allege four elements: (1) the exist-

ence of a contract, (2) the defendant’s knowledge thereof, (3) the

defendant’s intentional and unjustified procurement of a breach

thereof; and (4) damages. Sun Life Assurance Co. of Canada v. Im-

perial Prem. Fin., LLC, 904 F.3d 1197, 1215 (11th Cir. 2018). Simi-

larly, to state a claim for tortious interference with a business rela-

tionship, a plaintiff must allege four elements: (1) the existence of

a business relationship, (2) the defendant’s knowledge thereof;

(3) the defendant’s intentional and unjustified interference there-

with; and (4) damages. Ethan Allen, Inc. v. Georgetown Manor,

Inc., 647 So. 2d 812, 814 (Fla. 1994). Soho’s operative complaint

alleged facts that, if taken as true, established each element of its

claims against Rutois and KGA sufficiently for pleading purposes.

A. Count I

As to Count I, Soho alleged that Rutois made false state-

ments to the resort’s unit owners, residents, and guests with the

intent to induce the condo association, through its owners, to

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6 Opinion of the Court 21-11392

terminate its contractual agreement with Soho. These statements

included that Soho may start charging a resort and parking fee to

unit owners’ friends and family; that Soho cannot be trusted as the

manager to hire financial auditors, engineers, and counsel for the

Hyde Resort; that Soho had a conflict of interest; that Soho ex-

tended an illegal bribe to unit owners; and that Soho engaged in

discriminatory conduct, is racist, and underestimates the intelli-

gence of Hispanic people.

The district court, focusing on the third element (the defend-

ant’s intentional and unjustified procurement of a breach), found

that “[t]he problem with each of these allegations is the same: the

[second] amended complaint does not allege that Rutois actually

made any of these statements.” This was the same problem we

found in Duty Free Americas, Inc. v. Estée Lauder Cos. See 797

F.3d 1248, 1281 (11th Cir. 2015) (“As we see it, the problem with

each of these allegations is the same: the complaint does not allege

that Estée Lauder actually made any of these statements.”). There,

the plaintiff indeed failed to allege that the defendant made any

statements at all that directly supported the plaintiff’s claims. Id. at

1281. Instead, the plaintiff asked the court to infer the requisite in-

tent from various benign communications between the parties. Id.

In stark contrast, Soho not only alleged that Rutois made these

statements; he provided details about the contents of the state-

ments, how the statements were communicated, to whom the

statements were directed, and the dates the statements were made.

We find these allegations more than adequate at the pleading stage.

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The district court found that it was “[m]ore telling” that

“Soho[] fail[ed] to attach a single exhibit showcasing the statements

purportedly written by Rutois, including the alleged e-mail,” which

was “not even incorporated by reference in the” operative com-

plaint. But this is not a proper ground for dismissal because the

Federal Rules of Civil Procedure permit, but don’t require, the at-

tachment of relevant exhibits to the complaint. See Fed. R. Civ. P.

10(c).

Finally, the district court found that Rutois had the requisite

financial interest in the condo association, as its president, to in-

voke the affirmative defense of privilege. “Generally, the existence

of an affirmative defense will not support a motion to dismiss.

Nevertheless, a complaint may be dismissed under Rule 12(b)(6)

when its own allegations indicate the existence of an affirmative

defense, so long as the defense clearly appears on the face of the

complaint.” Quiller v. Barclays Am./Credit, 727 F.2d 1067, 1069

(11th Cir. 1984). Because no allegation in Soho’s operative com-

plaint indicated that Rutois had any relationship at all with the

condo association, this exception doesn’t apply. As such, the af-

firmative defense of privilege is unavailable at this stage of the pro-

ceedings. More factual development is necessary to establish

whether Rutois’s alleged actions were taken in his capacity as an

agent of the condo association, in his capacity as an agent of Soho’s

competitor, or in his personal capacity.

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8 Opinion of the Court 21-11392

B. Count II

As to Count II, Soho alleged that Rutois engaged in conduct

designed to interfere with Soho’s business relationships with its

employees at the Hyde Resort. Specifically, Soho alleged that Ru-

tois told Soho’s employees that they must follow his orders and

directives or face the consequences; that he was rude to and made

unreasonable demands of Soho’s employees; that he denigrated

Soho’s employees by speaking to them in a condescending, mali-

cious, humiliating, or threatening manner, to include continually

threatening Soho’s employees with loss of employment; that he

constantly bullied valet staff; that he threatened to terminate the

resort’s valet parking manager’s employment; that he encouraged

other unit owners at the Hyde Resort to similarly threaten Soho’s

staff; and that he once called local law enforcement officers on

members of the staff. Soho alleged that as a direct and proximate

result of Rutois’s improper conduct, Soho lost trained staff and suf-

fered income loss.

The district court found these allegations to be “vague” and

“insufficient to state a claim for tortious interference that is plausi-

ble on its face.” We disagree. Soho alleged a legitimate business

relationship—namely, its employment relationship with members

of its staff. See Florida Power & Light Co. v. Fleitas, 488 So. 2d 148,

152 (Fla. 3d DCA 1986) (“Intentional interference with a contrac-

tual employment relationship—even one, as here, which is termi-

nable at will—is actionable in Florida.”). It alleged that Rutois

knew of the relationship and intentionally and unjustifiably

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interfered with it. And it alleged that the relationship was damaged

when employees resigned as a result of Rutois’s actions. Nothing

more is needed at the pleading stage. Rule 8’s pleading standards

do not support the district court’s finding that Soho is required, at

this time, to “name[] any of the employees Rutois reportedly inter-

fered with” or to attach any supporting documentation to the op-

erative complaint. These details will emerge in discovery.

C. Count III

As to Count III, Soho alleged that KGA set up shop on resort

premises and proceeded to engage in various marketing practices

and activities targeting unit owners whom they knew to be partic-

ipants of the Soho rental program, with the intent of inducing them

to participate in KGA’s competing rental program. This is a closer

call than in Count I against Rutois, whose alleged actions leave lit-

tle doubt regarding their propriety. But Soho alleged that KGA vi-

olated various industry norms and resort policies by operating an

unsanctioned competitor to Soho within the resort, by comman-

deering Soho’s resources and employees for its benefit, by adver-

tising artificially lower rates, by using proprietary and trademarked

resort materials without authorization, and by hiring an employee

to solicit unit owners to participate in its rental program. “‘[W]hen

there is room for different views’ about the propriety of a defend-

ant’s interference with a plaintiff’s business relationships,” as there

is here, “‘the determination of whether the interference was im-

proper or not is ordinarily left to the jury.’” Duty Free Ams., 797

F.3d at 1280 (quoting Mfg. Rsch. Corp. v. Greenlee Tool Co., 693

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10 Opinion of the Court 21-11392

F.2d 1037, 1040 (11th Cir. 1982)). We therefore find that Soho’s

allegations are sufficient to pass the pleading threshold.

CONCLUSION

Because Soho has met the low bar of notice pleading, we

reverse the district court’s order dismissing its claims and remand

for further proceedings consistent with this opinion.

REVERSED AND REMANDED.