Southern District of Florida Dismisses ILSA and Personal Fraud Claims Against Developer With Prejudice

Recently a pre-construction purchaser of a unit in a stalled condominium project in Sunny Isles, Florida asserted multiple claims in federal court against the project's developer and its employees. In addition to the standard breach of contract claim, the plaintiff also attempted to allege multiple violations of the Interstate Land Sales Act ("ILSA") and Florida Deceptive and Unfair Trade Practices Act ("FDUTPA") as a class action on behalf of all other contracted unit-purchasers.

The plaintiff's initial ILSA claims were all based on alleged failures of the developer and its employees to make certain disclosures to HUD as required by ILSA. After a motion to dismiss filed on behalf of the developer and its employees, plaintiff acknowledged that its initial ILSA-disclosure claims were time-barred and agreed to amend its complaint. Within its amended complaint, the plaintiff re-framed the alleged defects in disclosure as ILSA-fraud by the developer and its employees - who again moved to dismiss. This time the plaintiff had failed to satisfy the heightened pleading requirements of fraud allegations under Rule 9(b) and Iqbal and failed to properly allege the elements of fraud. Most notably, plaintiff failed to allege reasonable reliance. The Southern District dismissed plaintiff's amended complaint without prejudice and gave specific instructions to the plaintiff as to how to rectify its pleading deficiencies,

In his second amended complaint, Plaintiff changed his theory upon which his ILSA-fraud claims were based and yet still failed to satisfy the requirements of 9(b) and the court's direction. The developer and its employees again moved to dismiss, this time with prejudice due to the plaintiff's continued failure to heed the court's instructions. Last month the Southern District entered a 22-page order dismissing all ILSA claims, all class action allegations, all conspiracy claims, and all claims against the individual employees with prejudice. All that remain are a breach of contract and FDUTPA claim against the developers.

Click here to read the Omnibus Order.

Categories: LitigationCondominium Associations
Tags: Condos and HOAsJamie A. ColeEdward G. GuedesJoshua D. KrutMichael S. PopokILSAFort Lauderdale Business Litigation AttorneysFort Lauderdale Business Litigation LawyersMiami Commercial Litigation AttorneyMiami Commercial Litigation LawyerSouth Florida Commercial Litigation AttorneySouth Florida Commercial Litigation LawyerFort Lauderdale Condominium Association AttorneysMiami Condominium Association AttorneysSouth Florida Condominium Association AttorneysSouth Florida Business Dispute Litigation AttorneysSouth Florida Business Dispute Litigation LawyersSouth Florida Private Transactions AttorneysSouth Florida Private Transactions LawyersFort Lauderdale Private Transactions AttorneysMiami Private Transactions AttorneysMatthew H. MandelFort Lauderdale LitigatorsMiami LitigatorsSouth Florida LitigatorsFlorida Commercial Litigation LawyerFort Lauderdale Civil Litigation AttorneysFort Lauderdale Commercial Litigation AttorneysFort Lauderdale Commercial Litigation AttorneysFort Lauderdale Construction LawyerMiami Construction LawyerMiami Commercial Litigation AttorneyMiami Litigation Attorney
Author(s): Michael S. Popok & Samuel I. Zeskind