UNITED STATES FIRE INSURANCE COMPANY

v.

FINEMARK NATIONAL BANK & TRUST

ORDER1

Before the Court is Defendant Finemark National Bank & Trust’s Motion to Dismiss (Doc. 32). Plaintiff United States Fire Insurance Company (“USFIC”) responded in opposition (Doc. 33). The Court denies the Motion. This is a dispute over money (“Funds”) placed in a bank account with Finemark (“Account”). USFIC issued a surety bond for a contractor (“Contractor”) in relation to a construction project (“Project”). Contractor failed

Finemark was Contractor’s bank. And Contractor owed Finemark money. Eventually, Contractor got a check for the Project (i.e., the Funds). So Contractor deposited the Funds in the Account. The Funds were earmarked to benefit vendors. But Finemark swept the Funds from the Account even though it had no right to do so. Rather, USFIC is entitled to the Funds. So USFIC sued Finemark for declaratory judgment and conversion. A complaint must recite “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). To survive a Rule 12(b)(6) motion, the “complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (cleaned up). A facially plausible claim allows a “court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. At this stage, courts usually don’t consider matters outside the four corners of the complaint and its exhibits. Allen v. USAA Cas. Ins., 790 F. 3d 1274, 1278 (11th Cir. 2015). So courts accept all well-pled allegations as true and view them most favorably to plaintiff. Almanza v. United Airlines, Inc., 851 F. 3d 1060, 1066 (11th Cir. 2017). Sitting in diversity, the Court applies federal procedural and Florida substantive law. Glob. Quest, LLC v. Horizon Yachts, Inc., 849 F. 3d 1022, 1027 (11th Cir. 2017).

First, Finemark thinks dismissal of Count² (conversion) is proper because the Funds are not identifiable. The Court disagrees. “Conversion is the exercise of wrongful dominion or control over property to the detriment of the rights of the actual owner.” Bel-Bel Int’l Corp. v. Cmty.

Bank of Homestead, 162 F. 3d 1101, 1108 (11th Cir. 1998) (cleaned up). Money can be the “subject of conversion so long as it consists of specific money capable of identification.” Fla. Desk, Inc. v. Mitchell Int’l, Inc., 817 So. 2d 1059, 1061 (Fla. Dist. Ct. App. 2002) (citation omitted). Put another way, there must be

“a specific fund capable of separate identification.” Bel-Bel, 162 F. 3d at 1108 (citation omitted). To be actionable, “there must be an obligation to keep intact or deliver the specific money in question, so that such money can be identified.” Taubenfeld v. Lasko, 324 So. 3d 529, 542 (Fla. Dist. Ct. App. 2021).

In many cases, “an action for conversion of money can only be maintained where the money at issue has been kept separate.” Transcapital Bank v. Shadowbrook at Vero, LLC, 226 So. 3d 856, 864 (Fla. Dist. Ct. App. 2017) (citation omitted); Regions Bank v. Kaplan, No. 17-15478, 2021 WL 4852268,

at *6 (11th Cir. Oct. 19, 2021). So money in a segregated account can support conversion. Combe v. Flocar Inv. Grp. Corp., 977 F. Supp. 2d 1301, 1308 (S.D. Fla. 2013); 12 Fla. Jur. 2d, Conversion and Replevin § 7 (June 2022 update). In passing, Finemark attacks USFIC’s earmark allegation—saying the pleading was conclusory. Not so. USFIC alleged the Funds were earmarked for specific vendors or debt. The Court must accept that factual allegation as true. Even leaving that aside, earmarking is not required so long as the money is still identifiable. Special Purpose Accounts Receivable Co-op Corp. v. Prime One Cap. Co., 125 F. Supp. 2d 1093, 1100 (S.D. Fla. 2000). So the Court denies the Motion in that regard. Next comes the crux of Finemark’s challenge. It contends Count² fails because the Funds comingled with other money in the Account. As USFIC counters, this argument is well outside the pleadings. See Allen, 790 F. 3d at

1278. And the Court will not settle disputed facts at this stage. E.g., Page v. Postmaster Gen. and Chief Exec. Officer of U.S. Postal Serv., 493 F. App’x 994, 995 (11th Cir. 2012) (“In adjudicating a motion to dismiss, the district court may not resolve factual disputes.”). Instead, the Court accepts the well-pled facts and views them favorably to USFIC. Almanza, 851 F. 3d at 1066. Nothing in the Complaint hints at comingling money within the Account. Instead, USFIC alleged a specific check deposited a specific lump sum around a specific day into a specific account (i.e., the Account). In other words, USFIC said specifically identifiable money at issue (i.e., the Funds) went into the Account without mentioning any comingling. Whether the Funds were kept separate within the Account is a factual matter to resolve later. So the Court denies the Motion in that regard.²

And second, Finemark argues Count² must fail because it is not independent of breach of contract. The Court disagrees. In Florida, “conversion must go beyond, and be independent from, a failure to comply with the terms of a contract.” Frayman v. Douglas Elliman

Realty, LLC, 515 F. Supp. 3d 1262, 1285 (S.D. Fla. 2021) (citation omitted). This rule stems from the independent tort doctrine and economic loss rule.³ Merchant One, Inc. v. TLO, Inc., No. 19-cv-23719-BLOOM/Louis, 2020 WL 248608, at *4 (S.D. Fla. Jan. 16, 2020); Carran v. Morgan, 510 F. Supp. 2d

1053, 1060 (S.D. Fla. 2007). At bottom, it prevents parties from circumventing their contracts by bringing tort claims. Ginsberg v. Lennar Fla. Holdings, Inc., 645 So. 2d 490, 494 (Fla. Dist. Ct. App. 1994). But this prohibition only applies “when the parties have a contractual relationship” or privity. E.g.,

Shadowbrook, 226 So. 3d at 864.4

61. So the Court denies the Motion in that regard.

With the Motion denied, the Court addresses Finemark’s Answer (Doc. 31). Because Finemark filed the Motion as to Count², it only Answered Count¹ (declaratory judgment). It is the Court’s practice to avoid piecemeal pleadings. So Finemark must file an amended answer as to both claims. Accordingly, it is now ORDERED: 1. Defendant’s Motion to Dismiss Count II of Plaintiff, United States Fire Insurance Company’s Amended Complaint (Doc. 32) is DENIED. 2. Defendant must FILE an amended answer on or before June 28, 2022. DONE and ORDERED in Fort Myers, Florida on June 14, 2022.

UNITED STATES DISTRICT JUDGE

Copies: All Parties of Record

Motorcars, LLC, No. 19-60917-CIV-COHN/SELTZER, 2019 WL 9786489, at *2 (S.D. Fla. July 23, 2019); Drogieria Betances, LLC v. Forward Shipping Miami, Inc., No. 21-60453-CIV- COHN/STRAUSS, 2021 WL 6841535, at *2 (S.D. Fla. Apr. 30, 2021); Un2Je Air¹, LLC v. Whittington, 324 So. 3d 1, 3 (Fla. Dist. Ct. App. 2021).