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Filing # 178191844 E-Filed 07/25/2023 03:11:12 PM
IN THE CIRCUIT COURT OF THE 11th
JUDICIAL CIRCUIT IN AND FOR
MIAMI-DADE COUNTY, FLORIDA
Case No.: 2023-017476-CA-01
FVP SMITHFIELD, a Delaware Florida Bar No: 0170259
Limited Liability Company,
Plaintiff,
vs.
PBM PARTNERS, LLC, a Florida
Limited Liability Company; HIPPEUS
PITT SPONSOR, LLC, a Florida
Limited Liability Company; and
MICHAEL BLUM, an individual,
Defendants.
__________________________________/
DEFENDANTS’ MOTION TO DISMISS COMPLAINT
The Defendants, PBM Partners, LLC; Hippeus Pitt Sponsor, LLC; and Michael Blum;
pursuant to Fla. R. Civ. P. 1.120 and Fla. R. Civ. P. 1.140, move to dismiss the Complaint filed
by FVP Smithfield, LLC (“Smithfield”) for the reasons set forth below.
INTRODUCTION
This lawsuit arises out of a lease for office space in a building in Pittsburgh,
Pennsylvania called The Pitt Building. The Plaintiff, Smithfield, entered into a lease for space
in The Pitt Building with the owner of the building, the Defendant PBM Partners (“PBM”).
Defendant Blum is a member of PBM. Defendant Hippeus Pitt Sponsor is the general manager
of PBM. For the reasons set forth below, this case should be dismissed because 1) all of
Smithfield’s claims are barred by the applicable statutes of limitation, and 2) Smithfield did
not have the legal standing to bring these claims as a result of filing for bankruptcy protection.
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2665 South Bayshore Drive, Suite 301, Coconut Grove, FL 33133 Phone: 305.358.6200 www.krmlegal.com
APPLICABLE LAW
Even though Smithfield filed this case in Florida, a review of the Complaint makes it
clear that all of the alleged conduct occurred in Pennsylvania. The Plaintiff alleges that the
Defendants created a “scheme” to convince Smithfield to enter into the lease agreement for
office space in The Pitt Building. (See ¶¶11-18 of the Complaint.) As Smithfield alleges: “The
sole function of Smithfield was the leasehold at The Pitt Building.” (Complaint ¶16.) A copy
of the lease is attached to the Complaint.
To the extent Smithfield’s claims arise from the lease, the lease itself contains a choice-
of-law provision in §25.9, which provides: “This Lease shall be construed, governed and
enforced with the Laws of the Commonwealth of Pennsylvania, without regard to the
principles of the laws of conflict thereof.” (All emphasis added.) “An agreement between
parties to be bound by the substantive laws of another jurisdiction is presumptively valid, and
this Court [Florida Supreme Court] will enforce a choice-of-law provision unless applying the
chosen forum’s law would contravene a strong public policy of this State.” 1 Southeast Floating
Docks, Inc. v. Auto-Owners Ins., Co., 82 So.3d 73 (Fla. 2012).
To the extent that Smithfield’s claims sound in tort, under Florida’s choice-of-law
analysis, Pennsylvania law applies to these claims as well. Florida applies the significant
relationships test to determine which state’s law applies. See Proprietors Ins. Co. v. Valsecchi,
435 So.2d 290 (Fla. 3d DCA 1983). “Courts all over the United States apply the law of the
state with relevant connection to the litigation.” Id. As set forth in the Complaint, all of the
relevant connections in this case are rooted in Pennsylvania:
1
As discussed later in this Motion, the public policy of this state is to apply the statute of
limitations from the state where the cause of action arose. See Florida Statutes §95.10, infra.
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1. Defendant PBM owned The Pitt Building, which is located in Pittsburgh,
Pennsylvania. (Complaint ¶13.)
2. The sole function of the Plaintiff, Smithfield, was a leasehold in The Pitt Building.
(Complaint ¶16.)
3. Smithfield entered into an office lease with the Defendant PBM for office space
located in The Pitt Building. (Complaint ¶23; Exhibit A to the Complaint.)
4. The lease provided that PBM was responsible for paying state (Pennsylvania) and
local taxes. (Complaint, Ex. A, ¶6.1.)
5. The lease says it “shall be construed, governed and enforced in accordance with the
Laws of the Commonwealth of Pennsylvania,” (Complaint, Ex. A, ¶25.9.)
6. Smithfield made approximately $570,000 in rental payments for space in The Pitt
Building. (Complaint ¶25.)
7. Smithfield spent approximately $1.1 million on improvements in the space it leased
in The Pitt Building. (Complaint ¶25.)
8. Smithfield claims that it had no use for the space it leased in The Pitt Building.
(Complaint ¶31.)
9. Smithfield alleges it terminated Blum as a result of conflicts of interest and
misrepresentations concerning The Pitt Building lease. (Complaint ¶37.)
10. PBM sued Smithfield for past due rent. This litigation was filed in Pennsylvania.
(Complaint ¶38.)
11. A judgment was entered against Smithfield for more than $3.3 million. This
judgment was entered in Pennsylvania. (Complaint ¶39.)
12. As a result of this judgment, Smithfield filed for chapter 7 bankruptcy. (Complaint
¶40.)
13. All of Smithfield’s alleged damages flow from the lease for office space in The Pitt
Building.
The only connection to Florida is that the corporate defendants are registered in Florida,
and Blum is a Florida resident. There is not a single allegation that any of the alleged conduct
forming the basis of the Complaint occurred in Florida. Since Smithfield only existed to lease
office space in Pittsburgh, it cannot be disputed that all of the alleged conduct by the
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Defendants occurred in Pennsylvania, and all of the causes of action set forth in the Complaint
arose in Pennsylvania. In short, Pennsylvania is the only state with significant and relevant
connections to this case. Only Pennsylvania law can apply to this matter since the causes of
action all arose in Pennsylvania.
MOTION TO DISMISS: EXPIRATION OF STATUTE OF LIMITATIONS
Florida Statutes §95.10, titled “Cause of action arising in another state,” provides as
follows:
When the cause of action arose in another state or territory of the United States,
or in a foreign country, and its laws forbid the maintenance of the action because
of lapse of time, no action shall be maintained in this state.
Before discussing the applicable statute of limitations under Pennsylvania law, it is
imperative to begin with the date that the Plaintiff’s causes of action accrued. In paragraph 37
of the Complaint, Smithfield alleges that “[u]pon learning of Blum’s duplicity, self-dealing
and fraud, Smithfield terminated Blum in early 2020 due to the patent conflicts of interest and
misrepresentations concerning The Pitt Building lease, Smithfield’s profitability and its
financial condition.” For purposes of a statute-of-limitations analysis, it is clear that
Smithfield’s claims accrued in early 2020 when Blum was terminated as a result of his alleged
self-dealing and fraud. This Complaint was filed on May 31, 2023 – more than three years
after Blum’s termination.
Turning to the Plaintiff’s causes of action, Count I (“Fraud and/or Constructive Fraud”),
Count II (“Civil Conspiracy”), Count III (“Fraud in the Inducement”), and Count IV (“Breach
of Fiduciary Duty”) are governed by a two-year statute of limitations. “Under Pennsylvania
law, tort actions, including fraud and breach of fiduciary duty, are subject to a two (2) year
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KUTNER, RUBINOFF & MOSS, LLP
2665 South Bayshore Drive, Suite 301, Coconut Grove, FL 33133 Phone: 305.358.6200 www.krmlegal.com
statute of limitations.” Wise v. Mortgage Lenders Network USA, Inc., 420 F.Supp.2d 389
(E.D.Penn. 2006), citing 42 Pa.C.S. §5524(7). Claims “for fraud, conversion, negligence, civil
conspiracy, and concerted tortious conduct […] have a two-year limitations period.” Brock v.
Thomas, 782 F.Supp.2d 133 (E.D.Penn. 2011).
This Complaint was filed in May 2023 – more than three years after Smithfield’s claims
accrued in early 2020. As a result, Counts I through IV are barred under Pennsylvania law.
“If the cause of action arose in another state, and the action is time-barred because of that
state’s limitation statutes, the borrowing statute precludes the maintenance of the action in
Florida.” Jones v. Cook, 587 So. 2d 570, 572 (Fla. 1st DCA 1991), citing Lumbermen’s Mutual
Casualty Co. v. August, 530 So.2d 293, 295 (Fla. 1988).
Count V of the Complaint is a claim for unjust enrichment. The Pennsylvania statute
of limitations for unjust enrichment is four years. 42 Pa.C.S. §5524(4). “A claim for unjust
enrichment accrues when the defendant “receives and retains benefits.” According to the
Complaint, the Defendants first received and retained benefits from Smithfield beginning on
December 28, 2017, when the subject lease was signed. (See ¶23 of the Complaint.) The
Complaint was filed more than five years later – more than one year after the statute of
limitations expired.
Count VI of the Complaint is for recission. “Under Pennsylvania law, there is no cause
of action for rescission.” Clark v. Allstate Ins. Co., CIV.A.10-294, 2010 WL 1904013, at *2
(W.D. Pa. May 7, 2010). “Rescission is not a claim for relief or a cause of action, but rather it
is an equitable remedy within a court's discretion.” Atl. Holdings, Ltd. v. Apollo Metals, Ltd.,
263 F. Supp. 3d 526, 532 (E.D. Pa. 2017) (citations omitted). The remedy of rescission is not
available to Smithfield since there are no valid causes of action. Id. (“I have already concluded
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KUTNER, RUBINOFF & MOSS, LLP
2665 South Bayshore Drive, Suite 301, Coconut Grove, FL 33133 Phone: 305.358.6200 www.krmlegal.com
that Apollo's claims for relief (fraudulent inducement and breach of contract) fail as a matter
of law. Accordingly, with no right to relief, Apollo cannot seek any remedy, including
rescission.”).
Count VII of the Complaint is for an accounting. Under Pennsylvania law, this is an
equitable claim that must be material to the relief sought. See Setlock v. Sutila, 444 Pa. 552
(Penn. 1971). Since all of Smithfield’s other claims are barred by the statute of limitation,
Smithfield has no right to relief. As a result, this count must be dismissed as well.
Since the statute of limitations defense appears on the face of the Complaint, this Court
should dismiss counts I through VII with prejudice. See Estate of James v. Martin Memorial
Hospital, 422 So.2d 1043 (Fla. 4th DCA 1982) (holding that complaint need not anticipate
affirmative defenses, but if grounds for such exist on face of the complaint, motion to dismiss
may be made based on same).
Finally, count VIII of the Complaint is for declaratory relief under Florida law. Since
Florida law does not apply to this case, this count should be dismissed. If Florida law does
apply, the declaratory relief sought by Smithfield is not available pursuant to Florida Statutes
Chapter 86. Section 86.011 provides that “circuit and county courts have jurisdiction within
their respective jurisdictional amounts to declare rights, status, and other equitable or legal
relations whether or not further relief is or could be claimed.” Smithfield is not seeking a
declaration of rights, status, or equitable/legal relationships. Instead, it is seeking a declaration
that the office lease is void. This relief is not available under Chapter 86.
MOTION TO DISMISS: LACK OF CAPACITY TO SUE
Smithfield filed for bankruptcy protection as a result of a judgment entered against it
as a result of its failure to pay rent pursuant to the lease. (Complaint ¶¶38-40.) The bankruptcy
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proceeding has been concluded. As set forth below, the fact that Smithfield filed for
bankruptcy prevents it from bringing claims in this case.
1. Smithfield No Longer Exists
Fla. R. Civ. Pro. 1.120(a) provides, in relevant part, that a party may “raise an issue as
to the legal existence of any party, [or] the capacity of any party to sue … by specific negative
averment which shall include such supporting particulars as are peculiarly within the pleader’s
knowledge.” Smithfield’s Complaint must be dismissed since it lacks the capacity to bring
any claims against the Defendants.
When a corporation is discharged from Chapter 7 bankruptcy, “the corporation’s assets
are liquidated, and, at the close of the bankruptcy proceedings, the corporation becomes
‘defunct.’” U.S. Dismantlement Corp., Inc. v. Brown Associates, Inc., 2000 WL 433971 (E.D.
Penn. 2000). 2 “The liquidated corporation becomes defunct, never to rise again, and without
further assets or prospect to generate assets.” Norton, Norton Bankr.Law & Prac.2d §74:2, n.
13, as quoted by U.S. Dismantlement Corp., supra. “A corporation that cannot own or operate
any assets cannot pursue a cause of action because of cause of action in an asset.” U.S.
Dismantlement Corp., supra.
The federal court in U.S. Dismantlement cited to Braden v. Tri-R Builders, Inc., 86 B.R.
138 (N.D.Ind. 1986). In that case, a federal bankruptcy Court in the Northern District of
Indiana also held that the filing of a chapter 7 creates a defunct corporation. As the Court
explained, “In other words, the corporation ceases to operate or own any assets.” In re Tri-R
Builders, Inc., 86 B.R. 138, 141 (Bankr. N.D. Ind. 1986).
2
Cases for the federal Third Circuit Court of Appeal and district courts within the circuit are
cited since Smithfield’s bankruptcy petition was filed in Delaware, part of the Third Circuit.
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In In re Blanton, 105 B.R. 811 (W.D.Tex. 1989), another federal bankruptcy court
explained that “in a Chapter 7 corporate bankruptcy, the purpose is to distribute any assets
equitably among existing creditors before laying the defunct corporation to rest.” Importantly,
the Court held that a corporation’s debts are not discharged and it cannot continue to exist: “A
corporation does not receive a discharge or a fresh start.” Id. Smithfield cannot seek
bankruptcy protection and then, in essence, have a fresh start by, in its own words, having “the
right to pursue all claims and causes of action” against the Defendants.
This makes perfect sense. PBM has a judgment against Smithfield that is in excess of
$3.3 million. Smithfield admits that it filed for bankruptcy as a result of this judgment. As it
alleges in ¶40 of the Complaint: “In light of this insurmountable judgment amount […]
Smithfield filed a petition for bankruptcy protection.” Now that the bankruptcy has concluded
it would be inequitable to allow Smithfield to bring claims against PBM and its related entities.
This is exactly why Chapter 7 bankruptcy causes an entity to cease business. As the U.S.
Dismantlement court succinctly explained: “A corporation that has been laid to rest does
not pursue a cause of action.” Id. (emphasis added).
2. Smithfield Cannot Assert the Pending Claims
Even if Smithfield does still exist as a corporate entity, it is foreclosed from bringing
the claims set forth in the Complaint.
In paragraph 37 of the Complaint, Smithfield alleges that it learned of Blum’s (alleged)
fraud in early 2020, and, as a result, Blum was terminated. After Blum’s termination,
Smithfield defaulted on the lease at The Pitt Building, which resulted in a judgment against
Smithfield in excess of $3.3 million. (Complaint ¶38.) Smithfield then filed a petition for
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bankruptcy protection as a result of this judgment. (Complaint ¶39.) Thus, it is undisputed,
pursuant to the allegations set forth in the Complaint, that Smithfield knew of Blum’s
(“alleged”) fraud prior to filing for bankruptcy.
A “Chapter 7 debtor no longer has standing to pursue a cause of action which existed
at the time the Chapter 7 petition was filed.” In re Banks, 223 Fed.Appx. 149 (Third Cir. 2007)
(citations omitted). See also Bauer v. Commerce Union Bank, 859 F.2d 438, CCH
Bankr.L.Rep. ¶ 74,486; Jones v. Harrell, 858 F.2d 667, CCH Bankr.L.Rep. ¶ 72,478; In re
Tvorik, 83 B.R. 450, 456 (Bankr.W.D.Mich.1988).
The Third Circuit Court of Appeal in In re Banks, supra., relied on Cain v. Hyatt, 101
B.R. 440, 442 (E.D. Pa. 1989) in reaching its decision. The facts in Cain are very similar to
the pending case. There, the Plaintiff, like Smithfield, filed for Chapter 7 bankruptcy. Like
Smithfield, the Plaintiff filed a complaint against Hyatt after the bankruptcy case was closed.
Like the Defendants here, Hyatt moved to dismiss the complaint on the basis that the plaintiff
lacked standing to bring its claims. The Court, citing a number of opinions from around the
country, held that the Plaintiff did not have standing to bring claims that existed prior to the
bankruptcy filing. As the Court explained: “[A]fter the appointment of a trustee, a Chapter 7
debtor no longer has standing to pursue a cause of action which existed at the time the Chapter
7 petition was filed.” Id.
Likewise, Smithfield has no standing to bring claims against the Defendants in this
action, and this case should be dismissed.
WHEREFORE, for the reasons set forth above, the Defendants, PBM Partners, LLC;
Hippeus Pitt Sponsor, LLC, and Michael Blum, respectively request this Court to grant this
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Motion to Dismiss, enter an Order dismissing the Complaint with prejudice, and award
attorneys’ fees.
CERTIFICATE OF SERVICE
WE HEREBY CERTIFY that a true and correct copy of the foregoing was
electronically filed and served on this 25th day of July 2022.
KUTNER RUBINOFF & MOSS, LLP
Attorney for Plaintiff
2665 S. Bayshore Drive, Suite 301
Miami, Florida 33133
Phone: 305-353-6200
moss@krmlegal.com
diaz@krmlegal.com
By: s/Andrew M. Moss
Andrew M. Moss
Florida Bar No. 0170259
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Filing # 178191844 E-Filed 07/25/2023 03:11:12 PM IN THE CIRCUIT COURT OF THE 11th JUDICIAL CIRCUIT IN AND FOR MIAMI-DADE COUNTY, FLORIDA Case No.: 2023-017476-CA-01 FVP SMITHFIELD, a Delaware Florida Bar No: 0170259 Limited Liability Company, Plaintiff, vs. PBM PARTNERS, LLC, a Florida Limited Liability Company; HIPPEUS PITT SPONSOR, LLC, a Florida Limited Liability Company; and MICHAEL BLUM, an individual, Defendants. __________________________________/ DEFENDANTS’ MOTION TO DISMISS COMPLAINT The Defendants, PBM Partners, LLC; Hippeus Pitt Sponsor, LLC; and Michael Blum; pursuant to Fla. R. Civ. P. 1.120 and Fla. R. Civ. P. 1.140, move to dismiss the Complaint filed by FVP Smithfield, LLC (“Smithfield”) for the reasons set forth below. INTRODUCTION This lawsuit arises out of a lease for office space in a building in Pittsburgh, Pennsylvania called The Pitt Building. The Plaintiff, Smithfield, entered into a lease for space in The Pitt Building with the owner of the building, the Defendant PBM Partners (“PBM”). Defendant Blum is a member of PBM. Defendant Hippeus Pitt Sponsor is the general manager of PBM. For the reasons set forth below, this case should be dismissed because 1) all of Smithfield’s claims are barred by the applicable statutes of limitation, and 2) Smithfield did not have the legal standing to bring these claims as a result of filing for bankruptcy protection. Page 1 of 10 KUTNER, RUBINOFF & MOSS, LLP 2665 South Bayshore Drive, Suite 301, Coconut Grove, FL 33133 Phone: 305.358.6200 www.krmlegal.com APPLICABLE LAW Even though Smithfield filed this case in Florida, a review of the Complaint makes it clear that all of the alleged conduct occurred in Pennsylvania. The Plaintiff alleges that the Defendants created a “scheme” to convince Smithfield to enter into the lease agreement for office space in The Pitt Building. (See ¶¶11-18 of the Complaint.) As Smithfield alleges: “The sole function of Smithfield was the leasehold at The Pitt Building.” (Complaint ¶16.) A copy of the lease is attached to the Complaint. To the extent Smithfield’s claims arise from the lease, the lease itself contains a choice- of-law provision in §25.9, which provides: “This Lease shall be construed, governed and enforced with the Laws of the Commonwealth of Pennsylvania, without regard to the principles of the laws of conflict thereof.” (All emphasis added.) “An agreement between parties to be bound by the substantive laws of another jurisdiction is presumptively valid, and this Court [Florida Supreme Court] will enforce a choice-of-law provision unless applying the chosen forum’s law would contravene a strong public policy of this State.” 1 Southeast Floating Docks, Inc. v. Auto-Owners Ins., Co., 82 So.3d 73 (Fla. 2012). To the extent that Smithfield’s claims sound in tort, under Florida’s choice-of-law analysis, Pennsylvania law applies to these claims as well. Florida applies the significant relationships test to determine which state’s law applies. See Proprietors Ins. Co. v. Valsecchi, 435 So.2d 290 (Fla. 3d DCA 1983). “Courts all over the United States apply the law of the state with relevant connection to the litigation.” Id. As set forth in the Complaint, all of the relevant connections in this case are rooted in Pennsylvania: 1 As discussed later in this Motion, the public policy of this state is to apply the statute of limitations from the state where the cause of action arose. See Florida Statutes §95.10, infra. Page 2 of 10 KUTNER, RUBINOFF & MOSS, LLP 2665 South Bayshore Drive, Suite 301, Coconut Grove, FL 33133 Phone: 305.358.6200 www.krmlegal.com 1. Defendant PBM owned The Pitt Building, which is located in Pittsburgh, Pennsylvania. (Complaint ¶13.) 2. The sole function of the Plaintiff, Smithfield, was a leasehold in The Pitt Building. (Complaint ¶16.) 3. Smithfield entered into an office lease with the Defendant PBM for office space located in The Pitt Building. (Complaint ¶23; Exhibit A to the Complaint.) 4. The lease provided that PBM was responsible for paying state (Pennsylvania) and local taxes. (Complaint, Ex. A, ¶6.1.) 5. The lease says it “shall be construed, governed and enforced in accordance with the Laws of the Commonwealth of Pennsylvania,” (Complaint, Ex. A, ¶25.9.) 6. Smithfield made approximately $570,000 in rental payments for space in The Pitt Building. (Complaint ¶25.) 7. Smithfield spent approximately $1.1 million on improvements in the space it leased in The Pitt Building. (Complaint ¶25.) 8. Smithfield claims that it had no use for the space it leased in The Pitt Building. (Complaint ¶31.) 9. Smithfield alleges it terminated Blum as a result of conflicts of interest and misrepresentations concerning The Pitt Building lease. (Complaint ¶37.) 10. PBM sued Smithfield for past due rent. This litigation was filed in Pennsylvania. (Complaint ¶38.) 11. A judgment was entered against Smithfield for more than $3.3 million. This judgment was entered in Pennsylvania. (Complaint ¶39.) 12. As a result of this judgment, Smithfield filed for chapter 7 bankruptcy. (Complaint ¶40.) 13. All of Smithfield’s alleged damages flow from the lease for office space in The Pitt Building. The only connection to Florida is that the corporate defendants are registered in Florida, and Blum is a Florida resident. There is not a single allegation that any of the alleged conduct forming the basis of the Complaint occurred in Florida. Since Smithfield only existed to lease office space in Pittsburgh, it cannot be disputed that all of the alleged conduct by the Page 3 of 10 KUTNER, RUBINOFF & MOSS, LLP 2665 South Bayshore Drive, Suite 301, Coconut Grove, FL 33133 Phone: 305.358.6200 www.krmlegal.com Defendants occurred in Pennsylvania, and all of the causes of action set forth in the Complaint arose in Pennsylvania. In short, Pennsylvania is the only state with significant and relevant connections to this case. Only Pennsylvania law can apply to this matter since the causes of action all arose in Pennsylvania. MOTION TO DISMISS: EXPIRATION OF STATUTE OF LIMITATIONS Florida Statutes §95.10, titled “Cause of action arising in another state,” provides as follows: When the cause of action arose in another state or territory of the United States, or in a foreign country, and its laws forbid the maintenance of the action because of lapse of time, no action shall be maintained in this state. Before discussing the applicable statute of limitations under Pennsylvania law, it is imperative to begin with the date that the Plaintiff’s causes of action accrued. In paragraph 37 of the Complaint, Smithfield alleges that “[u]pon learning of Blum’s duplicity, self-dealing and fraud, Smithfield terminated Blum in early 2020 due to the patent conflicts of interest and misrepresentations concerning The Pitt Building lease, Smithfield’s profitability and its financial condition.” For purposes of a statute-of-limitations analysis, it is clear that Smithfield’s claims accrued in early 2020 when Blum was terminated as a result of his alleged self-dealing and fraud. This Complaint was filed on May 31, 2023 – more than three years after Blum’s termination. Turning to the Plaintiff’s causes of action, Count I (“Fraud and/or Constructive Fraud”), Count II (“Civil Conspiracy”), Count III (“Fraud in the Inducement”), and Count IV (“Breach of Fiduciary Duty”) are governed by a two-year statute of limitations. “Under Pennsylvania law, tort actions, including fraud and breach of fiduciary duty, are subject to a two (2) year Page 4 of 10 KUTNER, RUBINOFF & MOSS, LLP 2665 South Bayshore Drive, Suite 301, Coconut Grove, FL 33133 Phone: 305.358.6200 www.krmlegal.com statute of limitations.” Wise v. Mortgage Lenders Network USA, Inc., 420 F.Supp.2d 389 (E.D.Penn. 2006), citing 42 Pa.C.S. §5524(7). Claims “for fraud, conversion, negligence, civil conspiracy, and concerted tortious conduct […] have a two-year limitations period.” Brock v. Thomas, 782 F.Supp.2d 133 (E.D.Penn. 2011). This Complaint was filed in May 2023 – more than three years after Smithfield’s claims accrued in early 2020. As a result, Counts I through IV are barred under Pennsylvania law. “If the cause of action arose in another state, and the action is time-barred because of that state’s limitation statutes, the borrowing statute precludes the maintenance of the action in Florida.” Jones v. Cook, 587 So. 2d 570, 572 (Fla. 1st DCA 1991), citing Lumbermen’s Mutual Casualty Co. v. August, 530 So.2d 293, 295 (Fla. 1988). Count V of the Complaint is a claim for unjust enrichment. The Pennsylvania statute of limitations for unjust enrichment is four years. 42 Pa.C.S. §5524(4). “A claim for unjust enrichment accrues when the defendant “receives and retains benefits.” According to the Complaint, the Defendants first received and retained benefits from Smithfield beginning on December 28, 2017, when the subject lease was signed. (See ¶23 of the Complaint.) The Complaint was filed more than five years later – more than one year after the statute of limitations expired. Count VI of the Complaint is for recission. “Under Pennsylvania law, there is no cause of action for rescission.” Clark v. Allstate Ins. Co., CIV.A.10-294, 2010 WL 1904013, at *2 (W.D. Pa. May 7, 2010). “Rescission is not a claim for relief or a cause of action, but rather it is an equitable remedy within a court's discretion.” Atl. Holdings, Ltd. v. Apollo Metals, Ltd., 263 F. Supp. 3d 526, 532 (E.D. Pa. 2017) (citations omitted). The remedy of rescission is not available to Smithfield since there are no valid causes of action. Id. (“I have already concluded Page 5 of 10 KUTNER, RUBINOFF & MOSS, LLP 2665 South Bayshore Drive, Suite 301, Coconut Grove, FL 33133 Phone: 305.358.6200 www.krmlegal.com that Apollo's claims for relief (fraudulent inducement and breach of contract) fail as a matter of law. Accordingly, with no right to relief, Apollo cannot seek any remedy, including rescission.”). Count VII of the Complaint is for an accounting. Under Pennsylvania law, this is an equitable claim that must be material to the relief sought. See Setlock v. Sutila, 444 Pa. 552 (Penn. 1971). Since all of Smithfield’s other claims are barred by the statute of limitation, Smithfield has no right to relief. As a result, this count must be dismissed as well. Since the statute of limitations defense appears on the face of the Complaint, this Court should dismiss counts I through VII with prejudice. See Estate of James v. Martin Memorial Hospital, 422 So.2d 1043 (Fla. 4th DCA 1982) (holding that complaint need not anticipate affirmative defenses, but if grounds for such exist on face of the complaint, motion to dismiss may be made based on same). Finally, count VIII of the Complaint is for declaratory relief under Florida law. Since Florida law does not apply to this case, this count should be dismissed. If Florida law does apply, the declaratory relief sought by Smithfield is not available pursuant to Florida Statutes Chapter 86. Section 86.011 provides that “circuit and county courts have jurisdiction within their respective jurisdictional amounts to declare rights, status, and other equitable or legal relations whether or not further relief is or could be claimed.” Smithfield is not seeking a declaration of rights, status, or equitable/legal relationships. Instead, it is seeking a declaration that the office lease is void. This relief is not available under Chapter 86. MOTION TO DISMISS: LACK OF CAPACITY TO SUE Smithfield filed for bankruptcy protection as a result of a judgment entered against it as a result of its failure to pay rent pursuant to the lease. (Complaint ¶¶38-40.) The bankruptcy Page 6 of 10 KUTNER, RUBINOFF & MOSS, LLP 2665 South Bayshore Drive, Suite 301, Coconut Grove, FL 33133 Phone: 305.358.6200 www.krmlegal.com proceeding has been concluded. As set forth below, the fact that Smithfield filed for bankruptcy prevents it from bringing claims in this case. 1. Smithfield No Longer Exists Fla. R. Civ. Pro. 1.120(a) provides, in relevant part, that a party may “raise an issue as to the legal existence of any party, [or] the capacity of any party to sue … by specific negative averment which shall include such supporting particulars as are peculiarly within the pleader’s knowledge.” Smithfield’s Complaint must be dismissed since it lacks the capacity to bring any claims against the Defendants. When a corporation is discharged from Chapter 7 bankruptcy, “the corporation’s assets are liquidated, and, at the close of the bankruptcy proceedings, the corporation becomes ‘defunct.’” U.S. Dismantlement Corp., Inc. v. Brown Associates, Inc., 2000 WL 433971 (E.D. Penn. 2000). 2 “The liquidated corporation becomes defunct, never to rise again, and without further assets or prospect to generate assets.” Norton, Norton Bankr.Law & Prac.2d §74:2, n. 13, as quoted by U.S. Dismantlement Corp., supra. “A corporation that cannot own or operate any assets cannot pursue a cause of action because of cause of action in an asset.” U.S. Dismantlement Corp., supra. The federal court in U.S. Dismantlement cited to Braden v. Tri-R Builders, Inc., 86 B.R. 138 (N.D.Ind. 1986). In that case, a federal bankruptcy Court in the Northern District of Indiana also held that the filing of a chapter 7 creates a defunct corporation. As the Court explained, “In other words, the corporation ceases to operate or own any assets.” In re Tri-R Builders, Inc., 86 B.R. 138, 141 (Bankr. N.D. Ind. 1986). 2 Cases for the federal Third Circuit Court of Appeal and district courts within the circuit are cited since Smithfield’s bankruptcy petition was filed in Delaware, part of the Third Circuit. Page 7 of 10 KUTNER, RUBINOFF & MOSS, LLP 2665 South Bayshore Drive, Suite 301, Coconut Grove, FL 33133 Phone: 305.358.6200 www.krmlegal.com In In re Blanton, 105 B.R. 811 (W.D.Tex. 1989), another federal bankruptcy court explained that “in a Chapter 7 corporate bankruptcy, the purpose is to distribute any assets equitably among existing creditors before laying the defunct corporation to rest.” Importantly, the Court held that a corporation’s debts are not discharged and it cannot continue to exist: “A corporation does not receive a discharge or a fresh start.” Id. Smithfield cannot seek bankruptcy protection and then, in essence, have a fresh start by, in its own words, having “the right to pursue all claims and causes of action” against the Defendants. This makes perfect sense. PBM has a judgment against Smithfield that is in excess of $3.3 million. Smithfield admits that it filed for bankruptcy as a result of this judgment. As it alleges in ¶40 of the Complaint: “In light of this insurmountable judgment amount […] Smithfield filed a petition for bankruptcy protection.” Now that the bankruptcy has concluded it would be inequitable to allow Smithfield to bring claims against PBM and its related entities. This is exactly why Chapter 7 bankruptcy causes an entity to cease business. As the U.S. Dismantlement court succinctly explained: “A corporation that has been laid to rest does not pursue a cause of action.” Id. (emphasis added). 2. Smithfield Cannot Assert the Pending Claims Even if Smithfield does still exist as a corporate entity, it is foreclosed from bringing the claims set forth in the Complaint. In paragraph 37 of the Complaint, Smithfield alleges that it learned of Blum’s (alleged) fraud in early 2020, and, as a result, Blum was terminated. After Blum’s termination, Smithfield defaulted on the lease at The Pitt Building, which resulted in a judgment against Smithfield in excess of $3.3 million. (Complaint ¶38.) Smithfield then filed a petition for Page 8 of 10 KUTNER, RUBINOFF & MOSS, LLP 2665 South Bayshore Drive, Suite 301, Coconut Grove, FL 33133 Phone: 305.358.6200 www.krmlegal.com bankruptcy protection as a result of this judgment. (Complaint ¶39.) Thus, it is undisputed, pursuant to the allegations set forth in the Complaint, that Smithfield knew of Blum’s (“alleged”) fraud prior to filing for bankruptcy. A “Chapter 7 debtor no longer has standing to pursue a cause of action which existed at the time the Chapter 7 petition was filed.” In re Banks, 223 Fed.Appx. 149 (Third Cir. 2007) (citations omitted). See also Bauer v. Commerce Union Bank, 859 F.2d 438, CCH Bankr.L.Rep. ¶ 74,486; Jones v. Harrell, 858 F.2d 667, CCH Bankr.L.Rep. ¶ 72,478; In re Tvorik, 83 B.R. 450, 456 (Bankr.W.D.Mich.1988). The Third Circuit Court of Appeal in In re Banks, supra., relied on Cain v. Hyatt, 101 B.R. 440, 442 (E.D. Pa. 1989) in reaching its decision. The facts in Cain are very similar to the pending case. There, the Plaintiff, like Smithfield, filed for Chapter 7 bankruptcy. Like Smithfield, the Plaintiff filed a complaint against Hyatt after the bankruptcy case was closed. Like the Defendants here, Hyatt moved to dismiss the complaint on the basis that the plaintiff lacked standing to bring its claims. The Court, citing a number of opinions from around the country, held that the Plaintiff did not have standing to bring claims that existed prior to the bankruptcy filing. As the Court explained: “[A]fter the appointment of a trustee, a Chapter 7 debtor no longer has standing to pursue a cause of action which existed at the time the Chapter 7 petition was filed.” Id. Likewise, Smithfield has no standing to bring claims against the Defendants in this action, and this case should be dismissed. WHEREFORE, for the reasons set forth above, the Defendants, PBM Partners, LLC; Hippeus Pitt Sponsor, LLC, and Michael Blum, respectively request this Court to grant this Page 9 of 10 KUTNER, RUBINOFF & MOSS, LLP 2665 South Bayshore Drive, Suite 301, Coconut Grove, FL 33133 Phone: 305.358.6200 www.krmlegal.com Motion to Dismiss, enter an Order dismissing the Complaint with prejudice, and award attorneys’ fees. CERTIFICATE OF SERVICE WE HEREBY CERTIFY that a true and correct copy of the foregoing was electronically filed and served on this 25th day of July 2022. KUTNER RUBINOFF & MOSS, LLP Attorney for Plaintiff 2665 S. Bayshore Drive, Suite 301 Miami, Florida 33133 Phone: 305-353-6200 moss@krmlegal.com diaz@krmlegal.com By: s/Andrew M. Moss Andrew M. Moss Florida Bar No. 0170259 Page 10 of 10 KUTNER, RUBINOFF & MOSS, LLP 2665 South Bayshore Drive, Suite 301, Coconut Grove, FL 33133 Phone: 305.358.6200 www.krmlegal.com