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Filing # 180856210 E-Filed 08/30/2023 05:58:11 PM
IN THE CIRCUIT COURT OF THE 11TH
JUDICIAL CIRCUIT IN AND FOR
MIAMI-DADE COUNTY, FLORIDA
CIRCUIT CIVIL DIVISION
CASE NO.: 2023-020202-CA-01
CODY KERNS, an individual, KERNS CAPITAL
MANAGEMENT, INC., a British Virgin Islands
Corporation, and WFTMB HOLDINGS, LLC,
a Florida Limited Liability Company,
Plaintiffs,
v.
FXWINNING, LTD., a Hong Kong Limited Company,
JONATHAN LOPEZ, an individual,
JULIAN KUSCHNER, an individual,
DAVID MERINO, an individual,
RENAN DA ROCHA GOMES BASTOS, an individual,
RAFAEL BRITO CUTIE, an individual,
BBRC REAL ESTATE, LLC,
a Florida Limited Liability Company
Defendants.
/
PLAINTIFFS’ RESPONSE IN OPPOSITION TO DEFENDANTS JULIAN
KUSCHNER’S AND JONATHAN LOPEZ’S MOTION TO DISMISS THE COMPLAINT
Plaintiffs, Cody Kerns, Kerns Capital Management, Inc., and WFTMB Holdings, LLC
(collectively, “Plaintiffs”), respond in opposition to Defendants, Julian Kuschner’s and Jonathan
Lopez’s (collectively, “Defendants”), Motion to Dismiss the Complaint (the “Motion”) as follows:
INTRODUCTION
In a shameless, brazen scheme that evokes thoughts of FTX and Bernie Madoff,
Defendants Julian Kuschner (“Kuschner”) and Jonathan Lopez (“Lopez”) – along with their self-
professed partners, David Merino (“Merino”) and Rafael Brito Cutie (“Brito”) – knowingly
perpetrated a fraudulent scheme on Plaintiffs. According to Kuschner and Lopez, Merino had
invented an algorithm that would allow clients such as Plaintiffs to receive high returns on their
foreign exchange trading. There were just two catches – you had to invest and trade through a
company called FXWinning, Ltd., and you had to put in more and more money if you wanted to
see the highest of returns. As a result of Plaintiffs’ deposits with FXWinning, Ltd. (“FXWinning”),
Defendants Kuschner, Lopez, Merino, and Brito earned extremely high commissions – totaling
35% to 40% of Plaintiffs’ accounts – that allowed them to live a life of luxury, enjoying the fruits
of their fraud. Little by little, spurred on by Defendants’ deceit, Plaintiffs deposited more and more
with FXWinning in an effort to obtain higher and higher returns. After Plaintiffs had more than
$20 million in deposits with FXWinning between the three of them, FXWinning abruptly halted
all withdrawals from client accounts under the guise of an anti-money laundering compliance
audit. Then, after Plaintiffs had been notified that FXWinning had passed its compliance
requirements, FXWinning just shut down completely with Plaintiffs left without their money.
Now, faced with Plaintiffs’ 161-paragraph Complaint against them for fraud (Count I),
FDUTPA (Count II), conspiracy (Count III), negligent misrepresentation (Count IV), unjust
enrichment (Count VI), fraudulent transfer as to Lopez (Count VIII), and fraudulent transfer as to
1
Kuschner (Count IX), Kuschner and Lopez have attempted to flip Florida’s pleading standard on
its head by trying to get off scott-free by simply having this Court take their word as true that they
did not engage in this fraud and by outrageously ignoring the first 104 paragraphs of Plaintiffs’
Complaint as if they never existed.
In those first 104 paragraphs, Plaintiffs set forth in striking detail exactly how both
Kuschner and Lopez falsely represented the safety of investing in FXWinning to them, as well as
their role as “partners” in FXWinning along with Merino and Brito. Indeed, Plaintiffs set forth
each misrepresentation Kuschner and Lopez made, when they made them, why they made them,
and to whom they made them. And they do this in separate sections respectively titled
“Misrepresentations to Kerns and Kerns Capital” and “Misrepresentations to McGinnis.” It
cannot get any clearer than that.
Worse, Defendants have the gall to claim Plaintiffs do not sufficiently allege that Kuschner
and Lopez were partners with the principals of FXWinning even though Kuschner and Lopez held
themselves out as partners of FXWinning and repeatedly assured Plaintiffs they were partners with
Merino and Brito. Needless to say, Florida law forbids a person to disclaim liability from such
partnership when others – such as Plaintiffs – relied on such representations.
In short, Plaintiffs pled all that is required to survive a motion to dismiss, including with
the requisite specificity and particularity required for certain of their counts. Plaintiffs identify the
misrepresentations made to them and upon which they relied to their detriment. They show that all
the Defendants agreed to, and committed acts in furtherance of, a conspiracy to commit fraud.
And to add insult to injury, Defendants took the money they fraudulently obtained from this fraud
and used it to purchase multimillion dollar Miami real estate at the same time they were lulling
Plaintiffs with statements about how FXWinning was still legitimate.
2
ARGUMENT
I. Plaintiffs Plead Count I (Fraud) Sufficiently
Defendants argue Plaintiffs fail to plead their fraud claim with the particularity required by
the Florida Rules of Civil Procedure. Yet, even a cursory review of the Complaint reveals
Defendants’ argument holds no water. The only thing Plaintiffs must plead with particularity are
the “circumstances constituting fraud or mistake.” Fla. R. Civ. P. 1.120(b). 1 In other words, they
need only plead the “time, place or manner in which [the misrepresentations] were made, and how
the representations were false or misleading.” Robertson v. PHF Line Ins. Co., 702 So. 2d 555,
556 (Fla. 1st DCA 1997); accord Erwine v. Gamble, Pownal & Gilroy, Architects & Engr’s, 343
So. 2d 859, 861 (Fla. 2d DCA 1976) (stating that Rule 1.120(f) “simply provides that for the
purpose of testing the sufficiency of a pleading, averments of time and place are material”).
Meanwhile, the “intent [and] knowledge, … of a person may be averred generally[.]” Id.; accord
Bankers Mut. Capital Corp. v. U.S. Fidelity and Guar. Co., 784 So. 2d 485, 490 (Fla. 4th DCA
2001) (“In all averments of fraud . . . [m]alice, intent, knowledge, and mental attitude, and other
condition of mind of a person may be averred generally.”).
Incredibly, Defendants quibble with Plaintiffs incorporation of the allegations of the
Complaint within their counts stating that Plaintiffs “invite the reader to guess which allegations .
. . support Plaintiffs’ fraud-based claims.” Mot. at 8. But Plaintiffs, in separate sections
respectively titled “Representations Made to Kerns & Kerns Capital” and “Representations
1
The elements of fraud are “(1) a false statement concerning a specific material fact; (2) the
maker's knowledge that the representation is false; (3) an intention that the representation induces
another's reliance; and (4) consequent injury by the other party acting in reliance on the
representation.” Lopez-Infante v. Union Cent. Life Ins. Co., 809 So. 2d 13, 15 (Fla. 3d DCA 2002).
3
Made to McGinnis,” set forth the exact misrepresentations each defendant made to Kerns, Kerns
Capital, and McGinnis:
Misrepresentations Made to Misrepresentation Made to McGinnis
Kerns & Kerns Capital
Statement to Induce Investment: “In or around Statement to Induce Investment: “In or
December 2021 or January 2022, in Miami-Dade about June of 2023, McGinnis met
County, Florida, Kuschner and Lopez, acting in Kuschner at a dinner with Kerns in Miami
their capacity as agents for the other Defendants, [to solicit him].” Compl. at ¶¶ 51; 52.
approached Kerns about a new investment
opportunity.” Compl. at ¶ 40. Misrepresentation 9: “On or about July 4,
2022, in a telephone conversation,
Misrepresentation 1: “Kuschner and Lopez Kuschner represented to McGinnis that
represented to Kerns that this new investment Kuschner and Lopez had fully vetted
opportunity was a proprietary algorithm FXWinning. Kuschner represented to
developed by Merino that could achieve high McGinnis that Lopez and Kuschner
monthly returns on foreign exchange trades.” personally flew out to meet and vet the
Compl. at ¶ 41. broker and the liquidity provider, and saw
the actual funds held by FXWinning.
Misrepresentation 2: “During this meeting in Kuschner insisted that FXWinning was
Miami-Dade County, Kuschner and Lopez stated appropriately liquidated.” Compl. at ¶ 53.
that Merino was their “partner” and showed
Kerns their own FXWinning accounts that used Misrepresentation 10: “On or about July 7,
the algorithm, which they claimed were achieving 2022, during an in-person meeting,
rates of return of 8% to 15% each month.” Compl. Kuschner represented to McGinnis that he,
at ¶ 42. 2 Merino, Brito, and Lopez were partners in
FXWinning.” Compl. at ¶ 54.
Misrepresentation 3: “In and around that same
time period, in Miami-Dade County, Kuschner Misrepresentation 11: “From that date
and Lopez, represented to Kerns via text message,
until approximately April of 2023,
in telephone conversations, and during in-person
Kuschner and Lopez repeatedly represented
to McGinnis that Kuschner, Lopez, and
meetings, that FXWinning was a safe platform to
conduct foreign exchange trading.” Compl. at ¶Merino were partners. Those
44. representations were made through voice
notes and during in-person meetings.”
Misrepresentation 4: “In and around that same Compl. at ¶ 55.
time period, in Miami-Dade County, via text
message, voice notes, and in telephone Misrepresentation 12: “On or around July
conversations, Kuschner and Lopez also 7, 2022, Kuschner invited McGinnis over to
represented to Kerns that they had personally his apartment in Miami to meet with
flown to Dubai, United Arab Emirates, to meet Kuschner and Lopez. During that meeting,
with Merino and Brito (FXWinning’s Chief Lopez showed McGinnis what Lopez
2
Putting words in Plaintiffs’ mouths, Kuschner and Lopez contend Plaintiffs explain that
Kuschner and Lopez were investors just like Plaintiffs. See Mot. at 12. Nowhere in the Complaint
do Plaintiffs allege that Kuschner and Lopez were similarly situated investors in FXWinning.
4
Executive Officer), to examine FXWinning’s represented as Lopez’s FXWinning
system, and review FXWinning’s liquidity.” account, with $21 million in it. Kuschner
Compl. at ¶ 45. showed McGinnis what Kuschner
represented as Kuschner’s account, with
Misrepresentation 5: “In and around that same between $5 million and $6 million in it.
time period, Kuschner and Lopez represented to Lopez and Kuschner also showed McGinnis
Kerns via text message, voice notes, and in an account at FXWinning and stated it
telephone conversations, that if anything were to belonged to someone in the royal family in
ever go wrong with his investment, Kuschner and Dubai with hundreds of millions of dollars
Lopez would facilitate a safe and easy exit in it. Lopez and Kuschner also discussed a
process whereby Kerns could withdraw his funds Swiss hedge fund that Merino brought to
from FXWinning.” Compl. at ¶ 46. FXWinning, which traded approximately
$650 million.” Compl. at ¶¶ 56-57.
Moreover, after FXWinning stopped processing Plaintiffs’ withdrawal requests, Kuschner
and Lopez doubled down and continued to make more false statements to Plaintiffs regarding
Plaintiffs’ funds. See also Compl. at ¶ 78 (“In or around March 2023, Kuschner and Lopez . . . in
telephone conversations, represented to Kerns and Kerns Capital that Kuschner and Lopez were
flying to Dubai to meet with Merino and Brito to review the company’s situation in light of the
KYC/AML audit.”); id. at ¶ 79 (“In or around March 2023, … in telephone conversations,
Kuschner and Lopez, on their own behalf and as agents of FXWinning . . . represented to Kerns
and Kerns Capital that they met with Merino and Brito and saw $3 billion in liquidity [and] Kerns
and Kerns Capital’s money was safe.”); id. at ¶ 106 (“As outlined above, FXWinning, Kuschner,
Lopez, Merino, da Rocha, and Brito . . . made false statements of fact to Plaintiffs in the manner
and at the times alleged.”).
Plaintiffs also allege exactly how Kuschner’s and Lopez’s statements were false. See
Compl. at ¶ 98 (“Since the inception of FXWinning and Defendants’ relationship with Plaintiffs,
FXWinning, Kuschner, Lopez, Merino, da Rocha, and Brito, all knew or should have known that
(1) FXWinning was nothing more than a fraudulent scheme to induce potential traders to transfer
money to FXWinning; (2) no high rate of return would be possible; and (3) Plaintiffs would never
5
receive a full withdrawal of their deposited money as they were promised.”); id. at ¶ 107
(“FXWinning, Kuschner, Lopez, da Rocha, and Brito knew that the statements were false when
they made them to Plaintiffs.”); id. at ¶ 93 (“To date, Defendants have failed to return any of
Plaintiff’s money.”). Thus, Plaintiffs have adequately alleged the first element of fraud – that the
defendant made a false statement concerning a specific material fact. Robertson, 702 So. 2d 556.
Plaintiffs also allege the second element of fraud – that is, Defendants’ knowledge that the
representation is false. See Compl. at ¶ 107 (“FXWinning, Kuschner, Lopez, Merino, da Rocha,
and Brito knew that the statements were false when they made them to Plaintiffs.”). They likewise
allege the third element of fraud – Defendants’ intention that the representation induces another's
reliance. Id. at ¶ 109 (“FXWinning, Kuschner, Lopez, Merino, da Rocha, and Brito made the
representations to Plaintiffs for the purpose of inducing Plaintiffs to act in reliance thereon.”). That
is sufficient. See Fla. R. Civ. P. 1.120(b) (“Malice, intent, knowledge, mental attitude, and other
condition of mind of a person may be averred generally.”).
Finally, Plaintiffs have alleged consequent injury by the other party acting in reliance on
the representation.” Id. at ¶ 111 (“As a result of FXWinning, Kuschner’s, Lopez’s, Merino’s, da
Rocha’s, and Brito’s conduct, Plaintiffs have been damaged. That damage includes, but is not
limited to, the loss of their funds deposited in FXWinning”).
Even worse, Defendants single case, Simon v. Celebration Co., 883 So. 2d 826, 833 (Fla.
5th DCA 2004), is wildly inapposite. There, the Fifth District reversed the trial court’s dismissal
of fraud and negligent misrepresentation claims, finding the plaintiffs should have been granted
leave to amend. See Mot. at 13-14. As for the sufficiency of the allegations, the plaintiffs in Simon
had merely alleged that a school falsely represented it would “implement a curriculum of ‘proven
best practices’ that would include ‘technology’ and ‘whatever it takes[.]” Id. at 833. Such lack of
6
specificity, compounded with the fact that the Simon plaintiffs failed to particularize which
defendants made which statements, deemed the allegations insufficient. Id.
Here, unlike in Simon, Plaintiffs set out which Defendants made which statements, and
alleged that with the requisite particularity. They state who made the statements, what the
statements were, when the statements were made, and why the statements were made. See Compl.
¶¶ 41-46, 53-55, 57-58, 61. That ends the inquiry. Plaintiffs sufficiently plead their fraud claim.
II. Plaintiffs Sufficiently Plead Count II (FDUTPA)
Turning to Plaintiffs’ FDUTPA count, Kuschner and Lopez are incorrect, as a threshold
matter, in their assertion that this Court must require Plaintiffs to plead their FDUTPA claim with
particularity. For that proposition, Defendants rely on State Farm Auto. Ins. Co. v. Performance
Orthopaedics & Neurosurgery, LLC, 278 F.Supp.3d 1307, 1328 (S.D. Fla. 2017). Yet, a litany of
other courts have found that the heightened pleading standard does not apply to FDUTPA claims.
As one court explained, “FDUTPA claims seek a remedy for conduct distinct from traditional
common law torts such as fraud. As such, the uniqueness of the cause of action place it outside
the ambit of Rule 9(b) 3.” Harris v. Nordyne, LLC, No. 14-CIV-21884, 2014 WL 12516076, at *4
(S.D. Fla. Nov. 14, 2014). 4 This Court should similarly hold that FDUPTA claims are not subject
to a heightened pleading standard.
3
Florida Rule of Civil Procedure 1.120(b) is “analogous to Fed. R. Civ. P. 9(b)[.]” Talbot v.
Anderson, No. 8:15-CV-1313, 2015 WL 13297966, at *6 (M.D. Fla. Aug. 17, 2005) (internal
citations omitted).
4
See Harris, 2014 WL 12516067, at *4 (joining “several decisions in holding that the
requirements of Rule 9(b) categorically do not apply to claims under FDUTPA.”); see also Deere
Constr., LLC v. Cemez Constr. Materials Fla., LLC, 198 F.Supp.3d 1332, 1342 (S.D. Fla. 2016)
(same); Eli Lilly & Co. v. Tyco Integrated Sec., LLC, No. 13-80371-CIV, 2015 WL 11251732, at
*3 (S.D. Fla. Feb. 10, 2015) (same); Sanchez-Knutson v. Ford Motor Co., 52 F. Supp. 3d 1223,
1239 (S.D. Fla. 2014) (same); Toback v. GNC Holdings, Inc., No. 13-80526-CIV, 2013 WL
5206103, at *2 (S.D. Fla. Sept. 13, 2013) (same).
7
But even if this Court applies the heightened pleading standard, the same specific,
particularized allegations of false representations made by Kuschner and Lopez are sufficient to
state a FDUTPA claim. Again, Defendants wholly ignore the general allegations of the Complaint
(the allegations of which are expressly incorporated into each count) and incredibly state that
Plaintiffs allege only “that [they] are ‘consumers’ and that Defendants committed ‘deceptive acts’
and ‘unfair and unconscionable acts’ in ‘the conduct of their trade or commerce’ without any
accompanying detail.” Mot. at 8 (quoting Compl. at ¶¶ 113-15). That is simply not true. As set
forth on the Misrepresentations Chart, Plaintiffs identified what conduct each Defendant engaged
in that was deceptive, unfair, and unconscionable.
Defendants also argue that Plaintiffs’ FDUTPA claim fails because Plaintiffs “have not
alleged that Kuschner or Lopez participated in or had some measure of control over FXWinning.”
See Mot. at 14. In doing so, they misstate the law. Imposition of individual liability requires a
showing of participation in or “some measured control over the [entity’s] deceptive practices” –
i.e., not over the company as a whole. KC Leisure, Inc. v. Haber, 972 So. 2d 1059, 1073 (Fla. 5th
DCA 2008) (emphasis added). Plaintiffs meet their burden.
Plaintiffs allege that Kuschner and Lopez not only made a litany of misrepresentations
regarding the safety of investing with FXWinning, but stated directly to Plaintiffs that they were
“partners” in FXWinning, and with Merino and Brito (the co-owners of FXWinning), and that
they could facilitate a safe exit should anything ever go wrong. See Compl. at ¶¶ 40, 42 (“In or
around December 2021 or January 2022 . . . in Miami-Dade County, Florida, Kuschner and Lopez
stated [to Kerns] that Merino was their ‘partner’ . . . .”); id. at ¶ 54 (“On or about July 7, 2022,
during an in-person meeting, Kuschner represented to McGinnis that he, Merino, Brito, and Lopez
were partners in FXWinning.”); id. at ¶ 46 (“Kuschner and Lopez represented to Kerns . . . that if
8
anything were to ever go wrong with his investment, Kuschner and Lopez would facilitate a safe
and easy exit process whereby Kerns could withdraw his funds from FXWinning.”).
Either way, to state a claim under FDUTPA, Plaintiffs need only allege “three elements:
(1) a deceptive act or unfair practice; (2) causation; and (3) actual damages.” Waste Pro USA v.
Vision Constr. ENT, Inc., 282 So. 3d 911, 917 (Fla. 1st DCA 2019) (quoting Rollins, Inc. v.
Butland, 951 So. 2d 860, 869 (Fla. 2d DCA 2006)). Here, Plaintiffs allege that Kuschner and Lopez
engaged in deceptive and unfair conduct by making false representations regarding the safety of
investing with FXWinning and their high rate of return. See Misrepresentation Chart, supra. Then,
as shown above, they doubled down on their misrepresentations after FXWinning stopped
processing Plaintiffs’ withdrawal requests. See Compl. at ¶¶ 78, 79, 106.
Plaintiffs also sufficiently allege causation and damages. See id. at ¶¶ 48, 50 (“In reliance
on Kuschner’s and Lopez’s representations . . . Kerns deposited more than $3 million into the
Kerns Account . . . Kerns deposited Kerns Capital funds with FXWinning in reliance on
Kuschner’s and Lopez’s aforementioned representations . . . .”); id. at ¶¶ 59, 60 (“In reliance on
[Kuschner and Lopez’s] representations . . . McGinnis deposited $495,000 into the McGinnis
Account.”); id. at ¶ 119 (“As a result of . . . Kuschner’s [and] Lopez’s . . . deceptive, unfair, and
unconscionable acts in the conduct of their trade or commerce, Plaintiffs have suffered damages.”).
Defendants own caselaw supports Plaintiffs here. See KC Leisure, 972 So. 2d at 1074 (“The
complaint alleged that defendants, including Mr. Haber, collectively and unanimously cooked up
a scheme of providing a ‘license,’ rather than the bargained-for franchise.”). Plaintiffs allege that
Kuschner and Lopez (along with the other Defendants) cooked up a scheme to induce Plaintiffs to
invest their money with FXWinning, which turned out to be nothing more than a house of cards.
See Compl. at ¶ 98. The Motion as to Plaintiffs’ FDUTPA claim should also be denied.
9
III. Plaintiffs Have Adequately Pled Count III (Conspiracy to Commit Fraud)
For Count III (Conspiracy to Commit Fraud), Defendants once again ignore every general
allegation in the Complaint and, instead, argue that Plaintiffs’ conspiracy count fails because “[i]t
alleges that Defendants ‘did agree to commit an unlawful act’ and ‘did all do some overt act in
pursuan[ce] of the conspiracy’ with no detail about how there was an agreement, what the
agreement contained, or what overt acts Defendants took in furtherance of the conspiracy.” Mot.
at 9 (quoting Compl. at ¶¶ 123-25). Defendants even go so far as to argue that Plaintiffs do “not
even allege how the Defendants worked together or how Kuschner and Lopez worked for the
FXWinning Defendants.” Mot. at 15.
“A civil conspiracy requires: (a) an agreement between two or more parties, (b) to do an
unlawful act or to do a lawful act by unlawful means, (c) the doing of some overt act in pursuance
of the conspiracy, and (d) damage to plaintiff as a result of the acts done under the conspiracy.”
Charles v. Fla. Foreclosure Placement Ctr., LLC, 988 So. 2d 1157, 1159-60 (Fla. 3d DCA 2008)
(quoting Raimi v. Furlong, 702 So. 2d 1273, 1284 (Fla. 3d DCA 1997)). “Each coconspirator need
not act to further a conspiracy; each ‘need only know of the scheme and assist it in some way to
be held responsible for all of the acts of his coconspirators.’” Charles, 988 So. 2d at 1160 (quoting
Donofrio v. Matassini, 507 So. 2d 1278, 1281 (Fla. 2d DCA 1987)). “A conspirator need not take
part in the planning, inception, or successful conclusion of a conspiracy.” Donofrio, 507 So. 2d at
1281; accord Charles, 988 So. 2d at 1160. Significantly, “[t]he existence of a conspiracy and an
individual’s participation in it may be inferred from circumstantial evidence.” Donofrio, 507 So.
2d at 1281 (internal citations omitted).
Here, Plaintiffs allege an agreement between the Defendants. See Compl. at ¶ 123
(“Kuschner, Lopez, Merino, da Rocha, and Brito did come to an agreement to commit fraud against
10
Plaintiffs by perpetrating their scheme outlined above.”). Indeed, such agreement can even be
inferred from the Defendants’ alleged conduct, including but not limited to the fraudulent scheme
alleged in the Complaint. See Donofrio, 507 So. 2d at 1281. Plaintiffs thoroughly spell out the
fraudulent scheme that Defendants carried out pursuant to that agreement. See Section I, supra;
Misrepresentation Chart, supra. Similarly, Plaintiffs specifically identify the overt acts Kuschner
and Lopez took in furtherance of the conspiracy and on behalf of FXWinning and the other
Defendants. See, e.g., Misrepresentations Chart, supra. 5 Plaintiffs also allege that Kuschner and
Lopez knew they were perpetrating a fraud. 6 Compl. at ¶¶ 93, 98, 107. Thus, given all of those
allegations, Plaintiffs adequately allege that Kuschner and Lopez “kn[e]w of the scheme and
assist[ed] it in some way.” Charles, 988 So. 2d at 1160.
That is sufficient for the Motion to be denied. See Tejera v. Lincoln Lending Servs., LLC,
271 So. 3d 97, 103 n.6 (Fla. 3d DCA 2019) (“Because this issue was decided at the motion-to-
dismiss stage, we must accept this allegations as true and all reasonable inferences must be
construed in favor of [Plaintiffs].”).
IV. Plaintiffs Adequately Plead Count IV (Negligent Misrepresentation)
As for Count IV (Negligent Misrepresentation), Defendants once again ask this Court to
ignore all general allegations of the Complaint and dismiss Plaintiffs’ negligent misrepresentation
5
See also Compl. at ¶ 4 (“…Kuschner and Lopez represented to Kerns … that if anything
were to ever go wrong with his investment, Kuschner and Lopez would facilitate a safe and easy
exit process whereby Kerns could withdraw his funds from FXWinning.”).
6
Compl. at ¶ 98 (“Since the inception of FXWinning and Defendants’ relationship with
Plaintiffs, FXWinning, Kuschner, Lopez, Merino, da Rocha, and Brito, all knew or should have
known that (1) FXWinning was nothing more than a fraudulent scheme to induce potential traders
to transfer money to FXWinning; (2) no high rate of return would be possible; and (3) Plaintiffs
would never receive a full withdrawal of their deposited money as they were promised.”); id. at ¶
107 (FXWinning, Kuschner, Lopez, da Rocha, and Brito knew that the statements were false when
they made them to Plaintiffs); id. at ¶ 93 (“To date, Defendants have failed to return any of
Plaintiff’s money.”).
11
count. Mot. at 9. At the risk of belaboring the point, the Complaint encompasses multiple
allegations of Kuschner’s and Lopez’s misrepresentations such that the heightened pleading
standard is satisfied. 7 See Misrepresentation Chart, supra.
And, as Defendants themselves note, the elements of negligent misrepresentation are less
stringent than fraud: “[N]egligent misrepresentation requires: (1) a misrepresentation of a material
fact; (2) that the representor either knew of the misrepresentation, made the misrepresentation
without knowledge of its truth or falsity, or should have known the representation was false; (3)
the representer intended to induce another to act on the misrepresentation; and (4) injury.” See
Mot. at 13 (citing Hirsh v. Silversea Cruises Ltd., No. 14-CV-61533, 2015 WL 12780626, at *5
(S.D. Fla. Mar. 5, 2015)). To be sure, in addition to pleading with specificity all of the false
statements made by Kuschner and Lopez, Plaintiffs allege that “Kuschner [and] Lopez . . . were
negligent in making the statements because they should have known that the representations were
false.” Compl. at ¶ 130; see also Misrepresentation Chart, supra.
Plaintiffs also allege Kuschner and Lopez “intended to induce Plaintiffs to rely on the
misrepresentations.” Compl. at ¶ 131. Intent may be averred generally. See Fla. R. Civ. 1.120(b).
And Plaintiffs allege “[a]s a result of Plaintiffs’ justifiable reliance on . . . Kuschner [and] Lopez’s
. . . misrepresentations, Plaintiffs have been injured.” Compl. at ¶ 133. They even plead what that
injury is. See id. at ¶ 93 (“To date, Defendants have failed to return any of Plaintiff’s money.”).
That is all Plaintiffs need to allege to state this claim and the Motion should be denied.
7
Plaintiffs need only plead the misrepresentations with particularity. See Grovenor House,
LLC. v. E.I. Du Pont De Nemours & Co., No. 09-21698 CIV, 2010 WL 883647, at *2 (S.D. Fla.
Mar. 8, 2010) (applying Florida substantive law and stating that “[s]ince an action for ‘negligent
misrepresentation’ is based on fraud rather than negligence, a plaintiff asserting this claim ‘must
state with particularity the circumstances constituting fraud.’”).
12
V. Count VI (Unjust Enrichment) is Sufficiently Pled
Turning to unjust enrichment, Plaintiffs need only allege that “(1) [they] conferred a benefit
on the defendant, who has knowledge thereof; (2) defendant voluntarily accepts and retains the
benefit conferred; and (3) the circumstances are such that it would be inequitable for the defendant
to retain the benefit without first paying the value thereof to the plaintiff.” Doral Collision Ctr.,
Inc. v. Daimler Tr., 341 So. 3d 424, 429 (Fla. 3d DCA 2022) (internal citations omitted); see also
Hall v. Humana Hosp. Daytona Beach, 686 So. 2d 653, 656 (Fla. 5th DCA 1996) (“[T]he more
modern action for unjust enrichment, is an equitable remedy requiring proof that money had been
paid due to fraud, misrepresentation, imposition, duress, undue influence, mistake, or as a result
of some other grounds appropriate for intervention by a court of equity.”) (citations omitted).
Here, Plaintiffs allege they “conferred a benefit on Defendants . . . including but not limited
to, depositing their funds with FXWinning and commissions and profits from the scheme …
Defendants had knowledge of the benefits conferred … Defendants voluntarily accepted and
retained the conferred benefits [and] [t]he circumstances are such that it would be inequitable for
Defendants to retain the benefits conferred without paying Plaintiffs the value of that benefit.”
Compl. at ¶¶ 140-43.
Kuschner and Lopez insist that Plaintiffs have failed to allege that they conferred a “direct
benefit” on Kuschner and Lopez. Given that Plaintiffs have alleged that they conferred a benefit
on Kuschner and Lopez, which is all the case law requires, the issue of a “direct benefit” is for
another day and cannot be resolved at the motion to dismiss stage. See, e.g., Sierra Equity Grp.,
Inc. v. White Oak Equity Partners, LLC, 650 F. Supp. 2d 1213, 1229 (S.D. Fla. 2009) (“Whether
the [Defendants] did or did not receive a direct benefit from Plaintiff is a question of fact that
cannot be resolved at the motion to dismiss stage in this case.”); see also Hankinson v. R.T.G
13
Furniture Corp., No. 15-81139-CIV-COHN/SELTZER, 2016 WL 11721897, at *3 (S.D. Fla.
Sept. 29, 2016). Not incidentally, Defendants’ case was decided at the summary judgment stage.
See CFLB P’ship, LLC v. Diamond Blue Int’l, Inc., 352 So. 3d 357, 360 (Fla. 3d DCA 2022).
Hankinson is highly instructive. There, the plaintiffs pled a claim for unjust enrichment to
remedy a fraudulent scheme by which plaintiffs were sold furniture treatment protection plans
from Rooms to Go stores. Hankinson, 2016 WL 11721897 at *1. The defendant argued the unjust
enrichment claim failed against the parent companies because plaintiffs, in defendant’s view,
alleged no more than “mere ownership” on the part of the parent companies. Id. at *2. The court
disagreed, ruling that “Plaintiff plead facts that plausibly suggest that Defendants operated a
common scheme to sell [furniture protection plans]….” Id. According to the Hankinson court, the
defendants’ argument that plaintiffs only conferred a benefit on the entity they purchased their
furniture protection plan from was premature and “improper for the Court to determine” on a
motion to dismiss. Id. at *3.
Here, like in Hankinson, Defendants contend that Plaintiffs’ unjust enrichment claim fails
because Plaintiffs allege they deposited money with FXWinning but did not allege they transferred
funds directly to Kuschner and Lopez. See Mot. at 16-17. Thus, at best, Defendants’ argument is
premature and “improper for the Court to determine” on a motion to dismiss. Hankinson, 2016
WL 11721897 at *3. The Motion should therefore be denied.
VI. Plaintiffs Adequately Allege Fraudulent Transfers (Count VIII and Count IX)
Defendants next contend that Plaintiffs’ fraudulent transfer claims should be dismissed.
First, Defendants argue that Plaintiffs are not “creditors” as defined by Section 726.102(5),
Florida Statutes. See Mot. at 17. Under the Florida Uniform Fraudulent Transfer Act (“FUFTA”),
a creditor is “a person who has a claim.” § 726.102(5), Fla. Stat. “As defined in section 726.102,
14
a ‘claim, is broadly construed and ‘means a right to payment, whether or not the right is reduced
to judgment, liquidated, unliquidated, fixed, contingent, … or unsecured.’” Friedman v. Heart
Inst. Of Port St. Lucie, Inc., 863 So. 2d 189, 192 (Fla. 2003) (quoting § 726.102(3), Fla. Stat.)
(emphasis added); see also Money v. Powell, 139 So. 2d 702, 703 (Fla. 2d DCA 1962) (“In this
state contingent creditors and tort claimants are as fully protected against fraudulent transfers as
holders of absolute claims.”).
Here, Plaintiffs allege that Kuschner and Lopez fraudulently obtained Plaintiffs’ money
through the FXWinning fraud. See Compl. at ¶¶ 70, 75, 151, 157. Thus, Plaintiffs have a claim
against Kuschner and Lopez for the loss of Plaintiffs’ money as a result of the fraud Kuschner and
Lopez perpetrated against them, forming the basis for Plaintiffs’ fraud, FDUTPA, negligent
misrepresentation, and civil conspiracy counts. That is, Plaintiffs have a claim against Kuschner
and Lopez as defined by Florida’s fraudulent transfer statute. See § 726.102(3), Fla. Stat. (defining
a claim as a right to payment, whether or not the right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, … or unsecured.”). The law does not require that Plaintiffs wait
until their claims are reduced to judgment to assert that Kuschner and Lopez committed a
fraudulent transfer against them. See Friedman, 863 So. 2d at 193 (“[A] creditor is merely a person
who ‘has a claim,’ and a ‘claim’ may be ‘unliquidated, . . . contingent, [or] unmatured.’” (quoting
§ 726.102(3)-(4), Fla. Stat.); see also id. (permitting a corporation’s fraudulent transfer claim to
proceed simultaneously with its underlying breach of employment agreement claim because the
FUFTA permits “contingent” claims not yet reduced to judgment.”). 8
8
Defendants supporting case law is wildly inapposite. Defendants cite a report and
recommendation that was rejected by the reviewing district court and quote favorable language
that is completely factually distinguishable. See In re Burton Wian Receivership Cases Pending in
the Tampa Div. of Middle Dist. Of Fla., No. 8:05-CV-1856-T-27, 2008 WL 818509, at *6 (M.D.
Fla. Jan. 28, 2008), report and recommendation adopted in part and rejected in part sub nom, No.
15
Second, Defendants incredibly (yet inaccurately) assert “Plaintiffs fail to allege that their
specific funds were ever used for the purchases of the real property at issue.” Mot. at 18. To the
contrary, Plaintiffs allege Kuschner and Lopez purchased real property “with their ill-gotten gains”
from the FXWinning scheme. See Compl. at ¶¶ 69-70, 95-97, 99. Defendants own case, Conesco,
supports Plaintiffs’ position. There, the Third District affirmed dissolving a lis pendens because
the plaintiff failed to demonstrate “the requisite fraud and egregious conduct in the absence of any
allegation that the [Defendants] wrongfully or fraudulently obtained [Plaintiffs’] funds to
purchase, invest in, or improve the Florida home.” Conesco Servs., LLC v. Cuneo, 904 So. 2d 438,
440 (Fla. 3d DCA 2005). Unlike in Conesco, Plaintiffs allege Kuschner and Lopez made a litany
of false statements to them that induced Plaintiffs to invest money with FXWinning—a portion of
which Defendants received as commissions – that were used to purchase the real property at issue.
See id.; Misrepresentations Chart, supra; Compl., at ¶¶ 3, 70.
Defendants also argue that Plaintiffs fail to adequately allege Kuschner and Lopez had the
requisite “actual intent.” Mot. at 18. Yet, Plaintiffs have alleged that Kuschner and Lopez made
their respective transfers with “actual intent.” Compl., at ¶¶ 153, 159. That is sufficient. See
Bankers Mut., 784 So. 2d at 490 (stating that intent can be averred generally).
Next, Defendants contend that Plaintiffs claim fails to “explain why Kuschner or Lopez
were insiders, how the “transfer was concealed,” why “the value of the consideration received by
Kuschner was not reasonably equivalent to the value of the asset transferred,” or how the “transfer
8:05-CV-1856-T-27, 2008 WL 818504, at *3-4 (M.D. Fla. Mar. 26, 2008). Despite Defendants
assertions, this is not a case where Plaintiffs ask the Court to “permit an entity which has
transferred its assets to others or had them stolen to recover those assets from whomever may be
in possession of them . . . .” See Mot. at 17 (quoting In re Wiand, 2008 WL 818509, at *6. Plaintiffs
seek to avoid transfers that Kuschner and Lopez made with money they obtained by directly
defrauding Plaintiffs. Compl., at ¶¶ 99, 101-102, 151-155, 157-161.
16
occurred shortly after a substantial debt was incurred.” Mot. at 18 (quoting Compl. at ¶¶ 153, 159).
Again, Kuschner and Lopez misapprehend the law. This is the pleading stage. Those are all
ultimately facts in and of themselves. See Clark v. Boeing Co., 395 So. 2d 1226, 1229 (Fla. 3d
DCA 2981) (“Pleadings must contain ultimate facts supporting each element of the cause of
action.”). Case in point: “The intent to delay or defraud creditors is an ultimate fact and not a
conclusion of law, which may be pleaded in so many words without stating the specific facts or
evidence which go to substantiate the charge, although a statement of the substantive facts from
which the inference of fraudulent intent may be drawn would not be improper . . . .” Godard v.
Crenshaw, 186 So. 822, 825 (Fla. 1938) (emphasis added). That one badge of fraud is all Plaintiffs
need to survive a motion to dismiss. They need not prove their allegations at this stage.
Yet, Plaintiffs have alleged many more of the badges of fraud outlined in the statute, all of
which are also ultimate facts: “The transfer was to an insider as defined in the Florida Statutes[,],
[Defendants] retained possession or control of the property transferred after the transfer[,] [t]he
transfer was concealed, [t]he value of the consideration received by Lopez was not reasonably
equivalent to the value of the asset transferred.” Compl. at ¶¶ 154, 159.
Moreover, even if it were necessary (which it is not), Plaintiffs sufficiently allege how the
transfers occurred shortly after a substantial debt was incurred. Indeed, Plaintiffs allege that
Kuschner purchased real property in March 2023 and Lopez purchased real property in April 2023.
Id. at ¶¶ 101-102. FXWinning stopped processing withdrawals (at least Plaintiffs’ withdrawal
requests) in early 2023 when they allegedly began undergoing a KYC/AML audit. Id. at ¶ 76. In
other words, while Plaintiffs were being told their investment was safe and would be processed,
Kuschner and Lopez were using Plaintiffs’ funds to make multi-million-dollar real estate
17
purchases. See id. at ¶¶ 76, 79, 151, 157. 9 Simply put, Plaintiffs have adequately alleged their
fraudulent transfer claims, and the Motion should be denied.
VII. Plaintiffs Properly Allege Each Claim Against Kuschner and Lopez in a Separate
Count.
Next, according to Defendants, “[c]ommingling distinct causes of action against multiple
defendants violates Florida Rule of Civil Procedure 1.110(f).” Mot. at 10. Although hardly a
beacon of clarity, Defendants appear to suggest that it is improper to sue multiple defendants in a
single claim. That is not true. See Fla. R. Civ. P. 1.110(f).
Defendants cite Collado v. Baroukh, 226 So. 3d 924 (Fla. 4th DCA 2017) and K.R. Exch.
Servs. v. Fuerst, Humphrey, Ittleman, PL, 48 So. 3d 889, 893 (Fla. 3d DCA 2010) in support of
their position. Unlike the Collado plaintiff, Plaintiffs here do not “ma[k]e blanket references to
‘defendants’” nor did Plaintiffs “commingl[e] separate and distinct claims against multiple
defendants[.]” Collado, 226 So. 3d at 928. Plaintiffs set forth specific allegations of misconduct
by Kuschner and Lopez in separate paragraphs and in separately titled sections. K.R. Exchange
likewise fails to support Kuschner and Lopez’s cause. Unlike in K.R. Exchange, Plaintiffs divided
their causes of action into separate counts and pled the specific conduct of each defendant
separately. Cf. K.R. Exchange, 48 So. 3d at 893.
At its core, Defendants’ argument is simply that “[t]he commingled nature of all these key
allegations makes it impossible for Kushner and Lopez to identify what facts are specifically
9
Defendants’ suggestion that they must be insolvent in order to commit a fraudulent transfer
is yet another misstatement of the law. See Mot. at 18. By statute, the debtor’s insolvency is but
one of a non-exhaustive list of eleven factor courts consider when determining whether “actual
intent” is present. See § 726.105(2)(a)-(k), Fla. Stat.; see also U.S. v. Ressler, 433 F. Supp. 459,
464 (S.D. Fla. 1977) (“Factors indicating the actual fraudulent intent are absence of consideration,
family relationship of the parties to the transfer; retention of possession of the property by the
transferor; failure to notify the transferee of the transfer; and the financial condition of the
transferor after the transfer.”).
18
alleged against them” and that what Plaintiffs’ have done is “the antithesis of particularized
allegations.” Mot. at 10-11. Plaintiffs have dispelled with those arguments above. See supra, §§ I,
II, III, IV; Misrepresentation Chart, supra. Indeed, Plaintiffs devote entire separately titled sections
and separately numbered paragraphs explaining exactly what Kuschner and Lopez did that gives
rise to Plaintiffs’ claims. See Compl. at ¶¶ 40-50, 51-62. Then in each separate count Plaintiffs re-
incorporate each allegation in the claims. See id., at ¶¶ 105, 112, 122, 128, 138, 150, 156.
VIII. Plaintiffs Sufficiently Allege That Kuschner and Lopez Were Partners and Agents
Finally, Defendants argue Plaintiffs fail to properly allege Kuschner and Lopez were
partners or agents with FXWinning. See Mot. at 11-12. Kuschner and Lopez’s reliance on the
specific elements of the agency/partnership relationship puts form over substance under the facts
alleged. Here, Plaintiffs allege that, on multiple occasions, Kuschner and Lopez held themselves
out as “partners” of Merino, Brito, and FXWinning. Compl., at ¶¶ 42, 54, 55. Under Florida law,
“[i]f a person, by words or conduct, purports to be a partner, or consents to being represented by
another as a partner, in a partnership or with one or more persons who are not partners, the
purported partner is liable to a person to whom the representation is made if such person, relying
on the representation, enters into a transaction with the actual or purported partnership.” §
620.8308(1), Fla. Stat. (emphasis added); see also Country Clubs of Sarasota, Ltd. v. Zaun Equip.,
Inc., 350 So. 2d 539 (Fla. 1st DCA 1977) (“Persons who hold themselves out as partners are
estopped from denying the partnership relationship to the detriment of those relying on it.”).
Again, here Plaintiffs repeatedly allege that Kuschner and Lopez held themselves out as
“partners” in FXWinning, Merino and Brito. See Compl. at ¶ 54 (“On or about July 7, 2022, …
Kuschner represented to McGinnis that he, Merino, Brito, and Lopez were partners in
FXWinning.”) (emphasis added); id. at ¶ 42 (“During [a] meeting in Miami-Dade County,
19
Kuschner and Lopez stated that Merino was their “partner” ….”) (emphasis added). Relying on
Kuschner’s and Lopez’s representations of their “partnership” in FXWinning and with Merino and
Brito, Plaintiffs’ invested into FXWinning to their detriment. See id. at ¶¶ 50, 60, 62, and 90.
Plaintiffs also sufficiently allege that Kuschner and Lopez were agents of Merino, Brito,
and FXWinning. “While agency is normally a contractual relationship created by agreement of the
parties, it may also be inferred from past dealings between the parties. Beardslee v. Fla. Elections
Com’n, 962 So. 2d 390, 392 (Fla. 5th DCA 2007). “It may be proved by the facts and circumstances
of each particular case, including the words and conduct of the parties.” Id. (emphasis added).
Here, Plaintiffs allege that Kuschner and Lopez represented that they “met with Merino and Brito
and saw $3 billion in FXWinning liquidity with their own eyes.” Compl., at ¶ 79. And further that
Kuschner, Lopez, and Merino met with Kerns in March 2023 in Miami where “Merino told Kerns
and Kerns Capital that the Kerns Account and the Kerns Capital Account were safe, and that all
money would be released and paid.” Id. at ¶ 80 (emphasis added). Thus, the “words and conduct”
of Defendants, as alleged in the Complaint, sufficiently allege at this stage that Defendants were
agents of one another and the Motion should be denied. 10
CONCLUSION
Based on the foregoing, this Court should deny the Motion, or in the alternative, provide
Plaintiffs with leave to amend their Complaint.
10
In any event, Kuschner and Lopez are the agents of Merino, Brito, and FXWinning because
they said they were partners of Merino and Brito, and in FXWinning with Merino and Brito. See
Kelly v. State, Dep’t of Ins., 597 So. 2d 900, 902 (Fla. 3d DCA 1992) (“It is well-established law
that partners, acting within their authority and in pursuit of the partnership business, bind all other
partners and act as their agents.”).
20
Dated: August 30, 2023 Respectfully submitted,
SANCHEZ FISCHER LEVINE, LLP
1200 Brickell Avenue, Suite 750
Miami, Florida 33131
Telephone: (305) 925-9947
By: /s/ David M. Levine
David M. Levine, Esq.
Florida Bar No.: 84431
Email: dlevine@sfl-law.com
Secondary: eservice@sfl-law.com
Fausto Sanchez, Esq.
Florida Bar No.: 86229
Email: fsanchez@sfl-law.com
Lauren M. Allen, Esq.
Florida Bar No.: 1018424
Email: lallen@sfl-law.com
Robert Kemper, Esq.
Florida Bar. No.: 1038549
Email: rkemper@sfl-law.com
Counsel for Plaintiffs
Preview
Filing # 180856210 E-Filed 08/30/2023 05:58:11 PM IN THE CIRCUIT COURT OF THE 11TH JUDICIAL CIRCUIT IN AND FOR MIAMI-DADE COUNTY, FLORIDA CIRCUIT CIVIL DIVISION CASE NO.: 2023-020202-CA-01 CODY KERNS, an individual, KERNS CAPITAL MANAGEMENT, INC., a British Virgin Islands Corporation, and WFTMB HOLDINGS, LLC, a Florida Limited Liability Company, Plaintiffs, v. FXWINNING, LTD., a Hong Kong Limited Company, JONATHAN LOPEZ, an individual, JULIAN KUSCHNER, an individual, DAVID MERINO, an individual, RENAN DA ROCHA GOMES BASTOS, an individual, RAFAEL BRITO CUTIE, an individual, BBRC REAL ESTATE, LLC, a Florida Limited Liability Company Defendants. / PLAINTIFFS’ RESPONSE IN OPPOSITION TO DEFENDANTS JULIAN KUSCHNER’S AND JONATHAN LOPEZ’S MOTION TO DISMISS THE COMPLAINT Plaintiffs, Cody Kerns, Kerns Capital Management, Inc., and WFTMB Holdings, LLC (collectively, “Plaintiffs”), respond in opposition to Defendants, Julian Kuschner’s and Jonathan Lopez’s (collectively, “Defendants”), Motion to Dismiss the Complaint (the “Motion”) as follows: INTRODUCTION In a shameless, brazen scheme that evokes thoughts of FTX and Bernie Madoff, Defendants Julian Kuschner (“Kuschner”) and Jonathan Lopez (“Lopez”) – along with their self- professed partners, David Merino (“Merino”) and Rafael Brito Cutie (“Brito”) – knowingly perpetrated a fraudulent scheme on Plaintiffs. According to Kuschner and Lopez, Merino had invented an algorithm that would allow clients such as Plaintiffs to receive high returns on their foreign exchange trading. There were just two catches – you had to invest and trade through a company called FXWinning, Ltd., and you had to put in more and more money if you wanted to see the highest of returns. As a result of Plaintiffs’ deposits with FXWinning, Ltd. (“FXWinning”), Defendants Kuschner, Lopez, Merino, and Brito earned extremely high commissions – totaling 35% to 40% of Plaintiffs’ accounts – that allowed them to live a life of luxury, enjoying the fruits of their fraud. Little by little, spurred on by Defendants’ deceit, Plaintiffs deposited more and more with FXWinning in an effort to obtain higher and higher returns. After Plaintiffs had more than $20 million in deposits with FXWinning between the three of them, FXWinning abruptly halted all withdrawals from client accounts under the guise of an anti-money laundering compliance audit. Then, after Plaintiffs had been notified that FXWinning had passed its compliance requirements, FXWinning just shut down completely with Plaintiffs left without their money. Now, faced with Plaintiffs’ 161-paragraph Complaint against them for fraud (Count I), FDUTPA (Count II), conspiracy (Count III), negligent misrepresentation (Count IV), unjust enrichment (Count VI), fraudulent transfer as to Lopez (Count VIII), and fraudulent transfer as to 1 Kuschner (Count IX), Kuschner and Lopez have attempted to flip Florida’s pleading standard on its head by trying to get off scott-free by simply having this Court take their word as true that they did not engage in this fraud and by outrageously ignoring the first 104 paragraphs of Plaintiffs’ Complaint as if they never existed. In those first 104 paragraphs, Plaintiffs set forth in striking detail exactly how both Kuschner and Lopez falsely represented the safety of investing in FXWinning to them, as well as their role as “partners” in FXWinning along with Merino and Brito. Indeed, Plaintiffs set forth each misrepresentation Kuschner and Lopez made, when they made them, why they made them, and to whom they made them. And they do this in separate sections respectively titled “Misrepresentations to Kerns and Kerns Capital” and “Misrepresentations to McGinnis.” It cannot get any clearer than that. Worse, Defendants have the gall to claim Plaintiffs do not sufficiently allege that Kuschner and Lopez were partners with the principals of FXWinning even though Kuschner and Lopez held themselves out as partners of FXWinning and repeatedly assured Plaintiffs they were partners with Merino and Brito. Needless to say, Florida law forbids a person to disclaim liability from such partnership when others – such as Plaintiffs – relied on such representations. In short, Plaintiffs pled all that is required to survive a motion to dismiss, including with the requisite specificity and particularity required for certain of their counts. Plaintiffs identify the misrepresentations made to them and upon which they relied to their detriment. They show that all the Defendants agreed to, and committed acts in furtherance of, a conspiracy to commit fraud. And to add insult to injury, Defendants took the money they fraudulently obtained from this fraud and used it to purchase multimillion dollar Miami real estate at the same time they were lulling Plaintiffs with statements about how FXWinning was still legitimate. 2 ARGUMENT I. Plaintiffs Plead Count I (Fraud) Sufficiently Defendants argue Plaintiffs fail to plead their fraud claim with the particularity required by the Florida Rules of Civil Procedure. Yet, even a cursory review of the Complaint reveals Defendants’ argument holds no water. The only thing Plaintiffs must plead with particularity are the “circumstances constituting fraud or mistake.” Fla. R. Civ. P. 1.120(b). 1 In other words, they need only plead the “time, place or manner in which [the misrepresentations] were made, and how the representations were false or misleading.” Robertson v. PHF Line Ins. Co., 702 So. 2d 555, 556 (Fla. 1st DCA 1997); accord Erwine v. Gamble, Pownal & Gilroy, Architects & Engr’s, 343 So. 2d 859, 861 (Fla. 2d DCA 1976) (stating that Rule 1.120(f) “simply provides that for the purpose of testing the sufficiency of a pleading, averments of time and place are material”). Meanwhile, the “intent [and] knowledge, … of a person may be averred generally[.]” Id.; accord Bankers Mut. Capital Corp. v. U.S. Fidelity and Guar. Co., 784 So. 2d 485, 490 (Fla. 4th DCA 2001) (“In all averments of fraud . . . [m]alice, intent, knowledge, and mental attitude, and other condition of mind of a person may be averred generally.”). Incredibly, Defendants quibble with Plaintiffs incorporation of the allegations of the Complaint within their counts stating that Plaintiffs “invite the reader to guess which allegations . . . support Plaintiffs’ fraud-based claims.” Mot. at 8. But Plaintiffs, in separate sections respectively titled “Representations Made to Kerns & Kerns Capital” and “Representations 1 The elements of fraud are “(1) a false statement concerning a specific material fact; (2) the maker's knowledge that the representation is false; (3) an intention that the representation induces another's reliance; and (4) consequent injury by the other party acting in reliance on the representation.” Lopez-Infante v. Union Cent. Life Ins. Co., 809 So. 2d 13, 15 (Fla. 3d DCA 2002). 3 Made to McGinnis,” set forth the exact misrepresentations each defendant made to Kerns, Kerns Capital, and McGinnis: Misrepresentations Made to Misrepresentation Made to McGinnis Kerns & Kerns Capital Statement to Induce Investment: “In or around Statement to Induce Investment: “In or December 2021 or January 2022, in Miami-Dade about June of 2023, McGinnis met County, Florida, Kuschner and Lopez, acting in Kuschner at a dinner with Kerns in Miami their capacity as agents for the other Defendants, [to solicit him].” Compl. at ¶¶ 51; 52. approached Kerns about a new investment opportunity.” Compl. at ¶ 40. Misrepresentation 9: “On or about July 4, 2022, in a telephone conversation, Misrepresentation 1: “Kuschner and Lopez Kuschner represented to McGinnis that represented to Kerns that this new investment Kuschner and Lopez had fully vetted opportunity was a proprietary algorithm FXWinning. Kuschner represented to developed by Merino that could achieve high McGinnis that Lopez and Kuschner monthly returns on foreign exchange trades.” personally flew out to meet and vet the Compl. at ¶ 41. broker and the liquidity provider, and saw the actual funds held by FXWinning. Misrepresentation 2: “During this meeting in Kuschner insisted that FXWinning was Miami-Dade County, Kuschner and Lopez stated appropriately liquidated.” Compl. at ¶ 53. that Merino was their “partner” and showed Kerns their own FXWinning accounts that used Misrepresentation 10: “On or about July 7, the algorithm, which they claimed were achieving 2022, during an in-person meeting, rates of return of 8% to 15% each month.” Compl. Kuschner represented to McGinnis that he, at ¶ 42. 2 Merino, Brito, and Lopez were partners in FXWinning.” Compl. at ¶ 54. Misrepresentation 3: “In and around that same time period, in Miami-Dade County, Kuschner Misrepresentation 11: “From that date and Lopez, represented to Kerns via text message, until approximately April of 2023, in telephone conversations, and during in-person Kuschner and Lopez repeatedly represented to McGinnis that Kuschner, Lopez, and meetings, that FXWinning was a safe platform to conduct foreign exchange trading.” Compl. at ¶Merino were partners. Those 44. representations were made through voice notes and during in-person meetings.” Misrepresentation 4: “In and around that same Compl. at ¶ 55. time period, in Miami-Dade County, via text message, voice notes, and in telephone Misrepresentation 12: “On or around July conversations, Kuschner and Lopez also 7, 2022, Kuschner invited McGinnis over to represented to Kerns that they had personally his apartment in Miami to meet with flown to Dubai, United Arab Emirates, to meet Kuschner and Lopez. During that meeting, with Merino and Brito (FXWinning’s Chief Lopez showed McGinnis what Lopez 2 Putting words in Plaintiffs’ mouths, Kuschner and Lopez contend Plaintiffs explain that Kuschner and Lopez were investors just like Plaintiffs. See Mot. at 12. Nowhere in the Complaint do Plaintiffs allege that Kuschner and Lopez were similarly situated investors in FXWinning. 4 Executive Officer), to examine FXWinning’s represented as Lopez’s FXWinning system, and review FXWinning’s liquidity.” account, with $21 million in it. Kuschner Compl. at ¶ 45. showed McGinnis what Kuschner represented as Kuschner’s account, with Misrepresentation 5: “In and around that same between $5 million and $6 million in it. time period, Kuschner and Lopez represented to Lopez and Kuschner also showed McGinnis Kerns via text message, voice notes, and in an account at FXWinning and stated it telephone conversations, that if anything were to belonged to someone in the royal family in ever go wrong with his investment, Kuschner and Dubai with hundreds of millions of dollars Lopez would facilitate a safe and easy exit in it. Lopez and Kuschner also discussed a process whereby Kerns could withdraw his funds Swiss hedge fund that Merino brought to from FXWinning.” Compl. at ¶ 46. FXWinning, which traded approximately $650 million.” Compl. at ¶¶ 56-57. Moreover, after FXWinning stopped processing Plaintiffs’ withdrawal requests, Kuschner and Lopez doubled down and continued to make more false statements to Plaintiffs regarding Plaintiffs’ funds. See also Compl. at ¶ 78 (“In or around March 2023, Kuschner and Lopez . . . in telephone conversations, represented to Kerns and Kerns Capital that Kuschner and Lopez were flying to Dubai to meet with Merino and Brito to review the company’s situation in light of the KYC/AML audit.”); id. at ¶ 79 (“In or around March 2023, … in telephone conversations, Kuschner and Lopez, on their own behalf and as agents of FXWinning . . . represented to Kerns and Kerns Capital that they met with Merino and Brito and saw $3 billion in liquidity [and] Kerns and Kerns Capital’s money was safe.”); id. at ¶ 106 (“As outlined above, FXWinning, Kuschner, Lopez, Merino, da Rocha, and Brito . . . made false statements of fact to Plaintiffs in the manner and at the times alleged.”). Plaintiffs also allege exactly how Kuschner’s and Lopez’s statements were false. See Compl. at ¶ 98 (“Since the inception of FXWinning and Defendants’ relationship with Plaintiffs, FXWinning, Kuschner, Lopez, Merino, da Rocha, and Brito, all knew or should have known that (1) FXWinning was nothing more than a fraudulent scheme to induce potential traders to transfer money to FXWinning; (2) no high rate of return would be possible; and (3) Plaintiffs would never 5 receive a full withdrawal of their deposited money as they were promised.”); id. at ¶ 107 (“FXWinning, Kuschner, Lopez, da Rocha, and Brito knew that the statements were false when they made them to Plaintiffs.”); id. at ¶ 93 (“To date, Defendants have failed to return any of Plaintiff’s money.”). Thus, Plaintiffs have adequately alleged the first element of fraud – that the defendant made a false statement concerning a specific material fact. Robertson, 702 So. 2d 556. Plaintiffs also allege the second element of fraud – that is, Defendants’ knowledge that the representation is false. See Compl. at ¶ 107 (“FXWinning, Kuschner, Lopez, Merino, da Rocha, and Brito knew that the statements were false when they made them to Plaintiffs.”). They likewise allege the third element of fraud – Defendants’ intention that the representation induces another's reliance. Id. at ¶ 109 (“FXWinning, Kuschner, Lopez, Merino, da Rocha, and Brito made the representations to Plaintiffs for the purpose of inducing Plaintiffs to act in reliance thereon.”). That is sufficient. See Fla. R. Civ. P. 1.120(b) (“Malice, intent, knowledge, mental attitude, and other condition of mind of a person may be averred generally.”). Finally, Plaintiffs have alleged consequent injury by the other party acting in reliance on the representation.” Id. at ¶ 111 (“As a result of FXWinning, Kuschner’s, Lopez’s, Merino’s, da Rocha’s, and Brito’s conduct, Plaintiffs have been damaged. That damage includes, but is not limited to, the loss of their funds deposited in FXWinning”). Even worse, Defendants single case, Simon v. Celebration Co., 883 So. 2d 826, 833 (Fla. 5th DCA 2004), is wildly inapposite. There, the Fifth District reversed the trial court’s dismissal of fraud and negligent misrepresentation claims, finding the plaintiffs should have been granted leave to amend. See Mot. at 13-14. As for the sufficiency of the allegations, the plaintiffs in Simon had merely alleged that a school falsely represented it would “implement a curriculum of ‘proven best practices’ that would include ‘technology’ and ‘whatever it takes[.]” Id. at 833. Such lack of 6 specificity, compounded with the fact that the Simon plaintiffs failed to particularize which defendants made which statements, deemed the allegations insufficient. Id. Here, unlike in Simon, Plaintiffs set out which Defendants made which statements, and alleged that with the requisite particularity. They state who made the statements, what the statements were, when the statements were made, and why the statements were made. See Compl. ¶¶ 41-46, 53-55, 57-58, 61. That ends the inquiry. Plaintiffs sufficiently plead their fraud claim. II. Plaintiffs Sufficiently Plead Count II (FDUTPA) Turning to Plaintiffs’ FDUTPA count, Kuschner and Lopez are incorrect, as a threshold matter, in their assertion that this Court must require Plaintiffs to plead their FDUTPA claim with particularity. For that proposition, Defendants rely on State Farm Auto. Ins. Co. v. Performance Orthopaedics & Neurosurgery, LLC, 278 F.Supp.3d 1307, 1328 (S.D. Fla. 2017). Yet, a litany of other courts have found that the heightened pleading standard does not apply to FDUTPA claims. As one court explained, “FDUTPA claims seek a remedy for conduct distinct from traditional common law torts such as fraud. As such, the uniqueness of the cause of action place it outside the ambit of Rule 9(b) 3.” Harris v. Nordyne, LLC, No. 14-CIV-21884, 2014 WL 12516076, at *4 (S.D. Fla. Nov. 14, 2014). 4 This Court should similarly hold that FDUPTA claims are not subject to a heightened pleading standard. 3 Florida Rule of Civil Procedure 1.120(b) is “analogous to Fed. R. Civ. P. 9(b)[.]” Talbot v. Anderson, No. 8:15-CV-1313, 2015 WL 13297966, at *6 (M.D. Fla. Aug. 17, 2005) (internal citations omitted). 4 See Harris, 2014 WL 12516067, at *4 (joining “several decisions in holding that the requirements of Rule 9(b) categorically do not apply to claims under FDUTPA.”); see also Deere Constr., LLC v. Cemez Constr. Materials Fla., LLC, 198 F.Supp.3d 1332, 1342 (S.D. Fla. 2016) (same); Eli Lilly & Co. v. Tyco Integrated Sec., LLC, No. 13-80371-CIV, 2015 WL 11251732, at *3 (S.D. Fla. Feb. 10, 2015) (same); Sanchez-Knutson v. Ford Motor Co., 52 F. Supp. 3d 1223, 1239 (S.D. Fla. 2014) (same); Toback v. GNC Holdings, Inc., No. 13-80526-CIV, 2013 WL 5206103, at *2 (S.D. Fla. Sept. 13, 2013) (same). 7 But even if this Court applies the heightened pleading standard, the same specific, particularized allegations of false representations made by Kuschner and Lopez are sufficient to state a FDUTPA claim. Again, Defendants wholly ignore the general allegations of the Complaint (the allegations of which are expressly incorporated into each count) and incredibly state that Plaintiffs allege only “that [they] are ‘consumers’ and that Defendants committed ‘deceptive acts’ and ‘unfair and unconscionable acts’ in ‘the conduct of their trade or commerce’ without any accompanying detail.” Mot. at 8 (quoting Compl. at ¶¶ 113-15). That is simply not true. As set forth on the Misrepresentations Chart, Plaintiffs identified what conduct each Defendant engaged in that was deceptive, unfair, and unconscionable. Defendants also argue that Plaintiffs’ FDUTPA claim fails because Plaintiffs “have not alleged that Kuschner or Lopez participated in or had some measure of control over FXWinning.” See Mot. at 14. In doing so, they misstate the law. Imposition of individual liability requires a showing of participation in or “some measured control over the [entity’s] deceptive practices” – i.e., not over the company as a whole. KC Leisure, Inc. v. Haber, 972 So. 2d 1059, 1073 (Fla. 5th DCA 2008) (emphasis added). Plaintiffs meet their burden. Plaintiffs allege that Kuschner and Lopez not only made a litany of misrepresentations regarding the safety of investing with FXWinning, but stated directly to Plaintiffs that they were “partners” in FXWinning, and with Merino and Brito (the co-owners of FXWinning), and that they could facilitate a safe exit should anything ever go wrong. See Compl. at ¶¶ 40, 42 (“In or around December 2021 or January 2022 . . . in Miami-Dade County, Florida, Kuschner and Lopez stated [to Kerns] that Merino was their ‘partner’ . . . .”); id. at ¶ 54 (“On or about July 7, 2022, during an in-person meeting, Kuschner represented to McGinnis that he, Merino, Brito, and Lopez were partners in FXWinning.”); id. at ¶ 46 (“Kuschner and Lopez represented to Kerns . . . that if 8 anything were to ever go wrong with his investment, Kuschner and Lopez would facilitate a safe and easy exit process whereby Kerns could withdraw his funds from FXWinning.”). Either way, to state a claim under FDUTPA, Plaintiffs need only allege “three elements: (1) a deceptive act or unfair practice; (2) causation; and (3) actual damages.” Waste Pro USA v. Vision Constr. ENT, Inc., 282 So. 3d 911, 917 (Fla. 1st DCA 2019) (quoting Rollins, Inc. v. Butland, 951 So. 2d 860, 869 (Fla. 2d DCA 2006)). Here, Plaintiffs allege that Kuschner and Lopez engaged in deceptive and unfair conduct by making false representations regarding the safety of investing with FXWinning and their high rate of return. See Misrepresentation Chart, supra. Then, as shown above, they doubled down on their misrepresentations after FXWinning stopped processing Plaintiffs’ withdrawal requests. See Compl. at ¶¶ 78, 79, 106. Plaintiffs also sufficiently allege causation and damages. See id. at ¶¶ 48, 50 (“In reliance on Kuschner’s and Lopez’s representations . . . Kerns deposited more than $3 million into the Kerns Account . . . Kerns deposited Kerns Capital funds with FXWinning in reliance on Kuschner’s and Lopez’s aforementioned representations . . . .”); id. at ¶¶ 59, 60 (“In reliance on [Kuschner and Lopez’s] representations . . . McGinnis deposited $495,000 into the McGinnis Account.”); id. at ¶ 119 (“As a result of . . . Kuschner’s [and] Lopez’s . . . deceptive, unfair, and unconscionable acts in the conduct of their trade or commerce, Plaintiffs have suffered damages.”). Defendants own caselaw supports Plaintiffs here. See KC Leisure, 972 So. 2d at 1074 (“The complaint alleged that defendants, including Mr. Haber, collectively and unanimously cooked up a scheme of providing a ‘license,’ rather than the bargained-for franchise.”). Plaintiffs allege that Kuschner and Lopez (along with the other Defendants) cooked up a scheme to induce Plaintiffs to invest their money with FXWinning, which turned out to be nothing more than a house of cards. See Compl. at ¶ 98. The Motion as to Plaintiffs’ FDUTPA claim should also be denied. 9 III. Plaintiffs Have Adequately Pled Count III (Conspiracy to Commit Fraud) For Count III (Conspiracy to Commit Fraud), Defendants once again ignore every general allegation in the Complaint and, instead, argue that Plaintiffs’ conspiracy count fails because “[i]t alleges that Defendants ‘did agree to commit an unlawful act’ and ‘did all do some overt act in pursuan[ce] of the conspiracy’ with no detail about how there was an agreement, what the agreement contained, or what overt acts Defendants took in furtherance of the conspiracy.” Mot. at 9 (quoting Compl. at ¶¶ 123-25). Defendants even go so far as to argue that Plaintiffs do “not even allege how the Defendants worked together or how Kuschner and Lopez worked for the FXWinning Defendants.” Mot. at 15. “A civil conspiracy requires: (a) an agreement between two or more parties, (b) to do an unlawful act or to do a lawful act by unlawful means, (c) the doing of some overt act in pursuance of the conspiracy, and (d) damage to plaintiff as a result of the acts done under the conspiracy.” Charles v. Fla. Foreclosure Placement Ctr., LLC, 988 So. 2d 1157, 1159-60 (Fla. 3d DCA 2008) (quoting Raimi v. Furlong, 702 So. 2d 1273, 1284 (Fla. 3d DCA 1997)). “Each coconspirator need not act to further a conspiracy; each ‘need only know of the scheme and assist it in some way to be held responsible for all of the acts of his coconspirators.’” Charles, 988 So. 2d at 1160 (quoting Donofrio v. Matassini, 507 So. 2d 1278, 1281 (Fla. 2d DCA 1987)). “A conspirator need not take part in the planning, inception, or successful conclusion of a conspiracy.” Donofrio, 507 So. 2d at 1281; accord Charles, 988 So. 2d at 1160. Significantly, “[t]he existence of a conspiracy and an individual’s participation in it may be inferred from circumstantial evidence.” Donofrio, 507 So. 2d at 1281 (internal citations omitted). Here, Plaintiffs allege an agreement between the Defendants. See Compl. at ¶ 123 (“Kuschner, Lopez, Merino, da Rocha, and Brito did come to an agreement to commit fraud against 10 Plaintiffs by perpetrating their scheme outlined above.”). Indeed, such agreement can even be inferred from the Defendants’ alleged conduct, including but not limited to the fraudulent scheme alleged in the Complaint. See Donofrio, 507 So. 2d at 1281. Plaintiffs thoroughly spell out the fraudulent scheme that Defendants carried out pursuant to that agreement. See Section I, supra; Misrepresentation Chart, supra. Similarly, Plaintiffs specifically identify the overt acts Kuschner and Lopez took in furtherance of the conspiracy and on behalf of FXWinning and the other Defendants. See, e.g., Misrepresentations Chart, supra. 5 Plaintiffs also allege that Kuschner and Lopez knew they were perpetrating a fraud. 6 Compl. at ¶¶ 93, 98, 107. Thus, given all of those allegations, Plaintiffs adequately allege that Kuschner and Lopez “kn[e]w of the scheme and assist[ed] it in some way.” Charles, 988 So. 2d at 1160. That is sufficient for the Motion to be denied. See Tejera v. Lincoln Lending Servs., LLC, 271 So. 3d 97, 103 n.6 (Fla. 3d DCA 2019) (“Because this issue was decided at the motion-to- dismiss stage, we must accept this allegations as true and all reasonable inferences must be construed in favor of [Plaintiffs].”). IV. Plaintiffs Adequately Plead Count IV (Negligent Misrepresentation) As for Count IV (Negligent Misrepresentation), Defendants once again ask this Court to ignore all general allegations of the Complaint and dismiss Plaintiffs’ negligent misrepresentation 5 See also Compl. at ¶ 4 (“…Kuschner and Lopez represented to Kerns … that if anything were to ever go wrong with his investment, Kuschner and Lopez would facilitate a safe and easy exit process whereby Kerns could withdraw his funds from FXWinning.”). 6 Compl. at ¶ 98 (“Since the inception of FXWinning and Defendants’ relationship with Plaintiffs, FXWinning, Kuschner, Lopez, Merino, da Rocha, and Brito, all knew or should have known that (1) FXWinning was nothing more than a fraudulent scheme to induce potential traders to transfer money to FXWinning; (2) no high rate of return would be possible; and (3) Plaintiffs would never receive a full withdrawal of their deposited money as they were promised.”); id. at ¶ 107 (FXWinning, Kuschner, Lopez, da Rocha, and Brito knew that the statements were false when they made them to Plaintiffs); id. at ¶ 93 (“To date, Defendants have failed to return any of Plaintiff’s money.”). 11 count. Mot. at 9. At the risk of belaboring the point, the Complaint encompasses multiple allegations of Kuschner’s and Lopez’s misrepresentations such that the heightened pleading standard is satisfied. 7 See Misrepresentation Chart, supra. And, as Defendants themselves note, the elements of negligent misrepresentation are less stringent than fraud: “[N]egligent misrepresentation requires: (1) a misrepresentation of a material fact; (2) that the representor either knew of the misrepresentation, made the misrepresentation without knowledge of its truth or falsity, or should have known the representation was false; (3) the representer intended to induce another to act on the misrepresentation; and (4) injury.” See Mot. at 13 (citing Hirsh v. Silversea Cruises Ltd., No. 14-CV-61533, 2015 WL 12780626, at *5 (S.D. Fla. Mar. 5, 2015)). To be sure, in addition to pleading with specificity all of the false statements made by Kuschner and Lopez, Plaintiffs allege that “Kuschner [and] Lopez . . . were negligent in making the statements because they should have known that the representations were false.” Compl. at ¶ 130; see also Misrepresentation Chart, supra. Plaintiffs also allege Kuschner and Lopez “intended to induce Plaintiffs to rely on the misrepresentations.” Compl. at ¶ 131. Intent may be averred generally. See Fla. R. Civ. 1.120(b). And Plaintiffs allege “[a]s a result of Plaintiffs’ justifiable reliance on . . . Kuschner [and] Lopez’s . . . misrepresentations, Plaintiffs have been injured.” Compl. at ¶ 133. They even plead what that injury is. See id. at ¶ 93 (“To date, Defendants have failed to return any of Plaintiff’s money.”). That is all Plaintiffs need to allege to state this claim and the Motion should be denied. 7 Plaintiffs need only plead the misrepresentations with particularity. See Grovenor House, LLC. v. E.I. Du Pont De Nemours & Co., No. 09-21698 CIV, 2010 WL 883647, at *2 (S.D. Fla. Mar. 8, 2010) (applying Florida substantive law and stating that “[s]ince an action for ‘negligent misrepresentation’ is based on fraud rather than negligence, a plaintiff asserting this claim ‘must state with particularity the circumstances constituting fraud.’”). 12 V. Count VI (Unjust Enrichment) is Sufficiently Pled Turning to unjust enrichment, Plaintiffs need only allege that “(1) [they] conferred a benefit on the defendant, who has knowledge thereof; (2) defendant voluntarily accepts and retains the benefit conferred; and (3) the circumstances are such that it would be inequitable for the defendant to retain the benefit without first paying the value thereof to the plaintiff.” Doral Collision Ctr., Inc. v. Daimler Tr., 341 So. 3d 424, 429 (Fla. 3d DCA 2022) (internal citations omitted); see also Hall v. Humana Hosp. Daytona Beach, 686 So. 2d 653, 656 (Fla. 5th DCA 1996) (“[T]he more modern action for unjust enrichment, is an equitable remedy requiring proof that money had been paid due to fraud, misrepresentation, imposition, duress, undue influence, mistake, or as a result of some other grounds appropriate for intervention by a court of equity.”) (citations omitted). Here, Plaintiffs allege they “conferred a benefit on Defendants . . . including but not limited to, depositing their funds with FXWinning and commissions and profits from the scheme … Defendants had knowledge of the benefits conferred … Defendants voluntarily accepted and retained the conferred benefits [and] [t]he circumstances are such that it would be inequitable for Defendants to retain the benefits conferred without paying Plaintiffs the value of that benefit.” Compl. at ¶¶ 140-43. Kuschner and Lopez insist that Plaintiffs have failed to allege that they conferred a “direct benefit” on Kuschner and Lopez. Given that Plaintiffs have alleged that they conferred a benefit on Kuschner and Lopez, which is all the case law requires, the issue of a “direct benefit” is for another day and cannot be resolved at the motion to dismiss stage. See, e.g., Sierra Equity Grp., Inc. v. White Oak Equity Partners, LLC, 650 F. Supp. 2d 1213, 1229 (S.D. Fla. 2009) (“Whether the [Defendants] did or did not receive a direct benefit from Plaintiff is a question of fact that cannot be resolved at the motion to dismiss stage in this case.”); see also Hankinson v. R.T.G 13 Furniture Corp., No. 15-81139-CIV-COHN/SELTZER, 2016 WL 11721897, at *3 (S.D. Fla. Sept. 29, 2016). Not incidentally, Defendants’ case was decided at the summary judgment stage. See CFLB P’ship, LLC v. Diamond Blue Int’l, Inc., 352 So. 3d 357, 360 (Fla. 3d DCA 2022). Hankinson is highly instructive. There, the plaintiffs pled a claim for unjust enrichment to remedy a fraudulent scheme by which plaintiffs were sold furniture treatment protection plans from Rooms to Go stores. Hankinson, 2016 WL 11721897 at *1. The defendant argued the unjust enrichment claim failed against the parent companies because plaintiffs, in defendant’s view, alleged no more than “mere ownership” on the part of the parent companies. Id. at *2. The court disagreed, ruling that “Plaintiff plead facts that plausibly suggest that Defendants operated a common scheme to sell [furniture protection plans]….” Id. According to the Hankinson court, the defendants’ argument that plaintiffs only conferred a benefit on the entity they purchased their furniture protection plan from was premature and “improper for the Court to determine” on a motion to dismiss. Id. at *3. Here, like in Hankinson, Defendants contend that Plaintiffs’ unjust enrichment claim fails because Plaintiffs allege they deposited money with FXWinning but did not allege they transferred funds directly to Kuschner and Lopez. See Mot. at 16-17. Thus, at best, Defendants’ argument is premature and “improper for the Court to determine” on a motion to dismiss. Hankinson, 2016 WL 11721897 at *3. The Motion should therefore be denied. VI. Plaintiffs Adequately Allege Fraudulent Transfers (Count VIII and Count IX) Defendants next contend that Plaintiffs’ fraudulent transfer claims should be dismissed. First, Defendants argue that Plaintiffs are not “creditors” as defined by Section 726.102(5), Florida Statutes. See Mot. at 17. Under the Florida Uniform Fraudulent Transfer Act (“FUFTA”), a creditor is “a person who has a claim.” § 726.102(5), Fla. Stat. “As defined in section 726.102, 14 a ‘claim, is broadly construed and ‘means a right to payment, whether or not the right is reduced to judgment, liquidated, unliquidated, fixed, contingent, … or unsecured.’” Friedman v. Heart Inst. Of Port St. Lucie, Inc., 863 So. 2d 189, 192 (Fla. 2003) (quoting § 726.102(3), Fla. Stat.) (emphasis added); see also Money v. Powell, 139 So. 2d 702, 703 (Fla. 2d DCA 1962) (“In this state contingent creditors and tort claimants are as fully protected against fraudulent transfers as holders of absolute claims.”). Here, Plaintiffs allege that Kuschner and Lopez fraudulently obtained Plaintiffs’ money through the FXWinning fraud. See Compl. at ¶¶ 70, 75, 151, 157. Thus, Plaintiffs have a claim against Kuschner and Lopez for the loss of Plaintiffs’ money as a result of the fraud Kuschner and Lopez perpetrated against them, forming the basis for Plaintiffs’ fraud, FDUTPA, negligent misrepresentation, and civil conspiracy counts. That is, Plaintiffs have a claim against Kuschner and Lopez as defined by Florida’s fraudulent transfer statute. See § 726.102(3), Fla. Stat. (defining a claim as a right to payment, whether or not the right is reduced to judgment, liquidated, unliquidated, fixed, contingent, … or unsecured.”). The law does not require that Plaintiffs wait until their claims are reduced to judgment to assert that Kuschner and Lopez committed a fraudulent transfer against them. See Friedman, 863 So. 2d at 193 (“[A] creditor is merely a person who ‘has a claim,’ and a ‘claim’ may be ‘unliquidated, . . . contingent, [or] unmatured.’” (quoting § 726.102(3)-(4), Fla. Stat.); see also id. (permitting a corporation’s fraudulent transfer claim to proceed simultaneously with its underlying breach of employment agreement claim because the FUFTA permits “contingent” claims not yet reduced to judgment.”). 8 8 Defendants supporting case law is wildly inapposite. Defendants cite a report and recommendation that was rejected by the reviewing district court and quote favorable language that is completely factually distinguishable. See In re Burton Wian Receivership Cases Pending in the Tampa Div. of Middle Dist. Of Fla., No. 8:05-CV-1856-T-27, 2008 WL 818509, at *6 (M.D. Fla. Jan. 28, 2008), report and recommendation adopted in part and rejected in part sub nom, No. 15 Second, Defendants incredibly (yet inaccurately) assert “Plaintiffs fail to allege that their specific funds were ever used for the purchases of the real property at issue.” Mot. at 18. To the contrary, Plaintiffs allege Kuschner and Lopez purchased real property “with their ill-gotten gains” from the FXWinning scheme. See Compl. at ¶¶ 69-70, 95-97, 99. Defendants own case, Conesco, supports Plaintiffs’ position. There, the Third District affirmed dissolving a lis pendens because the plaintiff failed to demonstrate “the requisite fraud and egregious conduct in the absence of any allegation that the [Defendants] wrongfully or fraudulently obtained [Plaintiffs’] funds to purchase, invest in, or improve the Florida home.” Conesco Servs., LLC v. Cuneo, 904 So. 2d 438, 440 (Fla. 3d DCA 2005). Unlike in Conesco, Plaintiffs allege Kuschner and Lopez made a litany of false statements to them that induced Plaintiffs to invest money with FXWinning—a portion of which Defendants received as commissions – that were used to purchase the real property at issue. See id.; Misrepresentations Chart, supra; Compl., at ¶¶ 3, 70. Defendants also argue that Plaintiffs fail to adequately allege Kuschner and Lopez had the requisite “actual intent.” Mot. at 18. Yet, Plaintiffs have alleged that Kuschner and Lopez made their respective transfers with “actual intent.” Compl., at ¶¶ 153, 159. That is sufficient. See Bankers Mut., 784 So. 2d at 490 (stating that intent can be averred generally). Next, Defendants contend that Plaintiffs claim fails to “explain why Kuschner or Lopez were insiders, how the “transfer was concealed,” why “the value of the consideration received by Kuschner was not reasonably equivalent to the value of the asset transferred,” or how the “transfer 8:05-CV-1856-T-27, 2008 WL 818504, at *3-4 (M.D. Fla. Mar. 26, 2008). Despite Defendants assertions, this is not a case where Plaintiffs ask the Court to “permit an entity which has transferred its assets to others or had them stolen to recover those assets from whomever may be in possession of them . . . .” See Mot. at 17 (quoting In re Wiand, 2008 WL 818509, at *6. Plaintiffs seek to avoid transfers that Kuschner and Lopez made with money they obtained by directly defrauding Plaintiffs. Compl., at ¶¶ 99, 101-102, 151-155, 157-161. 16 occurred shortly after a substantial debt was incurred.” Mot. at 18 (quoting Compl. at ¶¶ 153, 159). Again, Kuschner and Lopez misapprehend the law. This is the pleading stage. Those are all ultimately facts in and of themselves. See Clark v. Boeing Co., 395 So. 2d 1226, 1229 (Fla. 3d DCA 2981) (“Pleadings must contain ultimate facts supporting each element of the cause of action.”). Case in point: “The intent to delay or defraud creditors is an ultimate fact and not a conclusion of law, which may be pleaded in so many words without stating the specific facts or evidence which go to substantiate the charge, although a statement of the substantive facts from which the inference of fraudulent intent may be drawn would not be improper . . . .” Godard v. Crenshaw, 186 So. 822, 825 (Fla. 1938) (emphasis added). That one badge of fraud is all Plaintiffs need to survive a motion to dismiss. They need not prove their allegations at this stage. Yet, Plaintiffs have alleged many more of the badges of fraud outlined in the statute, all of which are also ultimate facts: “The transfer was to an insider as defined in the Florida Statutes[,], [Defendants] retained possession or control of the property transferred after the transfer[,] [t]he transfer was concealed, [t]he value of the consideration received by Lopez was not reasonably equivalent to the value of the asset transferred.” Compl. at ¶¶ 154, 159. Moreover, even if it were necessary (which it is not), Plaintiffs sufficiently allege how the transfers occurred shortly after a substantial debt was incurred. Indeed, Plaintiffs allege that Kuschner purchased real property in March 2023 and Lopez purchased real property in April 2023. Id. at ¶¶ 101-102. FXWinning stopped processing withdrawals (at least Plaintiffs’ withdrawal requests) in early 2023 when they allegedly began undergoing a KYC/AML audit. Id. at ¶ 76. In other words, while Plaintiffs were being told their investment was safe and would be processed, Kuschner and Lopez were using Plaintiffs’ funds to make multi-million-dollar real estate 17 purchases. See id. at ¶¶ 76, 79, 151, 157. 9 Simply put, Plaintiffs have adequately alleged their fraudulent transfer claims, and the Motion should be denied. VII. Plaintiffs Properly Allege Each Claim Against Kuschner and Lopez in a Separate Count. Next, according to Defendants, “[c]ommingling distinct causes of action against multiple defendants violates Florida Rule of Civil Procedure 1.110(f).” Mot. at 10. Although hardly a beacon of clarity, Defendants appear to suggest that it is improper to sue multiple defendants in a single claim. That is not true. See Fla. R. Civ. P. 1.110(f). Defendants cite Collado v. Baroukh, 226 So. 3d 924 (Fla. 4th DCA 2017) and K.R. Exch. Servs. v. Fuerst, Humphrey, Ittleman, PL, 48 So. 3d 889, 893 (Fla. 3d DCA 2010) in support of their position. Unlike the Collado plaintiff, Plaintiffs here do not “ma[k]e blanket references to ‘defendants’” nor did Plaintiffs “commingl[e] separate and distinct claims against multiple defendants[.]” Collado, 226 So. 3d at 928. Plaintiffs set forth specific allegations of misconduct by Kuschner and Lopez in separate paragraphs and in separately titled sections. K.R. Exchange likewise fails to support Kuschner and Lopez’s cause. Unlike in K.R. Exchange, Plaintiffs divided their causes of action into separate counts and pled the specific conduct of each defendant separately. Cf. K.R. Exchange, 48 So. 3d at 893. At its core, Defendants’ argument is simply that “[t]he commingled nature of all these key allegations makes it impossible for Kushner and Lopez to identify what facts are specifically 9 Defendants’ suggestion that they must be insolvent in order to commit a fraudulent transfer is yet another misstatement of the law. See Mot. at 18. By statute, the debtor’s insolvency is but one of a non-exhaustive list of eleven factor courts consider when determining whether “actual intent” is present. See § 726.105(2)(a)-(k), Fla. Stat.; see also U.S. v. Ressler, 433 F. Supp. 459, 464 (S.D. Fla. 1977) (“Factors indicating the actual fraudulent intent are absence of consideration, family relationship of the parties to the transfer; retention of possession of the property by the transferor; failure to notify the transferee of the transfer; and the financial condition of the transferor after the transfer.”). 18 alleged against them” and that what Plaintiffs’ have done is “the antithesis of particularized allegations.” Mot. at 10-11. Plaintiffs have dispelled with those arguments above. See supra, §§ I, II, III, IV; Misrepresentation Chart, supra. Indeed, Plaintiffs devote entire separately titled sections and separately numbered paragraphs explaining exactly what Kuschner and Lopez did that gives rise to Plaintiffs’ claims. See Compl. at ¶¶ 40-50, 51-62. Then in each separate count Plaintiffs re- incorporate each allegation in the claims. See id., at ¶¶ 105, 112, 122, 128, 138, 150, 156. VIII. Plaintiffs Sufficiently Allege That Kuschner and Lopez Were Partners and Agents Finally, Defendants argue Plaintiffs fail to properly allege Kuschner and Lopez were partners or agents with FXWinning. See Mot. at 11-12. Kuschner and Lopez’s reliance on the specific elements of the agency/partnership relationship puts form over substance under the facts alleged. Here, Plaintiffs allege that, on multiple occasions, Kuschner and Lopez held themselves out as “partners” of Merino, Brito, and FXWinning. Compl., at ¶¶ 42, 54, 55. Under Florida law, “[i]f a person, by words or conduct, purports to be a partner, or consents to being represented by another as a partner, in a partnership or with one or more persons who are not partners, the purported partner is liable to a person to whom the representation is made if such person, relying on the representation, enters into a transaction with the actual or purported partnership.” § 620.8308(1), Fla. Stat. (emphasis added); see also Country Clubs of Sarasota, Ltd. v. Zaun Equip., Inc., 350 So. 2d 539 (Fla. 1st DCA 1977) (“Persons who hold themselves out as partners are estopped from denying the partnership relationship to the detriment of those relying on it.”). Again, here Plaintiffs repeatedly allege that Kuschner and Lopez held themselves out as “partners” in FXWinning, Merino and Brito. See Compl. at ¶ 54 (“On or about July 7, 2022, … Kuschner represented to McGinnis that he, Merino, Brito, and Lopez were partners in FXWinning.”) (emphasis added); id. at ¶ 42 (“During [a] meeting in Miami-Dade County, 19 Kuschner and Lopez stated that Merino was their “partner” ….”) (emphasis added). Relying on Kuschner’s and Lopez’s representations of their “partnership” in FXWinning and with Merino and Brito, Plaintiffs’ invested into FXWinning to their detriment. See id. at ¶¶ 50, 60, 62, and 90. Plaintiffs also sufficiently allege that Kuschner and Lopez were agents of Merino, Brito, and FXWinning. “While agency is normally a contractual relationship created by agreement of the parties, it may also be inferred from past dealings between the parties. Beardslee v. Fla. Elections Com’n, 962 So. 2d 390, 392 (Fla. 5th DCA 2007). “It may be proved by the facts and circumstances of each particular case, including the words and conduct of the parties.” Id. (emphasis added). Here, Plaintiffs allege that Kuschner and Lopez represented that they “met with Merino and Brito and saw $3 billion in FXWinning liquidity with their own eyes.” Compl., at ¶ 79. And further that Kuschner, Lopez, and Merino met with Kerns in March 2023 in Miami where “Merino told Kerns and Kerns Capital that the Kerns Account and the Kerns Capital Account were safe, and that all money would be released and paid.” Id. at ¶ 80 (emphasis added). Thus, the “words and conduct” of Defendants, as alleged in the Complaint, sufficiently allege at this stage that Defendants were agents of one another and the Motion should be denied. 10 CONCLUSION Based on the foregoing, this Court should deny the Motion, or in the alternative, provide Plaintiffs with leave to amend their Complaint. 10 In any event, Kuschner and Lopez are the agents of Merino, Brito, and FXWinning because they said they were partners of Merino and Brito, and in FXWinning with Merino and Brito. See Kelly v. State, Dep’t of Ins., 597 So. 2d 900, 902 (Fla. 3d DCA 1992) (“It is well-established law that partners, acting within their authority and in pursuit of the partnership business, bind all other partners and act as their agents.”). 20 Dated: August 30, 2023 Respectfully submitted, SANCHEZ FISCHER LEVINE, LLP 1200 Brickell Avenue, Suite 750 Miami, Florida 33131 Telephone: (305) 925-9947 By: /s/ David M. Levine David M. Levine, Esq. Florida Bar No.: 84431 Email: dlevine@sfl-law.com Secondary: eservice@sfl-law.com Fausto Sanchez, Esq. Florida Bar No.: 86229 Email: fsanchez@sfl-law.com Lauren M. Allen, Esq. Florida Bar No.: 1018424 Email: lallen@sfl-law.com Robert Kemper, Esq. Florida Bar. No.: 1038549 Email: rkemper@sfl-law.com Counsel for Plaintiffs