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Filing # 189180586 E-Filed 01/05/2024 12:57:48 PM
IN THE CIRCUIT COURT OF THE 11TH
JUDICIAL CIRCUIT IN AND FOR
MIAMI-DADE COUNTY, FLORIDA
CODY KERNS, et al.,
Plaintiffs, Complex Business Litigation Division
v. CASE NO.: 2023-020202-CA-01
FXWINNING, LTD., et al.,
Defendants.
_______________________________________/
DEFENDANTS, RENAN DA ROCHA GOMES
BASTOS AND BBRC REAL ESTATE, LLC’S REPLY
IN SUPPORT OF MOTION TO DISMISS AMENDED COMPLAINT
Defendants, Renan Da Rocha Gomes Bastos (“Bastos”) and BBRC Real Estate, LLC
(“BBRC”) (collectively, the “Defendants”), through undersigned counsel and pursuant to Florida
Rule of Civil Procedure 1.140, file this Reply in Support of Motion to Dismiss Amended
Complaint filed by Plaintiffs, Cody Kerns, Kerns Capital Management, Inc., and WFTMB
Holdings, LLC (collectively, “Plaintiffs”), and state:
I. INTRODUCTION
The arguments that Plaintiffs assert in their Response in Opposition to defendants’ Motion
to Dismiss Amended Complaint (“Response”) are misplaced. The sole basis for Defendants’
inclusion in this lawsuit is because Bastos allegedly received commissions derived from funds that
Plaintiffs delivered to FxWining. Every allegation other than those concerning the foregoing are
conclusory and lack supporting allegations of ultimate fact.
II. ARGUMENT
A. Plaintiffs’ Miss the Mark Regarding their Conspiracy Allegations.
Plaintiffs point to paragraphs 239 and 240 of their Amended Complaint to establish Bastos’
agreement to participate in FxWinning’s fraud. But those allegations are conclusory on their face
NELSON MULLINS RILEY & SCARBOROUGH | ATTORNEYS AT LAW
One Biscayne Tower | 2 South Biscayne Blvd. 21st Floor Miami, FL 33131 | T: 305.373.9400 | F: 305.373.9443 | nelsonmullins.com
and add no underlying facts. This failure underscores Plaintiffs’ failure to state a cause of action
against Bastos for conspiracy.
“The rule in Florida is well settled that allegations of conspiracy must be clear, positive
and specific.” Kutner v. Kalish, 173 So. 2d 763, 765 (Fla. 3d DCA 1965). “To be held liable for
the acts of all co-conspirators, each co-conspirator ‘need only know of the scheme and assist in it
in some way.’” Principal Life Ins. Co. v. Mosberg, 2010 WL 473042, *6 (S.D. Fla. Feb. 5, 2010)
(quoting Donofrio v. Matassini, 503 So. 2d 1278, 1281 (Fla. 2d DCA 1987)). Where, as here, “a
conspiracy claim alleges that two or more parties agreed to commit fraud, the plaintiffs must plead
this act with specificity.” Amer. United Life Ins., Co. v. Martinez, 480 F. 3d 1043, 1067-68 (11th
Cir. 2007). Plaintiffs must accordingly “plead, with particularity, that [Bastos] knew of the
conspiracy and agreed to commit fraud.” Principal Life Ins. Co., 2010 WL 473042 at *6. They do
not.
“Here, the Plaintiffs provide only conclusory statements.” Id. at 1068. They merely
conclude that Bastos knew Kushner, Lopez, Merino, and Brito were engaged in a fraud without
any factual support. See id. While Plaintiffs tout paragraphs 239 and 240 as sufficient to establish
Bastos’ knowledge or participation in the other defendants’ fraudulent scheme, they are devoid of
ant facts supporting the conclusory allegations therein. As a matter of law: “This is not sufficient.”
Id.; accord Tusha v. Richmond, 2023 WL 8699476, at *3 (M.D. Fla. Dec. 15, 2023) (dismissing
RICO conspiracy claim where allegations of an agreement among defendants were “conclusive
and sweeping”).
Plaintiffs maintain that is it “incredible” that Bastos agues “he could have . . . received a
commission, without ever knowing [FxWinning’s] scheme was fraudulent or agreeing to
participate the fraud.” Response at p. 3. Bastos’ “argument,” however, is a direct quote from
Judge Altonaga. See Principal Life Ins. Co., 2010 WL 473042 at *6. Judge Altonaga’s reasoning
2
NELSON MULLINS RILEY & SCARBOROUGH | ATTORNEYS AT LAW
One Biscayne Tower | 2 South Biscayne Blvd. 21st Floor Miami, FL 33131 | T: 305.373.9400 | F: 305.373.9443 | nelsonmullins.com
is sound—FxWinning could have and did steal Plaintiffs’ money without Bastos ever knowing of
the plan to do so.
Plaintiffs also find it “incredible” Bastos argues that “[t]o assume or speculate that [Bastos]
participated in a conspiracy merely because [he] ultimately received some benefits from the
investments is insufficient for the imposition of liability against [him].” Response at p. 3. But this
“argument” is also a direct quote—this time from a Fourth District Court of Appeal holding. See
Eagletech Commc'ns, Inc. v. Bryn Mawr Inv. Grp., Inc., 79 So. 3d 855, 863 (Fla. 4th DCA 2012).
Though Plaintiffs find Judge Altonaga’s and the Fourth District Court of Appeal’s rulings to be
“incredible,” they do exist and are highly persuasive here—especially considering that Plaintiffs
fail to allege even one fact demonstrating Bastos knew that Merino and Brito were using
FxWinning to steal its customers’ funds.1 See Meridian Tr. Co. v. Batista, 2018 WL 4693533, at
*6 (S.D. Fla. Sept. 26, 2018) (dismissing claim for conspiracy lacking factual allegations
demonstrating that defendant agreed with alleged con-conspirators).
Plaintiffs’ argument that they sufficiently allege an overt act Bastos took in furtherance of
the conspiracy fails for similar reasons. One thing is clear from Plaintiffs’ Complaint: None of the
Plaintiffs ever had any contact with Bastos. They strain to include Bastos in the conspiracy by
alleging four supposed overt acts Bastos took:
a. Pulling commissions directly from Plaintiffs’ accounts;
b. Splitting commissions pulled from Plaintiffs’ accounts with his co-conspirators;
c. Refraining from returning the commissions he pulled directly from Plaintiffs’ accounts;
and
1
In fact, Bastos has filed suit against FxWinning and its principals in this Court for millions of Dollars in
damages arising from the same scheme as Plaintiffs here baselessly claim Bastos participated. See CFT
Solutions, LLC, et al. v. FxWinning, Ltd., et al., Case No. 2023-016392-CA-01.
3
NELSON MULLINS RILEY & SCARBOROUGH | ATTORNEYS AT LAW
One Biscayne Tower | 2 South Biscayne Blvd. 21st Floor Miami, FL 33131 | T: 305.373.9400 | F: 305.373.9443 | nelsonmullins.com
d. Instructing Kushner and Lopez not to inform Plaintiffs that Bastos was involved in the
operation of the VIP MAM and that Bastos was receiving commissions directly from
their accounts so that Bastos could stay hidden from Plaintiffs.
See Response at pp. 3-4. Like their failed attempt to satisfy the knowledge element, Plaintiffs
unsuccessfully try to establish Bastos’ overt acts in furtherance of the conspiracy almost
exclusively through his receipt of commissions. However, if the receipt of commissions is
insufficient as a matter of law to establish Bastos was aware of the conspiracy in the first place, it
logically cannot form the basis of an overt act taken in furtherance of same.
The only other allegation to which Plaintiffs point is Bastos’ allegedly asking Lopez and
Kushner not to disclose that he was receiving commissions. This does not establish that Bastos
assisted the conspiracy “in some way” such that he can “be held responsible for all of the acts of
his or her coconspirators.” Plastiquim, S.A. v. Odebrecht Constr., Inc., 337 So. 3d 1270, 1274
(Fla. 3d DCA 2022). It merely establishes that Bastos wished to remain anonymous (which is his
right under Article I, Section 23 of the Florida Constitution).
B. Plaintiffs Fail to Establish That Bastos Directly Participated in or had Knowledge of
the Fraud Such That he can be Liable for Violating FDUTPA.
“[I]t has long been the law in Florida that in order to proceed against an individual using a
FDUTPA violation theory, the aggrieved party must allege that the individual was a direct
participant in the improper dealings.” KC Leisure, Inc. v. Haber, 972 So. 2d 1069. 1074 (Fla. 5th
DCA 2008) (emphasis added). Plaintiffs fail to establish any direct participation in the improper
dealings—only that he controlled and managed “the VIP MAM,” instructed Lopez and Kushner
to maintain his anonymity; and that Bastos “agreed” to use Lopez’s and Kushner’s
misrepresentations to induce Plaintiffs to invest with FxWinning.
Lopez’s and Kushner’s improper dealings were the making of misrepresentations to induce
Plaintiffs to place funds with FxWinning. Merino’s and Brito’s improper dealings were to convert
4
NELSON MULLINS RILEY & SCARBOROUGH | ATTORNEYS AT LAW
One Biscayne Tower | 2 South Biscayne Blvd. 21st Floor Miami, FL 33131 | T: 305.373.9400 | F: 305.373.9443 | nelsonmullins.com
those funds. Plaintiffs fail, however, to identify a single allegation of Bastos’s participation in
either the inducement or the theft.
They instead point to their naked allegation that Bastos controlled and managed “the VIP
MAM” without alleging any facts to explain what exactly “the VIP MAM” was or what role it
played in the alleged fraudulent scheme. Nor do they allege how “controlling and managing the
VIP MAM” constitutes direct participation in Lopez’, Kushner’s Merino’s, and Brito’s improper
dealings.
To properly state a cause of action against Bastos for FDUTPA violations, Plaintiffs “must
allege [his] direct involvement in any dealings that may constitute a violation of FDUTPA”
Aboujaoude v. Poinciana Dev. Co., II, 509 F. Supp. 2d 1266, 1277 (S.D. Fla. 2007). They do not,
however, “specify . . . how [Bastos’ actions] constitute a violation of the FDUTPA,” as they must.
Id. Plaintiffs accordingly fall well-short of the heightened pleading standard required to state a
claim for FDUTPA violations. See State Farm Mut. Auto. Ins. Co. v. Performance Orthopedics &
Neurosurgery, LLC, 278F. Supp. 3d 1307, 1327 (S.D. Fla. 2017) (applying heightened pleading
standard to FDUTPA claim).
Plaintiffs also inadequately seek to impute Lopez’s and Kushner’s wrongful conduct to
Bastos using a thinly veiled agency theory of liability. In their original Complaint, Plaintiffs
alleged claims for fraud and negligent misrepresentation against Bastos for Lopez’s and Kushner’s
fraud based on agency principals. Bastos moved to dismiss on the grounds that they failed to
adequately allege agency. Plaintiffs did not re-assert those claims in their Amended Complaint.
Instead, their theory of liability against Bastos for FDUTPA violations rely on the same agency
principals, however. But rather than claiming that Lopez and Kushner made misrepresentations to
Plaintiffs as Bastos’ agent, they allege that Bastos agreed to use their misrepresentations to his
benefit in a thinly-veiled attempt to obscure this back-door attempt to conceal their continued
5
NELSON MULLINS RILEY & SCARBOROUGH | ATTORNEYS AT LAW
One Biscayne Tower | 2 South Biscayne Blvd. 21st Floor Miami, FL 33131 | T: 305.373.9400 | F: 305.373.9443 | nelsonmullins.com
attempt to rely agency principals without actually establishing an agency relationship. See
Response at p. 5. However: “A rose by any other name would smell as sweet.” WILLIAM
SHAKESPEARE, Romeo & Juliet, act II. Sc. 2.
Plaintiffs’ attempt to impute vicarious liability on Bastos for their FDUTPA violations fails
because they do not adequately allege agency. To demonstrate that Kuschner and Lopez were
Bastos’ actual agents, Plaintiffs must allege: (a) Bastos’ acknowledgement that Kuschner and
Lopez were acting as his agents; (b) acceptance of such undertaking by Kuschner and Lopez; and
(c) Bastos’ control over Kuschner and Lopez's day-to-day activities during the course of the
agency. Ocana v. Ford Motor Co., 992 So. 2d 319, 326 (Fla. 3d DCA 2008). “Apparent agency
exists only if each of the following three elements is present: 1) a representation by the purported
principal; 2) reliance on that representation by a third party; and 3) a change in position by the
third party in reliance on the representation.” Id. (emphasis in original). “Here, there is no evidence
that the purported principal, [Bastos], made any representation to [Plaintiffs], the purported third
part[ies].” Id. at 327 (emphasis in original). Plaintiffs do not allege any of the foregoing. Whether
Plaintiffs claim that Bastos directly participated in FDUPTA violations or should be held
vicariously liable for Lopez’s or Kushner’s violations, they fail to properly allege a claims against
Bastos.
C. Plaintiffs’ Ignore Black Letter Law Requiring Dismissal of Their Claim for Unjust
Enrichment.
Rather than address the black-letter law Defendants cite to support dismissal of Plaintiffs’
claim for unjust enrichment, Plaintiffs argue only that this Court ruled in their favor on a similar
issue. But those other defendants challenging the validity of Plaintiffs’ claim for unjust enrichment
are not similarly situated (they were in privity) and did not advise the Court of the controlling law
that Defendants here have.
6
NELSON MULLINS RILEY & SCARBOROUGH | ATTORNEYS AT LAW
One Biscayne Tower | 2 South Biscayne Blvd. 21st Floor Miami, FL 33131 | T: 305.373.9400 | F: 305.373.9443 | nelsonmullins.com
Plaintiffs “had absolutely no relationship with [Bastos] and has not conferred a direct
benefit on [Bastos].” Extraordinary Title Srvc’s, LLC v. Fla. Power & Light Co., 1 So. 3d 400,
404 (Fla. 3d DCA 2009). Plaintiffs contracted with FxWinning, not Bastos, for brokerage services;
Plaintiffs deposited funds with FxWinning, not Bastos; and Bastos provided no services to
Plaintiffs. “Based on these facts, which are not in dispute, the Plaintiff[s] cannot allege nor
establish that [they] conferred a direct benefit on [Bastos].” Id.
D. Plaintiffs Fail to Establish Bastos Intent to Defraud Creditors.
“Because of the difficulty of proving actual intent, past statutory law, existing case law and
the UFTA look to indicia of intent commonly known as ‘badges of fraud.’” Amjad Munim, M.D.,
P.A. v. Azar, 648 So. 2d 145, 152 (Fla. 4th DCA 1994). In its Motion, BBRC argues that of the
five badges of fraud that Plaintiffs allege to support their claim for fraudulent transfer, they include
no facts to support three of them. Plaintiffs do not address this argument in their Response except
to improperly state that intent may be alleged generally. Here, however, they are not permitted to
simply allege intent in general terms. They must allege specific facts that establish the existence
of the badges of fraud and cannot simply make conclusory allegations as Plaintiffs have. See,
generally, American Seafood, Inc. v. Clawson, 598 So. 2d 273, 274 (Fla. 3d DCA 1992)
(conclusory allegations insufficient to establish claim for intentional torts).
This leaves Plaintiffs with having properly alleged only two of the recognized eleven
badges of fraud to establish fraudulent intent. “Badges of fraud are not conclusive, but are more or
less strong or weak according to their nature and the number occurring in the same case.” Banner
Const. Corp. v. Arnold, 128 So. 2d 893, 896 (Fla. 1st DCA 1961). “While a single badge of fraud
standing alone may only generate little more than a suspicious circumstance, insufficient in itself
to constitute the requisite fraud to set aside a conveyance, several of them when considered
7
NELSON MULLINS RILEY & SCARBOROUGH | ATTORNEYS AT LAW
One Biscayne Tower | 2 South Biscayne Blvd. 21st Floor Miami, FL 33131 | T: 305.373.9400 | F: 305.373.9443 | nelsonmullins.com
together may afford a basis from which its existence may be properly inferred.” Wieczoreck v. H
& H Builders, Inc., 450 So. 2d 867, 874 (Fla. 5th DCA 1984).
Plaintiffs have not alleged “several” badges of fraud, however. To wit, the pronoun
“several” is defined as “more than two and fewer than many.” Miriam-Webster Dictionary (online
ed. 2023), available at https://www.merriam-webster.com/dictionary/several. All that Plaintiffs
have alleged is that Bastos purchased property in a trust. That alone cannot be sufficient to state a
claim for fraudulent transfer. To rule otherwise would expose any individual facing potential
liability in a suit to simultaneously face pro forma automatic fraudulent transfer claims against the
defendant’s assets. The binding precedent requires more.
III.CONCLUSION
WHEREFORE, Defendants, Renan Da Rocha Gomes Bastos and BBRC Real Estate,
LLC, respectfully requests that this Court dismiss the Amended Complaint with prejudice and
grant such other and further relief as this Court deems just and proper.
Respectfully submitted,
NELSON MULLINS RILEY
& SCARBOROUGH LLP
2 South Biscayne Blvd., 21st Floor
Miami, Florida 33131
Telephone: 305.373.9436
By: /s/ Justin B. Kaplan
Justin B. Kaplan
Fla. Bar No. 33725
Justin.Kaplan@nelsonmullins.com
Ryan K. Todd
Fla. Bar No. 91679
Ryan.Todd@nelsonmullins.com
Elaine Kussurelis
Fla. Bar No. 1019234
Elaine.Kussurelis@nelsonmullins.com
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CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 5th day of January 2024, a true and correct copy of the
foregoing was sent by e-mail via the Florida Courts eFiling Portal (pursuant to Rule 2.516, Florida
Rules of Judicial Administration and Administrative Order SC13-49), to all counsel of record.
/s/ Justin B. Kaplan
Justin B. Kaplan
9
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Filing # 189180586 E-Filed 01/05/2024 12:57:48 PM IN THE CIRCUIT COURT OF THE 11TH JUDICIAL CIRCUIT IN AND FOR MIAMI-DADE COUNTY, FLORIDA CODY KERNS, et al., Plaintiffs, Complex Business Litigation Division v. CASE NO.: 2023-020202-CA-01 FXWINNING, LTD., et al., Defendants. _______________________________________/ DEFENDANTS, RENAN DA ROCHA GOMES BASTOS AND BBRC REAL ESTATE, LLC’S REPLY IN SUPPORT OF MOTION TO DISMISS AMENDED COMPLAINT Defendants, Renan Da Rocha Gomes Bastos (“Bastos”) and BBRC Real Estate, LLC (“BBRC”) (collectively, the “Defendants”), through undersigned counsel and pursuant to Florida Rule of Civil Procedure 1.140, file this Reply in Support of Motion to Dismiss Amended Complaint filed by Plaintiffs, Cody Kerns, Kerns Capital Management, Inc., and WFTMB Holdings, LLC (collectively, “Plaintiffs”), and state: I. INTRODUCTION The arguments that Plaintiffs assert in their Response in Opposition to defendants’ Motion to Dismiss Amended Complaint (“Response”) are misplaced. The sole basis for Defendants’ inclusion in this lawsuit is because Bastos allegedly received commissions derived from funds that Plaintiffs delivered to FxWining. Every allegation other than those concerning the foregoing are conclusory and lack supporting allegations of ultimate fact. II. ARGUMENT A. Plaintiffs’ Miss the Mark Regarding their Conspiracy Allegations. Plaintiffs point to paragraphs 239 and 240 of their Amended Complaint to establish Bastos’ agreement to participate in FxWinning’s fraud. But those allegations are conclusory on their face NELSON MULLINS RILEY & SCARBOROUGH | ATTORNEYS AT LAW One Biscayne Tower | 2 South Biscayne Blvd. 21st Floor Miami, FL 33131 | T: 305.373.9400 | F: 305.373.9443 | nelsonmullins.com and add no underlying facts. This failure underscores Plaintiffs’ failure to state a cause of action against Bastos for conspiracy. “The rule in Florida is well settled that allegations of conspiracy must be clear, positive and specific.” Kutner v. Kalish, 173 So. 2d 763, 765 (Fla. 3d DCA 1965). “To be held liable for the acts of all co-conspirators, each co-conspirator ‘need only know of the scheme and assist in it in some way.’” Principal Life Ins. Co. v. Mosberg, 2010 WL 473042, *6 (S.D. Fla. Feb. 5, 2010) (quoting Donofrio v. Matassini, 503 So. 2d 1278, 1281 (Fla. 2d DCA 1987)). Where, as here, “a conspiracy claim alleges that two or more parties agreed to commit fraud, the plaintiffs must plead this act with specificity.” Amer. United Life Ins., Co. v. Martinez, 480 F. 3d 1043, 1067-68 (11th Cir. 2007). Plaintiffs must accordingly “plead, with particularity, that [Bastos] knew of the conspiracy and agreed to commit fraud.” Principal Life Ins. Co., 2010 WL 473042 at *6. They do not. “Here, the Plaintiffs provide only conclusory statements.” Id. at 1068. They merely conclude that Bastos knew Kushner, Lopez, Merino, and Brito were engaged in a fraud without any factual support. See id. While Plaintiffs tout paragraphs 239 and 240 as sufficient to establish Bastos’ knowledge or participation in the other defendants’ fraudulent scheme, they are devoid of ant facts supporting the conclusory allegations therein. As a matter of law: “This is not sufficient.” Id.; accord Tusha v. Richmond, 2023 WL 8699476, at *3 (M.D. Fla. Dec. 15, 2023) (dismissing RICO conspiracy claim where allegations of an agreement among defendants were “conclusive and sweeping”). Plaintiffs maintain that is it “incredible” that Bastos agues “he could have . . . received a commission, without ever knowing [FxWinning’s] scheme was fraudulent or agreeing to participate the fraud.” Response at p. 3. Bastos’ “argument,” however, is a direct quote from Judge Altonaga. See Principal Life Ins. Co., 2010 WL 473042 at *6. Judge Altonaga’s reasoning 2 NELSON MULLINS RILEY & SCARBOROUGH | ATTORNEYS AT LAW One Biscayne Tower | 2 South Biscayne Blvd. 21st Floor Miami, FL 33131 | T: 305.373.9400 | F: 305.373.9443 | nelsonmullins.com is sound—FxWinning could have and did steal Plaintiffs’ money without Bastos ever knowing of the plan to do so. Plaintiffs also find it “incredible” Bastos argues that “[t]o assume or speculate that [Bastos] participated in a conspiracy merely because [he] ultimately received some benefits from the investments is insufficient for the imposition of liability against [him].” Response at p. 3. But this “argument” is also a direct quote—this time from a Fourth District Court of Appeal holding. See Eagletech Commc'ns, Inc. v. Bryn Mawr Inv. Grp., Inc., 79 So. 3d 855, 863 (Fla. 4th DCA 2012). Though Plaintiffs find Judge Altonaga’s and the Fourth District Court of Appeal’s rulings to be “incredible,” they do exist and are highly persuasive here—especially considering that Plaintiffs fail to allege even one fact demonstrating Bastos knew that Merino and Brito were using FxWinning to steal its customers’ funds.1 See Meridian Tr. Co. v. Batista, 2018 WL 4693533, at *6 (S.D. Fla. Sept. 26, 2018) (dismissing claim for conspiracy lacking factual allegations demonstrating that defendant agreed with alleged con-conspirators). Plaintiffs’ argument that they sufficiently allege an overt act Bastos took in furtherance of the conspiracy fails for similar reasons. One thing is clear from Plaintiffs’ Complaint: None of the Plaintiffs ever had any contact with Bastos. They strain to include Bastos in the conspiracy by alleging four supposed overt acts Bastos took: a. Pulling commissions directly from Plaintiffs’ accounts; b. Splitting commissions pulled from Plaintiffs’ accounts with his co-conspirators; c. Refraining from returning the commissions he pulled directly from Plaintiffs’ accounts; and 1 In fact, Bastos has filed suit against FxWinning and its principals in this Court for millions of Dollars in damages arising from the same scheme as Plaintiffs here baselessly claim Bastos participated. See CFT Solutions, LLC, et al. v. FxWinning, Ltd., et al., Case No. 2023-016392-CA-01. 3 NELSON MULLINS RILEY & SCARBOROUGH | ATTORNEYS AT LAW One Biscayne Tower | 2 South Biscayne Blvd. 21st Floor Miami, FL 33131 | T: 305.373.9400 | F: 305.373.9443 | nelsonmullins.com d. Instructing Kushner and Lopez not to inform Plaintiffs that Bastos was involved in the operation of the VIP MAM and that Bastos was receiving commissions directly from their accounts so that Bastos could stay hidden from Plaintiffs. See Response at pp. 3-4. Like their failed attempt to satisfy the knowledge element, Plaintiffs unsuccessfully try to establish Bastos’ overt acts in furtherance of the conspiracy almost exclusively through his receipt of commissions. However, if the receipt of commissions is insufficient as a matter of law to establish Bastos was aware of the conspiracy in the first place, it logically cannot form the basis of an overt act taken in furtherance of same. The only other allegation to which Plaintiffs point is Bastos’ allegedly asking Lopez and Kushner not to disclose that he was receiving commissions. This does not establish that Bastos assisted the conspiracy “in some way” such that he can “be held responsible for all of the acts of his or her coconspirators.” Plastiquim, S.A. v. Odebrecht Constr., Inc., 337 So. 3d 1270, 1274 (Fla. 3d DCA 2022). It merely establishes that Bastos wished to remain anonymous (which is his right under Article I, Section 23 of the Florida Constitution). B. Plaintiffs Fail to Establish That Bastos Directly Participated in or had Knowledge of the Fraud Such That he can be Liable for Violating FDUTPA. “[I]t has long been the law in Florida that in order to proceed against an individual using a FDUTPA violation theory, the aggrieved party must allege that the individual was a direct participant in the improper dealings.” KC Leisure, Inc. v. Haber, 972 So. 2d 1069. 1074 (Fla. 5th DCA 2008) (emphasis added). Plaintiffs fail to establish any direct participation in the improper dealings—only that he controlled and managed “the VIP MAM,” instructed Lopez and Kushner to maintain his anonymity; and that Bastos “agreed” to use Lopez’s and Kushner’s misrepresentations to induce Plaintiffs to invest with FxWinning. Lopez’s and Kushner’s improper dealings were the making of misrepresentations to induce Plaintiffs to place funds with FxWinning. Merino’s and Brito’s improper dealings were to convert 4 NELSON MULLINS RILEY & SCARBOROUGH | ATTORNEYS AT LAW One Biscayne Tower | 2 South Biscayne Blvd. 21st Floor Miami, FL 33131 | T: 305.373.9400 | F: 305.373.9443 | nelsonmullins.com those funds. Plaintiffs fail, however, to identify a single allegation of Bastos’s participation in either the inducement or the theft. They instead point to their naked allegation that Bastos controlled and managed “the VIP MAM” without alleging any facts to explain what exactly “the VIP MAM” was or what role it played in the alleged fraudulent scheme. Nor do they allege how “controlling and managing the VIP MAM” constitutes direct participation in Lopez’, Kushner’s Merino’s, and Brito’s improper dealings. To properly state a cause of action against Bastos for FDUTPA violations, Plaintiffs “must allege [his] direct involvement in any dealings that may constitute a violation of FDUTPA” Aboujaoude v. Poinciana Dev. Co., II, 509 F. Supp. 2d 1266, 1277 (S.D. Fla. 2007). They do not, however, “specify . . . how [Bastos’ actions] constitute a violation of the FDUTPA,” as they must. Id. Plaintiffs accordingly fall well-short of the heightened pleading standard required to state a claim for FDUTPA violations. See State Farm Mut. Auto. Ins. Co. v. Performance Orthopedics & Neurosurgery, LLC, 278F. Supp. 3d 1307, 1327 (S.D. Fla. 2017) (applying heightened pleading standard to FDUTPA claim). Plaintiffs also inadequately seek to impute Lopez’s and Kushner’s wrongful conduct to Bastos using a thinly veiled agency theory of liability. In their original Complaint, Plaintiffs alleged claims for fraud and negligent misrepresentation against Bastos for Lopez’s and Kushner’s fraud based on agency principals. Bastos moved to dismiss on the grounds that they failed to adequately allege agency. Plaintiffs did not re-assert those claims in their Amended Complaint. Instead, their theory of liability against Bastos for FDUTPA violations rely on the same agency principals, however. But rather than claiming that Lopez and Kushner made misrepresentations to Plaintiffs as Bastos’ agent, they allege that Bastos agreed to use their misrepresentations to his benefit in a thinly-veiled attempt to obscure this back-door attempt to conceal their continued 5 NELSON MULLINS RILEY & SCARBOROUGH | ATTORNEYS AT LAW One Biscayne Tower | 2 South Biscayne Blvd. 21st Floor Miami, FL 33131 | T: 305.373.9400 | F: 305.373.9443 | nelsonmullins.com attempt to rely agency principals without actually establishing an agency relationship. See Response at p. 5. However: “A rose by any other name would smell as sweet.” WILLIAM SHAKESPEARE, Romeo & Juliet, act II. Sc. 2. Plaintiffs’ attempt to impute vicarious liability on Bastos for their FDUTPA violations fails because they do not adequately allege agency. To demonstrate that Kuschner and Lopez were Bastos’ actual agents, Plaintiffs must allege: (a) Bastos’ acknowledgement that Kuschner and Lopez were acting as his agents; (b) acceptance of such undertaking by Kuschner and Lopez; and (c) Bastos’ control over Kuschner and Lopez's day-to-day activities during the course of the agency. Ocana v. Ford Motor Co., 992 So. 2d 319, 326 (Fla. 3d DCA 2008). “Apparent agency exists only if each of the following three elements is present: 1) a representation by the purported principal; 2) reliance on that representation by a third party; and 3) a change in position by the third party in reliance on the representation.” Id. (emphasis in original). “Here, there is no evidence that the purported principal, [Bastos], made any representation to [Plaintiffs], the purported third part[ies].” Id. at 327 (emphasis in original). Plaintiffs do not allege any of the foregoing. Whether Plaintiffs claim that Bastos directly participated in FDUPTA violations or should be held vicariously liable for Lopez’s or Kushner’s violations, they fail to properly allege a claims against Bastos. C. Plaintiffs’ Ignore Black Letter Law Requiring Dismissal of Their Claim for Unjust Enrichment. Rather than address the black-letter law Defendants cite to support dismissal of Plaintiffs’ claim for unjust enrichment, Plaintiffs argue only that this Court ruled in their favor on a similar issue. But those other defendants challenging the validity of Plaintiffs’ claim for unjust enrichment are not similarly situated (they were in privity) and did not advise the Court of the controlling law that Defendants here have. 6 NELSON MULLINS RILEY & SCARBOROUGH | ATTORNEYS AT LAW One Biscayne Tower | 2 South Biscayne Blvd. 21st Floor Miami, FL 33131 | T: 305.373.9400 | F: 305.373.9443 | nelsonmullins.com Plaintiffs “had absolutely no relationship with [Bastos] and has not conferred a direct benefit on [Bastos].” Extraordinary Title Srvc’s, LLC v. Fla. Power & Light Co., 1 So. 3d 400, 404 (Fla. 3d DCA 2009). Plaintiffs contracted with FxWinning, not Bastos, for brokerage services; Plaintiffs deposited funds with FxWinning, not Bastos; and Bastos provided no services to Plaintiffs. “Based on these facts, which are not in dispute, the Plaintiff[s] cannot allege nor establish that [they] conferred a direct benefit on [Bastos].” Id. D. Plaintiffs Fail to Establish Bastos Intent to Defraud Creditors. “Because of the difficulty of proving actual intent, past statutory law, existing case law and the UFTA look to indicia of intent commonly known as ‘badges of fraud.’” Amjad Munim, M.D., P.A. v. Azar, 648 So. 2d 145, 152 (Fla. 4th DCA 1994). In its Motion, BBRC argues that of the five badges of fraud that Plaintiffs allege to support their claim for fraudulent transfer, they include no facts to support three of them. Plaintiffs do not address this argument in their Response except to improperly state that intent may be alleged generally. Here, however, they are not permitted to simply allege intent in general terms. They must allege specific facts that establish the existence of the badges of fraud and cannot simply make conclusory allegations as Plaintiffs have. See, generally, American Seafood, Inc. v. Clawson, 598 So. 2d 273, 274 (Fla. 3d DCA 1992) (conclusory allegations insufficient to establish claim for intentional torts). This leaves Plaintiffs with having properly alleged only two of the recognized eleven badges of fraud to establish fraudulent intent. “Badges of fraud are not conclusive, but are more or less strong or weak according to their nature and the number occurring in the same case.” Banner Const. Corp. v. Arnold, 128 So. 2d 893, 896 (Fla. 1st DCA 1961). “While a single badge of fraud standing alone may only generate little more than a suspicious circumstance, insufficient in itself to constitute the requisite fraud to set aside a conveyance, several of them when considered 7 NELSON MULLINS RILEY & SCARBOROUGH | ATTORNEYS AT LAW One Biscayne Tower | 2 South Biscayne Blvd. 21st Floor Miami, FL 33131 | T: 305.373.9400 | F: 305.373.9443 | nelsonmullins.com together may afford a basis from which its existence may be properly inferred.” Wieczoreck v. H & H Builders, Inc., 450 So. 2d 867, 874 (Fla. 5th DCA 1984). Plaintiffs have not alleged “several” badges of fraud, however. To wit, the pronoun “several” is defined as “more than two and fewer than many.” Miriam-Webster Dictionary (online ed. 2023), available at https://www.merriam-webster.com/dictionary/several. All that Plaintiffs have alleged is that Bastos purchased property in a trust. That alone cannot be sufficient to state a claim for fraudulent transfer. To rule otherwise would expose any individual facing potential liability in a suit to simultaneously face pro forma automatic fraudulent transfer claims against the defendant’s assets. The binding precedent requires more. III.CONCLUSION WHEREFORE, Defendants, Renan Da Rocha Gomes Bastos and BBRC Real Estate, LLC, respectfully requests that this Court dismiss the Amended Complaint with prejudice and grant such other and further relief as this Court deems just and proper. Respectfully submitted, NELSON MULLINS RILEY & SCARBOROUGH LLP 2 South Biscayne Blvd., 21st Floor Miami, Florida 33131 Telephone: 305.373.9436 By: /s/ Justin B. Kaplan Justin B. Kaplan Fla. Bar No. 33725 Justin.Kaplan@nelsonmullins.com Ryan K. Todd Fla. Bar No. 91679 Ryan.Todd@nelsonmullins.com Elaine Kussurelis Fla. Bar No. 1019234 Elaine.Kussurelis@nelsonmullins.com 8 NELSON MULLINS RILEY & SCARBOROUGH | ATTORNEYS AT LAW One Biscayne Tower | 2 South Biscayne Blvd. 21st Floor Miami, FL 33131 | T: 305.373.9400 | F: 305.373.9443 | nelsonmullins.com CERTIFICATE OF SERVICE I HEREBY CERTIFY that on this 5th day of January 2024, a true and correct copy of the foregoing was sent by e-mail via the Florida Courts eFiling Portal (pursuant to Rule 2.516, Florida Rules of Judicial Administration and Administrative Order SC13-49), to all counsel of record. /s/ Justin B. Kaplan Justin B. Kaplan 9 NELSON MULLINS RILEY & SCARBOROUGH | ATTORNEYS AT LAW One Biscayne Tower | 2 South Biscayne Blvd. 21st Floor Miami, FL 33131 | T: 305.373.9400 | F: 305.373.9443 | nelsonmullins.com