Opinion
Case No. 1:19-cv-20638-GAYLES
2020-06-30
Juan LLAURO, et al., Plaintiffs, v. Gregory TONY, in his official capacity as Sheriff of Broward County Sheriff's Office, et al., Defendants.
Anthony Accetta, Law Offices of Anthony Accetta, PA, Richard Alan Alayon, Alayon & Associates, Coral Gables, FL, Richard James Caldwell, Miami, FL, for Plaintiffs Capri Construction Corp., Juan Llauro, Carlos Llauro, Jorge Llauro, Maria Martinez, Samuel Abad, Joel Brito. Richard Alan Alayon, Alayon & Associates, Coral Gables, FL, for Plaintiffs Sandra Llauro, Irene Tovar, Estate of Nidia Llauro. David Lawrence Ferguson, Seth David Haimovitch, Kopelowitz Ostrow Ferguson Weiselberg Gilbert, Fort Lauderdale, FL, for Defendants Detective Michael Linville, Gregory Tony, in his official capacity as Sheriff of Broward County Sheriff's Office. Zachary Edward Vosseler, Miami-Dade County Attorney's Office, Miami, FL, for Defendant Detective Joel Valdes. Adam Katzman, Broward County Attorney's Office, Fort Lauderdale, FL, for Defendant Florida Broward County. Matthew John Conigliaro, Carlton Fields Jorden Burt, Tampa, FL, for Defendant Bridgefield Employers Insurance Company.
Anthony Accetta, Law Offices of Anthony Accetta, PA, Richard Alan Alayon, Alayon & Associates, Coral Gables, FL, Richard James Caldwell, Miami, FL, for Plaintiffs Capri Construction Corp., Juan Llauro, Carlos Llauro, Jorge Llauro, Maria Martinez, Samuel Abad, Joel Brito.
Richard Alan Alayon, Alayon & Associates, Coral Gables, FL, for Plaintiffs Sandra Llauro, Irene Tovar, Estate of Nidia Llauro.
David Lawrence Ferguson, Seth David Haimovitch, Kopelowitz Ostrow Ferguson Weiselberg Gilbert, Fort Lauderdale, FL, for Defendants Detective Michael Linville, Gregory Tony, in his official capacity as Sheriff of Broward County Sheriff's Office.
Zachary Edward Vosseler, Miami-Dade County Attorney's Office, Miami, FL, for Defendant Detective Joel Valdes.
Adam Katzman, Broward County Attorney's Office, Fort Lauderdale, FL, for Defendant Florida Broward County.
Matthew John Conigliaro, Carlton Fields Jorden Burt, Tampa, FL, for Defendant Bridgefield Employers Insurance Company.
ORDER
DARRIN P. GAYLES, UNITED STATES DISTRICT JUDGE THIS CAUSE comes before the Court on Defendants’ Motion to Dismiss the Amended Complaint (the "Motion") [ECF No. 33]. The Court has reviewed the Motion and the record and is otherwise fully advised. For the reasons discussed below, the Motion is granted.
I. BACKGROUND
The Court takes as true the following facts gathered from the Amended Complaint and the attached exhibits therein. [ECF No. 1, as amended by ECF No. 19]. See Gill as Next Friend of K.C.R. v. Judd , 941 F.3d 504, 511 (11th Cir. 2019) (citing Griffin Indus., Inc. v. Irvin , 496 F.3d 1189, 1199 (11th Cir. 2007) ("We are required to accept the facts as set forth in the plaintiff's complaint as true, and our consideration is limited to those facts contained in the pleadings and attached exhibits.")). Plaintiffs argue that because they allege that specific statements in the attached exhibits are false, the Court cannot take those statements as true. Not so. The law is clear in this circuit that "when exhibits attached to a complaint contradict the general and conclusory allegations of the pleading, the exhibits govern." Id. at 514 (citation and internal quotation marks omitted). Accordingly, and for the reasons discussed below, the Court credits the specific statements in the attached exhibits over several of Plaintiffs’ general allegations.
Between January 2013 and April 2015, Defendants Detectives Michael Linville and Joel Valdes (collectively, the "Detectives") investigated executive officers and high-level employees of Plaintiff Capri Construction Corp. ("Capri") for their alleged involvement in a scheme to use shell companies to avoid paying workers’ compensation insurance premiums and payroll taxes (the "investigation"). The investigation culminated with the arrests of Plaintiffs Juan Llauro (president of Capri), Jorge Llauro (vice-president), Samuel Abad (lead superintendent), Maria Martinez (secretary), and Joel Brito (another superintendent) (collectively, the "arrestees") for workers’ compensation fraud in violation of Fla. Stat. § 440.105(4)(b). Jorge, Abad, and Martinez were also arrested for organized scheme to defraud, in violation of Fla. Stat. § 817.034(4)(a)(1), and money laundering, in violation of Fla. Stat. § 896.101. The criminal charges against the arrestees were eventually dropped.
Following the arrests, the Detectives searched Capri's premises and seized Capri's bank account (the "Main Account") and bank accounts held by Juan, Jorge, and Carlos Llauro (treasurer and executive supervisor of Capri) (collectively, the "Llauro husbands") and their wives, Plaintiffs Sandra Llauro, Irene Tovar, and the Estate of Nidia Llauro (collectively, the "Llauro wives" ). Broward County Sheriff's Office ("BSO") also initiated an in rem civil asset forfeiture action against Plaintiffs related to the arrests, which BSO and Plaintiffs settled for $250,000.
The Court adopts Plaintiffs’ reference to Sandra Llauro, Irene Tovar, and Nidia Llauro as the "Llauro wives."
The Alleged Scheme
Plaintiffs attach to the Amended Complaint four probable cause affidavits that the Detectives prepared in support of warrants for the (1) arrest of Juan, Jorge, Abad, and Martinez (the "arrest affidavit"), [ECF No. 19-2]; (2) arrest of Brito (the "Brito arrest affidavit"), [ECF No. 19-11]; (3) search of Capri's premises (the "search affidavit"), [ECF No. 19-4]; and (4) seizure of the Main Account and the Llauro husbands and wives’ personal accounts (the "seizure affidavit"), [ECF No. 19-3] (collectively, the "affidavits"). The affidavits describe a scheme wherein general contractors, such as Capri, use shell companies and cash-paid laborers to avoid paying higher workers’ compensation insurance premiums and payroll taxes. A Florida state court judge signed arrest, search, and seizure warrants based on the information provided in the affidavits.
A "shell company" can be defined as a company without active business operations or significant assets. See https://www.investopedia.com/terms/s/shellcorporation.asp (last visited June 16, 2020).
The scheme typically unfolds as follows. When general contractors enter bids for a construction job, they must provide proof of workers’ compensation insurance. This usually takes the form of a certificate of insurance. When general contractors hire subcontractors, the subcontractors must provide such proof of coverage. Subcontractors typically obtain workers’ compensation insurance for a small number of employees, which results in a lower insurance premium. The arrest affidavit outlines how some general contractors may "rent" the subcontractors’ certificates of insurance for an established fee. That way, the general contractors can "hide" a number of their employees under the subcontractors’ certificates in order to avoid paying higher premiums to their own insurers by failing to report those employees.
The Investigation
The 37-page arrest affidavit outlines the Detectives’ nearly two-and-a-half-year investigation into the arrestees’ alleged participation in one of these such schemes. As part of the investigation, BSO conducted hundreds of hours of surveillance of Capri's day-to-day business between January 1, 2014, and January 1, 2015. BSO also used at least three confidential informants. The Detectives interviewed and obtained statements from several shell company owners who worked for Capri and corroborated that Capri was using shell companies to underreport payroll.
For example, Joel Pimentel from South Florida Structure Builders Corp. told the Detectives that he rented Capri his shell company's certificate of insurance for an established fee. Wilmer Zelaya from Y&W Construction Inc. told the Detectives that Abad referred several work group leaders from Capri to him to inquire about Capri using his company's certificate of insurance. Ignacio Luna from Mexcon Inc. advised the Detectives that he made a deal with Jorge and Abad to process invoices and payroll for multiple uninsured work groups in exchange for 7% of those workers’ total payroll. Francisco Turcios from Solid Construction Service Inc. told the Detectives that he started his shell company at Abad and Jorge's direction.
From this, and additional information gleaned from interviews with other shell company owners, the Detectives obtained an investigative subpoena for the Main Account in order to identify payments that Capri made to shell companies. The arrest affidavit states that the Detectives analyzed funds debited from the Main Account and compared those amounts to the payroll that Capri reported to its workers’ compensation insurer, Defendant Bridgefield Employers Insurance Company ("Bridgefield"). The arrest affidavit explains that Capri had a policy with Bridgefield that covered 41 employees and included an annual payroll of $1.4 million.
The arrest affidavit reveals, however, that Capri made $28,293,901.64 in payments from the Main Account to shell companies during the length of the Detectives’ investigation. According to the arrest affidavit, Capri originally paid shell companies with checks but switched to direct deposit because Capri believed that this method would prevent law enforcement from seizing the funds. The Detectives also describe these findings with similar detail in the seizure affidavit and state that, during the period of the investigation, funds totaling $2,737,034.48 had been disbursed from the Main Account to secondary accounts held by the Llauro husbands and wives.
The Arrestees’ Alleged Roles in the Scheme
The Detectives allege that Juan, as president of Capri, helped lead the alleged fraud. The arrest affidavit identifies Juan as having applied for a workers’ compensation insurance policy and a policy renewal with Bridgefield by using false, incomplete, or misleading information about the number of covered employees working at Capri and the company's annual payroll. For his part in the alleged scheme, the arrest affidavit details that Jorge (vice-president of Capri) controlled Capri's day-to-day operations and, along with Abad, assigned work group leaders to projects.
The arrest affidavit identifies Martinez as the person responsible for scheduling bank direct deposits to the various shell companies that worked for Capri and for confirming that those companies had workers’ compensation insurance certificates. Once Martinez confirmed coverage, Jorge would approve the new shell company to conduct business with Capri. In the Brito arrest affidavit, the Detectives submit that Brito participated in the alleged fraud while employed by Capri between August and December 2015 as a superintendent overseeing jobsites and issuing invoices to shell companies. At least one confidential informant reported to the Detectives that Brito issued him an invoice for work performed even though the informant was not the owner, an employee, or a documented representative of the shell company listed on the invoice.
B. Procedural Background
On February 29, 2019, the arrestees, Carlos Llauro, the Llauro wives (collectively, the "Individual Plaintiffs"), and Capri brought this action against the Detectives, Defendant Gregory Tony in his official capacity as Sheriff of BSO, and Bridgefield. [ECF No. 1, as amended by ECF No. 19]. The Individual Plaintiffs assert federal claims under 42 U.S.C. § 1983 against the Detectives and BSO as described below. Plaintiffs also assert several state-law tort claims as follows: (1) false arrest and false imprisonment (brought by the arrestees and Carlos Llauro against the Detectives and BSO); (2) vicarious liability (brought by the Individual Plaintiffs against BSO); (3) rescission (brought by Capri against BSO); (4) malicious prosecution (brought by all Plaintiffs against Bridgefield); and (5) breach of contract (brought by Capri against Bridgefield).
By suing Sheriff Tony in his official capacity, Plaintiffs are actually suing BSO. See Busby v. City of Orlando , 931 F.2d 764, 776 (11th Cir. 1991) ("[W]hen an officer is sued ... in his or her official capacity, the suit is simply ‘another way of pleading an action against an entity of which an officer is an agent.’ " (citation omitted)).
For their § 1983 claims, the Individual Plaintiffs assert that the Detectives violated their right to be free from officers making false statements and omitting material information in the probable cause affidavits that led to the arrestees’ arrests, the search of Capri's premises, and the seizure of funds from the Individual Plaintiffs’ personal accounts. Specifically, Plaintiffs allege that the Detectives:
1. Inaccurately translated one or more witness statements in the affidavits, id. ¶ 44;
2. Misstated in the arrest affidavit that Plaintiffs paid shell companies over $17 million in unreported payroll, id. ¶¶ 25, 27;
3. Misstated in the seizure affidavit that "all monies" in the Individual Plaintiffs’ personal accounts were linked to the arrestees’ alleged criminal activity, id. ¶ 29;
4. Omitted from the affidavits "inconvenient testimony," id. ¶ 45;
5. Omitted from the affidavits that some witnesses recanted their testimony concerning "material facts," id. ;
6. Omitted from the affidavits that the Detectives "improperly continued to ask the same questions of witnesses until they received the answers they wanted," id. ;
7. Omitted from the arrest affidavit that the Detectives "threatened witnesses with deportation unless they provided testimony, regardless of its truth, that helped the Detectives build a case against their targets, and even stopped the lawful deportation of a witness who was telling the Detectives what they wanted to hear by causing ICE to cease its efforts to deport him," id. ¶ 46;
8. Omitted from the arrest affidavit that the Detectives were in possession of a taped conversation between a confidential informant and a Capri representative where the representative "made it clear that there was no way that Capri would hire the [confidential informant] as a Capri employee that would not be reported to the workers’ compensation insurer," id. ¶ 47; and
9. Omitted from the arrest affidavit a ruling of the Office of Insurance Regulation, holding that a "workers’ compensation insurer seeking to assess additional premiums for workers’ compensation insurance must prove the existence and identity of any unreported" workers, id. ¶ 26.
Plaintiffs allege that the Detectives falsely stated that Capri had unreported payroll for unreported employees in the amounts of $14,042,132.38 in 2014 and $3,299,935.11 in 2015. Those amounts are listed under "Count 8/Count 9" of the section of the arrest affidavit titled "Probable Cause Specific to This Affidavit." [ECF No. 19-2 at 13]. It is unclear why the Detectives do not also include in those counts the $11,015,813.10 that Capri allegedly paid to shell companies in 2013. Plaintiffs do not allege that the Detectives inaccurately stated the 2013 amount.
On July 19, 2019, Defendants filed the instant Motion, arguing that the Individual Plaintiffs’ § 1983 claims against the Detectives should be dismissed with prejudice because the Detectives are entitled to qualified immunity. [ECF No. 33]. Defendants reason that removing the alleged misstatements and including the allegedly material omissions would not negate the probable cause set forth in the affidavits. Defendants further argue that if the Court finds that the Detectives are entitled to qualified immunity, all remaining claims should also be dismissed. Plaintiffs filed their response on October 3, 2019, [ECF No. 39], and Defendants filed their reply on November 5, 2019, [ECF No. 43]. After briefing on the issue, the Court denied Plaintiffs’ Motion to File a Sur-Reply. [ECF No. 48]. On Defendants’ motion, the Court then stayed the action, pending ruling on the instant Motion. [ECF No. 54].
As discussed below, the Court agrees with Defendants that the Individual Plaintiffs’ § 1983 claims against the Detectives must be dismissed with prejudice because the Detectives are entitled to qualified immunity. Consequently, the Court also disposes of Plaintiffs’ remaining claims.
II. LEGAL STANDARD
A. Motion to Dismiss
To survive a motion to dismiss brought pursuant to Federal Rule of Civil Procedure 12(b)(6), a claim "must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). This means that a claim must contain "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (quoting Twombly , 550 U.S. at 556, 127 S.Ct. 1955 ). While a court must accept well-pleaded factual allegations as true, "conclusory allegations ... are not entitled to an assumption of truth—legal conclusions must be supported by factual allegations." Randall v. Scott , 610 F.3d 701, 709–10 (11th Cir. 2010). "[T]he pleadings are construed broadly[,]" Levine v. World Fin. Network Nat'l Bank , 437 F.3d 1118, 1120 (11th Cir. 2006), and the allegations in the complaint are viewed in the light most favorable to the plaintiff, Bishop v. Ross Earle & Bonan, P.A. , 817 F.3d 1268, 1270 (11th Cir. 2016). The question is not whether the claimant "will ultimately prevail ... but whether his complaint [is] sufficient to cross the federal court's threshold[.]" Skinner v. Switzer , 562 U.S. 521, 530, 131 S.Ct. 1289, 179 L.Ed.2d 233 (2011).
B. Qualified Immunity
"Qualified immunity shields government officials from liability for civil damages for torts committed while performing discretionary duties unless their conduct violates a clearly established statutory or constitutional right." Stephens v. DeGiovanni , 852 F.3d 1298, 1314 (11th Cir. 2017) (quoting Hadley v. Gutierrez , 526 F.3d 1324, 1329 (11th Cir. 2008) ). "Because qualified immunity is a defense not only from liability, but also from suit, it is important for a court to ascertain the validity of a qualified immunity defense as early in the lawsuit as possible." Lee v. Ferraro , 284 F.3d 1188, 1194 (11th Cir. 2002) (citation and internal quotation marks omitted). "At the motion to dismiss stage in the litigation, the qualified immunity inquiry and the Rule 12(b)(6) standard become intertwined." Keating v. City of Miami , 598 F.3d 753, 760 (11th Cir. 2010) (citation and internal quotation marks omitted).
An official who asserts an entitlement to qualified immunity must first establish that he or she was acting within the scope of his or her discretionary authority when the allegedly wrongful act occurred. Carter v. Butts County , 821 F.3d 1310, 1319 (11th Cir. 2016) ; see also Moore v. Pederson , 806 F.3d 1036, 1042 (11th Cir. 2015) ("[T]he term ‘discretionary authority’ includes all actions of a governmental official that (1) were undertaken pursuant to the performance of his duties, and (2) were within the scope of his authority." (citation and internal quotation marks omitted)). Here, it is undisputed that the Detectives were both acting within their discretionary authority when they executed the affidavits. With discretionary authority established, "the burden shifts to [the plaintiff] to demonstrate that qualified immunity is inappropriate." Id.
To make that determination, the Court undergoes a two-pronged inquiry. First, the Court asks, "whether the facts, [t]aken in the light most favorable to the party asserting the injury, ... show [that] the officer's conduct violated a [federal] right." Salvato v. Miley , 790 F.3d 1286, 1292 (11th Cir. 2015) (first and third alterations in original) (quoting Tolan v. Cotton , 572 U.S. 650, 655–56, 134 S.Ct. 1861, 188 L.Ed.2d 895 (2014) (per curiam)). Second, the Court asks, "whether the right in question was ‘clearly established’ at the time of the violation." Id. (quoting Tolan , 572 U.S. at 656, 134 S.Ct. 1861 ). "A clearly established right is one that is sufficiently clear that every reasonable official would have understood that what he is doing violates that right." Mullenix v. Luna , 577 U.S. 7, 136 S. Ct. 305, 308, 193 L.Ed.2d 255 (2015) (citation and internal quotation marks omitted). Thus, "[t]o survive a motion to dismiss based upon qualified immunity, the plaintiff must have alleged sufficient facts to support a finding of a constitutional violation of a clearly established law." Chandler v. Sec'y of Fla. Dep't of Transp. , 695 F.3d 1194, 1198 (11th Cir. 2012).
III. DISCUSSION
The Court first addresses the Individual Plaintiffs’ claims under 42 U.S.C. § 1983 against the Detectives. Plaintiffs allege that the Detectives violated the Fourth Amendment by including false statements in, and omitting material information from, the affidavits. The Court disagrees.
A police officer may be held liable under § 1983 for submitting an application for an arrest warrant that contains false and misleading information or omits information. Holmes v. Kucynda , 321 F.3d 1069, 1083 (11th Cir. 2003) (false statements); Haygood v. Johnson , 70 F.3d 92, 95 (11th Cir. 1995) (omitted information). But, to amount to a constitutional violation, that information must be so clearly material to a determination of probable cause "that every reasonable law officer would have known that [its] omission [or inclusion] would lead to a search [or seizure] in violation of federal law." Haygood , 70 F.3d at 95 ; see also Franks v. Delaware , 438 U.S. 154, 165, 98 S.Ct. 2674, 57 L.Ed.2d 667 (1978) ("[T]ruthful" "does not mean ... that every fact recited in the warrant affidavit is necessarily correct [but] ... that the information put forth is believed or appropriately accepted by the affiant as true."). In other words, "[t]here is no constitutional violation ‘if, absent the misstatements or omissions, there remains sufficient content to support a finding of probable cause.’ " Stefani v. City of Grovetown , 780 F. App'x 842, 850–51 (11th Cir. 2019) (citation omitted).
In Paez v. Mulvey , the Eleventh Circuit set forth a two-part test for determining whether a misstatement or omission in a warrant affidavit constitutes a Fourth Amendment violation. 915 F.3d 1276, 1287 (11th Cir. 2019). "First, [the Court] ask[s] whether there was an intentional or reckless misstatement or omission." Id. At this stage, the Court must take Plaintiffs’ allegations as true that the Detectives intentionally, or in reckless disregard for the truth, made false statements or omitted information in the affidavits. Therefore, the Court limits its analysis to the second inquiry, concerning the information's materiality: "whether probable cause would be negated if the offending statement was removed or the omitted information included." Id. (citation omitted). Probable cause "is not a high bar[.]" Kaley v. United States , 571 U.S. 320, 338, 134 S.Ct. 1090, 188 L.Ed.2d 46 (2014). It "requires only a probability or substantial chance of criminal activity, not an actual showing of such activity." Illinois v. Gates , 462 U.S. 213, 243 n.13, 103 S.Ct. 2317, 76 L.Ed.2d 527 (1983). "In dealing with probable cause, ... as the very name implies, we deal with probabilities. These are not technical; they are the factual and practical considerations of everyday life on which reasonable and prudent men, not legal technicians, act." Marx v. Gumbinner , 905 F.2d 1503, 1507 (11th Cir. 1990) (citing Brinegar v. United States , 338 U.S. 160, 175, 69 S.Ct. 1302, 93 L.Ed. 1879 (1949) ). "So long as it is reasonable to conclude from the body of evidence as a whole that a crime was committed, the presence of some conflicting evidence or a possible defense will not vitiate a finding of probable cause." Paez , 915 F.3d at 1286. The bar is so low that the Eleventh Circuit has found the statements of a single witness sufficient to establish probable cause. See, e.g. , Martin v. Wood , 648 F. App'x 911, 916 (11th Cir. 2016) (finding probable cause for arrest based on a statement from the plaintiff's sister that the plaintiff was mismanaging the funds in their mother's trust).
"To receive qualified immunity, an officer need not have actual probable cause, but only ‘arguable’ probable cause." Brown v. City of Huntsville, Ala. , 608 F.3d 724, 734 (11th Cir. 2010) (citation omitted). "Arguable probable cause exists where ‘reasonable officers in the same circumstances and possessing the same knowledge as the [officers] could have believed that probable cause existed to arrest [the p]laintiff.’ " Grider v. City of Auburn, Ala. , 618 F.3d 1240, 1257 (11th Cir. 2010) (citation omitted). As the Eleventh Circuit explained in Grider :
The standard is an objective one and does not include an inquiry into the officer's subjective intent or beliefs. Whether an officer possesses arguable probable cause depends on the elements of the alleged crime and the operative fact pattern. Showing arguable probable cause does not, however, require proving every element of a crime. If the arresting officer had arguable probable cause to arrest for any offense, qualified immunity will apply.
Id. (internal citations omitted). In cases alleging constitutional violations based on omissions or misstatements in arrest warrant affidavits, officers are entitled to qualified immunity "if the affidavits (including the omitted information [and excluding the misstatements] ) would have demonstrated even arguable probable cause—that a reasonable officer could have believed an offense was committed[.]" Paez , 915 F.3d at 1288 (emphasis in original) (citation omitted). The question thus becomes "whether [the] affidavit contains other facts sufficient to show probable cause for an arrest warrant." Rhodes v. Kollar , 503 F. Appx. 916, 923 (11th Cir. 2013). If it does, the remaining probable cause or arguable probable acts as an "absolute bar" to § 1983 claims. L.S.T., Inc. v. Crow , 49 F.3d 679, 685 (11th Cir. 1995) (citation omitted).
Here, removing the alleged misstatements and including the omissions would not negate probable cause in the arrest affidavit. Before engaging in the analysis set forth in Paez , the Court first disposes of several of Plaintiffs’ allegations that are too vague to consider: the affidavits (1) were "false, misleading"; (2) "contained material omissions, misstatements, and lies"; and (3) "omitted exculpatory evidence" and "inconvenient testimony." These blanket statements are "so broad" that they provide the Court "no help in determining which statements in the affidavit are material misstatements or what has been omitted." Gill as Next Friend of K.C.R. v. Judd , 941 F.3d 504, 515 (11th Cir. 2019).
Similarly, the Court cannot take as true the following claims: that the Detectives (1) inaccurately translated witness statements, (2) omitted the fact that some witnesses later recanted their testimony concerning material facts in the affidavits, and (3) threatened witnesses with deportation unless they provided testimony. Plaintiffs fail to identify which statements were inaccurate and who said them, so the Court cannot determine whether the statements were necessary for probable cause. And because Plaintiffs fail to identify the recanting witnesses and what part of their testimony was allegedly false, the Court cannot determine whether including that detail in the arrest affidavit would vitiate probable cause to arrest the arrestees. The final claim is likewise too imprecise.
The Court cannot consider the additional omission that Plaintiffs included in their response to the Motion: that a confidential informant could not reasonably serve as a basis for probable cause in the arrest affidavit because he stated in a conference with the Detectives and Plaintiffs’ attorney that he did not pay workers in cash and that he knew of no companies working for Capri that did. Plaintiffs cannot amend the Amended Complaint "via a response to a motion to dismiss." Guerrero v. Target Corp. , 889 F. Supp. 2d 1348, 1356 n.6 (S.D. Fla. 2012) (citation omitted).
Having sifted through the generalities, the following claims remain: that the Detectives had no basis for asserting (1) in the arrest affidavit that Capri paid shell companies over $17 million in unreported payroll and (2) in the seizure affidavit that all monies in the Individual Plaintiffs’ personal accounts represented contraband that was linked to the arrestees’ alleged criminal activity. Plaintiffs’ also claim that the Detectives impermissibly omitted from the arrest affidavit that (1) the Office of Insurance Regulation held that a "workers’ compensation insurer seeking to assess additional premiums for workers’ compensation insurance must prove the existence and identity of any unreported" workers (the "OIR ruling") and (2) the Detectives were in possession of a taped conversation between a confidential informant and a Capri representative where the representative "made it clear that there was no way that Capri would hire the [informant] as a Capri employee that would not be reported to the workers’ compensation insurer."
Alleged Misstatements
In support of the first alleged misstatement, Plaintiffs note that the prosecuting attorney for the underlying criminal case "admitted during the criminal proceedings that there was no evidence of any wrongdoing or that any of these payments were for unreported Capri employees." Even assuming this is true, "[t]hat a defendant is subsequently acquitted or charges are dropped against the defendant is of no consequence in determining the validity of the arrest itself." Gumbinner , 905 F.2d at 1507 ; see also Baker v. McCollan , 443 U.S. 137, 145, 99 S.Ct. 2689, 61 L.Ed.2d 433 (1979) ("The Constitution does not guarantee that only the guilty will be arrested. If it did, § 1983 would provide a cause of action for every defendant acquitted—indeed, for every suspect released."). The relevant inquiry in a qualified-immunity analysis is whether probable cause or arguable probable cause exists, "not whether an arrestee's conduct is a crime or ultimately will result in conviction." Scarbrough v. Myles , 245 F.3d 1299, 1303 n.8 (11th Cir. 2001). This is because "[p]olice officers are not expected to be lawyers or prosecutors." Id.
The Court notes that, in their response to the Motion, Plaintiffs support this claim with the following dialogue:
THE COURT: Right. I haven't heard anything other than they existed. Okay. My question is, then you had no probable cause for a search warrant.
[Prosecutor]: Correct.
[ECF No. 39 at 27].
Plaintiffs ask the Court to accept as true that the Detectives falsely claimed that Capri paid over $17 million in unreported payroll. But Plaintiffs fail to allege that the Detectives falsely stated any specific facts that led them to this conclusion. Plaintiffs’ allegation is too general when viewed alongside the Detectives’ specific statements in the arrest affidavit attached to the Amended Complaint. In Gill , the Eleventh Circuit outlined a rule for courts to employ when faced with allegations that conflict with materials attached to a complaint: "specific over speculative, concrete over conclusory." 941 F.3d at 514. "[W]hen exhibits attached to a complaint ‘contradict the general and conclusory allegations of the pleading, the exhibits govern.’ " Id. It is only "[w]hen a complaint contains specific, well-pleaded allegations that either do not appear in the attached exhibit or that contradict conclusory statements in the exhibit" will the complaint allegations govern. Id. Plaintiffs do not allege that the Detectives misstated any specific evidence described in the arrest affidavit. Thus, based on Gill's guidance, the Detectives’ specific statements in the arrest affidavit govern.
It is worth reminding that Plaintiffs do not allege that the arrest affidavits, as is, fail to demonstrate probable cause to arrest the arrestees. Rather, they claim that excluding specific statements and including material omissions would negate already existing probable cause. However, the arrest affidavits establish probable cause to conclude that the arrestees had engaged in, were engaged in, or were about to engage in workers’ compensation fraud based on statements obtained from several shell company owners. See Sada v. City of Altamonte Springs , 434 F. App'x 845, 850 (11th Cir. 2011) (holding that officers who interviewed various witnesses, whose statements were corroborative, had "more than enough for probable cause").
The arrestees were arrested for workers’ compensation fraud in violation of Fla. Stat. § 440.105(4)(b). Jorge, Abad, and Martinez were also arrested for organized scheme to defraud and money laundering. Fla. Stat. § 440.105(4)(b)(5) makes it unlawful "[t]o knowingly make any false, fraudulent, or misleading oral or written statement, or to knowingly omit or conceal material information ... for the purpose of obtaining workers’ compensation coverage or for the purpose of avoiding, delaying, or diminishing the amount of payment of any workers’ compensation premiums." The arrest affidavits describe how the Detectives obtained multiple sworn statements implicating the arrestees in a scheme where Capri avoided higher insurance premiums and assisted shell companies to do the same. For example, shell company owners told the Detectives that Capri (1) knew that there were uninsured workers on its jobsites, (2) rented shell companies’ insurance certificates for established fees, and (3) demanded shell companies open bank accounts so to avoid law enforcement seizure of payments.
Finally, the Court does not credit Plaintiffs’ allegation that the Detectives had "no basis" for stating in the seizure affidavit that there was probable cause to believe that the funds in the Individual Plaintiffs’ personal accounts were contraband. In addition to the arrest affidavits’ allegations of the arrestees’ alleged criminal activity, the Detectives further assert in the seizure affidavit that Capri disbursed over $2.7 million from the Main Account to secondary bank accounts held by the Llauro husbands and wives. The Detectives categorize these amounts as contraband based on the definition provided by Florida law: "[a]ny personal property, including, but not limited to, ... money ... which was used or was attempted to be used as an instrumentality in the commission of, or in aiding or abetting in the commission of, any felony, whether or not comprising an element of the felony, or which is acquired by proceeds obtained as a result of a violation of the Florida Contraband Forfeiture Act." Fla. Stat. § 932.701(2)(a)(5). Again, Plaintiffs do not claim that any specific statement in the 53-page seizure affidavit, which establishes probable cause, is false. Because Plaintiffs fail to specifically identify any misstatements in the seizure affidavit, the Court finds that there was no constitutional violation.
Alleged Omissions
Turning to the omissions, Plaintiffs allege that the OIR ruling, holding that "a workers’ compensation insurer seeking to assess additional premiums for workers’ compensation insurance must prove the existence and identity of any unreported" employees, was exculpatory information that should have been included in the arrest affidavits. Not so. Proof of the identification of a specific person or persons who received unreported compensation is not an element of any crime for which the arrestees were arrested. In their response to the Motion, Plaintiffs rely on the fact that the Detectives failed to identify these supposed "fake employees." Citing no authority, Plaintiffs argue that the identity of these "fake employees" is a necessary element of every crime for which the arrestees were arrested.
But Plaintiffs themselves demonstrate that this is patently false by listing the elements for each crime in their response to the Motion. None of the germane statutes require the Detectives to identify any unreported employees to establish probable cause for arrest. Moreover, an arresting officer is only required to "conduct a reasonable investigation to establish probable cause." Rankin v. Evans , 133 F.3d 1425, 1435 (11th Cir. 1998). "[T]he law does not require ‘that every conceivable step be taken, at whatever cost, to eliminate the possibility of convicting an innocent person[.]’ " Tillman v. Coley , 886 F.2d 317, 321 (11th Cir. 1989) (citation omitted).
The last alleged omission—that a Capri representative stated in a taped conversation that Capri would never fail to report an employee to its insurer—would not vitiate probable cause. The arrest affidavit alleges that there was probable cause to believe that the arrestees committed several crimes. The question, therefore, is whether, after including the omission, probable cause as to any one offense remains. Paez , 915 F.3d at 1285 ("[A]rguable probable cause as to any one offense is sufficient to defeat § 1983 claims for other Fourth Amendment violations, including false arrest and unlawful searches.") (citing Madiwale v. Savaiko , 117 F.3d 1321, 1327 (11th Cir. 1997) (finding officer entitled to qualified immunity when a misstatement in a search warrant vitiated arguable probable cause as to one offense, but the misstatement was "not relevant to the existence of probable cause to believe that ... other ... crimes had been committed")). The answer is yes. That one Capri representative, whose authority is unknown, stated that Capri would never commit workers’ compensation fraud does not alone negate probable cause for that crime as set forth in the comprehensive arrest affidavit, let alone probable cause for the other crimes. See Paez , 915 F.3d at 1286 ("So long as it is reasonable to conclude from the body of evidence as a whole that a crime was committed, the presence of some conflicting evidence or a possible defense will not vitiate a finding of probable cause.").
In sum, Plaintiffs failed to meet their "burden of showing that, in the light of pre-existing law , the facts omitted in this case ... clearly would have negated probable cause if those facts had been included[.]" See Haygood , 70 F.3d at 95 (emphasis in original). Stated differently, "the facts omitted here were not so clearly material that every reasonable law officer would have known that their omission would lead to [arrests] in violation of federal law." Id. At bottom, "[w]hether or not a Fourth Amendment violation has occurred depends upon objective reasonableness in light of the facts and circumstances." United States v. Hromada , 49 F.3d 685, 691 (11th Cir. 1995) (citing Scott v. United States , 436 U.S. 128, 136, 98 S.Ct. 1717, 56 L.Ed.2d 168 (1978) ). The arrests in this case were objectively reasonable based on the probable cause outlined in the arrest affidavits. Thus, the Detectives did not violate the arrestees’ constitutional rights and are therefore entitled to qualified immunity as to the arrestees’ § 1983 claims. Consequently, the Court dismisses those claims with prejudice.
Search and Seizure Affidavits
Additionally, because the search affidavit established a sufficient link between the arrestees’ alleged criminal conduct and Capri's premises, it contained "sufficient information to conclude that a fair probability existed that seizable evidence would be found in the place sought to be searched." United States v. Martin , 297 F.3d 1308, 1314 (11th Cir. 2002) (citation omitted). As a result, the Detectives are entitled to qualified immunity as to Carlos’ false arrest claim because he was an occupant of Capri's premises during the execution of a valid search warrant. Muehler v. Mena , 544 U.S. 93, 98, 125 S.Ct. 1465, 161 L.Ed.2d 299 (2005) ("An officer's authority to detain incident to a search is categorical; it does not depend on the quantum of proof justifying detention or the extent of the intrusion to be imposed by the seizure." (citation and internal quotation marks omitted)).
The Court notes that Plaintiffs do not specifically allege that any statements in the search affidavit, not already considered by the Court in this Order, were false or misleading.
The Detectives are also entitled to qualified immunity as to the Llauro wives’ § 1983 claims because, as discussed above, the seizure warrant proffered probable cause to seize funds from their personal accounts. Thus, the Court dismisses with prejudice the Individual Plaintiffs’ § 1983 claims against the Detectives. See Bryant v. Dupree , 252 F.3d 1161, 1163 (11th Cir. 2001) (explaining that a district court need not allow amendment when it would be futile). Having found that the Detectives did not violate the Individual Plaintiffs’ constitutional rights, the Court also dismisses with prejudice their derivative § 1983 claims against BSO. See Vineyard v. County of Murray , 990 F.2d 1207, 1211 (11th Cir. 1993) ("Only when it is clear that a violation of specific rights has occurred can the question of § 1983 municipal liability for the injury arise.").
State-Law Claims
After dismissing the Individual Plaintiffs’ § 1983 claims against the Detectives and BSO—the only federal claims in this action—the Court declines to exercise supplemental jurisdiction over Plaintiffs’ state-law claims which lack an independent jurisdictional basis. See 28 U.S.C. § 1367(c)(3) (permitting a court to decline exercising supplemental jurisdiction when it "has dismissed all claims over which it has original jurisdiction"); see also Raney v. Allstate Ins. Co. , 370 F.3d 1086, 1088–89 (11th Cir. 2004) ("The decision to exercise supplemental jurisdiction over pendant state claims rests within the discretion of the district court. We have encouraged district courts to dismiss any remaining state claims when, as here, the federal claims have been dismissed prior to trial." (citations omitted)); Carnegie-Mellon Univ. v. Cohill , 484 U.S. 343, 350 n.7, 108 S.Ct. 614, 98 L.Ed.2d 720 (1988) ("[I]n the usual case in which all federal-law claims are eliminated before trial, the balance of factors to be considered under the pendent jurisdiction doctrine—judicial economy, convenience, fairness, and comity—will point toward declining to exercise jurisdiction over the remaining state-law claims.").
Plaintiffs have not alleged that this Court has diversity jurisdiction over the remaining state-law claims.
The Court, therefore, dismisses without prejudice Plaintiffs’ state-law claims. See Carnegie-Mellon Univ. , 484 U.S. at 350, 108 S.Ct. 614 ("[W]hen the federal-law claims have dropped out of the lawsuit in its early stages and only state-law claims remain, the federal court should decline the exercise of jurisdiction by dismissing the case without prejudice.") (citing Mine Workers v. Gibbs , 383 U.S. 715, 726–27, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966) ) (footnote omitted); see also Smith v. Franklin Cty. , 762 F. App'x 885, 891 n.3 (11th Cir. 2019) (affirming district court's dismissal of state-law claims without prejudice after it granted summary judgment on the federal claims).
IV. CONCLUSION
Based on the foregoing, it is ORDERED AND ADJUDGED that:
1. Defendants’ Motion to Dismiss the Amended Complaint [ECF No. 33] is GRANTED ;
2. Plaintiffs’ Amended Complaint [ECF No. 19] is DISMISSED ;
3. Any pending motions are DENIED as moot ; and
4. The case is CLOSED .
The Court denies Plaintiffs’ request for leave to amend the Amended Complaint in order to cure technical deficiencies. Plaintiffs have not provided the Court with a compelling reason to allow amendment in the face of dismissal on the merits.
DONE AND ORDERED in Chambers at Miami, Florida, this 30th day of June, 2020.