Case 1:14-cv-03457-SCJ Document 9-1 Filed 11/03/14 Page 1 of 27

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
DUSTIN JOHNSON,
Plaintiff,
v.
MORRIS SCHNEIDER
WITTSTADT, LLC f/k/a MORRIS
HARDWICK SCHNEIDER, LLC;
MSLAW, INC. f/k/a MHSLAW, INC.;
NATHAN HARDWICK IV, ESQ.;
MARK WITTSTADT, ESQ.;
GERARD WM. WITTSTADT JR., ESQ.,
Defendants.

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CIVIL ACTION FILE

NO. 1:14-CV-03457-SCJ

THE WITTSTADT DEFENDANTS

MEMORANDUM OF LAW IN SUPPORT OF MOTION TO DISMISS
Like many others, Dustin Johnson misplaced trust in Nat Hardwick, his
close friend. But that doesnt forgive the knowingly false conclusions Johnson
throws at Morris Schneider Wittstadt, LLC, MSWLaw, Inc. (improperly named
MSLaw, Inc.), Mark Wittstadt and Gerard Wm. (Rod) Wittstadt, Jr. (collectively
the Wittstadt Defendants) in this lawsuit. Because they lack any factual support
and are contrary to controlling law, the Court should dismiss with prejudice
Johnsons shotgun claims leveled at the Wittstadt Defendants.

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I. FACTUAL BACKGROUND 1
Stripped of rhetoric and speculation, Johnsons allegations boil down to this:
Hardwick told Johnson that if he entered into a promissory note and guaranty with
the Wittstadt Defendants, Johnson would earn $1 million on a $3 million loan.
(R.8, 3439.)2 Absent any communication with the Wittstadt Defendants, and
without ever executing, or even seeing, a written note or guaranty purporting to
obligate any of the Wittstadt Defendants, Johnson wired $3 million to an account
identified by Hardwick. (R.8, 3441, 5761.) Johnson learned that Hardwick
was accused of embezzling $30 million from the Wittstadt Defendants, but
Hardwick denied wrongdoing.3 (R.8, 6266.) Johnson never alerted the
Wittstadt Defendants to the supposed loan until his lawyer sent an October 14,
1

On this motion, the Court should accept the truth of facts alleged in the
Complaint but should not accept conclusory allegations, opinions, and legal
conclusions. See United Techs. Corp. v. Mazer, 556 F.3d 1260, 1269 (11th Cir.
2009); South Fla. Water Mgmt. Dist. v. Montalvo, 84 F.3d 402, 408 n.10 (11th Cir.
1996). After excising speculation, unsupported conclusions, and innuendo, not
much remains, and the Wittstadt Defendants do not admit that any of it is true.
2

Hardwick made assorted other representations regarding other investors and

the status of alleged loan documents; none were made by the Wittstadt Defendants.
(R.8, 4044.)
3

Likewise, when confronted by the Wittstadts, Hardwick denied wrongdoing

and said he would put money back into the firm to replace funds he had received
in error. Hardwick maintained, in writing and orally, that the funds were his
moneyfrom his personal accounts or personally borrowed by him.
2

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2014 letter demanding $4 million. (R.8, 70, 72.) Shortly thereafter, Johnson
filed this suit.
Most of the remaining pleaded facts add flavor, but little else. Morris
Schneider Wittstadt (MSW) is a real estate law firm. (R.8, 3.) MSWLaw, Inc.
is the parent company of MSW. (Id., 2, 38.) Lawyers Mark and Rod Wittstadt
own and manage MSW. (Id., 21, 26.) Before being accused of embezzlement,
Hardwick was a member of MSWs and MSWLaws predecessors. (Id., 16, 31.)
Johnson is, or was, a professional golfer.4 (Id., p. 2.)
Johnson and Hardwick were very, very close. Hardwick played a
particularly unique and significant role of trust and confidence, serving as one of
Mr. Johnsons primary advisors on all matters relating to his career as a
professional golfer, as well as an officer in Mr. Johnsons professional
corporation. (Id.) Johnson says he relied to his detriment on Hardwicks
misrepresentations. (Id., 47, 48, 49, 57, 66, 67.)
Everything else asserted by Johnson consists either of patently false and
irrelevant facts, or completely unsupported, inactionable, conclusory statements.

Apparently his status is in doubt, as Johnson has taken an indefinite leave of

absence from the PGA Tour amid allegations of substance abuse. Hank Gola,
Report: Golf star Dustin Johnson hit with six-month ban from PGA Tour after
testing positive for cocaine, N.Y. DAILY NEWS (August 2, 2014).
3

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Examples of the former are false statements regarding the Wittstadt Defendants
response to Johnsons pre-suit $4 million demand.5 (Id., 7678.) Examples of
the latter are much too numerous and pervasive to recount here. In sum, while long
on hyperbole and inflammatory accusation, the Complaint is bereft of any facts
showing the Wittstadt Defendants to be any more than victims of Hardwicks
alleged misconduct.
II.

ARGUMENT AND CITATION OF AUTHORITY

While Dustin Johnsons complaint against the Wittstadt Defendants may be

a tribute to creative fiction, it is a travesty to legal pleading. Purposely abusing the
Federal Court system to falsely accuse good, ethical lawyers of crimes and lies
should be severely punished, but today is not the day for that. Instead, the Wittstadt
Defendants show the Court that shotgun pleading to paint a patently false picture is
not condoned. Throwing libelous accusations against the wall to see if they stick
does not meet any acceptable pleading standard. And, spitting out terms like
racketeering and wire fraud with no legal or factual foundation cannot save a
meritless suit.

One must surmise that such falsehoods were included to attempt to purposely
malign the Wittstadt Defendants and discourage them from defending this suit.
4

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A.

Johnsons Complaint Fails All Applicable Pleading Standards.

The Court should dismiss the Complaint because it is a shotgun pleading and

fails to state a claim under Federal Rules 8(a)(2) and 9(b).

1.

Johnsons Complaint is an impermissible shotgun pleading.

Johnsons shotgun pleading has no place in this Court. See Paylor v.

Hartford Fire Ins. Co., 748 F.3d 1117, 1126 (11th Cir. 2014) (A defendant served
with a shotgun complaint should move the district court to dismiss the complaint
pursuant to Rule 12(b)(6)). The Eleventh Circuit has condemned shotgun
pleadings upwards of fifty times. Davis v. Coca-Cola Bottling Co., 516 F.3d
955, 979 n.54 (11th Cir. 2008); see also Paylor, 748 F.3d at 1125 n.3 (collecting
23 published cases in which [a]ll of the judges of this court, active and senior,
have either authored or concurred in an opinion condemning shotgun pleadings.).
Shotgun pleadings are those which: (1) fail to specify the facts relevant to
each claim, (2) assert claims against a number of defendants without specification,
and (3) contain a plethora of baseless causes of action. See Hon. Emmett Ripley
Cox, Thirty-Two Years on the Federal Bench, 99 FLA. L. REV. 1685, 169192
(2014). Johnsons Complaint fits this definition like a glove. First, each count
incorporates not only the Factual Allegations, but also the allegations of
Parties, Jurisdiction, and Venue. (See, e.g., R.8, 79.) Together, that makes
5

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78 allegations incorporated for each count (for a complaint with a total of 1,326
incorporated allegations and 1,541 total allegations). Second, the Complaint makes
no distinction among the [many] defendants charged, though geographic and
temporal realities make plain that all of these defendants could not have
participated in every act complained of. Magluta v. Samples, 256 F.3d 1282, 1284
(11th Cir. 2001). Johnson uses the generic term Defendants no fewer than 87
times. Third, Johnson includes 17 wholly baseless counts.
Plaintiffs file shotgun complaints and include frivolous claims to extort the
settlement of a meritorious claim; worse yet, they file shotgun complaints to extort
the settlement of unmeritorious claims. Davis, 516 F.3d at 982 (quotation
omitted). The result is a massive waste of judicial and private resources;
moreover, the litigants suffer, and society loses confidence in the courts ability to
administer justice. Johnson Enters. of Jacksonville, Inc. v. FPL Group, Inc., 162
F.3d 1290, 1333 (11th Cir. 1998) (quotation omitted). This Court should recognize
Johnsons shotgun Complaint for what it isan unmeritorious fiction designed to
extort a settlementand dismiss it with prejudice.6

[A] defendant faced with a [shotgun] complaint . . . is not expected to frame

a responsive pleading. Anderson v. Dist. Bd. of Trustees of Cent. Fla. Cmty. Coll.,
77 F.3d 364, 366 (11th Cir. 1996). Instead, [a] defendant served with a shotgun
complaint should move the district court to dismiss the complaint pursuant to Rule
6

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2.

Johnsons Complaint fails under Rule 12(b)(6).

Given that the Wittstadt Defendants had no contact with Johnson, it is not
surprising that he failed to plead a single actionable claim. Johnson has not, and
cannot, set forth enough factual matter (taken as true) to suggest [each] required
element. See Watts v. Fla. Intl Univ., 495 F.3d 1289, 1295 (11th Cir. 2007)
(quotation omitted). The Supreme Court condemned Johnsons technique when it
held that pleading requires more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action will not do. Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007).7
Johnson teed up claims resting entirely on labels and conclusions. Beginning
in Count 1, Johnson concludes [a]ll Defendants participated in the aforementioned
activities as part of a joint enterprise to engage in racketeering against their
targets. (R.8, 84.) But this is no more than a paraphrase of a required RICO
element. See U.S. v. Browne, 505 F.3d 1229, 1257 (11th Cir. 2007) ([T]he
12(b)(6). Paylor, 748 F.3d at 1126. Or, the court, acting sua sponte should
[strike] the plaintiffs complaint. Anderson, 77 F.3d at 367 n.5.
7

[A] complaint must contain sufficient factual matter, accepted as true, to

state a claim to relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (quotation omitted). The plausibility standard . . . asks for more than a
sheer possibility that a defendant has acted unlawfully. Id. Rule 8 . . . does not
unlock the doors of discovery for a plaintiff armed with nothing more than
conclusions. Id. at 67879.
7

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defendants participated . . . in the conduct of the enterprise . . . through a pattern of

racketeering activity.). This pattern of formulaic recitations continues for all 17
counts and dooms each of them from the start. Twombly, 550 U.S. at 555, 570.
3.

Johnson Does Not Come Close to Satisfying Rule 9(b).

Johnson premises his Complaint on the far-fetched notion that the Wittstadt
Defendants conspired with the man accused of defrauding them out of $30 million
to defraud Johnson out of $3 million. Rule 9(b) nips this hypothesis at the bud.
Rule 9(b) requires that [i]n alleging fraud or mistake, a party must state
with particularity the circumstances constituting fraud or mistake. Fed. R. Civ. P.
9(b). Such particularity is required to ensure that defendants have fair notice of
the precise misconduct with which they are charged and to safeguard defendants
against spurious charges of immoral and fraudulent behavior. Wagner v. First
Horizon Pharm. Corp., 464 F.3d 1273, 1277 (11th Cir. 2006) (quotation omitted).
To satisfy Rule 9(b), a plaintiff must allege:
(1) precisely what statements were made in what documents or oral
representations or what omissions were made, and (2) the time and
place of each such statement and the person responsible for making
(or, in the case of omissions, not making) same, and (3) the content of

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such statements and the manner in which they misled the plaintiff, and
(4) what the defendants obtained as a consequence of the fraud.
Ziemba v. Cascade Intl, Inc., 256 F.3d 1194, 1202 (11th Cir. 2001) (quotation
omitted). In short, Johnson must set forth the who, what, when, where, and how
of the Wittstadt Defendants allegedly fraudulent behavior. Belmont Holdings
Corp. v. SunTrust Banks, Inc., 896 F. Supp. 2d 1210, 1219 n.9 (N.D. Ga. 2012).
Instead, Johnson simply concludes, Hardwick made representations,
identified above and fully incorporated herein, to Johnson which Hardwick knew
were false. (R.8, *91.)8 This is the exact opposite of pleading precisely what
statements were made and wholly fails to satisfy either the Twombly standard or
the Ziemba requirements. Ziemba, 256 F.3d at 1202.
B.

Hardwicks Conduct Cannot Be Imputed to the Wittstadt Defendants.

Johnsons Complaint posits that, while the Wittstadt Defendants did nothing

wrong themselves, they are responsible for Hardwicks illegal acts. To support his
hypothesis, Johnson regurgitates boilerplate, conclusory legaleseHardwick
acted as a duly authorized agent of [defendant] as the principal, with such
principal legally bound for the care and loyalty of Hardwick in its business and

On page 35 of the Complaint, paragraph numbers jump from 138 back to

83. The repetitive numbers are identified by using the label *#.
9

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bound for the neglect and fraud of Hardwick in the transaction of such business.
(See, e.g., R.8, 10.) But reciting legal-sounding magic words does not make an
action viable, and this gambit fails as a matter of settled Georgia law.
When an alleged agents acts in fraudulently inducing the [plaintiff] to
invest money in a nonexistent fund which he falsely represented to be [the
defendants] fund were personal acts for his own benefit . . . there is no basis for
concluding that [the defendant] was vicariously liable . . . for [the alleged agents]
tortious conduct or for any contractual obligation. Hobbs v. Principal Fin Grp.,
Inc., 230 Ga. App. 410, 411 (1998). [W]here the tortious conduct of the employee
is personal to himself because it springs from purely personal motives, the
employee is deemed to have departed from the scope of his employment and the
master is not liable. Id. (quotation omitted); see also Witcher v. JSD Props., LLC,
286 Ga. 717, 719 (2010) ([W]hen the agent departs from the scope of the agency,
and begins to act for himself and not for the principal; when his private interest is
allowed to outweigh his duty as a representative; when to communicate the
information would prevent the accomplishment of his fraudulent scheme, he
becomes an opposite party, not an agent [. . . and] the law does not impute to the
principal notice of such fraud); Keenan v. Hill, 190 Ga. App. 108, 111 (1989)
(when an agent departs from the scope of his duties and acts in such a way that his
10

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private interest outweighs his obligation as a corporate representative, the law will
not impute his knowledge to the corporation.).
Hardwick, accused of embezzling millions from MSW, was the source of
every alleged communication regarding the supposed loan investment. (R.8, 34
39, 6266.) When Johnson finally decided to communicate with the Wittstadt
Defendants after he alleges the loan was made he learned that Hardwicks
alleged representations were false, and that he had no loan agreement. (R.8, 70
73, 75.) Georgia law prohibits Johnsons ex post facto attempt to impute
Hardwicks alleged illegal actions to the Wittstadt Defendants.
C.

Counts 14 Fail to State a Valid Civil RICO Claim.

Johnsons woefully inadequate RICO allegations fail for both general and

specific reasons. As noted above and required by Rule 8(a)(2), allegations must
contain more than labels and conclusions, and a formulaic recitation of the
elements of a cause of action will not do. Twombly, 550 U.S. at 555. RICO
allegations must comply not only with the plausibility criteria articulated in
Twombly and Iqbal, but also with Fed. R. Civ. R. 9(b)s heightened pleading
standard.9 Am. Dental Assn v. Cigna Corp., 605 F.3d 1283, 1291 (11th Cir.

To satisfy the Rule 9(b) standard, RICO complaints must allege: (1) the
precise statements, documents, or misrepresentations made; (2) the time and place
11

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2010). At the outset, Counts 14 must be dismissed because they fail to meet these
generally required pleading standards.
Specifically, to state a Federal RICO claim (Count 1), Johnson was required
to allege: (1) that an enterprise existed; (2) that the enterprise affected interstate
commerce; (3) that the defendants were employed by or associated with the
enterprise; (4) that the defendants participated, either directly or indirectly, in the
conduct of the enterprise; and (5) that the defendants participated through a pattern
of racketeering activity. Browne, 505 F.3d at 1257. To state a Georgia RICO
claim (Count 3) Johnson must allege that a person, [acted] through a pattern of
racketeering activity or proceeds derived therefrom, to acquire or maintain, directly
or indirectly, any interest in or control of any enterprise, real property, or personal
property of any nature, including money. O.C.G.A. 16-14-4(a).
To allege a pattern of racketeering under both Federal and Georgia RICO,
Johnson had to plausibly allege (1) two racketeering predicates, (2) that are related,
and (3) continuous. See Am. Dental, 605 F.3d at 129091; Adkins v. Cagle Foods
JV, LLC, 411 F.3d 1320, 1325 (11th Cir. 2005). Predicate acts extending over a

of and person responsible for the statement; (3) the content and manner in which
the statements misled the Plaintiffs; and (4) what the Defendants gained by the
alleged fraud. Ambrosia Coal & Constr. Co. v. Pages Morales, 482 F.3d 1309,
131617 (11th Cir. 2007).
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few weeks or months and threatening no future criminal conduct do not suffice.
Browne, 505 F.3d at 1259 (quotation omitted).
To survive a motion to dismiss, RICO conspiracy claims (Counts 2, 4)
require, inter alia, plausible allegations of a RICO violation. [I]f the underlying
allegations of RICO violations are not viable, a conspiracy claim based on those
violations must also fail. Fuller v. Home Depot Servs., LLC, 512 F. Supp. 2d
1289, 1295 (N.D. Ga. 2007).
Johnsons allegations as to each RICO element are non-existent or fail to
state a claim. They are uniformly conclusory and fail for that reason alone. See Am.
Dental, 605 F.3d at 129192 (Plaintiffs do not point to a single specific
misrepresentation . . . it follows that the complaint has not alleged a right to relief
that is plausible on its face.). While Johnson blindly concludes that RICO
violations exist, he fails to plausibly and factually allege the supposed enterprise,
that the enterprise had an effect on interstate commerce, that the Wittstadt
Defendants were employed by or associated with the enterprise, that any predicate
acts were committed, that each Wittstadt Defendant participated in the conduct of
the enterprise, or that the Wittstadt Defendants engaged in a pattern of racketeering
activity. See generally R.8, 79114.

13

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Counts 14 fail for three other reasons. First, the Eleventh Circuit requires
dismissal of RICO claims when plaintiffs have lumped together all of the
defendants in their allegations of fraud. Ambrosia Coal, 482 F.3d at 1317.
Johnson never once allege[s] facts with respect to each defendants participation,
Am. Dental, 605 F.3d at 1291, but instead solely refers to all Defendants
collectively. (R.8, 8284, 9193, 10002, 10911.) Second, the plaintiff has
not pleaded sufficiently the existence of an enterprise that is separate and distinct
from the person under the statute. Therefore, the Plaintiffs [RICO claim] must
fail. Fuller, 512 F. Supp. 2d at 1295. Third, because the underlying allegations of
RICO violations are not viable, a conspiracy claim based on those violations must
also fail. Id. at 1295.
D.

Count 5 is Frivolous, at Best.

A party cannot directly recover civil damages under the federal mail or

wire fraud statutes because [t]he federal mail and wire fraud statutes do not, in
and of themselves, create a private right of action. Am. Gen. Life & Accident Ins.
Co. v. Ward, 509 F. Supp. 2d 1324, 1334 (N.D. Ga. 2007) (citing Napper v.
Anderson, Henley, Shields, Bradford & Pritchard, 500 F.2d 634, 636 (5th Cir.
1974)); see also id. at 1330 (Under Georgia law, the violation of a criminal statute
does not automatically give rise to a civil cause of action.) (quoting Oswald v.
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Am. Natl Can Co., 194 Ga. App. 882, 883 (1990)). Moreover, the only allegation
here, that MSW received a wire initiated by Johnson, is not wire fraud.
Respecting the Courts limited time, we say no more; the claim must be dismissed.
E.

Counts 68 Fail to State a Breach of Contract Claim. No Written

Contract Exists and the Statute of Frauds Precludes the Oral Contract
Claim.
First, no written contract exists between Johnson and the Wittstadt

Defendants.10 To assert otherwise, is a fraud on the Court. (R.8, 126, 132.)

A party who cannot point to any contractual provision that [the defendant]
breached . . . cannot state a claim for breach of contract . . . . Am. Casual Dining,
L.P. v. Moes Sw. Grill, LLC, 426 F. Supp. 2d 1356, 1369 (N.D. Ga. 2006).
Johnson can point to no breached contract provision because no contract exists.
His written contract counts (67) are spurious and his oral contracts fail for lack of
contract, lack of agency and under the statute of frauds. See O.C.G.A. 13-530(2), (7) (Georgias statute of frauds); see also Hathaway v. Bishop, 214 Ga. App.
870, 873 (1994) ([O]ral guarantees are unenforceable under the statute of
frauds.)
10

Plaintiff has attached no loan agreement or guaranty between him and the
Wittstadt Defendants because none exists. Just as this Court could consider such
documents on a Rule 12(b)(6) motion if they did exist, Brooks v. Blue Cross &
Blue Shield of Fla., Inc., 116 F.3d 1364, 1369 (11th Cir. 1997), it should consider
that no such documents exist here.
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Under the Georgia statute of frauds both (1) a promise to answer for the
debt, default, or miscarriage of another and (2) any commitment to lend money
must be in a signed writing to be binding on the promisor. O.C.G.A. 13-5-30(2),
(7); see also Hathaway, 214 Ga. App. at 873 ([O]ral guarantees are unenforceable
under the statute of frauds.). Johnsons conjectured oral guaranty and oral loan are
therefore barred as a matter of law.
Moreover, by law, Hardwick could not act as the Wittstadt Defendants
agent because an agent may not bind a principal on a promissory note made for the
agents own benefit. Ozburn v. Morris & Co., 22 Ga. App. 325, 325 (1918).
Equally important, agency to sign a promissory note must be conferred in express
terms. Exch. Bank v. Thrower, 118 Ga. 433, 433 (1903). Whoever lends to one
claiming the right to make or indorse negotiable paper in the name of another does
so in the face of all the danger signals of business . . . if the lender parts with his
money, he does so at his own peril. If the power was not in fact conferred, he must
bear the loss occasioned by his own folly . . . So strict is the rule that it will not be
presumed even from an appointment of one as general agent . . . [.] Id.

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F.

Count 9 Fails to State Actionable Fraud.

Johnsons fraud claim11 fails for three independent reasons: (1) he makes no

well-pleaded allegations that the Wittstadt Defendants (as opposed to Hardwick)

are liable for fraud; (2) he fails to plead with the particularity required by Rule
9(b); and (3) the alleged fraud consists only of broken promises.
Unable to point to a single interaction between him and any of the Wittstadt
Defendants, Johnson simply concludes that Hardwick acted on his own behalf,
and on behalf of [the Wittstadt Defendants], as a duly authorized agent and
employee, with their full knowledge, actual or constructive, and their full
authorization, express or implied. (R.8, *92, *101.) Conclusory statements bear
no weight. Iqbal, 556 U.S. at 679. And, Hardwick could not be acting as the agent
of any party to the alleged loan agreement because, if Johnsons allegations are to
be believed, Hardwick was defrauding all parties. See Pursley v. Stahley, 122 Ga.

11

Actionable fraud requires: (1) a false representation by a defendant of a

material fact; (2) scienter, or knowledge of the falsity by the defendant; (3) an
intention to induce the plaintiff to act or refrain from acting; (4) justifiable reliance
by the plaintiff; and (5) damage to the plaintiff. Stiefel v. Schick, 260 Ga. 638, 639
(1990); Brown v. Morton, 274 Ga. App. 208, 210 (2005); Intl Indem. Co. v.
Terrell, 178 Ga. App. 570, 574 (1986). Because the Complaint lacks plausible,
non-conclusory allegations supporting any of these five elements, Johnsons fraud
claim is not actionable as a matter of law.
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362, 362 (1905) (attorney who fraudulently drafted note to increase his own profit
could not be agent of either party).
Second, and as set forth in Section II.A.3 above, Johnson fails to plead with
particularity. Johnsons allegation, Hardwick made representations, identified
above and fully incorporated herein is a hornbook Rule 9(b) violation. (R.8,
*91.)
Third, an allegation of fraud based on broken promises is not actionable.
The general rule is that actionable fraud cannot be predicated upon promises to
perform some act in the future. Nor does actionable fraud result from a mere
failure to perform promises made. Otherwise any breach of a contract would
amount to fraud. Equifax, Inc. v. 1600 Peachtree, LLC, 268 Ga. App. 186, 195
(2004) (quotation omitted). Hardwicks alleged promise to repay Johnson $4
million cannot equate to fraud against the Wittstadt Defendants under Georgia law.
G.

Count 10, Alleged Breach of Fiduciary Duty, Fails for Two Reasons.
Johnson fails to state a claim for breach of fiduciary duty12 for two

independent reasons: (1) he makes no well-pleaded allegation for a fiduciary duty

12

Establishing a claim for breach of fiduciary duty requires proof of three

elements: (1) the existence of a fiduciary duty; (2) breach of that duty; and (3)
damage proximately caused by the breach. SunTrust Bank v. Merritt, 272 Ga.
App. 485, 489 (2005) (quotation omitted).
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between himself and the Wittstadts; and (2) he does not plead with particularity.
Par for Johnsons pleading course, he again rests entirely on a meaningless
conclusion: All defendants, and each of them, owed Johnson a fiduciary duty.
(R.8, *104.) This conclusion has no effect. Iqbal, 556 U.S. at 679. The Wittstadt
Defendants had no communications with Johnson regarding the supposed loan,
had no knowledge of the alleged loan, were not present for any of the alleged
communications between Johnson and Hardwick, and neither Wittstadt had an
attorney-client relationship with Johnson at any time.13 Contrary conclusory
statements mean nothing without plausible factual allegations to support them.
Second, and as set forth in Section II.A.3 above, Johnson fails to plead the
allegedly fraudulent breach with the particularity required by Rule 9(b). See
Wagner, 464 F.3d at 1278 (fraud allegations in a non-fraud claim must satisfy Rule
9(b)).
H.

Counts 11-12 Fail to State Claims for Negligence or Negligence Per Se.
Count 11 is frivolous. Negligence per se requires violation of a statute or

ordinance, not alleged violations of professional rules. See Amick v. BM & KM,
Inc., 275 F. Supp. 2d 1378, 1382 (N.D. Ga. 2003) (outlining elements of
13

Johnson has no relationship whatsoever with the Wittstadts. None. He has

never met or spoken to Rod and has had no more than a single, brief, social
introduction to Mark.
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negligence per se claim under Georgia law). An allegation that an attorney has
failed to comply with the Georgia Rules of Professional Conduct does not
constitute negligence per se. Allen v. Lekoff, Duncan, Grimes & Dermer, P.C., 265
Ga. 374, 377 (1995).
In addition, Johnsons ordinary negligence14 theory fails to state a claim for
four reasons: (1) the underlying fraud is not pleaded with particularity; (2) the
Wittstadt Defendants owed no duty as a matter of law; (3) Johnsons breach
conclusions are inactionable; and (4) Georgias economic loss doctrine bars a
negligence claim.
First, negligence premised on an underlying fraud must be pleaded with
particularity. See Wagner, 464 F.3d at 1278. Otherwise, Johnson could make an
end-run around Rule 9(b). See id. Once again, Johnsons generic references to
Hardwicks alleged fraud, concealment, and false representations are insufficient.
Second, the Wittstadt Defendants have no duty to protect Johnson from
Hardwick, a third party, as a matter of law. As held by the Georgia Supreme Court,
14

To state a cause of action for negligence in Georgia . . . there must be (1)

a legal duty to conform to a standard of conduct raised by the law for the
protection of others against unreasonable risks of harm; (2) a breach of this
standard; (3) a legally attributable causal connection between the conduct and the
resulting injury; and (4) some loss or damage flowing to the plaintiff's legally
protected interest as a result of the alleged breach of the legal duty. City of
Douglasville v. Queen, 270 Ga. 770, 771 (1999).
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one owes no duty to protect another from injuries inflicted by a third party. May
v. State, 295 Ga. 388, 398 (2014).
Third, Johnson only presents inactionable conclusions to the effect that the
Wittstadt Defendants allow[ed] Hardwick to make false representations and did
not take reasonable steps to prevent Hardwick from acting in such a manner with
no factual support. (R.8, *120.) To be sure, were there anything that could have
been done to stop Hardwick, the Wittstadt Defendants undeniably would have
acted to prevent their own loss of tens of millions of dollars.
Fourth, a party who suffers purely economic losses must seek his remedy in
contract and not in tort. Gen. Elec. Co. v. Lowes Home Ctrs., Inc., 279 Ga. 77, 78
(2005). Here, Johnson attempts to do both. But, Johnsons alleged economic loss
bars recovery under his negligence theories.
I.

Count 13 Fails to State a Claim for Money Had and Received.

Claims for unjust enrichment and money had and received are not separate

causes of action. An action for money had and received is merely one form of
action to recover damages based on unjust enrichment. National City Bank v.
Busbin, 175 Ga. App. 103, 107 (1985). In addition to failing as a shotgun claim,
Johnsons purported claim for money had and received/unjust enrichment fails for

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two additional reasons: (1) he alleges that only one Wittstadt Defendant received
money; and (2) this claim is only viable when there is no alleged contract.
Because the Complaint does not allege that any defendant other than MSW
received any money, it is improper as to all other Wittstadt Defendants for this
reason alone. (R.8, *124, *127.) See Haugabook v. Crisler, 297 Ga. App. 428,
432 (2009) (In order to maintain an action for money had and received it is
necessary to establish that defendants have received money belonging to the
plaintiff or to which he is in equity and good conscience entitled.) (quotation
omitted).
Equally important, Count 13 fails against all Wittstadt Defendants because
Johnson alleges the existence of a contract. Under Georgia law, [t]he theory of
unjust enrichment applies when there is no legal contract[.] Bolinger v. First
Multiple Listing Serv., Inc., 838 F. Supp. 2d 1340, 1366 (N.D. Ga. 2012) (quoting
Smith Serv. Oil Co. v. Parker, 250 Ga. App. 270, 271 (2001)). Count 13 expressly
incorporates, as if set forth herein, allegations of a valid promissory note and
guaranty. (R.8, *123 (incorporating 6874 alleging the existence of a
contract).) Even though Johnson is wrong in his misplaced contract allegations, an
unjust enrichment/money had and received claim cannot stand when, like here, a
complaint inconsistently alleges the existence of a contract and unjust enrichment
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in the same count. See Am. Casual Dining, 426 F. Supp. 2d at 1372 (dismissing
claim incorporating inconsistent allegation of a valid contract).
J.

Count 14 Fails to State a Conversion Claim.

Johnsons conversion count fails for three independent reasons: (1) he does

not allege that any defendant but MSW has actual possession of any money; (2)
conversion is not the appropriate claim for failure to pay money allegedly owed;
and (3) he admits he had no right to the funds at the time of the alleged conversion.
First, actual possession is a necessary element for a conversion claim.
Washington v. Harrison, 299 Ga. App. 335, 338 (2009). Count 14 must be
dismissed as to all defendants but MSW because Johnson does not allege that any
defendant but MSW has actual possession of any property. (R.8, *124, *127.)
Second, under Georgia law, conversion is not a viable claim where there is
nothing more than a failure by the defendant to pay money owed to the plaintiff.
Internal Med. Alliance, LLC v. Budell, 290 Ga. App. 231, 239 (2008). Here, the
conversion allegation merely alleges that MSW owes Johnson $3 million.
Allowing Plaintiffs conversion claim to proceed would directly contradict
Budells clear statement of black letter Georgia law.
Third, Count 14 must be dismissed because Johnson admits that he
voluntarily relinquished control over his funds at Hardwicks request. (R.8, 59
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60, *131). In Georgia, to maintain an action to recover for the conversion of

personalty, a plaintiff must establish . . . that either he or his predecessor in interest
had possession or an immediate right to possession of the converted property at the
time of the alleged conversion. Levenson v. Word, 286 Ga. 114, 11516 (2009)
(internal citation omitted). By Johnsons own admission, he had no right to
possession of the funds until months after he wired them and asserted the alleged
acceleration clause. (R.8, 6970.)
K.

Count 15 Fails to State a Claim for Equitable Relief.

Johnson seeks equitable relief in the form of rescission or constructive trust.

(R.8, *147, *149.) Neither is available to him.

It is axiomatic that before Johnson can rescind a contract, he must have an
enforceable contract. As shown in Section II.E. above, Johnson has no contract. He
cant produce a written contract and, by law, has no oral contract. As such, to the
extent an equitable rescission count is asserted, it must be dismissed.
In Georgia, a constructive trust is a remedy created by a court in equity to
prevent unjust enrichment . . . it is not an independent cause of action . . . but a
device by which property might be recovered if [the Plaintiffs] unjust enrichment
claim were to prevail. St. Paul Mercury Ins. Co. v. Meeks, 270 Ga. 136, 137
(1998). Stating a wished-for remedy does not equate to stating a claim.
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L.

Counts 1617 Allege Remedies, Not Causes of Action.

Both attorneys fees and punitive damages are remedies, not causes of

action. And, as already discussed above, these remedies are not available to
Johnson because he cannot state a substantive claim for relief.
III.

CONCLUSION

Johnsons conclusory and inflammatory assertions do not state a claim

against the Wittstadt Defendants. Simply put, what Johnson theorizes, did not
happen. No amount of re-pleading can revive Johnsons baseless claims. The Court
should dismiss with prejudice Johnsons Complaint as to the Wittstadt Defendants.
Respectfully submitted this 3rd day of November, 2014.
PARKER HUDSON RAINER & DOBBS LLP
/s/ William J. Holley, II
William J. Holley, II
Georgia Bar No. 362310
WJH@phrd.com
Scott E. Zweigel
Georgia Bar No. 786616
SEZ@phrd.com
1500 Marquis Two Tower
285 Peachtree Center Avenue NE
Atlanta, Georgia 30303
Telephone: (404) 523-5300
Facsimile: (404) 522-8409
Attorneys for the Wittstadt Defendants

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CERTIFICATE OF COMPLIANCE
In compliance with Local Rule 7.1D, I certify that the foregoing
WITTSTADT DEFENDANTS MEMORANDUM OF LAW IN SUPPORT OF
MOTION TO DISMISS has been prepared in conformity with Local Rule 5.1.
The foregoing memorandum was prepared with Times New Roman (14 point)
type, with a top margin of one and one-half (1 ) inches and a left margin of one
(1) inch. This memorandum is proportionately spaced, and is no longer than 25
pages.

/s/ William J. Holley, II

William J. Holley, II

Case 1:14-cv-03457-SCJ Document 9-1 Filed 11/03/14 Page 27 of 27

CERTIFICATE OF SERVICE
I hereby certify that I have this day served a copy of the within and
foregoing THE WITTSTADT DEFENDANTS MEMORANDUM OF LAW
IN SUPPORT OF MOTION TO DISMISS with the Clerk of Court using the
CM/ECF system which will automatically send email notification of such filing to
the attorneys of record in this action.
This 3rd day of November, 2014.

/s/ William J. Holley, II

William J. Holley, II