Case 0:15-cv-60034-UU Document 125 Entered on FLSD Docket 07/20/2016 Page 1 of 16

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA
Case No. 0:15-cv-60034-UU
ENERGY SUPREME LLC,
Plaintiff,
v.
SUPREME ENERGY RESOURCES, INC., et al.,
Defendants.
__________________________________________________/
ORDER
THIS CAUSE is before the Court upon Plaintiffs Motion for Summary Judgment as to
Count IV for Violation of the Florida Securities and Investor Protection Act (D.E. 113) and
Defendants Motion to Dismiss Plaintiffs Florida State Law Claims [DE 1] (D.E. 115).
THE COURT has reviewed the Motions, the pertinent portions of the record and is
otherwise fully advised of the premises.
BACKGROUND
On January 6, 2015, Plaintiff, Energy Supreme, LLC (Plaintiff), filed this action
against Defendants, Supreme Energy Resources, Inc. (Supreme Energy) and Marc Walther
(Walther) (collectively, Defendants). 1

D.E. 1.

In its Complaint, Plaintiff alleges the

following claims: (1) violation of Section 10(b) of the Securities and Exchange Act of 1934 and
Rule 10b-5, 15 U.S.C. 78j(b) against Defendants, (2) violation of Section 20(a) of the
Securities and Exchange Act of 1934 against Walther, (3) violation of Section 12(a)(2) of the
1

In the Courts prior Order on Plaintiff Energy Supreme LLCs Motion for Summary Judgment
(D.E. 108), the Court addressed the procedural history of this case in detail. Because Plaintiffs
Motion for Partial Summary Judgment is narrowly directed at one count, the Court will not recite
the entirety of the procedural history in this Order.
1

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Securities and Exchange Act of 1933, (4) securities fraud pursuant to Florida Securities and
Investor Protection Act against Defendants, and (5) common law fraud against Defendants.
D.E. 1.
On December 18, 2015, Plaintiff moved for summary judgment against Defendants as to
the five counts of Plaintiffs Complaint. D.E. 84. On March 14, 2016, this Court issued her
Order on Plaintiffs Motion for Summary Judgment. D.E. 108. The Court denied Plaintiffs
Motion principally on the grounds that Plaintiff failed to establish loss causation, a necessary
element of each of the claims. But, the Court entered summary judgment against Plaintiff as to
Count Three, its claim for a violation of section 12(2) of the Securities Act of 1933, because
section 12(2) is applicable only to public offerings, and this case only involves a private
agreement to sell securities.
On March 16, 2016, the parties attended a Pre-Trial Conference. D.E. 112. Following
the Conference, this Court issued an Order allowing Defendants to move for dismissal of
Plaintiffs Florida state law claims in light of the pendency of a parallel state court proceeding. 2
The Court also permitted Plaintiff to move again for summary judgment as to its claim in Count
Four for violation of the Florida Securities and Investor Protection Act, Fla. Stat. 517.301,
based upon E.F. Hutton & Co., Inc. v. Rousseff, 537 So. 2d 978 (Fla. 1989) a case that Plaintiff

On June 21, 2013, Plaintiff filed an action against Defendants, Supreme Energy and Impact
Fusion, in the Circuit Court of the Seventeenth Judicial Circuit in and for Broward County,
Florida. In the state court action, Plaintiff asserted the following state law claims: breach of
contract, unjust enrichment, and breach of implied covenant of good faith and fair dealing.
Plaintiff then filed its action against Defendants before this Court on January 6, 2015. In both
actions, Plaintiff is seeking approximately $250,000 in damages. At the Conference, the Court
inquired into the status of the state court proceeding and asked the parties whether res judicata
would bar the present action and whether Plaintiff improperly split its cause of action.
Thereafter, the Court required the parties to brief this issue to satisfy the Court that she may
properly exercise jurisdiction over this action.

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presented and argued to the Court at the March 16th Conference.

On March 18, 2016, Plaintiff

filed its Motion for Partial Summary Judgment as to Count IV for Violation of the Florida
Securities and Investor Protection Act. D.E. 113. On March 28, 2016, Defendants filed their
Motion to Dismiss Plaintiffs Florida State Law Claims. D.E. 115.
The Motions are now ripe for this Courts consideration. The Court will first address
Defendants Motion to Dismiss Plaintiffs State Law Claims, and then Plaintiffs Motion for
Partial Summary Judgment.
DEFENDANTS MOTION TO DISMISS PLAINTIFFS STATE LAW CLAIMS
Defendants move to dismiss Counts IV and V of Plaintiffs Complaint, alleging
respectively Plaintiffs claim for a violation of FSIPA and its claim for common law fraud.
Defendants argue that these claims should be dismissed on the grounds that Plaintiff improperly
split its cause of action, and Plaintiff should have alleged these claims in the parallel state court
proceeding, which it filed prior to this action. In response, Plaintiff argues that the rule against
splitting causes of action is inapplicable because the federal and state court actions do not arise
from the same transaction and occurrence. Plaintiff further argues that the rule against splitting
causes of action is inapplicable because the state court does not have jurisdiction over claims
brought under Sections 10 and 20 of the Securities Exchange Act of 1934, 47 Stat. 891, 15
U.S.C. 78jb.
Under Florida law, [t]he rule against splitting causes of actions is designed to prevent a
multiplicity of suits. Bowman v. Coddington, 517 Fed. Appx. 683, 685 (11th Cir. 2013) (citing
3

In addition, the Court ordered Plaintiff to file a separate trial brief on whether the convertible
note in this case qualifies as a security for purposes of liability under sections 10(b) of the
Securities and Exchange Act of 1934, 15 U.S.C. 78j(b) and 78t(a), and Rule 10b-5.3In this
case, the parties do not dispute that the Convertible Note qualifies as a security as defined by
15 U.S.C. 78c(a)(10). D.E. 114. Because the qualification of the Note as a security is not a
disputed fact, this is not an issue that the Court will consider further.
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Brody Constr., Inc. v. Fabri-Built Structures, Inc., 322 So. 2d 61, 63 (Fla. 4th DCA 1975)).
The law presumes that a single cause of action can be tried and determined in one suit, and will
not permit the plaintiff to maintain more than one action against the same party for the same
cause, and if the first suit is effective and available, and affords ample remedy to the plaintiff,
the second suit is unnecessary. Id. (citing Mims v. Reid, 98 So. 2d 498, 501 (Fla. 1957)).
However, [i]t is well established that the general rule against splitting causes of action
does not apply when suit is brought in a court that does not have jurisdiction over all of a
plaintiffs claims. See Aquatherm Indus., Inc. v. Fla. Power & Light Co., 84 F.3d 1388, 1392
(11th Cir. 1996) (citing Restatement of Judgments (Second) 25) (If . . . the court in the first
action would clearly not have had jurisdiction to entertain the omitted theory or ground . . . then
a second action in a competent court presenting the omitted theory or ground should be held not
precluded.); 18 Charles A. Wright, Arthur R. Miller, Edward H. Cooper, Federal Practice &
Procedure: Jurisdiction 4470 (1981) (On balance, it seems better to reject claim preclusion
when jurisdiction is exclusively federal); see also Hayes v. Solomon, 597 F.2d 958, 984 (5th Cir.
1979) (holding that [t]he principle of res judicata which prohibits splitting a cause of action
applies only to claims capable of recovery in the first action.).
The Court agrees with Plaintiff that the claim-splitting doctrine is not applicable under
the facts of this case. Here, Plaintiff was required to file its Sections 10 and 20 claims in this
Court because federal courts have exclusive jurisdiction over such claims. See Merrill Lynch,
Pierce, Fenner & Smith Inc. v. Manning, 136 S.Ct. 1562, 1568 (2016) (Section 27 . . . provides
federal district courts with exclusive jurisdiction of all suits in equity and actions at law brought
to enforce any liability or duty created by [the Securities Exchange Act of 1934] or the rules and
regulations thereunder.). Further, because the elements of the Section 10 claim are intertwined

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with the elements of FSIPA and common law fraud claims, the Court agrees with Plaintiff that it
would have been a waste of time and resources for Plaintiff to have asserted its Florida state law
claims in the state action, while Plaintiffs Section 10 federal securities fraud claim was pending
before this Court.
Accordingly, Defendants, Supreme Energy Resources, Inc. and Marc Walther, Motion to
Dismiss Plaintiffs Florida State Law Claims is DENIED.
PLAINTIFFS MOTION FOR PARTIAL SUMMARY JUDGMENT
A. Factual Allegations
The following facts are not in dispute unless otherwise indicated. Steven Adelstein
(Adelstein) is the sole manager of Plaintiff. D.E. 84-2; Adelstein Aff. 1. Defendant, Marc
Walther (Walther), is the Chief Executive Officer (CEO) of Defendant, Supreme Energy
Resources, Inc. (Supreme Energy) and Defendant, Impact Fusion International, Inc. (Impact
Fusion). Walther Dep. 128:3-4.
In 2012, Walther, acting on behalf of Supreme Energy and Impact Fusion, contacted
Adelstein about the possibility of his making a $400,000 investment in Supreme Energy. D.E. 1
15. At that time, Supreme Energy was a relatively new business without consistent cash flow
and significant assets. D.E. 1 16. Adelstein was unwilling to risk more than $250,000.
Adelstein Dep. 39:10-18. After a period of discussion, Adelstein and Walther settled on a
transaction that would entail a $250,000 loan to be made by a new entity, which loan would be
convertible into a 33.3% stock ownership interest in Supreme Energy, a seat for Adelstein on
Supreme Energys Board of Directors, and a loan guaranty of Impact Fusion. D.E. 1 16.
Absent the conversion rights and a seat on the Board of Directors, Adelstein was not interested in

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loaning any funds to Supreme Energy (Adelstein Dep. 57:2-9, 58:3-20), and Walther knew that
(Walther Dep. 195:24-196:7).
On December 19, 2012, Plaintiff and Supreme Energy executed a Letter of Intent
(LOI). D.E. 1-1; Adelstein Aff. 2. Consistent with the preliminary discussions, the LOI
provided for a loan from Plaintiff to Supreme Energy in the amount of $250,000. Walther Dep.
62:14-16. The LOI further provided for Plaintiff, at its option, to convert its $250,000 loan into
the capital stock of [Supreme Energy] representing an ownership interest of thirty-three and
one-third percent (33.3%) on a fully diluted basis. D.E. 1-1 3. The LOI also stated that
Adelstein, or his appointee, would be nominated to Supreme Energys Board of Directors
(Walther Dep. 643-65:1), and that Adelstein would be entitled to one (1) board seat (Walther
Dep. 65:2-6).
On December 19, 2012 the same day the Letter of Intent was executed a quorum of
Supreme Energys Board of Directors consisting of Walther and Joseph Scivoletto, secretly
adopted a Resolution of the Board of Directors of Supreme Energy to issue Series A Preferred
Shares. Walther Dep. 79:6-15; D.E. 84-3, Resolution. The Resolution expressly stated that the
quorum of the board of directors of the company adopted the foregoing resolution on December
19, 2012. D.E. 84-3, Resolution. Further, the Resolution authorized the issuance of 666 shares
of Series A Preferred Shares to each of the following: JSR Productions, LLC (an entity
controlled solely by Walther), RMS7 (an entity controlled solely by Scivoletto), Inc., and Bottom
Line Holdings, Inc. (an entity solely controlled by Walthers long-time associate, Rhonda
Windsor). D.E. 84-3, Resolution; Walther Dep. 132:5. The Resolution did not reference voting
rights but Walther intended to issue the preferred shares with voting rights of 150 to 1 share of

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common stock as a means of protecting the corporation from hostile parties.. Walther Dep. 74,
25- 75, 1-7, 78, 10-25.
The Adelstein and Walthers continued to negotiate after they executed the LOI (D.E. 18
31; D.E. 48 31), but at no time did Walther tell Adelstein that Supreme Energy intended to
issue Preferred Shares. Walther Dep. 79:6-15. Those negotiations were concluded on January
24, 2013 when Plaintiff and Supreme Energy entered into a Convertible Promissory Note
(Note) and Bridge Loan Agreement (Bridge Loan). D.E. 18 19, 32; D.E. 48 19, 21,
32; D.E. 1-2; D.E. 1-3; Adelstein Aff. 3, 4. Walther executed these documents on Supreme
Energys behalf. Id.
The Bridge Loan Agreement and Note provided for a loan of $250,000 payable as
follows: two $125,000.00 installments due from Plaintiff on or before January 28, 2013 and
February 15, 2013. Adelstein Aff. 10. Additionally, the Bridge Loan Agreement contained a
representation that Supreme Energys capital stock is wholly owned by Impact Fusion and
provided for Impact Fusions guaranty of payment. Walther Dep. 144:9-16; D.E. 1-2; D.E. 1-3.
It also provided Plaintiff with the right, at its option, to convert its $250,000.00 loan into the
capital stock of [Supreme Energy] representing an ownership interest of thirty-three and onethird percent (33.3%) on a fully diluted basis. D.E. 1-3 1. Section 7 of the Bridge Loan
Agreement contained the Representations and Warranties of [Supreme Energy]. Section 7(e)
of the Bridge Loan Agreement stated, The outstanding capital stock of [Supreme Energy] is as
set forth on Schedule 2 attached hereto and made a part hereof, and is currently owned by
[Impact Fusion]. D.E. 1-3; D.E. 18 33; D.E. 48 33. The Bridge Loan Agreement and
Schedule 2 did not reference any Preferred Shares. Walther Dep. 72:12-19; D.E. 1-3. The
Bridge Loan Agreement also provided in Section 3 that Adelstein, or his appointee would be

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entitled to 1 board seat (out of 4) . . . as long as (i) the Loan is outstanding or (ii) the Lender
has an ownership interest in the Borrower. D.E. 1-3.
Instead of making two $125,000 payments, Plaintiff, through its counsel, Wayne H.
Miller, Esq., loaned Supreme Energy a total of $244,500.00 (Adelstein Aff. 11), in the
following amounts on the following dates:

$11,500.00 paid on January 28, 2013 to Dynaris, Inc., a supplier of

Supreme Energy, at Walthers request;

$138,500.00 paid on January 30, 2013 to Supreme Energy;

$7,500.00 paid on February 6, 2013 to Wayne H. Miller, Esq., for

attorneys fees and costs as provided for in Section 9(d) of the Bridge
Loan Agreement;

$75,000.00 paid on February 7, 2013 to Supreme Energy; and

$12,000.00 paid on April 1, 2013 to Supreme Energy.

Unknown to Adelstein and Plaintiff, Walther caused the issuance of the preferred shares
in February 2013. D.E. 84-4. The preferred shares conferred voting rights of 150 to one share of
common stock. Walther Dep. 74:25-75:1. In June, 2013, Adelstein learned that Walther had
issued the preferred shares (Adelstein Dep. 78:8-22). Adelstein thereafter demanded repayment
(Adelstein Dep. 80:13-18). Neither Supreme Energy nor Impact Fusion has returned any funds
to Plaintiff. Walther Dep. 58:3-4; Adelstein Aff. 17.
B. Legal Standard
Summary judgment is authorized only when the moving party meets its burden of
demonstrating that the pleadings, depositions, answers to interrogatories and admissions on file,
together with the affidavits, if any, show that there is no genuine issue as to any material fact and
that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56. When
determining whether the moving party has met this burden, the Court must view the evidence

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and all factual inferences in the light most favorable to the non-moving party. Adickes v. S.H.
Kress & Co., 398 U.S. 144, 157 (1970); Rojas v. Florida, 285 F.3d 1339, 1341-42 (11th Cir.
2002).
The party opposing the motion may not simply rest upon mere allegations or denials of
the pleadings; after the moving party has met its burden of proving that no genuine issue of
material fact exists, the non-moving party must make a showing sufficient to establish the
existence of an essential element of that partys case and on which that party will bear the burden
of proof at trial. See Celotex Corp. v. Catrell, 477 U.S. 317 (1986); Poole v. Country Club of
Columbus, Inc., 129 F.3d 551, 553 (11th Cir. 1997); Barfield v. Brierton, 883 F.2d 923, 933
(11th Cir. 1989).
If the record presents factual issues, the Court must not decide them; it must deny the
motion and proceed to trial. Envntl. Def. Fund v. Marsh, 651 F.2d 983, 991 (5th Cir. 1981).
Summary judgment may be inappropriate even where the parties agree on the basic facts, but
disagree about the inferences that should be drawn from these facts. Lighting Fixture & Elec.
Supply Co. v. Contl Ins. Co., 420 F.2d 1211, 1213 (5th Cir. 1969). If reasonable minds might
differ on the inferences arising from undisputed facts, then the Court should deny summary
judgment. Impossible Elec. Techs., Inc. v. Wackenhut Protective Sys., Inc., 669 F.2d 1026, 1031
(5th Cir. 1982); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) ([T]he
dispute about a material fact is genuine . . . if the evidence is such that a reasonable jury could
return a verdict for the nonmoving party.)
Moreover, the party opposing a motion for summary judgment need not respond to it
with evidence unless and until the movant has properly supported the motion with sufficient
evidence.

Adickes, 398 U.S. at 160.

The moving party must demonstrate that the facts

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underlying the relevant legal questions raised by the pleadings or are not otherwise in dispute, or
else summary judgment will be denied notwithstanding that the non-moving party has introduced
no evidence whatsoever. Brunswick Corp. v. Vineberg, 370 F.2d 605, 611-12 (5th Cir. 1967).
The Court must resolve all ambiguities and draw all justifiable inferences in favor of the nonmoving party. Liberty Lobby, Inc., 477 U.S. at 255.

C. Analysis
In its Motion for Partial Summary Judgment, Plaintiff moves for summary judgment as to
Count IV of its Complaint for a Violation of the Florida Securities and Investor Protection Act
(FSIPA) under Florida Statute section 517.307. Plaintiff argues that it is entitled to summary
judgment as a matter of law on its FSIPA claim because proof of loss causation is not a
necessary element to prevail under Florida law, and the remaining elements required to succeed
on the claim have been established as a matter of law in the Courts prior Order on the Motion
for Summary Judgment (D.E. 108).
In response, Defendants argue that Plaintiff is prohibited from seeking rescission as a
remedy because Plaintiff only sought damages in its Complaint. Furthermore, Defendants argue
that Plaintiff is not entitled to judgment for damages because it did not exercise its conversion
rights, and therefore, it is impossible to calculate the difference between the consideration paid
for the security and the value of the security . . . at the time it was disposed of by the plaintiff.
Defendants then argue that even if Plaintiff is entitled to rescission, Plaintiff is not entitled to
attorneys fees because it did not plead a claim for attorneys fees in its Complaint.

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The Court will address the following: (1) whether Plaintiff is entitled to summary
judgment on its FSIPA claim; (2) whether Plaintiff is entitled to rescission as a remedy
notwithstanding its failure to plead rescission as a remedy in its Complaint; and (3) whether
Plaintiff is entitled to attorneys fees as the prevailing party.
1. Plaintiffs FSIPA claim
Section 517.301 of the Florida Securities and Investor Protection Act makes it unlawful
for any person in connection with the offer, sale, or purchase of any investment or security
1. To employ any device, scheme, or artifice to defraud;
2. To obtain money or property by means of any untrue statement of a
material fact or any omission to state a material fact necessary in order to
make the statements made, in light of the circumstances under which they
were made, not misleading; or
3. To engage in any transaction, practice, or course of business which
operates or would operate as a fraud or deceit upon a person.
Fla. Stat. 517.301(1); see also Gripp v. Perazzo, 357 F.3d 1218, 1222 (11th Cir. 2004). Florida
Statute section 517.211 provides for the following remedies:
(2) Any person purchasing or selling a security in violation of s. 517.301,
and every director, officer, partner, or agent of or for the purchaser or
seller, if the director, officer, partner, or agent has personally participated
or aided in making the sale or purchase, is jointly and severally liable to
the person selling the security to or purchasing the security from such
person in an action for rescission, if the plaintiff still owns the security, or
for damages, if the plaintiff has sold the security.
(3) In an action for rescission:
(a) A purchaser may recover the consideration paid for the security or
investment, plus interest thereon at the legal rate, less the amount
of any income received by the purchaser on the security or
investment upon tender of the security or investment.
(b) A seller may recover the security upon tender of the consideration
paid for the security, plus interest at the legal rate, less the amount
of any income received by the defendant on the security.

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(4) In an action for damages brought by a purchaser of a security or

investment, the plaintiff shall recover an amount equal to the difference
between:
(a) The consideration paid for the security or investment, plus
interest thereon at the legal rate from the date of purchase; and
(b) The value of the security or investment at the time it was
disposed of by the plaintiff, plus the amount of any income
received on the security or investment by the plaintiff.
(5) In an action for damages brought by a seller of a security, the plaintiff
shall recover an amount equal to the difference between:
(a) The value of the security at the time of the complaint, plus the
amount of any income received by the defendant on the security;
and
(b) The consideration received for the security, plus interest at the
legal rate from the date of sale.
Fla. Stat. 517.211.
In Gripp, the Eleventh Circuit Court of Appeals stated that [t]he elements of a cause of
action under 517.301 are identical under the Federal Rule 10b-5, except that the scienter
requirement under Florida law is satisfied by showing of mere negligence. 357 F.3d at 1222
(citing Gochnauer v. A.G. Edwards & Sons, Inc., 810 F.2d 1042, 1046 (11th Cir. 1987)).
However, the Florida Supreme Court subsequently held that proof of loss causation is not
required in a civil securities proceeding under sections 517.211 and 517.301, Florida Statutes.
E.F. Hutton & Co., Inc. v. Rousseff, 537 So. 2d 978, 981 (1989). The Florida Supreme Court
explained that compared to Rule 10b-5, [t]he Florida statutes . . . are far more restrictive. Id. at
981.

In a claim for relief under section 517.301, [t]he elements . . . in a nutshell, are

misrepresentation of a material fact on which the buyer justifiably relied. Id. at 981. The
Florida Supreme Court further emphasized, [l]oss causation has never been required there. The

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buyer need not show any causal connection between the misrepresentation and his damage;
indeed, he need not even show that he has been damaged. Id.
In this Courts prior Order denying Plaintiffs Motion for Summary Judgment, this Court
found as follows:
(1) It is undisputed that Walther failed to disclose to Plaintiff, either orally or
in any of the written documents, that Supreme Energy was issuing or
intended to issue preferred shares to any other entities (D.E. 108, p. 10);
(2) Based upon the record evidence, it is clear that had Adelstein been aware
that Supreme Energy was going to issue preferred shares with voting
rights of 150 to one common shares, he would not have entered into the
Agreement with Plaintiff. Thereafter it is undisputed that Walthers
omission was material to the transaction (D.E. 108, p. 11);
(3) Based upon the record evidence, the Court finds there is a strong inference
Walther acted with the requisite state of mind in failing to disclose that
Supreme Energy was issuing preferred shares with voting rights . . .
Walthers scienter, therefore, is undisputed (D.E. 108, p. 12); and
(4) With respect to the justifiable reliance element of this claim, the United
States Supreme Court has removed Plaintiffs burden of coming forward
with evidence of reliance on an omission (D.E. 108, p. 12).
The sole basis upon which this Court previously denied summary judgment was Plaintiffs
failure to meet its burden in proving loss causation in Plaintiffs Rule 10b-5 claim. The Court
found that the proximate cause of Plaintiffs alleged loss was from Defendants nonpayment of
the Note, not from the alleged omission. Because Plaintiff never exercised its conversion rights,
or even attempted to exercise its right, the Court concluded it was impossible to ascertain loss
causation, which Plaintiff was required to prove in order to succeed on its claim. See Pelletier v.
Stuart-James Co., Inc., 863 F.2d 1550, 1557 (11th Cir. 1989).
However, based upon the Supreme Court of Floridas opinion in E.F. Hutton & Co., Inc.
v. Rousseff, 537 So. 2d 978 (Fla. 1989), it is clear that Plaintiff is not required to prove loss
causation in order to prevail on its FSIPA claim. See E.F. Hutton, 537 So. 2d at 981 (Proof of

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loss causation is not mentioned in sections 517.211 or 517.301 . . . Accordingly, we hold that
proof of loss causation is not required in a civil securities proceeding under sections 517.211 and
517.301, Florida Statutes.). As noted by the Florida Supreme Court, the statute is far more
restrictive than a federal Rule 10b claim, and [b]ecause section 517.211 contains an express
civil liability provision, Florida courts need fashion no court-made civil right. They need only
follow the clear language of the statute. Id. at 981. In considering the E.F. Hutton ruling, along
with the undisputed facts addressed in the Courts prior Order on Plaintiffs Motion for Summary
Judgment (D.E. 108), the Court finds that Plaintiff has met its burden in proving each element of
its FSIPA claim as a matter of law. Accordingly, Plaintiffs Motion for Partial Summary
Judgment is GRANTED.
2. Rescission Remedy
Defendants argue that Plaintiff is not entitled to a judgment for rescission because
Plaintiff did not expressly request the remedy of rescission in its Complaint. Defendants insist
that Plaintiff only sought damages in its Complaint, and therefore, it is barred from obtaining
rescission as a remedy at this stage. In response, Plaintiff argues that it pleaded a violation of
FSIPA in its Complaint, and section 517.211 of the Florida Statutes sets forth the available
remedies for such a violation, which includes rescission as a remedy.
The Court agrees with Plaintiff that it is not barred from obtaining rescission as a remedy
notwithstanding the fact that Plaintiff failed to plead such relief in its Complaint. Under section
517.211 of the Florida Statutes, it is clear that rescission is available as a remedy. Defendants
cannot then argue that they were not placed on notice that Plaintiff might seek rescission if it
were to prevail on its FSIPA claim. Defendants citation to Davis v. McGahee, 257 So. 2d 62
(Fla. 1st DCA 1972) is also misplaced. In Davis, the appellate court found that it was not

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improper for the trial court to deny a jury trial even though plaintiff had filed an amended
complaint seeking damages, since the relief sought was intertwined with the initial equitable
relief sought by the plaintiff. Id. at 63-64. The Davis case involved an entirely different set of
facts and did not involve a statute that expressly provided for rescission as a remedy, which is at
issue in this case.
In sum, the Court rejects Supreme Energys contention that Plaintiff was required to
plead a rescission cause of action or remedy in its Complaint and finds that Plaintiff can seek
rescission pursuant to the plain terms of section 517.211.
3. Attorneys Fees
Defendants argue that Plaintiff is not entitled to attorneys fees because it failed to
request fees in its Complaint. In response, Plaintiff argues that it is entitled to attorneys fees
pursuant to section 517.211(6) of the Florida Statutes, and Defendants were on notice that
attorneys fees were recoverable under FSIPA.
Section 517.211(6) of the Florida Statutes provides, In any action brought under this
section . . . the court shall award reasonable attorneys fees to the prevailing party unless the
court finds that the award of such fees would be unjust. Fla. Stat. 517.211(6). Because the
Florida Statutes expressly provide for such an award, the mere fact that Plaintiff failed to
expressly plead its entitlement to attorneys fees in its Complaint is not fatal to Plaintiffs ability
to recover such fees under Florida law. See Brown v. Gardens by the Sea South Condo. Assn,
424 So. 2d 181 (Fla. 4th DCA 1983) ([I]t is not necessary to plead entitlement to statutory
attorney fees.). Therefore, the Court concludes that as the prevailing party on its FSIPA claim,
Plaintiff is entitled to an award of attorneys fees. It is hereby

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ORDERED AND ADJUDGED that Defendants, Sup reme Energy Resources, Inc. and
Marc Walther, Motion to Dismiss Plaintiffs Florida State Law Claims [DE 1] (D.E. 115) is
DENIED. It is further
ORDERED AND ADJUDGED that Plaintiff Energy Supreme, LLCs Motion for
Summary Judgment as to Count IV for Violation of the Florida Securities and Investor
Protection Act (D.E. 113) is GRANTED. It is further
ORDERED AND ADJUDGED that Plaintiff SHALL file its Proposed Final Judgment no
later than Monday, July 25, 2016.
DONE AND ORDERED in Chambers at Miami, Florida, this 19th day of July, 2016.

________________________________
UNITED STATES DISTRICT JUDGE
cc:
counsel of record via cm/ecf

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