Judge dismisses several counterclaims made by Delray Beach couple regarding a business deal gone bad

By Marian Johns | May 7, 2019

WEST PALM BEACH – The U.S. District Court for the Southern District of Florida recently granted in part and denied in part an Illinois resident and credit union's motion to dismiss counterclaims by a Delray Beach couple who alleged breach of contract and fraud regarding the sale of interest in a mortgage company.

According to the April 4 order and opinion by U.S. District Judge Kenneth Marra, counterclaim defendants Ravi Kadiyala and Credit Union Mortgage Utility Banc petitioned the court to dismiss counterclaimants Marie Molly Pupke and Mark John Pupke's allegations of breach of contract, fraud, conversion and tortious interference with advantageous business relationship. 

The case involves the Pupkes, who originated and brokered residential real estate mortgages through Euro International Mortgage Inc., entering into a contract in November 2012 with the counterclaim defendants, Kadiyala and Credit Union Mortgage Utility Banc, for the sale of interests in Euro to Credit Union Mortgage Utility Banc. Kadiyala served as the buyer in the transaction, according to court filings in the case on casetext.com. 

The counterclaimants allege that Kadiyala and Credit Union Mortgage Utility Banc breached the contract by not attending the closing. However Kadiyala and the Credit Union Mortgage Utility Banc argue the Pupkes' counterclaims were filed 10 months after Florida's five-year statute of limitations on breach of contract claims had passed, court filings said. The Pupkes' claim the lapse in filing was due to the case being transferred from Illinois to Florida. 

The Pupkes also claimed fraud and conversion and argued that the counterclaim defendants "took ownership of the funds" of the Pupkes' business, EURO, which was inconsistent with the Purpkes "right of possession." However the defendants argue the Pupkes were not "deprived" of any property or ownership of their business. The Pupkes also claimed they "had a business relationship" with several entities including banks and lenders that were not "evidenced" by a contract that is enforceable.

Marra concluded the Pupkes had six and a half months prior to the statue of limitations deadline when the case was transferred and dismissed the breach of contract claims and the fraud allegations without prejudice to give the Pupke's a "second chance" to "adequately allege fraud with particularity." 

Marra denied the motion to dismiss the Pupkes conversion claims because Kadiyala represented himself as the owner of Euro at a bank and withdrew funds from several banks. Marra also concluded that the Pupkes' claims of tortious interference needed "more specificity" and dismissed the claims without prejudice. 

Marra gave the Pupkes until April 18 to file an amended counterclaim regarding the conversion allegation.

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