Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—MDFla: Staffing Company Liable For Fraudulent Business Practices, (May 17, 2013)

By Jody Coultas, J.D.

A payroll funding company, TemPay, Inc., was entitled to summary judgment on its Florida Deceptive and Unfair Trade Practices Act (DUTPA) claims against Biltres Staffing of Tampa Bay, LLC and its president, the federal district court in Tampa has held (Tempay, Inc. v. Biltres Staffing of Tampa Bay, LLC, May 15, 2013, Whittemore, J.). However, there was insufficient evidence to support summary judgment on DUTPA claims against the managing member of Biltres Staffing.

TemPay, a payroll funding and accounts receivable factoring company, entered into several agreements with Biltres Staffing, whereby TemPay agreed to purchase certain accounts receivable of Biltres Staffing. Otto Biltres was responsible for the day-to-day management of Biltres Staffing, while Constandina Biltres was the sole managing member and owner of Biltres Staffing.

TemPay was suspicious of Biltres Staffing and Otto Biltres’ business activities, including a steady weekly increase in staffing invoices and several customer payments that were returned for insufficient funds. TemPay discovered that Otto Biltres filed fictitious name notifications for one or more of the Biltres Staffing customers, that he owned the email addresses of the purported customer contacts furnished to TemPay, and that the Bank of America accounts purportedly owned by the Biltres Staffing customers were actually owned or controlled by Otto Biltres.

To state a DUTPA claim, TemPay needed to show Biltres Staffing engaged in deceptive or unfair practices that caused actual damages. Deceptive practices are those that are likely to mislead consumers. Unfair practices offend established public policy and are immoral, unethical, oppressive, unscrupulous, or substantially injurious to consumers.

Biltres Staffing and Otto Biltres did not dispute that they engaged in deceptive or unfair trade practices that caused damages to TemPay, and the undisputed evidence demonstrated as much, according to the court.

Nevertheless, the evidence was insufficient to support summary judgment in favor of TemPay and against Constandina Biltres under the DUTPA, according to the court. TemPay needed to show that Constandina Biltres was a direct participant in the alleged DUTPA violations. At most, Constandina Biltres served as the managing member of Biltres Staffing. The evidence created an inference that she was a knowing participant in a fraudulent and deceptive activity for purposes of the DUTPA, but was insufficient to establish TemPay’s entitlement to summary judgment as a matter of law.

The case is No. 8:11-cv-02732-T-27AEP.

Attorneys: Charles M. Harris, Jr. (TrenamKemker) for TemPay, Inc. Michael A. Gold (Cohen & Foster, P.A.) for Biltres Staffing of Tampa Bay, LLC.

Companies: TemPay, Inc.; Biltres Staffing of Tampa Bay, LLC

Cases: StateUnfairTradePractices FloridaNews