FORT LAUDERDALE, Fla. (Legal Newsline) – A Chicago law firm is asking a federal court in Florida to dismiss an amended complaint over allegations that it orchestrated a fraudulent tax credit scheme that snared four former NFL players, and the plaintiffs in the case have asked the court to deny the motion.
In response to the motion to dismiss filed, plaintiffs Duane Starks, Jevon Kearse, Laveranues Coles and Lito Sheppard argued that a "substantial portion of the motion to dismiss amounts to nothing more than arguments that defendants decided against making in the first round(s) of briefing on plaintiffs' original complaint."
Their response was filed Jan. 4 in the Fort Lauderdale Division of the U.S. District Court for the Southern District of Florida.
Defendants Gary J. Stern, Chuhak and Tecson PC, David Shiner and Jeanne Kerkstra, represented by Gray Robinson, want the amended complaint, including claims of fraud and conspiracy, dismissed. Their motion was filed Dec. 21.
The defendants claim in their motion there is no "cause of action" and arguing it "remains devoid of any allegations linking any specific plaintiff’s investment decision to any specific representation of any specific defendant."
They argue the conspiracy claim fails as a matter of law because the group of alleged conspirators included the attorneys. Precedent in federal court has found that an attorney acting within the scope of his or her representation is immune from an alleged conspiracy claim, the defendants argue.
In their response, the plaintiffs argue that the defendants are claiming conspiracy under state law and that "no Florida court has endorsed that theory. ... Instead, Florida recognizes that in many cases involving an alleged conspiracy between attorney and client, the two are actually considered to be one," the plaintiffs state.
"Defendants have utterly failed to explain why their possession of law licenses should immunize them for conduct as part of the conspiracy that did not require a legal degree: promoting, marketing and selling modern-day snake oil," the plaintiffs argue.
The defendants, in their motion requesting dismissal, state that documents reveal "the plaintiffs were warned that their credits might not be allowed to reduce their tax liabilities."
The defendants also state the amended complaint adds "very little substance."
"Mostly, plaintiffs removed references to the dismissed Federal RICO claims, and some defendants and plaintiffs," the motion argues.
Chuhak and Tecson has faced several legal actions in various parts of the country linked to the so-called "green gas" scheme. Its attorneys allegedly approached investment companies and individuals, including a number of NFL players, and offered tax credits accrued by landfill operators that captured methane gas and convert into electricity.
The plaintiffs stated in a complaint filed in the U.S. District Court for the Southern District of Florida in December 2017 the credits were bogus, which led them to suffer millions of dollars in damages, including loss of investment, adverse tax consequences, penalties, expenses and professional fees.
Kearse and Sheppard played college football for the University of Florida, while Coles went to Florida State University and Starks went to the University of Miami. They alleged that the defendants knew that the landfills did not have the right equipment to carry out the conversion.
The Florida court has already dismissed some of the claims of aiding and abetting breach of fiduciary duty and for fraud under the federal Racketeer Influenced and Corrupt Organizations, but allowed the plaintiffs to move forward with an amended complaint.