Starmark Financial, LLC v. Vasant Nanavati

CourtDistrict Court, S.D. Florida
DecidedJanuary 26, 2026
Docket0:25-cv-60551
StatusUnknown

This text of Starmark Financial, LLC v. Vasant Nanavati (Starmark Financial, LLC v. Vasant Nanavati) is published on Counsel Stack Legal Research, covering District Court, S.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Starmark Financial, LLC v. Vasant Nanavati, (S.D. Fla. 2026).

Opinion

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA FORT LAUDERDALE DIVISION CASE NO. 25-60551-CIV-DIMITROULEAS/HUNT

STARMARK FINANCIAL, LLC,

Plaintiff,

vs.

VASANT NANAVATI,

Defendant. _______________________________________/

REPORT AND RECOMMENDATION THIS CAUSE is before this Court on Defendant’s Motion to Dismiss (“Motion”). ECF No. 32. The Honorable William P. Dimitrouleas, United States District Judge, referred the Motion to the undersigned United States Magistrate Judge for appropriate rulings. ECF No. 36; see also 28 U.S.C. § 636(b); S.D. Fla. L.R., Mag. R. 1. Upon thorough and careful review of the Motion, the Response, ECF No. 34, the Reply, ECF No. 35, and being otherwise fully advised in the premises, the undersigned respectfully RECOMMENDS that the Motion be GRANTED for the reasons below. BACKGROUND The following facts are based on the allegations set forth in the Complaint. ECF No. 1. Plaintiff Starmark Financial, LLC (“Starmark”) is a Florida limited liability company based in Deerfield Beach, Florida. Id. at 1. Starmark’s Chief Executive Officer (“CEO”) is Brett Silver, who lives in Florida. Id. Non-party Luther Appliance & Furniture Sales Acquisition LLC (“Luther”) is a retail seller of merchandise. Id. at 2. Luther’s business model required loans from a third-party creditor to fulfill sales orders. Id. In December 2022, Starmark entered into a contract with Luther for the purchase of the majority of Luther’s accounts. Id. at 2. At this time, non-party First Avenue Funding (“First Avenue”) was the creditor that provided funds to Luther in support of its sales orders. Id. As a result, First Avenue held liens on Luther’s accounts. Id.

In March 2023, Prosperitas Partners LLC (“Prosperitas”) acquired Luther. Id. at 3–4. Prosperitas was owned in part by another company, 9th Planet Partners LLC (“9th Planet”), which was wholly owned by Defendant Vasant Nanavati (“Defendant”), who is an individual and nonresident of Florida.1 Id. at 4. Through Defendant’s ownership of 9th Planet, Defendant held a 12.63% membership interest in Prosperitas. Id. Shortly after Prosperitas’s acquisition of Luther, Prosperitas appointed one of its members, Brad Powers, to serve as Luther’s CEO. Id. Powers was the initial manager of the relationship between Starmark and Luther. Id. On or about October 20, 2023, Powers delegated management of the Luther- Starmark relationship to Defendant. Id. From that point on, Defendant “was directly

involved in all aspects of the Luther-Starmark relationship.” Id. Starmark continued purchasing accounts from Luther. Id. Unbeknownst to Starmark at the time, Luther began running a “double-pledging” scheme. Id. Essentially, ownership of the accounts was pledged both to First Avenue and to Starmark. Id. Defendant knew about this double- pledging scheme as early as October 2023 and also knew that Luther was experiencing “financial challenges.” Id. at 7.

1 Starmark alleges that Defendant is a citizen of New York. ECF No. 1 at 1. However, Defendant asserts in his Motion that he is a resident of Rhode Island. ECF No. 32 at 1. For the purposes of this analysis, it suffices that Defendant is not a resident of Florida. On January 12, 2024, Defendant emailed Starmark, stating that “Starmark would fund Luther’s receivables moving forward.” Id. at 4. On January 17, 2024, Defendant met in person with Powers (CEO of Luther), Silver (CEO of Starmark), and Ken Annarelli (Chief Financial Officer [“CFO”] of Starmark) to discuss the purchasing and funding of Luther’s accounts. Id. The meeting took place in Florida.2 Defendant said to Silver and

Annarelli that First Avenue was “no longer in the picture.” Id. at 5. Following that meeting, Defendant emailed Starmark with instructions for wiring funds to a Luther bank account. Based on Defendant’s representations, Starmark sent approximately $824,706.97 between January and February 2024 to fund Luther’s accounts. Shortly after, Defendant stopped communicating with Starmark. On or about October 9, 2024, Starmark was informed that Powers had died. Id. at 5. Fred Larcombe, the CFO of Luther, held a series of calls with Defendant and Starmark over the next two weeks. Id. These calls took place on a daily basis. Id. at 4. Larcombe informed Starmark about Luther’s insolvency, explained that Luther was unable to

operate, and “admitted there was fraud in Luther’s business dealings.” Id. at 6. On or about October 30, 2024, Luther began winding down their operations.3 Following instructions from Defendant and other members of Prosperitas, Luther “refused to turn over payments from the accounts owned by Starmark or provide the corresponding

2 “[A] court must accept the plaintiff’s allegations as true and evaluate all plausible inferences derived from those facts in favor of the plaintiff.” Whitwam v. JetCard Plus, Inc., 34 F. Supp. 3d 1257, 1259 (S.D. Fla. 2014). The Complaint does not specify where this in-person meeting took place, but the undersigned infers in Starmark’s favor that it was Florida. This is not disputed by Defendant. Indeed, Defendant concedes that “Defendant’s only Florida contact was one dinner meeting.” ECF No. 32 at 2.

3 Luther underwent a bankruptcy proceeding. See In re Luther Appliance & Furniture Sales Acquisition LLC, No. 25-10163 (Bankr. S.D. Fla. 2025). financial data.” Id. at 6. Defendant “directed this withholding of payments and data.” Id. Additionally, Defendant “directly benefited financially,” evidenced by “questionable wire transfers from Luther’s accounts to Prosperitas members.” Id. at 7. Based on the foregoing, Starmark filed two lawsuits in this Court. The first lawsuit was filed against Luther for breach of contract and conversion.4 See Starmark Fin., LLC

v. Luther Appliance, No. 24-62357-CIV-DIMITROULEAS/HUNT, 2025 WL 531932 (S.D. Fla. Jan. 6, 2025). Starmark obtained a default judgment against Luther in that case. See ECF No. 37. Starmark brought the instant suit against Defendant while the suit against Luther was still pending. See ECF No. 1. The Complaint alleges breach of fiduciary duty and fraud. See id. at 8–12. The basis of these claims is that Defendant breached his fiduciary duties of care, loyalty, good faith, and full disclosure by misrepresenting Luther’s financial situation and that Defendant defrauded Starmark through false statements of material facts about Luther’s finances. See id. As relief, Starmark seeks damages, equitable

restitution, a constructive trust, and attorney’s fees and costs. Id. at 13. Now before the undersigned is Defendant’s Amended Motion to Dismiss. ECF No. 32. LEGAL STANDARD “To survive a motion to dismiss, 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) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “To meet this ‘plausibility standard,’ a plaintiff must ‘plead[] factual content that allows the

4 “A court may take judicial notice of its own records and the records of inferior courts.” United States v. Rey, 811 F.2d 1453, 1457 (11th Cir. 1987). court to draw the reasonable inference that the defendant is liable for the misconduct alleged.’” Arias v. Integon Nat’l Ins. Co., No. 18-22508-CIV-ALTONAGA/GOODMAN, 2018 WL 4407624, at *2–3 (S.D. Fla. Sep. 17, 2018) (quoting Iqbal, 556 U.S. at 678).

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