Opinion
Civil Action No. 00-3924.
August 2, 2004
MEMORANDUM AND ORDER
Plaintiffs Joseph and Mary Ellen Madison ("plaintiffs") bring this action against defendants Universal Marketing Innovators, Inc. ("Universal"), Clifford Henry ("Henry"), John Gillespie ("Gillespie") and Allstar Mortgage, Inc. ("Allstar") because Universal, Henry and Gillespie have failed to pay sums due and owing under various notes extending loans to these parties for the purchase of specific properties (counts II-IX). Plaintiffs also vaguely assert a civil RICO claim against Universal and Henry (count XI). Plaintiffs' claims against Allstar are based on the allegation that it received and used funds from Universal and Henry, which were wrongfully procured from plaintiffs (counts XIII-XIV). Presently before the court is defendant Gillespie's motion to dismiss the action as to Gillespie for lack of subject matter jurisdiction. For the reasons set forth below, I will grant Gillespie's motion to dismiss.
Plaintiffs also initially included claims against B.K. Properties, Inc. and Catherine Henry. The cause of action against B.K. Properties was dismissed by order of the court filed on January 2, 2001. And the cause of action against Catherine Henry was voluntarily dismissed by plaintiffs by order of the court filed on February 28, 2001.
Due to the recent filing of bankruptcy by Henry, Universal and Allstar, this suit was stayed as to these defendants by order of the court filed on July 28, 2004.
BACKGROUND
The facts as alleged in the amended complaint are as follows. On July 1, 1998, plaintiff Joseph Madison extended a loan to Universal and Henry in the amount of $85,000 for the purchase of a property known as the Wilmington property. In return for the loan, Universal and Henry executed a promissory note in the amount of $85,000. The note provided for an annual interest rate of 15% with a balloon payment of all outstanding principal and interest due on or before July 1, 1999. The note also provided for a 5% late fee for any overdue monthly payments and the award of reasonable attorneys' fees and costs in the event of a default. Henry also executed and delivered a mortgage on the Wilmington property as collateral for the Wilmington loan. Universal and Henry represented that they would have the Wilmington mortgage recorded as a first lien mortgage on the Wilmington property. Despite their representations, the Wilmington mortgage was never recorded. Universal and Henry have refused to pay the sums due under the loan and thus, owe $111,562.50 to plaintiff on the Wilmington note.
On November 15, 1997, plaintiffs Joseph and Mary Ellen Madison extended a $25,000 loan to Universal for the purchase of a property known as the Coatesville property. In return for the loan, Universal executed a promissory note in the amount of $25,000. The Coatesville note had the same terms as the Wilmington note, including a 15% interest rate. Universal executed a mortgage to plaintiffs on the Coatesville property as collateral for the loan. Universal represented to plaintiffs that it would have mortgage recorded as a first lien mortgage on the property. Universal never did so. The property was sold on August 30, 1999, to Leroy and Geraldine Baynard. Plaintiffs received no proceeds from that sale. Universal has refused to make payments under the loan and is in default in the amount of $35,156.25.
Also on November 15, 1997, Joseph and Mary Ellen Madison executed a loan in the amount of $19,000 to Universal for the purchase of a property known as the Buffalo property. In return for the Buffalo loan, Universal executed a promissory note in the amount of $19,000. The terms of the note were the same as the terms of the Wilmington and Coatesville notes. The principal amount due under the Buffalo note was increased to $30,000 in October, 1998. Universal is in default of the terms of this note and owes plaintiffs $38,075.00 pursuant to this note.
On June 19, 1997, Joseph Madison extended a loan to Henry and Gillespie, jointly and severally, in the amount of $75,000, for the purchase of a property known as the Delran property. In return for the loan, Henry and Gillespie executed a promissory note in the amount of $75,000. The note had the same terms as the other notes described above, and it specified that all outstanding principal and interest was due on or before June 19, 1998. On or about April 1, 1999, Henry and Gillespie sold the Delran property and gave Madison money to be applied to the Delran note. As security for the repayment of the balance of the Delran note, Henry and Gillespie provided Madison with a second lien mortgage on the Delran property. This second mortgage was never recorded, despite the representations of Henry and Gillespie that it would be. Henry and Gillespie have defaulted on the Delran note and owe the plaintiff $23,400.
The plaintiffs' complaint alleges 13 counts in total. Count II alleges that Universal and Henry are in default of their obligations under the Wilmington note and, therefore, plaintiff Joseph Madison demands compensatory damages, punitive damages, and attorneys' fees and costs. This count also sounds in fraud, though, as it includes the following allegations: (1) Universal and Henry fraudulently induced plaintiff to make the loan; (2) Universal and Henry were aware that plaintiff was relying on the security of the Wilmington mortgage as an inducement to making the Wilmington loan; (3) Universal and Henry never had any intention of recording the Wilmington mortgage; and (4) Universal and Henry acted willfully and maliciously. In count III, plaintiff claims defendants were unjustly enriched by the Wilmington loan and requests compensatory damages and attorneys' fees as relief. Count IV mirrors count II, though it references the Coatesville loan and includes plaintiff Mary Ellen Madison. Count V mirrors count II, but again concerns the Coatesville loan and includes plaintiff Mary Ellen Madison. In count VI, plaintiffs do not include the fraud-like charges, but rather simply allege that the defendants are in default of their obligations under the Buffalo loan, and accordingly seek compensatory damages, punitive damages, and attorneys' fees. Count VII alleges that defendants were unjustly enriched by the Buffalo loan. Count VIII, again, mirrors counts II and IV, though it pertains to the Delran note, does not include Mary Ellen Madison, and includes Gillespie and Henry instead of Universal as the defendants. Count IX mirrors counts III and V, with the same modifications, including Gillespie and Henry as defendants.
Count I of the complaint solely consists of the facts of the case and does not include any specific claim. Hence, only counts II through XIV will be discussed here.
In Count X, plaintiffs allege that the loans (all four) were inappropriately transferred to Henry personally and Henry "perpetrated a fraud upon the creditors of Universal by making transfers of assets of Universal for his own personal account." Plaintiffs request $208,193.75 in compensatory damages, the full amount of all loans due from Henry. Count XI alleges that Universal and Henry violated the civil RICO statute by engaging in a pattern of wrongful activity which impacted interstate commerce. As a result, the plaintiffs request compensatory damages in the amount of $208,193.75, treble damages, and attorneys' fees and costs. In Count XII, plaintiffs allege that Henry, Universal and Gillespie induced plaintiffs to transfer funds to defendants under false pretenses and thus, plaintiffs request the creation of a constructive trust in regard to all real property owned by defendants that was purchased with funds received from plaintiffs. Count XIII alleges that defendants Allstar and C. Henry received funds from Universal and Henry to purchase real property and these funds were "wrongfully, intentionally and fraudulently procured from plaintiffs." Plaintiffs request the creation of a constructive trust in regard to all real property owned by Allstar and C. Henry that was purchased with funds received from Universal and/or Henry. Count XIV alleges that defendants Allstar and C. Henry received funds from Universal and Henry which were "transferred by Henry and Universal with the specific intent to perpetrate a fraud upon the creditors of Henry and Universal," making these transfers "fraudulent conveyances." Plaintiffs seek an accounting of all funds received from Universal and/or Henry by both Allstar and C. Henry and the return of all such monies.
This count also contained a claim against B.K. Properties, but, as explained above, this party has been dismissed from this suit.
This count also contained a claim against B.K. Properties, but, as explained above, this party has been dismissed from this suit.
Defendant Gillespie filed a motion to dismiss the claims asserted against him in counts VIII, IX and XII for lack of subject matter jurisdiction. Gillespie Br. More specifically, Gillespie alleged that complete diversity of citizenship is lacking, plaintiffs' claims against Gillespie do not meet the minimum amount in controversy requirement for jurisdiction and plaintiffs do not assert a claim against Gillespie that involves a federal question. Id. Plaintiffs responded by asserting: (1) there is complete diversity of citizenship because Gillespie is a citizen of Maryland, not Pennsylvania; (2) plaintiffs have met the minimum amount in controversy requirement because they have a claim for punitive damages against Gillespie; and (3) even if the court does not have subject matter jurisdiction based on diversity, the court has supplemental jurisdiction over the claims against Gillespie because the court has subject matter jurisdiction based on the existence of a federal question in plaintiffs' RICO claim against Henry and Universal. Pl. Br. The court then ordered the deposition of Gillespie in order to determine his citizenship. See June 13, 2001 Order. After the deposition, Gillespie filed a second brief in support of his motion to dismiss, reiterating the arguments he made in his first brief, but adding more factual support. Gillespie Br. II. Plaintiffs filed a supplemental brief in opposition, also reiterating their previously articulated arguments, but with more factual support. Pl. Supplemental Br.
DISCUSSION
Gillespie argues that the court lacks subject matter jurisdiction, as least as far as the claims against him are concerned. More specifically, Gillespie contends that there is no jurisdiction based on diversity, as plaintiffs allege in their complaint, because (1) he is a citizen of the same state as plaintiffs, Pennsylvania, and, in the alternative, (2) plaintiffs' claims against him do not meet the minimum amount in controversy requirement for diversity jurisdiction. Further, in response to plaintiffs' opposition to his motion to dismiss, Gillespie argues that there is no supplemental jurisdiction because (1) there is no jurisdiction based on a federal question, as plaintiffs' RICO claim is fatally defective, and (2) supplemental jurisdiction is not conferred when original jurisdiction is based on diversity. These arguments will be addressed in turn.
I. Jurisdiction Based on Diversity
The United States Code clearly provides that this court has "original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between (1) citizens of different States. . . ." 28 U.S.C. § 1332(a) (2004). Gillespie argues that this court does not have subject matter jurisdiction over the claims asserted against him because (1) he is a citizen of the same state as plaintiffs, Pennsylvania, and, in the alternative, (2) plaintiffs' claims against him do not meet the minimum amount in controversy requirement, $75,000. Gillespie's claims will be addressed in turn.
Gillespie contends that he is a citizen of Pennsylvania, not of Maryland, as plaintiffs allege. This is important because plaintiffs are citizens of Pennsylvania, which means that if Gillespie is correct there would not be complete diversity of citizenship between plaintiffs and Gillespie and the court would accordingly not have subject matter jurisdiction over the claims against Gillespie based on diversity. Plaintiffs dispute Gillespie's contention. In order to resolve this dispute, the court ordered the deposition of Gillespie and any other persons the parties felt might have relevant information. Unfortunately, Gillespie's deposition testimony did not provide a clear and obvious resolution to the dispute over his citizenship. Rather, this court must weigh the evidence to determine whether Gillespie is a citizen of Pennsylvania or Maryland Since plaintiffs are parties asserting federal jurisdiction, they have the burden of proving it exists. See McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 182-83 (1936); Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990). Plaintiffs have failed to meet that burden.
Neither party requested an evidentiary hearing on the issue.
Plaintiffs cite a number of statements made by Gillespie during his deposition, as well as documentary evidence produced in conjunction therewith, that "lead to the inescapable conclusion that Gillespie is, in fact, a resident of the State of Maryland" Pl. Supplemental Br. 3-4. Jurisdiction pursuant to § 1332(a), however, requires that the citizenship of the parties, and not merely their residences or addresses, be of different states. See Krasnov v. Dinan, 465 F.2d 1298, 1300-01 (3d Cir. 1972); Icipa S.R.L. v. Learjet, Inc., 1997 WL 400024, at *1 (E.D. Pa. 1997) (requiring express allegation of citizenship and not mere address). For purposes of diversity jurisdiction, an individual is a citizen of the state in which he is domiciled. See, e.g., Juvelis ex re. Juvelis v. Snider, 68 F.3d 648, 654 (3d Cir. 1995). Moreover, domicile is not always the same as residence, and a person may reside in one place, but be domiciled elsewhere. See, e.g., Mississippi Band of Choctaw Indians v. Holyfield, 490 U.S. 30, 48 (1989); Juvelis, 68 F.3d at 651 n. 3 ("`[T]he domicile of a person is the place where he has his true, fixed home and principal establishment, and to which, whenever he is absent, he has the intention of returning. Domicile . . . is more than an individual's residence, although the two typically coincide.'") (citing 13B CHARLES A. WRIGHT, ARTHUR R. MILLER EDWARDH. COOPER, FEDERAL PRACTICE AND PROCEDURE § 3612 (2d ed. 1984)). An individual can be domiciled in, and therefore a citizen of, only one state for diversity purposes. See Williamson v. Osenton, 232 U.S. 619, 625 (1914).
Plaintiffs highlight the following evidence to support their contention that Gillespie is a citizen of Maryland Gillespie maintains a vacation home in Maryland, which he and his wife visit on most weekends in the summer and some weekends in the winter. Gillespie Dep. 9. He maintains a driver's license from the State of Maryland listing this Maryland address, which he stated was done for insurance purposes at his insurance agent's suggestion. Id. at 8-9. One of his two cars is registered in Maryland, the other in Pennsylvania. Id. at 19. He files tax returns using the Maryland address and receives mail there. Id. at 9.
Although I agree that this evidence supports a finding that Gillespie is currently a resident of Maryland, an issue I do not decide here, plaintiffs have not established that Gillespie is domiciled in Maryland As the Third Circuit made clear in Krasnov, the court should consider a number of factors when "`determining whether a party has intended to establish a domicile in the state to which he has moved, . . . [including] his declarations, exercise of political rights, payment of personal taxes, house of residence, and place of business.'" Krasnov v. Dinan, 465 F.2d at 1301 (citations omitted). Gillespie clearly stated at his deposition, "I was born in Philadelphia. . . . Since 1970 I've always had a home outside of Philadelphia without giving up my Pennsylvania citizenship. I've always been a Pennsylvanian and I'm still a Pennsylvanian. I've had homes in North Wildwood, Avalon and now I have one in Maryland, other than my primary residence in Pennsylvania." Gillespie Dep. 23-24. Gillespie explained that he spends at least eighty-five percent of the time at his Pennsylvania residence. Id. at 24. He also stated that he votes in Pennsylvania, and had voted in Pennsylvania as recently as one month prior to the deposition. Id. at 20, 23. Gillespie owns a business in Pennsylvania, id. at 10, and owns a car that is registered in Pennsylvania. Id. at 9. There is some discrepancy over where Gillespie was actually served with process and there is an alleged inconsistency with his maintaining automobile registrations in both Pennsylvania and Maryland However, these incongruities only affect the determination of Gillespie's state of residence, and not his state of domicile. Plaintiffs have not produced any evidence that would contradict Gillespie's testimony that his domicile has always been in Pennsylvania and his expressed intention to keep Pennsylvania as his state of domicile, a necessary component of the determination. See Krasnov, 465 F.2d at 1300 (citations omitted) ("The intention and the act must concur in order to effect such a change of domicile as constitutes a change of citizenship."). Hence, I must conclude that Gillespie is a citizen of Pennsylvania and, accordingly, there is no diversity of citizenship between plaintiffs and him.
The Federal Rules of Civil Procedure provide that "[p]arties may be dropped or added by order of the court on motion of any party or of its own initiative at any stage of the action and on such terms as are just." FED. R. CIV. P. 21 (2004). Of course, "the district court is precluded from retaining diversity jurisdiction by dismissing a nondiverse party if that party is indispensable under FED. R. CIV. P. 19." Publicker Industries, Inc. v. Roman Ceramics Corp., 603 F.2d 1065, 1069 (3d Cir. 1979). Rule 19 provides that an individual is an "indispensable party" if:
(1) in the person's absence complete relief cannot be accorded among those already parties, or (2) the person claims an interest relating to the subject of the action and is so situated that the disposition of the action in the person's absence may (I) as a practical matter impair or impede the person's ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of the claimed interest.
Fed.R.Civ.P. 19 (2004). No party claims that Gillespie is an indispensable party. Further, the terms of the Delran note provide for joint and several liability and explain that the holder of the note "may enforce its rights under this Note against each person [who signs the Note] individually or against all of [them] together." Delran Note at ¶ 8. Hence, Gillespie is not an indispensable party and can be dismissed without affecting the rights of Joseph Madison to collect on the Note in this action. It is also important to note that upon Gillespie's dismissal from this action, Madison can still bring an action against Gillespie in an appropriate state court for the allegations contained in this complaint. See Maryland Rule 2-101; Peiffer v. King Pontiac Buick GMC, Inc., 105 F. Supp. 2d 470, 473-74 (D. Md. 2000) (explaining the applicability of Maryland Rule 2-101); see also 42 PA. CONS. STAT. § 5103; Electronic Lab Supply Co. v. Cullen, 782 F. Supp. 1016, 1021 (E.D. Pa. 1991) (interpreting the scope of PA. CONS. STAT. § 5103).
Since it is clear the court does not have subject matter jurisdiction on the claims against Gillespie pursuant to 28 U.S.C. § 1332 because complete diversity of citizenship is lacking, I need not consider Gillespie's alternative argument, that the amount in controversy does not meet the threshold requirement of $75,000.
II. Supplemental Jurisdiction
In plaintiffs' opposition to Gillespie's motion to dismiss they argue that if the court finds it does not have subject matter jurisdiction on the claims against Gillespie based on diversity, the court still should not dismiss the claims because it has supplemental jurisdiction over these claims pursuant to 28 U.S.C. § 1367. Gillespie responds to this argument by contending (1) "supplemental jurisdiction cannot be based on a RICO claim fatally defective on its face," Gillespie Br. II 4, and (2) "supplemental jurisdiction is not conferred when the original jurisdiction is based on diversity." Id. at 3. These arguments will be addressed in turn.
This court has "original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. Plaintiffs assert in their opposition to Gillespie's motion to dismiss (though not in their complaint) that the court has jurisdiction pursuant to § 1331 because of plaintiffs' RICO claim against Universal and Henry. In order to plead a violation of RICO, plaintiffs must allege (1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity. See Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479, 496 (1985). A pattern of racketeering activity requires at least two predicate acts of racketeering. See 18 U.S.C. § 1961(5). These predicate acts of racketeering may include, inter alia, federal mail fraud under 18 U.S.C. § 1341 or federal wire fraud under 18 U.S.C. § 1343. See 18 U.S.C. § 1961(1); Saporito v. Combustion Eng'g, Inc., 843 F.2d 666, 676 (3d Cir. 1988), vacated on other grounds, 489 U.S. 1049 (1989). Gillespie contends that plaintiffs' "RICO claim [is] based on state law torts not enumerated in RICO." Gillespie Br. II 4. The Third Circuit has clearly stated, "RICO's list of acts constituting predicate acts of racketeering activity is exhaustive," reasoning that "if garden-variety state law crimes, torts, and contract breaches were to constitute predicate acts of racketeering (along with mail and wire fraud), civil RICO law, which is already a behemoth, would swallow state civil and criminal law whole." Annulli v. Panikkar, 200 F.3d 189, 200 (3d Cir. 1999). Hence, if the predicate acts upon which plaintiffs' RICO claim is allegedly based are not explicitly listed in RICO, the claim must fail.
Surprisingly, plaintiffs do not challenge Gillespie's argument that their RICO claim is based on state law torts not enumerated in RICO. Rather, plaintiffs vaguely assert that they have pled "more than `garden variety' breach of contract claims or state law torts . . . which are encompassed by the RICO statute." Pl. Supplemental Br. 6. Plaintiffs then also quote Annulli-specifically, the portion of the opinion in which the court noted the breadth of RICO due to the inclusion of mail and wire fraud as predicate acts and recognized that RICO "`may be applicable to many `garden-variety' fraud cases, . . . particularly considering the judiciary's broad interpretation of the mail fraud statute.'" Annulli, 200 F.3d at 199 (quoting Tabas v. Tabas, 47 F.3d 1280, 1296-97 (3d Cir. 1995)) (quoted in Pl. Supplemental Br. 6). Plaintiffs seem to imply that their claims that sound in fraud are sufficient to satisfy the requirements for pleading mail and/or wire fraud violations, which would support their RICO claim. I cannot reach that conclusion.
The federal mail and wire fraud statutes prohibit the use of the mail or interstate wires for purposes of carrying out any scheme or artifice to defraud. See 18 U.S.C. §§ 1341, 1343. If plaintiffs "rely on mail and wire fraud as a basis for a RICO violation, the allegations of fraud must comply with Federal Rule of Civil Procedure 9(b), which requires that allegations of fraud be pled with specificity." Lum v. Bank of America, 361 F.3d 217, 223 (3d Cir. 2004) (citing Saporito, 843 F.2d at 673). Satisfying Rule 9(b) requires plaintiffs to plead with particularity "the `circumstances' of the alleged fraud in order to place the defendants on notice of the precise misconduct with which they are charged, and to safeguard defendants against spurious charges of immoral and fraudulent behavior." Seville Indus. Mach. Corp. v. Southmost Mach. Corp., 742 F.2d 786, 791 (3d Cir. 1984). The Third Circuit has made it clear that in order to satisfy this requirement, plaintiffs must plead the "date, place or time" of the fraud and must "allege who made a misrepresentation to whom and the general content of the misrepresentation." Lum, 361 F.3d at 224 (citations omitted).
In the present case, the RICO cause of action consists of the following vague allegation:
97. Universal and Henry conducted an enterprise engaged in a pattern of wrongful activity in regard to the Wilmington Loan, Coatesville Loan, Delran Loan and Buffalo Loan which impacted interstate commerce.
98. The conduct of Universal and Henry constituted racketeering activity or a RICO enterprise pursuant to 18 U.S.C.A. § 1961, et seq., and the Plaintiffs were damaged due to the wrongful actions of Universal and Henry.
Am. Compl. ¶¶ 97, 98. Plaintiffs do not even specifically allege fraud, let alone allege fraud with the specificity necessary to comply with the requirements of Rule 9(b). Plaintiffs also do not specifically mention allegations contained elsewhere in the complaint. However, since Plaintiffs generally "incorporate by reference all [previously articulated] allegations contained in [the complaint]," Am. Compl. ¶ 96, I will consider these claims and determine if they allege with sufficient specificity mail fraud or wire fraud violations.
Plaintiffs make essentially the same allegations against Universal and Henry (and sometimes Gillespie) regarding each of the individual loans. One of the more specific articulations is as follows:
57. Additionally, Universal and Henry fraudulently induced Joseph A. Madison to make the Wilmington Loan by executing and delivering the Wilmington Mortgage.
58. At all times, Defendants Universal and Henry were aware that Plaintiffs were relying upon the security of the Wilmington Mortgage as an inducement to make the Wilmington Loan, and at no time did Universal and Henry have any intention of recording same.
59. The actions of Universal and Henry were willful and malicious, and were performed with the specific intent to cause harm to Plaintiff, Joseph A. Madison.
60. Plaintiff Joseph A. Madison has been damaged by the fraudulent and intentional conduct of Defendants Universal and Henry.
Am. Compl. ¶¶ 57-60. Although these vague allegations of general fraud/fraudulent inducement might be specific enough to meet the requirements of Rule 9(b), an issue the court does not here decide, they clearly do not contain the required specificity to constitute a claim for mail or wire fraud. The deficiency of these claims is particularly evident when one considers that the Third Circuit found much more specific allegations in Lum to not satisfy Rule 9(b). See Lum, 361 F.3d at 224-25.
Since plaintiffs have failed to plead fraud with specificity in their RICO claim (and Gillespie is not even named as a defendant in the RICO claim), so insubstantial a claim cannot be the basis for supplemental jurisdiction over him. See Hagans v. Lavine, 415 U.S. 528, 536-38 (1974). Plaintiffs do not assert any other cause of action that could even arguably contain a federal question, so as to confer subject matter jurisdiction pursuant to 28 U.S.C. § 1331. Rather, the court has subject matter jurisdiction over the claims asserted against Universal, Henry and Allstate because of diversity, i.e. pursuant to 28 U.S.C. § 1332. It is clear that this court cannot assert supplemental jurisdiction when original jurisdiction is based on diversity and "exercising supplemental jurisdiction over such claims would be inconsistent with the jurisdictional requirements of section 1332." See 28 U.S.C. § 1367(b). Hence, this court cannot assert supplemental jurisdiction pursuant to 28 U.S.C. § 1367 over the claims against Gillespie and these claims will be dismissed.
The claim may not be subject to outright dismissal at this juncture, a subject not briefed by the parties, only due to the bankruptcy of Henry, Universal and Allstate and corresponding stay of the action against these defendants.
CONCLUSION
This court does not have subject matter jurisdiction over the claims against Gillespie. More specifically, the court does not have diversity jurisdiction pursuant to 28 U.S.C. § 1332 because complete diversity of citizenship is lacking; Gillespie is a citizen of Pennsylvania, as are plaintiffs. The court also does not have supplemental jurisdiction over the claims against Gillespie because there is no supplemental jurisdiction when original jurisdiction is based on diversity and the court does not have federal question jurisdiction upon which supplemental jurisdiction could be based because plaintiffs' RICO claim against Universal and Henry is too insubstantial. Hence, the claims against Gillespie will be dismissed. An appropriate order follows.