Summary
holding that plaintiff's general allegations of mail fraud are insufficient to establish a predicate act under RICO
Summary of this case from PERSAUD v. BODEOpinion
04 Civ. 4545 (RMB).
June 24, 2005
DECISION AND ORDER
I. Background
On July 1, 2004, pro se plaintiff Edwin Rivera ("Plaintiff"), filed an amended complaint ("Amended Complaint") against Golden National Mortgage Banking Corporation, also known as Golden First Mortgage Corporation ("Golden Mortgage"), Philip E. Parker, Fred Santory, Daniel O'Sullivan, Patricia D'Amico (collectively, the "Parker Defendants"), Ronald Klar and Klar, Piergrossi Nunez, Cynthia Diaz, Lisa Piergrossi (collectively, the "Klar Defendants"), David Movtady, United Closing, Record Return Title Agency, Inc. ("Record Return Title"), Arthur Shattles, Amerifirst Mortgage Corporation, Alexander Avela, Jr., and Al Campo, "individually and severally" (all named defendants referred to collectively as "Defendants"), alleging civil violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1961- 1968, and violations of New York law in connection with an alleged "scheme and racketeering enterprise designed to defraud Plaintiff of more than $500,000.00 in the purchase of property located at 2423 Glebe Avenue, Bronx, New York." (Am. Compl. at 2, ¶ 1). Plaintiff also asserts claims, among others, of breach of contract, fraud and intentional misrepresentation, negligent misrepresentation, and intentional infliction of emotional distress. (Am. Compl. ¶¶ 10, 23-25). Plaintiff asserts that the Court has federal question jurisdiction under 18 U.S.C. § 1965(a), 28 U.S.C. § 1331, and supplemental jurisdiction under 28 U.S.C. § 1367. (See Am. Compl. ¶ 2).
Plaintiff names Rosewood Realty in the body of the Amended Complaint but not in the caption. (Am. Compl. ¶ 2). Rosewood Realty was not served and has not filed an appearance in the matter.
On or about October 14, 2004, Defendants jointly moved to dismiss the Amended Complaint pursuant Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure and Rule 6.1 of the Local Civil Rules of the United States District Courts for the Southern and Eastern Districts of New York ("Defendants' Motion to Dismiss"). Defendants filed a Memorandum of Law in Support of Defendants' Motion to Dismiss on or about October 20, 2004 ("Defendants' Memorandum"). Plaintiff filed an Affidavit in Opposition to Defendants' Motion to Dismiss on or about January 18, 2005 ("Plaintiff's Affidavit") and Defendants' filed the Reply Memorandum of Law in Support of Defendants' Motion to Dismiss on or about February 2, 2005 ("Defendants' Reply Memorandum").
Golden Mortgage, the Klar Defendants, the Parker Defendants, and Record Return Title filed Defendants' Motion to Dismiss and Defendants' Memorandum.
For the reasons set forth below, the Court grants Defendants' Motion to Dismiss.
II. Standard of Review
In reviewing a motion to dismiss, "the court must accept as true the factual allegations in the complaint and draw all reasonable inferences in favor of the plaintiff." Bolt Elec., Inc. v. City of New York, 53 F.3d 465, 469 (2d Cir. 1995) (citations omitted); Commercial Cleaning Servs., L.L.C. v. Colin Serv. Sys., Inc., 271 F.3d 374, 380 (2d Cir. 2001). Dismissal of the claim is proper when "it appears beyond doubt that plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Gant v. Wallingford Bd. of Educ., 69 F.3d 669, 673 (2d Cir. 1995) (citations omitted). "The issue is not whether a plaintiff is likely to prevail ultimately, but whether the claimant is entitled to offer evidence to support the claims." Chance v. Armstrong, 143 F.3d 698, 701 (2d Cir. 1998) (quotations omitted). "Conclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to prevent a motion to dismiss." Reisner v. A. Stoller, 51 F. Supp.2d 430, 440 (S.D.N.Y. 1999) (internal citations omitted). When deciding disputed jurisdictional issues in a motion to dismiss, the Court may look to "evidence outside the pleadings, such as affidavits." Filetech S.A. v. France Telecom S.A., 157 F.3d 922, 932 (2d Cir. 1998) (quotations omitted).
Where the plaintiff is proceeding pro se, the court will "read [the pro se party's] supporting papers liberally, and . . . interpret them to raise the strongest arguments that they suggest." Burgos v. Hopkins, 14 F.3d 787, 790 (2d Cir. 1994). "Nevertheless, the Court is also aware that pro se status does not exempt a party from compliance with relevant rules of procedural and substantive law." Iwachiw v. N.Y.C. Bd. of Educ., 194 F. Supp.2d 194, 204 (E.D.N.Y. 2002) (quotations omitted).
III. Analysis
The Court treats the following allegations in the Amended Complaint as true for the purposes of this motion. See, e.g., Eastchester Rehab. Health Care Ctr., L.L.C. v. Eastchester Health Care Ctr. L.L.C., No. 03 Civ. 7786, 2005 WL 887154, at *2 (S.D.N.Y. Apr. 15, 2005) (citing Harris v. City of New York, 186 F.3d 243, 247 (2d Cir. 1999):
Plaintiff, a resident of Bronx County, New York, states that Defendants engaged in a real estate scheme, beginning in September 1997, fraudulently to "induce plaintiff to spend monies, utilize a false appraisal to obtain a loan on behalf of plaintiff and appropriate for themselves the credit of $110,000.00 due to plaintiff" in connection with Plaintiff's purchase of a house located at 2423 Glebe Avenue ("Glebe House"). (Am. Compl. ¶ 62; see generally, Am. Compl. at 5, 7, ¶¶ 3, 18, 37, 41, 65, 70, 103). Plaintiff states that he purchased the Glebe House "expecting to receive a credit of $110,000.00 so as to recoup that spent on the major capital improvements and his closing costs." (Am. Compl. ¶ 19; see also, Am. Compl. Ex. P (cancelled checks)). Plaintiff did not receive the credit, was unable to recoup his costs, (Am. Compl. ¶ 106), and defaulted on his mortgage, which led to the foreclosure of the Glebe House. (Am. Compl. ¶ 51). Plaintiff states that "as a direct and proximate result of the defendant[s'] activities in violation of 1962 (a) and (d) of RICO, plaintiff has been injured in [his] business and property." (Am. Compl. ¶ 63).
Defendants argue, in support of their motion, that, among others: (1) Plaintiff's RICO claims are time-barred; (2) Plaintiff fails to allege a RICO claim with specificity; and (3) the Court should not entertain Plaintiff's (supplemental) state law claims.
(1) RICO Statute of Limitations
Civil RICO claims are subject to a four-year statute of limitations. Agency Holding Corp. v. Malley-Duff Assoc., 483 U.S. 143, 156 (1987); Tho Dinh Tran v. Alphonse Hotel Corp., 281 F.3d 23, 35 (2d Cir. 2002). Time begins to run when the plaintiff knew or should of known of his injury. Rotella v. Wood, 528 U.S. 549, 557-559 (2000) ("it would . . . be strange to provide an unusually long basic limitations period that could only have the effect of postponing whatever public benefit civil RICO might realize"); Iwachiw, 194 F. Supp.2d at 204 (dismissing pro se plaintiff's civil RICO claim as time-barred).
Plaintiff's RICO claim is time-barred. Clearly, Plaintiff was aware of his alleged injury related to the purchase of the Glebe House when he filed a complaint in the Supreme Court of the State of New York, County of Bronx, on June 28, 1999, Index No. 18177-99, against (several of) the instant Defendants, including Golden Mortgage, Philip E. Parker, Fred Santory, and Ronald Klar, alleging injury in the amount of $25,000,000 as a result of the Glebe House purchase ("June 1999 Complaint"). (June 1999 Complaint ¶ 22). Accordingly, time began to run on Plaintiff's civil RICO action in June of 1999, at the latest, and expired four years later in June 2003, almost a year before Plaintiff filed the instant action. See, e.g., Iwachiw, 194 F. Supp.2d at 204; Ackerman v. National Property Analysts, Inc., 887 F. Supp. 494, 504 (S.D.N.Y. 1992) ("Accordingly, plaintiffs' RICO claims against defendants are time barred and are dismissed with prejudice").
The June 1999 Complaint is attached as Exhibit F to the Defendants' Motion to Dismiss. (See Def.'s Mot. to Dismiss Ex. F); Filetech S.A., 157 F.3d at 932; see also, Reisner, 51 F. Supp.2d at 440.
(2) RICO Allegations
Assuming, arguendo, that the statute of limitations did not bar Plaintiff's civil RICO claim, Plaintiff's Amended Complaint, construed liberally, fails to meet RICO pleading requirements.
In order to sustain an action under RICO, a plaintiff "must have alleged that [he was] injured by Defendants' conduct of an enterprise through a pattern of racketeering activity." First Capital Asset Mgmt. v. Satinwood, Inc., 385 F.3d 159, 178 (2d Cir. 2004) (citing Cofacredit, S.A. v. Windsor Plumbing Supply Co., 187 F.3d 229, 242 (2d Cir. 1999)). A "pattern of racketeering activity" requires that: "(1) the defendants committed at least two predicate acts of racketeering within ten years of one another, (2) that these racketeering predicates are interrelated; and (3) that they reveal continued, or the threat of continued, racketeering activity." U.S. v. Diaz, 176 F.3d 52, 93 (2d Cir. 1999) (citations omitted); see Azrielle v. Cohen Law Offices, 21 F.3d 512, 520 (2d Cir. 1994). Where, as here, a complaint alleges that the RICO predicate acts involve (mail and wire) fraud, the pleading requirements of Rule 9(b) of the Federal Rules apply and plaintiff must allege the circumstances constituting fraud with particularity, including the relevant details of each act, such as when it was committed and how it was fraudulent. See Gelt Funding, 27 F.3d at 771;Mathon v. Feldstein, 303 F. Supp. 2d 317, 323 (E.D.N.Y. 2004) (stating, regardless of the plaintiff's pro se status, that the "complaint must adequately specify the statements it claims were false or misleading, give particulars as to . . . which . . . statements were fraudulent, state when and where the statements were made, and identify those responsible for the statements") (quotations omitted).
Plaintiff has not alleged predicate acts with the requisite specificity. Plaintiff generally alleges "acts of mail fraud by which Parker, Rosewood Realty, Santory and O'Sullivan . . . carried out the above referenced scheme or artifice to defraud the plaintiff," and "predicate acts all occurred after the effective date of RICO . . . and within (10) years of each other," but he fails to state with particularity when or which Defendants committed the predicate acts. (Am. Compl. ¶¶ 61(c), 62, 69(a), 70). For example, Plaintiff states broadly that "Defendants . . . engaged in a secret scheme of conduct including . . . (a) adopting a secret scheme, artifice, or plan to take control of the $110,000.00 credit due to plaintiff; (b) influencing the loan application process by submitting an appraisal with an inflated value for the property; (c) utilizing the ill gotten proceeds of the plaintiff[`s] loan to their benefit (d) subsequently purchasing plaintiff[`s] home for a mere $1000.00," but neglects to include names, dates or even allege use of the mails or a telephone. (Am. Compl. ¶ 65); see Mathon, 303 F. Supp. 2d at 323-24 (dismissing pro se plaintiff's civil RICO claim and stating that "in order to plead wire fraud with particularity as required by [Rule 9(b)], the plaintiff must identify the number of telephone calls that were made, the dates on which they were made, the identity of the persons making them, and the nature of the alleged misrepresentation"); see also, Wexner v. First Manhattan Co., 902 F.2d 169, 172-73 (2d Cir. 1990) (finding that a claim of mail or wire fraud must specify the content, date, June 24, 2005and place of any alleged misrepresentation and the identity of the persons making them).
Further, the Amended Complaint does not contain any continuity averments, i.e. that the Defendants were engaged in anything other than a "single fraudulent end with a limited goal lasting for a short period of time." Casio Computer Co. v. Sayo, No. 98 Civ 3722, 2000 WL 1877516, at *12 (2d Cir. Oct. 13, 2000); see, e.g., Jenkins v. Sea-Land Serv., No. 92 Civ. 2380, 1993 WL 33406, at *5 (S.D.N.Y. Feb 4, 1993) (granting motion to dismiss civil RICO action where pro se plaintiff's allegations of ongoing pattern of fraud "relate[d] to one transaction occurring at one point in time"). The continuous activity requirement prevents the application of RICO to isolated and sporadic acts.See U.S. v. Indelicato, 865 F.2d 1370, 1375 (2d Cir. 1989) ("the target of RICO is not sporadic activity"). A RICO claim will "typically fail when it relies upon a defendant's narrowly directed actions towards a single fraudulent end with a limited goal lasting for a short period of time." Casio Computer Co., 2000 WL 1877516, at *12.
(3) State Claims
Because the Court is dismissing Plaintiff's federal (RICO) claims, the Court also dismisses the state law claims without prejudice. See First Capital Asset Mgmt., 385 F.3d at 182-83 ("if the federal claims are dismissed before trial . . . the state claims should be dismissed as well"); Lerner v. Fleet Bank, N.A., 318 F.3d 113, 130 (2d Cir. 2003) ("In most circumstances, a district court should decline supplemental jurisdiction if all federal claims have been dismissed at the pleading stage").
Defendants allege that Plaintiff has brought several similar claims in state and federal courts and they seek a "Bill of Peace" to enjoin Plaintiff from bringing further actions regarding the Glebe House without leave of the Court. While Plaintiff certainly is litigious, "the history of this litigation to this point simply does not demonstrate the level of vexatiousness or harassment that has convinced the courts in this Circuit to issue such injunctions." Carlin v. Gold Hawk Joint Venture, 778 F.Supp. 686, 694 (S.D.N.Y. 1991) (citing for example In the Matter of Hartford Textile Corp., 681 F.2d 895, 896-97 (2d Cir. 1982)).
IV. Conclusion and Order
For the reasons stated, the Court grants Defendants' Motion to Dismiss. The Court respectfully requests that the Clerk close this case.