The opinion of the court was delivered by: WEXLER
In this action plaintiff contends that defendants engaged in a massive conspiracy to extract money from plaintiff by means of fraudulent automobile insurance claims. The first seven claims in the complaint are state law fraud claims, jurisdiction over which is based upon diversity of citizenship. The eighth claim is based upon the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961-1968 (1982).
Plaintiff contends that defendants violated § 1962(c), which provides that "[i]t shall be unlawful for any person employed by or associated with an enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt", and violated § 1962(d) by conspiring to violate § 1962(c). "Racketeering activity" is defined to encompass a variety of acts, called "predicate acts". § 1961)1). The "racketeering activity" which plaintiff alleges took place includes mail fraud under 18 U.S.C. § 1341. See § 1961(1)(B). Plaintiff therefore sues for treble damages pursuant to § 1964(c).
Previously, on June 14, 1984, pursuant to Rule 54(b) of the Federal Rules of Civil Procedure, we ordered the entry of summary judgment against defendants George Siff and Steven D'Ambra, in the amount of $1,682,806.68 (three times plaintiff's claimed actual damages) plus costs and attorney fees. The time to appeal from the judgment has expired.
Plaintiff has now moved for summary judgment against defendants Cohen, Cortopassi, Jarmel, Monzon, Boutelle, and O'Mahoney (who have defaulted by not answering the complaint), and defendants Rodgen, Wolf, Muratore, and Falcone (who have appeared in this action). The motion has been stayed as against Jarmel so that he may obtain counsel, and as against Muratore because he has died. Defendant Hyfin Credit Union has moved to dismiss the RICO claim, or in the alternative to dismiss the RICO claim as against Hyfin Credit Union Only. Defendant Falcone has moved to dismiss the RICO claim as against himself. Defendant Plaza Oldsmobile has moved for leave to amend its answer.
A. ABSENCE OF TARGET ENTERPRISE
Hyfin contends that dismissal of the RICO claim is required because the alleged conspiracy did not aim at the takeover of an enterprise. However, the Supreme Court has held that a violation of § 1962(c) can be made out by knowing participation in a criminal enterprise engaging in racketeering activities, and that there is no need for a "target enterprise". United States v. Turkette, 452 U.S. 576, 101 S. Ct. 2524, 69 L. Ed. 2d 246(1981). But see United States v. Ruggiero, 726 F.2d 913, 921 (2d CIr.1984) (discussing extend of participation required). Hyfin's argument is therefore invalid.
Hyfin's motion is based in part upon the fact that neither Hyfin nor any of its directors or officers have been indicted or convicted for any crime relevant to the complaint (though several other defendants have been convicted of crimes relevant or arguably relevant to the complaint). Defendant Falcone makes a similar argument.
In Sedima, S.P.R.L. v. Imrex Co., Inc., 741 F.2d 482 (2d CIr.1984), the Second Circuit stated that "a prior criminal conviction is a prerequisite to a civil RICO action." Id, at 496. The Court also stated that the plaintiff in a civil RICO suit must demonstrate a special type of injury, called a "racketeering injury". Id. The Court affirmed a lower court decision dismissing certain civil RICO claims. Either of the Court's two statements standing alone would have been sufficient to support the affirmance of the dismissal.
For reasons set forth below, we need not address the "absence of conviction" issue.
Hyfin also contends that plaintiff has not properly alleged a "racketeering injury". Hyfin relies upon three Second ...