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EXECUTIVE PHOTO, INC. v. NORRELL

February 7, 1991

EXECUTIVE PHOTO, INC., PLAINTIFF,
v.
RENE NORRELL, DEFENDANT. RENE NORRELL, THIRD-PARTY PLAINTIFF, V. SOLOMON BORNFREUND, THIRD-PARTY DEFENDANT.



The opinion of the court was delivered by: Leisure, District Judge:

ORDER AND OPINION

This is an action for conversion of property, and for violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961, et seq. Defendant Rene Norrell has now moved to dismiss the complaint in this action, pursuant to Federal Rules of Civil Procedure 9(b), 12(b)(1), 12(b)(6) and 12(c). For the reasons set forth below, defendant's motion is granted in part and denied in part.

Background

Plaintiff in this action is a New York corporation with its principal place of business in the Southern District of New York. Plaintiff is in the business of selling, at the wholesale and retail level, various consumer items, in particular cameras and camera equipment. Complaint ¶ 1. Defendant is a resident and citizen of New Jersey. Complaint ¶ 2. Plaintiff alleges that for several years, and at all times relevant to this action, one Solomon Bornfreund ("Bornfreund") was employed by plaintiff, engaged primarily in receiving merchandise in plaintiff's storeroom. Complaint ¶ 5. Commencing at a time unknown to plaintiff, Bornfreund and defendant allegedly entered into "a common plan, scheme, design and business pursuant to which Bornfreund stole merchandise from plaintiff's storeroom, removed it from plaintiff's premises, and sold it to defendant for cash." Complaint ¶ 6. The complaint further alleges that "defendant, knowing the merchandise had been stolen from plaintiff, resold the merchandise at a profit," Complaint ¶ 6, "transmitt[ing] the same in interstate commerce." Complaint ¶ 15. The value of the merchandise said to have been stolen by Bornfreund and subsequently purchased by defendant is alleged to be in excess of $750,000. Complaint ¶ 7.

This action was filed on January 22, 1990. Defendant filed his answer on March 5, 1990, and an amended answer on June 25, 1990. Defendant thereafter brought the instant motion to dismiss.

Discussion

1) Sufficiency of Plaintiff's Conversion Claim

Defendant first attacks the sufficiency of plaintiff's conversion claim, arguing that plaintiff has failed to plead with the particularity required by Fed.R.Civ.P. 9(b). Rule 9(b) provides, in relevant part, that "[i]n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity," and thus, by its own terms, is explicitly limited to averments of fraud or mistake, neither of which is found in plaintiff's conversion claim. Accordingly, the Court will not apply the heightened particularity standard of Rule 9(b) to plaintiff's conversion claim, but rather the liberal standard applicable to a motion brought pursuant to Fed.R.Civ.P. 12(b)(6).*fn1

"The court's function on a Rule 12(b)(6) motion is not to weigh the evidence that might be presented at a trial but merely to determine whether the complaint itself is legally sufficient." Festa v. Local 3 International Brotherhood of Electrical Workers, 905 F.2d 35, 37 (2d Cir. 1990); see also Ryder Energy Distribution Corp. v. Merrill Lynch Commodities, Inc., 748 F.2d 774, 779 (2d Cir. 1984) ("The function of a motion to dismiss `is merely to assess the legal feasibility of the complaint, not to assay the weight of the evidence which might be offered in support thereof.'" (quoting Geisler v. Petrocelli, 616 F.2d 636, 639 (2d Cir. 1980))).

Thus, a motion to dismiss must be denied "unless it appears beyond a doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974) (citing Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-102, 2 L.Ed.2d 80 (1957)); see also Morales v. New York State Dep't of Corrections, 842 F.2d 27, 30 (2d Cir. 1988). In deciding a motion to dismiss, the Court must limit its analysis to the four corners of the complaint, see Kopec v. Coughlin, 922 F.2d 152, 155 (2d Cir. 1991), and must accept the plaintiff's allegations of fact as true, together with such reasonable inferences as may be drawn in his favor. Papasan v. Allain, 478 U.S. 265, 283, 106 S.Ct. 2932, 2943, 92 L.Ed.2d 209 (1986); Murray v. Milford, 380 F.2d 468, 470 (2d Cir. 1967); Hill v. Sullivan, 125 F.R.D. 86, 90 (S.D.N.Y. 1989) ("all allegations in plaintiffs' amended complaint must be accepted as true and liberally construed."); see also Scheuer, supra, 416 U.S. at 236, 94 S.Ct. at 1686. Federal Rule of Civil Procedure 8(a) requires only a "`short and plain statement of the claim' that will give the defendant fair notice of what plaintiff's claim is and the ground upon which it rests." Conley, supra, 355 U.S. at 47, 78 S.Ct. at 102 (quoting Fed.R.Civ.P. 8(a)).*fn2

Applying this standard to plaintiff's claim for conversion, the Court finds that plaintiff has adequately pled that claim. "Under New York law, to establish a conversion action, a plaintiff must show legal ownership of, or a superior possessory right in, the disputed property, and `that the defendant exercised an unauthorized dominion over that property, . . . to the exclusion of the plaintiff's rights.'" Middle East Banking Co. v. State Street Bank International, 821 F.2d 897, 906 (2d Cir. 1987) (quoting Meese v. Miller, 79 A.D.2d 237, 242, 436 N.Y.S.2d 496, 500 (4th Dep't 1981)). "Conversion does not require the defendant's wrongful intent . . . [and a] rightful owner need only be deprived of his property, partially or temporarily." Pittston Warehouse Corp. v. American Motorists Insurance Co., 715 F. Supp. 1221, 1225 (S.D.N.Y. 1989) (citations omitted). In the case at bar, plaintiff's allegations that defendant knowingly received property stolen from plaintiff, and then resold that property at a profit, sufficiently pleads a claim for conversion under New York law. Defendant's motion to dismiss that claim is, therefore, denied.

2) Sufficiency of Plaintiff's RICO Claim

Section 1964(c) of Title 18 United States Code provides a civil remedy for "[a]ny person injured in his business or property by reason of a violation of section 1962 of this chapter. . . ." 18 U.S.C. § 1964(c). To state a claim for violation of § 1962, a plaintiff must allege "(1) that the defendant (2) through the commission of two or more acts (3) constituting a `pattern' (4) of `racketeering activity' (5) directly or indirectly invests in, or maintains an interest in, or participates in (6) an `enterprise' (7) the activities of which affect interstate or foreign commerce." Moss v. Morgan Stanley, Inc., 719 F.2d 5, 17 (2d Cir. 1983), cert. denied, 465 U.S. 1025, 104 S.Ct. 1280, 79 L.Ed.2d 684 (1984); see also Clapp v. Greene, 743 F. Supp. 273, 277 (S.D.N.Y. 1990) (quoting Moss, ...


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