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WIENER v. NAPOLI

March 29, 1991

FLORENCE WIENER, AS EXECUTRIX OF THE ESTATE OF SAMUEL WIENER, PLAINTIFF,
v.
JOSEPH P. NAPOLI, ESQ., MORRIS J. EISEN, ESQ., MORRIS J. EISEN, P.C., AND MORRIS J. EISEN & JOSEPH P. NAPOLI, DEFENDANTS.



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

  MEMORANDUM AND ORDER

The defendants' motions to dismiss the Complaint raise the novel issue of whether the defendants' alleged fraudulent activity as trial counsel for the plaintiff's attorney-decedent in tort litigation, is sufficient to state a claim for relief under the Racketeering Influenced Corrupt Organization Act, 18 U.S.C. § 1961, et seq. ("RICO").

I.  BACKGROUND

This action stems from financial arrangements between Samuel Wiener, an attorney at law, and the defendants-attorneys, whereby the defendants acted as trial counsel for Wiener. According to the Complaint, by letter agreement dated May 24, 1982, Wiener retained defendant Napoli as trial counsel with respect to fourteen civil actions and agreed to either (1) an equal division of the fees, or (2) a one-third Wiener/two-thirds Napoli division of the fees. The agreement also provided that Wiener would be reimbursed for any disbursements he incurred in connection with the actions. The Complaint also alleges that Napoli practiced individually and also in association and partnership with defendants Eisen and Eisen & Napoli.

After Wiener's death on August 20, 1982, Florence Wiener, as the executrix of Mr. Wiener's estate, retained defendant Napoli and the other defendants as attorneys in an additional ninety-nine of Wiener's cases (see Complaint, Schedule A). Wiener's estate and Napoli entered into separate agreements with respect to each case with regard to the division of fees. In the Complaint the "Eisen Enterprise" is apparently defined as Napoli individually and the other named defendants, as an association (see Complaint, ¶ 18). The Complaint provides, in part, as follows:

    "¶ 26. Since the transfer of the cases to the
  EISEN ENTERPRISE under the agreements entered into
  prior and subsequent to decedent's death, the fees
  and disbursements due from the cases set forth in
  Schedule A have not been paid either in full or, in
  many instances, not at all.
    ¶ 27. Defendants, both individually and as part
  of the EISEN ENTERPRISE, have in several instances
  concealed the resolution and settlement of cases
  from plaintiff and failed to remit monies due.
    ¶ 28. Defendants, both individually and as part
  of the EISEN ENTERPRISE, have forged indorsements
  on settlement drafts made payable to the Estate of
  SAMUEL WIENER and failed to remit fees and
  disbursements due thereunder.
    ¶ 29. Defendants, individually and as part of the
  EISEN ENTERPRISE, agreed to hold harmless an
  insurance carrier from any claim by decedent's
  estate to a lien on settlement proceeds if
  settlement drafts would be made payable to EISEN,
  P.C. and not to EISEN, P.C. and the Estate of
  SAMUEL WIENER, jointly, in order to conceal the
  fact of settlement from plaintiff.
    ¶ 30. Defendants have also failed to file closing
  statements with the New York State Office of Court
  Administration in a further effort to conceal
  settlements and the nonpayment of fees, in whole or
  in part, to plaintiff."

The Complaint sets forth five claims: (1) fraud; (2) accounting based on a constructive trust; (3) moneys had and received; (4) RICO (18 U.S.C. § 1962[c]); and (5) breach of contract. Subject matter jurisdiction is based on 28 U.S.C. § 1331, in that the RICO claim "arises under the . . . laws . . . of the United States." The Complaint asserts pendent jurisdiction with regard to the remaining four claims which are state law causes of action.

As to the RICO claim, the Complaint alleges that defendants "NAPOLI, EISEN, EISEN, P.C." and "EISEN & NAPOLI" constitute an "enterprise," the "EISEN ENTERPRISE," within the meaning of 18 U.S.C. § 1961(4), and that "NAPOLI, EISEN, EISEN, P.C." and "EISEN & NAPOLI" participated in the affairs of the "EISEN ENTERPRISE" through a "pattern of racketeering" by numerous acts of alleged mail fraud in violation of 18 U.S.C. § 1341.

In particular, the Complaint alleges the following:

    "¶ 56. Defendants formulated and implemented a
  fraudulent scheme to defraud plaintiff out of fees
  and disbursements due under the various written
  agreements referred to herein by concealing
  settlements, forging estate endorsements, inducing
  settlement checks to issue which did not account
  for the estate's continuing interests in settlement
  proceeds, by failing to file closing statements
  with the appropriate state authorities setting
  forth fees and disbursements due, all as set forth
  more fully in the claims for relief stated above.
    ¶ 57. The fraudulent scheme continues to this day
  and threatens to continue inasmuch as a number of
  the legal matters in which the defendants
  substituted as counsel in place of decedent SAMUEL
  WIENER are cases and matters which are still open,
  awaiting final resolution through either trial,
  settlement or other disposition.
    ¶ 58. On or about the dates set forth below, the
  defendants unlawfully, willfully and knowingly, and
  for the purpose of furthering and executing their
  fraudulent scheme, did place and cause to be placed
  in the United States Post Offices and authorized
  depositories for mail matter, and did cause to be
  delivered by mail, according to the directions
  thereon, certain mail matter to be sent and
  delivered by the United States Postal Service, all
  in violation of 18 U.S.C. § 1341, as follows:"

Thereafter, under the headings "Date," "Transmitting Party," "Receiving Party," and "Description," the Complaint lists 32 mailings by the defendant dating from November 11, 1982 to September 11, 1990. The "Description" of these mailings include "settlement draft," "fee check" or "check," "letter enclosing general release," and "closing ...


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