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February 21, 1995

MALVINA D'ORANGE, Plaintiff, against CHARLES M. FEELY, RALPH CRUDO, and CRUDO & CRUDO, P.C., Defendants.

The opinion of the court was delivered by: CONSTANCE BAKER MOTLEY



 The underlying cause of action in this case arises from the handling of estate funds of which Plaintiff is the sole beneficiary. *fn1" Plaintiff Malvina D'Orange is a senior citizen who resides in Queens, New York. (P 4.) *fn2" The estate involved is that of Plaintiff's late sister, Clarette Otalera. (P 4.) Defendant Charles M. Feely is the executor of this estate. (P 5.) Defendants Ralph Crudo and Crudo & Crudo, P.C. (hereinafter referred to collectively as the "Crudo Defendants") were counsel to the estate during probate proceedings. (P 6.)

 Defendant Feely drafted a will for Clarette Otalera in which Feely was appointed executor to the estate. (P 8.) Feely caused this will to be executed on or about May 9, 1989. (P 8.) Simultaneously, Otalera executed a power of attorney to Feely. (P 8.)

 At about the same time as the execution of these documents, Otalera provided to Feely approximately $ 60,000 in cash or property to hold in trust and to use on her behalf. (P 9.) From the time of the establishment of this trust until Otalera died on November 24, 1989, Feely misappropriated approximately $ 43,000 in trust funds for his own purposes. (P 10.)

 Plaintiff D'Orange was the sole beneficiary of Otalera's estate and stood to inherit approximately $ 255,000. (P 11.) Defendant Feely persuaded D'Orange to forgo a lump sum distribution of these funds and instead allow Feely to provide her with monthly installment payments of $ 3,000. (P 12.) Moreover, from the time of Otalera's death, Feely appropriated for his own benefit approximately $ 79,000 that belonged to the estate. (P 14.)

 In or before early 1993, Feely created or caused to be created financial journals and accountings that set forth false claims for clerical and legal services in order to cover up his misappropriation of the estate funds. (PP 16-18.) On May 27, 1993, and October 1, 1993, the Crudo Defendants separately forwarded to Plaintiff's counsel the two allegedly fraudulent "fiduciary accountings" that Feely had prepared. (PP 18, 32; Mot. Dismiss Compl. Exs. F, H.)

 Plaintiff's federal law causes of action arise under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961-1968 ("RICO"). Based on the two mailings identified above, Plaintiff charges the Crudo Defendants with both substantive RICO violations and conspiracy to violate RICO. See 18 U.S.C. § 1962(b)-(d). Plaintiff also asserts a pendant state law claim for breach of fiduciary duty against these Defendants.

 The Crudo Defendants have filed a motion to dismiss the Complaint pursuant to Rules 12(b)(6) and 9(b) of the Federal Rules of Civil Procedure. The Defendants assert four grounds for dismissing Plaintiff's RICO claims: (1) Defendants' acts in forwarding Feely's accountings were the legitimate acts of attorneys on behalf of a client in connection with pending litigation and therefore cannot constitute predicate acts; (2) Plaintiff has failed to satisfy the "pattern" requirement under RICO; (3) Plaintiff has failed to plead fraud with requisite particularity; and (4) the estate in this case does not qualify as an "enterprise." Defendants challenge Plaintiff's state law claim on both substantive and jurisdictional grounds. As discussed below, Defendants are correct that Plaintiff has failed to state a RICO claim against them. Therefore, the court lacks supplemental jurisdiction over Plaintiff's state law claim and the Complaint against the Crudo Defendants must be dismissed in its entirety.

 II. The Standard For Dismissal Under Rule 12(b)(6).

 A motion to dismiss pursuant to Rule 12(b)(6) should be granted only if it appears beyond doubt that plaintiffs can prove no set of facts in support of their claims which would entitle them to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S. Ct. 99, 2 L. Ed. 2d 80 (1957); Mills v. Polar Molecular Corp., 12 F.3d 1170, 1174 (2d Cir. 1993); Goldman v. Belden, 754 F.2d 1059, 1065 (2d Cir. 1985); Seagoing Uniform Corp. v. Texaco, Inc., 705 F. Supp. 918, 927 (S.D.N.Y. 1989). Therefore, on a motion to dismiss, all factual allegations of the complaint must be accepted as true, Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S. Ct. 2229, 81 L. Ed. 2d 59 (1984); Frasier v. General Elec. Co., 930 F.2d 1004, 1007 (2d Cir. 1991), and all reasonable inferences must be made in plaintiffs' favor. Cosmas v. Hassett, 886 F.2d 8, 11 (2d Cir. 1989); Meilke v. Constellation Bancorp, 1992 U.S. Dist. LEXIS 2368, No. 90-3915, 1992 WL 47342, at *1 (S.D.N.Y. Mar. 4, 1992). "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." Goldman v. Belden, 754 F.2d at 1067 (citation omitted).

 III. Plaintiff's Effort to Treat the Motion as One for Summary Judgement.

 Plaintiff charges the Crudo Defendants with only two predicate acts. Specifically, the Complaint charges that the Defendants forwarded to D'Orange's counsel two allegedly fraudulent accountings prepared by Feely. The Crudo Defendants assert that these accountings were sent in connection with D'Orange's proceeding against Feely in the Surrogate's Court. Further, the Defendants note that their role in this matter was limited to preparing transmittal letters which they sent to D'Orange's counsel along with each of the accountings. While the Complaint only mentions the accountings, Defendants assert that it incorporates the transmittal letters by reference. While a court evaluating a motion to dismiss under Rule 12(b)(6) can consider documents so incorporated, Kramer v. Time Warner Inc., 937 F.2d 767, 773 (2d Cir. 1991), it is not obvious that Defendants can satisfy this standard.

 Defendants also ask the court to take judicial notice of the Surrogate's Court proceedings in connection with which the accountings were provided. Since this is only a request to have the court acknowledge "the fact of such litigation" rather than the truth of any matters asserted therein, Defendants are on solid ground in making this request. Id. at 774.

 Plaintiff takes the view that Defendants have gone beyond the four corners of the complaint, and, therefore, plaintiff concludes that she can do the same. Disregarding the fact that, under Rule 12(b), it is the court rather than the parties that is empowered to convert a motion to dismiss into a motion for summary judgement, the evidence upon which D'Orange seeks to rely is insufficient to overcome Defendants' arguments. Moreover, even when a 12(b)(6) motion is treated as one for summary judgement, the same standard for dismissal applies. Soper v. Simmons Int'l, Ltd., 632 F. Supp. 244, 248 (S.D.N.Y. 1986) (Sand, J.) ...

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