The opinion of the court was delivered by: HECKMAN
REPORT AND RECOMMENDATION AND ORDER
This case has been referred to the undersigned pursuant to 28 U.S.C. § 636(b) for all pretrial matters and to hear and report on dispositive motions. Defendant Harold Dingman has moved for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure (Item 77) and for sanctions against plaintiffs pursuant to Fed.R.Civ.P. 11 (Item 101).1 For the following reasons, it is recommended that Dingman's motion for summary judgment be granted in part and denied in part. Dingman's motion for Rule 11 sanctions is denied.
On August 26, 1994 plaintiffs filed this action alleging that between April and October, 1993, defendants induced plaintiffs to invest their money in a fraudulent "serial transaction (roll) program" involving the purchase and sale of bank notes and securities, in violation of the federal Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1961-1968, and various common law theories. More specifically, plaintiffs allege that between April and June of 1993 they transferred a total of $ 775,317.00 to Centerpointe Capital Corp. ("Centerpointe"), a corporation established by Lalime and defendant David Miller to carry out the serial transaction program. These funds were deposited into an attorney trust account maintained by Dingman, as Centerpointe's attorney, at NationsBank of Virginia.
Plaintiffs allege that instead of using the solicited funds to buy and sell discounted bank notes and securities as promised, Miller, Dingman, Lalime and the other defendants used the funds for their own personal gain.
After discovery, and after litigation of several disputes that arose between counsel during the course of discovery, Dingman moved for summary judgment pursuant to Rule 56 (see Items 77-79). Dingman claims that he was retained by Miller in early 1993 to provide legal services to Centerpointe in connection with certain proposed real estate transactions. According to Dingman, he had no previous experience or knowledge in the area of securities transactions, he is not nor has he ever been an officer of Centerpointe and played no role in the operation or management of Centerpointe, and he had no communications of any kind with the plaintiffs prior to any of the transactions at issue. He contends that the proof fails in several respects to meet the requirements for establishing a violation of RICO or liability under any of the state law theories set forth in the complaint (see generally Item 79).
In response, plaintiffs have submitted extensive documentation in support of their contention that Dingman was directly involved in the serial transaction "scheme" and the Centerpointe "enterprise" (see Items 86-93). According to plaintiffs, these submissions establish that there are genuine issues of material fact precluding summary judgment in favor of Dingman.
Oral argument was heard by the undersigned on February 27, 1997. For the reasons that follow, it is recommended that Dingman's summary judgment motion be granted in part and denied in part.
Summary judgment is appropriate if the pleadings, discovery materials, and affidavits on file "show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). In reaching this determination, the court must assess whether there are any material factual issues to be tried while resolving ambiguities and drawing reasonable inferences against the moving party. Coach Leatherware Co., Inc. v. AnnTaylor, Inc., 933 F.2d 162, 166-67 (2d Cir. 1991). "Entry of summary judgment indicates that no reasonable jury could return a verdict for the losing party." Coach Leatherware, supra at 167.
As stated by the Second Circuit:
The trial court's task at the summary judgment motion stage of the litigation is carefully limited to discerning whether there are any genuine issues of material fact to be tried, not to deciding them. Its duty, in short, is confined at this point to issue-finding; it does not extend to issue-resolution. . . . It must be kept in mind that only by reference to the substantive law can it be determined whether a disputed fact is material to the resolution of the dispute.
Gallo v. Prudential Residential Services, 22 F.3d 1219, 1224 (2d Cir. 1994). In this case, the ...