others to compose an enterprise if it is sufficiently distinct. Riverwoods, 30 F.3d at 344; R.C.M., 1997 U.S. Dist. LEXIS 565, 1997 WL 27059 at *7. This requirement may not be circumvented by alleging that the corporate entity's agents or employees and the corporate entity itself form the RICO enterprise that carries out its regular business. Riverwoods, 30 F.3d at 344; R.C.M., 1997 U.S. Dist. LEXIS 565, 1997 WL 27059 at *7.
Plaintiff not only fails to allege an enterprise that is different from the law firm and the firm's partners, but in the RICO Statement
the Plaintiff states "Defendants in this action are the enterprise itself. Daniel and Norma Rhoades are the alter egos of Rhoades and Rhoades, P.C. and they have become a single entity and enterprise." (RICO Stmt. P 6(E).) Accordingly, by her own RICO Statement, Plaintiff sets forth a defect fatal to her RICO claim.
b. Racketeering Acts
Furthermore, Plaintiff's claim fails for lack of specificity. Plaintiff alleges that the Racketeering Acts consists of mail and wire fraud, obstruction of justice
and tampering with a witness.
There are no facts in either the RICO Statement or the Complaint that would fulfill the elements of either crime of obstruction of justice or tampering with a witness. The mail and wire fraud racketeering acts pled are completely devoid of any specificity and cannot meet the requirements of Rule 9(b).
(Compl.; RICO Stmt. PP 5(B), (C).)
2. Section 1962(b)
Section 1962(b) prohibits a person from acquiring or maintaining an interest in or control in an enterprise through a pattern of racketeering activity. It is only logical that the Plaintiff having failed to allege an appropriate enterprise, that this cause of action must fail as well. See, e.g., American Buying Ins. Serv. v. S. Kornreich & Sons, 944 F. Supp. 240, 246 (S.D.N.Y. 1996). If no enterprise has been properly alleged, there can be no entity in which to invest or to control. Furthermore, assuming arguendo that the law firm was not a Defendant and could be found distinct enough from Daniel and Norma Rhoades, which it cannot,
then the pleadings are insufficient to show a connection between the alleged interest in the law firm and a pattern of racketeering activity. See, e.g., Protter v. Nathan's Famous Sys., Inc., 925 F. Supp. 947, 955 (E.D.N.Y. 1996); Vista Co. v. Columbia Pictures Indus., Inc., 725 F. Supp. 1286, 1300 (S.D.N.Y. 1989). Furthermore, there is no allegation of the injury suffered as a result of an investment in any enterprise. Vista, 725 F. Supp. at 1300.
3. Section § 1962(d)
Plaintiff must prove that the Defendants "'embraced the objective of the alleged conspiracy,' and agreed to commit two predicate acts in furtherance thereof." United States v. Viola, 35 F.3d 37, 43 (2d Cir. 1994) (quoting United States v. Neapolitan, 791 F.2d 489, 495 (7th Cir. 1986), cert. denied, 479 U.S. 939, 93 L. Ed. 2d 371, 107 S. Ct. 421 (1986)), cert. denied, 513 U.S. 1198, 131 L. Ed. 2d 148, 115 S. Ct. 1270 (1995); Hecht, 897 F.2d at 25; Hayden v. Paul, Weiss, Rifkind, Wharton & Garrison, 955 F. Supp. 248, 1997 U.S. Dist. LEXIS 1849, 1997 WL 76674, at *6 (S.D.N.Y. 1997). Once again Plaintiff relies on conclusory statements both in the Complaint and in the RICO Statement. Plaintiff does not allege more than that the Defendants "conspired." In the RICO Statement, Plaintiff's second chance to detail the particulars of the allegations, she begins to talk about a conspiracy between the Defendants and Rabina, who was found by the Appellate Division not to have known about any fraud in the property transfer. Plaintiff does not even allege that there was an agreement, nor does she allege any actionable predicate acts which the Defendants allegedly agreed to commit.
4. Statute of Limitations
Furthermore, the Plaintiff's action, under §§ 1962(b)-(d), is barred by the statute of limitations. RICO claims have a four year statute of limitations. Agency Holding v. Malley-Duff & Assoc., Inc., 483 U.S. 143, 97 L. Ed. 2d 121, 107 S. Ct. 2759 (1987). The statute of limitations begins to run "when plaintiff discovers or should have discovered an injury." Bankers Trust Co. v. Rhoades, 859 F.2d 1096, 1103 (2d Cir. 1988), cert. denied, 490 U.S. 1007, 104 L. Ed. 2d 158, 109 S. Ct. 1642 (1989). According to the Second Circuit, the test of inquiry notice is objective:
The means of knowledge are the same thing in effect as knowledge itself. Where the circumstances are such as to suggest to a person of ordinary intelligence the probability that he has been defrauded, a duty of inquiry arises, and if he omits that inquiry when it would have developed the truth, and shuts his eyes to the facts which call for investigation, knowledge of that fraud will be imputed to him. This rule is fully applicable in cases . . . which involve claims of . . . fraud.
Armstrong v. McAlpin, 699 F.2d 79, 88 (2d Cir. 1983). Where there are multiple injuries, "each time plaintiff discovers or should have discovered an injury caused by defendant's violation of 18 U.S.C. § 1962, a new cause of action arises as to that injury, regardless of when the actual violation occurred." Bankers Trust, 859 F.2d at 1105.
In the present case, Plaintiff alleges seven injuries which took place between 1985 and 1993. Specifically: 1) on or about July 1986, Plaintiff suffered $ 10,000,000.00 worth of losses as a result of the Rhoades Defendants failure "to represent Plaintiff in an ethical, competent, and professional manner and with a high degree of skill" in the termination or modification of the venture agreement with Bogoni, (Compl. PP 21-31); 2) on or about January 1988, Plaintiff was injured in the amount of $ 10,000,000.00 due to the Rhoades Defendants failure to negotiate a better property sale deal with Rabina, (Compl. PP 33-41); 3) "during the period from about July 1988 to March 1990, [the Rhoades Defendants] collected, and have yet to return to Plaintiff, [from Rabina] 20 monthly [mortgage] payments of $ 52,500.00 each for an aggregate total of $ 1,050,000.00, (Compl. PP 55-60); 4) on or about January 1990 through December of 1991, Plaintiff was injured in the amount of $ 10,500,000.00 as a result of the Rhoades Defendants failure to defend properly Plaintiff in a re-conveyance suit brought by Bogoni, (Compl. PP 46-53); 5) Plaintiff was injured in the amount of $ 105,681.47 after the Rhoades Defendants advised Plaintiff not to file New York and Federal income taxes for the years 1988 through 1991, (Compl. PP 61-63); 6) during the years 1985 through 1991, Plaintiff paid $ 200,000.00 for fraudulent legal fees to the Rhoades Defendants, (Compl. PP 64-69); and 7) on or about June 1987 through June 1993, Plaintiff was injured in the amount of $ 164,900.00, which had been placed in an escrow account and has yet to be returned to the Plaintiff. (Compl. PP 70-74.)
The Plaintiff filed her cause of action on April 17, 1996; hence, she may recover for any injury she discovered or should have discovered on or after April 17, 1992. First, any reasonable juror could only find that Plaintiff, who had inherited real estate holdings and made them "flourish under her administration," (RICO Stmt. P 20), should have learned of any alleged fraud when each of these complained-of acts occurred. There is no claim that Defendants withheld information or deceived Plaintiff at the time the alleged acts were done. Alleged acts one through six occurred before 1992. Plaintiff's unsupported allegation that she found out about these alleged fraudulent acts "some time after January 1992" (Compl. PP 26, 42), still does not save her from the statute of limitations bar in that she does not allege she found out about them after April 17, 1992. Accordingly, the RICO statute of limitations bars the first six of Plaintiff's acts.
Regarding the seventh alleged act, which, read in a light most favorable to Plaintiff, alleges a cause of action for conversion arising in June 1993, the statute of limitations is not a bar. However, the act cannot support a RICO cause of action for the reasons stated above.
B. Supplemental Jurisdiction
The Court having dismissed all claims over which it had jurisdiction, now dismisses the Plaintiff's state law claims pursuant to 28 U.S.C. § 1367(c)(3).
The Court must determine whether it is appropriate to retain the remaining state law claims under supplemental jurisdiction. Section 1367(a) states in pertinent part:
the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution.
Section 1367(c) provides, however, four exceptions to the rule. A district court may decline to exercise jurisdiction if
(1) the claim raises a novel or complex issue of State law,