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FRIEDLANDER v. RHOADES

April 28, 1997

CLAIRE FRIEDLANDER, Plaintiff, against DANIEL RHOADES and NORMA RHOADES and RHOADES AND RHOADES, P.C. and Does 1 Through 20, inclusive, Defendants.


The opinion of the court was delivered by: BATTS

 DEBORAH A. BATTS, United States District Judge.

 Before the Court is the motion of Defendants Daniel Rhoades ("Daniel"), Norma Rhoades ("Norma"), and Rhoades and Rhoades, P.C. ("law firm") (collectively the Rhoades Defendants), to dismiss Plaintiff's civil Racketeer Influenced and Corrupt Organizations Act claim, 18 U.S.C. § 1961 et seq. ("RICO"), pursuant to Rules 9(b) and 12(b)(6) of the Federal Rules of Civil Procedure. The Rhoades Defendants argue that the Plaintiff's Complaint fails to state a valid RICO claim and that the action is barred by the statute of limitations. For the reasons that follow, Defendants' motion is GRANTED in its entirety.

 I. BACKGROUND

 Plaintiff is a former partner of a New York General Partnership known as Odette Realty Company ("Odette"). (Compl. P 18.) Defendants Daniel and Norma are admitted to practice law in New York State, (Compl. PP 8, 9), and own, control, and operate Defendant law firm, a New York professional corporation engaged in the practice of law within New York State. (Compl. PP 10-13.)

 Plaintiff alleges that on or about July 1986, the Rhoades Defendants began representing Plaintiff and continued to represent her in various legal matters until December 1991. (Compl. P 14.) At the time the Rhoades Defendants were hired, they represented to Plaintiff that they were experienced in the practice of law, "possessed a high degree of skill and legal acumen," would represent Plaintiff in a competent, professional and ethical manner, and would charge Plaintiff fair and reasonable hourly fees. (Compl. PP 15-16.)

 In February 1985, Plaintiff entered into a written agreement with Mr. Paul Bogoni ("Bogoni"), who owned the partnership interests in Odette not held by Plaintiff, to conduct a joint venture for the conversion of a New York City apartment building owned by Odette into cooperative ownership. (Compl. PP 19-20.) Problems grew out of the agreement and Plaintiff hired the Rhoades Defendants to represent and assist her in terminating, modifying or eliminating the terms and obligations imposed upon Plaintiff by the agreement. (Compl. P 21.) Plaintiff alleges that Daniel told her at that time, that he had "special expertise" and could "fully relieve plaintiff from all obligation under said agreement with Bogoni, and render such agreement null, void and of no further effect." (Compl. P 22.)

 The Rhoades Defendants advised Plaintiff to violate the agreement by interfering with the conversion of the building to cooperative ownership. (Compl. P 27.) Bogoni brought suit and the Supreme Court of the State of New York enjoined Plaintiff from interfering in the conversion of the building to cooperative ownership. (Compl. P 29.) The Rhoades Defendants advised Plaintiff to violate the court injunction. (Id.)

 On or about January 1988, the Rhoades Defendants introduced Plaintiff to Mr. Maidad Rabina ("Rabina") for the purpose of selling the New York City property owned by both Plaintiff and Bogoni. (Compl. P 33.) Plaintiff alleges that the Rhoades Defendants arranged for the sale and financing of the property at an amount unfavorable to the Plaintiff and advised her not to obtain Bogoni's consent to the sale because it was not necessary. (Compl. PP 34, 38.) Plaintiff and Rabina entered into an agreement where Rabina would pay $ 7.2 million to Plaintiff with $ 900,000.00 at closing and the remaining $ 6.3 million to be financed with a purchase money mortgage. (Compl. P 34.) Plaintiff transferred the property to Rabina on May 24, 1988, (Compl. P 37), but, as Defendants had advised, her neighborhood Jacoby & Meyers handled the closing. (Compl. PP 35-36.)

 Plaintiff also alleges that the Rhoades Defendants collected the mortgage payments from Rabina for the benefit of Plaintiff but that none of the 20 monthly payments of $ 52,500.00 were ever paid to her. The Rhoades Defendants have refused repeated requests to pay Plaintiff the money. (Compl. PP 54-57.)

 Bogoni again sued Plaintiff in the Supreme Court of the State of New York seeking re-conveyance of the property. (Compl. P 46.) The Rhoades Defendants again represented Plaintiff during the trial, and advised Plaintiff not to attend the trial and to commit perjury. (Compl. PP 47, 50, 51.) Furthermore, the Rhoades Defendants advised Plaintiff not to pay Federal or New York State income taxes until all litigation was resolved, which advice she followed. (Compl. PP 61-62.) Plaintiff lost at trial and the court entered judgment in favor of Bogoni against Plaintiff for the amount of $ 9 million and another judgment in favor of Rabina for $ 1.5 million. *fn1" (Compl. P 46.)

 Plaintiff claims that she paid more than $ 200,000.00 in legal fees to the Rhoades Defendants from 1985 through 1991. (Compl. PP 64, 69.) Plaintiff alleges that she did not discover or learn about the Rhoades Defendants' fraudulent actions until some time after January of 1992. (Compl. PP 26, 42.)

 Finally, Plaintiff alleges that on or about June 1987 and continuing through June 30, 1993, the Rhoades Defendants acquired $ 164,900.00 from an escrow account set up for the sale of another cooperative apartment. (Compl. P 70.) Plaintiff has demanded since June 30, 1993, the proceeds of the escrow account, but the Rhoades Defendants have refuse to turn over the money. (Compl. PP 72-73.)

 The Rhoades Defendants deny Plaintiff's allegations and now move to dismiss the Complaint pursuant to Rules 9(b) and 12(b)(6) of the Federal Rules of Civil Procedure. In addition, they argue that the Court should not grant Plaintiff's request to amend the Complaint because it would be futile.

 II. DISCUSSION

 Plaintiff alleges three claims against the Rhoades Defendants under 18 U.S.C. §§ ...


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