For all of these reasons, State Farm's motion to dismiss the
plaintiffs' FHA claims is denied.
State Farm moves to dismiss the plaintiffs' fifth cause of action,
which alleges that State Farm engaged in a pattern of racketeering
activity in violation of RICO, 18 U.S.C. § 1962(c) and Cd). In order
to state a claim for damages under RICO, a plaintiff must meet two
pleading burdens. First, the plaintiff must allege all of the elements of
a criminal RICO violation, specifically, that (1) a "person," namely, the
relevant defendant (2) through the commission of two or more acts (3)
constituting a "pattern" (4) of "racketeering activity" (5) directly or
indirectly invests in, or maintains an interest in, or participates in
(6) an "enterprise" (7) the activities of which affect interstate or
foreign commerce. Moss v. Morgan Stanley, Inc., 719 F.2d 5, 17 (2d Cir.
1983); see also 18 U.S.C. § 1962. Second, the plaintiff must allege
that he was injured in his business or property by reason of" the conduct
constituting a criminal RICO violation. Moss, 719 F.2d at 17; see also
18 U.S.C. § 1962. State Farm argues that the plaintiffs have failed
to allege a RICO "enterprise" and have failed to allege sufficient
predicate acts for a RICO violation.
With regard to the RICO "enterprise," State Farm argues that the
plaintiffs' fifth cause of action names only State Farm and its employees
as defendants, and appears to allege a RICO enterprise consisting only of
State Farm and its employees. As State Farm correctly argues, "[a]
corporate entity may not be simultaneously the `enterprise' and the
"person' who conducts the affairs of the enterprise through a pattern of
racketeering activity." Anatian v. Coutts Bank (Switzerland) Ltd.,
193 F.3d 85, 88-89 (2d Cir. 1999) (internal quotation marks omitted); see
also Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158, 161-62 (2001)
(§ 1962(c) requires some distinctness between the RICO "person" and
the RICO "enterprise," which cannot be met by referring to the same
entity by a different name); Bennett v. United States Trust Co.,
770 F.2d 308, 315 (2d Cir. 1985). State Farm also argues that the
plaintiffs have failed to allege sufficient predicate acts to constitute a
pattern of racketeering activity.
The plaintiffs respond in their papers that the relevant RICO
enterprise consists of "State Farm subsidiaries and its parent
corporation as well as . . . all those who have aided and abetted
defendant State Farm in its fraudulent schemes," apparently including
Fleet. (Pl.'s Opp. II at 20.) The plaintiffs argue, in addition, that a
defendant can be a "person" for RICO purposes and also be a part of the
relevant RICO "enterprise," so long as the defendant is not the only
entity comprising the "enterprise" and there is an association-in-fact
between the defendant and other alleged RICO co-conspirators. See, e.g.
Bennett, 770 F.2d at 315; see also generally Cedric, 588 U.S. at 163
(noting that owner or employee of a corporation is sufficiently distinct
from a corporation to allow for a RICO claim identifying the owner or
employee as the RICO "person" and the corporation as the "enterprise").
However, despite many arguments in their papers to the contrary, the
plaintiffs do not define the relevant RICO enterprise or person or persons
in the Second Amended Complaint, and their attempts to remedy this defect
derive almost wholly from their opposition papers in this motion.
Similarly, while the plaintiffs contend that they have identified several
acts that might constitute predicate acts of mail or wire fraud in the
Second Amended Complaint in their papers, they nowhere allege these acts
as predicate acts for a RICO claim in the Second Amended Complaint. On
its face, the Second Amended Complaint therefore fails to plead
sufficiently a civil RICO violation.
The plaintiffs have, however, made a number of arguments in their
opposition papers indicating that they understand the proper pleading
standards for a RICO claim, and that they may be able to cure the defects
in the Second Amended Complaint. Hence, the plaintiffs' fifth cause of
action is dismissed without prejudice to repleading if the plaintiffs can
plead a civil RICO violation that specifically identifies the relevant
RICO "enterprise," the relevant RICO "person" or "persons," and the
relevant predicate acts that give rise to the alleged RICO violation. Any
such repleading should not cause any delay in the progress of this case.
The plaintiffs are therefore directed to file any amendments to the
Second Amended Complaint to contain a civil RICO claim within twenty (20)
days of the issuance of this Opinion and Order.
State Farm moves to dismiss the plaintiffs' state law claims for lack
supplemental jurisdiction. For the reasons discussed above, however,
there are a number of federal claims still pending in this case, and
State Farm's motion is therefore denied.
The Court has considered all of the arguments raised by the parties. To
the extent not specifically addressed above, the arguments are either
moot or without merit.
Therefore, for the foregoing reasons:
1. The plaintiffs' motion for entry of partial judgment
pursuant to Rule 54(b) of the Federal Rules of Civil
Procedure is denied.
2. Fleet's motion to dismiss any claims in the Second
Amended Complaint that are brought on behalf of the
Burrells' children is granted.
3. Fleet's motion to dismiss the plaintiffs' claims in
the plaintiffs' sixth and eighth causes of action
relating to bad faith and willful negligence is
granted insofar as these claims are based on the
allegation that Fleet failed to file a proof of loss
with State Farm on behalf of the plaintiffs after
4. Fleet's motion to dismiss the plaintiffs' claims
against it for breach fiduciary duty, unjust
enrichment, and breach of the implied covenant of
good faith and fair dealing is denied insofar as
these claims relate to Fleet's acceptance and
handling of the proceeds issued by State Farm.
5. Fleet's motion to dismiss the plaintiff's claim for
tortious interference with contract is denied.
6. State Farm's and Fleet's motions to dismiss the
plaintiffs' claims for fraud and constructive fraud
7. State Farm's and Fleet's motions to dismiss the
plaintiffs claims for discrimination for failure to
plead facts sufficient to give rise to an inference
of discrimination are denied.
8. Fleet's motion to dismiss the conspiracy claims in
the plaintiffs' eighth cause of action is denied.
9. Fleet's motion to strike the portions of the Second
Amended Complaint seeking punitive damages and
attorneys' fees are denied as premature.
10. State Farm's motion to dismiss the plaintiffs'
claims against State Farm raised pursuant to the
Fair Housing Act is denied.
11. State Farm's motion to dismiss the plaintiffs' RICO
claims is granted, and the plaintiffs' RICO claims
against State Farm are dismissed without prejudice
to repleading within twenty (20) days of the
issuance of this Opinion and Order.
12. State Farm's motion to dismiss the pendent state
law claims against it for lack of supplemental
jurisdiction is denied.
13. The plaintiffs' motion for judgment as a matter of
law pursuant to Rule 52(c) of the Federal Rules of
Civil Procedure is denied.