The opinion of the court was delivered by: ARTHUR SPATT, District Judge Page 2
MEMORANDUM OF DECISION AND ORDER
Henry W. Mathon ("Mathon" or the "plaintiff"), proceeding pro se,
commenced this action alleging, among other things, that the defendants
violated 18 U.S.C. § 1961 et seq., the Racketeer Influenced and Corrupt
Organizations Act ("RICO"). Presently before the Court is a motion to
dismiss the amended complaint by all of the defendants for failure to
state a claim pursuant to Federal Rules of Civil Procedure ("Fed.R. Civ.
P.") 12(b)(6). The defendants also request that the Court decline to
exercise supplemental jurisdiction causes of action over the remaining
causes of action which arise under state law pursuant to
28 U.S.C. § 1367(c)(3).
The facts are taken from the amended complaint and are taken as true
for the purposes of this motion.
From 1999 through 2000, Mathon was employed by Neil Feldstein
("Feldstein") and Arthur Salm ("Salm") in various capacities at
Feldstein's car dealerships. Sometime in the year 2000, Mathon resigned
from his employment due to "abuse" by "Feldstein and Salm's right hand
man." Am. Compl. ¶ 34.
In early 2001, while Mathon was employed elsewhere, Feldstein contacted
Mathon by phone and requested that Mathon return to working for him.
Mathon agreed to work as a used car manager at Feldstein's Honda
From mid-March, 2001 through the end of September, 2001, Mathon earned
gross profits for the used car department in excess of $2 million and
Mathon earned $90,000 in salary and commission. Despite his success,
Feldstein, Salm and Diane Henson ("Henson"), removed Mathon from the used
car department for reasons unknown to Mathon. Feldstein, Salm and Henson
replaced Mathon with other individuals and Mathon became a showroom
After subsequent conversations with Feldstein and Henson by phone and
in person, Mathon presented a plan relating to "Special Finance" in the
automotive industry that he had been working on for the past three years.
Feldstein and Mathon subsequently told Mathon to put together a business
plan for the "Special Finance Entity" in which Mathon would be a 40%
The plaintiff claims that he entered into a "valid oral contract" with
Feldstein, Henson and Salm by which the plaintiff would receive 40% and
Feldstein, Salm and Honda would receive 60% of the newly created "Special
Finance Entity." Feldstein represented by phone and in person that the
"Special Finance Entity" would be implemented into Toyota, Buick, and
Lincoln and would result in Mathon earning more than $500,000 per year.
On or about November 8, 2001, Mathon, on his own time, began developing a
business plan, advertising copy and layout, and a budget and estimate of
start up costs which he subsequently presented to Feldstein, Henson and
Honda on December 12, 2001.
During this time, the plaintiff was upset by some "rumblings" about
him, namely that "individuals who were under the control of the
enterprise a/k/a Feldstein, Salm, Henson, Lomax, Honda, Toyota, Buick,
Lincoln and John Does were using the wire to discredit [his] reputation."
Am. Compl. ¶ 51. Feldstein and Henson told Mathon to disregard what he
had heard and instead "put his efforts into a new business that would
benefit him as partner." Am. Compl. ¶ 53.
Feldstein and Honda agreed to the timing and directed Mathon to hire
employees to implement the "Special Finance Entity." The "Special Finance
Entity" produced gross sales in excess of $1 million with $120,000 in
gross profit by February, 2002. However, Lomax, Feldstein, Henson, Salm
and Honda took out 100% of the "expenses" out of the "Special Finance
Entity" instead of the 60% originally agreed. Am. Compl. ¶ 70.
In mid-February, 2002, Lomax presented Mathon with a promissory note
and threatened Mathon that if he did not sign the note, Mathon would not
receive 40% of the "Special Finance Entity." Am. Compl. ¶ 71. Lomax used
"coercion and constraint," Am. Compl. ¶ 72, and Feldstein used "undue
influence with persuasion, pressure and short of actual force, but
stronger than mere advice that so overpowered Mathon's free will," Am.
Compl. ¶ 73, to force Mathon sign the promissory note. The plaintiff
claims that Feldstein and Lomax used "extortion by obtaining . . . the
promissory note as it was induced by wrongful use of actual and threatened
force, and fear under color of official right." Am.
Compl. ¶ 77.
After coercing the plaintiff to sign the promissory note, the
defendants systematically "looked to push Mathon out from the profitable
[Special Finance] Entity," Compl. ¶ 79, by cutting the budget and
terminating key employees who were of "varied ethnicities, female and
age." Am. Compl. ¶ 82. The plaintiff was subsequently fired "[b]y wire."
Am. Compl. ¶ 84. Mathon wanted to "take action," Am. Compl. ¶ 86, but
was warned by various people that Feldstein would "destroy him," id., in
the automobile industry. Mathon indicates that he was also fearful of
Feldstein because Feldstein owned a firearm.
On or about June, 2002, Lomax demanded payment of the promissory note
by phone and mail. Mathon refused and maintained that he did not owe any
money to Feldstein.
In mid-October, 2002, Worldwide Automotive, LLC, d/b/a Neil Honda
served the plaintiff with a summons and complaint to collect on the
promissory note. See Worldwide Automotive, LLC d/b/a Neil Honda v.
Henry W. Mathon, Index No. 02/014206 (Sup.Ct. Nassau County 2002)
(J. Raab) (the "State Court Action"). That summons and complaint were
prepared by the defendant Ackerman, Levine, Cullen & Brickman, LLP
("ALC&B") and signed by James A. Bradley ("Bradley), an attorney with
Thereafter, Mathon spoke to Bradley and Levine, another attorney at
ALC&B, by telephone about settling the case. Mathon claims that
Bradley represented to and gave
Mathon the impression that such telephone conversations served as
an answer to the State Court Complaint. Because Mathon had not filed an
answer, Neil Honda entered a default judgment and Mathon was served with
a subpoena in aid of the enforcement of judgment. Mathon then moved by
order to show cause to vacate the judgment. Several court appearances
followed, where, outside the courtroom, Bradley allegedly threatened
Mathon about "what Feldstein was capable of." Compl. ¶ 115. Bradley
sent a letter to Justice Raab, who was then the presiding Justice,
requesting that he rule on Mathon's motion to vacate the default
judgment. Mathon immediately responded to Bradley's letter.
Mathon claims that "[b]y strong armed tactics and outright coercion,
threats, extortion and collection of an unlawful debt by the practices of
the employees and associates of the Enterprise through a pattern of
racketeering activities," Am. Compl. ¶ 122, the defendants have
failed and refused to honor any and all contracts with regard to the
"Special Finance Entity." Mathon further ...