United States District Court, E.D. New York
LAW GROUP BY: Chauncey D. Henry, Esq. Attorneys for
MULLINS RILEY & SCARBOROUGH, LLP BY: Frank Morreale, Esq.
Attorneys for Defendants.
MEMORANDUM AND ORDER
LEONARD D. WEXLER, UNITED STATES DISTRICT JUDGE
Condos Brothers Construction Corp. ("Plaintiff”or
"Condos Brothers"), brings this civil RICO action
against Defendant Main Street America Assurance Company
("Defendant" or "Main Street") for the
alleged overpayment of workers' compensation insurance
premiums over the course of several years. Before the Court
is Defendant's motion to dismiss Counts I and II of
Plaintiff s Amended Complaint, pursuant to Federal Rule of
Civil Procedure 12(b)(6). Plaintiff opposes the motion. For
the following reasons, Defendant's motion to dismiss is
granted in its entirety.
Condos Brothers is a construction company providing services
within the Tri-State area that include custom masonry,
asphalt paving and landscape design. (Am. Compl. ¶¶
5, 32.) Defendant Main Street is a duly licensed insurance
company who served as Plaintiffs worker's compensation
insurance provider between 2010 and 2014. (Id.
¶¶ 7, 21, 35.) Main Street calculates its annual
premiums for its worker's compensation policies pursuant
to its independent manual of rules, rates, rating plans, and
classifications of its insured's employees, all of which
is maintained internally. (Id ¶ 22.)
about April 23, 2010 and continuing through April 23, 2014,
Condos Brothers and Main Street entered into an insurance
contract whereby Main Street agreed to provide workers'
compensation, commercial general liability and other
insurance coverage to Condos Brothers in exchange for the
payment of applicable premiums. (Id. ¶ 35.) As
per the insurance contract, Main Street initially charged an
estimated premium based on the payroll and sale amounts,
which fluctuate throughout the year. (Id. ¶
36.) The estimated premium was calculated using an estimated
exposure base provided by Condos Brothers prior to
commencement of the coverage period with respect to such
items as number of employees, size of payroll and other known
insurance contract provided for an audit at the end of the
coverage period to determine whether the estimated premium
paid represented the actual payroll and/or sales amount and
to calculate the actual premium owed by Condos Brothers.
(Id. ¶¶ 38-39.) Under the terms of the
insurance contract, Main Street agreed to compare the audited
premiums with the estimated premium paid and to either return
or credit overpayments made by Condos Brothers against other
sums owed. (Id. ¶ 40.) Similarly, Condos
Brothers agreed to reimburse Main Street for deficiencies
between the estimated premiums paid and the actual premiums
owed, if warranted. (Id.)
Brothers commenced this action on August 25, 2016, alleging
that Main Street willfully failed to correctly categorize
Plaintiffs employees as listed on its payroll records with
the appropriate classification code, resulting in inaccurate
premium rates and overpayment of insurance premiums by Condos
Brothers. (Id. ¶ 1.) Plaintiff filed an Amended
Complaint, as of right, on December 9, 2016. The Amended
Complaint contains three cause of action: (1) a violation of
the Racketeer Influenced and Corrupt Organizations Act
("RICO"), 18 U.S.C. § 1964(c); (2) conspiracy
to violate RICO, 18 U.S.C. § 1962(d); and (3) breach of
contract. Main Street now moves to dismiss the RICO claim and
the RICO conspiracy claim, pursuant to Federal Rule of Civil
Procedure 12(b)(6), for failure to state a claim upon which
relief may be granted. Plaintiff opposes the motion in its
survive a motion to dismiss [pursuant to Rule 12(b)(6)], a
complaint must contain sufficient factual matter, accepted as
true, to 'state a claim to relief that is plausible on
its face.'" Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly.
550 U.S. 544, 570 (2007)). "Facial plausibility" is
achieved when the "the plaintiff pleads factual content
that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged."
Iqbal. 556 U.S. at 678 (citing Twombly, 550
U.S. at 556). As a general rule, the court is required to
accept as true all of the allegations contained in the
complaint, see Iqbal. 556 U.S. at 678; Kassner
v. 2nd Ave. Delicatessen. Inc.. 496 F.3d 229, 237 (2d
Cir. 2007), and to "draw all reasonable inferences in
the plaintiffs favor." Troni, 2010 U.S. Dist.
LEXIS 79670, at *5 (quoting In re NYSE Specialists Sec.
Litig., 503 F.3d 89, 95 (2d Cir. 2007)).
"[t]hreadbare recitals of the elements of a cause of
action, supported by mere conclusory statements ... are not
entitled to the assumption of truth." Iqbal.
556 U.S. at 678-79 (citation omitted); see also
Twombly, . 555 U.S. at 555 (stating that the Court is
"not bound to accept as true a legal conclusion couched
as a factual allegation"). "While legal conclusions
can provide the framework of a complaint, they must be
supported by factual allegations, " which state a claim
for relief. Iqbal. 556 U.S. at 679. A complaint that
"tenders 'naked assertion[s]' devoid ...