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The Plaintiffs state that "unbeknownst to plaintiffs, Karl Alizade and City Safe, Inc., were in fact working for Lloyd's." (Complaint P 87) Further, the plaintiff's claim that Defendant WFFW "was instrumental in cancelling" Plaintiff Corporations property insurance in November, 1991 with the Pacific Employers group. The materiality of this allegation in the RICO context is inadequate. Similarly, the Plaintiffs' broad claim that the Defendants "knowingly used and conspired" in the use of the U.S. mails and wires, without a specific instance of such acts, is an insufficient plea. "While Rule 9(b) permits scienter to be demonstrated by inference, this 'must not be mistaken for license to base claims of fraud on speculation and conclusory allegations.' An ample factual basis must be supplied to support the charges." Ahmed v. Trupin, 781 F. Supp. 1017, 1025 (S.D.N.Y. 1992) (citations omitted). "Facts that are merely as consistent with fraudulent intent as they are with its absence are insufficient. Plaintiffs must allege facts that unambiguously give rise to a strong inference of fraudulent intent." Kas v. The Chase Manhattan Bank, N.A. No. 90 Civ. 44, 1991 U.S. Dist. Decision(S.D.N.Y. Dec. 16, 1991).
Finally, the Plaintiffs' broad claim that Defendants "conspired to violate the provisions of 18 U.S.C. §§ 1962(a) and 1962 (c), in violation of 19 U.S.C. § 1962(d)" is insufficient. (Complaint P 83). The Plaintiffs must "'show that the defendants understood the scope of the enterprise and knowingly agree to further its affairs through the commission of various offenses"' to state a § 1962 (d) claim. Morin v. Trupin 747 F. Supp. 1051, 1067 (S.D.N.Y. 1990) (quoting Seville Industrial Machinery Corp. v. Southmost Machinery Corp., 567 F. Supp. 1146, 1154 (D.N.J. 1983). Plaintiffs have not showed any overt act or assent of any Defendant to the alleged conspiracy.
At best, Plaintiffs allegations center around a business dispute involving a breach of contract. General re-allegations of numerous earlier paragraphs in the complaint, with the intention of making out RICO violations, via breach of contract, malicious prosecution, abuse of process, and other various state claims is not sufficient nor proper. Gregoris Motors v. Nissan Motor Corp., 630 F. Supp. 902, 913 (E.D.N.Y. 1986). The contract dispute, as we determined above, is collaterally estopped by the English Action from being raised here. Setting forth vague allegations that Defendants are somehow in league against Plaintiffs does not establish a factually based RICO scheme. Indeed, most of the alleged RICO disputes revolve around the notion that Defendant insurers were rationally resistant to the idea of paying a fraudulent claim. Cf. Atlantic Gypsum Co. v. Lloyds International Corp., 753 F. Supp. 505, 512 (S.D.N.Y. 1990) (Most of alleged RICO communications were motivated by Defendants' desire to have their loans repaid, "a desire neither surprising nor sinister.") See also Zaro, 779 F. Supp. at 282.
According, Defendants' motion to dismiss for failure to state a RICO Claim is granted.
B. § 1983 Claims
Section 1983 provides that "every person who, under color of [law] subjects, or causes to be subjected, any . . . person within the jurisdiction [of the United States] to the deprivation of any rights . . . secured by the Constitution and laws, shall be liable to the party injured in an action at law [or] suit in equity . . . ." Civil Rights Act of 1871, 42 U.S.C. § 1983. The Supreme Court has interpreted the "plain words" of this statute as imposing liability "only for conduct which 'subjects, or causes to be subjected' the complainant to a deprivation of a right secured by the Constitution and its laws." Rizzo v. Goode, 423 U.S. 362, 370, 46 L. Ed. 2d 561, 96 S. Ct. 598 (1976).
In their second federal claim, Plaintiffs Cindy Royce and Maximus contend that the Defendants violated their civil rights by providing false testimony, conspiring to commit perjury, and conspiring to suppress evidence. In addition, Defendants' alleged contact the {F. Supp. 703} Manhattan District Attorney's office resulted in viewing and tampering with evidence without notice. (Complaint PP 118-27). All these charges are related to the English Action and, as we have held above, are collaterally estopped from being raised here. Nevertheless, Plaintiffs argue that their allegations -- presumably through the incorporation of their state causes of action of malicious prosecution and abuse of process -- establish an actionable violation of 18 U.S.C. § 1983.
In this Circuit, "a complaint must contain specific allegations of fact which indicate a deprivation of constitutional rights; allegations which are nothing more than broad, simple, and conclusory statements are insufficient to state a claim under § 1983." Alfaro Motors, Inc. v. Ward, 814 F.2d 883, 887 (2d Cir. 1987); Koch v. Yunich 533 F.2d 80, 85 (2d Cir. 1976). Typical allegations sounding in the Plaintiffs' § 1983 charge are illustrated in the following excerpts from the Complaint:
121. After a call from Dennis Wade during the trial in London, the New York County District Attorney's office prevented the plaintiffs' attorneys from cross-examining J.M. McNicholas with respect to his contemporaneous reports known as DD5's.
122. After another call from Dennis Wade during the same trial, the New York County District Attorney's office caused the plaintiffs' attorneys to return to his office the Fire Marshall's photos which demonstrated that Karl Alizade had committed perjury as to the condition of the vault door.
(Complaint P 121-122) Not only are these allegations inappropriately vague, complaints regarding the procedures of another court of law are not appropriately raised here. (See, Part I.B supra).
Nevertheless, even a cursory review of the English record indicates that there is little factual basis in Plaintiffs' allegation. Mr. Justice Waller, in part, based his dismissal on these same allegations in his rendering of the judgment.
"I mentioned yesterday that very serious allegations were made against Mr. Alizade, Mr. Coin and, I should have mentioned yesterday, Detective McNicholas . . . But I do not think that I would be being fair to those witnesses, having regard to the observations made, if I did not say that as far as the case had gone -- and I have not heard all submissions -- it seemed to me that those witnesses were witnesses of truth. I do not think it is right, the submission having been made in open court as it was, that I should not express that view . . ."
(Judgment on Costs, Day 31, Def. Ex. P at 4)
To withstand dismissal under § 1983, a plaintiff must show the deprivation of a constitutional or legal right that resulted from the sort of abuse of governmental power that is necessary to raise an ordinary tort by a government agent to the stature of a violation of the Constitution. See e.g. Turpin v. Mailet, 579 F.2d 152, 169 (2d Cir. 1978) (Oakes, J., concurring), vacated sub nom. West Haven v. Turpin, 439 U.S. 974, 58 L. Ed. 2d 645, 99 S. Ct. 554, and cert. denied, 449 U.S. 1016, 66 L. Ed. 2d 475, 101 S. Ct. 577 (1980); Williams v. Kelley, 624 F.2d 695, 697, (5th Cir. 1980), reh denied, 632 F.2d 895 (5th Cir. 1980) cert. denied, 451 U.S. 1019 (1981). A statement of summary conclusions is insufficient to state a claim under § 1983. See Martin v. New York State Dep't of Mental Hygiene, 588 F.2d 371, 372 (2d Cir. 1978).
To recover under 42 U.S.C. § 1983, the Plaintiffs must demonstrate deprivation of a constitutional right by a person acting under color of state law. Flagg Bros., Inc. v. Brooks, 436 U.S. 149, 155, 56 L. Ed. 2d 185, 98 S. Ct. 1729 (1978). "To state a claim against a private entity on a section 1983 conspiracy theory, the complaint must allege facts demonstrating that the private entity acted in concert with the state actor to commit an unconstitutional act." Spear v. West Hartford, 954 F.2d 63, 68 (2d Cir. 1992), cert denied 121 L. Ed. 2d 33, 113 S. Ct. 66 (1992); Studifin v. New York City Police Department-License Division-Firearms Control Section, 728 F. Supp. 990, 993 (S.D.N.Y. 1990) (to establish claims against private defendant, "pleadings must specifically show agreement and concerted action between private party and the state actors. . ."). See also Dahlberg v. Becker, {F. Supp. 704} 748 F.2d 85, 89 (2d Cir. 1984), cert. denied, 470 U.S. 1084, 85 L. Ed. 2d 144, 105 S. Ct. 1845 (1985) (In order to state a § 1983 cause of action, a plaintiff must allege facts which implicate both state action and a state actor.) In this case no government official has been named in Plaintiffs' alleged conspiracy.
Plaintiffs must "show that the party charged with the deprivation is a person who is a state official or someone whose conduct is other wise chargeable to the State." In other words, to establish deprivation of a federally-protected right there must be both "state action" and a "state actor." Dahlberg at 89. Here, the Plaintiffs do not state how the District Attorney's office contacted them or "caused" the Plaintiffs' attorney to return the alleged photos. A fact-driven causal link is never established between Mr. Wade's alleged phone call and the Plaintiffs' alleged civil rights harms.
As a result, Plaintiffs' § 1983 claims are dismissed for failure to state a claim.
V. Pendent Claims are Dismissed
Leave is granted to replead the federal claims. However, in the absence of a valid federal claim in the Complaint at bar, this Court declines to exercise jurisdiction over the pendent state claims that are not collaterally estopped by the English Action. See United Mine Workers v. Gibbs, 383 U.S. 715, 726, 16 L. Ed. 2d 218, 86 S. Ct. 1130 (1966). As such, claims Two through Six, Eight, Nine and Ten, are dismissed as well.
Conclusion
For the reasons set forth above, Defendants' Motion for Summary Judgment as to Plaintiffs' First Cause of Action is granted. Defendants' Rule 12(b) Motions dismissing Plaintiffs' Seventh and Eleventh Causes of Action are granted. Plaintiffs' Second through Sixth, Eighth, Ninth and Tenth Causes of Action are dismissed for lack of jurisdiction.
The Defendants' Motion for a Cost Bond is denied.
It is so ordered.
New York, N. Y.
September 13, 1993
ROBERT W. SWEET
U.S.D.J.
1 Defendant Holmes joined the motion to dismiss filed originally by the Lloyd's, WFFW, Dennis Wade, Graham Miller, Shaun Coyne, Karl Alizade, City Safe Inc. and Detective McNicholas on April 12, 1993. Hartley Cooper filed a separate motion on June 16, 1993.
2 "The New York Courts which have given preclusive effect to foreign country judgments have generally not specified the source of the applicable law. See e.g., In re Zietz' Estates, 207 Misc. 22, 135 N.Y.S.2d 573, 577-78 (Surr. Ct. 1954), aff'd, 285 A.D. 1147, 143 N.Y.S.2d 602 (2d Dep't 1955). Newton v. Hunt, 59 Misc. 633, 112 N.Y.S. 573, 574-75 (1908), modified, 201 N.Y. 599, 95 N.E. 1134 (1911)." Fairchild, Arabatzis & Smith Inc. v. Prometco (Produce & Metals), 470 F. Supp. 610, 616 (S.D.N.Y. 1979).
3 Dominus litis means master or mistress of the suit.
4 A comparison of this action's Complaint and the English Action's Points of Complaint reveals the virtual identity of claims.
5 Although Plaintiffs attempted to sue their attorneys for professional malpractice in the Southern District, Judge Patterson, as a result, in part, of his review of both the competence and the experience of the counsel, granted the attorneysdefendants' motion for summary judgement on the question of attorney malpractice. See Cindy Royce Creations v. Simmons and Simmons 92 Civ. 9404, slip op. at 7-11 (S.D.N.Y. July 27, 1993). Accordingly, this court will presume the attorneys were competent.
6 See also New York v. Hendrickson Bros., Inc., 840 F.2d 1065 (2nd Cir. 1988), cert denied 488 U.S. 848, 102 L. Ed. 2d 101, 109 S. Ct. 128 (1988) and Lizza Industries, Inc. v. New York, 488 U.S. 848 (trial court did not err in civil antitrust suit involving conspiracy by contractors and their officers to rig bids on highway contracts by refusing to give mail fraud convictions of four of the co-conspirators preclusive effect; court did not err in allowing State to use judgments only as prima facie evidence that convicted co-conspirators had engaged in collusive schemes with respect to which his guilt was established in the criminal case).
7 Two district courts, in the District of Columbia and in the Southern District, have presumed it is "well settled" that both criminal convictions and pleas estop defendants from pursuing subsequent civil cases. However, the earlier "well settled" case, from the D.C. District Court, misstates the Supreme Court's holding in Emich, a criminal conviction case, for the proposition. Emich is a centennial Supreme Court decision that held prior final judgments or decrees in favor of the United States are available to a private suitor as prima facie evidence of all matters relevant to the judgment for estoppel purposes.
In Alsco, the D.C. District Court cites Emich to state "well established principles of federal law hold that guilty pleas collaterally estop the future civil adjudication of issues necessarily admitted to by the plea." Alsco-Harvard Fraud Litigation, 523 F. Supp. 790 (D.C.D.C. 1981) (citing Emich Motors v. General Motors, 340 U.S. 558, 568, 71 S. Ct. 408, 413, 95 L. Ed. 534 (1951)).
The later case, from the Southern District of New York, cites no precedent in support of this proposition whatsoever, See Roso v. Saxon Energy Corp., 758 F. Supp. 164, 167 (S.D.N.Y. 1991) ("It is well settled that a criminal conviction, whether by jury verdict or guilty plea, estops a convicted defendant from raising factual issues decided in the criminal proceeding in a subsequent civil lawsuit.").
8 New York State Insurance Law § 3404 (McKinney 1985) requires the use of a Standard Fire Policy for the State of New York. The relevant part states:
Concealment, Fraud:
This entire policy shall be void if, whether before or after a loss, the insured has wilfully concealed or misrepresented any material fact or circumstances concerning this insurance or the subject thereof, or the interest of the insured therein, or in case of any fraud or false swearing by the insured thereto.
9 Neither Defendant's Memorandum of Law nor Reply Memorandum bothered to draw the courts attention to the Lloyd's' contract version of a false swearing clause located in section which states in full:
21) This entire Policy shall be void if, whether before or after a loss, the Assured has concealed or misrepresented any material fact or circumstance concerning this insurance or the subject thereof, or the interest of the Assured therein, or in case of any fraud or false swearing by the Assured relating thereto.
(Lloyd's contract, Def. Ex. BB at 6)
10 The Complaint does not allege specific predicate acts. In order to review their RICO claims here, this Court presumes the two incidents presented in their complaint were meant to be seen by the court as predicate acts.
11 But see U.S. v. Indelicato, 865 F.2d 1370, 1381 (2nd Cir. 1989) cert denied, 493 U.S. 811, 107 L. Ed. 2d 24, 110 S. Ct. 56 (1989) ("We conclude today that proof of two acts of racketeering activity without more does not suffice to establish a RICO pattern; that the concepts of relatedness and continuity are attributes of activity, not of a RICO enterprise, and that a RICO pattern may not be established without some showing that the racketeering acts are interrelated and that there is continuity or a threat of continuity; that a pattern may be established without proof of multiple schemes, multiple episodes, or multiple transactions; and that racketeering acts that are not widely separated in time or space may nonetheless, given other evidence of the threat of continuity, constitute a RICO pattern.")
12 "There are many who talk the talk, but few who walk the walk." Dexter Scott King, the youngest son of Dr. Martin Luther King., Jr., Quote of the Day, UPI, Jan. 13, 1986, available in Decision, Nexis Library, UPI file.







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