Frederick v. Service Experts Heating & Air Conditioning LLC et al
MEMORANDUM OPINION. Signed by Judge R David Proctor on 7/14/2016. (AVC)
2016 Jul-14 PM 02:33
U.S. DISTRICT COURT
N.D. OF ALABAMA
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SERVICE EXPERTS HEATING & AIR
CONDITIONING, LLC, et al.,
Case No.: 2:14-cv-01647-RDP
This case is before the court on Defendants Service Experts Heating & Air Conditioning,
LLC (“Service Experts”)’s and Scott Freeman’s Motion for Judgment on the Pleadings (Doc. #
42), filed February 10, 2016. The Motion is fully briefed. (Docs. # 42, 54, 55). After careful
review, and for the following reasons, the court concludes that the Motion is due to be granted.
The court presumes the parties are familiar with the history of how this case has come
before it for the second time on removal, and will not repeat that history again here. On
November 5, 2016, the court dismissed Defendant GE Capital (“GE”) from this case with
prejudice. (Docs. # 38, 39). Plaintiff had only alleged claims against GE under the federal civil
Racketeer Influenced and Corrupt Organizations (“RICO”) statute, 18 U.S.C. § 1964(c). (See
Doc. # 1-8). Subsequently, Service Experts and Freeman filed this Motion, arguing that the
RICO claims against Service Experts should be dismissed for the same reasons they were
dismissed against GE, and asserting that all claims against Freeman should be dismissed for
failure to state a claim. (Doc. # 42). Service Experts and Freeman thereafter filed an Amended
Answer to accurately reflect information revealed during discovery. (Doc. # 48).
In March 2007, Plaintiff purchased from Defendant Service Experts, through its
employee Becky Collins,1 a new Trane HVAC unit. (Doc. # 1-8 at ¶¶ 8-9, 13). Plaintiff also
bought from Service Experts and Collins an extended manufacturer warranty for that unit—or so
she thought. (Id. at ¶¶ 10-21). In June 2011, Plaintiff’s HVAC unit began functioning poorly
and she had it inspected. (Id. at ¶¶ 27-28). The inspector asserted that the warranty Plaintiff had
purchased would cover the repairs. (Id. at ¶ 29). However, the inspector’s office could not
locate Plaintiff or her HVAC unit’s serial number in the Trane database. (Id. at ¶ 30).
On June 25, 2011, Plaintiff contacted Service Experts and spoke with Defendant
Freeman, the Manager of Operations and Service at Service Experts’s Birmingham office. (Doc.
# 1-8 at ¶ 31). He informed Plaintiff that she had not purchased an extended warranty. (Id.).
Rather, she had purchased from Service Experts and Collins an insurance policy through
Defendant Equiguard, Inc.2 (Id. at ¶¶ 32-33).
Plaintiff filed this lawsuit alleging (on behalf of herself and, with respect to certain
claims, a putative class of similarly situated individuals) that Service Experts and Freeman, with
the assistance of other Defendants (that is, GE and Equiguard), among other things, committed
fraudulent sales practices, breached various contracts, and engaged in racketeering. (Doc. # 1-8).
Plaintiff alleges that Service Experts’s role in the purported racketeering scheme to defraud
involved sending, or causing GE to send, to Plaintiff and the purported class -- via the mail and
Collins was initially a named Defendant in this case, but the claims against her have been dismissed.
Plaintiff has not served Equiguard. The parties have informed the court that it is likely no longer in
existence following bankruptcy. (See Doc. # 1-8 at ¶ 34; Doc. # 48 at ¶ 34).
e-mails -- fraudulent statements, invoices for installment payments on the HVAC unit and the
warranty, and notices of those statements and invoices. (Id.). Plaintiff has averred Service
Experts received payments, sent via a check in the mail or over its online payment website, for
the warranty that she thought she purchased, and that Service Experts would use these moneys to
finance the alleged scheme with the assistance of GE.3 (Id.). Specifically, Plaintiff claims that,
by its actions, Service Experts is liable under the civil RICO statute on the basis of predicate acts
of mail and wire fraud in the form of fraudulent invoices. (Id.). Counts Ten through Twelve of
the Amended Complaint allege, respectively, violations of 18 U.S.C. §§ 1692(a), 1692(c), and
1692(d), by GE, Service Experts, and Equiguard. (Id.).
Concerning Freeman, only two paragraphs in the RICO and other class portions of the
Amended Complaint mentioned him by name. (See Doc. # 1-8 at ¶ 108, 111. There were no
specific allegations against him individually in any of the other seven counts. (See Doc. # 1-8).
Although Plaintiff stated that “Service Experts, Freeman, Collins, and their Fictitious Defendant
equivalents shall collectively be referred to as the ‘Service Expert Defendants,’” (id. at ¶ 7), six
of the seven individual state law causes of action referenced only Service Experts or Collins
(See Doc. # 1-8).
Only Count III (Suppression) requested relief against
“Defendants, jointly and severally.” (See id. at ¶ 53).
In its Motion for Judgment on the Pleadings, Service Experts seeks dismissal of counts
ten through twelve as to itself, and Freeman seeks dismissal of all claims against him. (See Doc.
# 42). Both Defendants assert that Plaintiff has failed to plausibly allege facts supporting the
RICO claims, and likewise has insufficiently pleaded the predicate acts. (Id.). Additionally,
they argue that the Amended Complaint does not assert any claims against Freeman due to the
Service Experts denies that it has an online payment website. (Doc. # 48 at ¶ 24). The URL provided by
Plaintiff in the Amended Complaint is www.geonlineservice.com. (Doc. # 1-8 at ¶ 24).
dearth of factual allegations regarding him, and the lack of a request for any damages from him.
(Id.). Plaintiff argues that it has pleaded valid and specific RICO claims as to both Service
Experts and Freeman (or, at least with regards to Section 1962(c) for Freeman). (Doc. # 54).
Alternatively, if the court determines Defendants’ Motion is due to be granted, Plaintiff requests
leave to file an amended complaint pursuant to Federal Rule of Civil Procedure 15 to address the
“technicalities that are curable by amendment and not insurmountable obstacles to stating a
RICO claim.” (Id. at 22). Concerning the request for leave to amend, Defendants contend that,
because the court has entered a Scheduling Order in this case and the amendment deadline
contained therein has passed, (1) the “good cause” standard of Rule 16(b) applies (Doc. # 55),
and (2) Plaintiff has not shown good cause. (Id.). Therefore, they argue, leave to amend should
be denied. (Id.).
Standard of Review
Federal Rule of Civil Procedure 12(c) provides that a party may move for judgment on
the pleadings after the pleadings are closed, but early enough not to delay trial. The standard is a
familiar one. “Judgment on the pleadings is appropriate where there are no material facts in
dispute and the moving party is entitled to judgment as a matter of law.” Cannon v. City of West
Palm Beach, 250 F.3d 1299, 1301 (11th Cir. 2001) (citations omitted); see Bank of New York
Mellon v. Estrada, No. 12-cv-5952, 2013 WL 3811999, at *1 (N.D. Ill. July 22, 2013) (“A Rule
12(c) motion for judgment on the pleadings is ‘designed to provide a means of disposing of cases
when the material facts are not in dispute and a judgment on the merits can be achieved by
focusing on the content of the pleadings and any facts of which the court will take judicial
notice.’” (citations omitted)). The court must accept the facts alleged in the complaint as true
and view them in the light most favorable to the nonmoving party. Cannon, 250 F.3d at 1301.
A Rule 12(c) motion for judgment on the pleadings is analyzed the same as a Rule
12(b)(6) motion to dismiss. Pipes v. City of Falkville, Ala., No. 12-cv-2885, 2013 WL 3367105,
at *1 (N.D. Ala. July 5, 2013) (adopting report and recommendation); see also Losey v. Warden,
521 Fed. Appx. 717, 719 (11th Cir. 2013) (“A motion to dismiss and a motion for judgment on
the pleadings should not be granted unless ‘the plaintiff can prove no set of facts in support of his
claim which would entitle him to relief.’” (citations omitted)). Accordingly, to survive a motion
for judgment on the pleadings, “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) (citation and internal quotations omitted); see also Losey, 521 Fed. Appx. at 719
(applying plausibility standard articulated in Iqbal to Rule 12(c) motion).
A complaint states a plausible claim for relief “when [a] 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. Although detailed facts are not needed, a plaintiff
is obligated to provide as grounds for entitlement to relief more than mere labels and
conclusions. Id. Formulaic recitations of the elements of a cause of action do not satisfy a
plaintiff’s burden. Id. “While legal conclusions can provide the framework of a complaint, they
must be supported by factual allegations.” Id. at 679. A plausible claim for relief requires
Aenough fact[s] to raise a reasonable expectation that discovery will reveal evidence@ to support
the claim. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556 (2007).
Further, “[i]n the Eleventh Circuit, where substantive RICO violations are based upon
fraud, the ‘allegations must comply not only with the plausibility criteria articulated in Twombly
and Iqbal but also with Fed. R. Civ. P. 9(b)’s heightened pleading standard.’”4 Adell v. Macon
Cty. Greyhound Park, Inc., 785 F. Supp. 2d 1226, 1231 (M.D. Ala. 2011) (quoting Am. Dental
Assn. v. Cigna Corp., 605 F.3d 1283, 1291 (11th Cir. 2010)); accord Liquidation Commn. of
Banco Intercontinental, S.A. v. Renta, 530 F.3d 1339, 1355 (11th Cir. 2008) (“When a RICO
claim is based on predicate acts involving fraud, those predicate acts must be pleaded with
particularity, in accordance with Fed. R. Civ. P. 9(b).”); cf. Ambrosia Coal & Constr. Co. v.
Pages Morales, 482 F.3d 1309, 1316 (11th Cir. 2007) (“Civil RICO claims, which are essentially
a certain breed of fraud claims, must be pled with an increased level of specificity.”).
Accordingly, pursuant to Rule 9(b), a plaintiff pursuing a RICO complaint must allege: “(1) the
precise statements, documents, or misrepresentations made; (2) the time, place, and person
responsible for the statement; (3) the content and manner in which these statements misled the
Plaintiffs; and (4) what the defendants gained by the alleged fraud.” Am. Dental, 605 F.3d at
1291 (quoting Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 1380-81 (11th
Defendants argue that Plaintiff’s RICO claims should be dismissed as to Service Experts,
and all of her claims must be dismissed as to Freeman. Plaintiff disagrees and alternatively
requests leave to further amend her Amended Complaint. The court addresses each request in
Plaintiff’s RICO Claims are Due to be Dismissed as a Matter of Law
Plaintiff sought relief pursuant to the civil RICO statute. 18 U.S.C. § 1964(c). Section
1964(c) provides in relevant part that “[a]ny person injured in his business or property by reason
To the contrary, “RICO predicate acts not sounding in fraud need not necessarily be pleaded with the
particularity required by Fed. R. Civ. P. 9(b).” Liquidation Commn. of Banco Intercontinental, S.A. v. Renta, 530
F.3d 1339, 1355 (11th Cir. 2008).
of a violation of section 1962 of this chapter may sue therefor in any appropriate United States
district court and shall recover threefold the damages he sustains and the cost of the suit,
including a reasonable attorney’s fee . . . .” 18 U.S.C. § 1964(c). Specifically, Plaintiff alleges
three separate RICO violations of Section 1962: 18 U.S.C. §§ 1962(a), (c), and (d).5
As a threshold matter, a successful RICO claim requires a plaintiff to establish the
essential basics of a RICO enterprise as well as a “pattern of racketeering activity.” Jackson v.
BellSouth Telecomms., 372 F.3d 1250, 1264 (11th Cir. 2004). A RICO enterprise exists “where
a group of persons associates, formally or informally, with the purpose of conducting illegal
Id. (quoting United States v. Hewes, 729 F.2d 1302, 1311 (11th Cir. 1984)).
“Racketeering activity” includes such predicate acts as mail and wire fraud.
18 U.S.C. §
1961(1)(B). “A pattern is established by at least two acts of racketeering activity the last of
which occurred within ten years . . . after the commission of a prior act of racketeering activity.”
Lehman v. Lucom, 727 F.3d 1326, 1330 (11th Cir. 2013) (quoting McCaleb v. A.O. Smith Corp.,
200 F.3d 747, 750 (11th Cir. 2000) (ellipsis in original)). These predicate acts must be related to
one another and demonstrate criminal conduct of a continuing nature. Jackson, 372 F.3d at
1264. Proximate causation is a RICO requirement. Holmes v. Sec. Investor Protection Corp.,
503 U.S. 258, 268 (1992).
Plaintiff Has Sufficiently Pled Predicate Acts of Mail and Wire Fraud
by Service Experts
Plaintiff’s civil RICO claims against Service Experts are based on predicate acts of mail
and wire fraud. Therefore, Plaintiff must have adequately pled (i.e., in accordance with Twombly
and Iqbal, and Rule 9(b)) a violation of the federal mail and wire fraud statutes for her RICO
These individual provisions are set forth and analyzed in more detail below.
claims against Service Experts to survive the Motion to Dismiss. See Ayres v. Gen. Motors
Corp., 324 F.3d 514, 519 (11th Cir. 2000).
Mail and wire fraud claims are governed by the same elements.
United States v.
Langford, 647 F.3d 1309, 1320 (11th Cir. 2011); see also 18 U.S.C. §§ 1341, 1343. “Both
offences require that a person (1) intentionally participates in a scheme to defraud another of
money or property and (2) uses or ‘causes’ the use of the mails or wires for the purpose of
executing the scheme or artifice.” United States v. Ward, 486 F.3d 1212, 1222 (11th Cir. 2007)
(citations omitted). A person “causes” the mails or wires to be used within the meaning of the
statutes “when he acts ‘with knowledge that the use of the mails [or wires] will follow in the
ordinary course of business, or where such use can reasonably be foreseen, even though not
actually intended.’” Id. (quoting Pereira v. United States, 347 U.S. 1, 8-9 (1954)); see also
Unites States v. Bright, 588 F.2d 504, 509 (5th Cir. 1979)6 (“[I]t is not necessary that a defendant
actually do any of the mailing so long as there is sufficient evidence to tie him to the fraudulent
scheme which involves the use of the mails.”). The offenses’ gravamen “is the scheme to
defraud, and any ‘mailing [or wiring] that is incident to an essential part of the scheme satisfies
the mailing [or wiring] element,’ . . ., even if the mailing [or wiring] itself ‘contains no false
information.’” Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639, 647 (2008) (quoting
Schmuck v. United States, 489 U.S. 705, 712, 715 (1989) (internal citation omitted)). “A scheme
to defraud requires proof of material misrepresentations, or the omission or concealment of
material facts, reasonably calculated to deceive persons of ordinary prudence.” United States v.
In Bonner v. City of Prichard, Ala., 661 F.2d 12065, 1209 (11th Cir. 1981) (en banc), the Eleventh Circuit
adopted as binding precedent all decisions of the former Fifth Circuit handed down prior to the close of business on
September 30, 1981.
Hasson, 333 F.3d 1264, 1270-71 (11th Cir. 2003) (internal citations omitted).
reliance is not an element of mail or wire fraud. Bridge, 553 U.S. at 648-49.
Plaintiff contended that Service Experts used both the U.S. mails and electronic wires
(i.e., e-mails and telephones) when it sent and caused GE to send to Plaintiff fraudulent
statements and invoices for her installment payments for the HVAC system and warranty. (Doc.
# 1-8). And, she has alleged that Service Experts received payments via the U.S. mails and
wires.7 (Id.). Further, she asserts that Service Experts communicated with Equiguard via mail
and the wires to carry out their fraudulent scheme. (Id.). Clearly, Plaintiff has sufficiently pled
-- with both plausibility and particularity -- the element of mailing or wiring that is required to
show mail or wire fraud.
But that is not Plaintiff’s only pleading obligation.
Under Federal Rule of Civil
Procedure 9(b), a party “must state with particularity the [other] circumstances constituting
fraud.” Fed. R. Civ. P. 9(b). (In addition, the allegations must plausibly allege facts that satisfy
Twombly’s and Iqbal’s requirements). The rule of particularity “serves an important purpose in
fraud actions by alerting defendants to the precise misconduct with which they are charged.”
Durham v. Bus. Mgmt. Assocs., 847 F.2d 1505, 1511 (11th Cir. 1988) (citations and internal
quotations removed). Here, the court need not analyze in detail whether Plaintiff satisfied Rule
9(b) in this regard.
This is the case because Plaintiff pled her allegations with sufficient
particularity to alert Service Experts of the precise misconduct with which it is charged—mail
and wire fraud.
In its Amended Answer, Service Experts denied having an online payment system. (Doc. # 48 at ¶ 24).
However, Plaintiff’s allegations suggest that she sent (and Service Experts received) payments via the wires and
U.S. mails. (See Doc. # 1-8). In a motion for judgment on the pleadings, disputes of fact are resolved in the light
most favorable to the non-moving party—here, Plaintiff. See Cannon, 250 F.3d at 1301.
Nevertheless, pleading a claim with particularity is not the same as pleading a plausible
claim. See Iqbal, 556 U.S. at 686-87 (stating that Rule 9 does not give a plaintiff the “license to
evade the less rigid—though still operative—strictures of Rule 8”). Plaintiff must also satisfy
the plausibility requirement recognized in Twombly and Iqbal. Here, the Amended Complaint
does so. In summary, Plaintiff has alleged that Service Experts, through Collins, (1) fraudulently
induced her to purchase an Equiguard policy which she thought was a Trane extended warranty,
and (2) then, using the U.S. mails and wire services, sent her (or caused GE to send her) monthly
invoices, which Plaintiff paid and sent back to GE, who in turn sent those payments to Service
Experts.8 (Doc. # 1-8). These monthly invoices were purportedly paid for nearly four years.
(See id.). To violate the mail or wire fraud statutes, “it is not necessary that the transmitted
information include any misrepresentation.” Hasson, 333 F.3d at 1272 (citing Schmuck, 489
U.S. at 715). An interstate mail or wire transmission “is ‘for the purpose of executing’ the
scheme to defraud if it is ‘incident to an essential part of the scheme’ or ‘a step in the plot.’” Id.
at 1273 (quoting Schmuck, 489 U.S. at 710-11). The transmission of both monthly invoices and
payment of those invoices is “incident to an essential part of the scheme” to defraud Plaintiff
(and, she contended, other customers). Id. And, it is reasonably foreseeable that in the years
encompassing 2007-2011 a financing agent who handles customer transactions would utilize the
mails and wires for those transactions. Accordingly, the court concludes that Plaintiff has
Service Experts argues that because the court found that Plaintiff’s claims were not plausible as to GE, it
follows that those allegations are not plausible as to it. (See Doc. # 42). But that argument is misplaced. GE and
Service Experts are separate entities. Plaintiff alleged that GE was nothing more than a financing agent for Service
Experts (Doc. # 1-8), and that Service Experts, through its employee Collins, purposefully committed a fraud and
used or caused the use of mails and wires in furtherance thereof. (See id.).
pleaded plausible predicate acts, with sufficient particularity, of mail and wire fraud committed
by Service Experts.9
Plaintiff Has Not Sufficiently Pled Her RICO Claims
Plaintiff alleged violations of three provisions of the RICO statute: 18 U.S.C. §§ 1962(a),
1962(c), and 1962(d). The court addresses each in turn.
Plaintiff Has Not Pled a Plausible Claim under Section 1962(a)
Section 1962(a) provides in pertinent part that:
However, although the court is not presently issuing a ruling on the matter, it is readily apparent that
Plaintiff has not plausibly pleaded the predicate acts necessary to maintain a mail and/or wire fraud by Equiguard.
Equiguard has not appeared in this case and challenged Plaintiff’s claims against it, and the parties have informed
the court that it is no longer in existence and cannot file a response. But its lack of existence does not preclude the
court from observing that Plaintiff’s claims against it are not plausible. Indeed – and to be sure, Plaintiff has not yet
moved for entry of default against Equiguard – there is a substantial question as to whether the court would be able
to enter a default judgment. That is, there is a substantial question whether Plaintiff has pleaded plausible claims
against Equiguard. See Surtain v. Hamlin Terrace Found., 789 F.3d 1239, 1245 (11th Cir. 2015) (“Entry of default
judgment is only warranted when there is ‘a sufficient basis in the pleadings for the judgment entered.’” (citation
omitted)); see also Chudasama v. Mazda Motor Corp., 123 F.3d 1353, 1370 n. 41 (11th Cir. 1997) (“[A] default
judgment cannot stand on a complaint that fails to state a claim.”).
Plaintiff offered no plausible allegations that allow for an inference that Equiguard purposefully
participated in any scheme to defraud Plaintiff (and other customers of Service Experts). Her averments indicated
that Service Experts, through Collins, misled her and sold her an Equiguard policy instead of a Trane warranty.
(Doc. # 1-8). But, there were no plausible facts alleged that indicate Equiguard had any purposeful involvement in
(or knowledge of) Collins’s and Service Experts’s fraud. Plaintiff only made conclusory allegations in this regard,
and such statements do not abide in this court. See Iqbal, 556 U.S. at 679. Based on the facts as currently pled,
although Equiguard contracted with Service Experts to provide its policy, there is not a basis for a claim that
Equiguard had knowledge of any purported schemes to defraud. See Am. Dental, 605 F.3d at 1290 (quoting Iqbal,
556 U.S. at 682) (the “court may infer from the factual allegations in the complaint ‘obvious alternative
explanation[s],’ which suggest lawful conduct rather than the unlawful conduct the plaintiff would ask the court to
infer”). Similarly, and clearly, Equiguard never communicated with Plaintiff and thus could not have made material
misrepresentations or omissions that induced her into acting and purchasing the Equiguard policy—Plaintiff had
never even heard of Equiguard until June 2011. (Doc. # 1-8 at ¶ 32). And, based on her pleaded facts, it is not
reasonably foreseeable as to Equiguard that “Service Experts and Equiguard used the mail and wire to communicate
with each other regarding Service Experts’ purchase of the counterfeit ‘warranties’/insurance from Equiguard and
claims made and processed under those ‘warranties.’” (Doc. # 1-8 at ¶ 109). Such an allegation might implicate
Service Experts, but there are no facts concerning Equiguard’s purported role in the alleged scheme. Plaintiff
needed to show more to “nudge the claims across the line from conceivable to plausible.” Twombly, 550 U.S. at
Moreover, Plaintiff’s mail and wire fraud pleadings against Equiguard do not appear to satisfy Rule 9(b).
She set forth no facts concerning how and when it used the mails or wires to conduct the purported scheme to
defraud. Thus, the Amended Complaint does not adequately demonstrate the predicate acts of mail and/or wire
fraud by Equiguard.
[i]t shall be unlawful for any person who has received any income derived,
directly or indirectly, from a pattern of racketeering activity or through collection
of an unlawful debt in which such person has participated as a principal within the
meaning of section 2, title 18, United States Code, to use or invest, directly or
indirectly, any part of such income, or the proceeds of such income, in acquisition
of any interest in, or the establishment or operation of, any enterprise which is
engaged in, or the activities of which affect, interstate or foreign commerce.
18 U.S.C. § 1962(a). While the Eleventh Circuit has not pronounced a rule as to § 1962(a), it is
clear that “the essence of a violation of § 1962(a) is not commission of predicate acts but
investment of racketeering income.” Gristede’s Foods, Inc. v. Unkechauge Nation, 532 F. Supp.
2d 439, 446 (E.D.N.Y. 2007) (quoting Ouaknine v. MacFarlane, 897 F.2d 75, 83 (2d Cir.
1990)); see also Lockheed Martin Corp. v. Boeing Co., 357 F. Supp. 2d 1350, 1369 (M.D. Fla.
2005) (“a majority of courts that have addressed the issue have determined that a claimant under
§ 1962(a) must plead an injury which stems ‘not from the racketeering predicate acts themselves’
but from the ‘use or investment of . . . racketeering income.’”) (collecting cases). Thus, the use
or investment of racketeering income must proximately cause harm to the RICO victim. See
Boeing, 357 F. Supp. 2d at 1369; see also Nolen v. Nucentrix Broadband Networks Inc., 293
F.3d 926, 929 (5th Cir. 2002) (“any injury must flow from the use or investment of racketeering
income” (emphasis in original) (quotation omitted)); Parker & Parsley Petroleum Co. v. Dresser
Indus., 972 F.2d 580, 584 (5th Cir. 1992) (holding that there must be a nexus between the
claimed violation and the injury).
Plaintiff averred in paragraph 145 of her Amended Complaint that “Service Experts
received income derived, directly or indirectly, from a pattern of mail and wire fraud, described
above and, participating as a principle, used or invested, directly or indirectly, part of such
income, or the proceeds of such income, in the establishment or operation of the enterprise.”
(Doc. # 1-8 at ¶ 145). A § 1962(a) enterprise is “something acquired through the use of illegal
activities or by money obtained from illegal activities.” N.O.W. v. Scheidler, 510 U.S. 249, 259
(1994). In other words, a § 1962(a) enterprise is “‘the victim of unlawful activity,’ not the
vehicle through which that activity is committed.” Boeing, 357 F. Supp. 2d at 1368 (quoting
Scheidler, 510 U.S. at 259). “Obviously, [Service Experts] is not a victim, nor can it acquire
itself.” In re Managed Care Litig., 150 F. Supp. 2d 1330, 1352 (S.D. Fla. 2001). Accordingly,
applying the definition of a § 1962(a) enterprise here, Plaintiff’s claim fails.
Alternatively, and in any event, Plaintiff has not plausibly alleged any facts in support of
the “but-for” and proximate causation requirements under § 1962(a). See Cox v. Admr. U.S.
Steel & Carnegie¸ 17 F.3d 1386, 1399 (11th Cir. 1994) (“It is well-established that RICO
plaintiffs must prove proximate causation in order to recover.”), opinion modified on rehearing
on other grounds, 30 F.3d 1347 (per curiam). “[I]t is the use or investment of racketeering
income, not racketeering acts, which violates § 1962(a).” Boeing, 357 F. Supp. 2d at 1370.
Plaintiff has not pleaded facts showing how the use or investment of income derived from the
purported mail and wire fraud caused her harm. Instead, her allegations suggest that Service
Experts naturally invested corporate profits (even if some of those profits derived from alleged
fraud), which is not a plausible indication of a violation of § 1962(a). See Brittingham v. Mobil
Corp., 943 F.2d 197, 305 (3d Cir. 1991) (“The direct cause of plaintiffs’ alleged injuries was the
fraudulent conduct. Plaintiffs have neither alleged nor demonstrated a connection with the use or
investment of racketeering income other than the normal reinvestment of corporate profits.”).
Thus, Plaintiff’s § 1962(a) claim fails because she has not properly alleged an investment injury.
Plaintiff Has Not Sufficiently Pled a Plausible Claim under Section
Title 18 U.S.C. § 1962(c) states that it is “unlawful for any person employed by or
associated with any enterprise engaged in, or the activities of which affect, interstate or foreign
commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise’s
affair through a pattern of racketeering activity or collection of unlawful debt.” To state a claim
for relief under § 1962(c), a plaintiff must satisfy four elements: (1) conduct (2) of an enterprise
(3) through a pattern (4) of racketeering activity. Williams v. Mohawk Indus., Inc., 465 F.3d
1277, 1282 (11th Cir. 2006) (per curiam). Further, “to establish liability under § 1962(c) one
must allege and prove the existence of two distinct entities: (1) a ‘person;’ and (2) and
‘enterprise’ that is not simply the same ‘person’ referred to by a different name.” Cedric
Kushner Promotions, Ltd. v. Kind, 533 U.S. 158, 161 (2001). A RICO “enterprise” is defined to
include “any individual, partnership, corporation, association, or other legal entity, and any union
or group of individuals associated in fact although not a legal entity.” 18 U.S.C. § 1961(4).
An association-in-fact enterprise “can exist in the absence of a formally structured
group.’” Boeing, 357 F. Supp. 2d at 1360 (quoting United States v. Young, 906 F.2d 615, 619
(11th Cir. 1990)). However, not all associations-in-fact are RICO enterprises. Instead, “[t]he
critical determination in evaluating whether ‘an association of individual entities’ constitutes ‘a
RICO enterprise’ is whether ‘the association of individual entities, however loose or informal,
furnished a vehicle for the commission of two or more predicate crimes.’” Id. (quoting United
States v. Goldin Indus., Inc., 219 F.3d 1271, 1275 (11th Cir. 2000)) (“Goldin II”) (internal
changes omitted). In other words, they must be “associated together for the common purpose of
engaging in a course of conduct.”
United States v. Turkette, 452 U.S. 576, 583 (1981).
Furthermore, an individual entity “must participate in the operation or management of the
enterprise itself.” Reves v. Ernst & Young, 507 U.S. 170, 185 (1993).
Plaintiff alleged four different enterprises: (1) Service Experts alone; (2) Service Experts
and Equiguard as an association-in-fact; (3) Service Experts and GE as an association-in-fact;
and (4) Service Experts, Equiguard, and GE as an association-in-fact. (Doc. # 1-8 at ¶¶ 98-101).
The court addresses each in turn.
1) Service Experts Cannot be an Enterprise on its Own
Service Experts cannot itself be both the RICO person and the RICO enterprise. See
Cedric Kushner, 533 U.S. at 161. “The distinction between the RICO person and the RICO
enterprise is necessary because the enterprise itself can be a passive instrument or victim of the
racketeering activity.” United States v. Goldin Indus., Inc., 219 F.3d 1268, 1270 (11th Cir. 2000)
(en banc) (“Goldin I”). Indeed, “Congress’ intention in § 1962(c) [was] to target a specific
variety of criminal activity, ‘the exploitation and appropriation of legitimate businesses by
corrupt individuals.’” Id. (quoting Yellow Bus Lines, Inc. v. Drivers, Chauffeurs & Helpers
Local Union 639, 883 F.2d 132 (D.C. Cir. 1989), rev’d in part on other grounds, 913 F.2d 948
(D.C. Cir. 1990) (en banc) (citing in turn S. Rep. No. 617, 91st Cong., 1st Sess. 76-78 (1969),
U.S. Code Cong. & Admin. News 1970, p. 4007); see also B.F. Hirsch v. Enright Refining Co.,
Inc., 721 F.2d 628, 633 (3d Cir. 1984) (“the ‘person’ subject to liability cannot be the same entity
as the ‘enterprise.’”), abrogated in part on other grounds by Sedima v. Imrex Co., 473 U.S. 479
(1985). “[T]he person and the victim, or the person and the tool, are different entities, not the
same.” Cedric Kushner, 533 U.S. at 162.
In her opposition brief, Plaintiff argues that “Scott Freeman is the separate and distinct
defendant ‘person’ as to the Service Experts enterprise.” (Doc. # 54 at 8). Her argument misses
the mark by a wide margin. Plaintiff has not pleaded in the Amended Complaint that Freeman or
Collins is a RICO defendant, outside of two conclusory allegations that they were involved in the
purported scheme to defraud. (See Doc. # 1-8 at ¶¶ 108, 111). Nor did the three RICO counts
ask for relief from Freeman or Collins—they only requested relief from Service Experts,
Equiguard, and GE. (See id. at ¶¶ 144-161). Accordingly, the Amended Complaint has not
plausibly alleged that Freeman or Collins is a RICO “person.” “[W]hat is not in the complaint
cannot be added in a brief.” Adell, 785 F. Supp. 2d at 1241 (citing Gilmour v. Gates, McDonald
& Co., 382 F.3d 1312, 1315 (11th Cir. 2005)).
Under Plaintiff’s well-pleaded facts (taken as true), Service Experts is the only RICO
But, § 1962(c) “liability ‘depends on showing that the defendants conducted or
participated in the conduct of the ‘enterprise’s affairs,’ not just their own affairs.” Cedric
Kushner, 533 U.S. at 163 (quoting Reves, 507 U.S. at 185) (emphasis in original); see also
Goldin II, 219 F.3d at 1276 (“RICO forbids the imposition of liability where the enterprise is
nothing more than a subdivision or a part of the person. . . .”). Therefore, Plaintiff’s § 1962(c)
claim cannot stand on the basis of Service Experts alone being the RICO enterprise.
2) Plaintiff Has Not Plausibly Pled that Service Experts and
Equiguard are an Association-in-Fact Enterprise
Plaintiff alternatively pleaded that Service Experts and Equiguard are an association-infact enterprise. The court disagrees.
It is axiomatic that multiple corporations can form a RICO enterprise. See Goldin II, 219
F.3d at 1277. “The critical determination in evaluating whether ‘an association of individual
entities’ constitutes ‘a RICO enterprise’ is whether ‘the association of individual entities,
however loose or informal, furnished a vehicle for the commission of two or more predicate
crimes.’” Boeing, 357 F. Supp. 2d at 1360 (quoting Goldin II, 219 F.3d at 1275); see also
Turkette, 452 U.S. at 583 (entities must be “associated together for the common purpose of
engaging in a course of conduct”). Here, however, Plaintiff has not plausibly averred any facts
demonstrating how Equiguard contributed to the commission of two or more instances of mail or
wire fraud.10 Indeed,
Plaintiff do[es] not allege how [Equiguard] agreed to employ any of these
procedures as part of a long-term criminal enterprise predicated on acts of mail
and wire fraud. Simply specifying . . . contents of communications cannot
automatically constitute a valid claim that a defendant violated 18 U.S.C. §
1962(c) without also plausibly alleging the existence of a long-term criminal
Am. Dental, 605 F.3d at 1292-93. There are simply no plausible facts alleged that indicate
Equiguard had any knowledge of, much less purposeful involvement in, Service Experts’s
Plaintiff only made conclusory allegations in this regard, and the court
disregards them. See Iqbal, 556 U.S. at 679. The Amended Complaint shows only that Service
Experts may have been a vehicle on its own for the commission of two or more predicate
crimes—but not Equiguard.
Notwithstanding the foregoing, there is yet another reason Plaintiff has not sufficiently
pleaded that Equiguard and Service Experts are an association-in-fact enterprise. “The crucial
factor is whether each entity alleged to be part of the association-in-fact ‘is free to act
independently and advance its own interests contrary to those’ of the other entities” in
conducting the RICO scheme. Boeing, 357 F. Supp. 2d at 1365 (quoting Goldin II, 219 F.3d at
1277). In other words, both Service Experts and Equiguard “‘must have some part in directing’
the affairs of the enterprise.” Williams, 465 F.3d at 1285 (quoting Reves, 507 U.S. at 179).
There are no facts alleged which demonstrate how Equiguard had any part in directing any
affairs of the alleged enterprise. The only facts are that Service Experts sold Equiguard policies,
and Plaintiff instead purchased what she thought was a Trane HVAC extended warranty. (See
Doc. # 1-8).
To demonstrate that Equiguard was part of an association-in-fact enterprise,
Further, the court doubts that Plaintiff has adequately pled predicate acts of mail and wire fraud by
Equiguard. See note 9, supra.
Plaintiff would have to allege facts allowing for a reasonable inference that Equiguard exercised
some measure of control over Service Experts. She has not averred any plausible facts in that
regard. Accordingly, Plaintiff has not pleaded an association-in-fact RICO enterprise consisting
of Equiguard and Service Experts.11
3) Neither Service Experts and GE, Nor Service Experts, Equiguard,
and GE are Association-in-Fact Enterprises
Plaintiff has attempted to plead two other alternative association-in-fact RICO
enterprises: one consisting of Service Experts and GE, and another consisting of Service Experts,
GE, and Equiguard. Both attempts miss the mark. As the court has previously determined,
Plaintiff has not plausibly alleged any facts showing that GE is liable as a member of the
purported RICO enterprise. (See Doc. # 38).
Without GE, the only remaining potential
enterprises would be Equiguard and/or Service Experts. But, for the reasons noted above,
Plaintiff has not plausibly alleged a RICO enterprise consisting of Service Experts and
Equiguard. Taken as true, Plaintiff’s well-pleaded facts suggest only that Service Experts alone
is both the RICO person and the RICO enterprise. But, as a matter of law, Service Experts
cannot be both the RICO person and the RICO enterprise. Accordingly, Plaintiff has not pleaded
a claim under Section 1962(c), and that cause of action is due to be dismissed with prejudice.
Plaintiff Has Not Plausibly Alleged a Claim under Section 1962(d)
Pursuant to 18 U.S.C. § 1962(d), “[i]t shall be unlawful for any person to conspire to
violate any of the provisions of subsection (a), (b), or (c) of this section.” Because Plaintiff has
Moreover, and in any event, in an illicit association-in-fact enterprise, a RICO person must be distinct
from the RICO enterprise (even though a RICO person can certainly be a part of the RICO enterprise so long as the
enterprise is more than just that person). Goldin I, 219 F.3d at 1270; Goldin II, 219 F.3d at 1275. This is “because
the enterprise itself can be a passive instrument or victim of the racketeering activity.” Goldin I, 219 F.3d at 1270.
Plaintiff has not plausibly asserted that Equiguard is a RICO person distinct from the alleged enterprise. At best, she
has pleaded that Equiguard is a victim of the racketeering activity, with Service Experts misleading its customers
into buying Equiguard policies instead of Trane HVAC warranties. But, the court doubts that Service Expert’s
allegedly misleading utilization of the Equiguard policies is truly a victimization of Equiguard. Thus, taken as true,
Plaintiff’s well-pleaded facts suggest that Service Experts alone is both the RICO person and the RICO enterprise.
failed to state a claim for relief under 18 U.S.C. §§ 1962(a) or 1962(c), she cannot support a
cause of action pursuant to § 1962(d).
Nevertheless, even if Plaintiff successfully pleaded a cause of action under §§ 1962(a) or
1962(c), she still has not alleged a claim under § 1962(d). Plaintiff has failed to aver plausible
facts demonstrating an illicit agreement to defraud her was made between Service Experts and
the other RICO Defendants. It is true that a “defendant’s participation in a conspiracy may be
inferred from acts of his which furthered the objectives of the conspiracy.” United States v.
Kopituk, 690 F.2d 1289, 1323 (11th Cir. 1982) (citations and internal quotations omitted).
Nevertheless, a RICO plaintiff must still allege an agreement, including “knowledge of the
essential nature of the plan,” to demonstrate the plausible existence of a conspiracy. Id.; see also
Twombly, 550 U.S. at 557 (“without some further factual enhancement [an allegation of
conspiracy] stops short of the line between possibility and plausibility of entitlement to relief”)
(internal changes and citations omitted). Conclusory allegations, “accompanied by nothing more
than a bare assertion of a conspiracy, do not plausibly suggest a conspiracy.” Am. Dental, 605
F.3d at 1294. “[W]ithout that further circumstance pointing to a meeting of the minds, an
account of a defendant’s commercial efforts stays in neutral territory.” Twombly, 550 U.S. at
Here, Plaintiff has “merely alleged,” as part of her RICO claims, that Service Experts and
the other RICO Defendants conducted their relationship in a manner that defrauded Plaintiff.
Club Car, Inc. v. Club Car (Quebec) Import, Inc., 276 F. Supp. 2d 1276, 1284 (S.D. Ga. 2003).
But such an allegation falls short of identifying any agreement Service Experts made with GE or
Equiguard to engage in RICO-prohibited behavior.12 She has only made conclusory statements
Plaintiff argues in its Response that “[a] defendant’s participation in a [RICO] conspiracy may be
inferred from acts of his which furthered the objectives of the conspiracy.” (Doc. # 54 at 20 (quoting Kopituk, 690
and assumptions Acouched as  factual allegation[s].@ Iqbal, 556 U.S. at 678. Plaintiff has
simply not alleged facts to show a valid RICO violation. Accordingly, this claim is due to be
Defendant Scott Freeman is Due to be Dismissed from this Case
Plaintiff named Freeman as a Defendant in her Amended Complaint. (Doc. # 1-8).
However, Freeman’s name was only specifically mentioned in three paragraphs of the general
“Facts” section, and two paragraphs of the “Additional RICO Facts” section. (Doc. # 1-8 at ¶¶
31-33, 108, 111). He was not named individually in any of the twelve counts. (See Doc. # 1-8).
And only Count III (Suppression) prayed for relief from “Defendants, jointly and severally.”13
(Id. at ¶¶ 49-53). Defendants contend that, largely on the basis that no claims are alleged against
him, Freeman should be dismissed from this case entirely. (Docs. # 42, 55). They further argue
that the factual allegations set forth in the Amended Complaint undermine any claim of
suppression against Freeman. (Id.). The court agrees.
To demonstrate a claim of suppression (otherwise and perhaps more commonly known as
fraudulent suppression) a plaintiff must show (1) that a defendant had a duty to disclose an
existing material fact; (2) that the defendant concealed or suppressed that material fact; (3) that
the defendant’s suppression induced the plaintiff to act or refrain from acting; and (4) that the
plaintiff suffered actual damage as a proximate result. Crestview Meml. Funeral Home, Inc. v.
Gilmer, 79 So.3d 585, 590 (Ala. 2011) (citation omitted); see also Ala. Code § 6-5-102
F.2d at 1323)). However, Plaintiff has not plausibly alleged acts of Defendants other than Service Experts that
furthered the objectives of the purported conspiracy. Furthermore, Plaintiff’s argument ignores important language
from Kopituk in the paragraph preceding the selected quotation: “it is sufficient to show that [a defendant] had
knowledge of the ‘essential nature of the plan.’” Kopituk, 690 F.2d at 1323 (quotation omitted). Plaintiff has not
shown that Equiguard (or GE) had any knowledge of Service Expert’s alleged scheme to defraud.
In her response Plaintiff appears to agree that the suppression claim is the only state law claim alleged
against Freeman. (Doc. # 54). Further, the remaining non-RICO and non-class causes of action request relief from
Service Experts and Collins. (Doc. # 1-8). Accordingly, the court does not consider them to be claims against
Freeman and need not address them.
(codifying the tort of fraudulent suppression). “A party’s mere silence as to a material fact does
not constitute fraud unless that party is under a duty to disclose that fact. A duty to disclose can
arise either from a confidential relationship with the plaintiff or from the particular
circumstances of the case.” Id. (quoting Keck v. Dryvit Sys., Inc., 830 So.2d 1, 11 (Ala. 2002)).
The existence of a duty to disclose is a question of law. State Farm Fire & Cas. Co. v. Owen,
792 So.2d 834, 839 (Ala. 1998). “When the parties to a transaction deal with each other at arm’s
length, with no confidential relationship, no obligation to disclose information arises when the
information is not requested.” Mason v. Chrysler Corp., 653 So.2d 951, 954-55 (Ala. 1995)
(citations omitted). Further, a party “can be liable for suppression only if it had knowledge of
the material fact it allegedly suppressed.” Owen, 792 So.2d at 837 (citing Dodd v. Nelda
Stephenson Chevrolet, Inc., 626 So.2d 1288, 1293 (Ala. 1993)).
Here, Plaintiff has not identified facts giving rise to any duty on Freeman’s part to
disclose. Although Plaintiff has generally alleged that because “Defendants” had “superior
knowledge,” and that, “by virtue of other special circumstances in this case,” had a duty to
disclose material facts (Doc. # 1-8 at ¶ 50), there are no facts alleged in this case which give rise
to a confidential relationship. Nor has Plaintiff alleged what facts create the “other special
circumstances in this case.” (Id.). To be sure, Plaintiff has averred that she asked Collins in
2007 about the optional extended warranties, and she has alleged Collins “explicitly represented”
that Plaintiff was purchasing the extended warranties she desired. (Id. at ¶¶ 11-14). On those
facts, Plaintiff may have stated a claim for suppression against Collins and, jointly and severally,
her employer Service Experts. But, based on Plaintiff’s own pleadings, Freeman did not enter
the picture until June 25, 2011, when Plaintiff called Service Experts.
(Id. at ¶¶ 31-33).
Furthermore, Plaintiff’s allegations demonstrate that it was Freeman who revealed to Plaintiff
that she had purchased an Equiguard policy—not the warranty she thought she had purchased in
2007. (Id.). There are no facts demonstrating that Freeman had a prior duty to disclose. And, in
any event, when presented with the opportunity to do so, he actually disclosed the material facts
Likewise, and notwithstanding Plaintiff’s argument in her opposition brief that
Freeman’s “known role at this point relates” to the time “prior to being contacted by Plaintiff,”
she has not averred that Freeman was aware (or had knowledge) of Collins’s representations to
her when she purchased the HVAC and the Equiguard policy. (Doc. # 54 at 20-21) (emphasis in
original). Plaintiff has not plausibly stated a claim of suppression against Freeman.
Plaintiff also argues in her opposition brief that she has stated a claim against Freeman
for certain RICO causes of action. (Doc. # 54). This argument, according to Plaintiff, is
bolstered by the statements that “Service Experts, Equiguard, GE and Freeman used the mail and
wire to execute the enterprise’s fraudulent scheme,” and that “Defendants Freeman and Collins
also participated in this fraudulent scheme and Freeman participated in the management of it.”
(Doc. # 1-8 at ¶¶ 108, 111). First, as discussed above, she has not adequately pled her RICO
Second, these two quoted statements are conclusory and Acouched as  factual
allegation[s].@ Iqbal, 556 U.S. at 678. Indeed, there are no factual averments concerning
Freeman’s fraudulent use of the mails or wires, or participation in or direction of the purported
RICO enterprise. Instead, the facts in the Amended Complaint show that Freeman used the
wires on June 25, 2011, when he revealed to Plaintiff via telephone the truth concerning the
policy she purchased. And, finally, the RICO allegations referred to Service Experts, Equiguard,
and GE as the purported “enterprise.” (See Doc. # 1-8). Furthermore, only Service Experts and
GE were more specifically alleged to have conducted mail and wire fraud. (See id.). Similarly,
the prayer for relief in each RICO count has sought judgment from “Service Experts, Equiguard
and GE, separately and severally” (id. at ¶¶ 149, 155, 161); Freeman was not named.
Accordingly, the court concludes that Plaintiff has not stated any RICO claims against him, and
all of her claims as to Freeman are due to be dismissed.
Plaintiff is Not Entitled to Leave to Further Amend Her Amended Complaint
In her opposition brief, Plaintiff alternatively requests, pursuant to Rule 15(b), that the
court grant her leave to allow her to file another amended complaint. (Doc. # 54). Defendants
contend that leave should be denied because Plaintiff has not satisfied Rule 16(b)’s “good cause”
requirement. (Doc. # 55). The court agrees with Defendants.
Plaintiff has already amended her complaint once and, further, the timeframes provided
for under Federal Rule of Civil Procedure 15(a)(1) have long passed. Accordingly, under Rule
15(a)(2), “a party may amend its pleading only with the opposing party’s written consent or the
court’s leave. The court should freely give leave when justice so requires.” Fed. R. Civ. P.
15(a)(2). Rule 16(b) provides, however, that once a scheduling order has been entered in a case,
“[a] schedule may be modified only for good cause and with the judge’s consent.” Fed. R. Civ.
P. 16(b)(4). On November 13, 2015, the court entered the Class Certification Scheduling Order
in this case (Doc. # 41), which set a deadline of January 29, 2016, for Plaintiff to amend the
pleadings. (Id. at ¶ 8). Plaintiff’s opposition brief, which contained her alternative request for
leave to amend, was filed on March 9, 2016. Therefore, because that request “comes long after
the deadlines for filing motions to amend established in the scheduling order entered in this
case,” Plaintiff is “required to show good cause under Federal Rule of Civil Procedure 16(b).”
Mann v. Taser Intl., Inc., 588 F.3d 1291, 1312 (11th Cir. 2009); see also Dozier v. Rowan
Drilling Co., Inc., 397 F. Supp. 2d 837, 855 (S.D. Tex. 2005) (“Only upon the movant’s
demonstration of good cause to modify the scheduling order will the more liberal standard of
Rule 15(a) apply to the district court’s decision to grant or deny leave.” (Quoting S & W Enters.,
L.L.C. v. SouthTrust Bank of Ala., 315 F.3d 533, 536 (5th Cir. 2003))).
This is not a situation in which Plaintiff has timely moved to amend her Complaint.
Indeed, “[P]laintiff [has] had ample time to file a motion for leave to amend but failed to do so.”
Satz, 181 F.3d at 1279. Much earlier in this case, Plaintiff was aware (or should have been
aware) of the factual shortcomings of her Amended Complaint. Last year, the court dismissed
GE for many of the same reasons stated in this opinion.14 (See Docs. # 38, 39). Plaintiff could
have attempted to correct the mere “technical failures”15 in her Amended Complaint in the time
allotted under the Rule 16(b) order, but she did not do so.16
This next point is important. Plaintiff has not filed a motion for leave to amend her
pleadings. Rather, in her opposition brief, she has asked that, in the event the court is inclined to
find she has failed to state a claim, she be permitted to amend her complaint (again) to correct
technicalities she says are curable by amendment. Of course, as discussed in more detail below,
that approach by Plaintiff runs afoul of Eleventh Circuit guidance. See Long v. Satz, 181 F.3d
1275, 1279-80 (11th Cir. 1999) (upholding denial of request to amend included in opposition
brief, and observing that “[f]iling a motion is the proper method to request leave to amend a
But even if Plaintiff’s request were leniently construed as a motion for leave to amend
(and this court has doubts that is a correct construction), it would be denied because she has not
Moreover, at the Rule 16(b) Scheduling Conference, counsel for Service Experts mentioned that the
court’s dismissal of GE gave them reason to reassess the RICO counts alleged against them. That the subject
Motion was filed after Plaintiff’s deadline to amend the complaint does not matter.
To be clear, the court disagrees with Plaintiff’s characterization of her pleading flaws. Mere
“technicalities” are not the same as “factual contentions. ” Plainly put, this is not a case where the pleadings have
set forth facts that simply were not thoroughly or well-stated. Plaintiff has not alleged any basis for amendment.
Perhaps she did not for good reason: the strictures of Rule 11.
shown good cause. Plaintiff’s sole argument in support of leave to amend her pleadings is that
Defendants’ Motion raises “technicalities” which can be cured by amendment. (Doc. # 54 at 22).
The court disagrees. In actuality, Defendants have pointed to Plaintiff’s failure to plausibly
allege facts that support the claims asserted in her Amended Complaint.
It is not lost on the court that, to date, the parties have engaged in substantial discovery.
Yet, Plaintiff has not offered any new facts learned through that discovery which would warrant
a finding of good cause to amend. The Amended Complaint, which specifically added federal
RICO claims, was filed in the state court before this case was removed—on August 25, 2014.
(Doc. # 1). The court resolved Plaintiff’s remand motion on June 22, 2015. (Docs. # 22, 23).
Shortly thereafter, GE moved to stay discovery pending the resolution of its motion to dismiss
the claims against it (that is, Plaintiff’s RICO claims). (See Docs. # 1, 1-5, 1-6). The court
dismissed GE from this case on November 5, 2015, for failure to state a claim. (Docs. # 38, 39).
At the very latest, starting on that date, Plaintiff was aware that she had not plausibly alleged
facts demonstrating a RICO cause of action. Despite that knowledge, she did not move to amend
her Amended Complaint to correct any factual deficiencies. Since November 2015, the parties
have participated in discovery. (See Doc. # 41). Plaintiff has not argued (or in any other way
suggested to the court) that she has uncovered previously unknown facts that would allow her to
amend her pleadings and assert a plausible claim for relief (1) under RICO, and (2) against
Freeman. Accordingly, she has not shown good cause, and is not entitled to the “more liberal
standard of Rule 15(a).” Dozier, 397 F. Supp. 2d at 855. Therefore, her alternative request for
leave to amend is due to be denied.
Finally, and in any event, “[f]iling a motion is the proper method to request leave to
amend a complaint.” Satz, 181 F.3d at 1279-80. “It has long been established in this Circuit that
a district court does not abuse its discretion by denying a general and cursory request for leave to
amend contained in an opposition brief.” Davidson v. Maraj, 609 Fed. Appx. 994, 1002 (11th
Cir. 2015) (per curiam). “Where [as here] a request for leave to file an amended complaint
simply is imbedded within an opposition memorandum, the issue has not been raised properly.”17
Rosenberg v. Gould, 554 F.3d 962, 967 (11th Cir. 2009) (quoting Posner v. Essex Ins. Co., 178
F.3d 1209, 1222 (11th Cir. 1999)). Plaintiff’s request appears at the end of her opposition brief
in a seemingly backstop effort to save her RICO claims (and her other claim against Freeman).
Under Eleventh Circuit case law, her “request for leave to amend was insufficient as a matter of
law.” Davidson, 609 Fed. Appx. at 1002. Plaintiff is not entitled to leave to amend.
For all these reasons, Defendant’s Motion (Doc. # 42) is due to be granted. A separate
order will be entered.
DONE and ORDERED this July 14, 2016.
R. DAVID PROCTOR
UNITED STATES DISTRICT JUDGE
Furthermore, the request does not comply with the requirements for motions to amend set forth in this
court’s Scheduling Order. (See Doc. # 41 at ¶ 8). Similarly, Plaintiff “also failed to comply with Federal Rule of
Civil Procedure 7(b) when [she] failed to attach a copy of [her] proposed amendment or to describe the substance of
[her] proposed amendment.” Rosenberg v. Gould, 554 F.3d 962, 967 (11th Cir. 2009) (citing Satz, 181 F.3d at
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