Catano v. Capuano et al
Filing
129
ORDER granting in part and denying in part 98 Defendant's Motion for Summary Judgment. Signed by Magistrate Judge Edwin G. Torres on 7/11/2019. See attached document for full details. (js02)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 18-20223-Civ-TORRES
ZORAIDA CATANO,
Plaintiff,
v.
PAULINE CAPUANO and
TRAVIS SCHIRATO,
Defendants.
______________________________________/
ORDER ON DEFENDANT’S MOTION FOR SUMMARY JUDGMENT
This matter is before the Court on Pauline Capuano’s (“Defendant” or “Mrs.
Capuano”) motion for summary judgment [D.E. 98] against Zoraida Catano
(“Plaintiff”). [D.E. 78]. Plaintiff responded to Defendant’s motion on June 24, 2019
[D.E. 124] to which Defendant replied on July 11, 2019. [D.E. 129]. Therefore,
Defendant’s motion is now ripe for disposition. After careful consideration of the
motion, response, reply, and relevant authority, and for the reasons discussed
below, Defendant’s motion is GRANTED in part and DENIED in part.1
On March 22, 2019, the parties consented to the jurisdiction of the
undersigned Magistrate Judge. [D.E. 84].
1
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I.
BACKGROUND
In 2006, Mauricio Capuano (“Mr. Capuano”), as the sole shareholder,
incorporated his company, GSA Realty. [D.E. 1 at ¶¶ 10, 12]. A few months after
GSA Realty’s formation, the company purchased real property (the “Property”) in
Miami for $2,600,000.2 See id. at ¶ 11. In 2007, Mr. Capuano separated from his
wife, Mrs. Capuano, and remained estranged from her until his death in January
2014.
See id. at ¶ 13.
After the separation, Mr. Capuano began a romantic
relationship with Plaintiff, in Guatemala, which resulted in a daughter who was
born in November 2008.
In the meantime, Mrs. Capuano moved to the
Netherlands.
Several years later, in October 2013, Travis Schirato (“Mr. Schiarto”), Mrs.
Capuano’s nephew and a convicted felon, executed a purchase and sale agreement,
to sell GSA Realty’s Miami property to Laurinus Pierre and Michele Jean Gilles for
$2,300,000. At the time, Mr. Schirato held no position with GSA Realty nor did he
have any ownership interest in the company. A few months later, Mr. Capuano
died in Miami on January 2, 2014.
According to Mr. Capuano’s 2009 will –
submitted for probate in Guatemala – he devised half of his estate to Plaintiff and
the other half to his adult daughter, Graziela Capuano.3
After Mr. Capuano’s death, Plaintiff alleges that Defendants held a series of
telephone calls in which they discussed the pending sale of the Property, agreed to
2
The Property is located at 12901 Biscayne Bay Drive, Miami, Florida 33161.
3
Mr. Capuano executed the will five years prior to his death on August 7,
2009.
2
embezzle the proceeds from GSA Realty, and to conceal the embezzlement through
a series of transfers and financial transactions. Purporting to act on GSA Realty’s
behalf, Mr. Schirato, nearly three months after Mr. Capuano’s death, attended the
closing of the sale, receiving $300,000 on behalf of GSA Realty and obtaining a
promissory note from the buyers for $2,000,000, also payable to GSA Realty.
Immediately after the closing on March 25, 2014, Mr. Schirato transferred
the $300,000 from GSA Realty to himself or corporate entities under his control.
Mr. Schirato then transferred $114,000, out of the $300,000, to Mrs. Capuano who
then transferred those funds to a personal bank account in Guatemala. Plaintiff
believes that, thereafter, Mr. Schirato transferred $26,666.68 in interest payments
on the property to himself or his corporate entities. Subsequently, without any
authority to do so, Mr. Schirato advised the buyers, by letter, that servicing of the
loan was being transferred from GSA Realty to Mr. Schirato, individually. After the
buyers sent him another series of interest payments, totaling $40,000.02, Mr.
Schirato sent them another letter, stating that he had assigned the next thirty-six
payments to two individuals in New York.
A short time later, on August 20, 2014, Mr. Schirato executed a balloon note
endorsement and assignment of mortgage deed, in exchange for a substantial sum,
purporting to assign the note from GSA Realty to the individuals in New York.
Thereafter, Plaintiff alleges that Mrs. Capuano and Mr. Schirato persisted in
conspiring to hide the embezzled funds, with Mrs. Capuano making false
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representations to the probate court and further impeding the recovery of estate
assets, continuously through the time of the filing of Plaintiff’s complaint.
II.
APPLICABLE PRINCIPLES AND LAW
AThe court shall grant summary judgment if the movant shows that there is
no genuine dispute as to any material fact and the movant is entitled to judgment
as a matter of law.” Fed. R. Civ. P. 56(a).
A party asserting that a fact cannot be or is genuinely disputed must
support the assertion by: (A) citing to particular parts of materials in
the record, including depositions, documents, electronically stored
information, affidavits or declarations, stipulations (including those
made for purposes of the motion only), admissions, interrogatory
answers, or other materials; or (B) showing that materials cited do not
establish the absence or presence of a genuine dispute, or that an
adverse party cannot produce admissible evidence to support the fact.
Fed. R. Civ. P. 56(c)(1). AOn summary judgment the inferences to be drawn from
the underlying facts must be viewed in the light most favorable to the party
opposing the motion.@ Matsushita Electric Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 597 (1986) (quoting another source).
In opposing a motion for summary judgment, the nonmoving party may not
rely solely on the pleadings, but must show by affidavits, depositions, answers to
interrogatories, and admissions that specific facts exist demonstrating a genuine
issue for trial. See Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317,
323B24 (1986). The existence of a mere “scintilla” of evidence in support of the
nonmovant=s position is insufficient; there must be evidence on which the jury could
reasonably find for the nonmovant. See Anderson v. Liberty Lobby, Inc., 477 U.S.
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242, 252 (1986). AA court need not permit a case to go to a jury . . . when the
inferences that are drawn from the evidence, or upon which the non-movant relies,
are >implausible.=@ Mize v. Jefferson City Bd. Of Educ., 93 F.3d 739, 743 (11th Cir.
1996) (citing Matsushita, 475 U.S. at 592B94)).
At the summary judgment stage, the Court’s function is not to “weigh the
evidence and determine the truth of the matter but to determine whether there is a
genuine issue for trial.” Anderson, 477 U.S. at 249. In making this determination,
the Court must decide which issues are material. A material fact is one that might
affect the outcome of the case. See id. at 248 (AOnly disputes over facts that might
affect the outcome of the suit under the governing law will properly preclude the
entry of summary judgment. Factual disputes that are irrelevant or unnecessary
will not be counted.@).
“Summary judgment will not lie if the dispute about a
material fact is >genuine,= that is, if the evidence is such that a reasonable jury could
return a verdict for the nonmoving party.” Id.
III.
A.
ANALYSIS
Federal RICO Generally
“It is the purpose of [The Racketeer Influenced and Corrupt Organizations
Act (“RICO”)] to seek the eradication of organized crime in the United States by
strengthening the legal tools in the evidence-gathering process, by establishing new
penal prohibitions, and by providing enhanced sanctions and new remedies to deal
with the unlawful activities of those engaged in organized crime.” Organized Crime
Control Act of 1970, Pub. L. No. 91–452, 84 Stat. 922, 923.
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The federal RICO
statute provides 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 affairs through a pattern of racketeering activity or collection of
unlawful debt.” 18 U.S.C. § 1962(c). The statute creates a civil cause of action for
“[a]ny person injured in his business or property by reason of a violation” of the
substantive provisions contained in Section 1962 of the RICO Act. 18 U.S.C. §
1964(c).
The required elements to state a claim for civil RICO liability are (1) conduct,
(2) of an enterprise, (3) through a pattern (4) of racketeering activity. See Langford
v. Rite Aid of Ala., Inc., 231 F.3d 1308, 1311 (11th Cir. 2000); see also McCulloch v.
PNC Bank, 298 F.3d 1217, 1225 (11th Cir. 2002) (“[T]o state a RICO claim, a
plaintiff must plead (1) that the 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.”).
“Plaintiffs in such an action must identify and prove a pattern of racketeering
activity, defined as two ‘predicate acts' of racketeering activity within a 10–year
period.” Id. at 1311–12 (citing 18 U.S.C. § 1961(5)). “The phrase ‘racketeering
activity’ is defined as any act which is indictable under a lengthy list of criminal
offenses,” including any act or threat involving murder, kidnaping, gambling, arson,
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robbery, extortion, bribery, mail fraud, wire fraud, and counterfeiting. See id. at
1312; see also 18 U.S.C. § 1961(1).
Under Section 1964(c), civil RICO claimants must also demonstrate standing
by showing “(1) the requisite injury to ‘business or property,’ and (2) that such
injury was ‘by reason of’ the substantive RICO violation.” Williams v. Mohawk
Indus., Inc., 411 F.3d 1252, 1256 (11th Cir. 2005).
Civil RICO claims are
“essentially a certain breed of fraud claims,” meaning they “must be pled with an
increased level of specificity.” Ambrosia Coal & Const. Co. v. Pages Morales, 482
F.3d 1309, 1316 (11th Cir. 2007) (citing Fed. R. Civ. P. 9(b)). “To satisfy the Rule
9(b) standard, RICO complaints must allege: (1) the precise statements, documents,
or misrepresentations made; (2) the time and place of and person responsible for
the statement; (3) the content and manner in which the statements misled the
Plaintiffs; and (4) what the Defendants gained by the alleged fraud.” Ambrosia
Coal & Const. Co., 482 F.3d at 1316 (citing Brooks v. Blue Cross & Blue Shield of
Fla., Inc., 116 F.3d 1364, 1380-81 (11th Cir. 1997)).
B.
Federal RICO: Continuity
To prove a RICO violation under both federal and Florida law, a plaintiff
must establish, among other things, continuity.4
See Jackson v. BellSouth
Telecomm., 372 F.3d 1250, 1264 (11th Cir. 2004) (explaining that, in addition to
showing two or more related predicate acts, federal RICO plaintiffs must show “the
While we could begin our analysis with other elements, we begin with
continuity because there is a noticeable shortcoming on this issue in Plaintiff’s
RICO claims.
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predicate acts demonstrate[] criminal conduct of a continuing nature”); Lugo v.
State, 845 So. 2d 74, 99 (Fla. 2003) (explaining Florida RICO plaintiffs must
establish “that a continuity of particular criminal activity exists”). There are two
types of continuity: closed-ended continuity and open-ended continuity.
“Closed-
ended continuity refers to ‘a closed period of repeated conduct.’” Daedalus Capital
LLC v. Vinecombe, 625 F. App’x 973, 976 (11th Cir. 2015) (quoting H.J. Inc. v. Nw.
Bell Tel. Co., 492 U.S. 229, 241 (1989)). There is no bright-line rule as to how long a
scheme must last to satisfy closed-ended continuity, but “the substantial period of
time requirement for establishing closed-ended continuity cannot be met with
allegations of schemes lasting less than a year.”
Jackson, 372 F.3d at 1266
(emphasis added). A single scheme involving only one victim also does not satisfy
closed-ended continuity even when the scheme lasts for a substantial period of time.
Daedalus Capital, 625 F. App’x at 976 (citing Jackson, 372 F.3d at 1267; Sil-Flo,
Inc. v. SFHC, Inc., 917 F.2d 1507, 1516 (10th Cir. 1990) (affirming dismissal of
RICO claim when a “closed-ended series of predicate acts . . . constituted
a single scheme to accomplish one discrete goal, directed at one individual with no
potential to extend to other persons or entities”)).
By contrast, “[o]pen-ended continuity refers to ‘past conduct that by its
nature projects into the future with a threat of repetition.’” Daedalus Capital, 625
F. App’x at 976 (quoting Daedalus Capital LLC, 625 F. App’x at 976). In these
cases, “plaintiffs can meet their burden by establishing either that ‘the racketeering
acts themselves include a specific threat of repetition extending indefinitely into the
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future,’ or that ‘the predicate acts or offenses are part of an ongoing entity’s regular
way of doing business.”’ Jackson, 372 F.3d at 1265.
Defendant argues that neither form of continuity exists because Mr. Schirato
gambled away the proceeds of the real estate sale and there is no evidence that
Defendant committed any of the other alleged predicate acts. Plaintiff contends, on
the other hand, that closed-ended continuity exists because Defendant and Mr.
Schirato began their conspiracy with the death of Mr. Capuano on January 2, 2014
and continued it with the sale of the Property on March 25, 2014. Plaintiff also
asserts that the division of the sale proceeds took place in July 2015 and that
Defendant doubled down on the conspiracy with a false certification to a Florida
probate court that she had no knowledge that the shares of GSA Realty comprised
assets of Mr. Capuano’s estate. The scheme then allegedly continued in February
2016 with Defendant’s misrepresentations to a probate court in Guatemala and Mr.
Schirato’s embezzlement of the sale proceeds through July 2018 – resulting in a
conspiracy of approximately four years. Alternatively, Plaintiff argues that openended continuity exists because (1) the funds from the sale remain in the hands of a
third-party and (2) Mr. Schirato has attempted to obtain those funds with continued
misrepresentations to GSA Realty. Plaintiff therefore concludes that both types of
continuity exist in this case and that Defendant’s motion must be denied.
If we assume that Mrs. Capuano and Mr. Schirato committed the predicate
acts over the course of four years, we agree that this constitutes a substantial period
to establish closed-ended continuity for civil RICO liability. See Jackson, 372 F.3d
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at 1266 (“Other circuits have agreed that the substantial period of time requirement
for establishing closed-ended continuity cannot be met with allegations of schemes
lasting less than a year.”) (citing cases). But, closed-continuity cannot exist in this
case because the alleged racketeering was related to a single scheme with a discrete
goal “to embezzle, divide, and launder more than $2 million in funds that properly
belong to the Estate of Mauricio Capuano, of which Plaintiff . . . is a primary
beneficiary.”
[D.E. 1 at 1]. And the Eleventh Circuit has repeatedly held that in
cases “where [] RICO allegations concern only a single scheme with a discrete goal,
the courts have refused to find a closed-ended pattern of racketeering even when
the scheme took place over longer periods of time.” See Jackson, 372 F.3d at 1267
(citing cases).
Not to be deterred, however, Plaintiff relies heavily on the Court’s Order
denying Defendant’s motion to dismiss [D.E. 42] and insists that the alleged
conspiracy took place over a substantial amount of time to sustain a civil RICO
claim. Yet, Plaintiff’s argument is unpersuasive because the Court’s Order did not
consider whether the allegations related to a single goal.
The Court merely
considered whether there were plausible allegations that the predicate acts
occurred over a sufficient amount of time. In light of that, Plaintiff has failed to
explain how the predicate acts seek to accomplish any other goal than to deprive
Plaintiff of the funds and property belonging to the estate of Mr. Capuano. Indeed,
the allegations related to this scheme, as well as the scheme itself, even when
viewed in a light most favorable to Plaintiff, are not of the nature to establish the
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sort of offense that RICO was designed to address. We must therefore conclude that
– irrespective of the length of the alleged conspiracy – closed-ended continuity
cannot exist because Plaintiff merely alleges that the only goal in this case was to
embezzle, divide, and launder $2 million dollars of Mr. Capuano’s estate.5
As for open-ended continuity, Plaintiff argues that the proceeds of the real
estate sale are in the possession of a third party (LoanCare, LLC) and that Mr.
Schirato has continued his attempts to obtain possession of the estate’s funds
through fraudulent misrepresentations. Plaintiff relies, as support, on exhibits 25
and 26 that she submitted in opposition to Defendant’s motion for summary
judgment. [D.E. 125-25, 125-26]. But, Plaintiff does not offer any explanation of
how these exhibits constitute “a specific threat of repetition extending indefinitely
into the future . . . .” Jackson, 372 F.3d at 1265. Plaintiff instead directs the Court
See, e.g., Efron v. Embassy Suites (Puerto Rico), Inc., 223 F.3d 12, 18 (1st Cir.
2000) (noting that “the fact that a defendant has been involved in only one scheme
with a singular objective and a closed group of targeted victims” supports the
conclusion that there is no continuity); Edmondson & Gallagher v. Alban Towers
Tenants Ass’n, 48 F.3d 1260, 1265 (D.C. Cir. 1995) (finding that predicate acts
occurring over a three year period is insufficient to allege a pattern of racketeering
when the complaint alleged a single scheme with a single goal); see also Vicom, Inc.
v. Harbridge Merchant Servs., 20 F.3d 771, 780 (7th Cir. 1994) (various factors
besides temporal span should be considered in assessing continuity, including the
number of victims, the presence of separate schemes, and the occurrence of distinct
injuries); Resolution Trust Corp. v. Stone, 998 F.2d 1534, 1543 (10th Cir. 1993)
(finding that in addition to duration, weighing “extensiveness” of the RICO scheme,
including number of victims, number and variety of racketeering acts, whether the
injuries caused were distinct, the complexity and size of the scheme, and the nature
or character of the enterprise or the unlawful activity); United States v. Pelullo, 964
F.2d 193, 208 (3d Cir. 1992) (“We have eschewed the notion that continuity is solely
a temporal concept, though duration remains the most significant factor.”); U.S.
Textiles, Inc. v. Anheuser–Busch Cos., 911 F.2d 1261, 1269 (7th Cir. 1990) (“[I]t is
not irrelevant, in analyzing the continuity requirement, that there is only one
scheme.”) (internal quotation marks and citation omitted)).
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to the exhibits and leaves it to the Court to determine – based on three conclusory
sentences – whether open-ended continuity exists.
Plaintiff’s failure to develop her argument or explain how the exhibits arise to
a specific ongoing threat of ongoing criminal activity is by itself fatal because
“conclusory arguments are insufficient to withstand summary judgment.” Jackson
v. City of Albany, Ga., 49 F. Supp. 2d 1374, 1380 (M.D. Ga. 1998) (citing Kadlec v.
Illinois Bell Tel. Co., 407 F.2d 624 (7th Cir. 1969)). In any event, the exhibits that
Plaintiff relies on do not establish open-ended continuity. Exhibit 25, for example,
is an internal email chain involving several individuals at McKinley Mortgage and
LoanCare, LLC.
The communications show that Mr. Schirato contacted both
companies on several occasions to inquire about the funds related to Mr. Capuano’s
estate in June 2018. But, the emails fail to show how any of Mr. Schirato’s actions
constitute a specific threat of fraudulent misrepresentations or any other form of
racketeering. The most that one can infer from the emails (without any context or
supporting reasons) in the light most favorable to Plaintiff is that Mr. Schirato
contacted the third-parties and they responded that the funds of Mr. Capuano’s
estate cannot be provided until the current litigation is resolved. There is nothing
in the emails to suggest that Mr. Schirato committed any criminal wrongdoing.
Plaintiff then directs the Court’s attention to exhibit 26 but those emails are
equally unavailing because they merely provide that an attorney named David
Carlisle instructed employees at LoanCare, LLC to not disburse funds to anyone
because there is a pending state court action against Mr. Schirato. David states, for
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instance, that LoanCare should wait to take any action pending further order of the
Court and that this will ensure that the funds are distributed to the proper
individual(s). There is again nothing in the email chain to remotely suggest that
Mr. Schirato or Defendant made a fraudulent misrepresentation or a specific threat
of repetitive racketeering to establish open-ended continuity.
Accordingly,
Defendant’s motion for summary judgment as to Plaintiff’s federal RICO claims in
counts one and two is GRANTED for a lack of continuity.
C.
Federal RICO: Enterprise
Putting aside Plaintiff’s failure to establish continuity, a required element
common to all RICO claims is the existence of an enterprise. See Crowe v. Henry, 43
F.3d 198, 204 (5th Cir. 1995) (“A plaintiff asserting a RICO claim must allege the
existence of an enterprise.”) (citing Montesano v. Seafirst Commercial Corp., 818
F.2d 423, 427 (5th Cir. 1987)). A RICO enterprise is defined as “a group of persons
associated together for a common purpose” and “is proved by evidence of an ongoing
organization . . . and by evidence that the various associates function as a
continuing unit.” United States v. Turkette, 452 U.S. 576, 583 (1981). This means
that a RICO enterprise “must exhibit three basic characteristics: (1) a common or
shared purpose; (2) some continuity of structure or personnel; and (3) an
ascertainable structure distinct from that inherent in a pattern of racketeering.”
Diamonds Plus, Inc. v. Kolber, 960 F.2d 765, 769–70 (8th Cir. 1992).
enterprise can either be a legal entity or an association in fact.
See St. Paul
Mercury Insurance Co. v. Williamson, 224 F.3d 425, 439 (5th Cir. 2000).
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A RICO
Plaintiff alleges that that Mrs. Capuano and Mr. Schirato “conspired to and
did form an association-in-fact6” to embezzle funds through a pattern of criminal
activity. [D.E. 1]. An “association-in-fact” enterprise need not have any structural
features beyond “a purpose, relationships among those associated with the
enterprise, and longevity sufficient to permit these associates to pursue the
enterprise’s purpose.” Boyle v. United States, 556 U.S. 938, 946 (2009). This means
that “[t]here is no restriction upon the associations embraced by the definition,” and
it can include “both legitimate and illegitimate enterprises within its scope.”
Turkette, 452 U.S. at 580. It is important to note, however, that while the definition
of an enterprise is exceedingly broad, it is not without limits. An enterprise is not,
for instance, the same as a pattern of racketeering activity. Instead, an enterprise
“is an entity separate and apart from the pattern of activity in which it engages.”
Id. at 583 (“The existence of an enterprise at all times remains a separate element
which must be proved”).
“The question of whether the enterprise has a ‘separate existence’ from the
pattern of activity through which it is conducted ought to be the focus of inquiry in
every illegitimate enterprise case.”
David B. Smith & Terrance G. Reed, Civil
RICO, § 3.06, p. 3–50 (Matthew Bender & Co. 2000).
Proof of a pattern of
An association-in-fact enterprise requires the existence of an entity as “an
ongoing organization, formal or informal, and evidence that the various associates
function as a continuing unit.” Turkette, 452 U.S. at 583; see also NOW v. Scheidler,
510 U.S. 249, 259 n 5 (1994) (noting that an “enterprise” under Section 1962(a)
must “be an entity that was acquired through illegal activity,” whereas an
“enterprise” under Section 1962(c) is “generally the vehicle through which the
unlawful pattern of racketeering is committed, rather than the victim of that
activity”).
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racketeering, for example, does not prove the existence of an enterprise, or vice
versa. Instead, a plaintiff must allege and present evidence that establishes that
the association exists for a purpose other than to commit the predicate acts. See
Turkette, 452 U.S. at 580 (“The ‘enterprise’ is not the ‘pattern of racketeering
activity’; it is an entity separate and apart from the pattern of activity in which it
engages.”); Elliott v. Foufas, 867 F.2d 877, 881 (5th Cir. 1989) (“[T]he plaintiff must
plead specific facts which establish that the association exists for purposes other
than simply to commit the predicate acts.”); see also In re McCann, 268 F. App’x
359, 366 (5th Cir. 2008) (same). As such, if an association merely has a single
discrete goal to accomplish the predicate acts, it is not an association within the
meaning of the federal RICO statute.
See Household Bank FSB v. Metro
Associates, 1992 WL 350239 at *1 (E.D. La. 1992) (“If the association has as
its raison d’etre a single, discrete goal toward which all its energies are directed, the
association is not a RICO enterprise.”).
Here, Plaintiff claims that Defendants formed an association-in-fact
enterprise “to achieve the embezzlement and laundering of GSA Realty funds
through a pattern of criminal activity to a common purpose.” [D.E. 1]. Plaintiff also
alleges that evidence of the enterprise is proved through “the coordinated and
systematic accomplishment of mail and wire fraud, falsification of corporate
documents, misrepresentation of authority, and perjury in official proceedings.” Id.
But, Plaintiff never alleges – much less provides any evidence of – any distinction
between the enterprise and the pattern of racketeering activity.
15
The United States Court of Appeals for the Eighth Circuit formulated a
succinct test to determine whether an alleged enterprise is distinct from a pattern
of racketeering activity. The Court stated that “[i]n assessing whether an alleged
enterprise has an ascertainable structure distinct from that inherent in a pattern of
racketeering, it is our normal practice to determine if the enterprise would still
exist were the predicate acts removed from the equation.” Handeen v. Lemaire, 112
F.3d 1339, 1352 (8th Cir. 1997); see, e.g., Bank v. Brooklyn Law School, 2000 WL
1692844 at *4 (S.D.N.Y. 2000) (finding that a plaintiff failed to allege that the
enterprise exited separate and apart from a pattern of racketeering when there was
no allegation that the enterprise would exist if the predicate acts were removed
from the equation).
With this test in mind, Defendant’s motion is well taken because – even if we
assume that the enterprise meets the structure and purpose requirements of an
association-in-fact – there is zero evidence that this enterprise committed anything
other than the predicate acts. See Yandell v. Christensen, 2017 WL 7371183, at *6
(M.D. Fla. Aug. 18, 2017) (“To plead the existence of an enterprise, a plaintiff must
also establish distinctiveness.”) (citing Ray v. Spirit Airlines, Inc., 836 F.3d 1340,
1356 (11th Cir. 2016)). “In cases involving a legal entity, the matter of proving the
enterprise element is straightforward, as the entity’s legal existence will always be
something apart from the pattern of activity performed by the defendant or his
associates.” Boyle, 556 U.S. at 955 (citing Cedric Kushner Promotions, Ltd. v. King,
533 U.S. 158, 163 (2001)); see also United States v. Kragness, 830 F.2d 842, 855 (8th
16
Cir. 1987) (“Separating the enterprise from the pattern of racketeering is generally
not problematic where a legal entity is involved, since this entity is likely to be
clearly distinct from the acts of racketeering.”) (quotation omitted).
Yet, for an association-in-fact enterprise (as alleged here), there must be
evidence “of the entity’s ‘separate’ existence and ‘ongoing organization.’” Boyle, 556
U.S. at 955 (quoting Turkette, 452 U.S. at 583); see also Mackin v. Auberger, 59 F.
Supp. 3d 528, 545–46 (W.D.N.Y. 2014) (“Plaintiff's complaint must allege facts
supporting the separate existence of a RICO enterprise.”) (citing Manax v.
McNamara, 660 F. Supp. 657, 662 (W.D. Tex. 1987) (where plaintiffs alleged the
existence of an association-in-fact enterprise, comprised of the mayor and other
defendants who associated together to allegedly deprive plaintiff Manax of his
medical license, plaintiffs' RICO claim was dismissed because it was “not clear how,
or even if, the enterprise is separate from the Defendants . . . No facts are alleged
which lend support to the separate existence of a RICO enterprise.”)). And this will
often require “proof of an enterprise’s separate existence,” and “different evidence
from that used to establish the pattern of predicate acts.” Boyle, 556 U.S. at 955
(emphasis added).7
Plaintiff’s response – which attempts to rebut many of Defendant’s
arguments – noticeably sidesteps this issue. Plaintiff instead focuses on how the
enterprise has a common purpose and how Mrs. Capuano’s actions, even if
Evidence needed to establish an enterprise’s separate existence may be
provided via an organizational hierarchy, an internal discipline mechanism, regular
meetings, or a practice of reinvesting proceeds to promote and expand the
enterprise. See Boyle, 556 U.S. at 956.
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periodically in conflict with those of Mr. Schirato, does not undermine the
enterprise itself. Yet, Plaintiff never directly confronts Defendant’s argument that
there is zero evidence that the alleged enterprise existed for any other purpose than
to commit the predicate acts. And the reason for that omission might be because
the complaint specifically undermines that contention. See, e.g., [D.E. 1] (“In this
manner, Pauline and Travis conspired to and did form an association-in-fact . . . to
achieve the embezzlement and laundering of GSA Realty funds through a pattern of
criminal activity to a common purpose.”); see also Acosta v. Campbell, 2006 WL
146208, at *7 (M.D. Fla. Jan. 18, 2006) (“Acosta’s allegations are to the contrarythat the associations between CitiMortgage/Citibank and MCA exist merely for the
purpose of funding mortgages and the association between CitiMortgage/Citibank
and the Law Office existed for the purpose of foreclosing the mortgage. Acosta’s
RICO claims would fail on this basis alone.”).
Plaintiff has therefore failed to
provide any evidence that there is an enterprise that existed for any other purpose
than to commit the predicate acts. See Turkette, 452 U.S. at 583 (finding that an
enterprise must be “an entity separate and apart from the pattern of activity in
which it engages”).
Because each element of a RICO element is required, and Plaintiff fails to
show how Mrs. Capuano and Mr. Schirato took part in an enterprise – to
accomplish any other goal than the predicate acts – and Plaintiff fails to provide
any other evidence of the enterprise’s separate existence, Defendant’s motion for
summary judgment as to Plaintiff’s federal RICO claims is GRANTED for this
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additional reason. See, e.g., In re Actiq Sales & Mktg. Practices Litig., 2009 WL
1444443, at *6 (E.D. Pa. May 22, 2009) (“Plaintiffs have failed to plead sufficient
facts to establish that the alleged enterprise has a separate existence apart from the
pattern of activity in which it engages. Without such facts, Plaintiffs’ substantive
RICO claims are deficient.”); United States v. Lombardo, 639 F. Supp. 2d 1271, 1284
(D. Utah 2007) (“The separate existence requirement arises from the language of
the statute itself, which requires that a RICO conspiracy violation be based on the
existence of an enterprise and its planned pattern of racketeering activity.”)
(emphasis in original).
C.
Florida RICO
Plaintiff alleges in counts three and four that Defendant violated the Florida
RICO statute. A Florida RICO claim is examined in the same way as a federal
RICO claim. See Ferrell v. Durbin, 311 F. App’x 253, 256 (11th Cir. 2009) (“[T]he
Florida RICO statute is patterned after the Federal RICO statute and Florida RICO
cases follow Federal RICO cases. Thus, the analysis of the Federal RICO claims is
equally applicable to the Florida RICO claims.”) (citing See Jackson v. BellSouth
Telecomm., 372 F.3d 1250, 1263–64 (11th Cir. 2004)). In fact, the two statutes are
nearly identical and, like its federal counterpart, a Florida RICO claim requires two
predicate acts to bring conduct within the ambit of a pattern of racketeering
activity. See Fla. Stat. § 895.07 (‘“Pattern of racketeering activity’ means engaging
in at least two incidents of racketeering conduct that have the same or similar
intents, results, accomplices, victims, or methods of commission or that otherwise
19
are interrelated by distinguishing characteristics and are not isolated incidents”)
(emphasis added).8
Defendant’s motion is well taken because, for the reasons set forth above,
closed-ended continuity cannot exist “where the RICO allegations concern only
a single scheme with a discrete goal,” even when a scheme takes place over a long
period of time. Jackson, 372 F.3d at 1269. Open-ended continuity also fails for the
same reasons because there is no evidence that the alleged misrepresentations were
part of the “regular way of doing business” or that they constitute an ongoing threat
of criminal activity. Jackson, 372 F.3d at 1265. Accordingly, Defendant’s motion
for summary judgment as to Plaintiff’s Florida RICO claims in counts three and
four is GRANTED. See, e.g., Daedalus Capital LLC v. Vinecombe, 625 F. App’x
973, 977 (11th Cir. 2015) (“[T]he district court did not err in granting summary
judgment to Appellees on the federal and Florida RICO counts,” for a lack of
The federal RICO civil remedies provision provides, in relevant part, that
“[a]ny person injured in his business or property by reason of a violation of section
1962 of this chapter may sue therefore 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'’ fee . . . .” 18 U.S.C. § 1964(c).
8
The Florida RICO civil remedies provision titled “Civil cause of action” provides:
Any person who proves by clear and convincing evidence that he or she
has been injured by reason of any violation of the provisions of s.
772.103 shall have a cause of action for threefold the actual damages
sustained and, in any such action, is entitled to a minimum damages
in the amount of $200, and reasonable attorney's fees and court costs
in the trial and appellate courts.
Fla. Stat. § 772.104(1).
20
continuity); Ferrell v. Durbin, 311 F. App’x 253, 254 (11th Cir. 2009) (affirming the
dismissal of a plaintiff’s federal and Florida RICO claims for a lack of continuity).
D.
Conspiracy
The final issue is whether summary judgment should be granted as to
Plaintiff’s state law conspiracy claim. “Florida does not recognize an independent
action for conspiracy,” meaning a conspiracy claim is not viable without an
underlying cause of action. Allocco v. City of Coral Gables, 221 F. Supp. 2d 1317,
1360–61 (S.D. Fla. 2002) (citing Churruca v. Miami Jai Alai, Inc., 353 So. 2d 547,
550 (Fla. 1977); Hoch v. Rissman, Weisberg, Barrett, 742 So. 2d 451, 460 (Fla. 5th
DCA 1999)). That is, civil conspiracy is derived from the underlying claim that
forms the basis of the conspiracy and the “gist of a civil conspiracy is not the
conspiracy itself but the civil wrong which is done through the conspiracy which
results in injury to the Plaintiff.” Czarnecki v. Roller, 726 F. Supp. 832, 840 (S.D.
Fla. 1989) (discussing and applying Florida law). Therefore, Plaintiff’s conspiracy
claim cannot stand because, without a viable underlying cause of action, a
conspiracy claim must fail. See Spain v. Brown & Williamson Tobacco Corp., 363
F.3d 1183, 1199 (11th Cir. 2004) (“If the underlying cause of action is not viable, the
conspiracy claim must also fail.”); Palmer v. Gotta Have it Golf Collectibles, Inc., 106
F. Supp. 2d 1289, 1303 (S.D. Fla. 2000) (granting summary judgment for defendant
on plaintiff's conspiracy claim where there were no genuine issues of material fact
as to the underlying tortious interference claim); Ovadia v. Bloom, 756 So. 2d 137,
21
140 (Fla. 3d DCA 2000) (affirming summary judgment for defendant on conspiracy
claim where summary judgment was granted on underlying claims).
With that being said, the allegations in Plaintiff’s complaint give rise to
several causes of action notwithstanding the dismissal of Plaintiff’s federal and
state RICO claims. Indeed, claims such as fraud, conversion, and constructive trust
are some of the causes of action that come to mind. This means that, while the
Court could dismiss Plaintiff’s conspiracy count as failing to include an underlying
cause of action and close this case, that would not be in the interests of justice given
that there are several viable claims already embedded in Plaintiff’s complaint.
Plaintiff merely needs to coalesce the allegations presented and plead the relevant
causes of action that relate to the alleged actions of Mrs. Capuano and Mr. Schirato.
We therefore find that Plaintiff should, at least, be given leave to file an
amended complaint to set forth any viable causes of action to couple with her
conspiracy claim.
Allowing Plaintiff to amend her complaint will not prejudice
Defendant – because the required allegations are already presented in the
complaint – and it will allow Plaintiff to litigate her claims on the merits. There is
also no Scheduling Order in effect since Judge Scola referred the case on March 25,
2019 [D.E. 85], meaning Defendant has no persuasive argument that it will suffer
any prejudice if Plaintiff can amend her complaint to remedy her conspiracy claim.
Accordingly, in the interests of justice, Defendant’s motion for summary judgment
as to Plaintiff’s conspiracy claim is DENIED with Plaintiff given leave to amend
her complaint within fourteen (14) days from the date of this Order. If Plaintiff
22
chooses not to do so, Defendant may renew its motion as to Plaintiff’s conspiracy
claim.
IV.
CONCLUSION
For the foregoing reasons, it is hereby ORDERED AND ADJUDGED that
Defendant’s motion for summary judgment [D.E. 98] is GRANTED in part and
DENIED in part:
A. Defendant’s motion for summary judgment as to counts 1-4 is
GRANTED.
B. Defendant’s motion for summary judgment as to count 5 is DENIED.
C. Any amended complaint shall be filed within fourteen (14) days from the
date of this Order.
DONE AND ORDERED in Chambers at Miami, Florida, this 11th day of
July, 2019.
/s/ Edwin G. Torres
EDWIN G. TORRES
United States Magistrate Judge
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