Howell v. Adler et al
ORDER AND REASONS granting 11 and 16 Motions to Dismiss; Howell's claims against David Adler, the law firm Gordon, Arata, McCollam, Duplantis & Eagan, LLC, and attorneys David Messina, and Fernand Laudumiey are DISMISSED WITHOUT PREJUDIC E for lack of subject matter jurisdiction. Howell's RICO claim against the remaining defendants is DISMISSED WITH PREJUDICE. FURTHER ORDERED that Howell's remaining state law claims are DISMISSED WITHOUT PREJUDICE. Signed by Judge Lance M Africk on 3/21/2017.(blg)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
JOHN LAMARTINA HOWELL
DAVID V. ADLER ET AL.
ORDER AND REASONS
Before the Court are two motions 1 to dismiss.
After obtaining additional
briefing from the parties to address an issue which was not raised in the original
motions, the Court grants both motions and dismisses all claims.
The background of this litigation is somewhat confusing. After reviewing the
complaint, the briefs, and the records of prior court proceedings, however, the Court
gleans the following facts. The plaintiff is John LaMartina Howell (“Howell”). The
saga began when Howell’s mother, Elise LaMartina, repeatedly failed to pay
condominium assessments and homeowners’ association dues for a condo unit she
owns in Mandeville, Louisiana. As a result, one of the defendants, Lake Villas No. 2
Homeowners Association, Inc. (“Lake Villas”), obtained money judgments against
Howell’s mother in state court and then initiated proceedings to seize and sell the
R. Doc. Nos. 11, 16.
During that state court action, it became clear that the judicial mortgage
belonging to Lake Villas was not the only mortgage burdening the condo. In fact,
Lake Villas learned that its judicial mortgage was likely outranked by a conventional
mortgage on the property. It is the dispute over the ownership of that conventional
mortgage which gives rise to the controversy before the Court.
Without going into unnecessary detail, several conflicting narratives emerged
during the state court litigation. At various times it appeared the mortgage belonged
to Jane LaMartina—Howell’s grandmother, to Donald Grodsky—a friend of Howell’s
family, to Timothy Howell—Howell’s father, to Casa Pita, LLC—a limited liability
company of which Grodsky was the only member, and to Howell himself. The state
court ultimately decided that defendant Donald Grodsky was the owner of the
Because Grodsky had declared bankruptcy prior to the
initiation of the state court action, defendant David Adler, the bankruptcy trustee,
intervened in the proceedings on behalf of the bankruptcy estate. Further, prior to
the state court’s decision regarding the ownership of the mortgage, Adler and Lake
Villas reached an agreement whereby both would share in the proceeds of any judicial
sale of the condo unit. The agreement was approved by the bankruptcy court and
affirmed by this Court on appeal. See In re: Donald H. Grodsky, Civil Action No. 141341, at R. Doc. No. 19 (E.D. La. 2014) (Africk, J.).
Howell appealed the state court decision regarding ownership of the mortgage.
The Louisiana First Circuit Court of Appeal dismissed the appeal, and the Louisiana
Supreme Court denied his application for writs. See Lake Villas No. II Homeowners’
Ass’n, Inc. v. LaMartina, 2015-0244 (La. App. 1 Cir. 12/23/15), writ denied, 2016-0149
(La. 3/14/16), 189 So. 3d 1070. Howell then filed this lawsuit against Grodsky, Lake
Villas, Adler, and the attorneys and law firms which represented them in the state
court and bankruptcy proceedings. Howell asserts a litany of state law claims such
as civil conspiracy, abuse of process, defamation, and tortious interference with
business relations. The complaint states that this Court has jurisdiction pursuant to
28 U.S.C. § 1331, but the only federal claim identified in the complaint is Howell’s
allegation that the defendants “violated the federal RICO statute.” See R. Doc. No.
1, at 16.
A quick word on the applicability of the Rooker-Feldman doctrine is
appropriate even though the parties do not raise it. “[T]he Rooker–Feldman doctrine
holds that inferior federal courts do not have the power to modify or reverse state
court judgments except when authorized by Congress.” Truong v. Bank of Am., N.A.,
717 F.3d 377, 382 (5th Cir. 2013) (internal quotation marks and citation omitted).
However, “the doctrine is a narrow one and ‘is confined to . . . cases brought by statecourt losers complaining of injuries caused by state-court judgments rendered before
the district court proceedings commenced and inviting district court review and
rejection of those judgments.’” Id. (quoting Exxon Mobil Corp. v. Saudi Basic Indus.
Corp., 544 U.S. 280, 284 (2005)). Because the doctrine is jurisdictional, it must be
addressed at the outset of the litigation. Id.
Although the complaint is less than clear about the relief Howell is seeking,
the Rooker-Feldman doctrine bars at least some of Howell’s claims. The complaint
alleges, among other things, that “[a]fter denying every motion, exception, and
objection raised during the January 8, 2013 proceeding, the trial court proceeded to
erroneously, and against all law and evidence, conclude Grodsky was the owner of
your Plaintiff’s note.” R. Doc. No. 1, at 12 ¶ 39 (emphasis in original). To the extent
Howell asks this Court to overturn the state court judgment, Rooker-Feldman
precludes the Court from doing so. See Truong, 717 F.3d at 382; Morris v. Am. Home
Mortg. Servicing, Inc., 443 Fed. App’x. 22, 24 (5th Cir. 2011) (federal plaintiff’s claim
that a foreclosure judgment should be overturned as unlawful was barred “because
he is complaining of injuries caused by the state court judgments”).
However, the bulk of the complaint’s allegations center not on the impropriety
of the state court judgment itself, but rather on the alleged unlawful behavior of the
parties and their attorneys in obtaining that judgment. See, e.g., R. Doc. No. 1, at 13
¶ 43 (“When the opportunity presented itself, these Defendants entered into a scheme
and engaged in a pattern of behavior and misconduct intended to defraud John and
Jane of their property through threats, intimidation, bribery, and abuse of the legal
system.”). Such claims do not fall within the scope of Rooker-Feldman. The doctrine
does not apply to claims that the plaintiff was damaged by way of illegal acts or
omissions made by adverse parties during the state court proceedings. See Truong,
717 F.3d at 382-84; Ill. Cent. R.R. Co. v. Guy, 682 F.3d 381, 391 (5th Cir. 2012)
(Rooker–Feldman does not bar a claim that the state-court plaintiffs’ lawyers
obtained a settlement judgment through fraudulent misrepresentations); Drake v. St.
Paul Travelers Ins. Co., 353 Fed. App’x. 901, 905 (5th Cir. 2009) (Rooker–Feldman
does not bar state-court loser’s claim for damages as to state-court winner’s alleged
fraudulent statements in state-court litigation).
Because Howell advances such claims here, Rooker-Feldman does not bar this
Court from considering them. But although Rooker-Feldman is not jurisdictionally
fatal to all of the claims in the complaint, the Court finds that the remaining claims
should nonetheless be dismissed.
The Court first considers the motion to dismiss filed by Adler (the bankruptcy
trustee) and his attorneys in the bankruptcy proceedings (the law firm Gordon, Arata,
McCollam, Duplantis & Eagan, LLC and attorneys David Messina and Fernand
Laudumiey). Adler and his attorneys argue that Howell’s claims must be dismissed
because Howell failed to obtain permission from the bankruptcy court before filing
Pursuant to the U.S. Supreme Court’s decision in Barton v. Barbour, 104 U.S.
126, 127 (1881), lawsuits against bankruptcy trustees for acts committed in their
official capacities are not permitted without leave of the bankruptcy court. See
Villegas v. Schmidt, 788 F.3d 156, 158 (5th Cir. 2015). Failure to obtain leave from
the bankruptcy court deprives the non-appointing court of subject matter jurisdiction
that it might otherwise have. See Randazzo v. Babin, No. 15-4943, 2016 WL 4418969,
at *1 (E.D. La. Aug. 18, 2016). The Barton doctrine, as it has been termed, also
protects the bankruptcy trustee’s attorneys. See McDaniel v. Blust, 668 F.3d 153, 157
(4th Cir. 2012); In re Lowenbraun, 453 F.3d 314, 321 (6th Cir. 2006).
It is undisputed that Howell failed to obtain permission from the bankruptcy
court prior to filing this lawsuit. Further, it is clear that all of the allegations against
Adler and his attorneys relate to acts performed “within the context of [their] role of
recovering assets for the estate.” See McDaniel, 668 F.3d at 157. All of the allegations
against Adler and his attorneys accordingly fall within the scope of the Barton
doctrine, and this Court lacks jurisdiction to consider them. The claims against
Adler, the law firm Gordon, Arata, McCollam, Duplantis & Eagan, LLC, and
attorneys David Messina and Fernand Laudumiey must be dismissed.
The Court next considers the motion filed by Lake Villas and its attorneys in
the state court proceedings (the law firm Seale & Ross, PLC and attorneys Glen
Galbraith and Leslie Bolner). These defendants seek dismissal on the ground that
Howell has failed to state a federal claim. Although the motion was filed pursuant to
Rule 12(b)(1) of the Federal Rules of Civil Procedure, the Court explained in a
previous order that it is properly considered under Rule 12(b)(6). See R. Doc. No. 21.
Having now received additional briefing from the parties under the appropriate
standard, the Court considers whether the complaint states a RICO claim.
Rule 12(b)(6) permits a defendant to seek a dismissal of a complaint based on
the “failure to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6).
In deciding a motion to dismiss, the Court accepts as true the well-pled factual
allegations in the complaint, and construes them in the light most favorable to the
plaintiff. Hunter v. Berkshire Hathaway, Inc., No. 15-10854, 2016 WL 3710253, at *3
(5th Cir. July 11, 2016). For the complaint to survive a motion to dismiss, the facts
taken as true must state a claim that is plausible on its face. Brand Coupon Network,
L.L.C. v. Catalina Marketing Corp., 748 F.3d 631, 637-38 (5th Cir. 2014). A claim is
facially plausible “when the plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable for the misconduct
alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “The plausibility standard is
not akin to a probability requirement, but it asks for more than a sheer possibility
that a defendant has acted unlawfully.” Culbertson v. Lykos, 790 F.3d 608, 616 (5th
Cir. 2015). The Court cannot grant a motion to dismiss under Rule 12(b)(6) “unless
the plaintiff would not be entitled to relief under any set of facts that [the plaintiff]
could prove consistent with the complaint.” Johnson v. Johnson, 385 F.3d 503, 529
(5th Cir. 2004). Because Howell proceeds pro se, the Court liberally construes his
complaint. See Erickson v. Pardus, 551 U.S. 89, 94 (2007).
A plaintiff alleging a violation under the RICO statute, 18 U.S.C. § 1962, must
show that the litigation involves: “(1) a person who engages in (2) a pattern of
racketeering activity, (3) connected to the acquisition, establishment, conduct, or
control of an enterprise.” St. Germain v. Howard, 556 F.3d 261, 263 (5th Cir. 2009).
RICO defines an enterprise as “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 “(1) must
have an existence separate and apart from the pattern of racketeering, (2) must be
an ongoing organization and (3) its members must function as a continuing unit as
shown by a hierarchical or consensual decision making structure.” Allstate Ins. Co.
v. Plambeck, 802 F.3d 665, 673 (5th Cir. 2015) (internal quotation marks and citation
Howell alleges that the RICO enterprise is an association-in-fact of the
defendants. See R. Doc. No. 19, at 23. He claims the enterprise was formed to defraud
himself and his grandmother of their ownership interest in the mortgage.
allegations in Howell’s complaint are difficult to understand and often conclusory,
but Howell appears to rely entirely on the alleged fraudulent actions taken by the
defendants in the state court and bankruptcy litigation to prove that they were
working together toward a common purpose. Because the Fifth Circuit holds that a
“pattern of racketeering activity does not, by itself, necessarily show that an
enterprise exists,” Plambeck, 802 F.3d at 673, the Court is skeptical that Howell’s
allegations meet the standard for demonstrating an enterprise. Nevertheless, the
Court will not dismiss Howell’s RICO claim on that basis in light of the Supreme
Court’s instruction that evidence establishing the enterprise and evidence
establishing the pattern of racketeering activity “may in particular cases coalesce.”
See United States v. Turkette, 452 U.S. 576, 583 (1981).
But an enterprise must also be “an ongoing organization.” Plambeck, 802 F.3d
at 673. Indeed, “[t]he linchpin of enterprise status is the continuity or ongoing nature
of the association.” Id. The complaint alleges a pattern of misconduct which began
in February 2013 and concluded—at the latest—when the Louisiana Supreme Court
denied Howell’s application for writs in 2016. All of the alleged misconduct occurred
during the state court and bankruptcy court proceedings.
As the Fifth Circuit
recognized in In re Burzynski, 989 F.2d 733, 743 (5th Cir. 1993), such allegations are
insufficient to demonstrate continuity of an enterprise.
In Burzynski, the plaintiff doctor alleged that the defendant insurance
company and related entities committed predicate acts for the purpose of avoiding
paying plaintiff’s just insurance claims and putting the plaintiff out of business. 989
F.2d 733. The prior acts, which all occurred during a previous lawsuit between the
parties, consisted of the defendants sending thirty-five letters to other insurance
companies to dissuade them from paying plaintiff’s claims during the prior litigation,
filing fraudulent pleadings in the prior litigation, submitting false grant applications,
providing false information about plaintiff to federal investigators, and denying
coverage of plaintiff’s claims for patients insured by defendants. Id. at 738.
When considering whether the alleged scheme constituted an “enterprise” for
RICO purposes, the Fifth Circuit emphasized that “two individuals who join together
for the commission of one discrete criminal offense have not created an ‘associationin-fact’ enterprise, even if they commit two predicate acts during the commission of
this offense, because their relationship to one another has no continuity.” Id. at 743
(internal quotation marks and citation omitted). Because the defendants committed
“the alleged predicate acts during the course of that litigation, which began in August
1986 and ended in summary judgment for both sides on March 31, 1992,” the Fifth
Circuit held that the “association-in-fact” enterprise “lacks the needed continuity.”
Id. at 744.
The Burzynski case is analogous to the case before the Court.
defendants observe, lawsuits “are necessarily limited in time, coming to an end when
final judgment is rendered.” See R. Doc. No. 27, at 4. Accordingly, even if the
allegations in Howell’s complaint are accepted as true, the alleged enterprise ceased
to exist once the litigation came to an end. Further, although Howell may allege a
number of predicate acts which occurred during the course of the litigation, those
predicate acts do not establish a continuing enterprise where they relate to “the
commission of one discrete criminal offense,” see Burzynski, 989 F.2d at 743,—i.e.,
the fraudulent obtainment of Howell’s mortgage. See also Calcasieu Marine Nat.
Bank v. Grant, 943 F.2d 1453, 1462 (5th Cir. 1991) (holding that because the
defendants’ conspiracy to deprive the plaintiff of her interest in a valuable community
property partnership “was only a single, short-term goal,” the “ad hoc association
would lack the continuity required to support a RICO claim”); Manax v. McNamara,
842 F.2d 808, 812 (5th Cir. 1988) (“The association alleged by Manax had as its
purpose a single, relatively short-lived goal: accomplishing the destruction of Manax’s
medical practice. The association was ad hoc; i.e., it was formed for the immediate
accomplishment of one specific end. It therefore lacked the continuity required to
bring it within RICO’s ambit.”).
Howell attempts to distinguish Burzynski and characterize the enterprise as
ongoing in two ways. First, Howell argues that he continues to be injured by the
defendants’ wrongful conduct which deprived him of his interest in the mortgage.
Second, Howell argues that the enterprise is continuing because the defendants are
allegedly threatening to sue Grodsky if he changes his story and admits that the
mortgage does not belong to him. But neither of those allegations can satisfy the
continuity requirement. After all, if the fact that a plaintiff continues to suffer harm
from an alleged conspiracy was sufficient to satisfy the continuity requirement, a
plaintiff would always be able to allege a continuing enterprise. Similarly, Howell’s
conclusory assertion that members of the RICO conspiracy keep their co-conspirator
in line by threatening to sue him if he recants cannot be sufficient to show an ongoing
enterprise. Members of an alleged RICO conspiracy will always remain exposed to
future harm if one of the conspirators chooses to reveal the conspiracy.
In short, as in Burzynski, “the alleged predicate acts took place as part of
[earlier] litigation, which has ended.” 989 F.2d at 743. Further, the predicate acts
related to “the commission of one discrete criminal offense.” See id. Accordingly, even
accepting the complaint as true, the continuity element necessary to establish the
existence of an enterprise is lacking.
Even if Howell has adequately alleged an enterprise, however, a RICO plaintiff
must also allege facts which accepted as true demonstrate a “pattern of racketeering
activity.” See Howard, 556 F.3d at 263. Section 1961(5) of the statute defines
“pattern of racketeering activity,” and requires two or more predicate acts of
“racketeering activity” before the activity can be considered a “pattern.” 18 U.S.C. §
The complaint does not identify any predicate acts. In his opposition to the
motion, however, Howell requests leave to amend his complaint in order to plead
predicate acts. Although his brief is less than clear, Howell appears to identify
bribery, extortion, mail fraud, and wire fraud as predicate acts which would support
his claim. See 18 U.S.C. § 1961(1) (identifying the predicate acts which can constitute
racketeering activity). But even assuming that Howell can state a claim for bribery,
extortion, mail fraud, and wire fraud, it would be pointless to allow Howell to amend
his complaint in order to add those allegations. Just as Howell must allege continuity
with respect to the enterprise, he must also allege continuity with respect to the
pattern of racketeering activity. Because Howell cannot do so, his complaint as
amended would nevertheless be subject to dismissal. See Varela v. Gonzales, 773
F.3d 704, 707 (5th Cir. 2014) (internal quotation marks and citation omitted)
(observing—in a RICO case, no less—that “a district court may refuse leave to amend
if the filing of the amended complaint would be futile, i.e., if the complaint as amended
would be subject to dismissal”).
The Fifth Circuit has also explained that the “pattern of racketeering activity”
requirement is satisfied only by showing that the predicate acts are “related” to each
other and that they have “continuity.” Burzynski, 989 F.2d at 742. Predicate acts
are “related” if they “have the same or similar purposes, results, participants, victims,
or methods of commission, or otherwise are interrelated by distinguishing
characteristics and are not isolated events.”
To satisfy the continuity
requirement, a plaintiff “must be able to plead that the predicate acts amount to or
threaten continuing racketeering activity.” Id. (emphasis in original). Continuity
“refers either to a closed period of repeated conduct, or to past conduct that by its
nature projects into the future with a threat of repetition.” Id. (citation omitted).
Courts have habitually held that continuity can be satisfied by alleging either a closed
period of racketeering conduct or an open period of racketeering conduct.
A closed period of conduct may be demonstrated by proving a series of related
predicates extending over a substantial period of time. See Word of Faith World
Outreach Ctr. Church, Inc. v. Sawyer, 90 F.3d 118, 122 (5th Cir. 1996). An open
period of conduct may be shown where there exists a “specific threat of repetition
extending indefinitely into the future,” or “where it is shown that the predicates are
a regular way of conducting defendant’s ongoing legitimate business.” Id. Notably,
however, the Fifth Circuit recognizes that “[i]t is unnecessary to delve into the arcane
concepts of a closed-end or open-ended continuity under RICO in cases where alleged
RICO predicate acts are part and parcel of a single, otherwise lawful transaction, for
in such cases, a pattern of racketeering activity has not been shown.” Abraham v.
Singh, 480 F.3d 351, 355 (5th Cir. 2007) (internal quotation marks and citation
omitted). As the cases below illustrate, this is just such a situation.
In Word of Faith, television evangelist Robert Tilton and his church sued news
anchor Diane Sawyer, ABC, and other persons and entities who worked to produce a
series of news broadcasts critical of the church’s fundraising techniques. Word of
Faith, 90 F.3d 118. After the shows aired, donations to the church dropped sharply
and it was forced to shut down its television ministry. The church and Tilton alleged
that ABC and the other defendants had engaged in a RICO conspiracy aimed at
driving the church out of business. In considering the “continuity” of the defendants’
conduct, the Fifth Circuit opined:
In this case, the alleged predicate acts occurred during the production and
airing of PrimeTime broadcasts concerning Tilton and his Church. The alleged
acts were all part of a single, lawful endeavor—namely the production of
television news reports concerning a particular subject. We agree with the
district court that the Church has failed to plead a continuity of racketeering
activity, or its threat.
Id. at 123 (internal quotation marks and citation omitted).
Similarly, in the Burzynski case discussed in the previous section, the Fifth
Circuit held that the plaintiff had not adequately alleged a pattern of racketeering
activity because he had failed to show continuity. 989 F.2d at 742-43. Relying on a
previous case in which it “affirmed the dismissal of a RICO claim where the plaintiff
alleged multiple acts of fraud that were part and parcel of a single, discrete and
otherwise lawful commercial transaction,” the court held that because all of the
alleged misconduct took place during “the defense of a lawsuit—which is now over,”
the conduct “did not constitute or threaten long-term criminal activity.” Id. at 743
(citing Delta Truck & Tractor, Inc. v. J.I. Case Co., 855 F.2d 241, 244 (5th Cir. 1988));
see also Castrillo v. Am. Home Mortg. Servicing, Inc., 670 F. Supp. 2d 516, 531 (E.D.
La. 2009) (Vance, J.) (finding that alleged multiple acts related to the refinancing and
attempted foreclosure of plaintiff’s home were a single, discrete transaction). 2
Simply put, there can be no pattern of racketeering activity where the plaintiff
alleges “conduct that had an inherent and definite termination point and did not
present a future threat of repetition.” Larco Towing, Inc. v. Newpark Drilling Fluids,
LLC, No. 09-2928, 2010 WL 1416550, at *2 (E.D. La. Mar. 31, 2010) (Engelhardt, J.)
(citations omitted). Howell alleges a pattern of misconduct which began in February
2013 and concluded in 2016 when his application for writs to the Louisiana Supreme
Court was denied. The alleged scheme is now over, as defendants have purportedly
succeeded in their goal of defrauding plaintiff of the mortgage by obtaining a
favorable ruling in state court. Further, all of the alleged predicate acts occurred
during the course of a single, otherwise lawful endeavor—a lawsuit aimed at seizing
and selling Howell’s mother’s condo unit. See Singh, 480 F.3d at 355. Accordingly,
even accepting the complaint, deficient as it is, and the allegations in Howell’s
opposition brief as true, the continuity element necessary to establish a “pattern” of
racketeering activity is absent.
Although courts are generally willing to construe pro se filings liberally, “we
still require pro se parties to fundamentally abide by the rules that govern the federal
courts.” E.E.O.C. v. Simbaki, Ltd., 767 F.3d 475, 484 (5th Cir. 2014). “Pro se litigants
This case is not like Abraham v. Singh, 480 F.3d at 356 (overturning this Court’s
decision that the complaint failed to plead continuity where there were multiple
victims of the alleged human trafficking scheme and where there was no reason to
believe that the “systematic victimization” of up to 200 or more Indian citizens would
not have continued indefinitely but for the lawsuit).
must properly plead sufficient facts that, when liberally construed, state a plausible
claim to relief.” Id. While the Court could exercise supplemental jurisdiction over
the remaining state law claims under 28 U.S.C. § 1367(a), the Court will decline to
do so in light of its dismissal of all claims over which the Court has original
jurisdiction. See 28 U.S.C. § 1367(c)(3).
For the foregoing reasons,
IT IS ORDERED that the motions to dismiss are GRANTED.
claims against David Adler, the law firm Gordon, Arata, McCollam, Duplantis &
Eagan, LLC, and attorneys David Messina, and Fernand Laudumiey are
DISMISSED WITHOUT PREJUDICE for lack of subject matter jurisdiction.
Howell’s RICO claim against the remaining defendants is DISMISSED WITH
IT IS FURTHER ORDERED that Howell’s remaining state law claims are
DISMISSED WITHOUT PREJUDICE.
New Orleans, Louisiana, March 21, 2017.
LANCE M. AFRICK
UNITED STATES DISTRICT JUDGE
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