Collins v. Seago et al

Filing 16

RULING..Accordingly, having conducted preliminary screening under 28 U.S.C. §1915(e)(2)(B), this action will be dismissed sua sponte on the basis of frivolousness.. Signed by Judge James J. Brady on 05/06/11. (PAH)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
FRANCIS A. COLLINS
CIVIL ACTION
VERSUS
NO. 11-130-JJB-SCR
MICHAEL SEAGO, ET AL.
RULING
Plaintiff Francis A. Collins having been allowed to proceed in forma pauperis
(doc. 11), this matter is before the court for review under 28 U.S.C. §1915(e)(2)(B).
For the reasons that follow, the court finds that this matter should be summarily
dismissed with prejudice.
Collins brings this action asserting civil RICO1 claims based upon an alleged
“pattern of racketeering activity” involving two “predicate acts” consisting of “theft of
services by fraud” using the “mail, telephone and internet for almost two years.” In
essence, Collins alleges that defendant Michael Seago employed him to perform
accounting services in connection with Seago’s development of six housing
projects. Collins claims that Seago committed “theft by fraud” by failing to fully pay
his professional fees billed in connection with the first and the sixth of these
projects, sometimes referred to as “North Street 1" and/or “Camille Village.”
More particularly, plaintiff claims that Seago conducted “an enterprise” with

1

Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §1961, et seq.

1

two legal entities that were “100% controlled” by Seago, i.e., North Street 1,LLC and
Camille Village, LLC. It is alleged that Seago “fraudulently induced plaintiff to
produce an uncompleted accounting report,” which Seago then used to “obtain a
false and excessive calculation of a Loss on Development report” thereby injuring
plaintiff and depriving the United States in excess of a million dollars in tax
revenues. While Collins specifically states that he is “not undertaking to defend the
interests of the United States or any other party,” he requests that the court order
the government to properly investigate and prosecute the matter.2
To support his claims of “theft of services,” Collins attaches “documentary
evidence” consisting of his declaration under penalty of perjury, an invoice for
$2,205, an invoice for $3,750, Collin’s “Report of Analysis of Developer Loss
resulting from development of Camille Village Apartments”, and correspondence
from Seago offering to pay $500 to settle the matter “in full” (Exhs. A-F). According
to Collins’ declaration, the first “theft of professional services” occurred when Seago
refused to pay the $2,200 invoice, which however was later admittedly paid by
“Summit Apartment Management Company... from Camille Village Apartments’
rental operation bank account.” Collins purportedly performed “four more tasks for
Mr. Seago” which were “billed immediately and with Mr. Seago’s approval... paid by

2

Collins further asserts nebulous claims of “extortion” of building contractors and
architects by means of “malicious prosecution.” These claims are plainly irrelevant to
any damages suffered by plaintiff. Collins may only recover for injuries to his business
or property.

2

Summit Apartment Management Company without hesitation until the sixth time.”
Collins declares that the final invoice of $3,750 was never paid despite being “very
reasonable;” and, his employment was suddenly terminated upon Seago’s receipt
of the interim report, accomplishing a second “theft of services.” When Seago
“resisted” plaintiff’s “collection efforts for a year,” plaintiff filed his demand for RICO
damages.
Pursuant to 28 U.S.C. § 1915(e), an action brought in forma pauperis is
subject to dismissal if it is frivolous, malicious or fails to state a claim. An claim is
“frivolous” when it lacks an arguable basis either in fact or in law. Denton v.
Hernandez, 504 U.S. 25 (1992). While the court cannot dismiss claims simply
because they are “unlikely;” factual allegations that are clearly baseless are subject
to dismissal, including those that are “fanciful, fantastic and delusional” or “irrational
or ... wholly incredible.” Id.
To support a civil RICO claim, plaintiff must allege the existence of “(1) a
person who engages in (2) a pattern of racketeering activity, (3) connected to the
acquisition, establishment, conduct or control of an enterprise.” Abraham v. Singh,
480 F.3d 351, 355 (5th Cir. 2007). A showing of two or more “predicate criminal
acts” is required for there to be a “pattern of racketeering activity.” Id. The
predicate acts must be “(1) related and (2) amount to or pose a threat of continued
criminal conduct.” Id. While “continuity” may be alleged in various ways, it may be
seen as “both a closed and open-ended concept, referring either to a closed period
3

of repeated conduct, or past conduct that by its nature projects into the future with
a threat of repetition.” H.J. Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229,
241 (1989).
Having carefully reviewed the complaint and the exhibits, it is apparent that
the civil RICO claims lack any arguable basis in law or fact. There are no factual
allegations to establish that plaintiff sustained injuries as a result of Seago engaging
in a pattern of racketeering activity connect to the conduct of an enterprise.3 Plaintiff
must allege two or more predicate criminal acts for there to be a pattern of
racketeering activity.

St. Germain v. Howard, 556 F.3d 261 (5th Cir. 2009).

Accepting the factual allegations as true, it is apparent that this is simply a
contractual dispute arising from a business transaction between plaintiff and Seago.
Plaintiff’s allegations of “theft of services by fraud” using the “mail, telephone and
internet” are merely legal conclusions without factual support. Goldin, Peiser &
Peiser, L.L.P. v. Delta Brands, Inc., 2002 WL 550450 (N.D. Tex. 2002) (rejecting
civil RICO claims for alleged scheme to defraud an accounting firm of services
rendered by defendant’s use of multiple acts of mail, wire and/or “email fraud”).
Moreover, the billing dispute here falls within the scope of what is referred to
as “an isolated or sporadic incident,” which is insufficient to support a RICO claim
3

The court finds no need to explore an additional requisites such as whether
plaintiff has sufficiently alleged that there was an “enterprise” that existed “separate and
apart from the pattern of activity in which it engages.” See, Elliott v. Foufas, 867 F2d.
877, 811 (5th Cir. 1989).

4

as there is no threat of future criminal conduct. Plaintiff concedes in his complaint
that he was paid for all of his services except upon submission of his last invoice.
The facts alleged by plaintiff lack the “continuity” component needed to state “a
pattern of racketeering activity.” Id. There is no danger of such conduct in the
future.
While the court would normally provided an opportunity to amend, Collins has
clearly set forth his best case by filing an extensive complaint and submitting his
documentary evidence. Collins has followed up with several collateral motions
(docs. 4, 6, 8, 9, 13 and 14), all attempting to interject irrelevant and impertinent
matters. See, Brewster v. Dretke, 587 F.3d 764 (5th Cir. 2009). Further pleadings
would not serve to resolve any uncertainties in his claims, but would undoubtedly
result in Collins expanding upon his perceived grievances against the judicial
system. Accordingly, having conducted preliminary screening under 28 U.S.C.
§1915(e)(2)(B), this action will be dismissed sua sponte on the basis of
frivolousness.
Baton Rouge, Louisiana, May 6, 2011.

JAMES J. BRADY, JUDGE
MIDDLE DISTRICT OF LOUISIANA

5