Rojas-Buscaglia et al v. Taburno-Vasarhelyi

Filing 219

MEMORANDUM AND ORDER re 62 Motion to Dismiss for Failure to State a Claim; and re 190 Report and Recommendation. The Court has made an independent examination of the entire record in this case, including plaintiffs' objections and defendant Taburno's response in opposition, and ADOPTS IN PART and REJECTS IN PART the magistrate judge's findings and recommendations. Plaintiffs' motion to dismiss, therefore, is GRANTED IN PART and DENIED IN PART. There being no just reason for delay, Partial Judgment shall be entered accordingly. Signed by Judge Francisco A. Besosa on 08/21/2014. (brc) Modified on 8/21/2014 to add docket text(cm).

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
LUIS ROJAS-BUSCAGLIA, et al.,
Plaintiffs,
v.

CIVIL NO. 13-1766 (FAB)

MICHELE TABURNO-VASARELY,
Defendant.

MEMORANDUM AND ORDER
BESOSA, District Judge.
I.

Procedural History
On July 3, 2014, United States Magistrate Judge Camille L.

Velez-Rive issued a Report and Recommendation (“R&R”) (Docket
No. 190), recommending that the plaintiffs’ motion to dismiss,
(Docket

No.

62),

be

granted

in

part

and

denied

in

part.

Specifically, the magistrate judge recommends:
(1) that Defendant Taburno’s counterclaims against all
plaintiffs pursuant to 18 U.S.C. § 1513 be dismissed with
prejudice;
(2) that Defendant Taburno’s counterclaims against
plaintiffs Inart Corporation and Inart Services pursuant
to 18 U.S.C. § 1962 (a), (b), and (c), as well as § 1962
(d) for conspiring to violate §§ 1962 (a), (b), and (c),
be dismissed with prejudice;
(3) that Defendant Taburno’s counterclaims against
plaintiff Rojas pursuant to 18 U.S.C. §§ 1962 (a) and
(b), as well as § 1962 (d), for conspiring to violate
§ (a) and (b), be dismissed with prejudice;
(4) that Defendant Taburno’s counterclaims against
plaintiff Rojas pursuant to 18 U.S.C. § 1962(d), for
conspiring to violate § 1962 (c), be allowed to survive
plaintiffs’ motion to dismiss; and

Civil No. 13-1766 (FAB)

2

(5) that all state law claims against all plaintiffs be
allowed to survive plaintiffs’ motion to dismiss.
(Docket No. 190 at p. 21.)
objections to the R&R.

Defendant Taburno failed to file any

Accordingly, she has waived any objections

to the magistrate judge’s findings.

See Davet v. Maccorone, 973

F.2d 22, 31 (1st Cir. 1992) (“Failure to raise objections to the
Report and Recommendation waives the party’s right to review in the
district court . . . .”).

On July 22, 2014, plaintiffs filed an

objection to the R&R, noting their disagreement with several of the
magistrate judge’s conclusions.

(Docket No. 207).

On August 4,

2014, defendant Taburno opposed plaintiffs’ objections.

(Docket

No. 213.)
II.

Standard of Review
A district court may refer a pending dispositive motion to a

magistrate judge for a report and recommendation.

See 28 U.S.C.

§ 636(b)(1)(B); Fed. R. Civ. P. 72(b); Loc. R. 72(a).

Any party

adversely affected by the report and recommendation may file
written objections within fourteen days of being served with the
magistrate judge’s report.
that

files

a

determination

timely
of

See 28 U.S.C. § 636(b)(1).

objection

“those

portions

is
of

entitled
the

to

report

a
or

A party
de

novo

specified

proposed findings or recommendations to which specific objection is
made.”

Sylva v. Culebra Dive Shop, 389 F. Supp. 2d 189, 191-92

(D.P.R. 2005) (citing United States v. Raddatz, 447 U.S. 667, 673
(1980)).

Failure to comply with this rule precludes further

Civil No. 13-1766 (FAB)
review.

3

See Davet, 973 F.2d at 31.

In conducting its review, the

Court is free to “accept, reject, or modify, in whole or in part,
the findings or recommendations made by the magistrate judge.”
28 U.S.C. § 636 (a)(b)(1); Templeman v. Chris Craft Corp., 770 F.2d
245, 247 (1st Cir. 1985); Alamo Rodriguez v. Pfizer Pharm., Inc.,
286 F. Supp. 2d 144, 146 (D.P.R. 2003).

Furthermore, the Court may

accept those parts of the report and recommendation to which the
parties do not object.

See Hernandez-Mejias v. Gen. Elec., 428

F.Supp.2d 4, 6 (D.P.R. 2005) (citing Lacedra v. Donald W. Wyatt
Det. Facility, 334 F.Supp.2d 114, 125-126 (D.R.I. 2004)).
III. Discussion
Of plaintiffs’ numerous objections to the R&R, only one even
approaches the appropriate level of development warranting district

Civil No. 13-1766 (FAB)
court

review:1

that

4
the

magistrate

judge

erred

in

denying

plaintiff Rojas’ motion to dismiss the 18 U.S.C. § 1962(c) and (d)
claims against him.

(Docket No. 207 at pp. 7–8.)

Plaintiffs are

1

Plaintiffs’ arguments that there is no factual support for
the R&R’s conclusions (1) that the corporations participated in the
alleged scheme, or (2) that plaintiff Rojas committed “any criminal
activity,” are merely reiterations of their arguments in their
motion to dismiss.
(See Docket No. 62-1 at pp. 12–23.) Where
objections to an R&R are repetitive of the arguments already made
to the magistrate judge, a de novo review is unwarranted.
Westernbank P.R. v. Kachkar, 2009 U.S. Dist. LEXIS 78726, 25
(D.P.R. Sept. 1, 2009) (Delgado-Colon, J.). “Instead, the report
and recommendation is reviewed by the district judge for clear
error.” Rivera-Garcia, 2008 U.S. Dist. LEXIS 60305 (citing Camardo
v. Gen. Motors Hourly-Rate Emps. Pension Plan, 806 F. Supp. 380,
382 (W.D.N.Y 1992) (“It is improper for an objecting party to . .
. submit[] papers to a district court which are nothing more than
a rehashing of the same arguments and positions taken in the
original papers submitted to the [m]agistrate [j]udge. Clearly,
parties are not to be afforded a ‘second bite at the apple’ when
they file objections to a[n] R & R.”)). Having reviewed the R&R,
the Court finds no clear error regarding those two conclusions.
Furthermore, “a district court need not consider frivolous,
conclusive, or general objections.”
Espada-Santiago v. Hosp.
Episcopal San Lucas, 2009 U.S. Dist. LEXIS 19840 *3, 2009 WL 702350
(D.P.R. 2009) (Delgado-Colon, J.) (citations omitted). The Court
finds the remaining objections filed by plaintiffs at the very
least to be inadequately developed, general, or conclusory, and in
some instances frivolous:
the magistrate judge “apparent[ly]
conclu[ded]” that defendant Taburno inherited a sizable and
valuable art collection from Victor and Yvaral Vassarely, but
defendant Taburno cannot claim any ownership of those paintings,
(Docket No. 207 at pp. 2, 7, 8); the magistrate judge should have
included that defendant Taburno has provided no evidence regarding
her current U.S.-immigration status, id. at p. 3; and the
magistrate judge improperly concluded that defendant sufficiently
alleged that an enterprise operates in interstate commerce because
the alleged “predicate acts” in defendant Taburno’s counterclaim
amount to nothing more than “garden variety breach of contract
claims,” id. at pp. 3–4.

Civil No. 13-1766 (FAB)
thus

entitled

to

recommendation.
A.

a

5

de

novo

determination

of

that

proposed

See Sylva, 389 F. Supp. 2d at 191.

R&R Analysis
The magistrate judge began by properly setting forth the

requirements of an 18 U.S.C. § 1962(c) claim in her R&R:
It shall be 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.
(Docket No. 190 at p. 12.)

She then found that defendant Taburno

validly alleged enterprises operating in interstate commerce2 —
Inart Corporation, Inart Services, and Globar — and with which
plaintiff

Rojas

associated.

Id.

Rojas,

as

the

racketeer,

allegedly engaged in “several predicate acts,” which the magistrate
judge and this Court find to be more than adequately plead.
p.

13

(setting

forth

ten

acts

that

qualify

as

Id. at

“racketeering

activity” and violations of 18 U.S.C. § 1961(1)).
The

magistrate

judge

also

properly

conveyed

the

additional requirement to a RICO claim set forth by the Supreme
Court:

the

“continuity

plus

relationship”

standard.

(Docket

No. 190 at p. 13) (citing H.J. Inc. v. Northwestern Bell Tel. Co.,
492

U.S.

2

229,

239

(1989)).

Pursuant

to

that

standard,

the

The corporations “engaged in interstate commerce by virtue
of their selling activities with United States’ buyers.” (Docket
No. 190 at p. 12.)

Civil No. 13-1766 (FAB)

6

“pattern” of racketeering element of a RICO claim requires a party
to establish “that the racketeering predicates are related, and
that

they

amount

activity.”

to

or

pose

a

threat

of

continued

criminal

Giuliano v. Fulton, 399 F.3d 381, 386–87 (1st Cir.

2005) (citing Northwestern Bell, 492 U.S. at 239).

After setting

forth the ten categories of racketeering activities allegedly
attributable to plaintiff Rojas, the magistrate judge found a
threat of continued criminal activity “particularly in light of the
extended period of time the allegations encompass, that is, since
2004,” and because “[p]laintiff Rojas still has many valuable
pieces belonging to [d]efendant.”
B.

(Docket No. 190 at p. 15.)

Plaintiffs’ Objections
Not a model of clarity, plaintiffs’ objections to the

R&R’s analysis of defendant Taburno’s section 1962 (c) and (d)
claims appear to be:
possess

any

of

(1) that plaintiff Rojas does not in fact

defendant

Taburno’s

property;

(2)

that

the

counterclaim is devoid of any factual allegations that plaintiff
Rojas committed any criminal activity; and (3) that the magistrate
judge failed to discuss the concepts of “open-ended” and “closedended” continuity necessary to a “pattern of racketeering activity”
analysis.

(Docket No. 207 at pp. 5–8.)

objection in turn.

The Court addresses each

Civil No. 13-1766 (FAB)
1.

7

Rojas’ Illegitimate Possession and Alleged Criminal
Activity
For the purposes of a motion to dismiss, the Court

must take all well-pleaded facts contained in a counterclaim as
true

and

draw

complainant.

all

reasonable

inferences

in

favor

of

the

Gargano v. Liberty Int’l. Underwriters, Inc., 572

F.3d 45, 48-49 (1st Cir. 2009).

In her counterclaim, defendant

Taburno states that “[a]long the 35 years of collaboration with
[artist Victor Vasarely and Yvaral Vasarely] and through her
marriage, she became the owner of an important collection of
artworks,” (Docket No. 35 at p. 12); that “a final judgment [in
France] declared her as the sole owner,” id.; that sometime in 2005
“[t]he

situation

turned

bitter[,]

[and]

[defendant

Taburno]

terminated her collaboration with Rojas . . . [but] he emptied all
of Globar’s account, with [her] moneys in it,” id. at p. 15; that
“Rojas had her antiques and artwork hanging on the walls of his
condo and spread on the floor leaning against the walls . . . [and
when she] requested him to return her things . . . he did not,” id.
at pp. 18–19; that in 2013 “Rojas had placed some of her belongings
in his personal storage in the building[,] [and when] [Taburno]
started asking that those additional belongings be returned to her,
. . . Rojas ignored the demands,” id. at pp. 20–21; and that “Rojas
has refused to return her belongings and has, apparently, continued
selling [her] artwork without her authorization,” id. at p. 22.
Taking these facts as true, as it must for the purposes of the

Civil No. 13-1766 (FAB)

8

motion to dismiss, the Court rejects plaintiffs’ first objection
that the R&R improperly concluded that plaintiff Rojas “still has
many valuable pieces belonging to [d]efendant.” Plaintiffs’ second
objection cannot survive either, in light of the text of defendant
Taburno’s counterclaim.

Simply stated, section 1962(d)’s elements

do require criminal conduct — “racketeering activity” that is
outlined in section 1962(1) — and defendant Taburno’s counterclaim
is replete with factual allegations of such conduct.

(See Docket

No. 35 at pp. 12–24; Docket No. 190 at pp. 13–14.)
2.

Pattern of
Requirement

Racketeering

Plaintiffs’

third

Activity’s

objection

judge’s conclusion, however, holds water.

to

the

Continuity
magistrate

The R&R admittedly does

not dedicate a lengthy analysis to the additional continuity
requirement of a section 1962(d) cause of action.
190 at p. 15.)

(See Docket No.

It merely states:

Regarding the requirement of the threat of continued
criminal activity, the Court finds the allegations are
also enough to satisfy this prong, particularly in light
of the extended period of time the allegations encompass,
that is, since 2004.
See Apparel Art Int’l, Inc. v.
Jacobson, 967 F.2d 720, 723 (1st Cir. 1992) (The acts
must be similar, related, or encompass multiple criminal
episodes over a significant period of time). [sic] As
Plaintiff Rojas still has many valuable pieces belonging
to Defendant, the Court finds that a threat of continued
criminal activity still exists.
(Docket No. 190 at p. 15.)

Accordingly, the parties are entitled

to a more thorough, de novo analysis.

Civil No. 13-1766 (FAB)

9

The Supreme Court has “described continuity as ‘both
a closed- and open-ended concept, referring 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.’”

Efron v.

Embassy Suites (P.R.), Inc., 223 F.3d 12, 16 (1st Cir. 2000)
(citing Northwestern Bell, 492 U.S. at 241).

Pursuant to the

“closed-ended” approach, “continuity is established by showing a
series of related predicates extending over a substantial period of
time that amount to a threat of continued criminal activity.”
Giuliano,

399

F.3d

at

387

(internal

quotations

and

citation

omitted).

The “open-ended” approach, on the other hand, allows a

plaintiff to state a claim without waiting for a long-term pattern
to develop “so long as the alleged racketeering acts themselves
include a specific threat of repetition extending indefinitely into
the future or are part of an ongoing entity’s regular way of doing
business.”

Id. (internal quotations and citation omitted).
a.

Closed-ended Continuity
Closed-ended

continuity

may

sometimes

be

established by virtue of a large number of alleged predicate acts
and a lengthy duration of the alleged racketeering activity.
Giuliano, 399 F.3d at 387.
duration
predicate

of

the

alleged

acts are

so

“This is because, where the temporal
activity

extensive

and
that

the

alleged

common

sense

number
compels

of
a

conclusion of continuity, closed-ended continuity should be found.”

Civil No. 13-1766 (FAB)

10

Id. (internal citations omitted).

In her counterclaim, defendant

Taburno alleges ten types of predicate acts extending over a tenyear period, all of which relate to plaintiff Rojas’ possession of
defendant Taburno’s property and assets.
pp. 25–26.)

(See Docket No. 35 at

The Court finds those acts to be too few and too

sporadic, however, to give rise automatically to the closed-ended
continuity envisioned by appellate courts. Cf., Fleet Credit Corp.
v. Sion, 893 F.2d 441, 446–47 (1st Cir. 1990) (finding allegations
of 95 fraudulent mailings over a 4.5-year period to be adequate,
without more,

to

state a

pattern

of

racketeering);

see also

Guiliano, 399 F.3d at 387 (“[W]here only a few predicate acts are
alleged . . . continuity can never be established.”).

This case

thus falls into the “middle ground[,] where the duration and
extensiveness of the alleged conduct does not easily resolve the
issue[,] . . . [and where] we examine other indicia of continuity.”
Guiliano, 399 F.3d at 387.
When a case falls into the middle ground, the
First Circuit Court of Appeals has “consistently declined to find
continuity where the RICO claim concerns a single, narrow scheme
targeting few victims.”

Guiliano, 399 F.3d at 390.

The First

Circuit Court of Appeals finds itself “in good company,” id., as
that tenet holds true throughout many other circuits.

See, e.g.,

Edmonson & Gallagher v. Alban Towers Tenants Ass’n., 310 U.S. App.
D.C. 409 (D.C. Cir. 1995) (“[C]ombination of single scheme, single

Civil No. 13-1766 (FAB)

11

injury, and few victims . . . makes it virtually impossible for
plaintiffs to state a RICO claim.”); Resolution Trust Corp. v.
Stone, 998 F.2d 1534, 1545 (10th Cir. 1993) (“Where the scheme has
a limited purpose, most courts have found no continuity.”); SilFlo, Inc. v. SFHC, Inc., 917 F.2d 1507, 1516 (10th Cir. 1990)
(upholding dismissal of a RICO claim where 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.”); Menasco, Inc. v. Wasserman,
886 F.2d 681, 684 (4th Cir. 1989) (“Defendants’ actions were
narrowly directed towards a single fraudulent goal.”).

When a

party’s alleged racketeering falls in the middle ground, therefore,
“the fact that a defendant has been involved in only one scheme
with a singular objective and a closed group of targeted victims
[is]

‘highly

omitted).

relevant.’”

Efron,

223

F.3d

18

(citations

In this case, defendant Taburno identifies herself as

the only victim of the plaintiffs’ actions.
pp. 24–28.)
“stealing”

at

(Docket No. 35 at

She also alleges that plaintiff Rojas’ scheme of
her

misappropriate

belongings
her

assets,

has

a

artwork,

belongings for his own financial gain.

singular
antiques,

objective:
and

to

general

(See Docket No. 190 at

p. 10) (“In a nutshell, Defendant avers that in the end, through
the effected racketeering acts, Plaintiffs seek to profit from her
artwork and wealth by selling off her pieces without her consent,

Civil No. 13-1766 (FAB)

12

that this has deprived her of her property[,] and that this has
caused her financial and property damages.”); (see also Docket
No. 35 at p. 26) (“These predicate acts are all related to the
robbery

of

Vasarely’s

assets,

artwork,

antiques,

belongings and by misappropriation by fraud.”).

and

general

Those contentions

clearly exhibit the type of single scheme, single injury, and
single victim case that is fatal to a successful RICO claim.
Because “RICO is ‘not aimed at the isolated offender,’” Roeder v.
Alpha Indus., Inc., 814 F.2d 22, 31 (1st Cir. 1987) (citing Sedima,
S.P.R.L. v. Imrex Co., 473 U.S. 479, 496 n.14 and 116 Cong. Rec.
35193 (1970) (statement of Rep. Poff)), the Court cannot hold that
defendant Taburno’s counterclaim alleges closed-ended continuity.
b.

Open-Ended Continuity
Defendant Taburno’s claims fare no better under

an open-ended continuity analysis.

A party may establish open-

ended continuity “by showing that the predicate acts pose a threat
of continued criminal activity in that ‘the racketeering acts
themselves

include

a

specific

threat

of

repetition

extending

indefinitely into the future or are part of an ongoing entity’s
regular way of doing business.’”
Dist.

LEXIS

23228,

974

F.2d

Trundy v. Strumsky, 1992 U.S.
1329

Northwestern Bell, 492 U.S. at 242).

(1st

Cir.

1992)

(citing

In such an inquiry, courts

turn to the nature of the RICO enterprise and of the predicate
acts.

Cofacredit S.A. v. Windsor Plumbing Supply Co., Inc., 187

Civil No. 13-1766 (FAB)

13

F.3d 229, 242 (2d Cir. 1999).

Where, as here, an enterprise’s

nature is a legitimate business, plaintiffs’ allegations must
support an inference “that the predicate acts were the regular way
of operating that business, or that the nature of the predicate
acts themselves implies a threat of continued criminal activity.”
Id. at 243.
With regard to the entities in this case,
defendant Taburno admits that “Inart, Inart Services[,] and/or
Globar enterprise have a legitimate purpose.”
p. 25.)

(Docket No. 35 at

She does not assert that the alleged racketeering acts

were a regular means by which plaintiffs Inart, Inart Services, or
Globar conducted their business, however, and no such inference may
be drawn from the counterclaim.

See, e.g., Roeder v. Alpha Indus.

Inc., 814 F.2d 22, 31 (1st Cir. 1987) (finding “no suggestion that
defendants used similar means to obtain other subcontracts, or that
they bribed anyone else.”).

A finding of open-ended continuity,

therefore, must rest on the nature of the alleged predicate acts
for the claims to survive.
A court must examine the specific facts of the
case to determine whether predicate acts establish open-ended
continuity.

Northwestern Bell, 492 U.S. at 242.

“The threat of

continuing racketeering activity need not be established, however,
exclusively by reference to the predicate acts alone; rather, a
court should consider the totality of the circumstances surrounding

Civil No. 13-1766 (FAB)

14

the commission of those acts.” Heinrich v. Waiting Angels Adoption
Servs., 668 F.3d 393, 410 (6th Cir. 2012) (citation omitted).

As

the magistrate judge reviewed, the racketeering activities alleged
in this case are:
theft from interstate shipment, when a 53’ container with
Taburno’s belongings and artworks disappeared under
Rojas’ supervision in interstate shipment;
extortionate
credit
transactions,
when
plaintiffs
requested and obtained credit and financial transactions
under their name by using Taburno’s assets;
mail fraud, when the proceeds of a fraudulently
registered property under the name of Rojas were sent by
mail to Puerto Rico;
wire fraud, when plaintiffs used the phone, internet,
email and fax in pursuit of the sale of the unauthorized
sales of Taburno’s belongings;
obstruction of criminal investigations and state or local
law enforcement, when plaintiffs caused INS to terminate
Taburno’s visa to force her to leave the country and
forfeit her rights as a victim of Rojas’ robbery;
interference with commerce, robbery, or extortion, when
Taburno’s art was sold and sent, on at least 16
occasions, overseas to the continental United States,
without her authorization;
racketeering, when Rojas established a pattern of
extortion and robbery to steal Taburno’s money and
artworks, as well as a fraud scheme to register Taburno’s
properties and belongings under Rojas’ name;
engaging in monetary transactions in property derived
from specified unlawful activity, when plaintiffs used
Taburno’s funds to acquire properties in Chicago derived
from their theft and extortion;
interstate transportation of stolen property, when at
least one large robbed Taburno painting was shipped to
the United States mainland by plaintiffs;

Civil No. 13-1766 (FAB)

15

and
fraud,
when
plaintiffs
registered
Taburno’s
properties (car, real estate, and storage facilities)
under Rojas’ name and when they concealed the sale of
Taburno’s art and properties to retain the proceeds.
(Docket No. 190 at pp. 13–14) (corresponding sections of 18 U.S.C.
§ 1961 omitted).

Even despite the wide-ranging predicate acts

alleged in the counterclaim, the Court cannot say that plaintiff
Rojas’ actions will pursue indefinitely into the future.

As

discussed above, the allegations here indicate a case with a single
scheme, single injury, and single victim — one seemingly resulting
from an intimate personal relationship gone sour.3

“[S]chemes

which have a clear and terminable goal have a natural ending point
. . . [and] therefore cannot support a finding of any specific
threat of continuity that would constitute open-ended continuity.”
Efron, 223 F.3d at 19 (quoting Vicom, Inc. v. Harbridge Merchant
Servs. Inc., 20 F.3d 771, 782 (7th Cir. 1994)); see also Giuliano,
399 F.3d at 391; First Capital Asset Mgmt. v. Satinwood, Inc., 385
F.3d 159, 180-81 (2d Cir. 2004).

All of the racketeering activity

was focused on plaintiff Rojas’ singular objective of profiting
from defendant Taburno’s wealth and belongings. With the exception
of the sale of defendant Taburno’s artwork, none of the alleged

3

Defendant Taburno indicates that Rojas used to live with her
and her husband, Yvaral: “He became a friend, and, later, they
considered him the son they never had.” (Docket No. 35 at p. 13.)
She then alleges that her husband “died a sudden death in Rojas’
and [her] arms,” that her husband “asked Rojas, then 40, to ‘take
care’ of his 55 year old wife and not leave her alone[,] [and]
Rojas swore to it.” Id. at p. 14. “The situation turned bitter,”
however, in 2005. Id.

Civil No. 13-1766 (FAB)

16

predicate acts demonstrates a repetitive nature, let alone an
indefinite one.

Although Rojas’ continued possession of Taburno’s

artwork may indicate a specific threat of continued sales in the
future, the threat is not indefinite, because “[o]nce achieved, the
illegal scheme, as alleged, would end.” Giuliano, 399 F.3d at 391;
see also Lefkowitz v. Bank of N.Y., 2003 U.S. Dist. LEXIS 19520, 31
(S.D.N.Y. Oct. 31, 2003) (“Lefkowitz argues that because there is
‘no end in sight’ to the administration of the estates, there is a
threat of ongoing criminal activity ‘extending indefinitely into
the future.’

But this contention misconstrues the open-ended

continuity requirement.

The administration of the estates will

eventually, definitively, end.”).

The counterclaim thus alleges

“an inherently terminable scheme — a pattern of racketeering
activity with a built-in ending point,” Heinrich, 668 F.3d at 410
— that has led courts to reject open-ended continuity in similar
situations.

See, e.g., Heinrich, 668 F.3d at 410–11 (citing Vemco

v. Camardella, 23 F.3d 129, 134 (6th Cir. 1994) (finding no
open-ended continuity where only a single scheme to defraud one
plaintiff the cost of one paint system was pled); Vild v. Visconsi,
956 F.2d 560, 569 (6th Cir. 1992) (finding failure to plead
open-ended continuity when “the acts alleged amount[ed] at best to
a breach of contract with a single customer”); and Thompson v.
Paasche, 950 F.2d 306, 311 (6th Cir. 1991) (finding that there was
no open-ended continuity because the fraudulent scheme to sell

Civil No. 13-1766 (FAB)

17

nineteen lots of land was “an inherently short-term affair” that
would end once the lots were sold)). Because the counterclaim does
not suggest that plaintiffs’ scheme will “[go] on without end,” but
rather that a “soon-to-be reached endpoint” exists, Efron, 223 F.3d
at 20, an open-ended continuity argument cannot support defendant
Taburno’s RICO claims.

See Windsor Plumbing, 187 F.3d at 244

(“[A]n inherently terminable scheme does not imply a threat of
continued

racketeering

activity.”).

Without

the

requisite

continuity, defendant Taburno’s counterclaim fails to allege a
sufficient “pattern of racketeering activity” against plaintiff
Rojas.

Accordingly,

plaintiffs’

motion

to

dismiss

the

counterclaim’s sections 1962(c) and (d) claims is GRANTED.
IV.

Conclusion
After due consideration, the Court has made an independent

examination

of

the

entire

plaintiffs’

objections

and

record

in

defendant

this

case,

Taburno’s

including

response

in

opposition, and ADOPTS IN PART and REJECTS IN PART the magistrate
judge’s findings and recommendations.

The Court DISMISSES WITH

PREJUDICE the following: defendant Taburno’s counterclaims against
all plaintiffs pursuant to 18 U.S.C. § 1513; her counterclaims
against plaintiffs Inart Corporation and Inart Services pursuant to
18 U.S.C. § 1962 (a), (b), and (c), as well as § 1962 (d) for
conspiring to violate §§ 1962 (a), (b), and (c); her counterclaims
against plaintiff Rojas pursuant to 18 U.S.C. §§ 1962 (a) and (b),

Civil No. 13-1766 (FAB)

18

as well as § 1962 (d), for conspiring to violate § (a) and (b); and
her counterclaims against plaintiff Rojas pursuant to 18 U.S.C.
§ 1962(d), for conspiring to violate § 1962 (c).
of

Puerto

Rico

law

claims

against

plaintiffs’ motion to dismiss.

all

All Commonwealth

plaintiffs,

survive

Plaintiffs’ motion to dismiss,

(Docket No. 62), therefore, is GRANTED IN PART and DENIED IN PART.
Judgment shall be entered accordingly.
IT IS SO ORDERED.
San Juan, Puerto Rico, August 21, 2014.
s/ Francisco A. Besosa
FRANCISCO A. BESOSA
UNITED STATES DISTRICT JUDGE