Western Reserve Life Assurance Co. of Ohio v. Conreal LLC et al

Filing 231

MEMORANDUM AND ORDER granting 212 Motion for Partial Summary Judgment; denying 227 Motion for Reconsideration; 187 Plaintiffs' Motion for Prejudgment Attachment and a Preliminary Injunction is deferred until Plaintiffs file a supplemental memorandum, if any. If Plaintiffs do not file a supplemental memorandum within 60 days, then the Court will dismiss the motion without prejudice. So Ordered by Chief Judge William E. Smith on 2/27/2017. (Jackson, Ryan)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
___________________________________
)
)
)
)
)
Plaintiffs,
)
)
v.
)
)
JOSEPH CARAMADRE; RAYMOUR
)
RADHAKRISHNAN; ESTATE PLANNING
)
RESOURCES, INC.; ADM ASSOCIATES,
)
LLC; HARRISON CONDIT; EDWARD
)
MAGGIACOMO, JR.; and FORTUNE
)
FINANCIAL SERVICES, INC.,
)
)
Defendants.
)
___________________________________)
TRANSAMERICA LIFE INSURANCE
COMPANY and WESTERN RESERVE
LIFE ASSURANCE CO. OF OHIO,

C.A. No. 09-470 S

MEMORANDUM AND ORDER
WILLIAM E. SMITH, Chief Judge.
I. Background
Joseph

Caramadre’s

stranger-initiated

annuity

transaction

(“STAT”) schemes have been described at length not only by this
Court, but also by the First Circuit Court of Appeals and the
Rhode Island Supreme Court. 1

This Memorandum and Order assumes

that the reader is familiar with Caramadre’s STAT scheme, as

1

See, e.g., Caramadre v. Transamerica Life Ins. Co., 847 F.
Supp. 2d 329 (D.R.I. Feb. 7, 2012); Western Reserve Life
Assurance Co. of Ohio v. ADM Associates, Inc., 737 F.3d 135 (1st
Cir.
2013);
Western
Reserve
Life
Assurance
Co.
v.
ADM
Associates, Inc., 116 A.3d 794 (R.I. 2015).

well

as

the

criminal

charges

and

civil

litigation

it

has

generated.
Plaintiffs

originally

brought

seven

separate

civil

cases

which have been consolidated into one action, with Plaintiffs’
Consolidated Complaint (ECF No. 186) as the operative complaint.
Defendants Caramadre and ADM Associates, LLC (“ADM”) responded
with

answers

and

counterclaims.

There

are

currently

three

motions pending before the Court: (1) Defendants Caramadre and
ADM’s

Motion

regarding

to

their

Reconsider
untimely

the

Court’s

response

to

July

12,

Plaintiffs’

2016

Order

Motion

for

Partial Summary Judgment (ECF No. 227); (2) Plaintiffs’ Motion
for Partial Summary Judgment (ECF No. 212); and (3) Plaintiffs’
Motion

for

Caramadre’s

Prejudgment
Membership

Attachment

Interest

in

of
ADM

Defendant
and

for

Joseph

Preliminary

Injunction Preventing Caramadre from Transferring Assets of ADM
or his Interest Therein (ECF No. 187).

For the reasons that

follow, Defendants’ Motion to Reconsider is DENIED, Plaintiffs’
Motion for Partial Summary Judgment is GRANTED, and Plaintiffs’
Motion for Prejudgment Attachment and a Preliminary Injunction
is held pending additional briefing.

2

II. Discussion
A. Motion to Reconsider
On July 12, 2016, this Court entered an Order (ECF No. 226)
denying Defendants Caramadre and ADM’s Motion requesting leave
to file a memorandum of law in support of its opposition to
Plaintiffs’

Motion

for

Partial

Summary

Judgment.

The

Order

noted that the Court would disregard the memorandum that had
been untimely filed by ADM.

The Court also entered a text order

on July 12 granting Plaintiffs’ Motion to Strike Caramadre’s
memorandum

in

support

forth in the Order.

of

his

opposition

for

the

reasons

set

Defendants Caramadre and ADM subsequently

filed a Motion to Reconsider this Order, 2 in which Caramadre
states that he does not disagree with the Court’s decision to
disregard

the

acknowledges

memoranda

that

the

that

Court

were

was

“on

not

timely

proper

legal

filed,
grounds

and
to

disregard the late motions.” (Mot. to Recons. 1, 2, ECF No.
227.)

Caramadre then requests that the Court consider punishing

ADM’s attorney for his failure to timely file the response in

2

The Court notes that the Motion to Reconsider is purported
to have been filed on behalf of both Caramadre and ADM.
As
Plaintiffs’ point out, however, Caramadre is a pro se litigant
who may not represent ADM because he is not a licensed attorney.
(Obj. to Mot. to Recons. 2, ECF No. 228.)
Caramadre’s license
to practice law was suspended by the Rhode Island Supreme Court
until further order of that Court. In re Caramadre, 86 A.3d 388,
389 (R.I. 2014).
3

opposition

to

Plaintiffs’

motion

because,

he

contends,

the

attorney misled him to believe that the responsive documents
would be filed by the June 15, 2016 final deadline set by the
Court in a Text Order entered on June 8, 2016. (Id. at 3-5.)
Caramadre has not provided any basis on which the Court
could or would reconsider its July 12 Order and decision to
disregard the responsive memoranda filed by both Caramadre and
ADM.

The Court was well within its discretion to enforce the

final

deadline

that

it

set

after

it

had

granted

several

extensions, and the Court’s reasoning for enforcing the final
deadline is articulated in detail in its Order. (See ECF No.
226.)

The Motion to Reconsider is DENIED.

B. Motion for Partial Summary Judgment
Plaintiffs argue that they are entitled to summary judgment
on three of the seventeen counts in the Consolidated Complaint,
as well as on all five of Caramadre’s counterclaims and all four
of ADM’s counterclaims. (Mot. for Partial Summ. J. 1, ECF No.
212.)

Summary judgment may enter on any claim for which the

moving party can show that there is no genuine issue of material
fact and that it is entitled to judgment as a matter of law.
Fed. R. Civ. P. 56(a).

A genuine issue of material fact “exists

where the evidence is such that a reasonable jury could return a
verdict

for

the

nonmoving

party.”
4

Taylor

v.

Am.

Chemistry

Council, 576 F.3d 16, 24 (1st Cir. 2009) (internal quotation
marks and citation omitted).

The Court must consider the facts

in the light most favorable to the non-moving party and draw all
reasonable inferences in the non-moving party’s favor. Dávila v.
Corporación de Puerto Rico Para La Difusión Pública, 498 F.3d 9,
12 (1st Cir. 2007).
Plaintiffs’

motion

is

unopposed

because

Defendants

Caramadre and ADM failed to timely file a response. (See July
12, 2016 Order, ECF No. 226.)

Pursuant to the local rules of

civil procedure for the District of Rhode Island, Plaintiffs’
Statement of Undisputed Facts shall be deemed admitted because
Defendants did not file a Statement of Disputed Facts. LR Cv
56(a)(3).

Federal Rule 56 is clear, however, that this Court

must still analyze Plaintiffs’ motion to determine whether they
are entitled to judgment as a matter of law. See Fed. R. Civ. P.
56(e)(3); Sanchez-Figueroa v. Banco Popular de Puerto Rico, 527
F.3d 209, 212 (1st Cir. 2008) (noting that an unopposed motion
for

summary

judgment

“does

not

automatically

give

rise

to

a

grant of summary judgment” because “the district court still
must consider the plaintiff[s’] [claims] based on the record
properly before [it] . . . .”) (quoting Aguiar–Carrasquillo v.
Agosto–Alicea, 445 F.3d 19, 25 (1st Cir. 2006))).

5

1. Plaintiffs’ Claim for Civil Liability pursuant to R.I.
Gen. Laws § 9-1-2 as to Defendants Caramadre and
Radhakrishnan
Plaintiffs argue that they are entitled to summary judgment
on their claims in Count V that Caramadre and Radhakrishnan are
civilly liable for their criminal conduct because Caramadre and
Radhakrishnan
fraud,

and

pretenses

have

admitted

identity

and

fraud,

forgery,

and

to

committing

obtaining
conspiring

mail

fraud,

signatures
to

defraud

wire

by

false

and

obtain

significant sums of money from insurance companies in violation
of state law. (Pls.’ Mem. in Supp. of Mot. for Partial Summ. J.
(“Pls.’ Mem.”) 8-10, ECF No. 212.)

Plaintiffs’ Statement of

Undisputed Facts (“SUF”), deemed admitted by Defendants’ failure
to timely file a statement of disputed facts, states that they
were

two

of

several

insurance

companies

to

whom

Defendants

submitted annuity applications using terminally-ill individuals
as

annuitants.

(SUF

¶

7,

ECF

No.

213.)

Plaintiff’s

SUF

incorporates the Statement of Facts that Defendants admitted as
part of their respective plea agreements. (SUF ¶ 2; SUF Ex. B,
ECF No. 213.)
admitted

to

In the Statement of Facts, Defendants in fact

“knowingly

and

willfully

conspir[ing]

with

each

other and with others to commit” mail fraud, wire fraud, and
identity fraud, in violation of federal law. (SUF Ex. B 1.)
Defendants

also

admitted

that
6

they

“fraudulently

obtained

millions of dollars by making . . . material misrepresentations
and omissions to [] terminally-ill people . . . in order to
obtain

identity

information

and

signatures

for

furtherance of the scheme . . . .” (Id. at 3.)

use

in

It is also

undisputed that (1) Plaintiffs were acknowledged as victims of
Defendants’ scheme; (2) Western Reserve Life Assurance Co. of
Ohio (“WRL”) is entitled to $1,102,464.28 in restitution; and
(3)

Transamerica

Life

Insurance

Company

is

entitled

to

$805,926.18 in restitution. (SUF ¶ 15; SUF Ex. D 11.)
Rhode Island General Laws § 9-1-2 provides, in relevant
part, that “[w]henever any person shall suffer any injury to his
or her person, reputation, or estate by reason of the commission
of

any

crime

or

offense,

he

or

she

may

recover

his

or

her

damages for the injury in a civil action against the offender
. . . .”

The statute clearly enables Plaintiffs to recover the

monetary

damages

incurred

Radhakrishnan’s conduct.
and

Radhakrishnan

are

as

a

result

of

Caramadre

and

This Court concludes that Caramadre
civilly

liable

to

Plaintiffs

for

the

criminal conduct to which they admitted as part of the plea
agreement.

However, this claim represents only a portion of

Count V, which broadly claims civil liability for several state
and federal crimes and offenses allegedly perpetrated by five of
the seven defendants.

Plaintiffs are therefore entitled only to
7

judgment as a matter of law with respect to the civil liability
of Caramadre and Radhakrishnan.
2. Plaintiffs’ Claim for Violations
Defendants Caramadre and Radhakrishnan
Plaintiffs

argue

that

Defendants

are

of

RICO

liable

as

for

to

their

individual violations of the Racketeer Influenced and Corrupt
Organizations Act (“RICO”) pursuant to 18 U.S.C. § 1962(c) and
(d) and are therefore entitled to treble damages, costs of the
lawsuit, and attorneys’ fees pursuant to 18 U.S.C. § 1964(c)
(Count IV). 3 (Pls.’ Mem. 10.)
prove

a

RICO

claim

pursuant

Four elements are required to
to

18

U.S.C.

§

1962(c):

“(1)

conduct, (2) of an enterprise, (3) through a pattern, (4) of
racketeering activity.” Giuliano v. Fulton, 399 F.3d 381, 386
(1st

Cir.

2005)

(quoting

Kenda

Corp.

v.

Pot

O’Gold

Money

Leagues, Inc., 329 F.3d 216, 233 (1st Cir. 2003)); see also
Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496 (1985).

3

18 U.S.C. § 1962(c) provides that “[i]t 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.” The term “racketeering” covers many different types of
misdeeds, but relevant to this case it expressly includes wire
fraud (18 U.S.C. § 1343) and mail fraud (18 U.S.C. § 1341). 18
U.S.C. § 1961(1). Pursuant to 18 U.S.C. § 1962(d), it is
“unlawful for any person to conspire to violate any of the
provisions of subsection . . . (c) . . . .”
8

‘“Racketeering activity’ means any act that violates one of
the federal laws specified in the RICO statute, see 18 U.S.C.
§ 1961(1), including the mail and wire fraud statutes, 18 U.S.C.
§§ 1341 and 1343.” Id.

A “pattern” is established by “[a]t

least two acts of racketeering activity [occurring] within ten
years of each other.” Id. (citing § 1961(5)).
Court

has

requiring

construed

the

showing

that

a

pattern
‘the

element

“The Supreme

as

racketeering

additionally

predicates

are

related, and that they amount to or pose a threat of continued
criminal activity.’” Id. (quoting H.J. Inc. v. Nw. Bell Tel.
Co., 492 U.S. 229, 239 (1989)).
“includ[ing]

any

individual,

An “enterprise” is defined as
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).
“For claims under § 1962(d), a plaintiff must show that
each defendant in the RICO conspiracy case joined knowingly in
the scheme and was involved himself, directly or indirectly, in
the commission

of

at

least

two

predicate

acts.”

Libertad

v.

Welch, 53 F.3d 428, 441 (1st Cir. 1995) (quoting Feinstein v.
Resolution Trust Corp., 942 F.2d 34, 41 (1st Cir. 1991)).
Here,
conduct

there

that

is

falls

no

dispute

within

the
9

that

Defendants

definition

of

engaged

in

“racketeering

activity” because they pled guilty to one count of wire fraud,
and one count of conspiracy to commit wire fraud, mail fraud,
and identity theft, United States v. Caramadre, 807 F.3d 359,
365 (1st Cir. 2015), and admitted to a statement of facts that
included wire and mail fraud activity (SUF ¶ 2, Ex. B). See 18
U.S.C. § 1961(1).

There is also no dispute that Caramadre and

Radhakrishnan engaged in a pattern of this racketeering activity
because Radhakrishnan joined Caramadre’s existing scheme in 2007
and admitted to engaging in racketeering conduct through 2010
(SUF

¶

6).

therefore,

See
that

18

U.S.C.

Defendants

§

1961(5).

Caramadre

This

and

Court

finds,

Radhakrishnan

are

liable for their respective violations of RICO pursuant to 18
U.S.C. § 1962(c) and (d).
Similar to Count V of the Consolidated Complaint, however,
Plaintiffs’ Motion for Partial Summary Judgment represents only
a portion of Count IV, which broadly claims RICO violations for
five

of

the

seven

defendants.

Because

Plaintiffs’

SUF

only

asserted facts relevant to Caramadre and Radhakrishnan, they are
only entitled to judgment as a matter of law on Count IV of the
Consolidated Complaint with respect to Defendants Caramadre and
Radhakrishnan.

10

3. Plaintiffs’ Claim for Reverse Piercing/Alter Ego
Plaintiffs

argue

that

they

may

reach

the

assets

of

ADM

through Caramadre as a matter of law through a reverse piercing
of the corporate veil (Count XIII) because there is no dispute
that ADM is the alter ego of Caramadre. (Pls.’ Mem. 13-15.)

The

Rhode Island Supreme Court has held that a corporate form may be
disregarded and liability “determined by justice and fairness”
when

circumstances

reveal

“such

a

unity

of

interest

and

ownership between the corporation and its owner . . . such that
their separate identities and personalities no longer exist.”
Nat’l

Hotel

Assocs.

ex

rel.

M.E.

Venture

Mgmt.,

Inc.

Ahlborg & Sons, Inc., 827 A.2d 646, 652 (R.I. 2003).

v.

O.

Similarly,

the “equitable alter ego doctrine” may be invoked when there is:
(1) such a unity of interest and ownership that the
separate personalities of the corporation and the
individual no longer exist, viz., the corporation is,
in fact, the alter ego of one or a few individuals;
and (2) the observance of the corporate form would
sanction a fraud, promote injustice, or an inequitable
result would follow.
Heflin

v.

Koszela,

774

A.2d

25,

30

(R.I.

2001)

(quoting

Transamerica Cash Reserve, Inc. v. Dixie Power and Water, Inc.,
789 P.2d 24, 26 (Utah 1990)).
to

the

conscience

of

the

The second element is “addressed

court,

and

the

circumstances

under

which it will be met will vary with each case,” but “it must be
shown

that

the

corporation

itself
11

played

a

role

in

the

inequitable conduct at issue.” Id. (quoting Transamerica, 789
P.2d at 26).
It

is

undisputed

that

ADM

is

a

Rhode

Island

limited

liability company and that Caramadre is the sole member of ADM,
(Consolidated Compl. ¶ 6, ECF No. 186; Caramadre Ans. ¶ 6, ECF
No. 197; ADM Ans. ¶ 6, ECF No. 200; SUF ¶ 19), that ADM’s only
asset is an annuity that was purchased as part of Caramadre’s
scheme (SUF ¶¶ 22, 24, 27-28), and that Caramadre used ADM as
the

owner

and

beneficiary

of

one

of

through Caramadre’s scheme (SUF ¶ 22).

the

annuities

purchased

This Court finds that

there is no dispute that ADM’s corporate form played a role in
Caramadre’s perpetration of his scheme to defraud Plaintiffs,
and that ADM is an alter ego of Caramadre as a matter of law.
See Heflin, 774 A.2d at 30.

This Court will therefore disregard

ADM’s corporate form and allow Plaintiffs to reach the assets
held

by

ADM

through

any

liability

imputed

to

Caramadre.

See

counterclaims

for

claims

WRL

Nat’l Hotel Assocs., 827 A.2d at 652.
4. Counterclaims for Breach of Contract
Both
breach

of

ADM

and

Caramadre

contract

against

have

asserted

WRL.

ADM

that

“unilaterally rescinded” an annuity policy contract, and, as a
result, ADM has been both unable to submit a death claim and
unable

to

control

the

funds

in
12

the

annuity

account.

(ADM

Counterclaim

¶¶

32-34,

ECF

No.

200.)

Plaintiffs

argue

that

ADM’s claim fails because it has yet to submit a death benefit
claim

(a

condition

precedent

to

the

payment

of

the

death

proceeds pursuant to the annuity policy) and because ADM has not
suffered

any

damages

(a

required

element

for

the

breach

of

contract claim). (Pls.’ Mem. 15, 18.)
“To

succeed

on

a

breach

of

contract

claim

under

Rhode

Island law, a plaintiff must prove that (1) an agreement existed
between the parties, (2) the defendant breached the agreement,
and (3) the breach caused (4) damages to the plaintiff.” Barkan
v.

Dunkin’

Donuts,

Inc.,

627

F.3d

34,

39

(1st

Cir.

2010)

(footnote omitted) (citing Petrarca v. Fid. & Cas. Ins. Co., 884
A.2d 406, 410 (R.I. 2005)).
In the SUF, Plaintiffs assert that WRL issued the Charles
Buckman annuity in reliance upon the representations made in the
Charles Buckman Application. (SUF ¶ 24.)
copy of this policy to the SUF.

Plaintiffs attached a

Section 10 of the policy covers

the “death proceeds,” and specifically states that when WRL “has
due proof that the Annuitant died before the Commencement Date,
the death proceeds are payable to the beneficiary.” (SUF Ex. E
15.)

Plaintiffs also assert that ADM has not submitted a death

claim for the Charles Buckman annuity (SUF ¶ 25); they argue
that WRL cannot be in breach of the annuity contract because
13

their contractual obligation to pay the death benefit has not
yet been triggered.

In addition, ADM stated in a motion for

enlargement of time to submit a response to Plaintiffs’ motion
for

prejudgment

attachment

that

it

had

just

received

the

documents it needed to file a death claim, which indicates that
it had not yet attempted to retrieve this benefit. (ECF No.
196.)

This Court finds that there is no indication that ADM has

attempted to receive the death benefit from WRL and that there
is no other evidence on record at this time to indicate that WRL
has breached the annuity contract.
Plaintiffs also assert that WRL attempted to return all of
the premiums that ADM paid for the Charles Buckman annuity. (SUF
¶ 26.)

To support their assertion, Plaintiffs attached a letter

from WRL to Caramadre (as manager of ADM) that attempted to
rescind the annuity policy in part by enclosing a check for
$1,000,000 (representing all of the premiums that ADM had paid
for the annuity policy). (SUF Ex. F.)

Plaintiffs contend that

“ADM consciously rejected this opportunity” (Pls.’ Mem. 18), and
there

is

no

evidence

to

the

contrary.

The

Court

finds,

therefore, that there is no evidence on the record to indicate
that WRL has suffered any damages from any alleged breach of the
annuity policy.

14

Caramadre makes the same breach of contract claim in his
counterclaim, purportedly on behalf of “[his] limited liability
company.” (Caramadre Counterclaim ¶¶ 28-30, ECF No. 197.)

As

Plaintiffs argue, Caramadre’s claim fails because there is no
dispute that Caramadre is not a party to the annuity contract
and therefore does not have a contractual relationship with WRL.
(Pls.’ Mem. 28-29.)

Caramadre does not have any contractual

rights with respect to the Charles Buckman annuity and cannot
bring any claims against WRL with respect to this annuity. See
Brough v. Foley, 525 A.2d 919, 922 (R.I. 1987).

Plaintiffs are

therefore entitled to summary judgment in their favor on both
ADM and Caramadre’s counterclaims for breach of contract.
5. Counterclaims for Promissory Estoppel
ADM and Caramadre have also asserted counterclaims against
WRL for promissory estoppel.

ADM claims that WRL has breached

its promises (1) to pay a death benefit upon the filing of a
death

claim

investment

and

of

(2)

its

that

premiums

ADM

would

through

have

the

contract. (ADM Counterclaim ¶¶ 37-39.)

control

life

of

over

the

the

annuity

Caramadre makes the same

allegations in his counterclaim, purportedly on behalf of his
limited liability company. (Caramadre Counterclaim ¶¶ 33-35.)
Plaintiffs
repackaged

argue

breach

of

that

this

contract

counterclaim

claim,
15

and

that

is

simply

a

it

should

be

dismissed

because

ADM

was

an

instrumentality

of

Caramadre’s

criminal acts and Caramadre approaches his claims with unclean
hands. (Pls.’ Mem. 19-22.)

Plaintiffs also argue that ADM may

not prevail on this claim because an enforceable contract exists
between the parties. (Id. at 19-20.)
In Rhode Island, the elements of promissory estoppel are as
follows: “1. A clear and unambiguous promise; 2. Reasonable and
justifiable reliance upon the promise; and 3. Detriment to the
promisee, caused by his or her reliance on the promise.” Cote v.
Aiello,

148

Filippi,

818

A.3d

537,

547

(R.I.

2016)

608,

626

(R.I.

2003)).

A.2d

(quoting
The

Filippi
Rhode

v.

Island

Supreme Court first embraced the theory of promissory estoppel
“as a substitute for a consideration, rendering a gratuitous
promise

enforceable

as

a

contract”

such

that

“the

acts

of

reliance by the promisee to his detriment (provide) a substitute
for consideration.” Hayes v. Plantations Steel Co., 438 A.2d
1091, 1095–96 (R.I. 1982) (quoting East Providence Credit Union
v.

Geremia,

arguments

239

aside

A.2d

725,

about

727

whether

(R.I.
any

1968)).
factual

Putting
disputes

any

exist

regarding the elements of promissory estoppel, this equitable
theory is simply inapplicable to the dispute between the parties
because there is no failure of consideration.
the annuity policy.

ADM paid WRL for

And, as discussed supra regarding ADM’s
16

breach of contract claim, there is no dispute on the record that
ADM has either submitted the required paperwork for the death
benefit claim or been denied this benefit of the annuity policy.
ADM’s

counterclaim

for

promissory

estoppel

is,

therefore,

dismissed as a matter of law.
Plaintiffs

also

argue

that

Caramadre

cannot

pursue

this

counterclaim for the same reasons that he could not prevail on
his counterclaim for breach of contract; the agreement at issue
was

between

ADM

(Pls.’ Mem. 30.)

and

WRL

and

not

between

Caramadre

and

WRL.

Plaintiffs argue that this counterclaim must

be dismissed because Caramadre has not alleged that WRL made any
promises

to

him

and

because

Caramadre’s

unclean

hands

would

preclude recovery pursuant to the equitable remedy of promissory
estoppel. (Id.)

Because Caramadre has not alleged any promises

made to him by WRL, this Court concludes that this counterclaim
may be dismissed as a matter of law.
6. Counterclaims for Breach of Duty of Good Faith and
Fair Dealing
ADM and Caramadre have also asserted counterclaims against
WRL for its alleged breach of the duty of good faith and fair
dealing.

ADM claims that WRL’s attempt to rescind the annuity

policy despite knowing that the annuity contract was not subject
to any insurable interest requirement and was incontestable from
its inception constitutes a breach of the implied contractual
17

duty of good faith and fair dealing. (ADM Counterclaim ¶ 45.)
Caramadre makes the identical allegations, ostensibly on behalf
of ADM. (Caramadre Counterclaim ¶ 40.)
Plaintiffs

argue

that

Defendants

cannot

recover

on

this

claim as a separate cause of action, and reiterate that WRL has
not breached the annuity policy contract. (Pls.’ Mem. 22-23.)
Plaintiffs also argue that, because Caramadre is not a party to
the annuity policy contract, his counterclaim must fail as a
matter of law.
It is well-settled in Rhode Island that “[v]irtually every
contract contains an implied covenant of good faith and fair
dealing

between

the

parties

.

.

.

[to]

ensure[]

that

contractual objectives may be achieved,” and that “a claim for
breach of the implied covenant of good faith and fair dealing
does

not

create

an

independent

cause

of

action

separate

and

apart from a claim for breach of contract.” McNulty v. Chip, 116
A.3d 173, 185 (R.I. 2015) (internal quotations and citations
omitted).

These

counterclaims

are

therefore

dismissed

as

a

matter of law.
7. Counterclaims for Declaratory Judgment
ADM and Caramadre have also included a vague counterclaim
requesting
rights

and

that

this

other

Court

legal

“enter

relations
18

a

judgment
of

the

declaring
parties.”

the
(ADM

Counterclaim ¶ 29; Caramadre Counterclaim ¶ 25.)

Plaintiffs

argue that, without any context to support these claims, neither
Defendant is entitled to a declaratory judgment. (Pls.’ Mem.
25.)

The

Declaratory

Judgment

Act

“is

designed

to

enable

litigants to clarify legal rights and obligations before acting
upon them.” Ernst & Young v. Depositors Econ. Prot. Corp., 45
F.3d 530, 534 (1st Cir. 1995).

In addition, the Declaratory

Judgment Act “neither imposes an unflagging duty upon the courts
to decide declaratory judgment actions nor grants an entitlement
to litigants to demand declaratory remedies.” Id. (quoting El
Dia,

Inc.

1992)).

v.

Hernandez

Colon,

963

F.2d

488,

493

(1st

Cir.

The Court “ultimately must determine when declaratory

judgments are appropriate and when they are not.” Id.
Rule 57 of the Federal Rules of Civil Procedure governs the
procedure for obtaining a declaratory judgment pursuant to 28
U.S.C. § 2201.

The Advisory Committee Notes provide that a

court may decline to grant declaratory relief when it “will not
be

effective

in

settling

the

controversy.”

The

Notes

also

provide that the “demand for relief shall state with precision
the

declaratory

relief,

The

Defendants’

vague

“rights

and

specify

the

other
manner

cumulatively

request

legal
of

that

relations
relief
19

or

in

this
of

sought

the

Court

the

alternative.”
determine

parties”

with

any

does

measure

the
not
of

precision,

and

this

Court

declines

make such a broad determination.

Defendants’

invitation

to

There is also no doubt that

any attempt by this Court to declare the legal rights of the
parties would not “be effective in settling the controversy.”
See

Fed.

R.

Civ.

P.

57

Advisory

Committee

Notes.

These

counterclaims are, therefore, dismissed.
8. Counterclaim
Distress
Caramadre

claims

for

that

Negligent

he

is

Infliction

suffering

of

Emotional

severe

emotional

distress caused by WRL’s “outrageous” action of attempting to
rescind a valid and incontestable contract. (Counterclaim ¶¶ 43,
45, ECF No. 197.) Plaintiffs argue that this counterclaim must
fail because Caramadre is not within the class of plaintiffs who
are recognized in Rhode Island as able to recover under this
theory of liability. (Pls.’ Mem. 32.)

Rhode Island common law

is clear that “[o]nly two groups of plaintiffs are able . . . to
seek

recovery

under

a

theory

of

negligent

infliction

of

emotional distress: ‘those within the “zone-of-danger” who are
physically endangered by the acts of a negligent defendant, and
bystanders

related

to

a

victim

whom

they

witness

being

injured.’” Perrotti v. Gonicberg, 877 A.2d 631, 636 (R.I. 2005)
(quoting Jalowy v. Friendly Home, Inc., 818 A.2d 698, 710 (R.I.
2003)).

Caramadre has not alleged that he was either physically

endangered by Plaintiffs’ actions or a bystander who is related
20

to

a

victim.

He

is

therefore

not

within

the

class

of

individuals who could potentially prevail on this type of claim.
Plaintiffs are therefore entitled to judgment in their favor on
this counterclaim.
C. Motion
Injunction

for

Prejudgment

Attachment

and

Preliminary

Plaintiffs are requesting a prejudgment order of attachment
of Caramadre’s assets, including his membership interest in ADM.
(Mot.

for

Prej.

Attach.

Plaintiffs

argue

that

against

Caramadre

Consolidated

And

they

because

Complaint

Prelim.
will

many

(such

probably

of

as

Inj.

the

civil

1,

ECF

obtain

counts

No.
a

judgment

alleged

liability

for

187.)

in

the

criminal

acts, civil conspiracy to commit fraud, and unjust enrichment)
“are

effectively

agreement,”

proven

which

as

included

a
a

result
statement

of
of

Caramadre’s
facts

to

plea
which

Caramadre and his co-defendant stipulated. (Mem. in Supp. of
Mot. (“Attachment Mem.”) 6, 8, 10, 12, ECF No. 187; Attachment
Mem. Ex. 6, ECF No. 187-6.)

Plaintiffs also argue that there is

a need to furnish security to them because Caramadre will not
likely

have

the

financial

means

to

satisfy

a

judgment,

and

between Plaintiffs’ actual losses to Caramadre’s scheme, treble
damages, attorneys’ fees, and prejudgment interest, Plaintiffs
foresee

a

judgment

in

their

(Attachment Mem. 13-15.)

favor

that

exceeds

$10

million.

Plaintiffs believe that Caramadre’s
21

financial interest in ADM and the ADM annuity may be “the only
source of revenue to satisfy a judgment” in Plaintiffs’ favor.
(Id. at 14.)

In support of their motion, Plaintiffs filed a

declaration from a Senior Director of Operations for WRL, who
attested to the administrative process of the Charles Buckman
annuity and attached a chart detailing the “policy losses” that
total approximately $2.7 million. (Vorhies Decl. Ex. D, ECF No.
187-4.)

Plaintiffs

also

filed

documents

supporting

their

contention that Caramadre has admitted to facts that lead to the
likelihood of Plaintiffs’ success on many of their claims. (See
generally Exs. to Attachment Mem.)
In his opposition to the motion, Caramadre asserts that
Rhode Island’s statutory framework for prejudgment attachment is
clear that attachment may not apply to tort actions against instate

residents.

Caramadre

contends

that,

despite

his

incarceration in a federal prison located in Massachusetts, he
remains

a

Rhode

Island

resident

and

that

Plaintiffs’

claims

against him (conspiracy, RICO, civil liability for crimes and
offenses and unjust enrichment) sound in tort. (Opp’n 1-2, ECF
No. 203-1.) 4

4

ADM joined Caramadre’s memorandum in opposition (ECF No.
202).
Plaintiffs claim in their reply memorandum that ADM
cannot join Caramadre and failed to properly adopt Caramadre’s
arguments. (Reply Mem. 5, ECF No. 209.)
22

In response, Plaintiffs assert that Caramadre is currently
a

resident

of

Massachusetts,

not

Rhode

Island,

and

that

irrespective of the statute governing attachment for tort claims
against nonresident defendants, § 10-5-5 allows attachment in
any civil action of equitable character, and Plaintiffs have
included

a

count

for

unjust

enrichment

against

him

in

the

Consolidated Complaint. (Reply Mem. 1-3, ECF No. 209.)
Rule 64 of the Federal Rules of Civil Procedure provides,
in relevant part that, absent an applicable federal statute,
state law may be used to seize property “to secure satisfaction
of the potential judgment.”

In Rhode Island, a plaintiff may

move for a writ of attachment to run against the property of any
defendant “in any civil action of an equitable character.” R.I.
Gen. Laws § 10-5-5.

Before the Court grants such a motion,

however, it must hold a hearing.
A court having jurisdiction over a defendant or his or
her assets, including his or her personal estate or
real estate, may authorize a plaintiff to attach the
defendant's assets, or any part thereof, after hearing
on a motion to attach, notice of which has been given
to the defendant as provided in this section.
R.I. Gen. Laws § 10-5-2(a) (emphasis added); see also Hatch v.
O'Brien, 772 F. Supp. 1326, 1328 (D.R.I. 1991) (acknowledging
the notice and hearing requirement that the General Assembly
inserted to § 10-5-2 in 1973).

23

The Rhode Island Supreme Court is clear that prejudgment
attachment is not available in tort actions involving defendants
who

are

Rhode

Island

residents,

but

may

be

available

in

a

contract action if the damages “are susceptible of estimation
and

determination

under

the

ordinary

and

well-understood

commercial and business rules which apply to contracts proper,”
or in a tort action involving an out-of-state resident.

Martin

v. Lincoln Bar, Inc., 622 A.2d 464, 468 (R.I. 1993) (quoting
United States v. J. Tirocchi & Sons, Inc., 180 F. Supp. 645, 650
(D.R.I. 1960)).
Plaintiffs are also moving for a preliminary injunction to
enjoin Caramadre from moving any of ADM’s assets or transferring
his

interest

therein.

(Attachment

Mem.

3.)

Plaintiffs

acknowledge that the “Supreme Court has held that federal courts
lack

authority

dissipation

of

to

issue

assets

preliminary

pending

injunctions

adjudication

of

to

prevent

purely

legal

claims,” but argue that this does not apply to equitable claims,
such

as

unjust

Consolidated

enrichment

Complaint

(which

against

has

been

Caramadre,

as

asserted

in

well

against

as

the

five other defendants). (Attachment Mem. 15 n.7 (citing Grupo
Mexicano de Desarrollo S.A. v. All. Bond Fund, Inc., 527 U.S.
308 (1999).)

Plaintiffs assert that they are likely to succeed

on the merits of their claims, and that Caramadre’s presumed
24

inability

to

satisfy

a

judgment

constitutes

irreparable

harm

such that he should be enjoined from transferring his interest
in ADM’s assets.

Caramadre counterargues that Plaintiffs have

not met any of the four required elements for the issuance of a
preliminary
enrichment,

injunction
the

only

with

respect

equitable

to

the

claim

in

claim
the

for

unjust

Consolidated

Complaint.
The Court is ultimately concerned that circumstances may
have changed with respect to the status of Caramadre’s assets
since this motion for prejudgment attachment was filed, and that
the

Court

may

not

have

accurate,

respect to the status of his assets.

current

information

with

The Court therefore orders

as follows: If Plaintiffs wish to press this motion in light of
the decision rendered today on Plaintiffs’ Motion for Partial
Summary Judgment, Plaintiffs are directed to file a supplemental
memorandum in support of its motion within 60 days of today’s
date.

Pursuant to R.I. Gen. Laws § 10-5-2(a), the Court will

then schedule a hearing forthwith.
III. Conclusion
Defendants’ Motion to Reconsider the Court’s July 12, 2016
Order (ECF No. 227) is DENIED.

Plaintiffs’ Motion for Partial

Summary Judgment (ECF No. 212) is GRANTED in its entirety.
judgment

shall

enter

at

this

time,
25

however,

because

No

several

counts of the Consolidated Complaint remain to be litigated.
Plaintiffs’

Motion

for

Prejudgment

Attachment

and

Preliminary

Injunction (ECF No. 187) is deferred until Plaintiffs file a
supplemental memorandum, if any.
supplemental

memorandum

within

If Plaintiffs do not file a
60

dismiss the motion without prejudice.
IT IS SO ORDERED.

William E. Smith
Chief Judge
Date: February 27, 2017

26

days,

then

the

Court

will