Cesnik v. Edgewood Baptist Church , 88 F.3d 902 ( 1996 )

[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
No. 95-8151
D. C. Docket No. 93-CV-141-COL
BLANE CESNIK, KRISTI CESNIK,
Plaintiffs-Appellants,
versus
EDGEWOOD BAPTIST CHURCH, d/b/a New
Beginnings Adoption and Counseling
Agency, et al.,
Defendants-Appellees.
Appeal from the United States District Court
for the Middle District of Georgia
(July 5, 1996)
Before TJOFLAT, Chief Judge, CARNES, Circuit Judge, and FAY,
Senior Circuit Judge.
TJOFLAT, Chief Judge:
This case arises out of the adoptions of two newborn babies.
The adopting parents contend that the adoption agency
deliberately misrepresented that the infants were healthy when,
in fact, they were severely mentally and physically disabled.
The adopting parents brought this suit against the church that
operates the adoption agency and against three individuals
involved directly or indirectly in the adoptions. The parents'
complaint presented multiple common-law and statutory (both state
and federal) tort claims and a claim for breach of contract. On
motion for summary judgment, the district court dismissed all of
the parents' claims. This appeal followed.
With respect to the common-law tort claims, we are able to
say with confidence that the district court was correct in
relying on the statute of limitations to bar the claims. With
respect to the remainder of the appellants' claims, however, all
that we can say is that, with a few exceptions, the district
court's granting of summary judgment cannot be sustained on this
record. Our review of these claims is limited because the
appellants have presented us with a "shotgun" complaint, which is
so muddled that it is difficult to discern what the appellants
are alleging beyond the mere names of certain causes of action.
We begin this opinion with a statement of the facts, which
we glean from the depositions and affidavits that the parties
presented to the district court in support of and in opposition
2
to the appellees' joint motion for summary judgment. In drawing
this statement of facts, we consider the evidence in the record
in the light most favorable to the non-movants, the appellants.
See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.
Ct. 2505, 2513, 91 L. Ed. 2d 202 (1986). After setting out the
facts, we examine the appellants' complaint, and the district
court's reasons for disposing of appellants' claims. We then
explain why summary judgment was appropriate on some of
appellants' claims and why some of their claims should not have
been disposed of summarily.
I.
Blane and Kristi Cesnik, who live in St. Cloud, Minnesota,
are the parents of four severely mentally and physically disabled
children, all of whom they have adopted. They adopted their two
youngest children, Caleb and Eli, through the New Beginnings
Adoption and Counseling Agency, an unincorporated entity operated
by the Edgewood Baptist Church, a corporation organized under
Georgia law with its place of business in Columbus.1
In November of 1989, Kristi Cesnik called Phoebe Dawson, the
director of New Beginnings, and told Dawson that she and her
husband were seeking to adopt a healthy, non-disabled child of
any sex and any race. On November 20, 1989, a baby boy, whom the
Cesniks would name Caleb, was born at a hospital in Columbus.
1
The Cesniks adopted two disabled girls prior to the
adoptions that are the subject of this lawsuit. New Beginnings
was not involved with those prior adoptions.
3
Dawson contacted the Cesniks by telephone and told them that she
had obtained and reviewed the medical records of Caleb's
delivery, including the results of tests that the Cesniks had
asked to be performed. Dawson told them that all of the medical
records and other information she had obtained indicated that the
boy was perfectly healthy. Dawson also told the Cesniks that
Caleb's birth mother had received prenatal care since the sixth
week of pregnancy and that she had not used drugs during the
pregnancy.
Dawson delivered Caleb to the Cesniks on December 10, 1989,
at an airport in Minnesota. The Cesniks soon noticed that Caleb
had health problems. Four to six months after the placement, the
Cesniks received Caleb's medical records.2 The records showed
that the birth mother had, in fact, received no prenatal care,
that she had tested positive for opiates and barbiturates at the
time of delivery, that the delivery had been complicated, and
that Caleb had been born prematurely. The Cesniks' doctors soon
diagnosed Caleb with cerebral palsy, asthma, developmental
disorders, and severe behavioral problems. The doctors suspect
that most or all of these conditions were caused by exposure to
drugs and alcohol during the pregnancy and by a lack of prenatal
care.
2
At the time of Caleb's placement, the Cesniks signed a
form that stated that they had received Caleb's medical records.
This statement was not true. Dawson had told the Cesniks that
signing the form at that time would make it unnecessary for her
to make another trip to Minnesota.
4
When the Cesniks asked Dawson about the discrepancy between
the medical records and what she had told them, Dawson explained
that she had not actually reviewed Caleb's medical records before
he was placed with the Cesniks because the records had been
switched at the New Beginnings agency with those of another
mother with the same name. Dawson also claimed that Caleb's
birth mother had lied about her condition and her use of drugs.
The Cesniks accepted Dawson's explanations. The adoption of
Caleb became final on July 10, 1990.
In December of 1990, the Cesniks contacted New Beginnings
again, seeking to adopt a healthy, non-disabled, black or mixed-
race child.3 On February 12, 1991, a baby boy, whom the Cesniks
would name Eli, was born at a hospital in Columbus. Dawson
contacted the Cesniks by telephone and told them that she had
obtained and reviewed the medical records of Eli's delivery,
including the results of tests that the Cesniks had asked to be
performed. Dawson told them that all of the medical records and
other information she had obtained indicated that the boy was
perfectly healthy. Dawson also told the Cesniks that Eli's birth
mother had received prenatal care since the early stages of her
pregnancy, and that Dawson knew the birth mother's personal
history, including the fact that the birth mother had not used
drugs during the pregnancy.
3
The Cesniks sought a black or mixed-race child in the
interest of Caleb, who is black.
5
Dawson delivered Eli to the Cesniks on April 6, 1991, at an
airport in Minnesota. The Cesniks soon noticed that Eli had
health problems, and they contacted Dawson by telephone and
requested his medical records.4 The agency sent the medical
records a week or two later. The records showed that Eli's birth
mother had, in fact, received no prenatal care and that she had
experienced severe preeclampsia and toxemia. Furthermore, no
drug test had been performed on Eli at the time of birth, as had
been requested by the Cesniks. A drug test performed on April 1
indicated the presence of codeine and morphine, although that may
have been the result of medication that Eli was taking at the
time. The records also showed that Eli had intrauterine growth
retardation and low Apgar scores. The Cesniks' doctors soon
diagnosed Eli with cerebral palsy, pseudobulbar palsy, asthma,
stomach problems, fetal alcohol syndrome, facial deformities,
colitis, a sleeping disorder, and behavior problems associated
with autism. The doctors suspect, as they do with Caleb, that
most or all of these conditions were caused by exposure to drugs
and alcohol during the pregnancy and by a lack of prenatal care.
When the Cesniks asked Dawson about the discrepancy between
the medical records and what she had told them, Dawson explained,
as she did after Caleb's placement, that she had not actually
reviewed Eli's medical records before he was placed with the
Cesniks because the records had been switched at the New
4
Just as they did at the time of Caleb's placement, the
Cesniks signed a form that stated that they had received Eli's
medical records. Again, this statement was not true.
6
Beginnings agency with those of another mother with a similar
name. Dawson also claimed that Eli's birth mother had lied about
her condition and her use of drugs. This time, the Cesniks did
not accept Dawson's explanations.
On July 21, 1991, shortly after the Cesniks began making
inquiries about receiving an adoption assistance subsidy from the
state of Georgia for the two boys,5 Dawson met the Cesniks at
their home in Minnesota. Holding Eli in her arms, Dawson told
the Cesniks that she could withhold her consent to the Cesniks'
adoption of the boy if there was any further discussion of his
medical condition or if the Cesniks did not keep quiet about what
had happened. After this incident, the Cesniks had no further
contact with Dawson. The adoption of Eli became final on
September 26, 1991.
In August of 1992, the Cesniks made a formal complaint to
the Georgia Department of Human Resources about the manner in
which New Beginnings handled the placements of Caleb and Eli.
The state agency investigated, found various deficiencies in New
Beginnings' adoption procedures, and required the agency to take
corrective action.
5
The Georgia Department of Human Resources provides
federally subsidized adoption assistance payments for children
with "special needs," including mental and physical disabilities.
See Social Security Act of 1935, 42 U.S.C. § 673 (1994).
7
II.
On December 9, 1993, the Cesniks filed a complaint in the
United States District Court for the Middle District of Georgia
against the Edgewood Baptist Church, Andy Merritt (the associate
pastor of Edgewood Baptist Church who had supervisory authority
over New Beginnings), Phoebe Dawson (the executive director of
New Beginnings), and Mary Ellen Slaughter Winton (the social case
worker hired by New Beginnings to work with Eli's birth mother
during her pregnancy). The complaint consists of three counts,
which are preceded by ninety-nine numbered paragraphs of factual
recitations that are incorporated by reference into each of the
three counts. In addition, count two incorporates all of the
allegations -- including the causes of action -- of count one,
and count three, in turn, incorporates all of the allegations --
including the causes of action -- of counts one and two.
The complaint is the sort of "shotgun" notice pleading we
encountered in Anderson v. District Bd. of Trustees, 77 F.3d 364,
366-67 (11th Cir. 1996), and in scores of other cases -- both
reported and unreported -- that have come before this court.6 It
was framed in complete disregard of the principle that separate,
discrete causes of action should be plead in separate counts.
Anderson, 77 F.3d at 366. Count one, for example, which is
6
See, e.g., Fikes v. City of Daphne, 79 F.3d 1079, 1082-83
(11th Cir. 1996); Beckwith v. City of Daytona Beach Shores, 58
F.3d 1554, 1567 (11th Cir. 1995); Pelletier v. Zweifel, 921 F.2d
1465, 1517-18 (11th Cir.), cert. denied, 502 U.S. 855, 112 S. Ct.
167, 116 L. Ed. 2d 131 (1991); T.D.S. Inc. v. Shelby Mut. Ins.
Co., 760 F.2d 1520, 1543-44 n.14 (11th Cir. 1985) (Tjoflat, J.,
dissenting).
8
labeled "Wrongful Placement and Adoption," purports to plead at
least nine discrete theories of recovery. After alleging that
the Cesniks were induced by the appellees' misrepresentations to
adopt Caleb and Eli, the count states the following:
This count of the Complaint encompassed by the claim of
"Wrongful Placement and Adoption" and sounding in tort law,
includes but is not limited to the common law torts of
negligent breach of duty; negligent hiring, training,
supervision, discipline and retention of personnel;
negligence per se; breach of fiduciary relationship;
misrepresentation; fraud in the inducement and the act;
undue influence; duress; and intentional infliction of
emotional distress.
Nowhere in count one do the Cesniks set forth any of the elements
of these separate causes of action or the facts underpinning
them. Rather, a reader of the pleading must discern these things
for himself.
Count two is labeled "Breach of Contract." The count
alleges that in 1989 and again in 1991 the Cesniks and New
Beginnings entered into a contract for the placement of a healthy
baby. Count two does not, however, indicate whether the contract
was reduced to writing, nor does it recite the provision(s) of
the contract that New Beginnings breached.7 All that is alleged
is that "the defendants breached their contractual agreement with
the plaintiffs for the placement and adoption of the plaintiffs'
sons Caleb and Eli."
Count two also presents a claim for fraud with the following
allegation: "The defendants fraudulently took monies for the
7
Count two seeks to hold the individual defendants, as
well as the church, liable for breaching a contract as to which
the individual defendants are not parties.
9
placement of the plaintiffs' sons Caleb and Eli which were not
earned, were for services not provided, were for expenses not
incurred, and/or were not paid to the parties for whom the
Cesniks were billed." In addition, of course, by incorporating
all of the allegations of count one, count two alleges all of the
other tort claims alleged in count one.
Count three is labeled "Federal and State Conspiracy." As
we explain below, count three may be alleging five discrete
causes of action: three federal claims and two state claims.
Count three alleges the following (with respect to both the
Cesniks' federal and state claims):
All defendants . . . came to a mutual understanding to
try to accomplish a common and unlawful plan, namely to
engage in a "pattern of racketeering activity."
. . .
At the time the defendants knowingly and willingly
agreed to join such a conspiracy, they did so with the
specific intent to participate in at least two (2) of the
predicate mail fraud and wire fraud offenses.
Defendants knowingly and wilfully used the mails for
communication and telephones for conversations in Interstate
Commerce or caused to be transmitted by mail or wire in
Interstate Commerce communications for the purpose of
executing their scheme to defraud. 18 U.S.C. § 1341 and
1343.
Said conspiracy is actionable under 18 U.S.C. § 1962 et
seq. and O.C.G.A. § 16-4-1 et seq.
Under the Racketeer Influenced and Corrupt Organizations Act
("RICO"), 18 U.S.C. §§ 1961-1968 (1994) (as added by the
Organized Crime Control Act of 1970, Pub. L. No. 91-452,
§ 901(a), 84 Stat. 922, 941-48), it is illegal for persons to
10
engage in, or aid and abet another to engage in, a pattern
of racketeering activity if they also do the following:
invest income derived from the pattern of racketeering
activity in the operation of an enterprise engaged in
interstate commerce (section 1962(a)); acquire or maintain,
through the pattern of racketeering activity, any interest
in or control over such an enterprise (section 1962(b)); or
conduct, or participate in the conduct of, the affairs of
such an enterprise through a pattern of racketeering
activity (section 1962(c)). Section 1962(d) makes it a
crime to conspire to violate sections 1962(a), (b), or (c).
Pelletier v. Zweifel, 921 F.2d 1465, 1495-96 (11th Cir.), cert.
denied, 502 U.S. 855, 112 S. Ct. 167, 116 L. Ed. 2d 131 (1991).8
RICO provides a civil remedy for the victims of these section
1962 crimes, as follows: "Any person injured in his business or
property by reason of a violation of [18 U.S.C. § 1962] may sue
therefor in any appropriate United States district court and
shall recover threefold the damages he sustains and the cost of
the suit, including a reasonable attorney's fee." 18 U.S.C. §
1964(c).9
Count three alleges that the defendants were engaged in a
"conspiracy," presumably in violation of 18 U.S.C. § 1962(d). To
state a claim for damages suffered by reason of a violation of
8
An act of "racketeering," commonly called a predicate
act, is defined to include "any act which is indictable under
. . . [18 U.S.C. §] 1341 (relating to mail fraud), [and 18 U.S.C.
§] 1343 (relating to wire fraud)." 18 U.S.C. § 1961(1)(B). The
elements of mail and wire fraud are identical. "Mail or wire
fraud occurs when a person (1) intentionally participates in a
scheme to defraud another of money or property and (2) uses the
mails or wires in furtherance of that scheme." Pelletier, 921
F.2d at 1498.
9
Count three makes no reference to 18 U.S.C. § 1964(c).
We treat the Cesniks' allegation that the conspiracy is
"actionable under 18 U.S.C. § 1962 et seq." as stating a claim
for relief under section 1964(c).
11
section 1962(d), a plaintiff must allege that the defendants
conspired to violate one of the substantive provisions of 18
U.S.C. § 1962(a)-(c). The complaint nowhere indicates, however,
which crime the defendants allegedly conspired to commit. We are
left to speculate whether the Cesniks seek to state a claim for
damages by reason of a conspiracy to violate section 1962(a) or
(b) or (c).10 Finally, to state a RICO claim a plaintiff must
describe the "enterprise" involved in the defendant's scheme, for
without an enterprise there can be no RICO violation. See 18
U.S.C. § 1962(a)-(c). The word "enterprise" appears nowhere in
the complaint.11
Count three also possibly asserts two claims for relief
under the Georgia RICO (Racketeer Influenced and Corrupt
Organizations) Act, O.C.G.A. §§ 16-14-1 to 16-14-15 (1992 & Supp.
10
In their brief to the district court in opposition to
the appellees' joint motion for summary judgement, the Cesniks
did not inform the court which sections the appellees allegedly
conspired to violate.
11
Nor does the word "enterprise" appear in the Cesniks'
brief in opposition to the appellees' joint motion for summary
judgment. In the section of the Cesniks' appellate brief
concerning federal RICO, the word "enterprise" appears only in a
quotation from section 1962.
12
1995). Those claims are described in the margin;12 they suffer
the same infirmities as their federal counterparts.
Despite the fact that the Cesniks' complaint, especially
count three, is so disorganized, the appellees did not move the
district court to require the Cesniks to file a more definite
statement. See Fed. R. Civ. Proc. 12(e). Nor did the court
require one.13 Instead, the appellees opted to file an answer.
They admitted that the adoptions took place, but denied liability
under any of the appellants' theories of recovery. The appellees
also plead several affirmative defenses, including that the
12
There are two substantive criminal provisions in the
Georgia RICO statute:
(a) It is unlawful for any person, through a pattern of
racketeering activity or proceeds derived therefrom, to
acquire or maintain, directly or indirectly, any interest in
or control of any enterprise, real property, or personal
property of any nature, including money.
(b) It is unlawful for any person employed by or
associated with any enterprise to conduct or participate in,
directly or indirectly, such enterprise through a pattern of
racketeering activity.
O.C.G.A. § 16-14-4. Like 18 U.S.C. § 1962(d), O.C.G.A. § 16-14-
4(c) makes it illegal "to conspire or endeavor to violate any of
the provisions of subsection (a) or (b) of [O.C.G.A. § 16-14-4]."
O.C.G.A. § 16-14-6(c) provides a victim of these crimes a
civil remedy in much the same fashion as does 18 U.S.C. §
1964(c). We treat the allegation in the Cesniks' complaint that
the alleged conspiracy is "actionable under . . . O.C.G.A. § 16-
14-1 et seq." as stating a claim for relief under section 16-14-
6(c).
13
The court clearly had the discretion to strike, on its
own initiative, the Cesniks' complaint, and to require the
Cesniks to file a more definite statement. See Anderson, 77 F.3d
at 367 n.5.
13
complaint failed to state a claim for relief and that the statute
of limitations barred the Cesniks' claims.
Following extensive discovery, the district court granted
the appellees' motion for summary judgment as to all of the
Cesniks' claims for relief. The court read the Cesniks'
complaint as having presented several tort claims, a claim for
breach of contract, and claims "under the federal and state
conspiracy statutes." The court referred to the Cesniks' common-
law tort claims as claims for "personal injury, mental and
physical," claims under the "remaining theories under the tort of
wrongful adoption and placement,"14 and a "claim for fraud."
The district court concluded that the Cesniks' common-law
tort claims were barred by the applicable two-year statute of
limitations. It concluded that the Cesniks' contract claim was
foreclosed because they "could have avoided" the injury they
allegedly sustained
by the use of reasonable effort after they learned of the
mental and physical conditions of the children because under
the terms of the placement agreement the Plaintiffs could
simply have ended the adoption proceedings and could have
returned the children to the Agency.
Finally, the court found no merit in the Cesniks' federal and
state RICO claims because the record contained no evidence of a
conspiracy to defraud the Cesniks or the predicate acts of mail
or wire fraud. The court said nothing regarding the Cesniks'
14
In referring to the "remaining theories under the tort
of wrongful adoption and placement," we assume that the court was
referring to some or all of the tort theories described in count
one (labeled "wrongful placement and adoption" by the
appellants), which we quote in the text supra.
14
failure to describe the enterprise allegedly involved in the
appellees' conspiracy; nor did it indicate which substantive
provision of 18 U.S.C. § 1962 the appellees were supposed to have
conspired to violate. In short, the court did not consider
whether count three of the complaint stated a claim for relief.
III.
We are satisfied that the statute of limitations bars
whatever tort claims the Cesniks may have had under Georgia
common law. Accordingly, we affirm the district court's summary
disposition of those claims. As for the Cesniks' remaining
claims -- the claim for breach of contract and the claims under
the federal and Georgia RICO statutes -- with a few exceptions,
we are unable, on the state of the record before us, to sustain
the court's judgment. We first consider the common-law tort
claims.
A.
Although the district court did not identify all of the
Cesniks' common-law tort claims -- it referred to many of them as
the "remaining theories under the tort of wrongful adoption and
placement,"15 -- it concluded that all of them were barred by the
two-year statute of limitations because all of the alleged
tortious acts occurred (at the latest) prior to September 26,
15
Neither the Cesniks nor the district court cited any
authority for the proposition that Georgia recognizes a tort of
"wrongful adoption and placement," and we have found none.
15
1991 (the date of Eli's adoption), and the suit was not filed
until December 12, 1993. See O.C.G.A. §§ 9-3-33, 9-3-96
(1982).16 The Cesniks argue, however, that the running of the
period of limitations was tolled when Phoebe Dawson made her
threat at the Cesniks' home on July 21, 1991. The Cesniks claim
that after that date they were unable to take any sort of legal
action against the appellees out of fear that the agency might
take reprisals -- either by withholding the agency's consent to
the adoption of Eli,17 or by making it difficult for the Cesniks
to receive an adoption subsidy from the state of Georgia. This
fear supposedly persisted from the time of the threat until May
18, 1993, when the Georgia Department of Human Resources notified
the Cesniks that they would receive an adoption subsidy. The
Cesniks argue that the running of the period of limitations was
tolled during the twenty-seven months that they were under the
duress caused by Dawson's threat, and that therefore their claim
was filed within the limitations period.18 We do not agree.
16
O.C.G.A. § 9-3-96 provides that "[i]f the defendant . .
. [is] guilty of a fraud by which the plaintiff has been debarred
or deterred from bringing an action, the period of limitation
shall run only from the time of the plaintiff's discovery of the
fraud." The Cesniks did not discover the fraud associated with
the placements of Caleb and Eli until the boys' medical records
were sent to them by mail. Thus, in the case of Caleb, the
period of limitations began running in May of 1990; in the case
of Eli, in April of 1991.
17
Caleb's adoption had been final for a year before July
21, 1991, the day that Dawson made her threat. Eli's adoption,
however, was not final until September 26, 1991.
18
The Cesniks claim that the statute ran for 21 months in
the case of Caleb (from May of 1990, when the fraud was
discovered, to July 21, 1991, when Dawson made her threat, and
16
The record shows that shortly after the Cesniks began making
efforts to get a state adoption subsidy, Phoebe Dawson flew to
Minnesota and met the Cesniks in their home. Dawson asked to
hold Eli, and, once the child was in her arms, she is alleged to
have stated something to this effect: "This child is in my
custody. I can withhold [our] consent to adopt if there is any
more discussion of [Eli] being handicapped or drug exposed [or if
you do] not keep quiet about what ha[s] happened." Dawson then
handed Eli back and left the home. Dawson and the Cesniks had no
further contact.
The Cesniks claim that this threat put them in fear of
losing Eli if they took any action against the agency. But this
fear could have been reasonable only until August 8, 1991
(eighteen days after the threat), when New Beginnings gave its
consent to Eli's adoption. The Cesniks claim that after Eli's
adoption they feared that the agency might block their attempts
to receive an adoption subsidy for both Caleb and Eli from the
state of Georgia. But Dawson made no such threat, and it is not
clear that Dawson or New Beginnings had any influence in this
matter whatsoever. Moreover, the fear of retaliation by New
Beginnings was evidently not so great as to keep the Cesniks from
filing an administrative complaint against the adoption agency in
again from May of 1993, when the adoption subsidy was approved,
to December 9, 1993, when the claim was filed in district court),
and for 9½ months in the case of Eli (from April of 1991, when
the fraud was discovered, to July 21, 1991, and again, as with
Caleb, from May of 1993, to December 9, 1993). The period of
limitations is 24 months.
17
August of 1992.19 In sum, we find that there was no reasonable
basis for a claim of duress after August 8, 1991, which was more
than two years prior to the filing of the lawsuit.20 The
district court was thus correct in deciding that the statute of
limitations barred the appellants' common-law tort claims.
B.
The district court rejected the Cesniks' contract claim on
the ground that they could have mitigated their damages in full
by returning the children to New Beginnings, as provided in the
placement agreement. The problem with this holding is that
19
The Cesniks also offer no explanation for why they
waited another seven months after the approval of the adoption
subsidy to sue the agency.
20
We do not mean to suggest that a reasonable claim of
duress would necessarily have tolled the running of the statute
of limitations in this case. Duress is not one of the enumerated
conditions that tolls the statute of limitations under Georgia
law. See O.C.G.A. §§ 9-3-90 to 9-3-97.1 (1982 & Supp. 1995).
Moreover, we find no authority for the proposition that duress,
as a matter of Georgia common law or equity, can toll the statute
of limitations for a cause of action that is not itself based on
a claim of duress. Indeed, what little authority we have found
on the subject suggests that such a proposition could be
maintained in very few states. See Cooper v. Fidelity-Phila.
Trust Co., 201 F. Supp. 168, 170 (E.D. Pa. 1962) ("There is
little authority for the proposition that 'duress' tolls the
running of the statute of limitation."); Baratta v. Kozlowski,
464 N.Y.S.2d 803, 807 (App. Div. 1983) ("[R]eluctance [of courts]
to recognize duress as a toll [may lie] in the undesirability of
a rule that turns on the reasonableness of reliance upon threats
of physical or economic harm, the ease of fabrication of such
threats, or simply in the judicial reluctance to create an
entirely new defense to the [s]tatute of [l]imitations.")
(citations omitted); see also Annotation, Duress or Undue
Influence as Tolling or Suspending Statute of Limitations, 121
A.L.R. 1294 (1939); 51 Am. Jur. 2d. Limitation of Actions § 177
(1970); 54 C.J.S. Limitations of Actions § 92 (1987).
18
neither the complaint nor the court describes the placement
agreement. We will assume for sake of argument, however, that
New Beginnings breached the placement agreement when it
misrepresented the condition of the boys' health. We further
assume that upon the agency's breach the Cesniks could have
cancelled the agreement with New Beginnings and returned the
children to the agency. The question then becomes whether the
Cesniks were required to do so, or else suffer the consequences.
The situation is analogous to a seller misrepresenting the
quality of goods being sold to a buyer. Ordinarily, a buyer of
goods that are not of the quality represented has two options.
He can rescind the transaction by returning the goods to the
seller and demanding a return of the purchase price, or he can
stand on the transaction and sue for damages -- measured by the
difference in value between the goods as represented and the
goods as received. Here, the Cesniks kept the children and seek
to recover the expenses they will incur in excess of those they
would have incurred had the children not been disabled.
The district court held, in effect, that the Cesniks did not
have the option of standing on the contract and suing for
damages. Rather, according to the court, the Cesniks had but one
remedy: rescission. The court cited no authority for its
holding and the appellees have likewise cited none; nor can we
find any.21 Under the circumstances, we cannot sustain the
21
The appellees have cited statutes and cases that stand
for the proposition that, under the law of Georgia, a claimant
has a duty to mitigate his damages. This proposition, which is
19
court's summary rejection of the Cesniks' claim for breach of
contract against the Edgewood Baptist Church. Because there is
nothing in the record, however, that indicates that appellees
Dawson, Merritt, and Winton were parties to the Cesniks' contract
with the church, we affirm the district court's disposition of
the breach of contract claim brought against them individually.
C.
As we have pointed out, the pleading of the Cesniks' federal
and state RICO claims, in count three of their complaint, is
woefully deficient. Count three does not cite the crimes (under
18 U.S.C. § 1962 and O.C.G.A. § 16-14-4) that the defendants
allegedly conspired to commit. Nor does the pleading describe
the "enterprise" involved in the conspiracy.22 If ever there was
a need for a more definite statement, it was with respect to
count three.
well founded in the common law, speaks to the issue of damages;
it does not address the question whether the claimant can state a
cause of action for breach of contract. Assuming that, on
remand, the Cesniks can state a claim for breach of contract, the
extent to which they may have failed to mitigate their damages
will be a question to be resolved in litigating the issue of
damages.
22
The appellees did not base their joint motion for
summary judgment on this deficiency, however, and the district
court did not cite it as a ground for granting summary judgment.
We therefore do not consider whether we should exercise our
authority to affirm a district court's judgment dismissing a case
on a ground not relied upon by the district court -- in this
instance, on the ground that the appellants failed to articulate
an indispensable element of a federal or state RICO claim.
20
The district court did not reject these claims because they
were inadequately plead, however. Rather, the court concluded
that the Cesniks could not make out a federal or state RICO claim
because they had presented no evidence of (1) a conspiracy or (2)
predicate acts of mail or wire fraud. We are convinced that,
with the exception of appellee Winton, the court erred on these
two points.
With respect to the first point, a reasonable jury could
find from the evidence in the record that defendant Dawson
misrepresented the boys' health for the purpose of inducing the
Cesniks to accept them for adoption, that appellee Merritt
participated in or was aware of the scheme,23 and that their
conduct implicated the church.24 As for the second point, the
facts we have recited, in part II supra, establish (for purposes
of summary judgment) a scheme to defraud and several uses of the
mails and wires in furtherance of that scheme.25
23
In contrast, the appellants have pointed to no evidence
in the record, and we find none, sufficient to permit a
reasonable jury to find that appellee Winton either participated
in or was aware of the alleged conspiracy among Dawson, Merritt,
and the church to defraud the Cesniks. (Winton did not become a
employee of New Beginnings until after Caleb's placement; she is
alleged to have participated in Dawson's scheme only with respect
to Eli.) We thus affirm the district court's granting of summary
judgment in favor of Winton.
24
We express no view as to whether, under 18 U.S.C.
§ 1962(d), a corporation can be held to have conspired with one
of its employees.
25
The statute of limitations for a RICO claim is four
years under the federal statute, see Agency Holding Corp. v.
Malley-Duff & Assocs., Inc., 483 U.S. 143, 156, 107 S. Ct. 2759,
2767, 97 L. Ed. 2d 121 (1987), and five years under Georgia RICO,
see O.C.G.A. § 16-14-8. The record discloses uses of the mail
21
IV.
In conclusion, we affirm the district court's judgment
dismissing count one of the appellants' complaint. As to count
two, we affirm the court's judgment in favor of appellees Dawson,
Merritt, and Winton, but vacate its judgment in favor of the
church and remand for further proceedings. With respect to count
three, we affirm the court's judgment in favor of appellee
Winton, but vacate its judgment in favor of the remaining
appellees. As to these appellees, count three is remanded for
further proceedings.
Because the allegations of counts two and three are so
muddled, we instruct the district court, before proceeding
further in this case, to require the appellants to replead counts
two and three of their complaint. With respect to count two, the
appellants shall allege only a breach of contract -- assuming
that they wish to pursue such a claim. If the contract on which
their claim is based is in writing, the appellants shall either
attach the writing to the complaint, or recite the provision(s)
of the contract that they contend give rise to their action for
breach.
In repleading count three, the appellants shall state only
one claim for relief. If they wish to state a claim under the
federal RICO statute, they shall indicate the statutory
and the telephone within four years of the filing of this law
suit.
22
provision(s) giving rise to such claim and shall also describe
the enterprise involved in the RICO violation. If the appellants
wish to state a claim under the Georgia RICO statute, they shall
do so in a new count.
More need not be said.
SO ORDERED.
23