DocketNumber： 95-1055
Filed Date： 11/21/1995
Status： Precedential
Modified Date： 3/3/2016
November 21, 1995 [NOT FOR PUBLICATION]
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________________
No. 95-1055
WILLIAM GABOVITCH, ETC.,
Plaintiff, Appellant,
v.
MAURICE SHEAR, ET AL.,
Defendants, Appellees.
____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. William G. Young, U.S. District Judge] ___________________
____________________
Before
Torruella, Chief Judge, ___________
Stahl and Lynch, Circuit Judges. ______________
____________________
William Gabovitch on brief pro se. _________________
Brian A. Davis, Julie B. Brennan, and Choate, Hall & Stewart on ______________ ________________ _______________________
brief for appellees.
____________________
____________________
Per Curiam. Pro se plaintiff William Gabovitch, a ___________
certified public accountant and non-practicing attorney,
served for nearly eighteen years as a co-trustee of two
irrevocable inter vivos trusts created by Maurice Shear. In
1992, in connection with litigation filed in 1987 by Gertrude
Shear (Maurice's wife and the contingent life beneficiary of
the trusts), a state court judge removed plaintiff from his
position as trustee and ordered him to pay substantial
damages because of his mismanagement of the trusts.
Plaintiff's appeal from that decision remains pending in
state appellate court. Claiming that the allegations of
mismanagement were frivolous and that his removal had been
fraudulently obtained, plaintiff pursued various collateral
actions in state court--all without avail. He then turned to
federal court, filing the instant civil RICO action against
the Shears (and others), seeking injunctive relief and
damages on behalf of both himself and the trusts. See 18 ___
U.S.C. 1964(c). The district court, following a hearing,
dismissed the complaint for failure to state a claim. Having
reviewed the record in full, and having construed the
complaint in the light most favorable to plaintiff, see, ___
e.g., Feinstein v. Resolution Trust Corp., 942 F.2d 34, 37 ____ _________ ______________________
(1st Cir. 1991), we now affirm.1
____________________
1. While we have accepted all well-pled allegations in the
complaint as true and drawn all reasonable inferences in
plaintiff's favor, there is an inconsistency in his
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Extended discussion is unnecessary. To state a RICO
claim, plaintiff was required to allege that defendants
conducted an enterprise through a pattern of racketeering
activity. See, e.g., Libertad v. Welch, 53 F.3d 428, 441 ___ ____ ________ _____
(1st Cir. 1995). As well, he was required to allege that he
suffered injury in his business or property "by reason of" a
RICO violation. 18 U.S.C. 1964(c); see, e.g., Sedima, ___ ____ _______
S.P.R.L. v. Imrex Co., 473 U.S. 479, 496 (1985) ("the ________ __________
plaintiff has standing if, and can only recover to the extent
that, he has been injured in his business or property by the
conduct constituting the [RICO] violation"); see also Holmes ________ ______
v. Securities Investor Protection Corp., 503 U.S. 258, 268 ______________________________________
(1992) (RICO plaintiff must allege, not only "but for"
causation, but also proximate causation requiring "some
direct relation between the injury asserted and the injurious
conduct alleged").
This causation requirement enables us, at the outset, to
put to the side vast portions of plaintiff's voluminous
complaint. For example, plaintiff has detailed numerous
instances of criminal and fraudulent activity allegedly
undertaken by various of the defendants during the 1970's and
____________________
narrative. The Shears' principal motivation for filing the
1987 lawsuit, plaintiff contends, was to remove him as
trustee and thereby gain control of the trusts' primary
asset--the Mount Pleasant Hospital. Yet plaintiff elsewhere
explains that the trusts had sold their interest in the
hospital the previous year (and only reacquired ownership
thereof in 1991).
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1980's. Yet no contention is made that such conduct resulted
in injury to plaintiff's business or property. In turn,
plaintiff charges that defendants have engaged in various
misdeeds following his ouster as trustee in January 1992.
Again, such actions are not linked to any business or
property loss suffered by plaintiff. We note that plaintiff
lacks standing to complain of injury to the trusts
themselves, having been removed as trustee by the time the
instant suit was filed. And the suggestion that his status
as a potential creditor of the trusts grants him standing to
sue on his own behalf is misplaced. See, e.g., id. at 271; ___ ____ ___
National Enterprises v. Mellon Financial Services, 847 F.2d ____________________ __________________________
251, 254 (5th Cir. 1988).
The only business or property injury alleged in the
complaint is that stemming from the state court judgment--
i.e., plaintiff's loss of his position as trustee; the
accompanying monetary damages; the resulting harm to his
reputation and client base; and the legal expenses incurred
in litigating that action. The question thus becomes whether
plaintiff has set forth a predicate act of racketeering that
has proximately caused such injury. Plaintiff insists he has
done so in two respects. He argues that the filing by
defendants of the state court suit (as part of a broader,
unlawful scheme) constituted attempted extortion in violation
of the Hobbs Act, 18 U.S.C. 1951. And he argues that
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Gertrude Shear, by proffering false affidavits and testimony
to the state court (allegedly at the behest of her husband),
committed mail fraud in violation of 18 U.S.C. 1341. We
disagree that such claims establish the necessary predicate
act.
Numerous courts have held that the filing of litigation-
-no matter how lacking in merit--does not constitute a
predicate racketeering act of extortion. "If a suit is
groundless or filed in bad faith, the law of torts may
provide a remedy. Resort to a federal criminal statute is
unnecessary." I.S. Joseph Co. v. J. Lauritzen A/S, 751 F.2d _______________ ________________
265, 267-68 (8th Cir. 1984); accord, e.g., First Pacific ______ ____ ______________
Bancorp, Inc. v. BRO, 847 F.2d 542, 545 (9th Cir. 1988); von _____________ ___ ___
Bulow by Auersperg v. von Bulow, 657 F. Supp. 1134, 1143-45 __________________ _________
(S.D.N.Y. 1987) (holding that malicious prosecution claim
does not constitute predicate act of racketeering).
Plaintiff's reliance on Hall American Center Assocs. v. Dick, ____________________________ ____
726 F. Supp. 1083 (E.D. Mich. 1989), proves unavailing. The
defendants there had engaged in spurious litigation described
by the district court as a "clear abuse of process." Id. at ___
1086. The defendants here prevailed in the state court suit.
And Lemelson v. Wang Laboratories, Inc., 874 F. Supp. 430 (D. ________ _______________________
Mass. 1994), offers minimal succor to plaintiff, since the
court there was addressing the subject of RICO injury rather
than predicate acts.
-6-
Plaintiff's mail fraud claim likewise proves deficient.
For one thing, it lacks the specificity required by Fed. R.
Civ. P. 9(b). See, e.g., New England Data Services, Inc. v. ___ ____ _______________________________
Becher, 829 F.2d 286, 290 (1st Cir. 1987).2 Moreover, to ______
the extent his argument amounts to the allegation that
Gertrude Shear committed perjury, his cause would not be
advanced; perjury does not constitute an act of racketeering.
See, e.g., Pyramid Securities, Ltd. v. IB Resolution, Inc., ___ ____ ________________________ ___________________
924 F.2d 1114, 1118-19 (D.C. Cir.), cert. denied, 502 U.S. ____________
822 (1991); United States v. Williams, 874 F.2d 968, 973 n.17 _____________ ________
(5th Cir. 1989).
To be sure, as plaintiff observes, several courts have
indicated that a mail fraud claim premised largely on charges
of perjury can suffice as a predicate act. See, e.g., United ___ ____ ______
States v. Eisen, 974 F.2d 246, 254 (2d Cir. 1992) ("use of ______ _____
the mail fraud offense as a RICO predicate act cannot be
suspended simply because perjury is part of the means for
perpetrating the fraud"), cert. denied, 113 S. Ct. 1840 _____________
____________________
2. The suggestion that the information concerning
defendants' use of the mails was in their exclusive control--
such that plaintiff should be allowed to amend his complaint
following further discovery, see, e.g., Becher, 829 F.2d at ___ ____ ______
290--falls short. As a party to the state court suit,
plaintiff obviously was (or should have been) aware of the
circumstances surrounding the defendants' submission of
allegedly fraudulent affidavits to the court. See, e.g., ___ ____
Feinstein, 942 F.2d at 44 ("Although Becher may in certain _________ ______
circumstances give a plaintiff a second bite at the apple,
its generous formulation is not automatically bestowed on
every litigant.").
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(1993); see also Midwest Grinding Co. v. Spitz, 976 F.2d _________ _____________________ _____
1016, 1022-23 (7th Cir. 1992) (leaving question open). Here,
however, perjury is said to constitute the entire means for
perpetrating the fraud. As well, the Midwest Grinding court ________________
noted that in cases "allowing perjury to serve as a predicate
act [by way of a mail fraud or obstruction of justice
allegation], ... the defendant had either been convicted of
perjury before the civil RICO action commenced or had perjury
established as a matter of record in a separate proceeding."
Id. at 1022 n.3 (citations omitted). Nothing of the sort has ___
occurred here; quite to the contrary, the state court deemed
Gertrude Shear's evidence credible.
In essence, simply by alleging that defendants'
litigation stance in the state court case was "fraudulent,"
plaintiff is insisting upon a right to relitigate that entire
case in federal court (while the case remains pending in the
state appellate court). The RICO statute obviously was not
meant to endorse any such occurrence. Cf. Willis v. Lipton, ___ ______ ______
947 F.2d 998, 1001 (1st Cir. 1991) ("An extension of RICO
standing in these circumstances would serve to 'federalize' a
substantial volume of common law fraud litigation
traditionally left to state courts.").3
____________________
3. Plaintiff's two remaining arguments can be readily
rejected. The district court was not required to convert
defendants' motion to dismiss into one for summary judgment
before taking judicial notice of court papers from the state
court litigation. See, e.g., Edward v. John Hancock Mutual ___ ____ ______ ___________________
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Affirmed. _________
____________________
Life Ins. Co., 973 F.2d 1027, 1030 n.1 (1st Cir. 1992); Mack _____________ ____
v. South Bay Beer Distributors, Inc., 798 F.2d 1279, 1282 __________________________________
(9th Cir. 1986). Nor did it abuse its discretion in denying
plaintiff's post-judgment request to amend his complaint
(following further discovery), where any such amendment would
have been futile. See, e.g., Arzuaga-Collazo v. Oriental ___ ____ _______________ ________
Federal Sav. Bank, 913 F.2d 5, 7 (1st Cir. 1990); Nodine v. _________________ ______
Textron, Inc., 819 F.2d 347, 349 (1st Cir. 1987). _____________
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A. Greer Edwards, Jr. v. John Hancock Mutual Life Insurance ... , 973 F.2d 1027 ( 1992 )
united-states-v-douglas-williams-aka-doug-buford-salter-aka , 874 F.2d 968 ( 1989 )
National Enterprises, Inc. v. Mellon Financial Services ... , 847 F.2d 251 ( 1988 )
midwest-grinding-company-inc-an-illinois-corporation-cross-appellee-v , 976 F.2d 1016 ( 1992 )
Hall American Center Associates Ltd. Partnership v. Dick , 726 F. Supp. 1083 ( 1989 )
Dana Willis v. Kevin Lipton , 947 F.2d 998 ( 1991 )
Von Bulow Ex Rel. Auersperg v. Von Bulow , 657 F. Supp. 1134 ( 1987 )
William C. Feinstein v. Resolution Trust Corporation, Etc. , 942 F.2d 34 ( 1991 )
Henry G. Mack v. South Bay Beer Distributors, Inc., Dba Bay ... , 798 F.2d 1279 ( 1986 )
Lydia Libertad v. Father Patrick Welch , 53 F.3d 428 ( 1995 )
Lemelson v. Wang Laboratories, Inc. , 874 F. Supp. 430 ( 1994 )
William R. Nodine v. Textron, Inc. , 819 F.2d 347 ( 1987 )
Jose Lorenzo Arzuaga-Collazo v. Oriental Federal Savings ... , 913 F.2d 5 ( 1990 )
Pyramid Securities Limited v. Ib Resolution, Inc , 924 F.2d 1114 ( 1991 )
Sedima, S. P. R. L. v. Imrex Co. , 105 S. Ct. 3275 ( 1985 )
united-states-v-morris-j-eisen-joseph-p-napoli-harold-m-fishman , 974 F.2d 246 ( 1992 )
New England Data Services, Inc. v. Barry Becher , 829 F.2d 286 ( 1987 )
is-joseph-company-inc-a-minnesota-corporation-v-j-lauritzen-as-a , 751 F.2d 265 ( 1984 )