Richard S. Lehman v. Margarita Arias Piza

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[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 12-14126
________________________
D.C. Docket No. 1:11-cv-23479-RNS
RICHARD S. LEHMAN,
RICHARD S. LEHMAN, P.A.,
WILSON C. LUCOM TRUST FUND FOUNDATION,
Plaintiffs - Appellants,
versus
HILDA PIZA LUCOM,
MADELAINE ARIAS PIZA, et al.,
Defendants,
MARGARITA ARIAS PIZA,
MELINDA ISABEL ARIAS DE MORRICE,
FRANK MORRICE,
EDNA RAMOS CHUE,
Defendants - Appellees.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(August 28, 2013)
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Before TJOFLAT and WILSON, Circuit Judges, and PROCTOR, * District Judge.
WILSON, Circuit Judge:
Civil actions under the Racketeering Influenced and Corrupt Organizations
Act (RICO), 18 U.S.C. §§ 1961–1968, are subject to a four-year statute of
limitations. See Rotella v. Wood, 528 U.S. 549, 553, 120 S. Ct. 1075, 1080–81
(2000). Under the “separate accrual” rule, “the commission of a separable, new
predicate act within a 4-year limitations period permits a plaintiff to recover for the
additional damages caused by that act.” Klehr v. A.O. Smith Corp., 521 U.S. 179,
190, 117 S. Ct. 1984, 1991 (1997) (discussing, without adopting, the separate
accrual rule). In this appeal, we consider whether the allegations in a complaint
support the application of the separate accrual rule.
I. FACTUAL BACKGROUND
This case arises from what appears to be the best of intentions: an American
expatriate’s desire to bequeath assets now worth more than $200 million to a
foundation established for impoverished children in Panama. Unfortunately,
Wilson C. Lucom’s good intention has degenerated into years of acrimony
between his lawyer and his in-laws.
*
Honorable R. David Proctor, United States District Judge for the Northern District of
Alabama, sitting by designation.
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A. Lucom’s Will
Lucom married Hilda Piza Lucom (Hilda), a Panamanian, in the 1980s, and
they eventually made Panama their permanent home in 1995. Hilda had previously
been married to Gilberto Arias, the former Finance Minister of Panama and a
member of one of Panama’s most powerful families. Arias and Hilda had five
children together. By all accounts, Lucom’s relationship with the Arias children
was nothing short of hostile. Lucom and Hilda had no children of their own.
Richard Lehman is a Florida attorney who specializes in tax law. For 31
years, he worked as Lucom’s attorney, and the two developed a close personal
relationship. During the last nine months of Lucom’s life, Lehman flew regularly
to Panama to help Lucom put his estate in order. According to the complaint,
Lucom was a “sensitive soul” with “no natural children of his own,” and after
seeing firsthand the “needs and hunger endured by thousands of Panamanian
children, particularly in the rural areas,” he decided to direct most of his fortune to
the youth of Panama. To that end, Lucom’s June 20, 2005 will established the
“Wilson C. Lucom Trust Fund Foundation” (Foundation). After providing a
$240,000 annuity to Hilda, the will directed significantly smaller bequests to his
step-children and other individuals, along with a $1 million bequest to the Mayo
Clinic in Rochester, Minnesota. The rest of the estate, consisting mostly of real
property in Panama and the United States, was to be sold with the proceeds placed
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in the Foundation. At the time the will was drafted, these assets were valued at
$50 million. The crown jewel of Lucom’s estate is the Hacienda Santa Monica, a
7,000 acre ranch that includes 110 acres of beachfront property on the Pacific
coast. The ranch is now worth over $175 million.
The will appointed Lehman, Hilda, and Ruben Chinchorro Carles as the
executors, although Chinchorro was later replaced by Christopher Ruddy through a
codicil. According to Lehman, because of a scrivener’s error in the drafting of a
second codicil, the clause appointing the will’s executors was mistakenly stricken.
B. Lehman and the Arias Family Fight for Control of the Estate
Lucom passed away on June 2, 2006. Lehman successfully applied to a
Panamanian probate court for appointment as the estate’s sole executor, and one
month later, he also successfully petitioned a probate court in Palm Beach County,
Florida, for ancillary administration of Lucom’s will to administer the estate’s
Florida assets. In July 2006, Hilda and other members of her family challenged the
Panamanian court’s order appointing Lehman as the sole executor. Their efforts—
along with bribes, corruption, and perjury, according to Lehman—quickly led to
Lehman’s suspension as executor of the estate that August. Because Lehman had
not been removed as the executor, he began spending his own money, millions of
dollars he says, to protect the estate. The Panamanian proceedings culminated in
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an August 6, 2010 ruling by the Supreme Court of Panama declaring Hilda the sole
executor of the estate and its “universal heir.”
Two months after the August 2006 suspension order by the Panamanian
probate court, Hilda and her children 1 also mounted a challenge to the Florida
probate court’s order through a surcharge action in the same court. The surcharge
action ended on March 3, 2009, after a three-day trial, with a judgment against
Lehman for $1,013,547.05. The probate court found that Lehman had breached his
fiduciary duty to the estate by comingling funds, writing:
Although Lehman attempted to portray himself at trial as a protector
of the assets of the overall estate, the credible evidence showed him to
be a covetous opportunist using the ancillary estate assets to thwart
the Orders of the Panama Court in the domiciliary estate, seeking
personal advantage and control of the assets in the $25–50 million
domiciliary estate.
During the pendency of these litigations, in September 2006, the Arias
Group filed a variety of false criminal charges (known as denuncias) against
Lehman with the Panamanian police, and attempted to bribe and extort Lehman.
Lehman alleges a variety of injuries stemming from the false denuncias. In
addition to notifying the Panamanian and American courts about the denuncias, in
December 2007 the Arias group published several newspaper articles concerning
the denuncias. Lehman also alleges that the Arias Group filed a complaint with the
1
Hilda passed away on August 24, 2011. For ease of analysis, we will refer to the
remaining Appellees, three members of the Arias family and one of their lawyers, as the “Arias
Group.”
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Panamanian criminal courts, citing the denuncias, to shut down his personal and
professional web sites. And finally, the Arias Group used the denuncias to
“illegally black-list” Lehman by placing him on “Red Notice Alert” with Interpol. 2
To prevent this “onslaught,” on January 11, 2007, Lehman filed a complaint in
Palm Beach County against the Arias Group and its lawyers, alleging abuse of
process and civil conspiracy. The action was dismissed in December 2009.
II. PROCEDURAL BACKGROUND
Lehman 3 brought this complaint against the Arias Group on September 23,
2011. Several members of the Arias Group filed motions to dismiss the complaint,
which the trial court converted into motions for summary judgment. In the
motions for summary judgment, the Arias Group argued that: (1) Lehman sought
an inappropriate extraterritorial application of RICO; (2) Lehman had not pleaded
a cause of action or established standing for RICO; (3) Lehman lacked the capacity
to sue on behalf of the estate; and (4) Lehman’s RICO claims were barred by the
statute of limitations. The district court granted summary judgment in favor of the
2
Interpol is the common name of the International Criminal Police Organization, a 190-
country intergovernmental organization that facilitates “international police cooperation.”
Overview, Interpol, http://www.interpol.int/About-INTERPOL/Overview (last visited Aug. 26,
2013).
3
The Appellants in this case are Richard S. Lehman, individually and as the Executor of
the Wilson C. Lucom Estate, Richard S. Lehman, P.A., and the Wilson C. Lucom Trust Fund
Foundation (Lehman is the only trustee of the Foundation). Because all of the Appellants are
different representations of Lehman, this opinion will refer to the Appellants collectively as
“Lehman.”
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Arias Group after determining that Lehman’s RICO claims were barred by RICO’s
four-year statute of limitations. Agreeing with the Arias Group, the court wrote
that Lehman was “aware of injuries flowing from [the Arias Group’s] alleged
enterprise at least as early as January 2007.” Because Lehman brought the action
in September 2011—more than four years after his awareness of the alleged RICO
injuries—the district court dismissed the complaint. Lehman now argues that
under the separate accrual rule, his civil RICO claim was timely.
III. ANALYSIS
We review grants of summary judgment de novo, viewing the evidence in
the light most favorable to the nonmoving party. Miller’s Ale House v. Boynton
Carolina Ale House, LLC, 702 F.3d 1312, 1316 (11th Cir. 2012).
Under RICO, it is illegal “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.” 18 U.S.C.
§ 1962(c). Four elements must be proven in a RICO case: “(1) conduct (2) of an
enterprise (3) through a pattern (4) of racketeering activity.” Williams v. Mohawk
Indus., Inc., 465 F.3d 1277, 1282 (11th Cir. 2006) (per curiam) (internal quotation
marks omitted). “A pattern is established by at least two acts of racketeering
activity the last of which occurred within ten years . . . after the commission of a
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prior act of racketeering activity.” McCaleb v. A.O. Smith Corp., 200 F.3d 747,
750 (11th Cir. 2000) (alteration and internal quotation marks omitted). The civil
RICO provision permits a private plaintiff “injured in his business or property by
reason of a violation of section 1962” to recover treble damages. § 1964(c).
“The statute of limitations for civil RICO actions is four years.” McCaleb,
200 F.3d at 751. The action begins to run “when the injury was or should have
been discovered, regardless of whether or when the injury is discovered to be part
of a pattern of racketeering.” Maiz v. Virani, 253 F.3d 641, 676 (11th Cir. 2001)
(citing Rotella v. Wood, 528 U.S. 549, 555, 120 S. Ct. 1075, 1080 (2000)).
Our separate accrual rule in civil RICO actions derives from the accrual rule
under the Clayton Antitrust Act of 1914, Pub. L. 63-212, 38 Stat. 730 (codified as
amended at 15 U.S.C. §§ 12–27 and 29 U.S.C. §§ 52–53). As the Supreme Court
has observed, “Congress consciously patterned civil RICO after the Clayton Act.”
Klehr, 521 U.S. at 190, 117 S. Ct. at 1990. The rule provides that if a new RICO
predicate act gives rise to a new and independent injury, the statute of limitations
clock will start over for the damages caused by the new act. See Klehr, 521 U.S. at
190, 117 S. Ct. at 1991. At the same time—in keeping with the Clayton Act
accrual rule—the “plaintiff cannot use an independent, new predicate act as a
bootstrap to recover for injuries caused by other earlier predicate acts that took
place outside the limitations period.” Id.; Bivens Gardens Office Bldg., Inc. v.
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Barnett Bank of Fla., Inc., 906 F.2d 1546, 1552 n.9 (11th Cir. 1990), abrogated on
other grounds by Rothella v. Wood, 528 U.S. 549, 555, 120 S. Ct. 1075, 1080–81
(2000). By extension, when an injury is a “continuation of [an] initial injury,” it
“is not new and independent.” Pilkington v. United Airlines, 112 F.3d 1532, 1537–
38 (11th Cir. 1997) (emphasis in original).
We announced our adoption of the separate accrual rule in Bivens, where we
held that the mismanagement of a partnership’s assets and the sale of the
partnership’s primary asset, a hotel, were new and independent injuries from an
earlier wrongful takeover of the partnership. 906 F.2d at 1549–51. We reasoned
that the mismanagement of assets and the sale of the hotel were “not included
among the injuries that naturally flow from the wrongful takeover.” Id. at 1551.
Later, in Pilkington, we quoted with approval the Ninth Circuit’s articulation
of the appropriate circumstances for the rule: “‘1) It must be a new and
independent act that is not merely a reaffirmation of a previous act; and 2) It must
inflict new and accumulating injury on the plaintiff.’” 112 F.3d at 1537 (emphasis
omitted) (quoting Pace Indus., Inc. v. Three Phoenix Co., 813 F.2d 234, 238 (9th
Cir. 1987)). In Pilkington, the plaintiffs, who alleged a pattern of racketeering
activity based on post-strike harassment by United Airlines, contended that “each
act of harassment account[ed] for a new and independent injury.” Id. at 1536. We
disagreed, because although each act of harassment had an “adverse impact” on the
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plaintiffs, the injury was not new and independent. Id. at 1537–38. Instead, they
were “recharacterizations and continuations of the same injuries” that occurred
earlier. Id. at 1538.
We also endorsed the Ninth Circuit’s reasoning in Grimmett v. Brown, 75
F.3d 506, 508 (9th Cir. 1996), where a civil RICO plaintiff alleged that her ex-
husband’s attorney “masterminded the reorganization of [the ex-husband’s]
medical practices so as to cheat [the plaintiff] out of her post-divorce community
property interest in those practices.” See Pilkington, 112 F.3d at 1537 (citing
favorably the analysis in Grimmett). The complaint was dismissed as untimely
because the injury was “perfected upon the reorganization of the medical practices
and the filing of [the ex-husband’s] bankruptcy petition,” which occurred more
than four years before the filing of the plaintiff’s complaint. Grimmett, 75 F.3d at513–14. The Ninth Circuit rejected the plaintiff’s argument that “new and
independent” acts occurred during the bankruptcy proceeding. Id. at 514. Some of
the acts included submitting false documents to the bankruptcy court, falsely
testifying to the bankruptcy court, and concealing documents from the bankruptcy
court. Id. These acts were “part of the same corporate reorganization/bankruptcy
scheme,” and were “far less independent from one another than were the wrongful
takeover and mismanagement of assets in Bivens.” Id.10
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In the case before us, the district court found that Lehman was aware of all
the alleged RICO injuries more than four years before the September 23, 2011
filing date of his complaint. Comparing the allegations of Lehman’s January 2007
abuse of process complaint and his September 2011 civil RICO complaint, the
court observed that the two documents were “strikingly similar.” For example, the
January 2007 complaint alleged that the Arias Group
set up a plan that is continuing today to abuse the judicial process of
the Courts of both Panama and the United States in an attempt to
intimidate, bribe and extort Lehman to coerce him to resign in favor
of Hilda as the Executor in Panama and as Lucom’s Personal
Representative in Florida.
Likewise, the September 23, 2011 RICO complaint alleged that
[t]he criminal conspiracy had one objective: thwart [Lehman] through
acts of intimidation[,] extortion, corruption, theft, money laundering,
and bribery of foreign officials, so that the [Arias Group] could steal
the Estate assets for themselves.
After considering both complaints, we agree with the district court that
Lehman has done little more than repackage his 2007 abuse of process complaint.
We cannot accept Lehman’s argument that his only pre-September 2007 injury—
which he claims is a non-RICO injury at that—was his expenditure of attorney’s
fees on behalf of the estate. Like the RICO complaint, the abuse of process
complaint alleged that the Arias Group was “using [its] political influence in
Panama to access Estate assets, dissipate the assets before they are probated, and
thereby attempt to totally deplete the Estate before its assets can be probated.”
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Specifically, Lehman complained that the Arias Group was “attempting to sell
Hacienda Santa Monica and benefit from the sale proceeds.” The 2007 complaint
also recounted the denuncias filed against Lehman in Panama. It goes without
saying that any additional injuries stemming from those acts in the 2011 complaint
would be untimely, and in fact most of Lehman’s injuries in the 2011 complaint
might as well be cut-and-pasted from the 2007 action.
Lehman cannot avoid that reality by cherrypicking dates. For instance, his
RICO complaint alleges that in March 2011 the Arias Group “directed and/or
conspired . . . to sign off on, and transfer tracts of [the] Lucom Estate’s Hacienda
ranch to third party transferees.” This is, of course, by no means “new” or
“independent” from the 2007 allegation that the Arias Group was “attempting to
sell Hacienda Santa Monica.” The list goes on. The 2011 complaint alleges that
the Arias Group initiated “baseless, improperly motivated sham litigation in
Panama”; the 2007 complaint alleged “false and baseless criminal charges against
Lehman in Panama.” The 2011 complaint alleges that the Arias Group introduced
the “baseless” Panamanian criminal charges in the Florida Probate Court; the 2007
complaint alleged that the Arias Group “inform[ed] the Florida probate court of
[the] false charges.” The 2011 complaint alleges that the Arias Group caused
Lehman to incur “attorneys’ fees and costs to defend itself”; the 2007 complaint
alleged that the Arias Group had caused “the expenditure of funds . . . to defend
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against the unsubstantiated and false criminal charges and civil action.” The 2011
complaint alleges that the Arias Group engaged in a “conspiracy to steal the assets
of Lucom’s largest Estate Asset in Florida—Valores”; the 2007 complaint alleged
that the Arias Group was “wrongfully attempting to take control of Valores.”
In short, any claim by Lehman that he was not aware of his injuries before
September 23, 2007—four years prior to the RICO complaint—cannot be
substantiated. We agree with the district court that Lehman knew, or should have
known, of most of the injuries that justify the allegations in the complaint prior to
September 2007. That is to say, all of the injuries complained of by Lehman are
“merely . . . continuations of the same injuries previously alleged.” Pilkington,
112 F.3d at 1538. In light of the 2007 complaint, Lehman’s contention that his
only pre-September 2007 injury was the expenditure of attorney’s fees does not
hold water.4
Even if all of this is true, Lehman points out, there were other new and
independent post-September 2007 injuries: (1) an October 24, 2007 Interpol Red
Notice Alert that stemmed from the Arias Group’s denuncias; (2) the Arias
Group’s dissemination of damaging information about Lehman in newspapers in
4
We confess that we are unable to grasp Lehman’s argument that his expenditure of
attorney’s fees on behalf of the estate both is and is not a RICO injury. On page 52 of his brief,
he argues that no RICO injuries existed prior to September 2007 because “[t]he expenditure of
attorney’s fees, without more, is not a cognizable RICO injury.” How, then, only six pages
earlier, can Lehman complain of a RICO injury when he “expended more than one million
dollars ($1,000,000) of his own money in his efforts to defend Mr. Lucom’s assets in Panama”?
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December 2007; (3) the shutting down of Lehman’s websites on February 27,
2009; and finally (4) the harm to Lehman’s business reputation on March 3, 2009,
when the Florida probate court called him a “covetous opportunist.”
Yet all of these injuries fail for the same reason that Lehman’s earlier
injuries failed: they are merely “reaffirmation[s] of a previous act.” Pilkington,
112 F.3d at 1537. The Red Notice Alert, the newspaper articles, and the shutting
down of his websites were all injuries that arose from the denuncias filed against
him in September 2006. As we have said before, a “continuation of damages into a
later period will not serve to extend the statute of limitations for a RICO action.”
Id. As for name-calling by a Florida probate court, that injury, as Lehman admits
in his complaint, came from the introduction of what he refers to as “corrupt
Panamanian orders” into the Florida judicial proceedings. As the record makes
clear, the alleged “corrupt orders” began when Hilda challenged Lehman’s
appointment as executor in August 2006. Again, Lehman labors to recharacterize
a continuation of damages as a new and independent act, but Pilkington made clear
that a civil RICO plaintiff may not do so. See id. Like the plaintiff in Grimmett
who attempted to cleave the bankruptcy proceedings into separate acts for purposes
of timeliness, see 75 F.3d at 514, Lehman isolates different points in time during
the Panamanian proceedings in an attempt to salvage his claim. But Lehman
cannot make a silk purse out of a sow’s ear—he cannot make timely what is
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untimely and elude the staleness of his injuries, because it is readily apparent that
he was aware of the Arias Group’s activities four years before he filed his RICO
complaint.
IV. CONCLUSION
It bears mentioning that Lehman’s complaint at times reads like a petition
for certiorari to the Panama Supreme Court. It is true that the record before us
leaves some questions about what Lucom’s will actually said, and we may never
know for sure the intended executors or beneficiaries of his will. If Lehman is
taken at his word, it is indeed unfortunate that the disadvantaged youth of Panama
will not benefit from the generosity of the late Mr. Lucom. Yet we are not a
Panamanian probate court, nor are we vested with appellate jurisdiction to consider
appeals from Panamanian courts.
We conclude that none of the injuries in Lehman’s complaint are new and
independent because all of his alleged injuries are continuations of injuries that
have been accumulating since before September 2007. Therefore, Lehman’s civil
RICO complaint was untimely, and the district court did not err when it granted
summary judgment in favor of the Arias Group.
AFFIRMED.
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