Carnegie Associates, Ltd. v. United National Funding LLC

Order, Supreme Court, New York County (Barbara R. Kapnick, J.), entered July 12, 2012, which, to the extent appealed from as limited by the briefs, granted defendants’ motions to dismiss plaintiff s RICO claims and its breach of contract claim as against defendant Crump Group, Inc., and denied plaintiffs cross motion to amend the complaint, unanimously affirmed, with costs.

Neither Crump, nor its officer defendant Miller, were signatories to the contract which was between plaintiff and defendant United National Funding LLC (UNF). Accordingly, Crump cannot be held liable on any breach of the contract.

Plaintiff makes three fraud based allegations in support of its RICO claims: (i) UNF’s failed performance under the written letter agreement was part of an overarching plan by defendants to defraud plaintiff and others; (ii) defendants used the mail and wires to do so; and (iii) there was an indication that defendants may have engaged in a similar scheme in the past. The fact that insurance applications were processed through the mail, and that various telephone conversations and emails with Crump and/or UNF representatives allegedly confirmed that plaintiff would receive 60% of the commissions is insufficient to establish a fraudulent scheme or otherwise convert a breach of contract claim into a fraud claim. The deposition testimony of a UNF representative in an unrelated matter stating that he has placed insurance policies through Crump in the past and that he might owe money with respect to that business, is also insufficient to establish indicia of past or future racketeering. Concur — Gonzalez, EJ., Sweeny, Richter, Manzanet-Daniels and Clark, JJ.