362 F.3d 1219 (9th Cir. 2004), 02-16847, Turner v. Cook

Docket Nº:02-16847.
Citation:362 F.3d 1219
Party Name:Stephen TURNER, M.D., Susana Turner, on behalf of themselves and As Guardian Ad Litem for two minor children Daniel Turner and Deborah Turner, Western Paramedical Services, LLC, and David Turner, Plaintiffs-Appellants, v. David J. COOK, Esq., Cook Perkiss & Lew, a Professional Law Corp., Ah Beng Yeo and E.A. Martini, Defendants-Appellees.
Case Date:April 01, 2004
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit

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362 F.3d 1219 (9th Cir. 2004)

Stephen TURNER, M.D., Susana Turner, on behalf of themselves and As Guardian Ad Litem for two minor children Daniel Turner and Deborah Turner, Western Paramedical Services, LLC, and David Turner, Plaintiffs-Appellants,


David J. COOK, Esq., Cook Perkiss & Lew, a Professional Law Corp., Ah Beng Yeo and E.A. Martini, Defendants-Appellees.

No. 02-16847.

United States Court of Appeals, Ninth Circuit

April 1, 2004

Argued and Submitted Oct. 7, 2003.

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Herman A.D. Franck, Sacramento, CA, for the appellants.

Timothy Carl Aires, Newport Beach, CA, for the appellees.

Appeal from the United States District Court for the Northern District of California; Claudia Wilken, District Judge, Presiding. D.C. No. CV-01-03884-CW.

Before: B. FLETCHER and TASHIMA, Circuit Judges, and POLLAK, [*] District Judge.

POLLAK, District Judge:

In this suit initiated in the District Court for the Northern District of California and arising under the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692-1692o ("FDCPA"), and the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961-1968 ("RICO"), to which were annexed certain supplemental state-law claims, the plaintiffs-appellants are Stephen Turner; his wife, Susana Turner; the Turner children, Daniel, Deborah and David; and Western Paramedical Services, LLC ("WPS"), an entity that employed the Turners. 1 The defendants-appellees are Ah Beng Yeo, E.A. Martini, David J. Cook, and Cook, Perkiss & Lew, a law firm in which Cook is a partner. The plaintiffs-appellants' federal claims are that actions taken by Yeo and Martini, represented by Cook, to levy execution on an antecedent state-court tort judgment in favor of Yeo and Martini and against Stephen Turner, contravened the FDCPA and RICO. The actions of appellees of which appellants complained included pursuing a fraudulent conveyance action against Stephen Turner in a California state court and communicating with numerous insurance companies in order to accelerate the collection process.

From District Court orders sequentially dismissing the FDCPA and RICO claims (and, with them, the supplemental state-law claims), plaintiffs-appellants appeal. We affirm.


On August 21, 1998, after a jury trial in the Superior Court for Contra Costa County, in California, appellees Yeo and Martini obtained a judgment against Stephen Turner for more than $1,000,000. According to appellants' First Amended Complaint in the District Court, "the judgment arose from allegations of various

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business interference torts by Stephen Turner against Yeo and Martini." Yeo and Martini retained Cook and his law firm Cook, Perkiss & Lew to assist in collection of the judgment--assistance which appears to have continued until March, 2002. 2 On October 29, 1999, Cook filed a complaint in the Superior Court for Contra Costa County on behalf of Yeo and Martini against Stephen Turner, alleging that Turner, under the express direction of Susana Turner, had fraudulently conveyed his real and personal property, including his home, to a family limited partnership and a limited liability company, each allegedly controlled by the Turners, with the intent to prevent Yeo and Martini from collecting the money owed on the August 21, 1998 judgment.

On October 15, 2001, in response to the Yeo-Martini fraudulent conveyance action, Stephen and Susana Turner, suing for themselves and on behalf of their children, filed this action in the United States District Court for the Northern District of California, claiming violations of the FDCPA and various state laws. Subsequently an amended complaint was filed, which included all of the allegations in the original complaint and added RICO claims. The amended complaint included WPS as a plaintiff on the RICO claims and on a California Unfair Competition Act claim. WPS was not a plaintiff on the FDCPA claim or on the state-law claims other than the Unfair Competition Act claim.

The First Amended Complaint

In their FDCPA claims, the Turners alleged that appellees, as part of their efforts to collect on the state-court judgment, dispatched false and misleading communications--by mail, fax and telephone--to numerous insurance companies thought to be debtors of WPS, in violation of 15 U.S.C. §§ 1692c(b), 1692e(2)(A), 1692e(3), 1692e(9), 1692f(1). 3 According to the Turners, these communications falsely represented that the Superior Court for Contra Costa County had ordered all "accounts, accounts receivable, and other rights ... generated by Stephen Turner, or any entity of sic] his behalf," including WPS, to be turned over to Yeo and Martini. The Turners asserted that because WPS was not owned, operated or controlled by Stephen Turner, the Superior Court's order applied only to Stephen Turner and not to WPS. The Turners also claimed that appellees' fraudulent conveyance filings in the Superior Court contained "false, deceptive and improper statements." Specifically, the Turners objected to (1) references to Stephen Turner's

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prior misdemeanor criminal conviction and (2) a characterization of a Turner family trust--the Golden Gate Trust--suggesting that it was a "collusive trust" created to assist Stephen Turner in hiding his assets. The Turners also alleged that appellees engaged in conduct to "harass, oppress or abuse" them, in violation of 15 U.S.C. § 1692d 4 and § 1692f(6). 5 This alleged conduct included (1) serving excessive copies of court papers on the Turners; (2) improperly serving them with documents intended for other parties, such as a Nevada limited liability company; (3) making false statements in an August, 2001 court filing regarding the sale of appellants' residence; and (4) Cook's statement to Stephen Turner that: "You dirty Jew, I'll take everything away from you."

In their RICO claims, the Turners, now joined by WPS, charged appellees with violating 18 U.S.C. § 1962(c), 6 which prohibits a person from participating, "through a pattern of racketeering activity," in the conduct of the affairs of an "enterprise" whose activities affect interstate commerce, and 18 U.S.C. § 1962(d), 7 which prohibits conspiring to violate any of the three antecedent provisions of § 1962. The "enterprise," according to appellants' allegations, was Cook's law firm. The alleged "racketeering activity" involved the same mail, fax and telephone communications attributed to Cook's law firm in the Turners' FDCPA claims. This "racketeering activity," according to appellants, had been "continuous since the filing of the subject turnover order (dated July 18, 2000[)], through the present," and resulted in the "loss of money" for WPS, the loss of the "prospective economic advantage of developing the fledgling business of [WPS] into a viable business entity" for Stephen and Susana Turner, and the Turners' loss of "the prospects of continued and lucrative employment with [WPS]."

The District Court, in an order issued March 22, 2002, dismissed the FDCPA portions of the amended complaint on the grounds that the debt in question--the tort judgment--was not subject to the FDCPA. The District Court also dismissed appellants' RICO claims for failing to satisfy RICO's continuity requirement, but granted appellants leave to file "an Amended Complaint alleging a RICO violation."

The Second Amended Complaint

On April 22, 2002, the Turners and WPS filed a Second Amended Complaint in which they expanded upon their earlier RICO claims. In this complaint appellants alleged that appellees had sent out "hundreds" of letters and facsimiles to third-party insurance companies misrepresenting the substance of the Superior Court order--an activity that amounted to a continuous "pattern of related, non sporadic repetitious and highly numbered incidents ... of ... illegal racketeering conduct" in violation of 18 U.S.C. §§ 1962(c) and (d).

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Each time appellees engaged in this activity, appellants maintained, appellees committed an act of mail or wire fraud that was intended to "snare the continual billing activities of [WPS] by having [these] insurance companies divert payments wave after wave." Beside the economic loss appellees' allegedly fraudulent conduct caused WPS, appellants contended that appellees' conduct would have negative economic consequences for Stephen and Susana Turner because the Turners had "both lost the business expectancy of a good employment relationship with [WPS]," and would not receive their salaries if WPS suffered financial harm. Appellants maintained that the Turner children would also be harmed, since the children were the ultimate beneficiaries of the Golden Gate Trust, the Turner family trust which owned WPS. 8

Appellants also alleged that:

approximately [in] March, 2002, Cook and Cook, Perkiss & Lew substituted out as counsel of record on the fraudulent conveyance and other actions, and thus the racketeering activity is 'closed end' and is not expected to repeat. However, when it was going on, it was open ended and was never expected to stop, because Turner is in fact judgment proof, and as long as the judgment remains unpaid and Cook is on the case, these sort[s] of improper mailings etc[.] would be mailed out. It was the filing of the present lawsuit that caused Cook and Cook, Perkiss and Lew to withdraw of [sic] the cases, and thus shifted the activity to closed end.

On August 28, 2002, the...

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