Heinrich v. Waiting Angels Adoption Servs., Inc.

Citation668 F.3d 393
Decision Date07 February 2012
Docket NumberNo. 09–2470.,09–2470.
PartiesAmanda HEINRICH; Reece Heinrich; Philly Tavolilla; Michael Tavolilla; Anthony Casassa; Jill Casassa; David Kruger; Toni Flenniken; Jon Lundy; Regina Lundy; Curtis Wright; Robin Wright; Harold Saenz; Odalys Saenz, Plaintiffs–Appellants, v. WAITING ANGELS ADOPTION SERVICES, INC., a Michigan For–Profit Corporation; Simone Boraggina, and Joseph Beauvais, Defendants–Appellees.
CourtU.S. Court of Appeals — Sixth Circuit

OPINION TEXT STARTS HERE

ON BRIEF: Joni M. Fixel, Fixel Law Offices, PLLC, Okemos, Michigan, for Appellants. Kenneth Hardin, Hardin Thompson, P.C., Southfield, Michigan, for Appellees.Before: GIBBONS and SUTTON, Circuit Judges; ADAMS, District Judge. *

OPINION

JULIA SMITH GIBBONS, Circuit Judge.

Plaintiffs-appellants Amanda and Reece Heinrich and six other couples (referred to collectively as plaintiffs) appeal the district court's order granting the second motion for judgment on the pleadings filed by defendants-appellees, Waiting Angels Adoption Services, Inc. and its principals, Simone Boraggina and Joseph Beauvais (referred to collectively as defendants). The district court dismissed with prejudice, pursuant to Rules 12(b)(6) and 9(b), all claims in the plaintiffs' third amended complaint brought under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1962. On appeal, the plaintiffs argue (1) that the district court failed to include several alleged predicate acts in its analysis of their RICO claim, (2) that the district court erred in ruling that the third amended complaint did not adequately allege extortion, and (3) that the district court erred in concluding that the allegations in the third amended complaint failed to meet the requirement of continuity, which is necessary to establish a pattern of racketeering activity and a substantive RICO violation. For the reasons that follow, we reverse.

I.

The plaintiffs are seven couples who enlisted the assistance of the Waiting Angels Adoption Services, Inc. (Waiting Angels) in an attempt to adopt children from Guatemala. Believing that they were defrauded in the course of their adoption efforts, the plaintiffs initiated suit in federal district court on October 24, 2006, naming Waiting Angels and its two principals, Simone Boraggina and Joseph Beauvais, as defendants. The original complaint was first amended on March 26, 2007. About a month later, the case was stayed due to the pendency of state criminal proceedings against the individual defendants. After the state criminal proceedings were resolved, the district court granted the plaintiffs' motion to lift the stay on April 2008 and granted them permission to file a second amended complaint.

In response, the defendants filed a motion for judgment on the pleadings, pursuant to Federal Rules of Civil Procedure 12(c) and 9(b), which the district court granted. Some claims were dismissed with prejudice, but the plaintiffs were granted leave to amend and replead certain claims, including: (1) a RICO claim under section 1962(c) alleging Waiting Angels Adoption Services, Inc. as the enterprise and Boraggina and Beauvais as individual defendants, with the plaintiffs allowed to allege as predicate acts violations of federal mail fraud, wire fraud, and extortion statutes as well as violations of 18 U.S.C. §§ 2314 and 1952; (2) a RICO claim under section 1962(d) for conspiracy between Boraggina and Beauvais only, including the predicate acts identified above; and (3) various state law claims that are not at issue in this appeal.

The plaintiffs filed their third amended complaint on April 4, 2009. Counts 1 through 6 assert state law claims. Count 7 alleges violations of the mail and wire fraud statutes, 18 U.S.C. §§ 1341 and 1343, for the purpose of establishing the predicate acts of racketeering activity needed to support the RICO claims that follow. Count 8 asserts a claim that the individual defendants, Boraggina and Beauvais, committed a substantive RICO violation under 18 U.S.C. § 1962(c). It alleges that Waiting Angels constituted an “enterprise” within the meaning of the statute and that the individual defendants conducted the affairs of this enterprise through a pattern of racketeering activity, particularly through extortion and fraud. Finally, Count 9 asserts a RICO conspiracy claim between Boraggina and Beauvais under 18 U.S.C. § 1962(d).

The third amended complaint contains the following allegations that are particularly relevant to this appeal. First, as a general matter, the plaintiffs allege that the defendants advertised Waiting Angels's services on the internet and that the defendants' website displayed children that were advertised as available for adoption. The plaintiffs also allege that Waiting Angels was advertised as a non-profit organization, when, in reality, it was a for-profit organization.

Plaintiffs Heinrich

The Heinriches allege that on June 13, 2005, they were sent an email by the defendants containing baby pictures and that they decided to attempt to adopt baby Selvin, a baby pictured in the email and apparently available for adoption. They signed a contract with Waiting Angels and wired $12,000 for a “referral” or match. About a month earlier, they had been told by Boraggina that [once] the dossier is certified, the adoption will be completed in 4–6 months.” On January 30, 2006, Boraggina informed the Heinriches that the birth mother had not signed the necessary papers and the adoption could not proceed without this documentation.

Plaintiffs Kruger and Flenniken (Flenniken plaintiffs)

The Flenniken plaintiffs allege that in January 2006, they received an invoice for foster care fees for $1050 for baby Maria, the child they hoped to adopt. In mid-March 2006, they traveled to Guatemala and discovered that baby Maria remained in an orphanage and had never lived in foster care. Beauvais then sent the Flenniken plaintiffs an email demanding that they pay the rest of the adoption fees, and they responded that, under the adoption contract, the fees were not due until the case was out of PGN (the Guatemalan family court), and they would not pay until that time. The couple alleges that in response the defendants sent a request to the Guatemalan attorney to stop the adoption until they were sent a certified check.

The Flenniken plaintiffs further allege that due to their frustration with Waiting Angels and the individual defendants, they hired a different adoption agency to complete their adoption.

Plaintiffs Casassa

The Casassas allege that they were matched with Guatemalan twins by the defendants around January 28, 2006, after which they signed an adoption agreement and wired money for adoption fees and foster fees. On May 24, 2006, Boraggina emailed to advise them that the twins had been reclaimed by their birth mother. They assert that the twins had not been reclaimed by their birth mother but instead were already matched with another family through a different adoption agency. They allege that Boraggina had knowledge of this fact at the end of January 2006, when Waiting Angels collected fees for the adoption. They support this allegation by asserting further: (1) during the four months they were “matched” with the twins, the defendants sent no photos or medical information; (2) the U.S. Embassy in Guatemala had no record of a pending adoption case involving the Casassas; (3) the defendants did not respond to demands for proof that the plaintiffs' money had been sent to Guatemala; and (4) the twins had not been reclaimed by their birth mother but were matched with another adoptive family through a different adoption agency.

The Casassas also allege that on June 26, 2006, they contacted the defendants for an update and to inquire about the photos of new babies and toddlers being offered for adoption on the Waiting Angels website. The defendants informed the Casassas that the couple was not sent any referrals because the children pictured on the website were being handled by a Guatemalan attorney other than the attorney handling the twins' adoption. The couple further alleges that they were later told that the defendants could not get birth certificates for the babies they were displaying on the website.

Plaintiffs Tavolilla

The Tavolillas allege that they were considering baby Marvin for adoption and were sent his medical information by the defendants in May 2006. They were unsure of whether to begin the adoption process when they received a telephone call from Boraggina on May 25, 2006, advising them they needed to wire the money immediately to start the adoption process for baby Marvin because He's gonna go, He's gonna go, He's gonna go!!” Shortly after wiring $16,000 to the defendants, the Tavolillas received a call from their pediatrician who determined that the child had serious health issues and advised them not to adopt the child. The Tavolillas allege that they were assured by Boraggina that if the child was not healthy, the adoption fee would be returned. When they made this refund request, however, Boraggina responded by saying that Beauvais was responsible for such financial matters, that he was unavailable for a few days, and that she thought the money had already been sent to an attorney in Guatemala.

Plaintiffs Lundy

The Lundys allege that after two other unsuccessful adoption attempts in which the couple paid a total of $26,550 in fees, they emailed the defendants on July 13, 2006 to inquire about another baby featured on the Waiting Angels website. In a reply email, Boraggina informed the Lundys that the baby about whom they inquired was “unavailable to them because she was with a different attorney.”

Plaintiffs Wright

The Wrights allege that in September 2005, they sent Waiting Angels $14,350 for the retainer fee and adoption payment for the adoption of baby Wendy, after which they were faxed an adoption agreement. The complaint does not contain any further details about the terms of this...

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