867 F.2d 877 (5th Cir. 1989), 87-3653, Elliott v. Foufas

Docket Nº:87-3653.
Citation:867 F.2d 877
Party Name:Mary E. ELLIOTT and M.E. Elliott, Inc., Plaintiffs-Appellants, v. Plato FOUFAS, Individually and d/b/a Plato Foufas & Co., et al., Defendants-Appellees.
Case Date:March 15, 1989
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

Page 877

867 F.2d 877 (5th Cir. 1989)

Mary E. ELLIOTT and M.E. Elliott, Inc., Plaintiffs-Appellants,


Plato FOUFAS, Individually and d/b/a Plato Foufas & Co., et

al., Defendants-Appellees.

No. 87-3653.

United States Court of Appeals, Fifth Circuit

March 15, 1989

Page 878

[Copyrighted Material Omitted]

Page 879

        Louis R. Koerner, Jr., New Orleans, La., for plaintiffs-appellants.

        Brian P. Charbongau, and Paul J. Mirabile, Metairie, La., for Plato Foufas, Grodsky, Barrios, Middleberg & Riddle & First Federal Sav. Bank.

        Roy Cheatwood, Thomas K. Potter, III, and Pauline F. Hardin, New Orleans, La., for Grodsky, Barrios & Middleberg & Riddle.

        Appeal from the United States District Court for the Eastern District of Louisiana.

        Before CLARK, Chief Judge, GOLDBERG and GARWOOD, Circuit Judges.

        CLARK, Chief Judge:

        Mary Elliott appeals the dismissal by the district court of her claims pursuant to Fed.R.Civ.P. 12(b)(6) and the accompanying dismissal of pendent state law claims for lack of jurisdiction. This action is bottomed in contract claims for real estate commissions cast as violations of the Racketeering Influenced and Corrupt Organizations Act (RICO). Because Elliott failed to plead necessary predicate acts, the existence of an enterprise, and other claims with the required specificity, we affirm.


        Our review of this Rule 12(b)(6) dismissal accepts the facts as alleged in the complaint. According to the complaint, Mary Elliott contracted with 1020 Corporation to act as exclusive sales agent for the sale of condominium units located at 1020 Esplanade, New Orleans, Louisiana. The units were being renovated and were managed by 1020 Corporation, whose principal shareholder and director is Plato Foufas. Elliott was to be compensated for procuring sales of condominium units through commissions on the sales. Elliott maintains that a number of units were sold due to her efforts, but she was never paid a commission for those sales. She alleges that Foufas and others conspired to deprive her of those commissions and induced her to provide valuable sales and management services without compensation.

        As stated in the complaint, Foufas and his associates implemented a scheme by which commissions owed to Elliott would instead be used to reduce the indebtedness of 1020 Corporation to First Federal Savings Bank. Elliott alleges that Foufas did this because he was also personally obligated on the loans. The scheme included Arthemise Barrios, who prepared closing statements and other closing agreements on the sales and executed escrow agreements on behalf of 1020 Corporation; Barry Grodsky, an attorney who represented Plato Foufas; Middleberg & Riddle, the law firm with which Grodsky is associated; and First Federal Savings Bank, which received payment on loans, allegedly from funds due Elliott.

        According to Elliott, Foufas, with the aid of Barrios, diverted funds which represented her commissions into escrow accounts. These funds were then released to First Federal and applied against 1020's loans. When Elliott learned that she would not be paid, she filed a lien against 1020's property in an effort to recover her commissions. 1020 Corporation, represented by Grodsky, successfully opposed the action. Elliott maintains that Grodsky knew that her claims were valid, but continued to represent 1020 Corporation and Foufas to keep her from getting the money. As part of the scheme, Scardina, an employee of Foufas, falsely accused her of criminal wrongdoing in order to persuade her not to pursue her legal right to the commissions and to turn opinion against her.

        In her original complaint, Elliott named as defendants Plato Foufas, individually and d/b/a Plato Foufas & Co. Foufas filed a Rule 12(e) motion for more definite statement. The district court granted the motion and ordered Elliott to conform her complaint to the requirements of an Eastern District Standing Order governing the pleading of a RICO claim. Elliott's amended complaint did not significantly clarify

Page 880

the vague allegations of her original complaint. It did add peripheral defendants. All defendants then filed motions to dismiss the complaint for failure to state a claim on which relief could be granted. Elliott responded and also filed a motion to disqualify Middleberg & Riddle as counsel for Foufas since the firm itself was now a defendant. The court considered the motions of the defendants first and dismissed the case. Elliott's motion to disqualify...

To continue reading