D'iorio v. Adonizio
Decision Date | 30 December 1982 |
Docket Number | Civ. A. No. 82-0735. |
Citation | 554 F. Supp. 222 |
Parties | Deominia D'IORIO, Plaintiff, v. Angelo J. ADONIZIO, et al., Defendants. |
Court | U.S. District Court — Middle District of Pennsylvania |
Robert P. Casey, Dilworth, Paxon, Kalish & Kauffman, Scranton, Pa., for plaintiff.
Patrick J. O'Connor, Cozen, Begier & O'Connor, Philadelphia, Pa., for defendants.
On June 10, 1982, the plaintiff, Deominia D'Iorio, filed a complaint in six counts by which she seeks to recover damages suffered as a result of allegedly fraudulent transactions involving the various defendants. In count one of the complaint, the plaintiff invokes the jurisdiction of this court pursuant to the provisions of the Racketeer Influenced and Corrupt Organizations Act (RICO, 18 U.S.C. §§ 1961, et seq.), 18 U.S.C. § 1964(a) and (c), as well as 28 U.S.C. § 1331. Treble damages are sought. Counts two through six are pendent state claims which allege causes of action for wrongful appropriation of business opportunities, breach of fiduciary duties, civil conspiracy, fraudulent concealment, and breach of contract.
Various individuals and business entities are named in the complaint. They can be described briefly as follows: The defendant, Adonizio Brothers, is a Pennsylvania corporation engaged in the operation of a quarry. The plaintiff, her sister Yolanda Saporito, and the individual defendants Angelo Adonizio, Charles Adonizio, James Adonizio, Patrick Adonizio, Jr., Peter V. Adonizio and Samuel P. Adonizio constituted all the shareholders of Adonizio Brothers, Inc.1 Defendant Addy Asphalt Company is a Pennsylvania corporation engaged in general construction work. The plaintiff and the individual defendants are the sole shareholders of the Addy Asphalt Company. The defendant Addy Construction Company is a general partnership consisting of the plaintiff and the individual defendants. The business of the Addy Construction Co. is to lease equipment to Adonizio Brothers, Inc. and the Addy Asphalt Company. The defendant Wilkes Equipment Company is a partnership consisting of the individual defendants. The business of Wilkes Equipment Company is, allegedly, to lease equipment to Adonizio Brothers, Inc. and the Addy Asphalt Company.
In the first count of her complaint, the plaintiff alleges three separate claims which she contends are within the ambit of RICO. First, she alleges that the individual defendants defrauded her by forming the Wilkes Equipment Company, without her knowledge, to appropriate business opportunities available to the business entities of which she was a partner or shareholder. She alleges that from January of 1971 through March of 1979 Wilkes purchased various pieces of equipment. This equipment was then rented to Adonizio Brothers, Inc. and Addy Asphalt at rates which, over the rental period, substantially exceeded the purchase price. To bring this claim within the purview of RICO, the plaintiff has alleged that the scheme involved use of the mails, including mailing of partnership withdrawals, disbursements, financial statements, invoices, etc.
The plaintiff has alleged, as part of the first count, a second scheme involving the purchase of Addy Asphalt common stock. According to the complaint, shares of Addy common stock made available by the death of Adam Petrillo, a shareholder, were never made available to the plaintiff or to Addy Asphalt Company for purchase. Instead, the complaint alleges, the individual defendants purchased this stock themselves. Again, various uses of the mails and wires are alleged, including the reciprocal mailing of payment in return for the shares of stock purchased.
Finally, in connection with the first count of the complaint, the plaintiff alleges that the individual defendants defrauded her by paying themselves excessive salaries from Adonizio Brothers, Inc. and Addy Asphalt Company. Use of the mails in forwarding salary payments is alleged.
The pendent state claims have the same factual core as the federal claims.
A motion to dismiss the complaint was filed by the defendants on July 1, 1982, and, after having been granted an extension of time for the filing of a supporting brief, a brief was filed by the defendants on July 30, 1982. The plaintiff filed an opposing brief with appendices on August 17, 1982, and a reply brief was filed on August 31, 1982. By order of September 14, 1982, we allowed the defendants until September 30, 1982, to file supplemental briefs in support of their motion to dismiss.2 A supplemental brief was filed by the defendants on September 30, 1982, and a response was filed by the plaintiff on October 7, 1982. Defendants filed a reply brief on October 22, 1982. Various letters from counsel have also been filed of record.
Because our jurisdiction in this case hinges on the cognizability of the plaintiff's RICO claims, we must first address the defendants' various challenges to the validity of these claims. Plaintiff has invoked federal jurisdiction pursuant to 18 U.S.C. § 1964(a) and (c):
Section 1962 of Title 18, United States Code, provides, in pertinent part:
18 U.S.C. § 1962(a)-(c).
Thus, there are several discrete prerequisites for an individual to maintain a RICO claim: the affiliation of a defendant with an enterprise engaged in or affecting interstate commerce, and the involvement in or conduct of the enterprise through a pattern of racketeering activity. See United States v. Vignola, 464 F.Supp. 1091 (E.D. Pa.), aff'd, 605 F.2d 1199 (3d Cir.1979), cert. denied 444 U.S. 1072, 100 S.Ct. 1015, 62 L.Ed.2d 753 (1980).
One of the thorniest problems raised in connection with the instant motion stems from the phrase "pattern of racketeering activity." "Racketeering activity" is defined, in pertinent part, as follows: "any act which is indictable under any of the following provisions of title 18, United States Code: ... section 1341 ( ), section 1343 ( )." 18 U.S.C. § 1961(1)(B). "Pattern of racketeering activity" is further defined as requiring "at least two acts of racketeering activity, one of which occurred after the effective date of this chapter and the last of which occurred within ten years (excluding any period of imprisonment) after the commission of a prior act of racketeering activity." 18 U.S.C. § 1961(5). The plaintiff contends that the activities alleged constitute mail and/or wire fraud as defined in 18 U.S.C. §§ 1341 and 1343 and as such constitutes the "pattern of racketeering activity" required by RICO. Defendants, on the other hand, argue that even accepting the plaintiff's allegations as true, their conduct did not meet the definition of mail or wire fraud and that, in any case, RICO was never intended to be so broad in scope as to encompass the activities described.
Because it appears from the allegations of the complaint that the use of the mails is the most significant as going to a "pattern of racketeering activity" we will begin by discussing the requisite elements of mail fraud as...
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