Davis v. Yeroushalmi

• Citation: 985 F.Supp.2d 349
• Decision Date: 02 December 2013
• Docket Number: No. 12–cv–4167 (NG)(RML).,12–cv–4167 (NG)(RML).
• Court: U.S. District Court — Eastern District of New York
• Parties: Janina DAVIS and Subhana Rahim, Plaintiffs, v. Morad YEROUSHALMI, Moussa Yeroushalmi a/k/a Moishe Yeroushalmi, Farzaneh Yeroushalmi, Aswwad Ayinde a/k/a Arune Destula a/k/a Eric McGill, James Guy, Altria Development, LLC, M & M Developer, LLC, MBM Development, LLC, MBM Entertainment, LLC, PSY Trading, Inc., Jane Doe, and John Does 1–5, Defendants.

985 F.Supp.2d 349

Janina DAVIS and Subhana Rahim, Plaintiffs,

v.Morad YEROUSHALMI, Moussa Yeroushalmi a/k/a Moishe Yeroushalmi, Farzaneh Yeroushalmi, Aswwad Ayinde a/k/a Arune Destula a/k/a Eric McGill, James Guy, Altria Development, LLC, M & M Developer, LLC, MBM Development, LLC, MBM Entertainment, LLC, PSY Trading, Inc., Jane Doe, and John Does 1–5, Defendants.

No. 12–cv–4167 (NG)(RML).

United States District Court,

E.D. New York.

Dec. 2, 2013.

Andre Ramon Soleil, Soleil, Onua & Associates, LLP, Brooklyn, NY, for Plaintiffs.

Matin Emouna, Law Offices of Matin Emouna, Mineola, NY, for Defendants.

James Owen Guy, Clifton Park, NY, pro se.

OPINION & ORDER

GERSHON, District Judge:

This action arises out of the competing claims of ownership to three pieces of real property located in New York City. The allegations set forth in the First Amended Complaint include assertions of assault, battery and deception, as well as extortion, bank fraud and sham conveyances. Plaintiffs contend that the allegations asserted against the defendants are sufficient to establish a civil claim for violation of the Racketeer Influenced and Corrupt Organizations (RICO) statute, 18 U.S.C. § 1961 et seq., and that this court should exercise supplemental jurisdiction over the litany of state law claims also asserted. Defendantsmove to dismiss pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure, arguing that the allegations do not set forth a plausible RICO claim and that this court is therefore without subject matter jurisdiction.

Also consolidated for disposition herein is plaintiffs' motion for a preliminary injunction, by which they seek to stay several proceedings commenced in state court.

For the reasons set forth below, defendants' motion to dismiss is granted and plaintiffs' motion is denied as moot.

I. Background

The following is a brief synopsis of the procedural history and claims, as culled from the First Amended Complaint (the “Complaint”) ¹ and accompanying documents.

A. Factual Allegations

Plaintiffs Janina Davis (“Davis”) and Subhana Rahim (“Rahim”) are both female United States citizens residing in Brooklyn. Davis and defendant Aswad Ayinde, a.k.a Arune Destula, a.k.a. Eric McGill, also referred to as “Baku” (hereafter “Baku”) are the parents of a minor child, Altria Ayinde, who is, thankfully, not involved in this action. ( See Compl. ¶¶ 4–5, 9, 13, 18–19.) The nature of the relationship between Rahim and Baku is not described in this Complaint, but it appears that, together, they were at one point the owners of the premises located at 187 Gates Avenue, in Brooklyn.² ( See id. ¶ 31.)

Defendants Morad Yeroushalmi (“Morad”) and Moussa Yeroushalmi, a.k.a. Moishe Yeroushalmi (“Moussa”), are brothers. Defendant Farzaneh Yeroushalmi (“Farazaneh”) is the wife of Moussa. ( Id. ¶¶ 20–21.) Also named as defendants are several limited liability companies, all operating out of 683 Middle Neck Road, in Great Neck, New York: M & M Developer, LLC (“M & M”), the members of which are Morad and Moussa; MBM Development, LLC (“MBM–D”), whose members are Davis and M & M, and Altria Development, LLC (“Altria”), whose members are Davis, Moussa and Morad; MBM Entertainment, LLC (“MBM–E”), owned and operated by Morad and Farzaneh; and PSY Trading, Inc. (“PSY”), which is owned and operated by Baku. ( See id. ¶¶ 13–17, 22–26.)

The three pieces of real property that are at issue in this lawsuit are located at 187 Gates Avenue and 139 Clinton Avenue, both in Brooklyn (“Gates” and “Clinton,” respectively), and 148 West 127th Street, in Manhattan (“W127”). According to the Complaint, Rahim and Baku transferred title of Gates to Davis in October 2003; subsequently, in October 2004, Rahim brought an action in New York State Supreme Court (Kings County), alleging, inter alia, that Davis and Baku had “seized her property through larceny, conversion and extortion.” (Compl. ¶ 33.) Plaintiffs allege that Rahim settled her claims against Davis, but that “Baku's use of violence as a tool to compel Rahim to sign over her property interests is a legal fact as a result of his finding of liability.³” ( Id. ¶¶ 33–34.⁴) Plaintiffs further allege that the claims against Davis were settled due to a payment of $100,000 to Rahim from a group comprised of the defendants herein, which plaintiffs refer to as the “Yeroushalmi Clan.” ( See id. ¶¶ 27–29, 34.) Plaintiffs allege that this payment to Rahim amounted to the initiation of the Yeroushalmi Clan's “plot to eventually take Gates from Davis without privilege, consent, or adequate consideration.” ⁵ ( Id. ¶ 35.)

Plaintiffs also allege that, in April 2005, Davis, the owner of W127, entered into an agreement with M & M, which resulted in the formation of MBM–D and the transfer of title in W127 from Davis to MBM–D. The goal of this arrangement was the development of W127: M & M was to pay the costs of the “rehabilitation” and a fee of $150,000 to Davis, and Davis was to convey title to MBM–D, become a 50% partner with the entity, and ultimately share in the net profits made by the joint venture. ( Id. ¶ 39.) However, plaintiffs allege that defendants never intended to make such payment or to become Davis's partner, but rather, that the arrangement was merely a scheme to take the property without due consideration. ( Id. ¶¶ 40–42.) Plaintiffs make similar allegations with respect to Clinton: that Davis, Moussa and Morad entered into an agreement in April 2005 resulting in the formation of defendant Altria for the purpose of developing Clinton; that Moussa and Morad would pay the costs of development as well as $200,000 to Davis; that Davis would transfer title to the property, become a 50% partner and ultimately share in the profits of Altria; and that Moussa and Morad never intended to make such payment to Davis. ( Id. ¶ 47.)

According to the complaint, Davis “allegedly executed” deeds conveying both Gates and W127 to MBM–D on May 6, 2005, and conveying Clinton to Altria on August 15, 2005. ( See id. ¶¶ 49–52.) However, Davis alleges that she has “no recollection” of signing the deeds conveying Gates and W127, and that she “did not intend or agree to divest herself of interest in Clinton,” nor did she receive adequate consideration for the conveyance. ( Id. ¶¶ 49–50, 52–53; copies of the deeds are annexed to the Complaint at Exhibits E (Gates), F (W127) and G (Clinton).) She did, however, receive $150,000 from defendants for her interest in Clinton. ( Id. ¶ 56.) Davis also maintains a residence at Clinton, in apartment number 1. ( Id. ¶ 55.)

In May 2006, title of W127 was conveyed from MBM–D to MBM–E (an entity in which Davis did not have an interest); and in October 2006, from MBM–E to MBM–E and Baku as tenants in common. ( See Compl. ¶ 54(a), (c); Exs. H, J.) Also in October 2006, Baku conveyed his interest in W127 to PSY, resulting in a tenancy in common between PSY (1/3) and MBM–E (2/3). ( Id. ¶ 54(d); Ex. K.) Then, in March 2007, PSY and MBM–E transferred title to Morad and Farzaneh, resulting in a tenancy in common by the two parties, each with a 50% interest. ( Id. ¶ 54(h); Ex. O.) ⁶

1. The RICO Claim

These transfers form the backdrop for the substantive and conspiracy civil RICO claims asserted. Plaintiffs allege that Moussa, Morad, Farzaneh and their attorney, defendant James Guy (“Guy”), along with Baku, comprised the Yeroushalmi Clan, which constituted an enterprise within the meaning of 18 U.S.C. § 1961(4), the purpose of which was to strip Davis of her equity in the three properties, and the operation of which was conducted through a pattern of racketeering activity. ( See Compl. ¶¶ 60–64.) Alternatively, plaintiffs allege that the corporate defendants (M & M, MBM–D, MBM–E, Altria and PSY), acting with non-party entities Ishopnomarkup.com and 23 East 39th Street Developer, LLC, constitute a corporate enterprise having the same purpose and operation via the same pattern of racketeering activity. ( Id. ¶¶ 65–66.) As still another alternative theory of liability, plaintiffs allege that each of the corporate defendants constituted a separate enterprise whose affairs were each conducted and managed by the individual defendants through a pattern of racketeering activity. ( Id. ¶ 70.) The pattern of racketeering activity alleged in connection with each of these purported enterprises consists of extortion, bank fraud, identification fraud and robbery. ( Id. ¶¶ 63, 69, 70.) Plaintiffs also assert a claim for RICO conspiracy, alleging that Moussa, Guy and Baku conspired with Morad and Farzaneh in an effort to further or facilitate their criminal endeavor. ( Id. ¶ 145.)

With respect to the purported extortion, plaintiffs allege that, between 2002 and 2005, they were both subjected to regular physical and emotional abuse by Baku, and that the conveyance of Gates from Rahim to Davis and the conveyance of Clinton from Davis to MBM–D, were effectuated by Baku's violence. ( See id. ¶¶ 71–72, 74–79.) Plaintiffs further allege that Baku became a member of and began conspiring with the Yeroushalmi Clan in 2002, and that Baku received his first payment in April 2005 for his duties as “enforcer” and for delivery of the properties. ( Id. ¶¶ 73, 82.) Plaintiffs allege that Morad, Moussa and Farzaneh “knew that Baku battered Davis and Rahim for the purposes of controlling them and directing their continued ‘fleecing’ of equity and interest in their real properties,” and that this amounts to “larceny through extortion ... in an organized manner contrary to 18 U.S.C. § 1961(1)(A).” ( Id. ¶¶ 85–86.)

With respect to the purported bank fraud, plaintiffs allege that, between May 2006 and March 2007, Morad and Farzaneh borrowed $1.3 million against the title to Clinton, $1.1375 million against the title to Gates, and $975,000 against the title to W127, without the knowledge or consent of Davis. ( See id. ¶¶ 87–105.) Plaintiffs allege that defendants “knew or should have known that Davis would...