Eagle One Roofing Contractors, Inc. v. Dawn M. Acquafredda, Jack Acquafredda, Anthony Sabatino, Accord, Inc., 16-CV-3537 (NGG) (SJB)

Decision Date31 March 2018
Docket Number16-CV-3537 (NGG) (SJB)
CourtU.S. District Court — Eastern District of New York

NICHOLAS G. GARAUFIS, United States District Judge.

Plaintiff Eagle One Roofing Contractors, Inc. ("Eagle One"), a construction company, brings this action claiming violations of the Racketeering Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1964, conspiracy to violate RICO, 18 U.S.C. § 1962(d), and violations of state common law. (Am. Compl. (Dkt. 43).) The objects of this suit are former employees of PlaintiffDefendants Dawn M. Acquafredda, Jack Acquafredda, and Anthony Sabatino—and former subcontractors of PlaintiffDefendants Accord, Inc., Accord Sales, Inc., Richard Yopp, Jr., Richard Stankey, and Yvonne Carnabuci. (Id.) Plaintiff alleges that Defendants engaged in a scheme to defraud Plaintiff by submitting fictitious work invoices. (Id.)

Before the court are two motions to dismiss: one filed by Defendants Dawn Acquafredda and Jack Acquafredda (the "Acquafredda Motion") (Mot. to Dismiss ("Acquafredda Mot.") (Dkt. 46)), and the other filed by Defendants Accord, Inc., Accord Sales, Inc., Richard Yopp, Jr., Richard Stankey, and Yvonne Carnabuci (the "Accord Motion") (Mot. to Dismiss ("Accord Mot.") (Dkt. 47)). Both motions axe filed pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, and both seek to dismiss all claims filed against the moving parties. Defendant Anthony Sabatino has not appeared in the case and is the only defendant not moving to dismiss claims in the Amended Complaint (the "Complaint").

For the reasons set forth below, the Acquafredda Motion is GRANTED IN PART and DENIED IN PART, and the Accord Motion is GRANTED IN PART and DENIED IN PART.

As to Raymond Stankey and Jack Acquafredda, all of Plaintiff's claims—RICO claims, RICO conspiracy claims, and all state law claims—are DISMISSED without prejudice. As to Dawn Acquafredda, Accord, Inc., Accord Sales, Inc., Yvonne Carnabuci, and Richard Yopp, Jr., all of Plaintiff's claims—RICO claims, RICO conspiracy claims, and all state law claims—remain. Additionally, because Anthony Sabatino did not move to dismiss any of the claims against him, all claims against him also remain.

A. Facts

Eagle One is a construction company that does business primarily in New York, New Jersey, Connecticut, and Pennsylvania. (Am. Compl. ¶¶ 24-25.) Eagle One brings this action against its former employees Dawn Acquafredda, Jack Acquafredda, (together, "the Acquafredda defendants") and Anthony Sabatino, (collectively "the insider defendants"), as well as against Eagle One's former subcontractors: Accord, Inc., Accord Sales, Inc., (together, "Accord"), Richard Yopp, Raymond Stankey, and Yvonne Carnabuci (collectively "the Accord defendants"). (Am. Compl. ¶¶ 13-21.) Eagle One alleges that the insider defendants schemed together with the Accord defendants to defraud Eagle One of over $1.3 million by having EagleOne make out checks to Accord, a subcontractor of Eagle One, based on false invoices submitted by the Accord defendants for work that was never done. (Am. Compl. ¶ 2.)

Dawn Acquafredda was the president and sole shareholder of Eagle One between 1993 and 2007, during which time she also worked as the office manager. (Id. ¶ 27.) In 2008, she sold Eagle One to two of her brothers, Dan and Vincent Sabatino. The oral sale was memorialized in two later written agreements made in June 2009 and August 2011. (Id. ¶¶ 32-35.) After selling the company to her brothers, Dawn Acquafredda continued to be employed by Eagle One as the office manager "with responsibilities over significant parts of its operations, including the accounts payable functions." (Id. ¶ 30.) The other insider defendantsAnthony Sabatino, another of Dawn's brothers, and Jack Acquafredda, Dawn's husband—both worked for Eagle One as field supervisors. (Id. ¶ 37.) Field supervisors are responsible for overseeing Eagle One employees on job sites and supervising the work of Eagle One subcontractors. (Id. ¶ 38.)

The Complaint alleges that, at some point after August 2011, all defendants formed a conspiracy to defraud Eagle One. (Id. ¶ 40.) The alleged fraud would be accomplished by the Accord defendants sending "fictitious" invoices to Eagle One "by United States mail, by fax over interstate telephone lines or email through the internet for work that was not being done." (Id. ¶ 41.) Dawn Acquafredda, who was in charge of processing payment for Eagle One, would ensure that the invoices were processed and authorize the issuance of checks payable to Accord. (Id. ¶ 43.) Jack Acquafredda and Anthony Sabatino, the official Eagle One supervisors at the job sites, "aided and abetted the scheme by creating the false appearance that the work for which Accord was receiving payments was actually being done in the field." (Id. ¶ 45.) The Accorddefendants "then deposited the embezzled funds into an Accord bank account and [then] distributed the illicit proceeds among the members of the conspiracy." (Id. ¶ 44.)

Eagle One points to two jobs in particular where it alleges fraud. The first job was the project known as the 55 Water Street Job. In connection with that job, Accord issued invoices from September 24, 2013, through January 12, 2015, totaling $389,811.33, however, all the work for the job had actually been completed nine months earlier, in January 2013. (Am. Compl. ¶48.) The second job was the project known as the American Express Job, for which Accord had been hired to perform tile work for a kitchen costing approximately $30,000. (Id. ¶ 49.) Accord, however, submitted invoices from July 16, 2012, through October 15, 2014, totaling $757,778.52 for work relating to this job. (Id.) The invoices for both of these projects are attached to the Complaint as Exhibit 1. (Invoices (Dkt. 43-1).) Eagle One claims that it first discovered evidence of this alleged fraud in January 2015, when its external accountant began asking questions about certain entries in Eagle One's records. (Am. Compl. ¶ 50.) Pursuant to a subpoena, Eagle One obtained a canceled check that had been issued by Accord, and signed by Yopp, made payable to Sabatino and Dawn Acquafredda. (Id. ¶ 52.) The checks covered an eight-month period during which Dawn Acquafredda received $136,586 from Accord, and Sabatino received $47,500 from Accord. (Id. ¶ 53.) Copies of the canceled checks are attached to the Complaint as Exhibit 4. (Canceled Checks (Dkt. 43-4).)

B. The Complaint

Eagle One alleges that Defendants have committed RICO violations pursuant to 18 U.S.C. § 1962(c) and demands relief under 18 U.S.C. § 1964(c). (Am. Compl. ¶ 103.) Under Section 1964(c), "[a]ny person injured in his business or property by reason of a violation ofsection 1962 of this chapter may sue therefor in any appropriate United States district court and shall recover threefold the damages he sustains and the cost of the suit, including a reasonable attorney's fee." A plaintiff asserting a civil RICO claim must allege that he was injured in his business or property because of a defendant's acts in violation of any of the provisions of 18 U.S.C. § 1962. See 18 U.S.C. § 1964(c).

Plaintiff alleges that Defendants have committed the following predicate acts necessary to establish a RICO violation: "18 U.S.C. § 1343 (wire fraud); 18 U.S.C. § 1341 (mail fraud): 18 U.S.C. § 1952 (racketeering); 18 U.S.C. § 1956 (money laundering); 18 U.S.C. 1957(a) & (f) (monetary transactions in criminal proceeds); 18 U.S.C. § 2314 (transportation of stolen property); 18 U.S.C. §1952(a) (travel act criminal activity); and New York Penal Law §180.03 & 180.08 (commercial bribery and commercial bribe receiving in the first degree)." (Am. Compl. ¶ 91.) Eagle One also asserts claims of RICO conspiracy under 18 U.S.C. § 1962(d). (Am. Compl. ¶ 106.)

Additionally, Eagle One asserts, against all defendants, the common law claims of fraud, fraudulent concealment, conversion, and unjust enrichment; against the insider defendants, breach of fiduciary duties; and, against the Accord defendants, aiding and abetting a breach of fiduciary duties. (Id. ¶¶ 113-148.)

C. Procedural History

Defendants moved to dismiss the action pursuant to Federal Rule of Civil Procedure 12(b)(6) on June 16, 2017. The Accord defendants submitted a Memorandum in Support of the Motion to Dismiss ("Accord Mem.") (Mem. in Supp. of Mot. to Dismiss ("Accord Mem.") (Dkt. 46)) as did Dawn and Jack Acquafredda ("Acquafredda Mem.") (Mem. in Supp. of Mot. toDismiss ("Acquafredda Mem.") (Dkt. 47)). Eagle One submitted a Memorandum in Opposition (Pl. Mem. (Dkt. 48)) arguing that the action should not be dismissed. The Accord defendants submitted a Reply Memorandum ("Accord Reply Memo") (Reply Mem. in Supp. of Mot. to Dismiss ("Accord Reply Mem.") (Dkt. 49)), as did the Acquafredda defendants ("Acquafredda Reply Memo") (Reply Mem. in Supp. of Mot. to Dismiss ("Acquafredda Reply Mem.") (Dkt. 50)). Anthony Sabatino has not appeared in this action and is not a party to the motions before the court.

Before this case was initiated, on March 24, 2016, Dawn Acquafredda commenced an action in the Supreme Court of the State of New York, County of Nassau, Acquafredda v. Sabatino, No. 601979/2016 (N.Y. Sup. Ct. filed Mar. 24, 2016) (the "state court action"), claiming that her brothers—now the sole shareholders of Eagle One—breached the written sale agreements related to her sale of Eagle One. (Acquafredda Mem. at 5.) The defendants in that action responded with an affirmative defense that Dawn Acquafredda had forfeited her rights under the sale contract because of the alleged fraud at issue before this court. (Id.) The Acquafredda defendants claim that the action in this court was instituted "in...

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