Evans Law Corp. v. Burgos

• Decision Date: 27 October 2017
• Docket Number: CIVIL ACTION NO. 2:16-cv-13550
• Parties: THE EVANS LAW CORPORATION, APLC, ET AL., Plaintiffs v. CESAR R. BURGOS, ET AL. Defendants
• Court: U.S. District Court — Eastern District of Louisiana

THE EVANS LAW CORPORATION, APLC, ET AL., Plaintiffs v. CESAR R. BURGOS, ET AL. Defendants

CIVIL ACTION NO. 2:16-cv-13550

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA

October 27, 2017

CHIEF JUDGE KURT D. ENGELHARDT

MAG. JUDGE WILKINSON

ORDER AND REASONS

Presently before the Court is a motion to dismiss pursuant to Federal Rules of Civil Procedure 12(b) and (c) that was filed by Defendants, Cesar R. Burgos, The Burgos Law Corporation, APLC, George McGregor, and Robert Daigre ("Defendants" or "the Burgos Defendants"). (Rec. Doc. 104). With their motion, Defendants seek dismissal with prejudice of Count I, Plaintiffs' claims under the Racketeer Influenced and Corrupt Organization Act ("RICO"), asserting that Plaintiffs' claims are time-barred and fail as a matter of law under 18 U.S.C. 1961, et seq.; Defendants further request that the Court decline to exercise pendant jurisdiction over the remaining state law claims. (Rec. Doc. 104-1 at p. 1). The motion is opposed by the Plaintiffs, Robert Evans, III and the Evans Law Corporation, APLC ("Plaintiffs"). (Rec. Doc. 113). Defendants filed a reply in support of the motion to dismiss (Rec. Doc. 117), which was followed by Plaintiffs' sur-reply in opposition of dismissal (Rec. Doc. 120).

Having carefully considered the parties' submissions and the applicable law, IT IS ORDERED that Defendants' Motion to Dismiss Count I of the Fourth Amended Complaint (Rec. Doc. 104) is GRANTED for the reasons stated herein.

IT IS FURTHER ORDERED that Plaintiffs' Motion for Leave to File Revised RICO Statement (Rec. Doc. 108) is DENIED AS MOOT.

I. BACKGROUND

On July 7, 2016, the Plaintiffs, Robert B. Evans, III ("Mr. Evans") and the Evans Law Corporation, APLC, commenced this action against the Defendants, Cesar Burgos, Burgos & Associates, The Burgos Law Corporation, APLC, George McGregor, and Robert Daigre in the 24^th Judicial District Court in Jefferson Parish.¹ (See Rec. Doc. 1-1). On August 3, 2016, Defendants jointly removed this matter to the United States District Court for the Eastern District of Louisiana based on Plaintiffs' allegations that Defendants violated the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961, et seq. (Rec. Doc. 1).

In Count I of the Fourth Amended Complaint,² filed on May 24, 2017, Plaintiffs allege that Burgos, McGregor, and Daigre—RICO persons pursuant to § 1961(3)—conspired to violate 18 U.S.C. § 1962(c) by agreeing to the commission of a pattern of racketeering activity through the law firms of Burgos & Evans and Burgos & Associates (RICO enterprises), in violation of 18 U.S.C. § 1962(d). (Rec. Doc. 90 at p. 9). Plaintiffs contend that Defendants' schemes involved racketeering acts occurring over more than a three-year period, forming a pattern of racketeering, and resulted in the loss of millions of dollars in income. (Id.).

Plaintiffs allege that Defendants violated RICO by conspiring to eliminate Mr. Evans from the Burgos & Evans law firm based on the following predicate acts:

1) Conspiracy to Murder Evans in 2012: In 2012, Burgos formed a scheme to cause Evans' death by heavy doses/combination of hormonal drugs [daily growth hormone injections, namely Sermorelin, and weekly testosterone injections] he knew would likely cause him to have a heart attack....Burgos knew Evans had an aorta valve defect. He was hoping the drugs would cause Evans to have a fatal heart attack, which nearly happened.

2) Scheme to Deprive Evans of His share of the Dixie Brewing Settlement and Oust him form the Firm Begins in 2013 and Culminates in 2015: Burgos & Evans had been engaged in the Dixie Brewing case since 2010. By 2013, settlement discussions were underway, and with the attempt to kill him having failed, Burgos began his next scheme to oust Evans from the firm and deprive him of his share of the settlement. This entailed ongoing uses of the federal mail and wires to spread damaging misinformation about Evans to lay the foundation for his removal from the firm for mental unfitness and alleged drug addiction....

3) Scheme to Violate the Settlement Agreement: Burgos and Evans sued each other in Louisiana state court...on or about July 8, 2015, Burgos and Evans purportedly reached a settlement...Burgos has refused to send the first letter [to clients] directed by the judge and the second letter required by the settlement agreement. And he continued to send more emails and letters to [over 500] clients making the same false statements about Evans in violation of the mail and wire fraud statute...Burgos has not complied with a single obligation of his under the Settlement Agreement [including payment of remaining $900,000 owed to Evans as provided in the Settlement Agreement].

4) Scheme to Cover Up Burgos' Malpractice and Blame Evans: In approximately 2013 or 2014, Evans was hired to represent Mary Washington in a Medical Malpractice case...Burgos asked McGregor to assist Evans in said case...McGregor was assigned the task of drafting an opposition brief challenging the defendants' writ application...Burgos and McGregor failed to file any opposition brief...resulting in the dismissal of that defendant. Rather than tell the client the truth, they caused a letter to be sent to Mary Washington, in Texas, alleging that the failure to file a writ opposition was Evans' fault...This action violation of the mail fraud statute in that it was sent in furtherance of the scheme to harm Evans.

(Rec. Doc. 90 at p. 3-8). Plaintiffs allege that these four schemes "are related in that they were undertaken by Burgos and his later joining co-conspirators [McGregor and Daigre] in order to eliminate Evans from the law firm, take his clients, and deprive him of his 50% shares of revenues from his cases in the event the firm dissolved." (Id. at p. 9).

Presently before the Court is Defendants' Motion to Dismiss Plaintiffs' RICO claims pursuant to Federal Rule of Civil Procedure 12(b) and (c). (Rec. Doc. 104). First, Defendants seek to have the Plaintiffs' RICO claims dismissed pursuant to Fed. R. Civ. P. 12(c) as time-barred because the claims were brought more than four years after the alleged RICO conspiracy began. Alternatively, Defendants argue that Plaintiffs' RICO claims should be dismissed for failure to state cognizable claims under 18 U.S.C. § 1961, et seq.: "Each of [Plaintiffs'] allegations fails to properly set forth the necessary detail to be considered a predicate act under the federal RICO statute." (Rec. Doc. 104-1 at p. 16).

In its opposition, Plaintiffs assert that the four-year statute of limitations has not run because "the injuries alleged in this Complaint—Mr. Evans' share of the profits from Burgos & Evans Law when he was expelled from the firm—began accruing in May 2015 and continue to accrue, well within the limitations period." (Rec. Doc. 113). Plaintiffs counter that dismissal of their RICO claims is improper because the four alleged schemes were carried out by the Defendants for the purpose of removing Mr. Evans from the firm and taking his share of revenue from their cases. Further, Plaintiffs argue that the relevant alleged predicate acts comply with the heightened specificity requirements of Rule 9(b). (Rec. Doc. 113 at p. 2).

II. LAW AND ANALYSIS

A. Motion to Dismiss Under Rule 12(b)(6)

To survive a motion to dismiss pursuant to Rule 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal citation omitted). Facial plausibility exists "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. "The plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. A legally sufficient complaint must go beyond "labels and conclusions, and a formulaic recitations of the elements of a cause of action." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). Rather, a complaint's allegations "must make relief plausible, not merely conceivable, when taken as true." United States ex rel. Grubbs v. Kanneganti, 565 F.3d 180, 186 (5th Cir. 2009).

"Determining whether a complaint states a plausible claim for relief...[is] a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679 (internal citations omitted); see also Robbins v. Oklahoma, 519 F.3d 1242, 1248 (10th Cir. 2008) (degree of required specificity depends on context, i.e., the type of claim at issue). In evaluating a Rule 12(b)(6) motion, the Court is bound to "accept all well-pleaded facts as true, and . . . view them in the light most favorable to the plaintiff." Campbell v. Wells Fargo Bank, N.A., 781 F.2d 440, 442 (5th Cir. 1986). Further, "[a]ll questions of fact and any ambiguities in the controlling substantive law must be resolved in the plaintiff's favor." Lewis v. Fresne, 252 F.3d 352, 357 (5th Cir. 2001).

B. RICO

The civil enforcement provision of RICO provides that "[a]ny person injured in his business or property by reason of a violation of section 1962...may sue therefor in any appropriate United States district court and shall recover threefold the damages...and the cost of the suit, including a reasonable attorney's fee." 18 U.S.C. § 1964(c). Plaintiffs have brought the instant RICO action pursuant to 18 U.S.C. § 1962(d), which prohibits conspiring to violate subsections (a), (b), or (c) of the RICO statute. Specifically, Plaintiffs allege that Burgos, McGregor, and Daigre were involved in schemes involving racketeering acts over a three-year period, thus each violated 18 U.S.C. § 1962(d) by conspiring to violate 18 U.S.C. § 1962(c). Section 1962 states that it is "unlawful for any person employed by or associated with any enterprise engaged in, or the...