Gary Miller Imports, Inc. v. Doolittle

• Decision Date: 30 November 2020
• Docket Number: Civil Action No. 1:11-CV-178
• Parties: GARY MILLER IMPORTS, INC., Plaintiff, v. CARTER DOOLITTLE, et al., Defendants.
• Court: U.S. District Court — Western District of Pennsylvania

GARY MILLER IMPORTS, INC., Plaintiff, v. CARTER DOOLITTLE, et al., Defendants.

Civil Action No. 1:11-CV-178

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA

November 30, 2020

Re: Motion for Summary Judgment ECF No. 121

MEMORANDUM OPINION

U.S. D.J. Susan Paradise Baxter

I. Introduction

Pending before this Court is Defendants' motion for summary judgment. ECF No. 121. Jurisdiction is grounded in a civil claim asserted by Plaintiff Gary Miller Imports (GMI) under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1961-68¹. ECF No. 1. Plaintiff also raises state law claims of fraud and constructive fraud, conversion of corporate property, breach of fiduciary and employee duty, unjust enrichment, aiding and abetting and conspiracy. ECF No. 1.

There are four Defendants in this matter: Carter Doolittle, Brent Doolittle, Kevin Doolittle, and Landmark Chevrolet, Inc., a car dealership in New York state. The RICO claim, aswell as the conversion and conspiracy claims, are levied against all four Defendants. The aiding and abetting claim is brought against Kevin Doolittle and Landmark Chevrolet. Finally, all other legal claims are brought against Carter Doolittle and Brent Doolittle.

II. Factual and Procedural Background

Although the long history of the association between the parties is well-known to them, some of that history is required here to provide background for the Court's decision. Most of what follows is undisputed. Any disagreement between the parties on a particular factual or procedural point will be noted when relevant.

Plaintiff here is Gary Miller Imports which was formerly known as Gary Miller Dodge ("GMD"). GMD was incorporated in 1980 and Gary L. Miller (Miller) has been either the sole or majority owner/shareholder since that time. ECF No. 123, ¶ 9. Miller is also the majority shareholder of two other enterprises: Contemporary Motor Cars, Ltd., and Miller Management Group. Id., ¶¶ 13, 15. Defendants Brent, Carter, and Kevin Doolittle (collectively, "the Doolittles") are brothers who have worked in the retail automotive field since the 1970s and have been acquainted with Miller since then. Id., ¶ 16. In 1992, Brent and Carter Doolittle bought a minority interest in GMD. Id., ¶ 19. By 1997, Brent and Carter had acquired forty-nine percent of GMD's shares. Id. From 1997 until 2009, the two brothers worked as employees of GMD in addition to their positions as officers and directors of the company. Id., ¶ 20.

In 2001, all three brothers purchased a controlling interest in Landmark Chevrolet in Randolph, New York. Id., ¶ 23.² And, in 2007, the Doolittle brothers purchased a controllinginterest in Landmark Chrysler/Jeep in Westfield, New York in 2007. Id., ¶ 26. Between 2001 and 2009, GMD and the Landmark dealerships bought and sold vehicles to each other at wholesale prices, a practice the Doolittles claim was "common" in the automobile industry. ECF No. 122, p. 3;ECF No. 123, ¶ 148. One hundred and nine (109) of these transactions, beginning in March 2005 and ending in December 2009, form the basis of a portion of the RICO claim. ECF No. 1, ¶ ¶ 46-49; ECF No. 2, pages 7-10. The complaint details forty-one transfers of vehicles owed by GMD to Landmark Chevrolet [ECF No. 1, ¶ 46]; three transfers of vehicles from GMD to Landmark Chrysler Jeep [id. at ¶ 47]; forty-eight transfers from Landmark to GMD [id. at ¶ 48]; and seventeen transfers from Landmark Chrysler Jeep to GMD [id. at ¶ 49]. Each of these transactions resulted in a loss to GMD. Id. at ¶ ¶ 46-49.

In May 2009, after declaring its corporate bankruptcy, the Chrysler Corporation advised GMD that it was terminating its association with the dealership.³ ECF No. 123, ¶ 28. Carter Doolittle, as President of GMD, sought to arbitrate the collapse of the business relationship. Id. at ¶ 31. See also Consolidated Appropriation Act of 2010, § 747, Pub. L. 111-117, 123 Stat. 3034, 3219-21; Colonial Chevrolet Co. v. United States, 145 Fed. Cl. 243, 245 (2019). Miller, however, quashed attempts at arbitration. Id. at ¶ 36; ECF No. 130, ¶ 32-33 (inclusive of footnote 2). The Doolittles sued GMD in state court as a result of Miller's repudiation of arbitration andthe subsequent closure of GMD.⁴ Id. at ¶ 33. Those proceedings are apparently pending and are largely irrelevant to these.

It is Plaintiff's position that upon winding up the GMD business around early 2010, Mr. Miller discovered many examples of either Brent or Carter Doolittle fraudulently enriching themselves at the company's expense. Mr. Miller then directed counsel "to undertake an investigation and he, along with an accountant, reviewed the records of GMD." ECF No. 131, ¶ 38. The investigation uncovered many nefarious dealings, some going back decades, that caused financial harm to GMD. These included the failure to pay expenses on credit cards in a timely manner, causing GMD to incur late charges and fees; the failure to pay expenses on credit cards resulting from Defendants Carter Doolittle's and Brent Doolittle's purchase of personal items with those credit cards; and the use of the accounting and payroll system of GMD to embezzle extra pay, unearned vacation pay, and unearned bonus payments.⁵

Upon a report of the findings of that investigation, Mr. Miller directed that legal action be taken "to hold the Doolittles responsible for the harm they caused GMD." Id. GMI filed this lawsuit against the Doolittles and Landmark in August 2011. ECF No. 1⁶.The Doolittles andLandmark answered the Complaint. ECF No. 10. A long and disputatious period of discovery ensued.⁷ This case was transferred to the undersigned in October 2018.

Now before this Court is the Motion for Summary Judgment filed by Defendants. ECF No. 121. They concomitantly filed a memorandum in support of their motion (ECF No. 122), a Concise Statement of Material Fact in compliance with our Local Rule 56(B)(1) (ECF No. 123), and an Appendix (ECF No. 124). GMI has filed a memorandum in opposition to the motion (ECF No. 129), a Responsive Concise Statement, which includes cross-statements (ECF No. 130), and an Appendix (ECF No. 131). Defendants then filed a Reply brief as well as their own Responsive Concise Statement. ECF No. 143, ECF No. 144. Given these filings, this motion is joined and ripe for disposition.

III. Standard of Review

Federal Rule of Civil Procedure 56(a) provides that summary judgment must be granted if the "movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Under Rule 56, the district court must enter summary judgment against a party "who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

A "party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of 'the pleadings,depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact." Id. at 323, quoting Fed. R. Civ. P. 56. In other words, the moving party has the initial burden of proving to the district court the lack of evidence supporting the non-moving party's claims. Id. at 330; see also Andreoli v. Gates, 482 F.3d 641, 647 (3d Cir. 2007); UPMC Health Sys. v. Metro. Life Ins. Co., 391 F.3d 497, 502 (3d Cir. 2004).

After the moving party has satisfied this low burden, the non-moving party must provide facts showing that there is a genuine issue for trial to avoid summary judgment. Id. at 324. The non-moving party must then oppose the motion, and in doing so "'may not rest upon the mere allegations or denials of [its] pleadings' but, instead, 'must set forth specific facts showing that there is a genuine issue for trial. Bare assertions, conclusory allegations, or suspicions will not suffice.'" Jutrowski, 904 F.3d at 288-89, quoting D.E. v. Cent. Dauphin Sch. Dist., 765 F.3d 260, 268-69 (3d Cir. 2014).

In reviewing a motion for summary judgment, the court must view the facts in the light most favorable to the non-moving party and draw all reasonable inferences in that party's favor. Jutrowski v. Twp. of Riverdale, 904 F.3d 280, 288 (3d Cir. 2018) citing Scheidemantle v. Slippery Rock Univ. State Sys. of Higher Educ., 470 F.3d 535, 538 (3d Cir. 2006). The court may not "weigh the evidence" or "determine the truth of the matter." Anderson, 477 U.S. at 249. Instead, the court's role in reviewing the facts of the case is "to determine whether there is a genuine issue for trial." Id.

IV. Analysis and Discussion

A. The RICO Claim under 18 U.S.C. § 1962

Because the RICO claim is the only claim over which this Court has original jurisdiction, it will be addressed at the outset. Congress intended RICO to be a potent and flexible statute and the Supreme Court has instructed that it be read broadly. Tabas v. Tabas, 47 F.3d 1280, 1290-91 (3d Cir. 1995) (en banc) quoting Sedima, S.P.R.L. v. Imrex Company, Inc., 473 U.S. 479, 497-98 (1985) ("'RICO is to be read broadly. This is the lesson not only of Congress' self-consciously expansive language and overall approach, but also of its express admonition that RICO is to be liberally construed to effectuate its remedial purposes.'").

In Sedima, the Supreme Court recognized that by interpreting the RICO statute broadly the statute would be "use[d] not only against mobsters and organized criminals but also against 'respected and legitimate enterprises.'" Id. Sedima specifically concluded that Congress intended to "reach both legitimate and illegitimate enterprises" since "the former enjoy neither an inherent incapacity for criminal activity nor immunity from its consequences." Sedima, 473 U.S. at 499.

The focus of the court in any RICO ...