In re Naples

• Decision Date: 07 February 2015
• Docket Number: 12-CV-4460(JS)(ARL)
• Parties: JAMES V. NAPLES and JAMES C. NAPLES, Plaintiffs, v. PHILIP STEFANELLI; JOSEPH PARISI; DAVID PARISI; ENVIRONMENTAL SERVICES, INC.; COUNTY OF SUFFOLK (NEW YORK); and JOHN DOES 1-100, Defendants.
• Court: U.S. District Court — Eastern District of New York

JAMES V. NAPLES and JAMES C. NAPLES, Plaintiffs, v. PHILIP STEFANELLI; JOSEPH PARISI; DAVID PARISI; ENVIRONMENTALSERVICES, INC.; COUNTY OF SUFFOLK (NEW YORK); andJOHN DOES 1-100, Defendants.

12-CV-4460(JS)(ARL)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

February 7, 2015

MEMORANDUM & ORDER

APPEARANCES

For Plaintiffs:

Harry R. Thomasson, Jr., Esq.

Law Office of Harry Thomasson

3280 Sunrise Highway, Suite 112

Wantagh, NY 11793

For Defendants

Stefanelli:

Sean P. Lenihan, Esq.

Davis & Ferber, LLP

1345 Motor Parkway

Islandia, NY 11749

Arlene S. Zwilling, Esq.

Susan A. Flynn, Esq.

Suffolk County Attorney's Office

H. Lee Dennison Building, 5th Floor

100 Veterans Memorial Highway

Hauppauge, NY 11788

Suffolk County:

Arlene S. Zwilling, Esq.

Susan A. Flynn, Esq.

Suffolk County Attorney's Office

H. Lee Dennison Building, 5th Floor

100 Veterans Memorial Highway

Hauppauge, NY 11788

ESI Defendants:

Glen B. Gruder, Esq

Certilman Balin Adler & Hyman LLP

1393 Veterans Memorial Highway, Suite 301s

Hauppauge, NY 11788

Paul B. Sweeney, Esq.

Sanjay V. Nair, Esq.

Certilman Balin Adler & Hyman LLP

90 Merrick Avenue

East Meadow, NY 11554

SEYBERT, District Judge:

Currently pending before the Court is Defendants Environmental Services, Inc. ("ESI"), Joseph Parisi, and David Parisi's (collectively, the "ESI Defendants") motion to dismiss the Second Amended Complaint for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). (Docket Entry 33.) For the following reasons, the ESI Defendants' motion to dismiss is GRANTED IN PART and DENIED IN PART.

BACKGROUND

Plaintiffs James V. Naples ("James Naples") and James C. Naples ("Jimmy Naples") originally commenced this action on September 6, 2012 against three groups of defendants: (1) Suffolk County (the "County"), the Suffolk County Police Department (the "County Police Department"), and Philip Stefanelli ("Officer Stefanelli") (collectively, the "County Defendants"); (2) the State of New York, the New York State Department of Environmental Conservation Police Department (the "DEC Police Department"), and the New York State Department of Environmental Conservation (the "DEC") (collectively, the "State Defendants"); and (3) the ESI Defendants. Before any of the Defendants answered the original Complaint, Plaintiffs filed an Amended Complaint on October 17,2012, which asserted a variety of federal and state law claims arising out of an alleged conspiracy among Defendants to drive Plaintiffs' Long Island-based biofuel companies out of business. Specifically, the Amended Complaint asserted claims for: (1) violations of Plaintiffs' constitutional rights pursuant to 42 U.S.C. § 1983; (2) violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961, et seq.; (3) violations of Section 340 of New York's General Business Law (the "Donnelly Act"); (4) violations of Section 349 of New York's Business Law (the "Consumer Protection Act"); (5) intentional/negligent infliction of emotional distress; (6) tortious interference with business relations; (7) conversion and theft (against Officer Stefanelli and the ESI Defendants only); (8) fraud and extortion; (9) negligent hiring, training, and supervision (against the Suffolk County Police Department and the DEC Police Department only); and (10) libel and slander (against all Defendants but the DEC Police Department). (See Am. Compl., Docket Entry 3, ¶¶ 142-233.)

The County Defendants filed a motion to dismiss the Amended Complaint on December 14, 2012, and the State Defendants and ESI Defendants filed separate motions to dismiss on January 31, 2013. (Docket Entries 13, 18, 19.) By Memorandum and Order dated September 18, 2013 (the "First Dismissal Order"), the Court granted the State Defendants' motion to dismiss, dismissing withprejudice all claims against the State Defendants. Naples v. Stefanelli, 972 F. Supp. 2d 373, 390-91 (E.D.N.Y. 2013). The Court granted in part and denied in part the County Defendants' and the ESI Defendants' motions to dismiss, dismissing without prejudice, and with leave to replead, Plaintiffs' RICO and Donnelly Act claims against the ESI Defendants, as well as Plaintiffs' claims against the County and Officer Stefanelli alleging municipal liability under Section 1983.¹ Id. at 387-89, 394-97. The Court also dismissed Plaintiff's malicious prosecution claim against the ESI Defendants without prejudice, but did not grant Plaintiffs leave to replead that claim. Id. at 402 n.32. Finally, the Court denied the ESI Defendants' motion to dismiss insofar as it sought dismissal of Jimmy Naples' false arrest claim and both Plaintiffs' illegal search, intentional infliction of emotional distress, tortious interference, libel/slander, and conversion claims.² Id. at 393-94, 399-402.

Plaintiffs filed their Second Amended Complaint on October 25, 2013, which alleges the same factual background as the Amended Complaint, but attempts to correct the pleading deficiencies of Plaintiffs' malicious prosecution, RICO, and Donnelly Act claims against the ESI Defendants. The Second Amended Complaint is nearly identical to the Amended Complaint, the facts of which are set forth extensively in the First Dismissal Order. Accordingly, the Court presumes familiarity with the underlying allegations of this action, and the new allegations of the Second Amended Complaint are set forth throughout the discussion section of this Memorandum and Order.

Briefly, however,³ Plaintiffs James Naples and Jimmy Naples, who are father and son respectively, were the owners and operators of Island Biofuel, LLC and JNS Industries, LLC (collectively, the "Naples Corporations"), two Long Island biofuel companies that were engaged in, inter alia, the business of collecting and reselling waste kitchen oil. (SAC ¶¶ 3-4.) Plaintiffs, through the Naples Corporations, would enter into contracts with restaurants on Long Island to collect and resell their used kitchen oil. (See SAC ¶¶ 18-31.) If they secured a contract, Plaintiffs would provide the restaurant with lockedcontainers to store its used oil pending Plaintiffs' scheduled pick-up. (SAC ¶ 29.)

Defendants Joseph Parisi and David Parisi own and operate Defendant ESI, a biofuel company that was in competition with the Naples Corporations. (SAC ¶¶ 6-8, 17.) Plaintiffs claim that beginning in 2010, ESI began targeting Plaintiffs' customers and inducing them to breach their contracts with the Naples Corporations and hire ESI instead. (SAC ¶¶ 18-19.) If ESI was successful in convincing one of Plaintiffs' customers to sign a contract with ESI, ESI would remove Plaintiffs' containers and locks from the premises and replace them with ESI's containers and locks. (SAC ¶ 19.) Plaintiffs estimate that between 2010 and May 2012, the ESI Defendants stole in excess of twenty thousand gallons of oil worth approximately $50,000, containers valued at $15,000, and $100,000 in lost profits from Plaintiffs' customers. (SAC ¶¶ 26-27.)

Plaintiffs also claim that the ESI Defendants employed Officer Stefanelli, a Suffolk County police officer, and paid him in cash to use his influence in the County Police Department to threaten, harass, and intimidate Plaintiffs because they were competitors of ESI. (SAC ¶¶ 80, 98-100, 102, Ex. C.) They allege that in September 2011, Officer Stefanelli and other County police officers pulled over and falsely arrested Jimmy Naples while he was driving a truck to collect waste cooking oil from Plaintiffs'customers. (SAC ¶¶ 32-34.) The County officers and officers from the Suffolk County Motor Carrier Division allegedly conducted warrantless searches of the truck and wrongfully charged Island Biofuel with violating Section 140.00 of New York Vehicle and Traffic Law for operating a commercial vehicle in violation of the state's safety requirements--specifically, for having a broken windshield wiper blade and an expired "insurance health card." (SAC ¶ 55.) Officer Stefanelli also "arranged for the [DEC] to inspect and close" the Naples Corporations' garage in Center Moriches. (SAC ¶¶ 55-56, 74). The DEC ordered that the garage be closed, ticketed Jimmy Naples and Island Biofuel for operating a waste facility without a permit in violation of N.Y. Comp. Codes R & Regs. tit., § 360-1.7(a)(1)(i), and ticketed Island Biofuel for violating the New York Department of Transportation's regulations governing the safe operation of commercial motor vehicles, N.Y. Comp. Codes R & Regs. tit., § 820.0 et seq. (SAC ¶¶ 61, 76; Parisi Decl. Ex. 7.) Also, in October 2011, the County Police Department's Seventh Precinct (Defendant Stefanelli's precinct) rearrested Jimmy Naples and charged him with Criminal Mischief in the Fourth Degree in violation of N.Y. Penal Law § 145.00 for allegedly cutting a ten dollar lock on one of ESI's oil containers with bolt cutters (SAC ¶ 66; Parisi Decl. Ex. 7), apparently based on a false witness statements signed by David Parisi (SAC ¶ 67).

Plaintiffs claim that they discovered the alleged conspiracy between the ESI Defendants and Officer Stefanelli after Jimmy Naples' arrest, when Plaintiffs went to ESI's headquarters to retrieve some of their containers. (SAC ¶ 79.) Plaintiffs claim that upon arriving, they "were stunned to see Defendant Stefanelli working at the facility dressed fully in clothing indicating that he was employed by and working for Defendant ESI." (SAC ¶ 80.) They were "furious with the discovery of Defendant Stefanelli's presence," refused to sign the release forms for their containers, and insisted that the County Police Department be called. (SAC ¶ 83.) Officer Stefanelli made a call, and an officer arrived shortly thereafter. (SAC ¶ 84.) He spoke to Officer Stefanelli first and then told Plaintiffs that he would not get involved; if Plaintiffs wanted their container, they would have to sign the release as requested. (SAC ¶ 84.)

Plaintiffs allege that they complained to the County Police Department prior to and after Jimmy Naples' arrest, but the County...