Manax v. McNamara

Decision Date01 May 1987
Docket NumberCiv. A. No. W-87-CA-014.
Citation660 F. Supp. 657
PartiesWilliam G. MANAX, M.D. and Manax Medical and Surgical Clinic, a Texas Partnership d/b/a Oak Street Medical Clinic, Plaintiffs, v. Lanelle L. McNAMARA; Rod S. Squires; Dale D. Williams; Denise Gamino; Cox Enterprises, Inc., d/b/a Cox Texas Publications, Inc.; Sue Pescaia; Cechoslavak Publishing Company, Inc. d/b/a the West News, Defendants.
CourtU.S. District Court — Western District of Texas

Peter H. Fulton, Hurst, Tex., for plaintiffs.

Marshall M. Searcy & Lori B. Finkelston, Rain, Harrell, Emery Young & Doke, Dallas, Tex., for defendant McNamara.

John L. Lancaster, III, Jackson, Walker, Winstead, Cantwell & Miller, Dallas, Tex., for defendants Squires and Williams.

David H. Donaldson, Jr., Graves, Dougherty, Hearon & Moody, Austin, Tex., for defendants Gamino and Cox.

Noley R. Bice, Jr., Waco, Tex., for defendants Pescaia and Cechoslavak.

ORDER

WALTER S. SMITH, JR., District Judge.

On this date came on to be considered the motion of each Defendant to dismiss this cause. The motions are made pursuant to Rule 12(b) of the Federal Rules of Civil Procedure. The Court, having considered said motions, finds that they are meritorious and should be granted.

I.

Plaintiffs, Dr. William G. Manax and Manax Medical and Surgical Clinic, a Texas Partnership d/b/a The Oak Street Medical Clinic, invoke this Court's jurisdiction under the RICO statute, 18 U.S.C. § 1961 et seq., and the Civil Rights Act, 42 U.S.C. § 1981 et seq., and assert pendent jurisdiction for a breach of contract claim, libel, slander and tortious interference with business. The basis for this action involves an alleged conspiracy to harm Plaintiffs' medical practice.

Dr. William G. Manax currently operates his medical clinic in the community of West, Texas where he is chief of surgery at West Community Hospital. At the time Dr. Manax associated himself with the hospital, Dr. Emsley Davis was an active surgeon on its staff. In 1980, Dr. Davis faced various allegations involving his professional competence. These allegations were investigated by Dr. Manax and a notice of deficient patient care was given to Dr. Davis, who filed suit in this Court to prevent his removal from the staff. The attorney for Dr. Davis was Defendant Lanelle L. McNamara ("McNamara"). Defendant McNamara, during the defense of Dr. Davis, also initiated an investigation of Dr. Manax by obtaining his patient records and subsequently referred Dr. Manax's former patients to Defendant Attorneys Rod S. Squires and Dale D. Williams. The Plaintiff alleges that this referral was designed to encourage and solicit these attorneys to file suit against Dr. Manax for the purpose of harming his and the Medical Clinic's reputation and ability to practice medicine, as well as increase Manax's and the Clinic's medical malpractice premiums. Defendants contend that none of the malpractice actions brought on behalf of the individual clients have been found to be frivolous or to have been brought in bad faith.

The Plaintiffs further allege that McNamara filed complaints with the Texas State Board of Medical Examiners and also encouraged and directed others to file such complaints, the effect being to urge the revocation of Dr. Manax's license. Plaintiffs also complain that McNamara urged and coordinated false and misleading press articles adverse to Dr. Manax in concert with Defendant Denise Gamino, individually and as an agent, servant and employee of Defendant Cox Enterprises; Defendant Sue Pescaia, individually and as an agent, servant and employee of Defendant Cechoslavak Publishing Co., Inc., as well as Defendants Squires and Williams. However, the articles printed in The Austin American Statesman and The West News were accounts of Dr. Manax' professional life and the Defendants claim that they were pieced together from confidential records, court papers and numerous interviews. The Plaintiffs then allege that the dissemination of these articles involved interstate and intrastate commerce through the United States mail and through communication by telephone.

Defendant McNamara, as mayor of Waco, is alleged to have organized a conspiracy consisting of all of the Defendants and having as its purpose the concerted effort to deprive Dr. Manax of his license to practice in Texas and the right to practice anywhere in the future. The Plaintiffs contend that this effort has caused them to be the victims of a pattern of racketeering activity. Specifically, the Plaintiffs believe the Defendants constitute an illegal racketeering enterprise within the meaning of the Racketeering Influenced Corrupt Organization Act, (RICO), and that they have evidenced an ongoing pattern of unlawful racketeering activity by continuing to file lawsuits against Dr. Manax and by consistently urging the Texas State Board of Medical Examiners to conduct hearings against Dr. Manax. Further, the Plaintiffs allege that their civil rights have been violated because of the nature and extent of the Defendants activities, through the leadership of Defendant McNamara.

II.

A motion to dismiss pursuant to Rule 12(b) of the Federal Rules of Civil Procedure has been filed by each Defendant. When considering these motions, the Court must look to established law which holds that a motion to dismiss for failure to state a claim should not be granted unless it appears that the Plaintiff would not be entitled to any relief under any set of facts which could be proved in support of his claim. United States v. Uvalde Consolidated Independent School District, 625 F.2d 547 (5th Cir.1980). The general view is that motions to dismiss are not favored and are granted sparingly. Rios v. Dillman, 499 F.2d 329 (5th Cir.1974). Upon receipt of the motion, the complaint should not be dismissed merely because the Plaintiff's allegations do not support the particular legal theory advanced. On the contrary, the Court will examine the allegations to determine whether they call for relief on any possible theory. Williams v. United Credit Plan of Chalmette, Inc., 526 F.2d 713 (5th Cir.1976). Furthermore, a claim should not be dismissed merely because all of the elements that give rise to a legal basis for recovery have not been stated. Id. at 715.

There is no view, however, that motions to dismiss for failure to state a claim should never be granted. When used with care, there is a time and a place for Rule 12(b) motions to dismiss. Rios v. Dillman, 499 F.2d 329, 330 (5th Cir.1974). Specifically, the dismissal should be granted where it is certain that the Plaintiff cannot possibly be entitled to relief under any set of facts which could be proved in support of the allegations of the complaint. International Erectors v. Wilhoit Steel Erectors and R. Service, 400 F.2d 465 (5th Cir.1968).

III.

The Court will now analyze and decide each of the Plaintiff's claims as it relates to each Defendant.

Rico Allegations

The Plaintiffs allege that they are victims of a pattern of racketeering activity conducted by the Defendants and other persons and entities. They further allege that for a period of time beginning in 1981, Defendants have participated, engaged in and directed the affairs of an illegal racketeering enterprise within the meaning of the Racketeer Influenced and Corrupt Organizations Act through an ongoing pattern of unlawful racketeering activity. The initial question, therefore, is whether the Defendants have violated the Racketeer Influenced and Corrupt Organizations Act (RICO). RICO provides a private civil remedy to recover treble damages for violation of its substantive provisions, provided that the Plaintiff can demonstrate he has been injured in his business or property by the conduct constituting the violation. 18 U.S.C. § 1964(c). In their complaint, the Plaintiffs allege a violation of 18 U.S.C. § 1962(c), which requires (1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity. The Plaintiff must, of course, allege each of these elements to state a claim. Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479, 105 S.Ct. 3275, 3285, 87 L.Ed.2d 436 (1985). The criminal actions allegedly underlying the Plaintiffs' claims of racketeering activity are the predicate acts of mail fraud and wire fraud. 18 U.S.C. § 1341 and § 1343. To state a proper claim, it is only necessary that the Plaintiffs show the Defendants' actions and activities arguably come within the purview of Section 1341. An analysis under the mail fraud section necessitates a broad interpretation of the language of the statute and is to be construed in light of the statute's manifest purpose to prohibit all attempts to defraud by any form of misrepresentation. Durland v. United States, 161 U.S. 306, 313, 16 S.Ct. 508, 511, 40 L.Ed. 709 (1896). Inherent in any scheme to defraud is falsehood of some kind. Further, schemes to defraud under the mail fraud statute have fallen into two broad categories: 1) schemes which are intended to defraud individuals of money or other tangible property interests and 2) those which operate to deprive individuals of significant, often constitutionally protected, intangible rights. United States v. McNeive, 536 F.2d 1245 (8th Cir.1976).

However, the alleged predicate acts of the Defendants obviously do not come within this broad reading of Section 1341. The Plaintiffs allege specifically that the Defendants have used the mail and other means and instrumentalities of interstate commerce to deliver written statements defaming Dr. Manax and to deliver illegally obtained medical records and Texas State Board of Medical Examiners' documents. Also central to the Plaintiff's mail fraud contention is that Defendant McNamara urged and coordinated false and misleading press articles harmful to Dr. Manax in concert with Defendants Gamino, The Austin American Statesman, Pescaia, The West News, as well as Defendants Squires and Williams. This alleged scheme, when reduced to...

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