Marrazzo v. Bucks County Bank and Trust Co., 92-5694.

• Decision Date: 09 February 1993
• Docket Number: No. 92-5694.,92-5694.
• Parties: Daniel MARRAZZO and Carmela Marrazzo, h/w v. BUCKS COUNTY BANK AND TRUST COMPANY.
• Court: U.S. District Court — Eastern District of Pennsylvania

814 F. Supp. 437

Daniel MARRAZZO and Carmela Marrazzo, h/w v. BUCKS COUNTY BANK AND TRUST COMPANY.

No. 92-5694.

United States District Court, E.D. Pennsylvania.

February 9, 1993.

COPYRIGHT MATERIAL OMITTED

Leo R. Zamparelli, Trenton, NJ, for plaintiffs.

David N. Bressler, Lesser & Kaplin, Blue Bell, PA, for defendant.

MEMORANDUM AND ORDER

JOYNER, District Judge.

Defendant, Bucks County Bank and Trust Company, has refiled its Motion to Dismiss Plaintiffs' Amended Complaint pursuant to Fed.R.Civ.P. 12(b)(6) thereby again raising the argument that the said amended complaint fails to state a claim upon which relief can be granted. For the reasons outlined below, the Defendant's motion is granted.

Briefly stated, the relevant facts underlying the instant action as stated in the amended complaint, are as follows. Plaintiffs Daniel and Carmela Marrazzo are the proprietors of a business known as Manor Lane Florist located in Yardley, Pennsylvania. Since 1988, the Marrazzos have had their business checking accounts and a line of credit with the defendant bank. According to the amended complaint, "on occasion, beginning in 1988, Bucks County Bank would receive for payment a check or checks drawn on the Marrazzos' account for which the Marrazzos did not have sufficient funds on deposit." On such occasions, the bank would typically hold the checks for one day until the Plaintiff could deposit sufficient funds to cover the check and would then honor the check. Although it is alleged that the bank never lost any money as a result of having to hold the Marrazzos' checks and the Marrazzos never authorized it, the bank charged a fee of $25.00 per check held and deducted that fee directly from the subject checking account. The Plaintiffs contend in paragraph 20 of their amended complaint that a total of $108,775.00 was unlawfully deducted from their Bucks County checking account in the period between 1988 and 1991 and it is this sum which they seek to recover together with treble damages under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1961, et seq., the Fair Credit and Charge Card Disclosure Act of 1988, 15 U.S.C. §§ 1631, 1637 and under theories of usury, breach of fiduciary duty, breach of the obligation of good faith and fair dealing, breach of duty of due care and conversion.

I. STANDARDS GOVERNING MOTIONS TO DISMISS

The requirements for pleading claims in the U.S. District Courts are clearly stated in the Federal Rules of Civil Procedure. Under Fed.R.Civ.P. 8(a),

"A pleading which sets forth a claim for relief, whether an original claim, counterclaim, cross-claim, or third party claim, shall contain (1) a short and plain statement of the grounds upon which the court's jurisdiction depends, unless the court already has jurisdiction and the claim needs no new grounds of jurisdiction to support it, (2) a short and plain statement of the claim showing that the pleader is entitled to relief, and (3) a demand for judgment for the relief the pleader seeks. Relief in the alternative or of several different types may be demanded."

It is similarly clear that the sufficiency of a pleading is properly challenged by the filing of a motion to dismiss for failure to state a claim upon which relief can be granted under Fed.R.Civ.P. 12(b)(6). In disposing of such a motion, the court must accept the facts alleged in the complaint as true together with all reasonable inferences that can be drawn therefrom and construe them in the light most favorable to the plaintiff. Markowitz v. Northeast Land Co., 906 F.2d 100, 103 (3rd Cir.1990); Hough/Loew Associates, Inc. v. CLX Realty Co., 760 F.Supp. 1141 (E.D.Pa. 1991). To prevail on a motion to dismiss, a defendant must establish that the plaintiffs can prove no set of facts which would entitle them to relief. Hendix v. Fleming Companies, 650 F.Supp. 301 (W.D.Okla.1986) citing, inter alia, Haines v. Kerner, 404 U.S. 519, 92 S.Ct. 594, 30 L.Ed.2d 652 (1972). See Also: Ransom v. Marrazzo, 848 F.2d 398, 401 (3rd Cir.1988). The same standards apply to motions to dismiss RICO claims. Rose v. Bartle, 871 F.2d 331, 355 (3rd Cir.1989).

II. THE SUFFICIENCY OF PLAINTIFFS' CLAIMS

A. Plaintiffs' RICO Claims

It is well-settled that any person injured in his or her business or property by a RICO violation may bring a civil suit to recover treble damages. 18 U.S.C. § 1964(c). Although the amended complaint is not entirely clear as to the nature of the Marrazzos' RICO claims,¹ it appears that they are trying to state causes of action under Sections 1962(a) and (c) of the Act. Section 1962(a) of the RICO statute makes it unlawful for "any person who has received any income directly or indirectly from a pattern of racketeering activity" to use or invest that income in the acquisition, establishment or operation of any enterprise affecting or engaged in interstate or foreign commerce. Under Section 1962(c), it is unlawful for "any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprises' affairs through a pattern of racketeering activity or collection of an unlawful debt."

While "enterprise," "racketeering activity," and "pattern of racketeering activity" are defined in Section 1961, these definitions in and of themselves do not completely delineate the pleading requirements needed to state claims for relief under each of the subsections of § 1962.² To successfully plead a claim for civil relief under Section 1962(a), a plaintiff must allege (1) that the defendant has received money from a pattern of racketeering activity, and (2) invested that money in an enterprise; and (3) that the enterprise affected interstate commerce. Shearin v. E.F. Hutton Group, Inc., 885 F.2d 1162, 1165 (3rd Cir.1989). Stated otherwise, a plaintiff must allege injury resulting from the investment of racketeering income (investment injury) as distinct from injury from the predicate acts themselves. Glessner v. Kenny, 952 F.2d 702, 708 (3rd Cir.1991); Rose v. Bartle, 871 F.2d 331, 357-358 (3rd Cir.1989).

To state a Section 1962(c) claim, the following four elements must be alleged: (1) the existence of an enterprise affecting interstate commerce; (2) that the defendant was employed by or associated with the enterprise; (3) that the defendant participated, either directly or indirectly, in the conduct or the affairs of the enterprise and (4) that he or she participated through a pattern of racketeering activity that must include the allegation of at least two racketeering acts. Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496, 105 S.Ct. 3275, 3285, 87 L.Ed.2d 346 (1985); Shearin v. E.F. Hutton Group, Inc., supra, at 1165. Since § 1962(c) requires a finding that the defendant "person" conducted or participated in the affairs of an "enterprise" through a pattern of racketeering activity, the "person" charged with a violation of § 1962(c) must be distinct from the "enterprise." Brittingham v. Mobil Corporation, 943 F.2d 297, 300 (3rd Cir.1991); Hirsch v. Enright Refining Co., 751 F.2d 628, 633-634 (3rd Cir.1984).

In determining whether a pattern of racketeering activity has been adequately pled, the Court must initially consider whether a plaintiff can show both that the predicate acts of racketeering are related and that they amount to a threat of continued criminal activity. H.J. Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229, 240, 109 S.Ct. 2893, 2900, 106 L.Ed.2d 195 (1989). In this respect, it should be noted that continuity has been said to be both a closed and open-ended concept referring either to a closed period of repeated conduct or to past conduct that by its nature projects into the future with a threat of repetition. A party alleging a RICO violation may demonstrate continuity over a closed period by proving a series of related predicates extending over a substantial period of time or by demonstrating that a threat of continuing criminal activity exists. Id., 492 U.S. at 241, 109 S.Ct. at 2902; Hindes v. Castle, 937 F.2d 868, 872 (3rd Cir.1991).

In assessing whether a sufficient showing of continuity and relatedness has been made then, a court may consider for example: (1) the number of unlawful acts; (2) the length of time over which the acts were committed; (3) the similarity of the acts; (4) the number of victims; (5) the number of perpetrators; and (6) the character of the unlawful activity. H.J. Inc., 492 U.S. at 241, 109 S.Ct. at 2902; Hindes, 937 F.2d at 873 both citing, Barticheck v. Fidelity Union Bank, 832 F.2d 36 (3rd Cir.1987). Similarly, threatened criminal conduct can also be established by showing that "the predicate acts or offenses are part of an ongoing entity's regular way of doing business." Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1412 (3rd Cir.1991).

The Court's inquiry for relatedness in turn, may additionally focus on whether the alleged predicate acts are interrelated by distinguishing characteristics and are not isolated events. Rose v. Bartle, 871 F.2d 331, 364 (3rd Cir.1989). To be sure, the predicate acts relied upon to support a conviction under RICO must have the same or similar purposes, results, participants, victims or methods of commission or must be otherwise interrelated so as not to be isolated events. U.S. v. Pelullo, 964 F.2d 193, 207 (3rd Cir. 1992); Kehr Packages, Inc. v. Fidelcor, Inc., supra, at 1412 both citing H.J. Inc. v. North-western Bell Telephone Co., supra, 492 U.S. at 239, 109 S.Ct. at 2900.

Applying the preceding principles to the matter at bar and accepting all of the allegations contained in the Plaintiffs' amended complaint as true, the Court can reach no other conclusion but that the Plaintiffs have failed to state claims for civil relief under either Section 1962(a) or Section 1962(c). Specifically, the paragraphs outlining the common facts and Counts...