Nicholson v. WINDHAM ET AL.

• Decision Date: 18 September 2002
• Docket Number: No. A02A0948.,A02A0948.
• Parties: NICHOLSON v. WINDHAM et al.
• Court: Georgia Court of Appeals

571 S.E.2d 466

257 Ga. App. 429

NICHOLSON v. WINDHAM et al.

No. A02A0948.

Court of Appeals of Georgia.

September 18, 2002.

Certiorari Denied November 25, 2002.

Millard C. Farmer, Jr., Atlanta, for appellant.

Hawkins & Parnell, Emory L. Palmer, Christine L. Mast, H. Lane Young II, Atlanta, Oliver & Winkle, G. Robert Oliver, Anne Zavala-Moushey, for appellees. RUFFIN, Presiding Judge.

Donna Nicholson sued the law firm of Windham & Sauls, P.C., three lawyers at the firm, and five other employees (collectively "defendants") for allegedly violating Georgia's Racketeer Influenced & Corrupt Organizations ("RICO") Act,¹ conspiracy to violate the RICO Act, aiding and abetting the violation of the RICO Act, tortious interference with contractual rights, civil conspiracy, intentional infliction of emotional distress, defamation, libel, and slander. The defendants moved to dismiss the complaint, asserting that Nicholson lacked standing to bring a civil action under the RICO Act and that her complaint failed to state a claim for any other cause of action. The trial court dismissed the complaint in its entirety, and this appeal ensued. For the reasons that follow, we affirm in part and reverse in part.

1. Nicholson contends that the trial court erred in dismissing her claims against the defendants for violating the RICO Act, conspiracy to violate the RICO Act, and for aiding and abetting a RICO violation. We disagree.

A motion to dismiss for failure to state a claim upon which relief may be granted should not be sustained unless (1) the allegations of the complaint disclose with certainty that the claimant would not be entitled to relief under any state of provable facts asserted in support thereof, and (2) the movant establishes that the claimant could not possibly introduce evidence within the framework of the complaint sufficient to warrant a grant of the relief sought. In deciding a motion to dismiss, all pleadings are to be construed most favorably to the party who filed them, and all doubts regarding such pleadings must be resolved in the filing party's favor.²

In addition, this Court conducts a de novo review of a trial court's order dismissing a complaint for failure to state a claim.³ With these fundamental rules in mind, we now consider the dismissed claims.

As a mandatory condition to asserting the RICO claims, Nicholson must show a direct nexus between at least one of the predicate acts listed under the RICO Act and the injury she purportedly sustained.⁴ Specifically, a private plaintiff under the RICO Act must "show that the injury suffered flowed directly from the predicate offense."⁵ In other words, Nicholson must show that her injury was caused "by reason of" a violation of one of the specific crimes listed in OCGA § 16-14-3(9)(A).⁶

In framing her RICO claims, Nicholson alleged that Windham & Sauls was operating a RICO enterprise, which she characterized as a "real estate transaction closing mill." In her complaint, Nicholson alleged that the defendants engaged in predicate acts that included, inter alia, theft, tampering with evidence, obstruction of justice, mail fraud, and wire fraud. Nicholson also alleged that the defendants solicited her participation in the scheme. According to Nicholson, after she refused to participate in the scheme and complained about the alleged criminal acts, she was fired. Nicholson contends that her premature termination constitutes the injury which forms the basis of her RICO complaint.

Even assuming, as we do, that the allegations in the complaint are true, Nicholson still fails to prove a RICO violation because she is unable to demonstrate that she was directly harmed, as opposed to being indirectly harmed, by the predicate acts allegedly committed by the defendants.⁷ Nicholson alleged that the defendants engaged in racketeering activities including theft, mail fraud, wire fraud, tampering with evidence, obstruction, and stealing. However, none of these acts was directed at Nicholson.⁸

On appeal, Nicholson asserts that her RICO claim should survive the motion to dismiss because the defendants allegedly solicited her participation in the illegal activities. Under OCGA § 16-14-3(9)(A), solicitation of another to commit another crime constitutes a racketeering activity. Thus, Nicholson argues, her termination stemmed from defendants' solicitation, and therefore flows directly from a predicate act. Again, we disagree.

Although the defendants allegedly solicited Nicholson's participation, she refused and was fired. Accordingly, the injury—Nicholson's termination—stemmed from her refusal to participate rather than the solicitation itself. Under these circumstances, the harm is indirect rather than direct.⁹ Moreover, we fail to see how termination from questionable employment can constitute harm. According to Nicholson's complaint, the defendants were embroiled in numerous illegal activities. It seems reasonable to conclude that no employee of the firm would have a vested right to continue in such activity. It follows that Nicholson, having sustained at best an indirect injury, lacks standing to pursue her RICO claims.¹⁰

2. Nicholson contends that the trial court erred in dismissing her claim for tortious interference with contract. The complaint alleges that Nicholson entered a contract with Maristaff, Inc., which apparently is a temporary service that assigned Nicholson to Windham & Sauls. According to Nicholson, after observing illegal conduct and asking too many questions, she was demoted and then fired.¹¹ Nicholson alleges that, by terminating her employment "prematurely," defendants tortiously interfered with her contract with Maristaff.

To prevail on a her claim for tortious interference with contract, Nicholson must prove the existence of a contract and must "establish that the defendant is a `third party,' i.e., a `stranger' to the contract with which the defendant allegedly interfered."¹² An intended third-party beneficiary of a contract, who is legally authorized to enforce the contract, "cannot be held liable for tortious interference since he is not a stranger to the contract."¹³ Furthermore, "[t]he exclusion of third-party beneficiaries from the `stranger doctrine' has been expanded to cover those who benefit from the contract of others, without regard to whether the beneficiary was intended by the contracting parties to be a third-party beneficiary."¹⁴ Here, the law firm clearly was a beneficiary of Nicholson's employment contract and, thus, cannot be held liable for tortious interference.¹⁵

The individual defendants argue that they, too, cannot be held liable because "in Georgia, co-employees stand in the place of the employer for the purpose of determining whether one is a stranger to a contract." It is true that co-employees engaged in conduct "within the scope of their authority" cannot then be held liable for such conduct in the guise of a tortious interference claim.¹⁶ That is not to say, however, that all co-workers are immune from suit for tortious interference. If a co-worker with no authority to discharge Nicholson, "being activated by an unlawful scheme or purpose to injure and damage [her], maliciously and unlawfully persuades the employer to breach the contract with" her, such co-worker may be liable for tortious interference.¹⁷

Construed as true, the allegations in Nicholson's complaint demonstrate that the individual defendants engaged in unlawful conduct by soliciting her to engage in criminal activity and causing her termination when she refused. Nicholson does not allege that these actions fell within the scope of individual defendants' employment. It certainly is possible for Nicholson to discover evidence that such activities were not within the scope of the individual defendants' employment, which would create a jury issue as to whether the individual defendants tortiously interfered with Nicholson's employment contract.¹⁸ Thus, the trial court erred in granting the motion to dismiss with regard to Nicholson's claim of tortious interference against the individual defendants.

3. Nicholson contends that the trial court erred in dismissing her claim for intentional infliction of emotional distress. She asserts that allegations are sufficient to support such a claim. We agree.

This tort requires proof of four elements: (1) intentional or reckless conduct; (2) which is extreme and outrageous; (3) a causal connection between the wrongful conduct and the emotional distress; and (4) severe emotional distress.¹⁹ "[T]o warrant recovery[,] the conduct also must be of such serious import as to naturally give rise to such intense feelings of humiliation, embarrassment, fright or extreme outrage as to cause severe emotional distress. Otherwise, the conduct will not rise to the requisite level of outrageousness and egregiousness."²⁰

Nicholson alleged in her complaint that she suffered extreme emotional distress as the result of the wilful, malicious, and intentional acts of the defendants. She claimed that the defendants tried to require her "to become a criminal in order to perform her obligations under a contract" and that such conduct was so outrageous and extreme "as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community." Nicholson alleged that she "was directed by members of the RICO Enterprise to ignore and not to disclose the conduct or evidence of the illegal and fraudulent conduct...." According to Nicholson, "[a]s a result of the acts identified in this Complaint and such other acts to be shown by evidence, including the conspiracy... to commit illegal acts ... and the further conspiracy to cover up those acts, [she] ... suffered injuries to person and property." She claimed to have sustained "emotional distress that defies description."

As previously discussed, a motion to dismiss for failure to state a claim "should not...