Ornest v. Delaware North Companies, Inc.
| Decision Date | 08 May 1987 |
| Docket Number | No. 86-2042,86-2042 |
| Citation | 818 F.2d 651 |
| Parties | RICO Bus.Disp.Guide 6616 Harry ORNEST, Ruth Ornest, Laura Ornest, Maury Ornest, Cindy Ornest and Michael Ornest d/b/a The Ornest Family Partnership, Appellants, v. DELAWARE NORTH COMPANIES, INC., Triple R. Buildings Corporation and SBH Enterprises, Inc., formerly known as Dome Management, Inc., Appellees. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Merle L. Silverstein, Clayton, Mo., for appellants.
Robert T. Haar, St. Louis, Mo., for appellees.
Before ROSS, BOWMAN, and MAGILL, Circuit Judges.
Plaintiffs appeal from the District Court's order dismissing their complaint. Plaintiffs asserted against defendants a claim under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. Sec. 1962(c) & (d), and a state common law fraud claim. Plaintiffs, who are the owners of The Arena, an indoor sports arena in St. Louis, alleged generally that defendants had defrauded them of their share of commissions from vending machine sales under a concession agreement. The District Court granted defendants' motion to dismiss the civil RICO claims for failure to state a claim upon which relief can be granted, holding that the allegations in the complaint did not sufficiently set forth the "enterprise" element under subsection (c) or the "conspiracy" element under subsection (d) of Sec. 1962. The court also expressed "concern" about the sufficiency of plaintiffs' allegations of a "pattern of racketeering activity," but made no ruling on that issue. The court dismissed the state common law fraud claim, over which it previously had pendent jurisdiction, after dismissing the civil RICO claim. On appeal plaintiffs contend that the allegations in their complaint sufficiently allege an "enterprise" and a "conspiracy" under Sec. 1962, and thus state a claim under civil RICO, and that the District Court therefore erred in dismissing the complaint. We need not decide whether the allegations in the complaint are sufficient to establish an "enterprise" and a "conspiracy," however, for we hold that plaintiffs have failed to allege a "pattern" of racketeering activity, as required by this Court's decision in Superior Oil Co. v. Fulmer, 785 F.2d 252 (8th Cir.1986).
In reviewing the dismissal of a complaint for failure to state a claim, we follow "the accepted rule that a complaint should not be dismissed ... unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957). "We must assume the plaintiff's factual allegations to be true and must view them in the light most favorable to the plaintiff." Harrison v. Springdale Water & Sewer Commission, 780 F.2d 1422, 1426 (8th Cir.1986).
The gist of plaintiffs' civil RICO claim is that over an eight-year period defendants (a parent corporation and two of its subsidiaries) defrauded plaintiffs and their predecessors of their share of commissions from the sale of cigarettes (and other products) from vending machines under a concession agreement with Sportservice Corporation (which operates the concession and food service at The Arena). The complaint alleges that defendants conspired with and directed Sportservice to "skim" money from the gross receipts of vending machine sales and thereafter fraudulently falsified daily and monthly gross receipts reports submitted to plaintiffs. Plaintiffs further allege that the commissions from cigarette sales were forwarded by the vendor at defendants' direction to a private depository known as the S-M-L Trust in Cleveland. Defendants carried out their fraudulent scheme, it is alleged, through a pattern of racketeering activities consisting of mail fraud, in violation of 18 U.S.C. Sec. 1341, interstate travel in aid of a racketeering enterprise, in violation of 18 U.S.C. Sec. 1952, and other unspecified "acts of deception and fraud." 1
Under the prior decisions of this Court, it is clear that plaintiffs have failed to state a claim under RICO. The complaint fails to allege the necessary "pattern" of racketeering activity, as that element has been construed by this Court in Superior Oil Co. v. Fulmer, 785 F.2d at 254-257. See also Holmberg v. Morrisette, 800 F.2d 205, 209-210 (8th Cir.1986), cert. denied, --- U.S. ----, 107 S.Ct. 1953, 95 L.Ed.2d 526 (1987); DeViries v. Prudential-Bache...
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