Strates Shows, Inc. v. Amusements of America, Inc.
| Decision Date | 25 July 2005 |
| Docket Number | No. 5:04-CV-609-FL(1).,5:04-CV-609-FL(1). |
| Court | U.S. District Court — Eastern District of North Carolina |
| Parties | STRATES SHOWS, INC., Plaintiff, v. AMUSEMENTS OF AMERICA, INC., Rocky Mount Fair, Inc., Fair Management, Inc., Drew Amusement Operators, Inc. d/b/a Drew Expositions; Carolina Cable Lift LLC; Smokey Mountain Amusements, Inc., Amusements of Rochester d/b/a Powers Great American Midways, Meg Scott Phipps Campaign 2000, Friends of Bobby McLamb, Morris J. Vivona, Sr., Morris J. Vivona, Jr., Dominic A. Vivona, Sr., Dominic A. Vivona, Jr., John J. Vivona, Philip A. Vivona, Sebastian J. Vivona, Christopher Robyn Vivona, Norman Y Chambliss III, Margaret Scott Phipps aka Meg Scott Phipps; Robert E. Phipps, Bobby C. McLamb, Linda Johnson Saunders, Michael E. Blanton, Weldon B. Denny, Robbin Lee Turner, Deann S. Turner, Billy Joe Clark, Leslie E. Powers, Richard D. Janas, and James H. Drew, III; Defendants. |
I. Clark Wright, Jr., Ward & Davis, New Bern, NC, for Strates Shows, Inc., a Delaware corporation, plaintiff.
Joseph B. Cheshire, V, Cheshire, Parker, Schneider, Bryan & Vitale, John Keating Wiles, Cheshire Parker Schneider, Bryant & Vitale, Raleigh, NC, Alan W. Duncan, Smith Moore LLP, Greensboro, NC, Shannon R. Joseph, Smith Moore, LLP, Montaye Sigmon McGee, Smith Moore, LLP, R. Daniel Boyce, Boyce & Isley, PLLC, Raleigh, NC, C. Thomas Ross, Ross Law Firm, Winston-Salem, NC, David William Long, Poyner & Spruill, Raleigh, NC, Samuel T. Currin, Currin Law Firm, PLLC, Joseph Thomas Knott, III, Knott, Clark, Berger & Whitehurst, LLP, Raleigh, NC, for Amusements of America, Inc., a New Jersey corporation, Rocky Mount Fair, Inc, a North Carolina corporation, Fair Management, Inc, a Florida corporation, Drew Amusement Operators, Inc., a Georgia Corporation dba Drew Expositions, Carolina Cable Lift, a North Carolina limited liability company, Smokey Mountain Amusements, Inc., a Delaware corporation, Powers Great American Midways, a North Carolina business entity, Meg Scott Phipps Campaign 2000, a political campaign committee, Friends of Bobby McLamb, a political campaign committee, Morris J. Vivona, Sr., Morris J. Vivona, Jr., Dominic A. Vivona, Sr., Dominic A. Vivona, Jr., John J. Vivona, Philip A. Vivona, Christopher Robyn Vivona, Norman Y. Chambliss, III, Margaret Scott Phipps aka Meg Scott Phipps, Robert E. Phipps, Bobby C. McLamb, Linda Johnson Saunders, Michael E. Blanton, Weldon B. Denny, Robin Lee Turner, Deann S. Turner, Billy Joe Clark, Leslie E. Powers, Richard D. Janas, James H. Drew, III, Sebastian J. Vivona, Amusements of Rochester, Inc., d/b/a Powers Great American Midways, defendants.
Bobby C. McLamb, Lillington, NC, Pro se.
This matter is before the court upon defendants' motions to dismiss or for judgment on the pleadings pursuant to Federal Rules of Civil Procedure 12(b)(1), 12(b)(6), and 12(c) (DE #'s 59, 82, 85, 89, 90). Plaintiff has responded, and this matter is ripe for ruling. For the following reasons, the court grants defendants' motions.
Plaintiff commenced this action on August 23, 2004, asserting claims under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), based upon illegal campaign contributions solicited by defendant Margaret Scott Phipps ("Phipps") for the position of North Carolina Commissioner of Agriculture, and the related process of selecting providers for the North Carolina State Fair midway and elevated cable lifts or Sky Rides projects. Plaintiff asserts related state law claims based upon fraud, civil conspiracy, tortious interference with business relations, unfair and deceptive trade practices, conversion, and misappropriation. Plaintiff seeks compensatory, treble and punitive damages, as well as costs and attorney's fees.
In January, 2005, defendants Phipps and Robert E. Phipps filed a motion to dismiss asserting, inter alia, that plaintiff has failed to sufficiently allege causation and injury, thereby subjecting this action to dismissal for lack of standing or failure to state a claim. On March 28, 2005, defendants Norman Y. Chambliss, III, ("Chambliss") and Rocky Mount Fair, Inc. ("Rocky Mount"), filed a motion for judgment on the pleadings also asserting, inter alia, that plaintiff lacked standing to assert its RICO claims. Plaintiff timely responded to each of these motions. In addition, defendants Carolina Cable Lift, James H. Drew, III, ("Drew"), Smokey Mountain Amusements, Inc., Billy Joe Clark, and Weldon B. Denny ("Denny") filed separate motions to dismiss, adopting the arguments of defendants Phipps, Robert E. Phipps, Chambliss and Rocky Mount. Defendants Phipps, Robert E. Phipps, Chambliss and Rocky Mount filed separate replies.
Of the remaining defendants, the following filed answers, affirmative defenses, and/or cross-claims for contribution and indemnification: Amusements of America, Inc.; Fair Management, Inc.; Amusements of Rochester d/b/a Powers Great American Midways; Morris J. Vivona, Sr.; Morris J. Vivona, Jr.; Dominic A. Vivona, Sr.; Dominic A. Vivona, Jr.; John J. Vivona; Philip A. Vivona; Sebastian J. Vivona; Christopher Robyn Vivona; Bobby C. Mclamb; Michael E. Blanton; Robbin Lee Turner; Deann S. Turner; Leslie E. Powers; and James H. Drew, III. It does not appear from the case file that the following defendants named in the caption of the complaint have responded: Drew Amusement Operators, Inc. d/b/a Drew Expositions; Meg Scott Phipps Campaign 2000; Friends of Bobby McLamb; Linda Johnson Saunders; and Richard D. Janas. On January 18, 2005, plaintiff filed a motion for entry of default against defendant Linda Johnson Saunders ("Sanders"). The Clerk entered default against defendant Saunders on February 4, 2005.
Another competitor for the award of one of the North Carolina State Fair contracts, Phoenix Ski Corporation, filed a related action in this court on July 23, 2004. See Phoenix Ski Corp. v. Drew Exposition, et al., 5:04-cv-517-FL(1). Motions to dismiss filed on similar grounds in that case have been addressed separately by the court.
As is relevant to the motions pending before the court, the facts alleged in the complaint may be summarized as follows. Plaintiff is a family-owned carnival midway company that commenced business in 1923. ¶ 37.1 For many years leading up to 2002, under the direction of the Agriculture Commissioner, plaintiff successfully and safely operated the midway for the North Carolina State Fair ("State Fair"). ¶¶ 37, 42, 77.
In 1999, former Agriculture Commissioner Jim Graham announced that he would not seek re-election in 2000. ¶ 42. At some point during that year, defendants Morris J. Vivona, Jr., Norman Y. Chambliss, III, Rocky Mount Fair, Inc., Amusements of America, Inc. (AOA), and other associated defendants (hereinafter the "Vivona/AOA" defendants) agreed to work together to get an inside track to the "right people" and obtain the State Fair midway contract. ¶ 55.
In 1999 and early 2000, defendants Bobby C. McLamb ("McLamb") and Phipps were two candidates for the democratic primary for Commissioner of Agriculture. Around that time, the Vivona/AOA defendants helped defendant McLamb illegally obtain a $75,000 loan to help pay for campaign costs. ¶¶ 57, 58. On May 2, 2000, defendant McLamb lost the Democratic primary to defendant Phipps. ¶ 59. Thereupon, defendant McLamb pledged his support to defendant Phipps in return for Phipps' promise to help McLamb pay his campaign debt. ¶ 59.
Around May 2000, defendant James H. Drew, III ("Drew"), met with defendants Phipps and Denny and made illegal cash payments to Phipps to garner favor for defendant Drew in potential fair contracts. ¶ 62. Also around May 2000, defendant Chambliss assisted defendant McLamb in obtaining a loan, the proceeds of which were transferred to defendant AOA. ¶ 64.
In July 2000, the Vivona/AOA defendants, through defendant Chambliss, invited defendant Phipps to visit the Ohio State Fair as a guest of the Vivona/AOA defendants, who operated the midway at the Ohio State Fair. ¶ 66. Plaintiff Phipps informed plaintiff that she would be visiting the Ohio State Fair, in an effort to extort campaign contributions from plaintiff. ¶ 67. In August 2000, defendant Phipps visited the Ohio State Fair, at defendants' expense, and, at that time received various illegal cash payments from the Vivona/AOA defendants. In September 2000, defendant Phipps received further illegal cash payments from defendant Drew. In September 2000, defendant Phipps personally assisted defendant McLamb in extending the maturity date on his loan. ¶¶ 74-76.
Leading up to the election in November 2000, defendant Phipps vowed that "if it were left to me, Strates Shows [Inc.] would never get the State Fair midway contract." ¶ 77. On November 7, 2000 defendant Phipps was elected Commissioner of Agriculture. Following her election, defendant Phipps announced that defendants McLamb, Saunders and Denny would serve in various positions within the Department of Agriculture. ¶¶ 82-83. Phipps continued to consult with defendant Chambliss about raising money from the Vivona/AOA defendants. ¶¶ 78, 80-81.
During the period from November 2000 to February 2001, in response to requests and mailings from defendants, plaintiff, "through its owners and concessionaires," made a number of lawful, public and properly document contributions to defendant Phipps' campaign fund. ¶ 90. The proceeds of these contributions were used to fund the loan of defendant McLamb, which, in turn, was further restructured for purposes of concealment. ¶¶ 87-92, 94-97. As a result of these contributions, defendant Phipps made false assurances that she would be "working with" plaintiff on the State Fair, assurances which defendant Phipps used to extort further contributions. ¶ 93.
In April 2001, defendant Phipps formed the North Carolina State Fair Advisory Committee,...
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