Unpublished Disposition, 912 F.2d 469 (9th Cir. 1989)

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U.S. Court of Appeals for the Ninth Circuit - 912 F.2d 469 (9th Cir. 1989)

S.B. MITFORD, Plaintiff-Appellant,v.Wayne Anthony ROSS, David G. Shaftel, Ross, Gingras, Bailey& Miner, a Professional corporation, John W.Sedwick, Burr, Pease & Kurtz, aProfessional corporation,Defendants-Appellees.

No. 90-35055.

United States Court of Appeals, Ninth Circuit.

Submitted*  Aug. 9, 1990.Decided Aug. 29, 1990.

Before RONEY** , FARRIS and FERNANDEZ, Circuit Judges.


Plaintiff S.B. Mitford appeals the entry of judgment against him upon the granting of defendants' motions to dismiss his complaint. Holding that the district court correctly ruled that Mitford failed to state a RICO cause of action in his amended complaint, and that the state law claims should be dismissed for lack of jurisdiction, we affirm.

Mitford settled a wrongful employment termination claim in his favor for $2,035,554.10. Four years later he brought this suit against his former counsel, who represented him in connection with that suit, and against the opposing attorneys who represented his employer. He claimed substantial RICO damages focusing the arguments largely on the fee arrangements with his counsel, and alleging fraud, coercion and extortion in connection with those agreements. As to the opposing counsel he argues improper participation in the way the settlement funds were handled.

The district court dismissed Mitford's original complaint for failure to conform to Rule 8, Fed. R. Civ. P., which requires a complaint to contain a short and plain statement of his claim, with each averment being simple, concise and direct. Although Mitford argues as an issue on this appeal that the district court erred in that order, the dismissal was without prejudice, he was given leave to file and did file an amended complaint, and the judgment of the court is based on consideration of that amended complaint. Therefore, either any error committed by the court in connection with the original complaint is harmless or the issue is moot. See American Concrete Agricultural Pipe Association v. No-Joint Concrete Pipe Co., 331 F.2d 706, 708 (9th Cir. 1964). In any event, we review decisions under Rule 8 for abuse of discretion. Nevijel v. North Coast Life Insurance Co., 651 F.2d 671, 674 (9th Cir. 1981). The plaintiff would have some difficulty in meeting this standard of review when leave to amend was granted and the court carefully provided specific guidance to plaintiff for refiling the complaint:

Plaintiff should refer to Schreiber Distributing v. Serv-Well Furniture Co., 806 F.2d 1393 (9th Cir. 1986) for general guidance as to RICO pleading requirements. If the complaint is more than one page in length, the pages must be numbered. Plaintiff's counsel should read the forms in the book containing the Federal Rules of Civil Procedure for examples of properly drafted complaints.

Upon the filing of the amended complaint, the defendants moved to dismiss under Rule 8 and under Rule 12(b) (6), which permits dismissal of a complaint for "failure to state a claim upon which relief can be granted." Although the transcript reveals some vacillation between the two rules by the district court, it finally determined that the RICO claim should be dismissed for failure to state a claim, and that the state claims should be dismissed, without prejudice, for lack of jurisdiction.

"THE COURT: The complaint is exceedingly difficult to follow and raises questions under Rule 8, but the matter is close enough so that I am not going to proceed under Rule 8. In particular--well, I'm not proceeding under Rule 8; I'm proceeding under [Rule] 12(b) (6)."

Transcript November 27, 1989, p. 65.

"The dismissal is without prejudice to the filing in state court of the state claims, and the Court's decision is solely upon the RICO claim. Without the RICO claim, this Court lacks jurisdiction to adjudicate the state law claims." Transcript, November 27, 1989, p. 78.

The defendants argued that the acts alleged in Mitford's amended complaint, assumed to be true, did not constitute a "pattern of racketeering activity" under 18 U.S.C.A. Sec. 1962. We agree with the district court's decision that the allegations of the amended complaint did not allege the continuity and threat of continued illegal action required to state a claim under RICO. See Medallion Television Enterprises, Inc. v. SelecTV of California, Inc., 833 F.2d 1360, 1363-64 (9th Cir. 1987), cert. denied, 109 S. Ct. 3241 (1989) (plaintiff's allegations were separate incidents relating to one discrete criminal scheme and thus did not provide sufficient threat of continued illegality); Schreiber Distributing Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1399 (9th Cir. 1986) (allegations concerned only isolated event with no threat of continuation).

The allegations constituted at most a single fraud on a single individual which is outside of RICO and triable only as a state fraud claim. See Menasco, Inc. v. Wasserman, 886 F.2d 681, 685 (4th Cir. 1989) (" [i]f the pattern requirement has any force whatsoever, it is to prevent this type of ordinary commercial fraud from being transformed into a federal RICO claim") (citations omitted). Upon dismissal of the federal claims, the district court no longer had jurisdiction over the remaining claims.

The parties entered into a stipulation which gave the defense additional time within which to plead to the complaint. The plaintiff claims this agreement required an answer, not a motion to dismiss, and that he was entitled to default when no answer was filed. Although plaintiff probably misreads the law on this issue, see Bechtel v. Liberty National Bank, 534 F.2d 1335, 1341 (9th Cir. 1976), it is of little moment here because the complaint upon which the motion was made has been dismissed. The Rule 12(b) (6) issue could be raised in an answer, if one were now required. Since the defendants would win on that defense, anything else said in an answer would be superfluous.

Prior to the dismissal of the first complaint, plaintiff propounded interrogatories based on a newspaper column in an Anchorage newspaper under the byline of one of his attorneys. Objection was made on the ground that the information was not relevant and the interrogatories did not appear to be reasonably calculated to lead to the discovery of admissible evidence. The plaintiff argues the court erred in failing to grant his motion to compel answers to interrogatories. Although it does not appear that the district court abused its discretion, Munoz-Santana v. I.N.S., 742 F.2d 561, 562 (9th Cir. 1984), the issue is now moot because of our affirmance of the dismissal of the complaint.

Paragraphs ab. and ac. of the prayer for relief asked the court to find that the defendants had committed offenses constituting both state and federal felonies and that the defendant attorneys be disbarred. The district court correctly noted that it could not find defendants guilty of felonies in a civil suit, and that the procedures for disbarment contained in the court's rule should be followed for a claim for disbarment. The district court had no jurisdiction to disbar defendants from practice before any other courts. The plaintiff argues on appeal that the court misconstrued the relief requested. There is no way that these requests for relief could be construed that would make the appeal of the district court's decision on the point have merit. The brief cites no authority for the requested relief, and the arguments reflect a misunderstanding of the constitutional requirements for judicial decisions concerning criminal conduct.

The appellees ask the court to award them attorney's fees relating to this appeal, pursuant to Rule 11, Fed. R. Civ. P. It should be noted that there is a serious question as to whether Rule 11 sanctions may be invoked on appeal. Cooter & Gell v. Hartmarx Corp., 496 U.S. ----, 110 L. Ed. 2d 359, 382-84, 110 S. Ct. 2447 (1990) (" [n]either the language nor the Advisory Committee Note suggests that the Rule could require payment for any activities outside the context of district court proceedings"). The Federal Rules of Appellate Procedure provide in Rule 38 for the imposition of sanctions if the appellate court determines that such sanctions are appropriate. The standard for such an award on appeal is nearly identical to that used at the trial level, namely the court must decide whether the appeal is frivolous or wholly without merit. Mackey v. Pioneer National Bank, 867 F.2d 520, 526-27 (9th Cir. 1989) (citations omitted); Mir v. Little Co. of Mary Hospital, 844 F.2d 646, 653 (9th Cir., 1988); Lopez v. Dean Witter Reynolds, Inc., 805 F.2d 880, 885 (9th Cir. 1986). "Sanctions are appropriate when the result of an appeal is obvious and the arguments of error are wholly without merit." Grimes v. Commissioner, 806 F.2d 1451, 1454 (9th Cir. 1986).

We have concluded that an award of fees is not warranted on this appeal. The district court based its finding of frivolity in this case on counsel's failure to fully investigate the factual predicate for his client's allegations, and it specifically found that the legal claims advanced by the appellant were at least plausible. On appeal, we deal solely with the legal foundations for appellant's claims, and it cannot be said that the outcome of this appeal was obvious from the outset. As a result, the appellees request for attorney's fees is DENIED.



The panel unanimously finds this case suitable for submission without oral argument


Honorable Paul H. Roney, Senior Circuit Judge, U.S. Court of Appeals for the Eleventh Circuit, sitting by designation


This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Circuit Rule 36-3