Robertson v. Sun Life Financial et al, No. 2:2017cv02148 - Document 32 (E.D. La. 2017)
Court Description: ORDER AND REASONS granting 23 Motion to Dismiss for Failure to State a Claim. For the foregoing reasons, plaintiff's claims under the Racketeer Influenced and Corrupt Organizations Act and the Louisiana Racketeering Act are DISMISSED WITH PREJUDICE. Signed by Judge Sarah S. Vance on 9/21/2017. (cg)
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Robertson v. Sun Life Financial et al Doc. 32 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA LEVI E. ROBERTSON, on behalf of him self and all other sim ilarly situated VERSUS CIVIL ACTION NO. 17-2148 SUN LIFE FINANCIAL, ET AL. SECTION “R” (1) ORD ER AN D REASON S Defendant Sun Life Assurance Com pany of Canada (U.S.) m oves to dism iss plaintiff’s claim s under the Racketeer Influenced and Corrupt Organizations Act and the Louisiana Racketeering Act. 1 Because these claim s are barred by the statute of lim itations, the Court grants the m otion. I. BACKGROU N D This case arises out of allegedly fraudulent withdrawals from Plaintiff Levi Robertson’s annuity account. 2 Plaintiff asserts that he entered into a ten-year annuity contract with Defendant Sun Life Assurance Com pany of 1 2 R. Doc. 23. R. Doc. 1-1 at 2-3; R. Doc. 1-6 at 3. Dockets.Justia.com Canada (Sun Life) in J uly 20 0 5. 3 Plaintiff alleges that, beginning in October 20 0 5, m oney was fraudulently withdrawn from his account. 4 On October 9, 20 0 8, plaintiff filed a petition for damages in state court. 5 This petition alleged that Defendant Matthew Pizzolato forged a check for $ 99,999.99 in plaintiff’s nam e, and that Sun Life negligently perm itted a withdrawal in this am ount from plaintiff’s account without contacting plaintiff to verify the transaction. 6 Plaintiff am ended his petition three tim es between April 20 0 9 and March 20 12 to include additional allegations regarding Pizzolato’s fraudulent activities and Sun Life’s breach of contract and negligence in failing to m onitor plaintiff’s account properly. 7 On February 27, 20 17, the state court granted plaintiff leave to file a fourth am ended petition. 8 This am ended petition includes class action allegations and adds claim s against Sun Life under the Racketeer Influenced and Corrupt Organizations Act (RICO) and the Louisiana Racketeering Act. 9 On March 15, 20 17, Sun Life rem oved the case to this Court on the basis of 3 R. Doc. 1-4 at 3. Plaintiff’s petition also nam es as defendants Sun Life Financial and Sun Life Adm inistrators (U.S.). These defendants have since been dism issed from the litigation. See R. Doc. 1-10 at 4. 4 R. Doc. 1-1 at 2-3; R. Doc. 1-6 at 3. 5 R. Doc. 1-1. 6 Id. at 2-3. 7 R. Doc. 1-2; R. Doc. 1-3; R. Doc. 1-4. 8 R. Doc. 1-7 at 2. 9 R. Doc. 1-6. 2 federal question jurisdiction under 28 U.S.C. § 1441(a) and class action jurisdiction under 28 U.S.C. § 1332(d). 10 Sun Life now moves to dism iss plaintiff’s racketeering claim s. 11 II. LEGAL STAN D ARD To survive a Rule 12(b)(6) m otion to dism iss, the plaintiff m ust plead “sufficient factual m atter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (20 0 9) (quoting Bell Atl. Corp. v. Tw om bly , 550 U.S. 544, 570 (20 0 7)). A claim is facially plausible when the plaintiff pleads facts that allow the court to “draw the reasonable inference that the defendant is liable for the m isconduct alleged.” Id. at 678. A court m ust accept all well-pleaded facts as true and m ust draw all reasonable inferences in favor of the plaintiff. See Lorm and v. US Unw ired, Inc., 565 F.3d 228, 232 (5th Cir. 20 0 9). A legally sufficient com plaint m ust establish m ore than a “sheer possibility” that the plaintiff’s claim is true. Iqbal, 556 U.S. at 678. It need not contain detailed factual allegations, but it m ust go beyond labels, legal conclusions, or form ulaic recitations of the elem ents of a cause of action. Id. 10 11 R. Doc. 1. R. Doc. 23. 3 In other words, the face of the com plaint m ust contain enough factual m atter to raise a reasonable expectation that discovery will reveal relevant evidence of each elem ent of the plaintiff’s claim. Lorm and, 565 F.3d at 257. The claim m ust be dism issed if there are insufficient factual allegations to raise a right to relief above the speculative level, Tw om bly , 550 U.S. at 555, or if it is apparent from the face of the com plaint that there is an insuperable bar to relief, Jones v. Bock, 549 U.S. 199, 215 (20 0 7). III. D ISCU SSION A. Statu te o f Lim itatio n s Sun Life argues that plaintiff’s RICO and state law racketeering claims are barred by the applicable statutes of lim itations. 12 The statute of lim itations for civil RICO claim s is four years. Agency Holding Corp. v. Malley -Duff & Assocs., Inc., 483 U.S. 143, 156 (1987). The lim itations period for civil actions under the Louisiana Racketeering Act is five years. See La. R.S. 15:1356(H). Plaintiff’s fourth amended petition was filed in February 20 17, and it alleges acts of racketeering occurring in October 20 0 5, J anuary 12 R. Doc. 23. 4 20 0 6, and November 20 0 7. 13 Plaintiff does not contest that his racketeering claim s are untimely unless they relate back to his earlier petitions. 14 Federal Rule of Civil Procedure 15 allows an am ended com plaint to relate back to the date of the original pleading when “the am endment asserts a claim or defense that arose out of the conduct, transaction, or occurrence set out—or attem pted to be set out—in the original pleading.” Fed. R. Civ. P. 15(c)(1)(B). A state law claim m ay also relate back to the original pleading if relation back would be perm itted under state law. See Fed. R. Civ. P. 15(c)(1)(A). Louisiana Code of Civil Procedure article 1153 sets forth the same “conduct, transaction, or occurrence” test as Rule 15(c), and does not afford plaintiff a m ore liberal relation back standard than the federal rule. See McGregor v. La. State Univ. Bd. of Supervisors, 3 F.3d 850 , 863 n.22 (5th Cir. 1993) (noting that the federal and Louisiana rules on relation back are the same); Giroir v. South La. Med. Ctr., 475 So. 2d 10 40 , 10 42 (La. 1985) (explaining that article 1153 is based on Rule 15(c)). The sam e analysis therefore applies to determ ine the tim eliness of both plaintiff’s federal and state racketeering claim s. 13 14 R. Doc. 1-6 at 3. R. Doc. 28. 5 A claim first brought in an am ended com plaint “will not relate back if it asserts new and distinct conduct, transactions, or occurrences as the basis for relief” and attem pts “to add a new legal theory unsupported by factual claim s raised in the original com plaint.” McGregor, 3 F.3d at 863-64; see also In re Coastal Plains, 179 F.3d 197, 216 (5th Cir. 1999) (finding no relation back where claim in am ended com plaint related to a separate transaction); 6A Wright & Miller, Federal Practice and Procedure § 1497 (3d. ed. 20 17) (“[I]f plaintiff attempts to allege an entirely different transaction by amendm ent, Rule 15(c)(1)(B) will not authorize relation back.”). Plaintiff’s fourth am ended petition presents a different factual scenario from his earlier pleadings, and the facts contained in prior petitions do not support his newly added federal and state racketeering claim s. To state a claim under RICO, plaintiff m ust allege the existence of “(1) a person who engages in (2) a pattern of racketeering activity, (3) connected to the acquisition, establishm ent, conduct, or control of an enterprise.” Abraham v. Singh, 480 F.3d 351, 355 (5th Cir. 20 0 7). A pattern of racketeering activity “consists of two or m ore predicate crim inal acts that are (1) related and (2) am ount to or pose a threat of continued crim inal activity.” Id. (internal quotation m arks and citation om itted). The Louisiana Racketeering Act is based on RICO, and sim ilarly requires a connection to an 6 enterprise and at least two predicate racketeering acts. See La. R.S. 15:135253; State v. N ine Sav. Accounts, 553 So. 2d 823, 825 (La. 1989). Plaintiff’s earlier petitions did not allege, or even suggest, that Sun Life engaged in racketeering activities. The first four petitions described fraud by Matthew Pizzolato related to a single forged check for $ 99,999.99, and negligence and breach of contract by Sun Life for failing to detect the fraudulent transfer. 15 Plaintiff’s fourth am ended petition now alleges crim inal rather than negligent conduct by Sun Life, details additional fraudulent transactions, and introduces a new key actor, Sherel Pizzolato, linking Sun Life with Matthew Pizzolato. 16 In contrast to earlier allegations that Sun Life merely failed to monitor plaintiff’s account, Sun Life is now accused of conducting or acquiring a racketeering enterprise. 17 The transaction or occurrence at issue has metam orphosed from a single fraudulent withdrawal 18 to a series of withdrawals constituting a pattern of racketeering activity. 19 Given these fundam ental changes in plaintiff’s factual allegations, his racketeering claim s do not arise out of “the sam e 15 16 17 18 19 R. Doc. 1-1; R. Doc. 1-2; R. Doc. 1-3; R. Doc. 1-4. R. Doc. 1-6. Id. at 2. R. Doc. 1-1 at 3. R. Doc. 1-6 at 3. 7 pattern of conduct identified in the original com plaint.” FDIC v. Conner, 20 F.3d 1376, 1386 (5th Cir. 1994). The Fifth Circuit and the Louisiana Supreme Court have m ade clear that relation back is appropriate only when the defendant had fair notice of the claim s brought in the amended com plaint. See, e.g., Flores v. Cam eron Co., Tex., 92 F.3d 258, 273 (5th Cir. 1996) (“Notice is the critical element involved in Rule 15(c) determ inations.”) (internal citation and quotation m arks om itted); W inford v. Conerly Corp., 897 So. 2d 560 , 568-59 (La. 20 0 5) (allowing relation back when the original petition provided defendant “fair notice of the factual situation out of which the am ended petition arose”); see also 6A Wright & Miller § 1497 (explaining that “a failure of notice will prevent relation back”). Because plaintiff’s earlier filings did not indicate any basis for a racketeering cause of action against Sun Life, Sun Life received no notice of these potential claim s. 20 20 Plaintiff argues that he previously alleged that Sun Life was liable for participating in a com plex scheme of fraudulent behavior because his first am ended petition asserted that “[d]efendants named above are liable to plaintiff in solido for the reasons set out herein below ans [sic] as m ore fully describe in the case of Lea P. Kobuszewksi, et. Al. v. W. Carey Scriber et al.” See R. Doc. 28 at 6; R. Doc. 1-2 at 2. The petition appears to cite Kobuszew ski for the proposition that defendants are solidarily liable, and does not provide any specific notice that plaintiff was alleging Sun Life’s direct participation in a fraudulent schem e. Moreover, the Kobuszew ski case involved warranty claim s against the bank defendants, and is consistent with plaintiff’s original negligence and breach of contract claim s 8 Plaintiff cites to several federal court decisions allowing relation back under Rule 15(c), but each of these cases involved m uch greater factual sim ilarities between the original and am ended complaints. In FDIC v. Bennett, the Fifth Circuit found that relation back was appropriate because the plaintiff “did not allege any new operative facts in the am ended com plaint, but only [a] new legal theory for recovery.” 898 F.2d 477, 478 (5th Cir. 1990 ). The original and am ended com plaints in Bennett were based on the same transaction, the sale of a particular piece of land. Id. at 478-79. Plaintiff’s reliance on RICO cases from outside the Fifth Circuit is sim ilarly unavailing. In Benfield v. Mocatta Metals Corp., the Second Circuit concluded that the am ended com plaint related back because the allegations in the original and am ended com plaints “would require evidence of the same or sim ilar wrongful acts,” and the defendant “was placed on notice that a RICO claim , based in large part on the fraud already alleged, m ight be m ade against it.” 26 F.3d 19, 23 (2d Cir. 1994); see also In re Oly m pia Brew ing Co. Sec. Litig., 612 F. Supp. 1370 , 1374 (N.D. Ill. 1985) (allowing relation back where the evidence supporting RICO claim s was “intim ately tied up with the originally alleged predicate acts of fraud”). Because plaintiff m ade no against Sun Life. See Kobuszew ski v. Scriber, 518 So. 2d 524 (La. App. 2 Cir. 1987). 9 allegations of fraud against Sun Life until the fourth am ended petition, Sun Life had no sim ilar notice of a potential RICO claim against it. This case m ore closely m irrors the facts of Tho Dinh Tran v. Alphonse Hotel Corp., where the Second Circuit held that a RICO claim does not relate back if the original com plaint did not allege that the defendant com m itted any predicate racketeering acts. 281 F.3d 23, 36 (2d Cir. 20 0 2), overruled on other grounds by Slay ton v. Am . Express Corp., 460 F.3d 215 (2d Cir. 20 0 6). As in this case, the am ended com plaint in Tho Dinh Tran “introduced a significant new factual allegation that fundam entally changed the nature of the allegations, both factual and legal, that the plaintiff was asserting against the defendants.” Id.; see also Rosenberg v. Martin, 478 F.2d 520 , 526 (2d Cir. 1973). Other circuits have sim ilarly rejected the relation back of claims when the am ended com plaint asserted a different set of factual allegations. See Hernandez v. Valley View Hosp. Ass’n, 684 F.3d 950 , 962 (10 th Cir. 20 12) (finding that the am ended com plaint did not relate back because it was based on “factual allegations that were new and discrete from the facts she originally pled”); Meijer, Inc. v. Biovail Corp., 533 F.3d 857, 866 (D.C. Cir. 20 0 8) (explaining that defendants lacked adequate notice of an antitrust conspiracy claim when the original com plaint focused on the m isconduct of a single firm). 10 Accordingly, the Court finds that plaintiff’s federal and state racketeering claims do not arise “out of the conduct, transaction, or occurrence set out—or attem pted to be set out—in the original pleading.” Fed. R. Civ. P. 15(c)(1); see also La. Code Civ. Proc. art. 1153. These claims do not relate back to plaintiff’s earlier petitions and are therefore barred by the statute of lim itations. B. Le ave to Am e n d Plaintiff requests leave to amend his com plaint if Sun Life’s m otion is granted. 21 The Court will “freely give leave [to amend] when justice so requires.” Fed. R. Civ. P. 15(a). The Suprem e Court has held that “[i]f the underlying facts or circum stances relied upon by a plaintiff m ay be a proper subject of relief, he ought to be afforded an opportunity to test his claim on the m erits.” Fom an v. Davis, 371 U.S. 178, 182 (1962). Leave to am end, however, “is by no m eans autom atic.” Halbert v. City of Sherm an, 33 F.3d 526, 529 (5th Cir. 1994). The Court considers m ultiple factors, including “undue delay, bad faith or dilatory m otive on the part of the m ovant, repeated failure to cure deficiencies by am endm ents previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [and] futility of amendm ent.” Fom an, 371 U.S. at 182. Upon consideration 21 R. Doc. 28 at 18. 11 of these factors, the Court denies leave to am end. Because plaintiff’s claim s are barred by the statute of lim itations, am endment would be futile. IV. CON CLU SION For the foregoing reasons, the Court GRANTS Sun Life’s partial m otion to dism iss. Plaintiff’s claims under the Racketeer Influenced and Corrupt Organizations Act and the Louisiana Racketeering Act are DISMISSED WITH PREJ UDICE. New Orleans, Louisiana, this _ 22nd_ day of Septem ber, 20 17. ___ _____________________ SARAH S. VANCE UNITED STATES DISTRICT J UDGE 12
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