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CURRIER v. WHIM COMPANY

United States District Court, N.D. California


May 25, 2004.

PAUL T. CURRIER, Plaintiff, V. WHIM COMPANY, VICTOR MESHKOVSKY, ROBERT CHOW, COVAD COMMUNICATIONS GROUP, INC., COVAD COMMUNICATIONS COMPANY, MCI COMMUNICATIONS CORPORATION, and DOES 1-100, Defendants

The opinion of the court was delivered by: SUSAN ILLSTON, District Judge

WITHOUT LEAVE TO AMEND, DENYING MOTION FOR TEMPORARY ORDER DISMISSING COMPLAINT RETRAINING ORDER, AND DENYING APPLICATION TO PROCEED IN FORM A PAUPERIS
Now before the Court are plaintiff's amended complaint and application to proceed in forma pauperis ("IFP"), and motion for a temporary restraining order, both filed on April 15, 2004. For the reasons set forth below, the Court hereby DISMISSES plaintiff's complaint without leave to amend, DENIES plaintiff's motion for a temporary restraining order, and DENIES plaintiff's IFP application.

BACKGROUND

  According to the Amended Complaint for Damages ("Compl."), plaintiff Paul Talcott Currier is one of the operators of Seven Seas Clubs, Inc., a California corporation engaged in the business of providing meeting space and other materials for recovering alcoholics to maintain their sobriety. Compl. at ¶¶ 1. In November of 2002, Plaintiff entered into a lease with Victor Meshkovsky, general partner of the WHIM Company, for the basement space in a building owned by Meshkovsky and WHIM at 215 Leidesdorff Street in San Francisco's financial district. Compl. at ¶¶ 3, 8. Plaintiff used this space to hold meetings of the Seven Seas Club, to run other businesses, and as his living space. Compl. at ¶ 28. There is toxic mold growing in the building and raw sewage has flooded the basement. Compl. at ¶ 11, 13, 20. This has a negative impact on plaintiff's business. Compl. at ¶ 20. Plaintiff acknowledges that he has failed to pay rent. Compl. at Ex. A.

  In January of 2003, plaintiff began negotiations with defendant to lease or purchase the entire building under a "master lease-contract to purchase." Compl. at ¶ 9. During the period beginning in March of 2003 and ending in March 2004, plaintiff made multiple offers to buy defendant's building. Compl at ¶ 11. Each time, plaintiff offered four million dollars for the building, with the exception of one offer to buy the building at issue together with a second building for 4.5 million dollars. Compl. at Exs. A, E-H. In February of 2004, however, plaintiff discovered that the building requires two to five million dollars in renovations to comply with San Francisco building and safety codes. Compl. at ¶ 11. Defendants sued plaintiff for unlawful detainer and evicted him from the premises. Compl. at ¶ 28, 41, 88, Ex. E.

  On April 7, 2004, plaintiff filed this action against defendants WHIM Company, Victor Meshkovsky, Robert Chow and Does 1-100, alleging numerous state causes of action including fraud, as well as federal causes of action under the Americans with Disabilities Act ("ADA") and the Racketeering Influenced Corrupt Organizations Act ("RICO"). Plaintiff sought IFP status, so the Court reviewed the complaint pursuant to 28 U.S.C. § 1915 and, on April 13, 2004, dismissed that complaint with leave to amend. Plaintiff filed the amended complaint on April 15, 2004, adding new defendants Covad Communications Group, Covad Communications Co., and MCI Communications Corp. ("Telecom Defendants"). Plaintiff alleges that defendants WHIM, Chow, Meshkovsky and Does 1-100 violated the ADA because they discriminatorily refused to sell the building to plaintiff based on their knowledge that plaintiff and his clients are alcoholics, Compl. at ¶ 122-126, 130-132, and that they violated RICO by committing mail fraud, wire fraud, bank fraud, and by conspiring to commit those violations. Compl. at ¶ 186-195. Plaintiff does not assert any of his federal causes of action directly against the Telecom Defendants.

  LEGAL STANDARD

  IFP applications are reviewed under a two-part analysis under 28 U.S.C. § 1915. This analysis looks first to whether a plaintiff meets the requisite financial status to be permitted to proceed in federal court without first paying a filing fee. 28 U.S.C. § 1915(a)(1). The second stage of the analysis examines a plaintiff's complaint to ensure that it states cognizable, non-frivolous claims. 28 U.S.C. § 1915(e)(2)(B)(i)-(ii). If the Court determines that a plaintiff's assets exceed the maximum allowable amount, or that the complaint fails to state a claim, it must dismiss the action. See Cato v. United States, 70 F.3d 1103, 1106 (9th Cir. 1995) (noting that a court may dismiss an action under § 1915 if the "complaint neither identifies any constitutional or statutory right that was violated nor asserts any basis for federal subject matter jurisdiction . . .").

  Courts treat the second prong of the analysis similarly to a motion to dismiss filed by a defendant. If it is "clear that no relief could be granted under any set of facts that could be proved consistent with the [plaintiff's] allegations," then it is proper to dismiss an IFF. See Ascon Properties. Inc. v. Mobil Oil Co., 866 F.2d 1149, 1152 (9th Cir. 1989) (applying standard of review for motions to dismiss under Federal Rule of Civil Procedure 12(b)(6)). If a plaintiff alleges multiple causes of action that include both state and federal claims and the federal claims are dismissed, the Court will decline to assert supplemental jurisdiction over the remaining state-law claims. 28 U.S.C. § 1367(c)(3). Also similar to a motion to dismiss, all material allegations in an IFP complaint are taken as true and construed in the light most favorable to the plaintiff. See NL Ind., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986) (applying Federal Rule of Civil Procedure 12(b)(6)).

  DISCUSSION

  The first stage of IFP analysis requires that a plaintiff file an affidavit describing the totality of the plaintiff's assets and stating that the plaintiff is unable to pay the required fee. 28 U.S.C. § 1915(a)(1). Plaintiff has filed this affidavit, indicating that he has no assets and that his income is only a draw of $84 per week. IFP Application at 1:25. The Court notes that the IFP affidavit is somewhat inconsistent with the complaint, which alleges that the Seven Seas Club presently earns $l,500/month (though it is losing money monthly) and that he has made several multimillion-dollar offers to purchase defendant's office building. Compl. at ¶¶ 11, 27, 30, Exs. A, E-H, IFP Application at 2:1-5. Based on plaintiff's multiple offers to buy the office building in question, the income figure of $84 per week that plaintiff describes in his IFP application seems dubious. Notwithstanding this doubt, the Court will assume for purposes of this order that plaintiff's affidavit provides a true valuation of his assets and, accordingly, places him within the parameters necessary to grant an IFP application.

  In the second stage of IFP analysis, the Court reviews plaintiff's complaint to determine whether it states a cognizable cause of action against the defendants. 28 U.S.C. § 1915(e)(2)(B)(ii). The Court will review plaintiff's federal allegations before his state law allegations, because a failure to adequately plead a federal cause of action will result in dismissal of the entire case.

 1. ADA claim

  Plaintiff alleges that defendants refused to sell him the building on Leidesdorff Street because he and his clients are alcoholics. Compl. at ¶¶ 24-25, 99-103. The ADA provides that "[n]o individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the . . . facilities . . . or accommodations of any place of public accommodation by any person who owns, . . . a place of public accommodation." 42 U.S.C. § 12182(a). The term "disability" under the ADA means "a physical or mental impairment that substantially limits one or more of the major life activities" of an individual. 42 U.S.C. § 12102(2)(A). This definition also protects individuals who are not necessarily disabled but are regarded as having such impairments. 42 U.S.C. § 12102(2)(C). The analytical method for determining disability makes the ADA more than a mere laundry-list of disabilities entitling certain individuals to accommodation. See Burch v. Coca Cola Co., 119 F.3d 305, 315-316 (5th Cir. 1997) (establishing that alcoholism is not an per se disability). Ultimately, the "true determination of whether an individual has a disability is not necessarily based on the name or diagnosis of the impairment that person has, but rather on the effect of that impairment on the life of the individual. Some impairments may be disabling for particular individuals but not for others." 29 C.F.R. § 1630 App. (1996). Consistent with this framework, Congress has not included alcoholism in the ADA as a per se disability, because, without more, it is not one.*fn1 The Court previously found plaintiff s allegations that defendants refused to sell him the building at issue in this case because plaintiff and his clients are alcoholics to be insufficient, because plaintiff did not indicate that his alcoholism actually constitutes an impairment that substantially limits a major life activity. That is, plaintiff did not allege that his alcoholism caused any physical or mental impairments that could render him disabled, and his prior conclusory statements did not make it so. Plaintiff has not cured this defect in his complaint. While plaintiff's amended complaint does generally allege that certain major life activities, such a "walking, talking, working, thinking" are substantially affected by alcoholism, he still fails to assert that any of his own, specific, major life activities are substantially impaired by it. Compl. at ¶ 131. In order to be treated as disabled, plaintiff would have to allege that his alcoholism substantially limits him in at least one major life activity through a specific physical or mental condition other than intoxication itself. This he has not done.*fn2

  Accordingly, plaintiff fails to state an ADA claim.

 2. RICO claim

  Plaintiff next asserts that the non-telecom defendants have violated the federal RICO statute. Compl. at ¶¶ 186-195. Under 18 U.S.C. § 1962, it is "unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt." 18 U.S.C. § 1962(c). "Racketeering activity" is defined by reference to specific crimes and statutes, including "fraud connected with a case under Title 11." 18 U.S.C. § 1961(1). This definition, however, specifically excludes bankruptcy fraud as defined by 18 U.S.C. § 157, which independently punishes fraudulent petitions, documents, claims and representations that relate to falsely-filed bankruptcy proceedings. Id.; 18 U.S.C. § 157.

  In order to state a valid RICO claim under § 1962(c), a plaintiff must allege "(1) conduct, (2) of an enterprise, (3) through a pattern, (4) of racketeering activity." Jarvis v. Regan, 833 F.2d 149, 151-52 (9th Cir. 1987) (citations omitted). "In order to avoid dismissal for failure to state a claim, a plaintiff must plead specific facts, not mere conclusory allegations, which establish the existence of an enterprise." Elliott v. Foufas, 867 F.2d 877, 881 (5th Cir. 1989) (citations omitted).

  18 U.S.C. § 1962(d) makes unlawful conspiracy to violate any of the provisions of § 1962. "[I]f the section 1962(c) claim does not state an action upon which relief could ever be granted, regardless of the evidence, then the section 1962(d) claim cannot be entertained." Neibel v. Trans World Assurance Co., 108 F.3d 1123, 1127 (9th Cir. 1997). There is no private cause of action under the statute for conspiracy alone, as the conspiracy cause of action is only a means for establishing vicarious liability for an underlying tort. Beck v. Prupis, 120 S.Ct. 1608, 1615, 1615 n.7 (2000).

  Plaintiff's previous complaint failed to allege a RICO claim in several respects. He has not cured any of those defects here. First, plaintiff still does not allege that the defendants to the RICO claim are engaged in interstate commerce. To the contrary, plaintiff alleges that defendants Chow and Meshkovsky are California residents, who do business in California. Plaintiff's amended complaint does not ascribe any citizenship to the WHIM Company. While plaintiff does allege that defendant Chow stole and transported plaintiff's physical and intellectual property across state lines, this does not constitute commerce. Furthermore, all other actions in this case with respect to the Leidesdoff property appear to have occurred within the state of California. Second, plaintiff still fails to allege that any racketeering activity that may have occurred here is part of a pattern. Accordingly, plaintiff fails to allege that the involvement of interstate commerce that is essential to a RICO claim.

  Second, plaintiff only makes conclusory allegations of qualifying torts under the federal RICO statute, rather than the required specific allegations of fact. While plaintiff has added the words "mail fraud, wire fraud, and bank fraud" to his complaint, he has not specifically alleged the occurrence of any conduct satisfying the elements of any of those crimes. The words only state plaintiff's own ultimate legal conclusion as to the occurrence those crimes. They do not constitute the crucial assertions of actual underlying facts that the Court can consider as true for purposes of establishing those same conclusions to support an IFP application.

  Finally, although plaintiff has alleged the occurrence of bankruptcy fraud (not as a separate claim, but in more detail than his mail, wire, and bank fraud allegations), which is related to the definition of racketeering activity covering offenses "involving fraud connected with a case under Title 11," he still has not conformed his allegation to the RICO statute sufficiently to support a conspiracy claim. In order to satisfy this requirement, plaintiff must set forth which of defendants' actions with respect to the allegedly fraudulent bankruptcy are separate offenses "involving fraud" and that are "connected with" a Title 11 case. Furthermore, plaintiff must then demonstrate that these offenses are not excluded as RICO violations by their preexisting prohibition under 18 U.S.C. § 157. Having failed to do this a second time, plaintiff has not stated an actual RICO claim with respect to his allegations of bankruptcy fraud. Accordingly, plaintiff fails to state any RICO claim at all.

  Due to plaintiff's failure to state a federal claim, and given that most of plaintiff s complaint is devoted to state claims, this Court will not exercise jurisdiction over his case at this time. If plaintiff properly pleads a federal cause of action in the future, supplemental jurisdiction may be appropriate, but at the present time it is not. Accordingly, the Court hereby DISMISSES plaintiff's complaint without leave to amend, but without prejudice to filing a paid complaint, and DENIES plaintiff's IFP application.

 3. Preliminary injunction

  Plaintiff's motion for a temporary retraining order is identical to his previous motion seeking the same. Plaintiff seeks a stay of eviction proceedings against him, a grant of access to the Leidesdorff Street property, and use of the second and fourth floors of the building. Pl's. Mot. at 1. District courts do have broad discretion in fashioning equitable relief, but only for claims properly before them. United States v. Oakland Cannabis Buyers' Coop. 532 U.S. 483, 495, 121 S.Ct. 1711, 1720 (2001). As discussed above, this Court has no jurisdiction over plaintiff's complaint, as he fails to state a federal claim. Accordingly, the Court hereby DENIES his motion for a temporary restraining order.

 4. Lis pendens

  Plaintiff has filed a document entitled "Notice of Pendency of Action (Lis Pendens)" To the extent that this document was intended as notice of the pendency of this action affecting title to or possession of the Leidesdorff real property, this action is no longer pending. Accordingly, this lis pendens is expunged.

  CONCLUSION

  For the foregoing reasons, the Court hereby DISMISSES plaintiff's complaint without leave to amend, but without prejudice to filing a paid complaint, DENIES plaintiff's motion for a temporary restraining order; DENIES plaintiff's IFP application; and EXPUNGES the Notice of Pendency of Action (Lis Pendens) filed by plaintiff. The clerk shall close the file.

  IT IS SO ORDERED.


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