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Figures v. Szabo

United States District Court, N.D. California

May 4, 2015

MATTHEW FIGURES, et al., Plaintiffs,
TIBOR SZABO, et al., Defendants.


HAYWOOD S. GILLIAM, Jr., District Judge.

Defendant Tibor Szabo ("Szabo"), appearing pro se, moves to dismiss the First Amended Complaint ("FAC") filed by plaintiffs Matthew Figures and Colleen Devlin ("Plaintiffs") on January 21, 2015. Dkt. No. 28. The FAC alleges violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO") (18 U.S.C. §§ 1961-1968) and California's Unfair Competition Law ("UCL") (Cal. Bus. Prof. Code §§ 17200-17208) against Szabo and Salle Musical Arts d/b/a Salle Pianos & Events ("Salle") (collectively "Defendants"). Dkt. No. 20. The FAC also alleges common-law assault and battery against Szabo. The Court held a hearing on Szabo's motion on March 18, 2015. Having read and considered the parties' written submissions and arguments at the hearing, the Court GRANTS the motion to dismiss Plaintiffs' RICO claims with prejudice. The Court declines to assert supplemental jurisdiction over Plaintiffs' remaining state law claims, and dismisses those claims without prejudice.


Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint if it fails to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). On a motion to dismiss, the court accepts as true a plaintiff's well-pleaded factual allegations and construes all factual inferences in the light most favorable to the plaintiff. Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). But the plaintiff must allege facts sufficient to "raise a right to relief above the speculative level." Twombly, 550 U.S. at 555. Although the court generally is confined to assessing the allegations in the pleadings, when the complaint is accompanied by attached documents, such documents are deemed part of the complaint and may be considered in evaluating the merits of a Rule 12(b)(6) motion. Durning v. First Boston Corp., 815 F.2d 1265, 1267 (9th Cir. 1987). A court "need not accept as true allegations contradicting documents that are referenced in the complaint." Lazy Y Ranch Ltd. v. Behrens, 546 F.3d 580, 588 (9th Cir. 2008).

A statute of limitations defense may be raised by a motion to dismiss "[if] the running of the statute is apparent on the face of the complaint." Ledesma v. Jack Stewart Produce, Inc., 816 F.2d 482, 484 n. 1 (9th Cir. 1987); Jablon v. Dean Witter & Co., 614 F.2d 677, 682 (9th Cir. 1980). However, a complaint may not be dismissed unless it appears "beyond doubt" that plaintiffs can prove no set of facts that would establish the timeliness of the claim. Hernandez v. City of El Monte, 138 F.3d 393, 402 (9th Cir. 1998).


Unless otherwise noted, the following facts are taken from the FAC and presumed to be true for purposes of this motion. Defendant Szabo owns and operates Salle, an antique piano restoration and sales business located in San Francisco. FAC ¶ 6. Plaintiffs assert claims against Szabo and Salle on behalf of two separate putative classes. Plaintiff Figures seeks to sue on behalf of a class of individuals based on allegations that Szabo fraudulently accepted deposits on and promised to deliver classical pianos, but never delivered the pianos. FAC ¶¶ 31-35. Figures alleges that Szabo tricked him into paying a $6, 000 deposit from an out-of-state bank account to buy a piano that Szabo did not actually have. FAC ¶ 31. Plaintiff Devlin seeks to sue on behalf of a second class of individuals who were "violently assaulted" by Szabo. FAC ¶¶ 36-42. Devlin alleges that Szabo sexually and physically assaulted her after a musical event held at Salle in September 2014. FAC ¶¶ 37-38.

On October 21, 2014, Plaintiffs filed their original complaint alleging that Defendants' actions constituted common law assault and battery and violated the RICO and UCL statutes. Dkt. No. 1. On January 7, 2015, the Court dismissed the original complaint in its entirety for failure to allege fraud with particularity as required by Federal Rule of Civil Procedure 9(b). Dkt. No. 10. On January 21, 2015, plaintiffs filed the FAC, adding some additional factual detail to the allegations in several paragraphs and attaching a number of exhibits. FAC ¶¶ 19-35, 43-56; Dkt. Nos. 21-26.

Szabo again moves to dismiss the FAC for failure to state a claim. Among other arguments, Szabo contends that Plaintiffs' RICO claims are time-barred. Mot. at 3.


A. Plaintiffs' RICO Claims are Time-Barred

The statute of limitations for a RICO claim is four years. Agency Holding Corp. v. Malley-Duff & Associates, Inc., 483 U.S. 143, 156 (1987). In determining whether a cause of action has been properly pled within the statutory period, courts in this circuit follow the "injury discovery" rule. Pincay v. Andrews, 238 F.3d 1106, 1109 (9th Cir. 2001). Under that rule, "the civil RICO limitations period begins to run when a plaintiff knows or should know of the injury that underlies his cause of action." Id. A plaintiff is deemed to have "constructive knowledge" of a cause of action under the "should know" prong when he "ha[s] enough information to warrant an investigation which, if reasonably diligent, would have led to discovery of the fraud." Id. at 1110 (citation omitted). Importantly, a plaintiff need not have determined that the injury complained of is part of a "pattern of racketeering" to trigger the start of the limitations clock. Grimmett v. Brown, 75 F.3d 506, 511 (9th Cir. 1996).

As explained below, the facts alleged by Plaintiffs (including facts contained in documents they chose to attach to the FAC) conclusively establish that Figures knew or should have known of the injury underlying his RICO cause of action - Szabo's allegedly fraudulent inducement of the $6, 000 deposit without any intention of delivering the piano - by no later than August of 2010. Because Figures did not file suit until October 21, 2014, his claim is barred by the four-year RICO statute of limitations.

The FAC and attached exhibits reflect that Figures first expressed some doubt regarding Szabo on November 26, 2009, when Szabo asked Figures to wire money even though Figures had never met Szabo, viewed the merchandise, or visited the showroom. Dkt. No. 26-2 at 5 (email from Figures to Szabo stating "I am [leery] of wiring money out of state to a business I have never been to"). Despite Figures' reservations, he sent Szabo a $2, 000 deposit on November 27, 2009. Dkt. No. 26-2 at 7. At Szabo's request, Figures then sent another deposit on or around December 11, 2009. ...

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