Beauford v. Helmsley

865 F.2d 1386 (2d Cir. 1989) · United States Court of Appeals for the Second Circuit · January 13, 1989

Summary

The Second Circuit, sitting en banc, held that plaintiffs sufficiently pleaded a pattern of racketeering activity under civil RICO based on allegedly fraudulent mailings relating to the conversion of Parkchester apartments into condominiums. The court vacated the prior panel decision and the district court's judgment dismissing the complaint, and remanded for further proceedings. The court noted that the pleading might not satisfy Federal Rule of Civil Procedure 9(b) and suggested that plaintiffs be allowed to file a more particularized complaint.

Holdings

  1. A RICO pattern may be established without multiple schemes, multiple episodes, multiple transactions, or racketeering acts widely separated in time or space. Each individual racketeering act should be separately counted.
  2. The amended complaint adequately pleaded a RICO pattern because the alleged mail frauds were interrelated and the allegations supported continuity or a threat of continuity, notwithstanding that the alleged scheme had a finite objective.
  3. The amended complaint adequately pleaded the RICO enterprise element by alleging the sponsoring partnership and an association of the defendants as enterprises within the statutory definition.
  4. Although the court found the RICO pattern allegations sufficient at the pleading stage, it expressed doubt that the complaints satisfied Rule 9(b) and suggested that the district court permit plaintiffs to file a new pleading complying with the Federal Rules of Civil Procedure.

Questions Presented

  1. Whether the amended complaint adequately pleaded a RICO pattern of racketeering activity based on numerous allegedly fraudulent mailings made pursuant to a single condominium-conversion scheme.
  2. Whether RICO requires multiple schemes, multiple episodes, temporal separation of racketeering acts, or an open-ended scheme to establish continuity.
  3. Whether the amended complaint adequately pleaded the RICO enterprise element.
  4. Whether the complaint's allegations were sufficient at the pleading stage despite potential deficiencies under Federal Rule of Civil Procedure 9(b).

Disposition

reversed_and_remanded

Cases Cited (12)

  • Beauford v. Helmsley, 843 F.2d 103, 110 (2d Cir. 1988)(vacated)
  • United States v. Indelicato, 865 F.2d 1370 (2d Cir. 1989)(followed)
  • Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 489, 497-99 (1985)(followed)
  • United States v. Ianniello, 808 F.2d 184, 190-92 (2d Cir. 1986)(limited)
  • Beck v. Manufacturers Hanover Trust Co., 820 F.2d 46, 51 (2d Cir. 1987)(limited)
  • Furman v. Cirrito, 828 F.2d 898, 902-03 (2d Cir. 1987)(limited)
  • Albany Insurance Co. v. Esses, 831 F.2d 41, 44 (2d Cir. 1987)(limited)
  • Creative Bath Products, Inc. v. Connecticut General Life Insurance Co., 837 F.2d 561, 564 (2d Cir. 1988)(limited)
  • United States v. Benevento, 836 F.2d 60, 72 (2d Cir. 1987)(limited)
  • Badders v. United States, 240 U.S. 391, 394 (1916)(followed)

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