gabovitch v. shear, 1st cir. (1995)
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USCA1 Opinion
November 21, 1995 [NOT FOR PUBLICATION]
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________________
No. 95-1055
WILLIAM GABOVITCH, ETC.,
Plaintiff, Appellant,
v.
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MAURICE SHEAR, ET AL.,
Defendants, Appellees.
____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. William G. Young, U.S. District Judge] ___________________
____________________
Before
Torruella, Chief Judge, ___________
Stahl and Lynch, Circuit Judges. ______________
____________________
William Gabovitch on brief pro se. _________________
Brian A. Davis, Julie B. Brennan, and Choate, Hall & Ste ______________ ________________ __________________
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brief for appellees.
____________________
____________________
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Per Curiam. Pro se plaintiff William Gabovitch,___________
certified public accountant and non-practicing attorne
served for nearly eighteen years as a co-trustee of t
irrevocable inter vivos trusts created by Maurice Shear.
1992, in connection with litigation filed in 1987 by Gertru
Shear (Maurice's wife and the contingent life beneficiary
the trusts), a state court judge removed plaintiff from
position as trustee and ordered him to pay substanti
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damages because of his mismanagement of the trust
Plaintiff's appeal from that decision remains pending
state appellate court. Claiming that the allegations
mismanagement were frivolous and that his removal had be
fraudulently obtained, plaintiff pursued various collater
actions in state court--all without avail. He then turned
federal court, filing the instant civil RICO action again
the Shears (and others), seeking injunctive relief a
damages on behalf of both himself and the trusts. See___
U.S.C. 1964(c). The district court, following a hearin
dismissed the complaint for failure to state a claim. Havi
reviewed the record in full, and having construed t
complaint in the light most favorable to plaintiff, se _
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e.g., Feinstein v. Resolution Trust Corp., 942 F.2d 34,____ _________ ______________________
(1st Cir. 1991), we now affirm.1
____________________
1. While we have accepted all well-pled allegations in t
complaint as true and drawn all reasonable inferences
plaintiff's favor, there is an inconsistency in
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Extended discussion is unnecessary. To state a RI
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claim, plaintiff was required to allege that defendan
conducted an enterprise through a pattern of racketeeri
activity. See, e.g., Libertad v. Welch, 53 F.3d 428, 4 ___ ____ ________ _____
(1st Cir. 1995). As well, he was required to allege that
suffered injury in his business or property "by reason of"
RICO violation. 18 U.S.C. 1964(c); see, e.g., Sedi ___ ____ ____
S.P.R.L. v. Imrex Co., 473 U.S. 479, 496 (1985) ("t ________ __________
plaintiff has standing if, and can only recover to the exte
that, he has been injured in his business or property by t
conduct constituting the [RICO] violation"); see also Hol ________ ___
v. Securities Investor Protection Corp., 503 U.S. 258, 2 ______________________________________
(1992) (RICO plaintiff must allege, not only "but fo
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causation, but also proximate causation requiring "so
direct relation between the injury asserted and the injurio
conduct alleged").
This causation requirement enables us, at the outset,
put to the side vast portions of plaintiff's volumino
complaint. For example, plaintiff has detailed numero
instances of criminal and fraudulent activity allege
undertaken by various of the defendants during the 1970's a
____________________
narrative. The Shears' principal motivation for filing t
1987 lawsuit, plaintiff contends, was to remove him
trustee and thereby gain control of the trusts' prima
asset--the Mount Pleasant Hospital. Yet plaintiff elsewhe
explains that the trusts had sold their interest in t
hospital the previous year (and only reacquired owners
thereof in 1991).
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1980's. Yet no contention is made that such conduct result
in injury to plaintiff's business or property. In tur
plaintiff charges that defendants have engaged in vario
misdeeds following his ouster as trustee in January 199
Again, such actions are not linked to any business
property loss suffered by plaintiff. We note that plainti
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lacks standing to complain of injury to the trus
themselves, having been removed as trustee by the time t
instant suit was filed. And the suggestion that his stat
as a potential creditor of the trusts grants him standing
sue on his own behalf is misplaced. See, e.g., id. at 27 ___ ____ ___
National Enterprises v. Mellon Financial Services, 847 F. ____________________ __________________________
251, 254 (5th Cir. 1988).
The only business or property injury alleged in t
complaint is that stemming from the state court judgment
i.e., plaintiff's loss of his position as trustee; t
accompanying monetary damages; the resulting harm to
reputation and client base; and the legal expenses incurr
in litigating that action. The question thus becomes whet
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plaintiff has set forth a predicate act of racketeering t
has proximately caused such injury. Plaintiff insists he
done so in two respects. He argues that the filing
defendants of the state court suit (as part of a broade
unlawful scheme) constituted attempted extortion in violati
of the Hobbs Act, 18 U.S.C. 1951. And he argues t
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Gertrude Shear, by proffering false affidavits and testimo
to the state court (allegedly at the behest of her husban
committed mail fraud in violation of 18 U.S.C. 1341.
disagree that such claims establish the necessary predica
act.
Numerous courts have held that the filing of litigatio
-no matter how lacking in merit--does not constitute
predicate racketeering act of extortion. "If a suit
groundless or filed in bad faith, the law of torts
provide a remedy. Resort to a federal criminal statute
unnecessary." I.S. Joseph Co. v. J. Lauritzen A/S, 751 F. _______________ ________________
265, 267-68 (8th Cir. 1984); accord, e.g., First Pacif ______ ____ ___________
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Bancorp, Inc. v. BRO, 847 F.2d 542, 545 (9th Cir. 1988);_____________ ___
Bulow by Auersperg v. von Bulow, 657 F. Supp. 1134, 1143- __________________ _________
(S.D.N.Y. 1987) (holding that malicious prosecution cla
does not constitute predicate act of racketeerin
Plaintiff's reliance on Hall American Center Assocs. v. Dic ____________________________ __
726 F. Supp. 1083 (E.D. Mich. 1989), proves unavailing. T
defendants there had engaged in spurious litigation describ
by the district court as a "clear abuse of process." Id.___
1086. The defendants here prevailed in the state court sui
And Lemelson v. Wang Laboratories, Inc., 874 F. Supp. 430 ( ________ _______________________
Mass. 1994), offers minimal succor to plaintiff, since t
court there was addressing the subject of RICO injury rat
than predicate acts.
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Plaintiff's mail fraud claim likewise proves deficien
For one thing, it lacks the specificity required by Fed.
Civ. P. 9(b). See, e.g., New England Data Services, Inc.___ ____ _______________________________
Becher, 829 F.2d 286, 290 (1st Cir. 1987).2 Moreover,______
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the extent his argument amounts to the allegation t
Gertrude Shear committed perjury, his cause would not
advanced; perjury does not constitute an act of racketeerin
See, e.g., Pyramid Securities, Ltd. v. IB Resolution, Inc ___ ____ ________________________ _________________
924 F.2d 1114, 1118-19 (D.C. Cir.), cert. denied, 502 U. ____________
822 (1991); United States v. Williams, 874 F.2d 968, 973 n. _____________ ________
(5th Cir. 1989).
To be sure, as plaintiff observes, several courts ha
indicated that a mail fraud claim premised largely on char
of perjury can suffice as a predicate act. See, e.g., Unit ___ ____ ___
States v. Eisen, 974 F.2d 246, 254 (2d Cir. 1992) ("use______ _____
the mail fraud offense as a RICO predicate act cannot
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suspended simply because perjury is part of the means f
perpetrating the fraud"), cert. denied, 113 S. Ct. 18 _____________
____________________
2. The suggestion that the information concerni
defendants' use of the mails was in their exclusive control
such that plaintiff should be allowed to amend his complai
following further discovery, see, e.g., Becher, 829 F.2d___ ____ ______
290--falls short. As a party to the state court sui
plaintiff obviously was (or should have been) aware of t
circumstances surrounding the defendants' submission
allegedly fraudulent affidavits to the court. See, e. ___ __
Feinstein, 942 F.2d at 44 ("Although Becher may in certa _________ ______
circumstances give a plaintiff a second bite at the appl
its generous formulation is not automatically bestowed
every litigant.").
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(1993); see also Midwest Grinding Co. v. Spitz, 976 F. _________ _____________________ _____
1016, 1022-23 (7th Cir. 1992) (leaving question open). Her
however, perjury is said to constitute the entire means f
perpetrating the fraud. As well, the Midwest Grinding cou ________________
noted that in cases "allowing perjury to serve as a predica
act [by way of a mail fraud or obstruction of justi
allegation], ... the defendant had either been convicted
perjury before the civil RICO action commenced or had perju
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established as a matter of record in a separate proceedin
Id. at 1022 n.3 (citations omitted). Nothing of the sort___
occurred here; quite to the contrary, the state court dee
Gertrude Shear's evidence credible.
In essence, simply by alleging that defendant
litigation stance in the state court case was "fraudulent
plaintiff is insisting upon a right to relitigate that enti
case in federal court (while the case remains pending in t
state appellate court). The RICO statute obviously was n
meant to endorse any such occurrence. Cf. Willis v. Lipto
___ ______ ____
947 F.2d 998, 1001 (1st Cir. 1991) ("An extension of RI
standing in these circumstances would serve to 'federalize'
substantial volume of common law fraud litigati
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traditionally left to state courts.").3
____________________
3. Plaintiff's two remaining arguments can be readi
rejected. The district court was not required to conve
defendants' motion to dismiss into one for summary judgme
before taking judicial notice of court papers from the sta
court litigation. See, e.g., Edward v. John Hancock Mutu ___ ____ ______ ________________
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Affirmed.
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_________
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____________________
Life Ins. Co., 973 F.2d 1027, 1030 n.1 (1st Cir. 1992); Ma _____________ _
v. South Bay Beer Distributors, Inc., 798 F.2d 1279, 12 __________________________________
(9th Cir. 1986). Nor did it abuse its discretion in denyi
plaintiff's post-judgment request to amend his complai
(following further discovery), where any such amendment wou
have been futile. See, e.g., Arzuaga-Collazo v. Orient ___ ____ _______________ _____
Federal Sav. Bank, 913 F.2d 5, 7 (1st Cir. 1990); Nodine
_________________ ______
Textron, Inc., 819 F.2d 347, 349 (1st Cir. 1987)._____________
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