Filed: Oct. 27, 2009
Latest Update: Feb. 21, 2020
Summary: [DO NOT PUBLISH] IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT FILED _ U.S. COURT OF APPEALS ELEVENTH CIRCUIT Oct. 27, 2009 No. 09-11997 THOMAS K. KAHN Non-Argument Calendar CLERK _ D. C. Docket No. 08-00098-CV-T-27-EAJ RICHARD MERRITT, MARY JO MERRITT, Plaintiffs-Appellants, versus LAKE JOVITA HOMEOWNER'S ASSOCIATION, INC., LYONS HERITAGE PASCO, LLC, LYONS LAND PASCO, LLC, LAKE JOVITA JOINT VENTURE, MORRIS NEEDLES, individually and in his representative capacities as officer in
Summary: [DO NOT PUBLISH] IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT FILED _ U.S. COURT OF APPEALS ELEVENTH CIRCUIT Oct. 27, 2009 No. 09-11997 THOMAS K. KAHN Non-Argument Calendar CLERK _ D. C. Docket No. 08-00098-CV-T-27-EAJ RICHARD MERRITT, MARY JO MERRITT, Plaintiffs-Appellants, versus LAKE JOVITA HOMEOWNER'S ASSOCIATION, INC., LYONS HERITAGE PASCO, LLC, LYONS LAND PASCO, LLC, LAKE JOVITA JOINT VENTURE, MORRIS NEEDLES, individually and in his representative capacities as officer in ..
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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
Oct. 27, 2009
No. 09-11997
THOMAS K. KAHN
Non-Argument Calendar
CLERK
________________________
D. C. Docket No. 08-00098-CV-T-27-EAJ
RICHARD MERRITT,
MARY JO MERRITT,
Plaintiffs-Appellants,
versus
LAKE JOVITA HOMEOWNER'S ASSOCIATION, INC.,
LYONS HERITAGE PASCO, LLC,
LYONS LAND PASCO, LLC,
LAKE JOVITA JOINT VENTURE,
MORRIS NEEDLES,
individually and in his representative
capacities as officer in the LLCs,
BOBBY LYONS,
individually and in his representative
capacity as officer in the LLCs,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Middle District of Florida
_________________________
(October 27, 2009)
Before BARKETT, MARCUS and ANDERSON, Circuit Judges.
PER CURIAM:
Richard Merritt and Mary Jo Merritt (the “Merritts”) have appealed from the
dismissal of their complaint, filed pursuant to the federal Racketeer Influenced and
Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1962. The Merritts argue:
(1) that the district court erred by dismissing the claims against defendants Lake
Jovita Homeowners’ Association (“LJHOA”) and Lake Jovita Joint Venture
(“LJJV”) “with” prejudice in its August 29, 2008 order, and abused its discretion
by denying the Merritts’ motion to amend their complaint following the September
30, 2008 amended order; (2) that the district court erred in dismissing the Merritts’
second amended complaint, i.e., their federal RICO claim, pursuant to Rule
12(b)(6); and (3) that the district court abused its discretion by stating that it would
entertain a motion for sanctions against the Merritts.1 The appellees have moved
for sanctions against the Merritts pursuant to Rule 38 of the Federal Rules of
1
In the “Statement of the Issues” section of their brief, the Merritts also suggest that their
second amended complaint supported a claim under the Interstate Land Sales Full Disclosure
Act (“ILSFDA”), a claim that they never presented in any of their three complaints below.
Therefore, the issue is not properly before us. Hurley v. Moore, 233 F.3d 1295, 1297-98 (11th
Cir. 2000). Furthermore, the Merritts do not address this issue anywhere else in their brief and,
therefore, have waived the argument. See Mingkid v. U.S. Att’y Gen.,
468 F.3d 763, 767 n.1
(11th Cir. 2006) (“Issues not argued on appeal are deemed waived.”); Tedder v. F.M.C. Corp.,
590 F.2d 115, 117 (5th Cir. 1979) (stating that a point raised in the statement of the issues but
not addressed anywhere else in the brief is deemed abandoned). Accordingly, we decline to
address this issue.
2
Appellate Procedure. LJHOA and LJJV have also moved for sanctions pursuant
to 28 U.S.C. § 1927.
I. The August 29th order and the September 30th amended order
The Merritts’ misinterpret the September 30th order and apparently are
under the impression that this amended order stated new deficiencies in the
Merritts’ second amended complaint, which they were not given the opportunity to
cure. However, the September 30th order, which was titled “Amended Order,”
clearly stated that the final page of the order was amended to clarify that the claims
against LJHOA and LJJV were dismissed “without” prejudice, and that the
remainder of the order was identical to the August 29th order. The Merritts were
in no way prevented from complying with the amended order, as they had already
filed an amended complaint against all of the defendants, including LJHOA and
LJJV. The Merritts have failed to show that they were unduly prejudiced by the
court’s typographical error in the August 29th order, or by the court’s denial of
their motion to extend the time to amend the complaint. Accordingly, the district
court committed no error and did not abuse its discretion in denying the Merritts
the opportunity to further amend their complaint.
II. Dismissal for failure to state a federal RICO claim
We review a district court ruling on a Rule 12(b)(6) motion de novo,
3
accepting the allegations in the complaint as true and construing them in the light
most favorable to the plaintiff. Hill v. White, 321 F.3d 1334, 1335 (11th Cir.
2003). Furthermore, “[p]ro se pleadings are held to a less stringent standard than
pleadings drafted by attorneys and will, therefore, be liberally construed.”
Tannenbaum v. United States,
148 F.3d 1262, 1263 (11th Cir.1998).2
To survive dismissal for failure to state a claim, “a plaintiff’s obligation to
provide the ‘grounds’ of his ‘entitlement to relief’ requires more than labels and
conclusions, and a formulaic recitation of the elements of a cause of action will not
do.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555,127 S.Ct. 1955, 1964-65,
167 L. Ed. 2d 929 (2007) (citation omitted). “Factual allegations must be enough to
raise a right to relief above the speculative level.”
Id. at 555, 127 S.Ct. at 1965. A
district court may properly dismiss a complaint if it rests only on “conclusory
allegations, unwarranted deductions of facts or legal conclusions masquerading as
facts.” Oxford Asset Mgmt., Ltd. v. Jaharis,
297 F.3d 1182, 1188 (11th Cir. 2002).
In order to state a federal RICO violation, plaintiffs typically must allege
“(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity.”
Williams v. Mohawk Indus. 465 F.3d 1277, 1282 (11th Cir. 2006) (citation and
internal quotation marks omitted). A pattern of racketeering activity requires at
2
Although Richard and Mary Jo Merritt are both proceeding pro se, Richard Merritt has
been a licensed attorney in the state of Florida since 1982.
4
least two distinct but related predicate acts. Maiz v. Virani, 253 F.3d 641, 671
(11th Cir. 2001). The predicate acts must amount to, or otherwise pose a threat of,
“continuing racketeering activity.” H.J. Inc. v. Northwestern Bell Tel. Co.,
492
U.S. 229, 240,
109 S. Ct. 2893, 2901,
106 L. Ed. 2d 195 (1989) (emphasis in
original). Plaintiffs must also show injury to business or property by reason of the
substantive RICO violation.
Williams, 465 F.3d at 1282-83.
The Merritts allege predicate acts of mail fraud and wire fraud, which must
be pled with an increased level of specificity pursuant to Rule 9(b). See Ambrosia
Coal & Constr. Co. V. Morales, 482 F.3d 1309, 1316 (11th Cir. 2007). “RICO
complaints must allege: (1) the precise statements, documents, or
misrepresentations made; (2) the time and place of and person responsible for the
statement; (3) the content and manner in which the statements misled the Plaintiffs;
and (4) what the Defendants gained by the alleged fraud.”
Id. at 1316-17. In a
case involving multiple defendants, the complaint should inform each defendant of
the nature of his alleged participation in the fraud.
Id. at 1317.
Because the Merritts failed to plead their federal RICO claim with the
required level of specificity, the district court did not improperly dismiss their
complaint for failing to state a RICO claim. See Morales, 482 F.3d at 1317. Even
assuming that the Merritts sufficiently alleged the predicate acts, however, their
5
complaint still would have failed to state a RICO claim, because the Merritts failed
to show that the two predicate acts amounted to, or otherwise posed a threat of,
continuing racketeering activity. See H.J. Inc., 492 U.S. at 242, 109 S.Ct. at 2902
(“Predicate acts extending over a few weeks or months and threatening no future
criminal conduct do not satisfy [the continuity] requirement.”); see also Jackson v.
BellSouth Telecomms.,
372 F.3d 1250, 1266-67 (11th Cir. 2004) (finding nine
months insufficient to establish continuity and noting that “where the RICO
allegations concern only a single scheme with a discrete goal, the courts have
refused to find a closed-ended pattern of racketeering, even when the scheme took
place over longer periods of time.”).
III. The district court’s statement that it would entertain sanctions against
the Merritts
To the extent that the Merritts see the district court’s statement that it would
entertain sanctions against them as an impropriety that reflects adversely on its
other rulings, they are mistaken.3 In a ten page order, the district court set forth the
deficiencies in the Merritts’ first amended complaint and stated that it would
entertain renewed motions for sanctions from the defendants should the Merritts
plead a similarly deficient RICO claim. The court repeated that sentiment with
3
At the time when the Merritts appealed from the dismissal of their second amended
complaint, the award and the amount of any Rule 11 or other sanctions was not yet determined
and, therefore, not final. Accordingly, the question of district court sanctions is not before us.
6
more vigor when it dismissed the second amended complaint. Under Rule 11, the
district court always has the discretion to entertain motions for Rule 11 sanctions,
and it their argument that the court’s statement displayed an improper motive,
especially in light of the court’s thorough review of the complaint and its
deficiencies, is without merit. See Fed.R.Civ.P. 11(c)(2).
IV. Rule 38 motion for sanctions
Pursuant to Rule 38, “[i]f a court of appeals determines that an appeal is
frivolous, it may, after a separately filed motion or notice from the court and
reasonable opportunity to respond, award just damages and single or double costs
to the appellee.” Fed.R.Civ.P. 38. We have awarded sanctions to defendants in
RICO claims where there was no factual basis for them when initially pled, and yet
the plaintiffs persisted in propagating the litigation and appealing the decisions of
the district court to harass the defendants into some kind of settlement. Pelletier v.
Zweifel, 921 F.2d 1465, 1523 (11th Cir. 1991). We have also awarded sanctions
when the appellant disregarded the applicable law and relied on “clearly frivolous”
arguments. United States v. Single Family Residence & Real Property,
803 F.2d
625, 632 (11th Cir. 1986).
Because the Merritts’ appeal is clearly frivolous, pursuant to Rule 38, we
award to appellees double costs and reasonable attorney's fees incurred by reason
7
of this appeal, to be paid by appellants, Richard Merritt and Mary Jo Merritt.
V. Section 1927 sanctions
Under 28 U.S.C. § 1927, “[a]ny attorney or other person admitted to conduct
cases in any court of the United States or any Territory thereof who so multiplies
the proceedings in any case unreasonably and vexatiously may be required by the
court to satisfy personally the excess costs, expenses, and attorneys’ fees
reasonably incurred because of such conduct.”
While Mr. Merritt is an attorney licensed in the state of Florida, it is not
clear that he is an “attorney or other person admitted to conduct cases in any court
of the United States or any Territory thereof” for purposes of § 1927. See 28
U.S.C. § 1927. Given that the appellees are entitled to sanctions pursuant to Rule
38, we DENY the motion of LJHOA and LJJV to impose sanctions pursuant to
§1927 as well.
AFFIRMED and SANCTIONS IMPOSED. This case is REMANDED for
the district court to assess the amount of appellees' reasonable attorneys’ fees in
connection with this appeal.
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