NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
PER CURIAM.
Jack Newman and Jeanette Heimowitz (defendants), appeal the trial court's decision granting plaintiffs' and third-party defendants' motions to dismiss the amended counterclaims and amended third-party complaints with prejudice, denying defendants' motion for reconsideration. On appeal, defendants argue the court erred in finding the pleadings and proposed pleadings failed to state causes of action and in dismissing the complaint and counterclaim with prejudice. We affirm substantially for the reasons set forth in the comprehensive written opinion of Judge Donald J. Volkert, Jr.
At the heart of this litigation is a dispute over the proceeds of the Estate of Rose Newman (Estate), who died intestate in 2009 while living in the State of Israel. At the time of her death, Rose held assets in both Israel and in the United States. The Estate was probated in an Israeli court and the assets were divided equally among her four children; Alexander Newman, Jack Newman, Jeanette Heimowitz and Rachayl Han. All four of the children resided in Israel on the date of Rose's death. The Israeli court appointed an executor and directed that all disputes between or among the beneficiaries about the Estate's property should be presented to the executor notwithstanding the location of the property.
The determination by the Israeli Probate Court did not lead to a settlement of the Estate. In apparent dissatisfaction with the Israeli court's decision, Alexander Newman assigned his rights to prosecute claims to his five children who filed three separate complaints in the Superior Court of New Jersey.1
In one lawsuit, plaintiffs named defendants as: Jack Newman, the Estate, Capital One Bank (Capital) and Bank of America (BOA). Rose Newman maintained joint bank accounts at Capital and BOA with her son Jack. The claims against the Estate, Capital and BOA were subsequently dismissed without prejudice.
In a second lawsuit, plaintiffs named defendants as: Jack Newman, the Estate and Jackie and Sandy Realty Inc. (J&S). The complaint alleged J&S defaulted on a promissory note in favor of Alexander Newman for $447,000. Claims against the Estate and J&S were subsequently dismissed without prejudice.
In a third lawsuit, plaintiffs, including a corporate entity, West Bank, named defendants as: Jeanette Heimowitz, the Estate and Capital. Rose Newman maintained a joint bank account with Jeanette. The complaint alleged undue influence by Jeanette. The complaint also alleged Jeanette's claim to be an owner of West Bank was fraudulent. The Estate and Capital were subsequently dismissed without prejudice.
Jack Newman and Jeanette Heimowitz filed answers, including a counterclaim and a third-party complaint against Alexander and his wife, Barbara Newman, an attorney, who served as plaintiffs' counsel. Thereafter, defendants filed an amended counterclaim in each of the three cases and an amended third-party complaint in the actions.2 By court order, the actions were consolidated and Barbara Newman was disqualified as plaintiffs' counsel.
Plaintiffs filed a motion to dismiss the amended counterclaims for failure to state a cause of action. Barbara Newman, as a pro se third-party defendant, joined the motion seeking a dismissal of the third-party complaint. Defendants filed motions to enter default against Alexander Newman due to his non-appearance. Due to ongoing and pervasive discovery issues, the decision on these motions was delayed. In order to address discovery issues, the court appointed a Discovery Master. When that appointment did not resolve the non-provision of discovery by plaintiffs, after a motion by defendants, the court dismissed the actions with prejudice. At the time of the dismissal, plaintiffs' motions to dismiss the amended counterclaims, Barbara Newman's motion to dismiss the amended third-party complaint and defendants' motion for default against
Alexander Newman were pending.
On July 2, 2013, the judge denied defendants' motion to enter a default against Alexander provisionally, providing him with fourteen days to file a responsive pleading. The court granted plaintiffs' and Barbara Newman's motion with prejudice. Defendants filed a motion for reconsideration, arguing their pleadings stated causes of action and, alternatively, contending the dismissals should have been without prejudice. Contemporaneously, Barbara Newman, acting as counsel for Alexander Newman, filed a motion to dismiss the third-party complaint against him.
By order dated August 9, 2013, the judge granted Alexander's motion with prejudice and denied defendants' motion for reconsideration. Defendants appealed.
On appeal defendants argue:
POINT I
THE COURT BELOW ERRED IN HOLDING THAT THE ORIGINAL COUNT FIVE FAILED TO STATE A CAUSE OF ACTION FOR FRAUD.
A. THE ELEMENT OF DAMAGES HAS BEEN SUFFICIENTLY PLEADED.
B. THE ELEMENT OF RELIANCE HAS BEEN SUFFICIENTLY PLEADED.
POINT II
THE COURT BELOW ERRED IN HOLDING THAT THE ORIGINAL COUNT SEVEN FAILED TO STATE A CAUSE OF ACTION FOR CONSPIRACY.
POINT III
THE COURT BELOW ERRED IN HOLDING THAT THE DEFENDANTS' ORIGINAL FEDERAL RICO COUNTS FAILED TO STATE A CAUSE OF ACTION.
POINT IV
THE COURT BELOW ERRED IN HOLDING THAT THE DEFENDANTS' ORIGINAL NEW JERSEY RIC COUNTS FAILED TO STATE A CAUSE OF ACTION.
POINT V
EVEN IF DEFENDANTS' ORIGINAL PLEADINGS FAILED TO STATE A CAUSE OF ACTION, THE COURT BELOW ERRED IN DISMISSING THE PLEADINGS WITH PREJUDICE, INSTEAD OF WITHOUT PREJUDICE.
POINT VI
THE COURT BELOW ERRED IN HOLDING THAT THE DEFENDANTS' PROPOSED REVISED PLEADING FAILED TO STATE A CAUSE OF ACTION.
POINT VII
THE CASE SHOULD BE REMANDED TO PERMIT THE DEFENDANTS TO NOW FILE AN AMENDED PLEADING CONTAINING SUCH COUNTS AS HAVE BEEN FOUND ON THIS APPEAL TO STATE A CAUSE OF ACTION.
As we hold, the decision of Judge Volkert dismissing the counterclaim and the third-party complaint was in accord with the operative facts and controlling law. We add only the following.
Rule 4:6-2(e) provides that a complaint may be dismissed for "failure to state a claim upon which relief can be granted[.]" This rule tests "the legal sufficiency of the facts alleged on the face of the complaint." Printing Mart-Morristown v. Sharp Elecs. Corp., 116 N.J. 739, 746 (1989) [hereinafter Printing Mart].
On such a motion to dismiss, a plaintiff need not prove the case, but need only "`make allegations which, if proven, would constitute a valid cause of action.'" Kieffer v. High Point Ins. Co., 422 N.J.Super. 38, 43 (App. Div. 2011) (quoting Leon v. Rite Aid Corp., 340 N.J.Super. 462, 472 (App. Div. 2001)). On such a motion, plaintiff is "entitled to every reasonable inference of fact." Printing Mart, supra, 116 N.J. at 746 (citing Indep. Dairy Workers Union v. Milk Drivers Local 680, 23 N.J. 85, 89 (1956)).
We review de novo the trial court's Rule 4:6-2(e) dismissal of plaintiff's claims, applying the same standard as the trial court. Rezem Family Assocs., LP v. Borough of Millstone, 423 N.J.Super. 103, 114 (App. Div.), certif. denied, 208 N.J. 366 (2011). We limit our inquiry "`to examining the legal sufficiency of the facts alleged on the face of the complaint[.]'" Nostrame v. Santiago, 213 N.J. 109, 127 (2013) (quoting Printing Mart, supra, 116 N.J. at 746).
When courts decide Rule 4:6-2(e) dismissal motions, "`plaintiffs are entitled to every reasonable inference of fact[,]'" and "`[t]he examination of a complaint's allegations of fact ... should be one that is at once painstaking and undertaken with a generous and hospitable approach.'" Green v. Morgan Props., 215 N.J. 431, 452 (2013) (quoting Printing Mart, supra, 116 N.J. at 746).
I
"The Rico Claims"
Defendants argue the court erred by dismissing the counts alleging plaintiffs' violations of the federal and state Racketeer Influenced and Corrupt Organizations (RICO) laws.
Pursuant to 18 U.S.C.A. § 1962(c):
[i]t shall be 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.
The pattern of racketeering activity "requires at least two acts of racketeering activity[.]" 18 U.S.C.A. § 1961. To establish a RICO pattern it must also be shown that the acts have a "pattern element," and amount to or pose a threat of "continuous activity." State v. Ball, 268 N.J.Super. 72, 130-31 (App. Div. 1993) (citations omitted). Further, there must be some "relatedness" between the activities. Ibid.
In enacting RICO, Congress stated the purpose was "to seek the eradication of organized crime in the United States ... [and] to deal with the unlawful activities of those engaged in organized crime." Organized Crime Control Act of 1970, Pub. L. No. 91-452, § 1, 84 Stat. 922 (1970); see also Genty v. RTC, 937 F.2d 899, 912 (3rd Cir. 1991) (stating Congress's purpose for RICO was "to redress serious harm to the nation as a whole").
As the judge noted,
[a]t its core, this matter is a familial struggle over the Estate of the late Rose Newman. Hence, it would be error for the court to allow the case to escalate exponentially through the lens of the RICO statutes as defendants' claims are simply not of the nature the legislature intended to address.
For the same reasons, we find no basis for a cause of action pursuant to the state RICO statute.
Pursuant to N.J.S.A. 2C:41-2(c):
It shall be unlawful for any person employed by or associated with any enterprise engaged in or activities of which affect trade or commerce to conduct or participate, directly or indirectly, in the conduct of the enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt.
The New Jersey statute parallels the federal RICO statute and the relevant definitions are similar. See 18 U.S.C.S. § 1962(c). Although the legislature "came to perceive purposes and goals to be achieved by the proposed anti-racketeering statute distinct from those of the federal statutory scheme[,]" it intended "not to cover small-scale operations by its broad definition of `enterprise[.]'" State v. Ball, 141 N.J. 142, 156, 161 (1995); see also N.J.S.A. 2C:41-1.1(c) (stating its purpose was "to prevent, disrupt and eliminate the infiltration of organized crime type activities which are substantial in nature to the legitimate trade or commerce of this State").
Defendants failed to allege any pattern of continuing racketeering activity by plaintiffs. Further, as the judge held, defendants failed to prove plaintiffs' conduct was "of the character of organized crime or so substantial in nature such that it affected or will affect the legitimate trade or commerce of this state, or foreign trade or interstate commerce." As the judge found, and we agree, even when applying the liberal standard for dismissal, defendants failed to state a cause of action on their federal and state RICO counts.
II
"Dismissal with Prejudice"
Defendants contest the judge's decision to dismiss their pleadings with prejudice and to deny them leave to amend their pleadings again. When considered with the procedural history and the "suggested facts" in defendants' pleadings, their argument is unavailing.
Notwithstanding the opportunity to provide sufficient facts to sustain a cause of action in their first amended pleadings, defendants could not meet their minimal burden. In the circumstances presented, we are satisfied that "further opportunity to amend would not be fruitful." Johnson v. Glassman, 401 N.J.Super. 222, 247 (App. Div. 2008). Defendants have no further facts to plead and may not continue to file pleadings "in the hope [they] could use the tools of discovery to uncover evidence of wrongdoing." Nostrame, supra, 213 N.J. at 128. In such a context, dismissal with prejudice is "entirely appropriate." Ibid.
The decision to dismiss with prejudice and to deny further amendment are matters left to the discretion of the judge. Id. at 127; see Hoffman v. Hampshire Labs, Inc., 405 N.J.Super. 105, 116 (App. Div. 2009). Here, Judge Volkert's decision was within the sound exercise of discretion.
Defendants' remaining arguments regarding dismissal with prejudice of the counts pleading fraud and civil conspiracy and denial of the motion for reconsideration are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).
Affirmed.
