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BROSSMAN SALES v. BRODERICK

October 15, 1992

Brossman Sales, Inc. Plaintiff,
v.
Donald R. Broderick, II, and Darla J. Broderick Defendants.



The opinion of the court was delivered by: DANIEL H. HUYETT, 3RD

MEMORANDUM AND ORDER

 HUYETT, J.

 I. BACKGROUND

 Plaintiff Brossman Sales, Inc. purchased the property in question from defendants Donald and Darla Broderick in 1989 for $ 2,100,000.00. In essence, plaintiff contends that the Brodericks misrepresented that the property was in compliance with state and local environmental laws, when in reality defendants covertly released illegal waste on the property. More specifically, plaintiff alleges in its complaint that since 1985, defendants have continuously been associated with the Millcreek Estates enterprise and conducted its affairs through a pattern of racketeering activity involving acts of wire and mail fraud in violation of 18 U.S.C. §§ 1341 and 1343, bank fraud in violation of 18 U.S.C. § 1344 and acts of conspiracy to violate state and federal environmental laws, including the Clean Water Act.

 According to plaintiff's complaint, defendants' alleged wire and mail fraud was perpetrated over three general periods. Between 1985 and 1989, defendants perpetrated wire and mail fraud to deceive federal, state and local officials into believing that the Millcreek Estates property was in compliance with applicable environmental laws. From July, 1989 to November, 1989, defendants perpetrated wire and mail fraud to induce plaintiff into purchasing the Millcreek Estates property for much more than it was worth. Finally, since November, 1989, defendants have been perpetrating the fraud to deceive state and local officials into believing that plaintiff was responsible for the various environmental problems on the property.

 Defendants' alleged bank fraud consisted of concealing from the Ephrata National Bank the problems with the Millcreek Estates property, thereby obtaining funds loaned to plaintiff for purchase of the property at an artificially inflated price. Finally, plaintiff's Clean Water Act claim under 33 U.S.C. § 1365(a) arises from defendants deposition of fill material consisting of construction debris in areas of the property purchased by plaintiff that are designated as wetlands in violation of the Clean Water Act. 33 U.S.C. §§ 1311 and 1344.

 II. DISCUSSION

 A. Standard of Review

 In resolving a motion to dismiss, the Court must accept as true all the well-pleaded allegations of the complaint, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable interpretation of the pleadings, the plaintiff may be entitled to relief. Estate of Bailey by Oare v. County of York, 768 F.2d 503, 506 (3d Cir. 1985); Helstoski v. Goldstein, 552 F.2d 564, 565 (3d Cir. 1977) (per curiam). A complaint should not be dismissed "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim that would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957).

 B. Plaintiff's RICO Claim

 RICO makes it unlawful for any person employed by or associated with any enterprise to conduct the affairs of the enterprise through a pattern of racketeering activity. 18 U.S.C. § 1962(c). It is also unlawful to conspire to perform these acts. 18 U.S.C. § 1962(d).

 An "enterprise" is defined to include "any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact though not a legal entity." 18 U.S.C. § 1961(4). "Racketeering activity" is defined to include specified federal crimes, including mail fraud, 18 U.S.C. § 1341, wire fraud, 18 U.S.C. § 1343, and bank fraud, 18 U.S.C. § 1344. A "pattern of racketeering activity" requires at least two acts of racketeering activity within a ten year period. 18 U.S.C. § 1961(5).

 Defendants contend that plaintiff's RICO claim is deficient and should be dismissed for three reasons: (1) because it does not demonstrate the required "enterprise" element of a RICO violation, (2) because it does not adequately allege a "pattern of racketeering activity" as required by the RICO statute, and (3) because it does not allege the predicate act of ...


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