The opinion of the court was delivered by: BY THE COURT; J. CURTIS JOYNER
These consolidated actions are once again before the Court for consideration and disposition of the Defendants' Motions for Partial Summary Judgment in their favor with respect to those Counts in the Plaintiffs' complaints which seek recovery of monetary damages and an accounting under theories of fraud, misrepresentation, breach of contract, civil RICO and estoppel. In the case of Plaintiff Donald H. Lieberman, M.D., Defendants also move for summary judgment with respect to Count IV of his complaint charging Defendants with breach of a separate oral agreement. For the reasons delineated in the paragraphs which follow, the motions are granted in part and denied in part.
I. FACTUAL SUMMARY OF THE CASE
In essence, each of these cases arose in the summer and fall of 1991 when Plaintiffs Donald P. Greenberg, M.D., Donald H. Lieberman, M.D. and Robert Brewster were successively terminated, ostensibly "for cause" from their respective employment relationships with the Defendants. According to the allegations contained in the amended complaints, beginning in 1986, Defendant Oliver Tomlin and one Augustus Robbins, acting as officers and agents of the defendant Home Health Systems, Inc. ("HHS") contacted and actively recruited Dr. Greenberg, Dr. Lieberman and Mr. Brewster to act as "point men" for HHS by soliciting and obtaining physician investors for numerous limited partnerships to be developed by Defendants primarily in the areas of New Jersey, Pennsylvania, Northern Virginia, Maryland and Washington, D.C. In exchange, the Plaintiffs were to receive monthly base salaries, fringe benefits, expense allowances, bonuses and stock options in various amounts together with equity interests in the corporations which were to become the general partners of the limited partnerships which each Plaintiff would be "selling." To this end, all three Plaintiffs negotiated and entered into written employment agreements with HHS. At various times between the commencement of their employment relationships with HHS, each Plaintiff's agreement was modified in writing by the parties.
From all appearances, the thrust of all of the Plaintiffs' complaints involves the alleged intentional failure of the Defendants to meet their obligations under the employment agreements by not paying Plaintiffs the wages and cash distributions due them from their ownership/equity interests and not issuing optioned stock. In addition, Plaintiffs contend that although Oliver Tomlin had told them at the negotiations stage that the amount of expenses to be charged to the corporate general partners would essentially be limited to outside legal and accounting fees, in reality, Tomlin and HHS charged numerous expenses over and above the outside legal and accounting costs that had been discussed thus significantly reducing the overall profits of the general partners.
For their part, Defendants now assert that inasmuch as the parties' depositions, interrogatory answers and affidavits reveal no outstanding issues of material fact, they are entitled to the entry of judgment in their favor as a matter of law on all of Plaintiffs' claims with the exception of their claims that they were improperly terminated from their employment with HHS in breach of their written employment contracts. The parties have briefed and the motion was orally argued on January 12, 1993 and the matter is therefore now ripe for disposition.
A. STANDARDS GOVERNING THE ENTRY OF SUMMARY JUDGMENT
The legal standards and principles to be followed by the district courts in resolving motions for summary judgment are clearly set forth in Fed.R.Civ.P. 56. Subsection (c) of that rule states, in pertinent part,
. . . The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. A summary judgment, interlocutory in character, may be rendered on the issue of liability alone although there is a genuine issue as to the amount of damages.
In this way then, a motion for summary judgment dictates that a court must look beyond the bare allegations of the pleadings to determine if they have sufficient factual support to warrant their consideration at trial. Liberty Lobby, Inc. v. Dow Jones & Co., 267 U.S. App. D.C. 337, 838 F.2d 1287 (D.C. Cir. 1988), cert. denied, 488 U.S. 825, 109 S. Ct. 75, 102 L. Ed. 2d 51 (1988). See Also : Aries Realty, Inc. v. AGS Columbia Associates, 751 F. Supp. 444 (S.D. N.Y. 1990).
As a general rule, the party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion and identifying those portions of the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). In considering a summary judgment motion, the court must view the facts in the light most favorable to the party opposing the motion and all reasonable inferences from the facts must be drawn in favor of that party as well. U.S. v. Kensington Hospital, 760 F. Supp. 1120 (E.D. Pa. 1991); Schillachi v. Flying Dutchman Motorcycle Club, 751 F. Supp. 1169 (E.D. Pa. 1990).
This is not to say, however, that a non-movant may rest upon the allegations contained in his or her pleadings in defense of a summary judgment motion. See : Allen v. Denver Public School Board, 928 F.2d 978 (10th Cir. 1991). Indeed, F.R.C.P. 56(e) provides:
In other words, the burden of demonstrating the absence of genuine issues of material fact is initially on the moving party regardless of which party would have the burden of persuasion at trial. Following such a showing, the non-moving party must present evidence through affidavits or depositions and admissions on file which comprise of a showing sufficient to establish the existence of every element essential to that party's case. Celotex Corp. v. Catrett, supra, 106 S. Ct. at 2552-2553; Keyes v. National Railroad Passenger Corp., 756 F. Supp. 863 (E.D. Pa. 1991); Applications Research Corp. v. Naval Air Development Center, 752 F. Supp. 660 (E.D. Pa. 1990).
B. PLAINTIFFS' RICO CLAIMS
In this case, the Plaintiffs have raised claims under Sections 1962(b), (c) and (d) of the Racketeer Influenced and Corrupt Organizations Act ("RICO") 18 U.S.C. § 1961, et. seq. Indeed, Section 1964(c) permits "any person injured in his business or property" by reason of a section 1962 violation to bring a civil suit to recover therefor in any appropriate United States District Court. According to Section 1962(b), it is unlawful "for any person through a pattern of racketeering activity or through collection of an unlawful debt to acquire or maintain . . . any interest in or control of any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce." Under Section 1962(c), it is unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprises' affairs through a pattern of racketeering activity or collection of an unlawful debt."
Finally, under Section 1962(d), it is unlawful "for any person to conspire to violate any of the provisions of subsection (a), (b) or (c).
Not surprisingly, case law has established separate requirements for certain subsections. Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1411 (3rd Cir. 1991). To obtain civil relief under § 1962(b), a plaintiff must establish that the defendant had an interest in or control of any enterprise which affects interstate or foreign commerce and that a specific nexus existed between control of a named enterprise and the alleged racketeering activity. Kehr Packages v. Fidelcor, Inc., supra, 926 F.2d at 1411; Martin v. Brown, 758 F. Supp. 313, 318 (W.D. Pa. 1990). Furthermore, it is incumbent upon the plaintiff to make a showing of injury from the defendant's acquisition or control of an interest in a RICO enterprise in addition to injury from the predicate acts themselves. Casper v. Paine Webber Group, Inc., 787 F. Supp. 1480, 1494 (D. N.J. 1992). See Also : Northeast Jet Center, Ltd. v. Lehigh-Northampton Airport Authority, 767 F. Supp. 672 (E.D. Pa. 1991); Berk v. Ascott Investment Corp., 759 F. Supp. 245 (E.D. Pa. 1991).
To recover under Section 1962(c), the following four elements must be proven: (1) the existence of an enterprise affecting interstate commerce; (2) that the defendant was employed by or associated with the enterprise; (3) that the defendant participated, either directly or indirectly, in the conduct or the affairs of the enterprise and (4) that defendant participated through a pattern of racketeering activity that must include the allegation of at least two racketeering acts. Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496, 105 S. Ct. 3275, 3285, 87 L. Ed. 2d 346 (1985); Shearin v. E.F. Hutton Group, Inc., supra, at 1165; R.A.G.S. Couture, Inc. v. Hyatt, 774 F.2d 1350, 1352 (5th Cir. 1985). What's more, it has repeatedly been held that since § 1962(c) requires a finding that the defendant "person" conducted or participated in the affairs of an "enterprise" through a pattern of racketeering activity, the "person" charged with a violation of § 1962(c) must be separate and distinct from the "enterprise." Brittingham v. Mobil Corporation, 943 F.2d 297, 300 (3rd Cir. 1991); Hirsch v. Enright Refining Co., 751 F.2d 628, 633-634 (3rd Cir. 1984).
Finally, to make out a claim under § 1962(d), a plaintiff must set forth allegations and produce evidence which addressed the period of the conspiracy, the object of the conspiracy, and the certain actions of the alleged conspirators taken to achieve that purpose. Additionally, there should be proof that defendants agreed to commit the predicate acts and that they knew the acts were part of a pattern of racketeering activity. Glessner v. Kenny, 952 F.2d 702, 714 (3rd Cir. 1991); Shearin v. E.F. Hutton Group, Inc., supra, at 1166. See Also : Rose v. Bartle, 871 F.2d 331, 366 (3rd Cir. 1989).
A threshold requirement to successfully obtaining damages under any subsection of 1962 is the demonstration that a pattern of racketeering activity existed. To ascertain whether a pattern of racketeering activity has been established, the court must from the outset determine whether the racketeering predicates are related and that they amount to or pose a threat of continued criminal activity. H.J., Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229, 240, 109 S. Ct. 2893, 2900, 106 L. Ed. 2d 195 (1989); Kehr Packages Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1412 (3rd Cir. 1991). It should be noted that continuity has been said to be both a closed and open-ended concept referring either to a closed period of repeated conduct or to past conduct that by its nature projects into the future with a threat of repetition. A party alleging a RICO violation may demonstrate continuity over a closed period by proving a series of related predicates extending over a substantial period of time or by demonstrating that a threat of continuing criminal activity exists. H.J., Inc. v. Northwestern Bell Telephone Co., supra, 109 S. Ct. at 2902; Hindes v. Castle, 937 F.2d 868, 872 (3rd Cir. 1991).
In assessing whether a sufficient showing of continuity and relatedness has been made, a court may consider such factors as: (1) the number of related acts; (2) the length of time over which the acts were committed; (3) the similarity of the acts; (4) the number of victims; (5) the number of perpetrators; and (6) the character of the unlawful activity. Barticheck v. Fidelity Union Bank/First Nat. State, 832 F.2d 36, 39 (3rd Cir. 1987). Similarly, threatened criminal conduct can also be established by showing that "the predicate acts or offenses are part of an ongoing entity's regular way of doing business." Kehr Packages, Inc. v. Fidelcor, Inc., supra, 926 F.2d at 1412.
Finally, in evaluating the issue of relatedness, the court should look to see if the alleged predicate acts are interrelated by distinguishing characteristics and are not merely isolated events. Rose v. Bartle, supra, 871 F.2d 331, 364 (3rd Cir. 1989). In this regard, it has been held that predicate acts are related if they "have the same or similar purpose, results, participants, victims or methods of commission." United States v. Pelullo, 964 F.2d 193, 207 (3rd Cir. 1992), citing H.J., Inc. v. Northwestern Bell Telephone Co., supra, 492 U.S. at 240, 109 S. Ct. at 2901.
1. Pattern of Racketeering Activity
By way of the motion which is now before the Court, Defendants preliminarily assert that the record in the case at bar clearly evinces that Plaintiffs cannot establish the Defendants' involvement in the requisite pattern of racketeering activity and that, as a consequence, judgment must be entered in favor of the defense on all of the Plaintiffs' RICO claims. We disagree.
According to the amended complaints, the Plaintiffs' RICO actions are premised upon the Defendants' purported mailings of allegedly fraudulent tax documents, financial statements and numerous oral misrepresentations made to ...