United States District Court, W.D. Pennsylvania
September 15, 2005.
JOHN GAGLIARDI, Plaintiff,
T.J. KRATZENBERG, Esq., an individual; KRATZENBERG & ASSOCIATES, INC., a close Pennsylvania business corporation; JOEL AARON KLEIN, an individual; IRA WEISS, Esq.; LLOYD H. FUGE, Esq.; Defendants.
The opinion of the court was delivered by: DAVID CERCONE, District Judge
MEMORANDUM AND ORDER OF COURT
Proceeding pro se, John Gagliardi ("plaintiff") filed a
complaint on November 8, 2004, purporting to set forth a claim
under the Racketeer Influenced Corrupt Organization Act ("RICO")
and state law claims for fraud and conspiracy. Defendants are
presently or formerly practicing Pennsylvania attorneys and
business entities through which one or more of the individual
defendants have engaged in the practice of law. Presently before
the court are a number of Rule 12(b) (6) motions seeking summary
dismissal of the complaint on a variety of grounds. For the
reasons set forth below, plaintiff's complaint will be dismissed
for failure to present a case or controversy within the meaning
of Article III of the United States Constitution, and in the
alternative any purported RICO claim will be dismissed with
prejudice because the statute of limitations has run on any such
claim and the court will decline to exercise supplemental
jurisdiction over any state law claim raised by plaintiff's
Plaintiff's complaint is long on generalizations and rambling
suppositional projections, followed by non-sequiturs.
Nevertheless, it has been viewed pursuant to the applicable
standards governing pro se submissions that are challenged
through a motion to dismiss. In order to assure that plaintiff's
allegations and submissions were not prematurely assessed with
regard to the alternative disposition on statute of limitations grounds,
plaintiff was advised by the court that the motions to dismiss
would be treated as ones for summary judgment and given an
opportunity to submit any additional information that plaintiff
wanted the court to consider in resolving the issues raised.
See Doc. No. 25
It is well-settled that in reviewing a motion to dismiss under
Federal Rule of Civil Procedure 12(b)(6) "[t]he applicable
standard of review requires the court to accept as true all
allegations in the complaint and all reasonable inferences that
can be drawn therefrom, and view them in the light most favorable
to the non-moving party." Rocks v. City of Philadelphia,
868 F.2d 644, 645 (3d Cir. 1989). Dismissal of a complaint is proper
only where "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, 45-46 (1957); Langford
v. City of Atlantic City, 235 F.3d 845, 847 (3d Cir. 2000)
(citing Nami v. Fauver, 82 F.3d 63, 65 (3d Cir. 1996)). The
question is not whether the plaintiff will ultimately prevail;
instead, it is whether the plaintiff can prove any set of facts
consistent with the averments of the complaint which would show
the plaintiff is entitled to relief. Jordan v. Fox, Rothschild,
O'Brien & Frankel, 20 F.3d 1250, 1261 (3d Cir. 1994). Under this
standard a complaint will be deemed sufficient if it adequately
puts the defendant on notice of the essential elements of a cause
of action. Nami, 82 F.3d at 66.
While all factual allegations and reasonable inferences to be
drawn therefrom are to be accepted as true, "a court need not
credit a complaint's `bald assertions' or `legal conclusions'
when deciding a motion to dismiss." Morse v. Lower Merior School
District, 132 F.3d 902, 906 (3d Cir. 1997) (citations omitted).
In ruling on a 12 (b)(6) motion courts consistently have rejected
"legal conclusions," "unsupported conclusions," "unwarranted
inferences," "unwarranted deductions," "footless conclusions of
law" or "sweeping legal conclusions cast in the form of factual
allegations." Id. at n. 8 (citing in support Charles
Allen Wright & Arthur R. Miller, FEDERAL PRACTICE AND PROCEDURE §
1357 (2d ed. 1997), Leeds v. Meltz, 85 F.2d 51, 53 (2d Cir.
1996) ("while the pleading standard is a liberal one, bald
assertions and conclusions of law will not suffice") and Fernandez-Montes v. Allied Pilots
Ass'n., 987 F.2d 278, 284 (5th Cir. 1993) ("Conclusory
allegations or legal conclusions masquerading as factual
conclusions will not suffice to prevent a motion to dismiss.")).
It also is well settled that the Federal Rules of Civil
Procedure establish very liberal notice requirements governing
the necessary contents of a complaint. Rule 8(a) provides in
A pleading which sets forth a claim for relief . . .
shall contain (1) a short and plain statement of the
grounds upon which the court's jurisdiction depends . . .
[and] (2) a short and plain statement of the
claim showing that the pleader is entitled to
relief. . . .
Fed.R.Civ.P. 8(a). These standards generally are deemed
satisfied where the plaintiff sets forth facts that serve to put
a defendant on notice of the nature of the claim for relief and
the basis upon which it rests. Burks v. City of Philadelphia,
904 F.Supp. 421, 423-24 (E.D. Pa. 1995) (citing, inter alia,
Rannels v. S.E. Nichols, Inc., 591 F.2d 242
, 245 (3d Cir.
1979)). Furthermore, pleadings filed by pro se litigants are
to be construed liberally. McNeil v. United States,
508 U.S. 106, 113 (1993); Higgins v. Beyer, 293 F.3d 683
, 688 (3d Cir.
2002). And in such circumstances the court has an obligation to
"apply the applicable law, irrespective of whether a pro se
litigant has mentioned it by name." Higgins, 293 F.3d at 688
(quoting Holley v. Dept. of Veterans Affairs, 165 F.3d 244
247-48 (3d Cir. 1999)).
But the above-referenced standards are not to be read as a
license to excuse or overlook procedural shortcomings in
pleadings submitted by those who choose to represent themselves.
McNeil, 508 U.S. at 113 ("we have never suggested that
procedural rules in ordinary civil litigation should be
interpreted so as to excuse mistakes by those who proceed without
counsel"). Thus, a complaint drafted without the benefit of
counsel nevertheless must comply with Federal Rule of Civil
Procedure 8(a). And "[w]hile Fed.R.Civ.P. 8(a)(2) requires
only a `short and plain statement of the claims showing that the
pleader is entitled to relief,' Rule 12(b) (6) is not without
meaning." Krantz v. Prudential Investments Fund Management,
305 F.3d 140, 142 (3d Cir. 2002). It follows that in order to comply with the
applicable pleading standards "more detail is often required than
the bald statement by plaintiff that he has a valid claim of some
type against defendant." Id. at 142-43 (quoting 5A Charles A.
Wright and Arthur R. Miller, FEDERAL PRACTICE AND PROCEDURE §
1357 at 318 (2d ed. 1990)).
The gravamen of plaintiff's complaint is that defendants have
unjustly attempted to collect taxes and fees imposed upon real
estate situated within Allegheny County and undertaken efforts to
acquire the right to and collect delinquent taxes notwithstanding
actual or implied knowledge that the asserted tax deficiencies
and resulting indebtedness stem from erroneous factual
descriptions of the property, which repeatedly has led to
inaccurate and miscalculated assessment values. Plaintiff asserts
that an ongoing and coordinated enterprise can be inferred from
the conduct referenced in his complaint "because despite years of
efforts to acquaint particular tax collection functionaries of
the Defendants with the facts of the ongoing miscalculation of
tax indebtedness, your Plaintiff has to perennially renew his
explanations to subordinates who appear to acquire no background
information from the enterprises used in the Defendants'
fraudulent scheme." Complaint at ¶ 98. The coordinated and
ongoing acts of the enterprise have resulted in "the systematic
imposition of erroneously calculated and unjustly assessed and
unjustly collected taxes and fees per real property, along with
the imposition of encumbrances that render the pledge of
considerable property impossible, along with damages to your
Plaintiff's cash flow and ability to continue a livelihood from
businesses affected by the Defendants' activities." Id. at ¶
Specifically, plaintiff avers that he obtained a parcel in
Jefferson Hills Borough of Allegheny County known as lot and
block number 658-M-50, which is the reality subject to the tax
assessments in this action ("the subject property"). Id. at ¶
16. Plaintiff obtained the subject property by deed in 1970. It
was comprised of 46 acres. Id. at ¶¶ 17-18. Plaintiff deeded
the parcel to U.S. Industrial Fabricating, Inc., on September 10,
1973, and recorded the deed. Id. at ¶ 19. In November of 1974
plaintiff again deeded the same property to U.S. Industrial
Fabricators, Inc., and recorded the deed. A portion of the parcel comprising
five acres also was conveyed to McKeesport Industrial Development
Authority by recorded deed on November 29, 1974. Id. at ¶ 21.
This parcel contained two of the three warehouses originally
located on the parcel. See Exhibit I to complaint. This portion
became known as Lot and Block number 658-M-75. Complaint at ¶ 22.
Records pertinent to the tax assessment of lot and block
658-M-50 have described the subject property as "vacant property"
known as 191 Wall Road. Id. at ¶ 23. Notwithstanding this
description, at all pertinent times the property contained a 100
by 200 foot metal panel warehouse building know as Building No. 1
of 191 Wall Road in the USI Park on Wall Road in Jefferson Hills
Borough. Id. at ¶ 23. "Since 1976, the municipal reality taxes
of the plaintiff and/or his corporation have been incorrectly
calculated to produce assessments that have been recurrently
false and misleading, and frequently on their face." Id. at ¶
24. As a result of these inaccurate discrepancies, county taxes,
borough taxes, and school district taxes were rendered inaccurate
and plaintiff declined to pay any of the taxes for the years 1976
and 1977. Id. at ¶ 25. On June 4, 1999, the West Jefferson
Hills School District caused a scire facias proceeding to be
commenced against the then owner of the subject property based on
unpaid tax liens recorded against the subject property for
various years reflecting delinquent unpaid taxes and costs
totaling $184,573.86. Id. at ¶ 26.
The scire facias proceeding was filed by defendant attorney
Joel Aaron Klein and named as defendant the recorded title owner
of the subject property since 1990, plaintiff's ex-wife Dawn
Gagliardi. Id. at ¶ 31; Exhibit E to the complaint. A scarie
facias precipe was issued by the Court of Common Pleas of
Allegheny County on August 3, 2000, to plaintiff with notice to
his heirs and assigns as owners or "reputed owners" of the
subject property, which was described as vacant property. Id.
at ¶ 31; Exhibit E to the Complaint. It reflected a delinquency
of $84,485.16 for unpaid taxes stemming from at least calendar
years 1976, 1977, 1992, and 1994 through 1997. Exhibit E to the
Complaint. In 1990, the Allegheny County Department of Tax Claims and
Revenue Director, George Brawn, acknowledged to plaintiff that
the subject property had been improperly assessed based upon an
excessive number of structural improvements believed to be within
the premises and therefore a new evaluation was noted on the tax
receipts for 1988, 1989, and 1990, each of which was stamped
"exonerated corrected assessment." Complaint at ¶ 34; Exhibit P
to Complaint. "It is believed and therefore averred that the
[exonerated corrected assessments] were not formalized by the
County Law Department due to the actions or inactions of
[defendant] Ira Weiss who during that period served as County
Solicitor." Id. at ¶ 35. Plaintiff made repeated requests to
Weiss to correct the description of the subject property, but
Weiss failed to correct the erroneous description and as a result
the taxes continued to be assessed in a manner failing to reflect
the true value of the property. Id.
On April 30, 2003, the Elizabeth Forward School District filed
a lawsuit against Dawn Gagliardi for delinquent reality taxes and
obtained a judgment from the District Justice Office held by the
Honorable Ernest Marraccini on June 4, 2003. Notice of execution
sale and notice to Dawn Gagliardi were delivered to the household
of Dawn Gagliardi at 210 Grouse Drive, Elizabeth, PA, on October
22, 2004. Id. at ¶ 45. Included with that notice was a sheet of
paper indicating that inquiry should be made with "Keystone
Collection," an entity through which defendant Attorney
Kratzenberg has attempted to collect past due taxes and
assertedly has participated in the purported RICO scheme
identified in plaintiff's complaint. Id. at ¶¶ 46-48.
Defendants engaged in a RICO enterprise by usurping the role of
state actors and continuing to pursue collection of delinquent
tax assessments notwithstanding the disclosure/or acquisition of
information indicating the tax indebtedness arose from inaccurate
and mischaracterized information used to calculate the tax
assessments. Id at ¶¶ 80-86, 94-97, 130. Predicate acts include
"the privatized tax collection efforts of defendants [that] are
being peddled to the governing officials of desperate local
municipalities with various direct and indirect forms of
bribery," the advancing of extortionate extensions of credit to
pay such erroneous tax indebtedness, efforts to conceal the fraudulent nature of the
scheme, possible witness tampering and efforts to obtain control
of property through what appear to be legitimate transactions and
undertakings to impose and collect local, county, municipal and
school taxes. Id. at ¶¶ 118-130.
Defendants contend plaintiff's submissions suffer from a whole
host of substantive and procedural deficiencies, any one of which
warrant dismissal plaintiff's complaint. Two matters raised by
one or more of the defendants demonstrate the inability of
plaintiff to maintain a RICO claim: (1) plaintiff's attempt to
stand on the rights of others; and (2) the untimeliness of any
purported RICO claim advanced in plaintiff's submissions. Because
each of these grounds provide an independent basis for the
dismissal which all defendants seek, the court need not address
the myriad of alternative grounds which likewise appear to
mandate dismissal of plaintiff's complaint.
"Article III of the Constitution restricts the `judicial power'
of the United States to the resolution of `cases' and
`controversies'". UPS Worldwide Forwarding, Inc., v. U.S. Postal
Service, 66 F.3d 621, 625 (3d Cir. 1995), cert. denied,
516 U.S. 1171 (1996) (citing Valley Forge Christian College v.
Americans United For Separation of Church & State, Inc.,
454 U.S. 464, 471 (1982). Cases and controversies are restricted to
disputes initiated by "a litigant having `standing' to challenge
the actions sought to be adjudicated in the lawsuit." Id. In
order to have standing, a litigant must satisfy the
constitutional and prudential components which are required in
order to seek redress in federal court. Id. (citing Wheeler v.
Travelers Ins. Co., 22 F.3d 534, 537 (3d Cir. 1994)).
The Supreme Court has summarized the three components necessary
to satisfy "the irreducible constitutional minimum of standing"
First, the plaintiff must have suffered an "injury in
fact" an invasion of a legally detected interest
which is (a) concrete and particularized and (b)
actual or imminent, not conjectural or hypothetical.
Second, there must be a causal connection between the
injury and the conduct complained of. . . . Third, it
must be likely, as opposed to merely speculative,
that the injury will be redressed by a favorable
decision. Id. (quoting United States v. Hays, 515 U.S. 737,
"In addition to Article III standing requirements, federal
courts have developed prudential standing considerations `that
are part of judicial self government.'" Id. (quoting Lujan v.
Defenders of Wildlife, 504 U.S. 555
, 560 (1992)). The prudential
standing rules require that:
(1) A litigant "assert his [or her] own legal
interests rather than those of third parties;"
(2) courts refrain from adjudicating "abstract
questions of wide public significance which amount to
generalized grievances;" and
(3) a litigant demonstrate that her interests are
arguably in "the zone of interests" intended to be
protected by the statute, rule or constitutional
provision on which the claim is based.
Id. (quoting Wheeler, 22 F.3d at 538. "The rules of standing,
whether as aspects of the Article III case or controversy
requirement or as reflections of prudential considerations
defining and limiting the role of the courts, are threshold
determinations of the propriety of judicial intervention. It is
the responsibility of the complainant clearly to allege facts
demonstrating that he is a proper party to invoke judicial
resolution of the dispute and the exercise of the court's
remedial powers." Bender v. Williamsport Area School District,
45 U.S. 534, 546 n. 8 (1986) (citing Warth v. Seldin,
422 U.S. 490
, 517-18 (1975)).
The record before the court in the instant matter clearly
demonstrates that plaintiff seeks to stand on the rights of
others. All asserted acts performed by defendants were directed
at tax payers other than plaintiff. Plaintiff deeded the subject
property to U.S. Industrial Fabricators, Inc., on November 29,
1974, and recorded the same in the county recording system.
Complaint at ¶ 20. Thus, Industrial Fabricators remained the
title owner and tax payer until plaintiff's ex-wife, Dawn
Gagliardi, succeeded to ownership as a successor in title some
time prior to April 20, 1990. Id. at ¶¶ 26, 30, Exhibits E, L &
M to Complaint. The tax records submitted by plaintiff
demonstrate clearly that at all time pertinent the record owner
and thus the liable tax payer for all assessments alleged to be
inaccurate, false or misleading was U.S. Industrial Fabricators,
Inc., and/or Dawn A. Gagliardi and her two sons John and Lee.
Exhibits L, M, N and O to Complaint. Plaintiff's submissions make clear that he cannot claim to have
actual deeded ownership of the subject property at anytime during
the events in question. And while plaintiff was named as a
"reputed" owner of the property in the scrie facias
proceeding commenced by West Jefferson Hills School District, the
named defendant in that proceeding was of course the property
owner, Dawn Gagliardi. Exhibits E and F to Complaint. Similarly,
when defendant Attorney Kratzenberg initiated a lawsuit on behalf
of Elizabeth Forward School District for delinquent reality
taxes, the proceeding was commenced against Dawn Gagliardi.
Complaint at ¶ 45. Execution sales and notices to defend likewise
have been initiated against and served on the property owner,
Dawn Gagliardi. Exhibits Y, Z and AA to Complaint.
Plaintiff's attempt to predicate a RICO action based upon the
inaccurate descriptions of property belonging to others and the
enforcement proceedings to collect back taxes from those
individuals/entities violates the basic prudential component of
Article III standing requiring a litigant to assert his or her
own legal interests rather than those of third parties. The
record likewise demonstrates that plaintiff has not truly
suffered an "injury in fact" from the defendant's asserted
conduct because any legally protected interests invaded by the
defendants' conduct belonged to those who owned the property and
faced the consequences of defendants' collection efforts.
Plaintiff's assertion that defendants' actions have effectively
disabled him from using his property for business and personal
loans is precisely the type of conjectural or hypothetical injury
which fails to meet the constitutional minimum required for
standing. Consequently, plaintiff lacks standing to pursue any
purported RICO claim set forth in the complaint.
But even assuming for the purpose of argument that plaintiff's
status as an officer or director of Industrial Fabricators, Inc.,
is sufficient to meet the constitutional and prudential
requirements for Article III standing, plaintiff's allegations
and the exhibits attached to the Complaint demonstrate that the
limitations period governing any purported RICO claim based on
the conduct identified in the complaint has long ago expired.
Accordingly, any purported RICO claim presented in the complaint
will be dismissed with prejudice and the court will decline to exercise supplemental jurisdiction over any state law claim
presented by plaintiff's submissions.
Prior to the Supreme Court's decision in Klehr v. A.O. Smith
Corp., 521 U.S. 179 (1997), the United States Court of Appeals
for the Third Circuit applied a "last predicate act" exception to
the commonly utilized "injury and pattern discovery rule" for the
determining the accrual of RICO claims. Prudential Insurance Co.
v. United States Jypsum Co., 359 F.3d 226, 233 (3d Cir. 2004).
The Supreme Court rejected the use of that exception on the
ground that it would result in a limitations period longer than
that which Congress could have contemplated and would permit
claimants to recover for injuries outside the limitations period
by "boot strapping" them on to later and independent acts. Id.
(citing Klehr, 521 U.S. at 187-90). Subsequently, the Supreme
Court also rejected the "injury and pattern discovery rule"
itself in Rotella v. Wood, 528 U.S. 549 (2000). Under this rule
the statute of limitations began to run when a plaintiff knew or
should have known of each element of a civil RICO claim: the
injury, the source of the injury, and the pattern of activities
prohibited by RICO causing the injury. Prudential Insurance
Co., 359 F.3d at 233 (citing Rotella, 528 U.S. at 554).
Following Rotella, the United States Court of Appeals for the
Third Circuit adopted the "injury discovery rule" as the
governing standard for determining statute of limitations issues
in civil RICO claims. Forbes v. Eagleson, 228 F.3d 471, 484 (3d
Cir. 2000). This approach requires the court to "determine when
the plaintiffs knew or should have known of their injury."
Prudential Insurance Co., 359 F.3d at 233 (quoting Forbes,
228 F.3d at 484). "In addition to the injury, the plaintiffs must
also have known or should have known of the source of their
injury." Id. Nothing more is required to trigger the running of
the four-year limitations period governing a civil RICO claim.
Plaintiff contends to have been injured from the "false and
misleading encumbrances to real title" which have prevented and
discouraged him and his family from seeking financial assistance
through lending institutions. Complaint at ¶ 49. He explains his
injury in detail as follows:
The direct causal relationship between the injury and
the RICO violation is because of the cloud and
slanders of title placed upon the real property of the plaintiff,
your plaintiff has been effectively disabled from
using his property for business and personal loans as
well as personal bail bond.
Complaint at ¶ 87. Plaintiff also describes the violations of
18 U.S.C. § 1962(d) as follows:
The injury to business or property is: the systematic
imposition of erroneously calculated and unjustly
assessed and unjustly collected taxes and fees per
real property, along with the imposition of
encumbrances that render the pledge of considerable
property impossible, along with damages to the
plaintiff's cash flow and ability to continue a
livelihood from businesses affected by the
Complaint at ¶ 97. Plaintiff further avers that in 1990,
exonerated corrected assessments for years 1988, 1989 and 1990
were acknowledged by the Director of Allegheny County Tax Claims
and Revenue, but county records thereafter remained inaccurate
after repeated requests by plaintiff to Ira Weiss "who during
that period served as County Solicitor." Complaint at ¶ 35.
The above demonstrates that plaintiff was well aware of the
inaccurate description of the subject property and the
concomitant over assessment of local and school real estate taxes
well before 1990. Plaintiff admits that the subject property was
incorrectly described "since 1976" and false and misleading tax
assessments have recurrently been produced thereafter. Complaint
at ¶ 24. Plaintiff's family members were sued by the Borough of
Jefferson in an effort to collect back due taxes as assessed
pursuant to the exonerated corrected assessments in 1992. Exhibit
O to Complaint. As of that date, plaintiff necessarily obtained
notice sufficient to warrant further inquiry concerning (1) any
ongoing inaccurate description of property in the county
assessment records and/or (2) the assertedly misleading and false
tax assessments. Tax liens based on the inaccurate assessments
were thereafter entered for tax years 1992 and 1994 through 1997.
Exhibit F to Complaint. Plaintiff thus knew or should have known
of his injury and the source of his injury as of the date the
1992 lien was recorded against the subject property, April 21,
1994. See Exhibit F to Complaint. In fact, plaintiff admits
that he made repeated requests to defendant Ira Weiss in the
early 1990's to correct the description of the land and despite
these repeated requests it had not been corrected. A collection
action was initiated by another defendant to collect "unpaid taxes and various costs totaling $184,573.8"
based upon delinquent tax deficiencies entered as separate liens
against the property on August 9, 1996, July 11, 1997, June 4,
1998, and December 21, 1999. Complaint at ¶ 26; Exhibit F to
Complaint. It follows that plaintiff was also thus aware of the
source of his claimed injury no later than August 9, 1996, when a
lien was entered against the subject property based on the
erroneous uncorrected and assertedly false assessment. At this
point plaintiff had sufficient information to recognize that
there was a systematic imposition of taxes on the property based
on the actions of public officials, liens were being entered to
secure the delinquent taxes owed, and the informal efforts of
plaintiff to correct the amounts owed were not resulting in
formal action by those in charge of collecting back due taxes.
Because nothing more than the injury and the source of the injury
need to be shown to trigger the accrual of the limitations
period, the four-year limitations period governing any purported
RICO claim in plaintiff's complaint began to run no later than
August 9, 1996, and expired well before November 8, 2004. Exhibit
F to Complaint.
Plaintiff maintains that his RICO claim is not time barred due
to the application of equitable tolling and, more specifically,
"a genuine dispute of material fact as to whether the fraudulent
concealment exception applies to [the] statute of limitations."
Plaintiff's Response to the Weiss Motions (Doc. No. 29) at 10.
Plaintiff's position is untenable.
"The Supreme Court has stated that to equitably toll the
running of the limitation period in the civil RICO context by
claiming fraudulent concealment, plaintiffs must have exercised
`reasonable diligence' to discover their claim." Prudential
Insurance Co., 359 F.3d at 238 (citing Klehr,
521 U.S. at 194). In order to invoke the doctrine of equitable tolling and
avoid summary judgment, "there must be a genuine issue of
material fact as to whether the [plaintiffs] exercised reasonable
due diligence in investigating their claim." Id. (quoting
Matthews v. Kidder, Peabody & Co., 260 F.3d 239, 257 (3d Cir.
In order for the doctrine of fraudulent concealment to be a
basis for equitably tolling a civil RICO limitations period, the
record must be capable of establishing three elements: (1) there must be sufficient evidence to support a finding that defendants
engaged in affirmative acts of concealment designed to mislead
the plaintiffs regarding the facts supporting their claim; (2)
there must be sufficient evidence to support a finding that
plaintiffs exercised reasonable diligence, and (3) plaintiffs
must be able to prove that they were not aware, nor should they
have been aware, of the facts supporting their claim until a time
within the limitations period as measured backward from the date
the complaint was filed. Forbes, 228 F.3d at 487; Prudential
Insurance Co., 359 F.3d at 238.
Plaintiff's submissions to the court demonstrate clearly that
plaintiff failed to exercise reasonable diligence in ascertaining
the existence of his injury and its source. It likewise
demonstrates that plaintiff should have been aware of the facts
supporting his claims years before November 8, 2000.
Plaintiff expressly alleges that after corrected tax
assessments were made and tax records were issued with the
notation "exonerated corrected assessment" for 1988, 1989 and
1990, plaintiff made requests to the county solicitor, defendant
Weiss, to described the subject property in a true and correct
manner. Complaint at ¶¶ 34-35. Despite these requests, plaintiff
avers that Weiss permitted and authorized the erroneous
descriptions to continue, notwithstanding the known falsity of
records. Complaint at ¶ 35. As the reputed owner of the property
and sole officer of the corporate entity that was the recorded
owner, plaintiff had a duty to exercise reasonable diligence in
pursuing avenues for correcting the description and/or
ascertaining that all available legal avenues for changing the
description of the subject property in the county's tax
assessment records were unavailing.*fn1 Plaintiff has failed
to aver that any formal correction action was taken through the legal channels available to all property
owners of Allegheny County at any time after 1990 when his
repeated informal requests to Weiss failed to result in a true
and correct description of the subject property. Nor has
plaintiff come forward with any evidence indicating that
proceedings before the County Assessment Board were exhausted
after tax liens were recorded against the property on April 21,
1994, August 9, 1996, July 11, 1997, June 4, 1998 and so forth,
based on the ongoing false and misleading description that had
not been corrected.
By failing to pursue proper avenues of relief through the
County Board of Assessment and Appeals and/or failing to
investigate and challenge through proper channels the tax liens
regularly recorded against the property after April 21, 1994,
plaintiff has foreclosed any attempt to demonstrate that he
exercised reasonable diligence in discovering or investigating
the injuries upon which he founds his RICO claim. The failure of
his repeated informal requests to various county officials to
result in corrective measures placed him on "inquiry notice" of
such injuries and triggered the need to take formal measures to
correct the description of the subject property. Compare
Prudential Ins. Co., 359 F.3d at 238 ("As the discussion above
shows, irrespective of defendants' attempt to conceal from
Prudential the hazards posed by ACMs in Prudential's buildings,
Prudential had many other sources of information sufficient to
place it on inquiry notice of such ACM-related inquiries.") Had
plaintiff pursued such avenues at that time, he would have either
corrected the underlying injury or become aware of the source of
his alleged RICO injury at a time well before the applicable
limitations period as measured backwards from the filing of his
complaint. Consequently, plaintiff cannot establish a genuine
issue to support a finding that he was not aware, nor should he
have been aware, of the facts supporting his RICO claim prior to
November 8, 2000. Consequently, plaintiff's RICO claim is time
barred. Plaintiff lacks standing to pursue his RICO claim against any
of the defendants, and, in the alternative, any purported RICO
claim advanced by plaintiffs is untimely as a matter of law.
Because these defects in plaintiff's RICO claim cannot be cured
by amendment, the court will dismiss the claims in plaintiff's
complaint for lack of standing, and, in the alternative, dismiss
the RICO claim with prejudice and decline to exercise
supplemental jurisdiction over any state law claim encompassed
within plaintiff's complaint. An appropriate order follows.
ORDER OF COURT
AND NOW, this 15th day of September, 2005, for the
reasons set forth in the above memorandum, IT IS ORDERED that the
claims in plaintiffs' complaint be, and the same hereby are,
dismissed for failure to present on Article III case or
controversy, and, in the alternative, plaintiff's Racketeer
Influence Corrupt Organizations claim be, and the same hereby is,
dismissed with prejudice and any purported state law claim
presented is dismissed without prejudice pursuant to
28 U.S.C. § 1367(c). The clerk shall close this case.
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