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GAGLIARDI v. KRATZENBERG

September 15, 2005.

JOHN GAGLIARDI, Plaintiff,
v.
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 submissions.

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 pertinent part:
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 ¶ 97.

  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 ...


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