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Plum Property Associates, Inc. v. Mineral Trading Company

December 23, 2009


The opinion of the court was delivered by: Arthur J. Schwab United States District Judge




This case involves allegations of various violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), fraud and misrepresentation and state law claims of imposition of constructive trust, breach of oral contract, unjust enrichment, and conversion of funds. Before this Court is Defendant's Motion to Dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure on the grounds that Plaintiff has failed to state a claim upon which relief may be granted. (Doc. No. 6). For the following reasons, Defendant's Motion to Dismiss will be GRANTED as to Counts I-II and the Court will decline to exercise jurisdiction as to Counts III-VI.


Plaintiff, Plum Property Associates, Inc. ("Plum Property") commenced this action on August 11, 2009, with the filing of a Complaint in Civil Action. (Doc. No. 1). The Complaint alleges six claims for damages arising out of the sale of coal by Plum Property to Defendant Mineral Trading Company, LLC ("Mineral Trading") pursuant to an alleged oral contract between the parties.*fn1 Namely, Count I: Violation of 18 U.S.C. § 1962(c), Count II: Fraud and Misrepresentation, Count III: Imposition of Constructive Trust, Count IV: Breach of Oral Contract, Count V: Unjust Enrichment, and Count VI: Conversion of Funds. (Doc. No. 1). Plaintiff's Complaint alleges the Plaintiff agreed to sell coal to the Defendant pursuant to an oral agreement, wherein Defendant agreed to pay $64.00 per ton for coal shipped in January 2009 and $61.00 per ton for coal shipped in February 2009. (Doc. No. 1, ¶ 13). Plaintiff alleged after Defendant took the coal shipments, Defendant unilaterally told Plaintiff they would only pay $30.00 per ton instead of the previously agreed upon sums. (Doc. No. 1, ¶18). The Complaint contains allegations that the failure of Mineral Trading to pay the agreed upon purchase price constitutes fraudulent conduct. Plaintiff further alleges that the failure to pay the agreed upon price constitutes a violation of 18 U.S.C. §1341 (mail fraud), 18 U.S.C. §1343 (wire fraud), 18USC § 1956 (money laundering), 18 U.S.C. §1957 (engaging in monetary transactions derived from unspecified unlawful activity), and 18 U.S.C. §2314 (relating to the transportation of stolen money). (Doc. No. 1).

Because Plaintiff's case involves a claim under RICO, on August 14, 2009, this Court ordered Plaintiff to file a RICO Case Statement. (Doc. No. 3). Plaintiff's RICO Case Statement was filed on September 11, 2009. (Doc. No. 4). On November 30, 2009, Defendant filed the instant Motion to Dismiss/Motion for More Definite Statement. (Doc. No. 6). Plaintiff filed a Response to Motion to Dismiss/Motion for More Definite Statement on December 18, 2009.

(Doc. No. 12).


In light of the Supreme Court's decision in Bell Atlantic Corp. v. Twombly, 550 U.S.544 (2007), a complaint may be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6) if it does not allege "enough facts to state a claim to relief that is plausible on its face." Phillips v. County of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008)(quoting Twombly, 550 U.S. at 570). While Conley v. Gibson, 355 U.S. 41, 45-46 (1957), allowed dismissal of a claim only if "no set of facts" could support it, under Twombly, and most recently, Ashcroft v. Iqbal, 129 S.Ct. 1937, 2009 WL 1361536 (May 18, 2009), a claim for relief under Rule 12(b)(6) now "requires more than labels and conclusions" or "a formulaic recitation of the elements of a cause of action." Twombly, 550 U.S. at 555; Iqbal, 129 S.Ct. at 1950.

In Iqbal, the Supreme Court held that a claim is facially plausible when its factual content allows the court to draw a reasonable inference that the defendants are liable for the misconduct alleged. Marangos v. Swett, 2009 WL 1803264, *2 (3d Cir. 2009), citing Iqbal, 129 S.Ct. 1937, 2009 WL 1361536, *12. The plausibility standard in Iqbal "asks for more than a sheer possibility that a defendant has acted unlawfully." Swett, quoting Iqbal. While well-pleaded factual content is accepted as true for purposes of whether the complaint states a plausible claim for relief, legal conclusions couched as factual allegations or "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements," are not entitled to an assumption of truth. Swett, quoting Iqbal, at *13. "Where the well-pleaded facts do not permit the court to infer more than a mere possibility of misconduct, the complaint has alleged - but it has not 'show[n]' - 'that the pleader is entitled to relief.'" Iqbal, quoting Fed. R. Civ. P. 8(a)(2).

In considering a Rule 12(b)(6) motion, a court accepts all of the plaintiff's allegations as true and construes all inferences in the light most favorable to the non-moving party. Umland v. Planco Fin. Servs., 542 F.3d 59, 64 (3d Cir. 2008)(citing Buck v. Hampton Twp. Sch. Dist., 452 F.3d 256, 260 (3d Cir. 2006)). However, a court will not accept bald assertions, unwarranted inferences, or sweeping legal conclusions cast in the form of factual allegations. See In re Rockefeller Ctr. Props., Inc. Sec. Litig., 311 F.3d 198, 215 (3d Cir. 2002); Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 n. 8 (3d Cir. 1997). A court is not required to consider legal conclusions; rather, it should determine whether the plaintiff should be permitted to offer evidence in support of the allegations. Maio v. Aetna, 221 F.3d 472, 482 (3d Cir. 2000). The failure-to-state-a-claim standard of Rule 12(b)(6) seeks to promote judicial economy by eliminating unwarranted discovery and factfinding. United States ex. rel. Repko v. Guthrie Clinic, P.C., 557 F.Supp.2d 522, 525 (M.D. Pa. 2008). Therefore, a plaintiff must put forth sufficient facts that, when taken as true, suggest the required elements of a particular legal theory. See Wilkerson v. New Media Tech. Charter Sch., Inc., 522 F.3d 315 (3d Cir. 2008) (citing Phillips, 515 F.3d at 224). Generally, this does not impose a heightened burden on the claimant above that already required by Rule 8, but instead calls for fair notice of the factual basis of a claim while "rais[ing] a reasonable expectation that discovery will reveal evidence of the necessary element." Weaver v. UPMC, Civil Action No. 08-411, 2008 U.S. Dist. LEXIS 57988, at * 7 (W.D. Pa. July 30, 2008)(citing Phillips, 515 F.3d at 234; and Twombly, 550 U.S.. at 555).


A. RICO Claim ...

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