Kaplan v. Prolife Action League of Greensboro

475 S.E.2d 247, 123 N.C. App. 720, 1996 N.C. App. LEXIS 942

Opinions

MARTIN, Mark D., Judge.

Plaintiffs appeal from the trial court’s grant of partial summary judgment to defendants on plaintiffs’ claim for alleged violations of the North Carolina Racketeer Influenced and Corrupt Organizations Act (NC RICO).

The plaintiffs, Dr. Kaplan, a medical doctor, and his family, reside in Greensboro, North Carolina. Defendant Prolife Action League of Greensboro (PALG) is the organizational banner under which the named individual defendants espouse their anti-abortion beliefs. It is undisputed PALG has organized several pickets outside plaintiffs’ personal residence and Dr. Kaplan’s place of business because of the animus defendants hold towards abortion.

On 14 January 1992 plaintiffs instituted the present action against defendants claiming public and private nuisance; intentional infliction of emotional distress; invasion of privacy; violations of NC RICO, N.C. Gen. Stat. § 75D-1, et seq.) violations of the Federal Racketeer Influenced and Corrupt Organizations Act (federal RICO), 18 U.S.C. § 1961, et seq.) and interference with civil rights. In January 1992 plaintiffs voluntarily dismissed their federal RICO claim.

By order filed 8 June 1994, the Chief Justice of the Supreme Court of North Carolina designated the present case, pursuant to Rule 2.1 of the General Rules of Practice for the Superior and District Courts, as exceptional and assigned Superior Court Judge Thomas W. Ross to preside over all proceedings in this action.

By order signed 15 May 1995, Judge Ross granted defendants’ motions for partial summary judgment on plaintiffs’ NC RICO claim.

On appeal plaintiffs contend they proffered sufficient evidence of “pecuniary gain,” N.C. Gen. Stat. § 75D-2(c) (1990), and injury or damage to property, N.C. Gen. Stat. § 75D-8(c) (1990), and, therefore, the trial court erred by granting partial summary judgment to defendants.

At the outset we note a partial grant of summary judgment is an interlocutory order which is generally not subject to immediate appeal. See, e.g., Jeffreys v. Raleigh Oaks Joint Venture, 115 N.C. App. 377, 379, 444 S.E.2d 252, 253 (1994) (quoting Liggett Group, Inc. v. Sunas, 113 N.C. App. 19, 23, 437 S.E.2d 674, 677 (1993)). In the present case, however, pursuant to the trial court’s certification under N.C.R. Civ. P. 54(b), the parties are permitted to seek immediate review of the trial court’s order. N.C. Gen. Stat. § 1A-1, Rule 54(b) (1990); Jeffreys, 115 N.C. App. at 379, 444 S.E.2d at 253.

When ruling on a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party. James v. Clark, 118 N.C. App. 178, 181, 454 S.E.2d 826, 828, disc. review denied, 340 N.C. 359, 458 S.E.2d 187 (1995). The moving party must “positively and clearly” show there is no genuine issue as to any material fact and it is entitled to judgment as a matter of law. Id. at 180, 454 S.E.2d at 828. The moving party is entitled to judgment as a matter of law if it can prove “ ‘that an essential element of the plaintiff’s case is nonexistent ....’” Id. at 181, 454 S.E.2d at 828 (quoting Watts v. Cumberland County Hosp. System, 75 N.C. App. 1, 6, 330 S.E.2d 242, 247, disc. review denied on addt’l issues, 314 N.C. 548, 335 S.E.2d 27 (1985), rev’d on other grounds, 317 N.C. 321, 345 S.E.2d 201 (1986)).

In the present case, the propriety of the trial court’s grant of partial summary judgment is controlled by this Court’s interpretation of sections 75D-2(c) and 75D-8(c) of NC RICO. Construction of these provisions must necessarily be resolved by recourse to well settled canons of statutory interpretation.

The primary goal of statutory construction is to give effect to the intent of the legislature. Bowers v. City of High Point, 339 N.C. 413, 419, 451 S.E.2d 284, 289 (1994). “The will of the legislature ‘must be found from the [plain] language of the act, its legislative history and the circumstances surrounding its adoption which throw light upon the evil sought to be remedied.’ ” State v. Oliver, 343 N.C. 202, 211, 470 S.E.2d 16, 22 (1996) (quoting State ex rel. N.C. Milk Comm’n v. National Food Stores, 270 N.C. 323, 332, 154 S.E.2d 548, 555 (1967)). In any event, where a statute is susceptible to two constructions, one constitutional and the other unconstitutional, the former will be adopted. In re Arthur, 291 N.C. 640, 642, 231 S.E.2d 614, 616 (1977).

NC RICO was ratified approximately one year after the United States Supreme Court recognized the civil provisions of federal RICO were “evolving into something quite different from the original conception of its enactors.” Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 500, 87 L. Ed. 2d 346, 361 (1985). Further, prior to its ratification by the General Assembly, the scope of NC RICO’s private right of action was substantially limited pursuant to hearings conducted by the Senate Judiciary IV Committee. See Minutes for Senate Judiciary IV Committee, 1st session (July 11, 1985) (hereinafter Senate Judiciary IV Minutes).

I.

Section 75D-2(c) expressly limits the activities targeted by NC RICO. Specifically, section 75D-2(c) provides:

It is not the intent of the General Assembly that this Chapter apply to isolated and unrelated incidents of unlawful conduct but only to an interrelated pattern of organized unlawful activity, the purpose or effect of which is to derive pecuniary gain. Further, it is not the intent of the General Assembly that legitimate business organizations doing business in this State, having no connection to, or any relationship or involvement with organized unlawful elements, groups or activities be subject to suit under the provisions of this Chapter.

N.C. Gen. Stat. § 75D-2(c) (1990) (emphasis added). The plain language of the statute, coupled with the legislative intent, clearly indicates the scope of NC RICO is limited to cases where pecuniary gain is derived from organized unlawful activity prohibited under the statute. Put simply, section 75D-2(c) requires the aggrieved party to establish a causal connection between the alleged pecuniary gain and defendant’s activities which allegedly violate section 75D-4.

In the present case, plaintiffs assert defendants engaged in the following racketeering or unlawful organized activity: extortion; conspiracy to extort; attempted extortion; communication of threats; and transmittal of threatening writings. Plaintiffs further contend that, taken together, defendants alleged acts represent a pattern of racketeering activity prohibited under section 75D-4.

We assume, without deciding, that plaintiffs have offered sufficient evidence of a pattern of racketeering activity prohibited under section 75D-4. Nevertheless, to withstand summary judgment, plaintiffs’ forecast of evidence must also demonstrate a causal nexus between PALG’s alleged pecuniary gain and defendants’ organized unlawful activity under section 75D-4.

To establish pecuniary gain, plaintiffs direct this Court to three checks from defendant Virginia Bell (Bell checks) and PALG newsletters which solicit contributions. It is beyond question the Bell checks clearly evidence the receipt of money by PALG. In fact, defendants admit PALG is “getting money to operate the organization.” The present record is nonetheless devoid of any indication PALG derived this monetary gain from, or as a result of, activities prohibited by section 75D-4. On the other hand, the newsletters, unlike the Bell checks, do not, in and of themselves, establish pecuniary gain. Further, even assuming the solicitations resulted in donations, plaintiffs failed to allege, much less proffer, evidence that the donations were in any way derived as a result of organized unlawful activity prohibited by section 75D-4.

Indeed, the newsletters do not recount any illegal activity by PALG. Rather, the only PALG sponsored events referenced in the newsletters are pickets, yard sales, covered dish suppers, meetings, and the like. Admittedly, PALG’s picketing and demonstrating were intended to dissuade Dr. Kaplan from performing abortions, a lawful activity. We note, however, that all pickets, organized demonstrations, or boycotts, regardless of their substantive objective, are inherently coercive. Such activity ordinarily falls under the protective umbrella of the First Amendment to the United States Constitution. Texas v. Johnson, 491 U.S. 397, 404, 105 L. Ed. 2d 342, 353 (1989) (picketing “possesses sufficient communicative elements to bring the First Amendment into play”).

Wholly apart from any constitutional considerations, however, plaintiffs have nonetheless failed to establish, as a matter of law, a causal nexus between PALG’s pecuniary gain and defendants’ alleged organized unlawful activity under section 75D-4.1

II.

Alternatively, assuming plaintiffs proffered sufficient evidence of the requisite “pecuniary gain,” Judge Ross’ grant of partial summary judgment must also be affirmed on the entirely independent ground that plaintiffs failed to demonstrate any injury or damage to property cognizable under NC RICO.

Section 75D-8(c) provides, in pertinent part, “Any innocent person who is injured or damaged in his business or property by reason of any violation of G.S. 75D-4 involving a pattern of racketeering activity shall have a cause of action for three times the actual damages sustained and reasonable attorneys fees.” N.C. Gen. Stat. § 75D-8(c) (1990) (emphasis added).

In the instant action, plaintiffs limit their NC RICO claim solely to alleged injury or damage to property. Specifically, plaintiffs “do not seek damages for the diminution in value of their house. Instead, the property damages referred to [in their NC RICO claim] relate to [plaintiffs’] loss of the use and enjoyment of their home, as a result of the defendants’ appearance targeted at [plaintiffs’] home.” The dis-positive issue in this appeal therefore is whether “property,” as used in NC RICO, includes loss of use and enjoyment of plaintiffs’ personal residence.

We recognize that, generally speaking, the term property may include “not only the thing possessed but also . . . the right of the owner to the land; the right to possess, use, enjoy and dispose of it, and the corresponding right to exclude others from its use.”² Hildebrand v. Telegraph Co., 219 N.C. 402, 408, 14 S.E.2d 252, 256 (1941). See also Long v. City of Charlotte, 306 N.C. 187, 201, 293 S.E.2d 101, 110-111 (1982) (“where a person’s right to [] use [or] enjoy . . . his land is substantially impaired, his property has been taken”). Nevertheless, our research has not revealed any jurisdiction which adopts such an expansive definition of “property” under its respective RICO statute.

In fact, the only federal circuit court to squarely address the present issue has determined the loss of the use and enjoyment of one’s personal residence does not constitute an injury to property recoverable under federal civil RICO. Oscar v. University Students Co-Op. Ass’n, 965 F.2d 783, 787-788 (9th Cir.), cert. denied, 506 U.S. 1020, 121 L. Ed. 2d 581 (1992). In Oscar, plaintiffs rented apartments nekr Barrington Hall, a student co-operative run by defendants. Id. at 784. Plaintiffs alleged that Barrington Hall was being used as a drug house and the attendant filth, noise, violence, and vandalism deprived them of the use and enjoyment of their rental property. Id. at 785. The district court dismissed plaintiffs’ RICO claim. Id.

In affirming the dismissal, the Ninth Circuit stated:

While [federal] RICO is to be “liberally construed,” it is well established that not all injuries are compensable under this section. Two limitations are significant in this case. First, a showing of “injury” requires proof of concrete financial loss, and not mere “injury to a valuable intangible property interest.”

Second, it is clear that personal injuries are not compensable under [federal] RICO.

Id. (citations omitted). Characterizing plaintiffs’ claim for loss of the use and enjoyment of their leasehold as a claim for “personal discomfort and annoyance,” the Court concluded such a claim was “not a tangible injury to property . . . [because] the market value of [plaintiffs’] leasehold interest[s] has not declined.” Id. at 787.

While our research indicates no other federal circuit court of appeals has addressed whether loss of use and enjoyment is an injury to property under federal RICO, several circuits have considered analogous situations and likewise declined to expand the definition of “property” under federal RICO. See Genty v. Resolution Trust Corp., 937 F.2d 899, 918-919 (3d Cir. 1991) (medical expenses and emotional distress from exposure to toxic waste not recoverable, but diminution in market value of land recoverable); Berg v. First State Ins. Co., 915 F.2d 460, 464 (9th Cir. 1990) (loss of security and peace of mind due to cancellation of insurance policy not actionable); Rylewicz v. Beaton Services, Ltd., 888 F.2d 1175, 1179-1180 (7th Cir. 1989) (no cognizable RICO claim where harassment and intimidation directed against certain litigants in an effort to have them settle lawsuit). Indeed, the parties have not cited, and we are unaware of, any federal circuit which has extended federal RICO to embrace injury to an intangible property interest that in no way diminishes the market value of the property.

Plaintiffs nevertheless argue this Court should adopt the rationale propounded in the Oscar dissent. According to the Oscar dissent, “[w]e are seven centuries too late to characterize [a] nuisance [which causes loss of use and enjoyment of property] as injury to person rather than to property.” Oscar, 965 F.2d at 793 (Kleinfeld, J., dissenting). We note, however, that unlike the present case, the Oscar plaintiffs alleged a nuisance which was inextricably related to their property and, in fact, the Oscar plaintiffs were “harmed only because of their connection to the land.” Id. at 793.

Indeed, the Oscar dissent, itself, emphasized the alleged nuisance in that case would unavoidably be imposed on any future occupant of the property. Id. at 794. As the dissent stated:

[plaintiffs] do not suggest that the narcotics dealers bore them any special animus, just that the drug dealing adversely affected the nearby apartments in which they had the misfortune to live. The harm would be imposed on anyone who had the connection to the real estate that [plaintiffs] did, and it would not have been imposed on [plaintiffs] but for their connection to the land.

Id. (emphasis added). Therefore, according to the reasoning of the Oscar dissent, a nuisance which is inextricably related to property represents an injury to property, albeit the intangible property interest in the use and enjoyment of one’s personal residence, under federal RICO. See id. at 793-794. See also Long, 306 N.C. at 201, 293 S.E.2d at 110 (“where a person’s right to [] use [or] enjoy . . . his land is substantially impaired, his property has been taken); Hildebrand, 219 N.C. at 408, 14 S.E.2d at 256 (“property” includes the right to use and enjoy it).

It follows that plaintiffs’ NC RICO claim is fatally flawed under the reasoning of either the majority or dissent in Oscar. First, under the Oscar holding, loss of use and enjoyment of property does not constitute an injury to property under federal RICO. Second, even adopting the rationale of the Oscar dissent, plaintiffs’ claim in the present case fails because the alleged harm suffered by plaintiffs would not be imposed on anyone else who occupied the property as it does not arise from plaintiffs’ connection to the land. Cf. Oscar, 965 F.2d at 793-794. Rather, plaintiffs’ claim arises solely from alleged PALG activities which specifically targeted plaintiffs, especially Dr. Kaplan, as individuals.

Because plaintiffs’ claim would fail under the analogous federal RICO provision,³ and it is apparent the General Assembly did not intend to provide NC RICO with a broader remedial stroke than its federal counterpart, see Senate Judiciary IV Minutes, supra, we affirm the trial court’s grant of partial summary judgment in favor of defendants.

In sum, plaintiffs failed to proffer sufficient evidence under either section 75D-2(c) or section 75D-8(c) to withstand defendants’ motion for partial summary judgment. Accordingly, without prejudice to plaintiffs’ right to seek redress under any one of their remaining claims, we affirm Judge Ross’ grant of partial summary judgment.

Affirmed.

Judge LEWIS concurs. Judge JOHNSON dissents in part and concurs in part.

Footnotes

1

. The dissent implies we limit pecuniary gain to money extracted directly from plaintiffs. To the contrary, we superimpose no such requirement on section 75D-2(c). Rather, we merely apply the clear statutory mandate that the alleged pecuniary gain, no matter what the source of the funds, must be derived from the alleged unlawful activity.

2

. N.C. Gen. Stat. § 75D-3(h) defines “real property” as “any real property situated in [North Carolina] or any interest in such real property, including . . . any lease of or mortgage upon such real property.” Id. Plaintiffs argue section 75D-3(h) implies that “property,” under section 75D-8(c), should be broadly construed. Even granting this assumption, the issue nevertheless remains whether the term “property” should be stretched to encompass the intangible property interest a claimant has in the use and enjoyment of its land.

3

. Federal RICO, 18 U.S.C. § 1964(c) provides recovery to any person “injured in his business or property . . .” whereas section 75D-8(c) provides recovery to “[a]ny innocent person who is injured or damaged in his business or property . . . .” We perceive no legally significant distinction between the language of these provisions.