Shared Network Technologies, Inc. v. Taylor

669 F. Supp. 422, 1987 U.S. Dist. LEXIS 8233
CourtDistrict Court, N.D. Georgia
DecidedSeptember 10, 1987
DocketCiv. A. C87-1016A
StatusPublished
Cited by10 cases

This text of 669 F. Supp. 422 (Shared Network Technologies, Inc. v. Taylor) is published on Counsel Stack Legal Research, covering District Court, N.D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Shared Network Technologies, Inc. v. Taylor, 669 F. Supp. 422, 1987 U.S. Dist. LEXIS 8233 (N.D. Ga. 1987).

Opinion

ORDER

ROBERT H. HALL, District Judge.

Plaintiff brings this action alleging defendant violated the Federal and Georgia Racketeer Influenced and Corrupt Organizations Acts (“RICO”), 18 U.S.C. § 1961 et seq., Ga. Off’l Code Ann. § 16-14-1 et seq., Section 2(c) of the Robinson-Patman Act, 15 U.S.C. § 13(c), and the state laws prohibiting money had and received, fraud, conversion and waste of corporate assets. This court’s jurisdiction is predicated upon 28 U.S.C. § 1331 insofar as Counts V (federal RICO) and YII (Robinson-Patman Act) of plaintiff’s complaint arise under the laws of the United States. Plaintiff requests this court to exercise pendent jurisdiction over the remainder of its claims. Currently before the court is defendant’s motion to dismiss counts Y and VII of plaintiff’s complaint. For the reasons stated herein, the court DENIES defendant’s motion as to Count V and GRANTS defendant’s motion as to Count VII.

FACTS

Plaintiff, Shared Network Technologies, Inc. (“Share Net”), is a Georgia corporation which was incorporated in 1984 to sell shared telecommunication services. Complaint 11111, 6. Defendant, James S. Taylor (“Taylor”), acted as president of Share Net *424 from August 30, 1984 to May 7, 1987. Id., ¶¶ 2, 7. As president, Taylor was the chief operating officer of Share Net and in charge of the company’s day-to-day affairs. Id., 117. Between July and December 1985 Share Net received four invoices from a company known as Bellor Electronics for the sale and installation of electronic equipment. Id. ¶ 11. Pursuant to those invoices, Share Net paid at least $593,500.00 to Bellor Electronics or Bellor Communications. Id., 1110. In addition, on or about September 25, 1985, pursuant to an alleged purchase order supposedly issued by Share Net to Bellor Electronics, Share Net paid Bellor Electronics, by check signed by Taylor, $105,000.00. Id., ¶ 12.

Share Net alleges that Bellor Electronics and Bellor Communications are bogus corporations which are not now, and never have been, on-going businesses. Id., U 13. Share Net alleges Bellor Electronics exists in name only as a post office box in Dun-woody, Georgia. Id., 1Í14. Share Net further alleges that Taylor established and used Bellor Electronics in order to fraudulently induce Share Net to make payments to himself. Id., 1Í1T 21-22. Share Net contends that Taylor improperly authorized Share Net to pay the Bellor invoices, improperly signed the Share Net checks to Bellor Electronics and Bellor Communications, endorsed the Share Net checks written to Bellor and directed that the funds from the checks be deposited into an account controlled by Taylor at the Heritage Bank. Id., 111115-16.

Although it paid at least $593,500.00 to Bellor Electronics pursuant to Bellor invoices, Share Net never received the equipment and materials described in the invoices, nor did Bellor perform the services specified in the invoices. Id., ¶ 17. In Count II of its Complaint, Share Net alleges that Taylor made a series of fraudulent misrepresentations to Share Net in order to induce Share Net to pay him money through a nonexistent or bogus business. Id., 1f 21. Share Net contends that Taylor, with the intent and purpose of deceiving Share Net, fraudulently misrepresented to Share Net that the Bellor invoices should be paid when he knew Bellor was a bogus business which would not perform pursuant to the invoices. Id., ¶¶ 22-23. Share Net further contends that Taylor, for the purpose of deceiving Share Net, failed to disclose material and important facts regarding the transactions with Bellor to Share Net’s officers and directors. Id., TO 24-25.

In Count V of its Complaint, Share Net incorporates the facts and allegations enumerated above and alleges that Taylor violated federal RICO. Share Net alleges that Bellor Electronics is an enterprise within the meaning of 18 U.S.C. § 1961(4) which is engaged in, or the activities of which affect, interstate or foreign commerce. Id., II40. Share Net contends that the fraudulent misrepresentations made by Taylor to Share Net represented a scheme and artifice to defraud Share Net which was facilitated by use of the United States mail caused by Taylor and resulting in mail fraud within the meaning of 18 U.S.C. § 1341. Id., 1142. Such mail fraud, Share Net alleges, constituted racketeering activity as that term is defined in 18 U.S.C. § 1961(1)(B) and the alleged multiple fraudulent misrepresentations allegedly constituted a pattern of racketeering activity within the meaning of 18 U.S.C. § 1961(5) Id., 111143-44. Finally, Share Net alleges that Taylor and his agents, associates, and representatives conducted and conspired to conduct the affairs of Bellor Electronics through a pattern of racketeering activity in violation of 18 U.S.C. § 1962(c) and (d). Id., 1145.

In Count VII Share Net contends Taylor violated Section 2(c) of the Robinson-Pat-man Act, 15 U.S.C. § 13(c). Incorporating the previously alleged facts, Share Net alleges that during the relevant time period Taylor directed or controlled Bellor Electronics and that Bellor, through Taylor, fraudulently induced Share Net to pay Taylor at least $593,500.00. Id., HU 63-64. Share Net alleges that neither Taylor nor Bellor rendered services in connection with the bogus purchase of goods, wares or merchandise and that Taylor’s receipt of at least $593,500.00 in exchange for this series of bogus sales transactions constituted *425 an anticompetitive practice in violation of section 2(c) of the Robinson-Patman Act.

Taylor brings this motion to dismiss plaintiffs complaint pursuant to Fed.R. Civ.P. 12(b)(1) for lack of subject matter jurisdiction and Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief can be granted and failure to comply with the pleading requirements of Fed.R.Civ.P. 9(b).

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669 F. Supp. 422, 1987 U.S. Dist. LEXIS 8233, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shared-network-technologies-inc-v-taylor-gand-1987.