Sylvia Averbach v. Rival Manufacturing Co

809 F.2d 1016, 6 Fed. R. Serv. 3d 1144, 1987 U.S. App. LEXIS 1166
CourtCourt of Appeals for the Third Circuit
DecidedJanuary 20, 1987
Docket86-1196
StatusPublished
Cited by43 cases

This text of 809 F.2d 1016 (Sylvia Averbach v. Rival Manufacturing Co) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sylvia Averbach v. Rival Manufacturing Co, 809 F.2d 1016, 6 Fed. R. Serv. 3d 1144, 1987 U.S. App. LEXIS 1166 (3d Cir. 1987).

Opinion

OPINION OF THE COURT

GIBBONS, Chief Judge:

Sylvia Averbach appeals from an order dismissing, pursuant to Fed.R.Civ.P. 12(b), her complaint seeking relief from a judgment. The judgment from which she seeks relief was entered in favor of the defendants in a product liability action in the United States District Court for the Eastern District of Pennsylvania, Averbach v. Rival Manufacturing Company, Civil No. 78-1350, following a jury verdict on June 5, 1981. No appeal was taken from that judgment. On September 28, 1984 Averbach filed a Fed.R.Civ.P. 60(b) motion seeking a new trial. That motion was denied because it was filed more than a year after the judgment from which relief was sought, and this court affirmed on November 1, 1985. While the appeal was pending this separate action was filed in May, 1985. It pleads two counts: violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961, et seq. (1982 & Supp. Ill 1985) (RICO), and common law fraud. We hold that the RICO count fails to state a claim upon which Averbach may obtain relief from a judgment. We also hold that the common law fraud count would permit proof of facts which could afford relief from a judgment, that there was subject matter jurisdiction of that count, and that it should not have been dismissed at the pleading stage.

I.

In the underlying action Averbach sought to recover damages resulting from a fire in her home which, she claimed, was caused by a defective Rival electric can opener. During discovery in that action Averbach served on Rival Manufacturing Company an interrogatory asking:

If the Defendant has within the past five years received any complaints of an occurrence similar to that allegedly experienced by the Plaintiff, please state for each such complaint:
(a) Its date;
(b) Its substance, including a description of the factual circumstances;
(c) The name and address of the person making the complaint.

Plaintiff’s Interrogatories, Civ. No. 78-1350 at 10. Rival Manufacturing Company, on July 1, 1979, responded:

(a) December 7, 1976.
(b) The claim was for property damage to a house. It was alleged that a Rival Model 731/1 Can Opener/Knife Sharpener caused a fire. The evidence did not support the claimant’s allegations, the claim was denied by the Company and dropped by the claimant.
(c) This was a subrogation claim by State Farm Fire and Casualty Company, 5725 Foxridge Drive, Shawnee Mission, Kansas 66202.

Defendant Rival’s Answers to Plaintiff’s Interrogatories, Civ. No. 78-1350 at 5-6. No other occurrence was disclosed. A similar interrogatory served on Rival Manufacturing Company by a cross-claimant, the retail seller of the can opener, S. Klein Department Stores, was answered identically. Thus Averbach was informed of a single fire damage claim, made on behalf of a fire insurer, which that insurer apparently dropped after inquiry. At trial the jury decided in favor of the defendant.

In the instant action the complaint alleges that in August, 1983 Averbach’s counsel learned that the Consumer Products Safety Commission had information about Rival *1018 electric can openers causing fires. Counsel obtained copies of the Commission’s records which disclosed that between 1968 and 1974 Rival Manufacturing Company received 23 complaints of fires, 22 of which involved Rival electric can openers. In 1975 two more fires were brought to Rival’s attention and in 1976 two others were reported. In addition, after the date of the answer to the interrogatory but before trial Rival received reports of fires started by can openers in California, Chicago, and Philadelphia. All of these reports indicated that the arrangement of the electric switch was such that the device remained on at low speed when not in use, causing a heat buildup to the point of combustion.

If the information from the files of the Consumer Products Safety Commission about fires begun by Rival electric can openers is true, the answers to interrogatories served in the underlying action are grossly false. Rival would have had complaints, as of July 1, 1979, of at least 26 similar occurrences, not the one incident that was disclosed. The complaint alleges that, had truthful answers been given, Averbach’s presentation to the jury would have been much stronger, and could have produced a different verdict.

II.

In Count I Averbach alleges that by serving through the mails its false answers to interrogatories, Rival Manufacturing Company engaged in a pattern of racketeering activity, thereby corrupting an enterprise, the United States District Court for the Eastern District of Pennsylvania. The theory of the complaint is that the district court is an enterprise and that Rival Manufacturing Company, by serving the false answers to interrogatories, participated in the conduct of that enterprise’s affairs, all within the meaning of 18 U.S.C. § 1962(c) (1982).

We agree that a court may be an enterprise within the meaning of RICO. See United States v. Bacheler, 611 F.2d 443, 450 (3d Cir.1979) (Philadelphia Traffic Court); United States v. Herman, 589 F.2d 1191 (3d Cir.1978), cert. denied, 441 U.S. 913, 99 S.Ct. 2014, 60 L.Ed.2d 386 (1979) (Pittsburgh Magistrates); United States v. Vignola, 464 F.Supp. 1091, 1095 (E.D.Pa.), aff'd mem., 605 F.2d 1199 (3d Cir.1979), cert. denied, 444 U.S. 1072, 100 S.Ct. 1015, 62 L.Ed.2d 753 (1980), (Philadelphia Traffic Court). In those cases in which courts have been recognized as RICO enterprises, however, the participants engaged in patterns of activities designed to corrupt the operation of the courts’ own processes. Whereas litigants before courts call upon the courts to exercise the judicial process, they do not participate in it in the sense intended by Congress in 18 U.S.C. § 1962(c) (1982). Such litigants do not share with the court’s personnel a common purpose with respect to the activity complained of. Indeed Averbach’s allegations suggest that while those responsible for conducting Rival Manufacturing Company’s defense of product liability litigation may have had a common or shared purpose, that purpose was quite at variance with those of the judges and support personnel of the district court. If Averbach’s allegations are true, no more occurred with respect to the enterprise in question than to mislead those who conducted it.

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Bluebook (online)
809 F.2d 1016, 6 Fed. R. Serv. 3d 1144, 1987 U.S. App. LEXIS 1166, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sylvia-averbach-v-rival-manufacturing-co-ca3-1987.