Trundy v. Strumsky

• Court: Court of Appeals for the First Circuit
• Decided: September 3, 1992
• Docket: 92-1056
• Status: Published

Opinion

USCA1 Opinion

          September 3, 1992     [NOT FOR PUBLICATION]

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No. 92-1056

CHRISTOPHER C. TRUNDY, ET AL.,

                               Plaintiffs, Appellants,

                                          v.

                              RICHARD STRUMSKY, ET AL.,

                                Defendants, Appellees.

                                  __________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                     [Hon. William G. Young, U.S. District Judge]
                                             ___________________

                                 ___________________

                                        Before

                                 Breyer, Chief Judge,
                                         ___________
                           Campbell, Senior Circuit Judge,
                                     ____________________
                              and Selya, Circuit Judge.
                                         _____________

                                 ___________________

               Christopher C. Trundy on brief pro se.
               _____________________
               Paul J. McDonald, Steinkrauss & McDonald, Sonia S.  Baghdady
               ________________  ______________________  __________________
          and Gary F. Ritter on brief for appellees. 
              ______________
          Sidney J. Dockser on brief pro se.
          _________________

__________________

                                 __________________ 

Per Curiam.   In  1981 appellant Christopher  Trundy and
                 __________

            appellees Richard and Joanne  Strumsky and Edward and Deborah

            McCormick  formed a  debt  collection agency  called National

            Equity  Corporation.    Trundy   held  the  majority  of  the

            company's  stock.   The enterprise  collapsed in  acrimony in

            1984.   Trundy  then  sued his  four erstwhile  co-venturers,

            along with  appellee Sidney Dockser, their  lawyer, and Wayne

            Krupsky, an  accountant who  had worked for  National Equity.

            He  alleged   that  the  six  defendants   had  violated  the

            Racketeering Influenced and Corrupt Organizations Act (RICO),

            18  U.S.C.    1961  et seq.,  by forcing  Trundy  out of  the

            company and  converting its assets  to their own  benefit for

            use  in a  new debt collection  agency called  North American

            Equity.  Trundy also  asserted a number of pendent  state law

            claims.

                 At  length the  district court  heard and  granted Wayne

            Krupsky's motion  for summary  judgment.  Although  the other

            defendants  had not  filed dispositive motions,  the district

            court  granted  summary judgment  to  them,  too, ruling  sua
                                                                      ___

            sponte that  Trundy had  failed to create  a triable  dispute
            ______

            about  an  essential  element  of   his  RICO  claim  --  the

            commission  of  a "pattern"  of predicate  racketeering acts.

            Trundy  appealed.   We  affirmed  the  judgment in  favor  of

            Krupsky, but  remanded the matter  with respect to  the other

            defendants   after  finding  that  Trundy  had  not  received

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sufficient  notice  of  the  district  court's  intention  to

            subject  his  claims  against  those  defendants  to  summary

            judgment  scrutiny.   Trundy  v. Strumsky,  No. 90-1228  (1st
                                  ______     ________

            Cir., September 26, 1990).

                 After  the remand,  the Strumskys,  the  McCormicks, and

            Dockser  moved for  summary  judgment.   Trundy submitted  an

            opposition and  the district  court, reiterating  its opinion

            that  Trundy  had  not  created  a  triable issue  about  the

            defendants' alleged commission of a "pattern" of racketeering

            activity,  gave  judgment  to   the  defense.    This  appeal

            followed.  We affirm.

                 Before we can discuss  the merits of the appeal  we must

            dispose of  a jurisdictional  matter.  The  amended complaint

            named as plaintiffs "Christopher  C. Trundy, individually and

            in behalf  of National Equity  Corporation."   The notice  of

            appeal, however,  named only "Christopher C.  Trundy, et al."

            as appellants.   It is settled  law that  a court of  appeals

            "lacks power to  entertain an appeal from a  party who is not

            specified in the  notice of  appeal," and that  the term  "et

            al." does not indicate  that parties not otherwise designated

            intend  to  join  the  appeal.   Kaiser  v.  Armstrong  World
                                             ______      ________________

            Industries, 872 F.2d 512, 513-14 (1st Cir. 1989).  Therefore,
            __________

            we  take this as an appeal only by Trundy "individually," and

            not in behalf of the defunct corporation.

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Trundy   accused   the  defendants   of   violating  two

            substantive  provisions  of the  RICO  statute,  18 U.S.C.   

            1962(b)  and (c),  by committing  a "pattern  of racketeering

            activity."   His  opposition  to the  defendants' motion  for

            summary judgment described  a number of events  which he said

            constituted,  and   made  up  the  "pattern"   of,  predicate

            racketeering acts.   With  only two exceptions,  however, the

            source  of  his   description  was  his  unverified   amended

            complaint.  A party who opposes a motion for summary judgment

            must establish the existence  of a genuine issue  of material

            fact, and in so doing "may not rest upon mere allegations in,

            say,  an unverified  complaint  or lawyer's  brief, but  must

            produce evidence  which would be admissible at  trial to make

            out the requisite issue  of material fact."  Kelly  v. United
                                                         _____     ______

            States, 924 F.2d 355, 357 (1st  Cir. 1991).  See also Fed. R.
            ______                                       ________

            Civ.  P. 56(e)  (party opposing  motion for  summary judgment

            "may  not rest upon the  mere allegations or  denials" of his

            pleadings). 

                 Even if we were to credit  the unsupported assertions in

            Trundy's  amended complaint, we would not find a RICO pattern

            in the events he describes.  In order to establish a pattern,

            a plaintiff  "must show that the  racketeering predicates are

            related,  and that  they  amount  to  or  pose  a  threat  of
                      ___

            continued  criminal activity."    H.J., Inc.  v. Northwestern
                                              __________     ____________

            Bell  Telephone Co.,  492  U.S. 229,  239 (1989).     He  can
            ___________________

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establish that  the racketeering acts are  related by showing

            that  they  "have  the  same or  similar  purposes,  results,

            participants, victims, or methods of commission, or otherwise

            are  interrelated by  distinguishing characteristics  and are

            not  isolated events."    Id.  at  240.    He  can  establish
                                      ___

            continuity in either  of two  ways: (1) by  showing that  the

            predicate acts "amount to"  continued criminal activity, that

            is, "by proving a series of related predicates extending over

            a substantial period of time," id. at 242,  or (2) by showing
                                           ___

            that the predicate acts  pose a threat of  continued criminal

            activity in that "the  racketeering acts themselves include a

            specific threat of repetition extending indefinitely into the

            future [or] . . . are part of an ongoing entity's regular way

            of doing business."  Id.
                                 ___

                 At  the core  of the  amended complaint  are allegations

            that  various  of the  defendants  committed  eleven acts  of

            extortion  in  1984  by  threatening  Trundy  with   criminal

            prosecution,  public embarrassment, or (in one case) physical

            harm if Trundy  did not  surrender his  interest in  National

            Equity.  Trundy identified Mr. Strumsky as the source of four

            of  these  threats, and  says  that  Mrs. Strumsky  made  one

            threat, Mr. McCormick another, and Dockser three; he tells us

            only  that "the defendants" made the other two.  Because they

            had  similar methods  of  commission and  a  common goal  and

            victim, the alleged  instances of extortion  are sufficiently

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"interrelated by distinguishing  characteristics" to  satisfy

            the relationship  requirement set forth by  the Supreme Court

            in H.J., Inc.
               __________

                 The  allegations of extortion do not, however, establish

            the  requisite "continuity."   First,  it is  clear that  the

            defendants'  acts do not pose a  threat of continued criminal

            activity.    By Trundy's  own  account,  the extortion  ended

            nearly eight years ago  and nothing in the record  even hints

            at the possibility of its revival.

                 Second,  the  series  of  extortionate  threats  did not

            amount  to continued criminal  activity.  The  Court in H.J.,
                                                                    _____

            Inc.  specifically  excluded  conduct "extending  over  a few
            ____

            weeks or  months" from its definition of a pattern.  492 U.S.

            at  242.  The extortionate  threats here are  alleged to have

            taken  place  over  a  period of  eight-and-one-half  months,

            beginning  in late January 1983  and ending in  the middle of

            September  of  that year.    Their  frequency, moreover,  can

            accurately be described as  "sporadic."  See H.J., Inc.,  492
                                                     ___ __________

            U.S. at 239 (a pattern is not formed by "sporadic activity").

            Trundy alleges that  the defendants made five threats  in the

            five-day period between January 28 and February 1, one threat

            later in February,  none in March, one in April,  none in May

            or June, one in July,  none in August, and the last  three in

            September.  Such fitful activity, extending over a  period of

            only  several  months, does  not  demonstrate the  continuity

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necessary  to  form  a RICO  pattern,  see,  e.g., Hughes  v.
                                                   __________  ______

            Consol-Pennsylvania  Coal Co.,  945  F.2d 594,  611 (3d  Cir.
            _____________________________

            1991)  (acts   committed  over  twelve-month   period  not  a

            pattern); J.D.  Marshall Int'l,  Inc. v. Redstart,  Inc., 935
                      ___________________________    _______________

            F.2d  815, 820-21  (7th  Cir. 1991)  (thirteen months);  Kehr
                                                                     ____

            Packages, Inc.  v. Fidelcor, Inc.,  926 F.2d  1406, 1418  (3d
            ______________     ______________

            Cir.  1991)  (eight months);  Parcoil  Corp.  v. Nowsco  Well
                                          ______________     ____________

            Service, Ltd.,  887  F.2d 502,  503-5 (4th  Cir. 1989)  (four
            _____________

            months); Sutherland  v. O'Malley, 882 F.2d  1196, 1204-5 (7th
                     __________     ________

            Cir.  1989) (five  months),  especially where,  as here,  the

            events are merely the constituent parts of a "single criminal

            episode."  Apparel  Art Int'l, Inc. v.  Jacobson, No. 91-2070
                       ________________________     ________

            (1st Cir., June 26, 1992),  slip op. at 7-9; cf.  H.J., Inc.,
                                                         ___  __________

            492  U.S. at 240 (proof that the defendant "has been involved

            in  multiple  criminal  schemes  would  certainly  be  highly

            relevant to the inquiry into . . . continuity").

                 Trundy contends  that the  relevant events in  this case

            occurred over a period  of thirty-four rather than eight-and-

            one-half months.  He obtains the higher figure by counting as

            predicate  acts  the  alleged  filing  of  a  fraudulent  tax

            document  by  Mrs.  Strumsky   in  September  1985,  and  the

            incorporation  of  the second  debt collection  agency, North

            American Equity, in November 1986. 

                 Trundy's calculation  is inconsistent with  the logic of

            RICO's  pattern   requirement.      We   suppose   that   the

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incorporation  of  North  American  Equity  might  be  deemed

            "related" to the extortion  in an attenuated sense.   One can

            infer relatedness  by assuming that the  act of incorporation

            essentially renamed  what was once National  Equity, and thus

            represented  the coup de grace  in a struggle  for control of
                             _____________

            the enterprise that began with the alleged extortion.  

                 Yet however related  it may be  to the earlier  threats,

            the  incorporation  of  North   American  Equity  was  not  a

            predicate  crime,  and  if   a  defendant's  misdeed  is  not

            "racketeering activity," it cannot form an  element of a RICO

            pattern.  See  Fleet Credit Corp. v. Sion, 893  F.2d 441, 445
                      ___  __________________    ____

            (1st Cir.  1990).  "Racketeering  activity" is defined  in 18

            U.S.C.    1961(1) to mean the commission  of specific crimes,

            including mail fraud  in violation  of 18 U.S.C.    1341  and

            wire fraud in violation of 18 U.S.C.   1343.  We take it that

            Trundy  considers  the incorporation  fraudulent,  but common

            fraud is not racketeering activity, see Fleet Credit Corp. v.
                                                ___ __________________

            Sion, 893 F.2d  at 445, and we cannot assume  that the act of
            ____

            incorporation violated  either Section  1341 or Section  1343

            absent evidence  that the fraud was  accomplished through use

            of the mails  or interstate  wires.  The  assertions to  that

            effect  in  Trundy's appellate  brief  do not  suffice.   See
                                                                      ___

            Gooley v.  Mobil Oil Corp.,  851 F.2d 513, 515  n.2 (1st Cir.
            ______     _______________

            1988)  ("representations   in  a  brief   are  an  impuissant

            surrogate for a record showing").   

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The allegedly fraudulent tax filing -- whether or not it

            was accomplished  by mail or wire  -- was not  related to the
                                                      ___

            extortion in the sense  demanded by the definition of  a RICO

            pattern.   According  to Trundy, the  fraud consisted  of the

            false representation  in a tax  return that Trundy  alone was

            responsible  for  National  Equity's unpaid  taxes;  it  thus

            appears to have been  aimed not at the hijacking  of National

            Equity, but  at  saddling Trundy  with a  debt that  properly

            belonged to the defendants  as well.  Mrs. Strumsky's  effort

            to  avoid tax liability was "too separate, too distinct . . .

            to permit  a finding  that, taken together  with the  earlier

            acts, it is part  of a racketeering 'pattern.'"   Apparel Art
                                                              ___________

            Int'l, Inc. v. Jacobson, supra, slip op. at 12-13.
            ___________    ________  _____

                 The judgment of the district court is affirmed.
                                                       ________

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