The opinion of the court was delivered by: William T. Hart, District Judge.
MEMORANDUM OPINION AND ORDER
The plaintiff, The Pit Pros, Inc. ("Pit"), a California
corporation, filed a one count civil complaint against the
defendants Lou Wolf, Sheldon E. Howard, Joseph Berke and Time
Realty Company ("defendants"), residents of or doing business in
Chicago, Illinois. Pit alleges that the district court has
jurisdiction pursuant to the so-called RICO Act, 18 U.S.C. § 1961
et seq. RICO primarily has been used as a criminal statute,
but it provides for private civil actions as well. 18 U.S.C. § 1964.
Thus a person who has been injured in his business or
property may seek treble damages and attorneys' fees where such
injury resulted from, among other things,
any person employed by or associated with any
enterprise engaged in, or the activities of
which affect, interstate or foreign commerce,
[who] . . . conduct[s] or participate[s],
directly or indirectly, in the conduct of such
enterprises affairs through a pattern of
racketeering activity. . . .
The defendants owned or controlled an improved parcel of land
located in Chicago, Illinois which Pit desired to lease
presumably in order to operate an automobile lubrication
facility. Pit alleges that the defendants falsely and knowingly
represented that the property was zoned for such an activity and
that the title did not contain a restrictive covenant to the
contrary. Subsequently Pit discovered adverse zoning and a
restrictive covenant. The defendants allegedly have refused to
return Pit's earnest money in the amount of $3,000.00. Pit
further alleges that the alleged material misrepresentations,
upon which it claims to have relied, were transmitted by mail and
wire. Therefore, Pit asserts that a scheme or artifice within the
parameters of RICO is established.
Pitt's complaint must be dismissed, however, because it is
missing at least one of the requisite elements of a RICO claim — an
allegation of a pattern of racketeering. 18 U.S.C. see. 1961(5).
Section 1961(1) defines "racketeering activity" as "acts
involving" enumerated state and federal criminal violations. A
"pattern" is formed by the commission of two or more such "acts,"
the last of which must have occurred within ten years of a prior
"act." 18 U.S.C. § 1961 (5). The enumerated acts or predicate
acts do not include common law fraud but do include the federal
crimes of mail or wire fraud. See, e.g., Adair v. Hunt
International Resources Corp., 526 F. Supp. 736, 746 (N.D.Ill.
Here, at best, Pit alleges that the defendants committed a
single act of common law fraud in regard to a single real estate
transaction. There is no allegation that in furtherance of this
supposed scheme or artifice the defendants committed two or more
of the requisite criminal acts. Even if Pit alleged two instances
of mailings or phone calls, this complaint does not come close to
making out a case of mail or wire fraud. See, e.g., United States
v. George, 477 F.2d 508, 511 (7th Cir. 1973); Salisbury v.
Chapman, 527 F. Supp. 577 (N.D.Ill. 1981).
Furthermore, the Court does not believe that the behavior
complained of here, even if proved, is of the type cognizable
under civil RICO. Cf. United States v. Starnes, 644 F.2d 673 (7th
Cir. 1981) (mail fraud, Travel Act in conjunction with arson);
United States v. Weatherspoon, 581 F.2d 595 (7th Cir. 1979)
(multiple counts of mail fraud in conjunction with scheme to
defraud Veteran's Administration of illegally earned benefits for
attending school). In Katzen v. Continental Illinois National Bank
& Trust Co., No. 80 C 1378 (August 14, 1980), Judge Marshall
[the George doctrine] has not gone as far as
this complaint would have it go. . . . Whatever,
the conduct ascribed to defendants does not
constitute that type of behavior which the
mail/wire fraud statutes were intended to
prosecute. We suggest that counsel settle down
and handle this case for what it is — a commercial
action involving a disappointed investor who may
or may not have a claim against the defendants.
Similarly, Pit may or may not have a valid claim for
misrepresentation or breach of contract against the defendants.
But, his complaint does not state a claim under RICO.
Accordingly, defendants' motion to dismiss the complaint is
granted. Pit is given 20 days in which to amend its complaint if
it so chooses. A status hearing is set for January 27, 1983 at
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