the Court concludes that a reasonable jury could not find an intent to defraud.
Finally, Schwarz alleges that Canapary represented his organization as an incorporated entity that was expert in the planning of pension plans, when it was in fact neither a corporation nor expert. Id. paras. 13, 40. But his allegations as to Canapary's representation of himself as an "expert" are intolerably ambiguous. For example, Schwarz states that when he first met with Canapary, Canapary said that he "specialized in providing professional consulting services." Schwarz Aff. para. 13. Later, Schwarz says that he would not have accepted Canapary's advice had he known Canapary was not an "expert" -- whatever that means -- in pension planning. Id. para. 40. But plaintiffs have not established that pension consulting is an area with regulated standards of expertise; as related by Schwarz's affidavit, it would appear that Canapary at most engaged in puffing up his credentials. In any event, Canapary did have a working relationship with both Home Life, which did specialize in designing pension products and pension plans, as well as with a professional actuarial firm. Canapary thus did in fact specialize in pension consulting. As for Schwarz's claim that he would not have dealt with Canapary had he known that QP/PSC were not incorporated, this stands the usual rule on his head. The ordinary rule is that an incorporated entity, with its theoretically limited liability, must disclose the fact of incorporation in its business dealings.
In short, Schwarz pleads a level of ignorance and naivete that is implausible in light of his level of education, age, and previous experience managing AAP's substantial pension investments. It becomes even more implausible in light of the fact that Schwarz was represented by counsel (who he now sues for malpractice) when he adopted the Home Life approach. The Court finds much truth in defendants' argument that this suit was prompted by the buyer's remorse Schwarz felt when interest rates briefly skyrocketed in the late '70s, making the FA a relatively less attractive investment than some mutual funds.
Having examined all of the evidence, the Court concludes that a reasonable jury could not find that defendants engaged in a scheme to defraud. Accordingly, the Court grants summary judgment in favor of defendants and against plaintiffs on the RICO counts. And having granted summary judgment on all of the federal claims, the Court, determining in its discretion pursuant to Gibbs not to exercise pendent jurisdiction over the state malpractice claim against the Levenfeld defendants, dismisses that claim without prejudice.
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