dismiss Counts II, III, and V as barred by the statute of limitations.
D. Alleging Fraud with Particularity
Defendants also seek dismissal of Count Ill (common law fraud) on the ground that the Terrells have failed to allege fraud with particularity. Rule 9(b) of the Federal Rules of Civil Procedure requires that "the circumstances constituting fraud . . . be stated with particularity." This rule, however, must be read in conjunction with the general requirements of Rule 8(a), which states that a plaintiff need only plead a "short and plain statement of the claim showing that the pleader is entitled to relief." As a result, "a complaint is considered sufficient if it sets forth the time, place, particular contents of the false representation, the identity of the party making the misrepresentation, and the consequences of the misrepresentation." Onesti v. Thomson McKinnon Securities, Inc., 619 F. Supp. 1262, 1265 (N.D. Ill. 1985). However, when numerous transactions are involved, and take place over a period of time, less specificity is required. Id.
In the present case, the Terrells have sufficiently alleged the above elements. Throughout the entire complaint, they set forth the details of each of the alleged misrepresentations, including the party or parties making the representation, as well as the place, subject matter, and time frame thereof. Furthermore, the allegations clearly set forth facts which warrant "an inference of actual knowledge necessary for a showing of scienter." Design Time v. Synthetic Diamond Technology, 674 F. Supp. 1564, 1571 (N.D. Ind. 1987). We therefore reject defendants' claim that Count III fails to satisfy Fed. R. Civ. P. 9(b), and deny defendants' motion to dismiss it on that basis.
E. Alleging Agreement Between the Defendants
Defendants next argue that Counts IV (conspiracy to commit fraud) and VIII (RICO conspiracy) should be dismissed, claiming that the Terrells have failed to allege with particularity facts which demonstrate the existence of an agreement.
It is well established that an agreement between co-conspirators is an essential element of a conspiracy. See, e.g., Koulouris v. Estate of Chalmers, 790 F. Supp. 1372, 1378 (N.D. Ill. 1992). However, "because a conspiracy is difficult to prove with direct evidence, it may be established with circumstantial evidence and legitimate inferences therefrom." Bosak v. McDonough, 192 Ill. App. 3d 799, 549 N.E.2d 643, 646, 139 Ill. Dec. 917 (Ill. App. Ct. 1989). We find that the Terrells have alleged sufficient facts to support the inference of an agreement. The complaint sets forth various occasions on which two or more of the defendants were alleged to have acted together in defrauding the Terrells. In addition, it alleges that the defendants "combined, confederated and conspired to defraud plaintiffs." Finally, John Childers, Mike Childers, and Frank Schuette are all officers of TSI; the apparent closeness with which they worked and the extent of their individual and collective involvement in the Terrell's financial affairs clearly supports an inference of agreement. See Carl v. Galuska, 785 F. Supp. 1283, 1288 (N.D. Ill. 1992) (close employment and agency relationship supports inference of agreement among alleged co-conspirators). Accordingly, we deny defendants' motion to dismiss Counts IV and VIII.
F. Declaratory Judgment
The Terrells seek a declaration that they are entitled to indemnification from the defendants for damages and costs resulting from any mortgage foreclosure or related litigation regarding the property at 2134 Pine Street in Philadelphia. The defendants have moved to dismiss, claiming that there is no present "actual controversy" within the meaning of the Declaratory Judgment Act, 28 U.S.C. § 2201. We disagree.
It is true, as defendants argue, that no foreclosure action has been filed, and, as a result, it is unclear whether there will be any deficiency judgment ultimately entered against Walt Terrell. However, as noted in Wright & Miller:
It is clear that in some instances a declaratory judgment is proper even though there are future contingencies that will determine whether a controversy ever actually becomes real. The familiar type of suit, in which a liability insurer seeks a declaration that it will not be liable to indemnify an insured person for any damages the injured person may recover against the insured, is an example. The injured person may not sue or he may not obtain a judgment against the insured, but there is held to be sufficient controversy between the insurer and the injured person that a declaratory judgment is permissible.
10A Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 2757 at 586 (2d ed. 1983). Accord Associated Indem. Corp. v. Fairchild Indus., Inc., 961 F.2d 32, 35 (2d Cir. 1992). We are faced here with a nearly identical situation. Walt Terrell has been threatened with foreclosure, and the dates to remedy the existing default have passed. The "contingencies" existent in this case are therefore no more speculative than those contemplated in the traditional insurer indemnification declaratory judgment action, and thus do not preclude our review. Accordingly, we deny defendants' motion to dismiss the request for a declaratory judgment.
G. Pattern of Racketeering Activity
Defendants also move to dismiss Count VII (RICO) of the complaint, arguing that the Terrells have failed to adequately allege a pattern of racketeering activity, as required by the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1962 et seq.5 Although the statute itself provides little guidance as to what constitutes a "pattern of racketeering activity," the Supreme Court, in H.J., Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229, 106 L. Ed. 2d 195, 109 S. Ct. 2893 (1989), clarified the statutory requirements. There, the Court concluded that "to prove a pattern of racketeering activity 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., 492 U.S. at 239 (emphasis omitted). Defendants argue that the Terrells have met neither prong of this "continuity plus relationship" test. We disagree.
The relatedness element of a RICO claim is established if the defendants' conduct "embraces criminal acts that 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." H.J., Inc., 492 U.S. at 240 (quoting 18 U.S.C. § 3575(e)). The Terrells have alleged that the defendants used the mails and interstate telephone calls to defraud Walt Terrell out of 5% of his annual income, providing incompetent investment advice and making inappropriate and deceptive investments to TSI's benefit. In particular, the Terrells point to the activities of the defendants in conjunction with the Pine Street and Strata Energy investments, the annuity purchase, and the income tax overpayments. These various acts had the same purpose and result, and involved the same participants. Based upon the allegations of the complaint, the Terrells have therefore met the threshold for establishing the "relationship" element of a RICO pattern.
They have also adequately alleged "continuity." The Court in H.J., Inc. set forth guidelines for showing this element:
"Continuity" is both a closed- and open-ended concept, referring either to a closed period of repeated conduct, or to past conduct that by its nature projects into the future with a threat of repetition.
H.J., Inc., 492 U.S. at 241. We find that the Terrells have alleged behavior which arguably supports a finding of either a closed- or open-ended scheme. Because TSI no longer represents Walt Terrell, the plaintiffs have in some sense alleged a closed-ended scheme. The complaint sets forth a "series of related predicates extending over a substantial period of time." H.J., Inc. 492 U.S. at 242. Defendants' various actions in furtherance of the alleged scheme to defraud the Terrells took place over an eight year period, clearly satisfying the "substantial period of time" requirement. Furthermore, contrary to defendants' assertions, the fact that TSI no longer represents Walt Terrell is not fatal to plaintiffs' RICO claim. Indeed, the very nature of a "closed -ended scheme" is that it has, in fact, come to a close. We therefore find that the Terrells have adequately alleged such a scheme.
In addition, they have arguably set forth an open-ended scheme. This type of RICO claim hinges upon a showing that the scheme demonstrates "a specific threat of repetition extending indefinitely into the future," or that the offenses involved "are part of an ongoing entity's regular way of doing business." H.J., Inc., 492 U.S. at 242. Here, the complaint sets forth two other lawsuits in which TSI and John Childers are defendants, and both of which involve those defendants providing allegedly fraudulent investment advise to professional athletes. This type of allegation, evidencing similar schemes directed against multiple similar victims, is sufficient to support an allegation of continuity.
See, e.g., Morgan v. Bank of Waukegan, 804 F.2d 970, 975 (7th Cir. 1986) (multiple victims factor supporting RICO claim).
We are cognizant of the rarity with which civil RICO claims based upon business fraud are successful. See Midwest Grinding Co. v. Spitz, 976 F.2d 1016, 1025 (7th Cir. 1992). Nonetheless, given the deference owed plaintiffs' complaint at the motion to dismiss stage, we find that plaintiffs have adequately alleged the basis of a RICO claim. We, of course, do not hold that defendants actually engaged in racketeering activity, or committed the alleged predicate acts; we simply conclude that the allegations, as set forth, arguably support that conclusion. Accordingly, we deny defendants' motion to dismiss.
For the reasons set forth above, we deny defendants' motion to dismiss. In addition, we grant plaintiffs leave to amend their complaint to remedy the internally inconsistent prayer for relief. It is so ordered.
MARVIN E. ASPEN
United States District Judge