United States District Court, N.D. Illinois Eastern Division
August 2, 2005.
PATRICIA ANN CRISAFULLI, Plaintiff,
MICHAEL GARCIA, SONHERO KHOSHABA, AARON SPIVACK d/b/a LAW OFFICES OF AARON SPIVACK, JULIE M. RAMOS, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., a Delaware corporation, UNKNOWN OWNERS AND NON-RECORD CLAIMANTS, Defendants.
The opinion of the court was delivered by: ELAINE E. BUCKLO, District Judge
MEMORANDUM OPINION AND ORDER
Patricia Ann Crisfulli (plaintiff) sues defendants Michael
Garcia, Sonhero Khoshaba, Aaron Spivack, Julie M. Ramos, Mortgage
Electronic Registration Systems, Inc. (MERS), a Delaware
corporation, as well as Unknown Owners of Record and Non-record
Claimants. The amended complaint purports to state two claims for
relief, one against the individual defendants for violation of
the Racketeer Influenced and Corrupt Organizations Act of 1970,
18 U.S.C. § 1961 et seq. (RICO), and the other, against all
defendants, to quiet title to a condominium apartment in
Evanston, Illinois. Before the court is plaintiff's unopposed
motion for summary judgment.
Defendants Garcia, Khoshaba, and Spivack have been personally
served with process and held in default for failure to appear. Defendant Ramos was served by publication and has also failed to
appear. MERS has filed an answer in which it pled insufficient
knowledge to admit or deny the complaint and requests a finding
that it has a valid and enforceable first mortgage lien on the
Summary judgment is proper if the record shows that there is no
genuine issue as to any material fact, and that the moving party
is entitled to judgment as a matter of law. Fed.R.Civ.P.
56(c). In deciding a motion for summary judgment, I must view all
evidence in the light most favorable to the nonmoving party,
Valley Liquors, Inc. v. Renfield Importers, Ltd., 822 F.2d 656,
659 (7th Cir.), cert. denied, 484 U.S. 977 (1987), and must
draw all reasonable inferences in the non-movant's favor.
Santiago v. Lane, 894 F.2d 218, 221 (7th Cir. 1990). Further,
the Seventh Circuit has held that summary judgment motions, even
when unopposed, must be carefully scrutinized to ensure that the
record warrants the relief requested. Nabozy v. Podlesny,
92 F.3d 446, 457 n. 9 (7th Cir. 1996). I have reviewed plaintiff's
summary judgment motion and supporting papers. I find that
plaintiff has not established her right to a summary judgment
Plaintiff's allegations may be briefly summarized as follows.
Plaintiff owns a condominium apartment described as #3B, 250
Ridge Avenue, Cook County, Evanston, Illinois (the "Property").
On or about January 5, 2004, plaintiff met with defendant Garcia,
who held himself out as a real estate salesman, and executed a
listing agreement with him for potential sale of the Property.
Mr. Garcia never presented plaintiff with any contracts or
offers. On or about February 1, 2004, plaintiff called Mr. Garcia
and told him to take the Property off the market. During February
2004, she submitted an application to MERS for refinancing her
first mortgage loan. On or about February 24, 2004, without
plaintiff's knowledge or consent, Mr. Garcia, purportedly acting
as plaintiff's agent and using a fraudulently procured Power of
Attorney and Deed, which were attested by defendant Ramos, a
notary public, effectuated a transfer of the Property to
defendant Khoshaba. Law Title Insurance Company issued checks for
the proceeds of the fraudulent transaction to plaintiff. Mr.
Garcia immediately endorsed the checks made payable to plaintiff
to unknown third parties who absconded with the funds. Plaintiff
did not learn about the transaction or the fraudulent deed to Mr.
Khoshaba until June 2004. The Deed states that plaintiff was the
preparer of the instrument, and defendant Ramos was the notary
public attesting to the Plaintiff's signature. Plaintiff did not
prepare or execute the Deed. The settlement statement for the
transaction indicates that defendant Spivack, a lawyer, was paid
$750 from Seller's funds, apparently for representation of
plaintiff. Plaintiff has never communicated with Mr. Spivack
about anything, much less retained him to represent her with
regard to the fraudulent closing. Plaintiff has received no funds as a result of the checks issued
by Law Title at the fraudulent closing. Plaintiff now desires to
sell the Property but cannot do so because title "is vested in
the name of Khoshaba." Plaintiff further alleges defendants
Garcia, Koshaba, Spivack and Ramos constitute an "enterprise" as
that term is defined in RICO, 18 U.S.C. § 1961, which enterprise
engaged in "the activities of which affect interstate commerce."
(sic) "Subsequent to the execution of the Quit Claim Deed,
through February 27, 2004, Defendants Garcia, Khoshaba, Spivack
and Ramos engaged in a series of communications and discussions
in an effort to devise, foster or create a fraudulent pretext
upon which to eliminate [Plaintiff's] ownership interest in the
Property . . . "Said defendants communicated by wire (telephone)
in executing the scheme to defraud Plaintiff, and each use of the
wires in furtherance of the scheme constitute (sic) a separate
offense. Defendants Garcia, Khoshaba and Spivack used income
derived from a pattern of racketeering activity . . ." Plaintiff
does not reference any other violations of RICO by the individual
Assuming that all of plaintiff's allegations are true, they
still do not prove a claim under RICO, and plaintiff has not won
a ticket to the federal court by pleading the statute. For the
following reasons, which are not intended to be exhaustive, the
"garden variety" fraud shown by plaintiff does not come within
the purview of RICO.
1. Plaintiff has not shown that the individual defendants
constitute an "enterprise." She makes no attempt to show that
they had any type of organizational structure. A RICO enterprise
is "more than a group of people who get together to commit a
pattern of racketeering activity." Stachon v. United Consumers
Club, Inc., 229 F.3d 673, 676 (7th Cir. 2000). In Stachon,
the Seventh Circuit noted that an enterprise is not defined by
what it does. See also ABN Ambro Mortgage, Inc. v. Maximum
Mortgage, Inc., Case No. 1: Civ. 04CV492, 2005 WL 1162889 at *9,
(N.D. Ind., May 6, 2005).
2. Racketeering activity is a defined term; the types of
offenses which qualify for that designation are enumerated in
18 U.S.C. § 1961. Plaintiff, choosing from the statute's menu of
offenses, has opted to base her RICO claim on wire fraud, here
the use of the telephone by the individuals who participated in
effecting the fraudulent conveyance of title to her condominium
apartment, but she has not proved the elements of that claim. The
individual conversations are not described.
3. It is necessary to show a pattern of racketeering activity
consisting of at least two predicate acts of racketeering in
order to bring a case, criminal or civil, within the terms of the
statute. The pattern requirement seeks to prevent RICO from being
used as a surrogate for actions that involve "garden variety"
fraud. Midwest Grinding Co., Inc. v. Spitz, 976 F.2d 1016, 1022
(7th Cir. 1992). Multiple criminal acts in furtherance of a single scheme usually
do not meet the pattern requirement. Olive Can Co., Inc v.
Martin, 906 F.2d. 1147, 1151 (7th Cir. 1990). One cannot
reasonably infer a threat of continuing criminal activity from
the facts shown by plaintiff. See CIB Bank v. Esmail, 2004 WL
3119027 at *5, Case No. 04 C 4870 (N.D. Ill. Dec. 28, 2004).
For the foregoing reasons, I deny plaintiff's summary judgment
motion. I must also dismiss her RICO claim for lack of
jurisdiction over the subject matter. United States district
courts are courts of limited jurisdiction; they have only such
subject matter jurisdiction as Congress chooses to confer upon
them. Teamsters Nat. Transporters Ind. V. Troha, 328 F.3d 325,
327 (7th Cir. 2003). Fed.R.Civ.P. 12(h)(3) provides that
Whenever it appears by suggestion of the parties or
otherwise that the court lacks jurisdiction of the
subject matter, the court shall dismiss the action.
Plaintiff has demonstrated clearly that she has no viable claim
Plaintiff's sole asserted basis for my jurisdiction over her
state law claim is the doctrine of pendent jurisdiction, which
does not apply. Buethe v. Britt Airlines, Inc., 749 F.2d 1235,
1239-40 (7th Cir. 1984) ("The doctrine of pendent jurisdiction
gives a federal court power to hear a claim that has no
independent basis for federal jurisdiction if the claim derives
from a `common nucleus of operative fact' with a federal claim
that is substantively sufficient to confer subject matter jurisdiction on the
court.") (emphasis added). Plaintiff's federal claim is not
substantially sufficient to confer jurisdiction. If plaintiff
proves that she was defrauded by the individual defendants in a
state court, that court may award her damages, which this court
cannot. Thus, judicial economy will be served if the underlying
facts of Plaintiff's claims are adjudicated in a tribunal that
can grant her complete relief. I therefore dismiss Count II
without prejudice and terminate this action.
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