Carter Footwear, Inc. v. Graystone World-Wide, Inc.
Carter Footwear, Inc. v. Graystone World-Wide, Inc.
Opinion of the Court
MEMORANDUM
Before the court for disposition are motions to dismiss filed by several defendants in the above-captioned action. The plaintiffs are Carter Footwear and Del-Line, LLC, and the moving defendants are Patricia Wilds and William Madden. The matter has been fully briefed and argued and is thus ripe for disposition.
Background
Plaintiffs filed the instant RICO action alleging that the defendants engaged in an illegal scheme to defraud and cheat the investing public through false and materially misleading representations concerning the operations and assets of Defendant Gray-stone. Defendants Patricia Wilds and William Madden have filed motions to dismiss alleging that the court lacks jurisdiction over them or in the alternative that the complaint fails to assert a valid cause of action against them. After a careful review, and for the reasons that follow, the motions to dismiss will be denied.
Discussion
A. Personal Jurisdiction
Federal Rule of Civil Procedure 12(b)(2) provides that a party may file a
B. Failure to state a claim
Defendants allege that the plaintiffs’ complaint should be dismissed for non compliance with Fed.R.Civ.Pro. 9(b), or for failure to state a claim pursuant to Fed.R.Civ.Pro. 12(b)(6)
Rule 9(b) of the Federal Rules of Civil Procedure provides that “[i]n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity.” Fed.R.Civ.Pro. 9(b). The Third Circuit has held that Rule 9(b) requires plaintiffs to plead with particularity the “circumstances” of the alleged fraud in order to place the defendants on notice of the precise misconduct with which they are charged, and to safeguard defendants against spurious charges of immoral and fraudulent behavior. Seville Indus. Mach. Corp. v. Southmost Mach. Corp., 742 F.2d 786, 791 (3d Cir. 1984), cert. denied, 469 U.S. 1211, 105 S.Ct. 1179, 84 L.Ed.2d 327 (1985). Allegations of “date, place or time” fulfill these functions, but the court found nothing in the rule that requires them. Id. The rule is satisfied where some, precision and some measure of substantiation is present in the pleadings. Killian v. McCulloch, 850 F.Supp. 1239, 1254 (E.D.Pa. 1994).
A review of the complaint, based on this somewhat relaxed standard reveals that claims have sufficiently been pled against the moving defendants. With respect to Defendant Madden, our conclusion rests primarily on the fact that he was listed as an officer of Defendant .Investment Management of America (hereinafter “IMA”). See Compl. H26 and Ex. 12 of Compl. It is therefore appropriate for Madden to remain as a defendant at least until discovery is completed to determine what role, if any, he had in the corporation’s alleged wrongdoing.
Plaintiffs have alleged the following regarding Defendant Wilds: she was an employee of Defendant IMA and intricately involved in all of its affairs, Compl. H 28; she was one of Defendant IMA’s representatives at a Las Vegas show involving a scheme to falsely represent that IMA would fund Defendant Graystone’s acquisition of Carter’s assets, Compl. II102; and she faxed a fraudulent prospectus. Compl. 11109. We find that these allegations are sufficiently precise to substantiate the allegations of fraud. Accordingly, the motion to dismiss will be denied.
. The defendants’ motion alleges violation of Fed.R.Civ.Pro. 12(b)(5), however, we have construed it as a Rule 12(b)(6) motion.
Reference
- Full Case Name
- CARTER FOOTWEAR, INC. and Del-Line, LLC v. GRAYSTONE WORLD-WIDE, INC., Donald J. Hallisy, John J. Melcher, Adam J. Waxman, Concorde International, LLP, Brian Cork, David E. Nelson, Todd L. Kinney, Karl S. Smith, Smith Consulting Services, Inc., Investment Management of America, Inc., Andrew Badolato, Gerald Parker, Anthony Gomes, Ronald Doran, William Madden, Tod Lotz, Patricia Wilds, Douglas Smudz and Daniel Kemp
- Status
- Published