Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_14-cv-04684/USCOURTS-cand-4_14-cv-04684-2/pdf.json

Parties Involved:
Colleen Devlin
Plaintiff
Matthew Figures
Plaintiff
Salle Musical Arts
Defendant
Salle Pianos & Events
Defendant
Tibor Szabo
Defendant

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

MATTHEW FIGURES, et al.,

Plaintiffs,

v.

TIBOR SZABO, et al.,

Defendants.

Case No. 14-cv-04684-HSG 

ORDER DISMISSING COMPLAINT

Defendant Tibor Szabo (“Szabo”), appearing pro se, moves to dismiss the First Amended 

Complaint (“FAC”) filed by plaintiffs Matthew Figures and Colleen Devlin (“Plaintiffs”) on 

January 21, 2015. Dkt. No. 28. The FAC alleges violations of the Racketeer Influenced and 

Corrupt Organizations Act (“RICO”) (18 U.S.C. §§ 1961–1968) and California’s Unfair 

Competition Law (“UCL”) (Cal. Bus. Prof. Code §§ 17200 - 17208) against Szabo and Salle 

Musical Arts d/b/a Salle Pianos & Events (“Salle”) (collectively “Defendants”). Dkt. No. 20. 

The FAC also alleges common-law assault and battery against Szabo. The Court held a hearing 

on Szabo’s motion on March 18, 2015. Having read and considered the parties’ written 

submissions and arguments at the hearing, the Court GRANTS the motion to dismiss Plaintiffs’ 

RICO claims with prejudice. The Court declines to assert supplemental jurisdiction over 

Plaintiffs’ remaining state law claims, and dismisses those claims without prejudice.

I. LEGAL STANDARD

Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint 

if it fails to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion to 

dismiss, the plaintiff must allege “enough facts to state a claim to relief that is plausible on its 

face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). On a motion to dismiss, the court 

accepts as true a plaintiff’s well-pleaded factual allegations and construes all factual inferences in 

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the light most favorable to the plaintiff. Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 

1025, 1031 (9th Cir. 2008). But the plaintiff must allege facts sufficient to “raise a right to relief 

above the speculative level.” Twombly, 550 U.S. at 555. Although the court generally is confined 

to assessing the allegations in the pleadings, when the complaint is accompanied by attached 

documents, such documents are deemed part of the complaint and may be considered in evaluating 

the merits of a Rule 12(b)(6) motion. Durning v. First Boston Corp., 815 F.2d 1265, 1267 (9th

Cir. 1987). A court “need not accept as true allegations contradicting documents that are 

referenced in the complaint.” Lazy Y Ranch Ltd. v. Behrens, 546 F.3d 580, 588 (9th Cir. 2008). 

A statute of limitations defense may be raised by a motion to dismiss “[if] the running of 

the statute is apparent on the face of the complaint.” Ledesma v. Jack Stewart Produce, Inc., 816 

F.2d 482, 484 n. 1 (9th Cir. 1987); Jablon v. Dean Witter & Co., 614 F.2d 677, 682 (9th Cir. 

1980). However, a complaint may not be dismissed unless it appears “beyond doubt” that 

plaintiffs can prove no set of facts that would establish the timeliness of the claim. Hernandez v. 

City of El Monte, 138 F.3d 393, 402 (9th Cir. 1998).

II. BACKGROUND

Unless otherwise noted, the following facts are taken from the FAC and presumed to be

true for purposes of this motion. Defendant Szabo owns and operates Salle, an antique piano 

restoration and sales business located in San Francisco. FAC ¶ 6. Plaintiffs assert claims against

Szabo and Salle on behalf of two separate putative classes. Plaintiff Figures seeks to sue on behalf 

of a class of individuals based on allegations that Szabo fraudulently accepted deposits on and 

promised to deliver classical pianos, but never delivered the pianos. FAC ¶¶ 31 – 35. Figures 

alleges that Szabo tricked him into paying a $6,000 deposit from an out-of-state bank account to 

buy a piano that Szabo did not actually have. FAC ¶ 31. Plaintiff Devlin seeks to sue on behalf of 

a second class of individuals who were “violently assaulted” by Szabo. FAC ¶¶ 36 – 42. Devlin 

alleges that Szabo sexually and physically assaulted her after a musical event held at Salle in 

September 2014. FAC ¶¶ 37 – 38. 

On October 21, 2014, Plaintiffs filed their original complaint alleging that Defendants’ 

actions constituted common law assault and battery and violated the RICO and UCL statutes. Dkt. 

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No. 1. On January 7, 2015, the Court dismissed the original complaint in its entirety for failure to 

allege fraud with particularity as required by Federal Rule of Civil Procedure 9(b). Dkt. No. 10. 

On January 21, 2015, plaintiffs filed the FAC, adding some additional factual detail to the 

allegations in several paragraphs and attaching a number of exhibits. FAC ¶¶ 19 – 35, 43 – 56;

Dkt. Nos. 21 – 26.

Szabo again moves to dismiss the FAC for failure to state a claim. Among other 

arguments, Szabo contends that Plaintiffs’ RICO claims are time-barred. Mot. at 3.

III. ANALYSIS

A. Plaintiffs’ RICO Claims are Time-Barred

The statute of limitations for a RICO claim is four years. Agency Holding Corp. v. 

Malley–Duff & Associates, Inc., 483 U.S. 143, 156 (1987). In determining whether a cause of 

action has been properly pled within the statutory period, courts in this circuit follow the “injury 

discovery” rule. Pincay v. Andrews, 238 F.3d 1106, 1109 (9th Cir. 2001). Under that rule, “the 

civil RICO limitations period begins to run when a plaintiff knows or should know of the injury 

that underlies his cause of action.” Id. A plaintiff is deemed to have “constructive knowledge” of 

a cause of action under the “should know” prong when he “ha[s] enough information to warrant an 

investigation which, if reasonably diligent, would have led to discovery of the fraud.” Id. at 1110

(citation omitted). Importantly, a plaintiff need not have determined that the injury complained of 

is part of a “pattern of racketeering” to trigger the start of the limitations clock. Grimmett v. 

Brown, 75 F.3d 506, 511 (9th Cir. 1996).

As explained below, the facts alleged by Plaintiffs (including facts contained in documents 

they chose to attach to the FAC) conclusively establish that Figures knew or should have known 

of the injury underlying his RICO cause of action -- Szabo’s allegedly fraudulent inducement of 

the $6,000 deposit without any intention of delivering the piano -- by no later than August of 

2010. Because Figures did not file suit until October 21, 2014, his claim is barred by the four-year 

RICO statute of limitations.

The FAC and attached exhibits reflect that Figures first expressed some doubt regarding 

Szabo on November 26, 2009, when Szabo asked Figures to wire money even though Figures had 

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never met Szabo, viewed the merchandise, or visited the showroom. Dkt. No. 26-2 at 5 (email 

from Figures to Szabo stating “I am [leery] of wiring money out of state to a business I have never 

been to”). Despite Figures’ reservations, he sent Szabo a $2,000 deposit on November 27, 2009. 

Dkt. No. 26-2 at 7. At Szabo’s request, Figures then sent another deposit on or around December 

11, 2009. Dkt. No. 26-2 at 9. In total, Figures alleges that he sent Szabo approximately $6,000 in 

November and December of 2009. FAC ¶ 31; Dkt. No. 26-2 at 16. 

The FAC and attached documents further show that by May or June of 2010, Figures 

began to come to the conclusion that the piano for which he had paid the deposit was not going to 

be delivered. He sent a complaint to PayPal indicating that he had sent $4,150 to Szabo without 

receiving merchandise in return. Dkt. No. 26-2 at 14. After submitting this complaint, Figures 

investigated Szabo’s business practices by contacting other individuals who had similar 

complaints about Szabo and Salle. See Dkt. No 26-2 at 15. On June 4, 2010, one of these 

individuals said that Figures was the “victim” of a “scam artist” (referring to Szabo). Dkt. No. 26-

2 at 15.

Shortly thereafter, Figures filed formal complaints with the Federal Trade Commission 

(“FTC”) and the San Francisco District Attorney’s Consumer Protection Unit (“SFDA”). See Dkt. 

No. 26-2 at 17, 18 (response letters from the FTC and SFDA regarding consumer complaints 

submitted by Figures). On June 30, 2010, another alleged victim of Szabo’s scheme told Figures 

that there were a number of similarly-situated individuals, and described “a growing case that this 

is some kind of ponsi [sic] scam.” Dkt. No. 26-2 at 19. On July 10, 2010, Figures emailed the 

SFDA investigator on his case to report that “I received a call from Tibor [Szabo] today saying I’ll 

never get my money back,” and said he had saved the incoming call information on his cell phone. 

Dkt. No. 26-2 at 21. Figures alleges that the investigator informed him that “he would need to file 

a civil lawsuit to recover” the money he had paid to Szabo, but does not specify the date of that 

communication. FAC at ¶ 31(h). 

In late July of 2010, Figures received more emails from other alleged victims of Szabo’s 

scheme, indicating that Figures and others had been “defrauded,” and noting that “there is plenty 

of evidence that [Szabo] is running a scam.” Dkt. No. 26-2 at 22, 23. One of these emails from 

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another alleged victim noted that the SFDA investigator “advised us to file [a] claim, which we 

did,” and said that there was an upcoming court date in mid-August. Id. at 23. 

Accepting Figures’ allegations in the FAC and the attached exhibits as true, it is clear that 

Figures was on constructive notice, if not actual notice, by August 2010 that he had been 

defrauded by Szabo. Because he did not file his complaint until October 2014, more than four 

years later, his RICO cause of action is untimely and must be dismissed.

As a general rule, leave to amend a complaint that has been dismissed should be freely 

granted. Fed. R. Civ. P. 15(a). However, leave to amend may be denied when the Court 

“determines that the pleading could not possibly be cured by the allegation of other facts.” Lopez 

v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000). In this case, Plaintiffs attached documents to the 

FAC which conclusively establish that the statute of limitations began to run no later than August 

2010. Plaintiffs’ attached documents render implausible the FAC’s bare assertion that the fraud 

began in the fall of 2009 and “continu[es] to the present.” See Sprewell v. Golden State Warriors, 

266 F.3d 979, 988-89 (9th Cir. 2001) (affirming district court’s dismissal of claims contradicted 

by documents attached to plaintiff’s complaint); cf. A.R. Int’l Anti-Fraud Sys., Inc. v. Pretoria 

Nat’l Cent. Bureau of Interpol, 634 F.Supp.2d 1108, 1119 (E.D. Cal. 2009) (noting that court 

could consider document attached to the operative complaint in determining whether a cause of 

action was timely). In addition, Plaintiffs already have been given one opportunity to amend their 

complaint, and that effort was unsuccessful. Accordingly, further amendment would be futile, and 

Plaintiffs’ RICO claims are DISMISSED with PREJUDICE. 

B. Plaintiffs’ Supplemental State Law Claims are Dismissed

A district court may decline to exercise supplemental jurisdiction if it has dismissed all 

claims over which it has original jurisdiction. 28 U.S.C. § 1367(c)(3); Sanford v. MemberWorks, 

Inc., 625 F.3d 550, 561 (9th Cir. 2010). “[I]n the usual case in which all federal-law claims are 

eliminated before trial, the balance of factors to be considered under the pendent jurisdiction 

doctrine—judicial economy, convenience, fairness, and comity—will point toward declining to 

exercise jurisdiction over the remaining state-law claims. ” Id. at 561 (citation and internal 

quotation marks omitted). Having dismissed Plaintiffs’ only federal claim with prejudice, the 

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Court, in its discretion, declines to assert supplemental jurisdiction over the remaining state law 

claims. Accordingly, Plaintiffs’ assault and UCL claims are DISMISSED without prejudice.

IT IS SO ORDERED.

Dated:

______________________________________

HAYWOOD S. GILLIAM, JR.

United States District Judge

5/4/2015

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