United States Court of Appeals

For the First Circuit

No. 01-1622

NORTH BRIDGE ASSOCIATES, INC., AND 

RALPH H. SCOTT, III,

Plaintiffs, Appellants,

v.

BENJAMIN J. BOLDT, BOLDT FAMILY TRUST,

MARTHA'S VINEYARD HARBOR LANDINGS CONDOMINIUM TRUST, 

AND ARTHUR D. SMITH,

Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Mark L. Wolf, U.S. District Judge]

Before

 Selya, Circuit Judge,

Coffin, Senior Circuit Judge,

and Lipez, Circuit Judge.

Glenda H. Ganem, with whom Michael L. Snyder and McGovern,

Hug & Ganem were on brief, for appellants.

Peter E. Ball, with whom Seth B. Kosto and Hill & Barlow

were on brief, for appellees.
December 19, 2001
1 We view the plaintiffs pragmatically as Ralph H. Scott

III, his father, Ralph H. Scott II, and his mother, Betty Scott,

although the suit technically is brought by Ralph III in his

capacity as trustee for a family trust (Angels Realty Trust) and

by a closely held corporation (North Bridge Associates, Inc.),

whose officers and shareholders are the elder Scotts. See infra

at 5. The appellees are Boldt, two trusts for which Boldt has

served as trustee (Boldt Family Trust and Martha's Vineyard

Harbor Landings Condominium Trust), and an attorney for Boldt

Family Trust, Arthur D. Smith. In essence, this case involves

the Scotts' claims that they were defrauded by Boldt, who is the

only defendant in the RICO cause of action. 

2 The court dismissed the RICO claim with prejudice and the

state law causes of action without prejudice.

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COFFIN, Senior Circuit Judge. Appellants claim that they

twice were victims of real estate frauds perpetrated by appellee

Benjamin Boldt and others.1 They brought suit alleging a variety

of state law claims and a violation of the Racketeer Influenced

and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962(c).

The district court concluded, inter alia, that appellants could

not show the pattern of racketeering activity required to

support RICO liability and therefore dismissed the complaint.2

Appellants argue that their factual allegations were sufficient

to support recovery and that, in any event, the court should not

have dismissed the complaint without providing them a hearing

and an opportunity to amend or conduct discovery. We affirm.

I. Background

In summarizing plaintiffs' allegations, we are mindful that

we must accept the well pled facts of the complaint as true and
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indulge every reasonable inference in favor of allowing the

lawsuit to proceed. See Tompkins v. United Healthcare of New

England, Inc., 203 F.3d 90, 93 (lst Cir. 2000); Fed. R. Civ. P.

12(b)(6). We thus sketch the facts relating to the two alleged

frauds as if they were proven. 

Time-Share Scheme. Between 1977 and 1980, Ralph and Betty

Scott purchased three time-share condominium unit intervals from

appellee Martha's Vineyard Harbor Landings Condominium Trust

("Harbor Landings Trust"). Appellee Boldt, a Harbor Landings

trustee, lent the Scotts about $6,500 toward the purchase price

of the units in exchange for a promissory note ("the Note") and

a security interest. The Note barred the Scotts from

transferring title to the units and provided that transfer of

the Note could result in its acceleration and foreclosure. The

Note also provided that the Scotts would be liable for costs of

collection, including reasonable attorney's fees.

Sometime later, the Scotts assigned title to the units to

Angels Realty Trust ("Angels"), which was set up for the benefit

of their children, and Boldt assigned the Note and Mortgage to

appellee Boldt Family Trust. In 1992, Angels began withholding

payments because Boldt refused to provide information about

whether he was protecting the corpus of the Harbor Landings

Trust. In retaliation, Boldt Family Trust in 1995 accelerated
3 In April 1997, the amount demanded for attorney's fees

increased from about $3,000 to about $5,200.

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the Note under the pretext that the Scotts had improperly

transferred title to Angels. Boldt Family Trust threatened to

institute foreclosure proceedings.

In response to Angels' request in July 1996 for a payoff

figure, Boldt Family Trust demanded about $10,000 in principal,

interest and legal fees. Through its counsel, appellee Smith,

the Trust also instituted foreclosure proceedings. Angels paid

the approximately $7,000 in principal and interest, but refused

to pay "spurious and unsubstantiated legal fees."3 In April

1997, the time-share units were sold at foreclosure. Appellants

claim that Boldt and Smith fraudulently inflated legal fees for

the purpose of bringing about foreclosure.

Lot 1 Fraud. In July 1978, Boldt sold Betty Scott

approximately thirty acres of land, designated Lot 1, in

Edgartown, Massachusetts. Scott informed Boldt that she

intended to develop and subdivide the lot into single-family

homes. At the time of purchase, the lot was not connected to a

state road, and Boldt advised Scott that he would provide an

easement through a neighboring property he owned. Boldt,

however, failed to obtain permission for the easement from his

partner, and he later offered Scott the alternative of obtaining
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access to the highway through purchase of a lot, No. 407, in an

adjacent development, Edgartown Forest. The $12,000 purchase

price included a $2,000 cash payment and a $10,000 note. Boldt,

who had been hired to sell residential lots in Edgartown Forest,

told Scott that he would pay the note because of his failure to

secure the right of way that he previously had promised. Boldt,

however, again failed to follow through.

In 1980, the Town of Edgartown granted Scott subdivision

approval for Lot 1 based on plans showing highway access across

Lot 407. Construction of roads, utilities and foundations for

forty-three residences was begun, and development costs reached

approximately $2 million. In November 1987, Scott conveyed her

interest in Lot 1 to appellant North Bridge Associates, Inc.,

whose officers, directors and shareholders are Scott and her

husband.

Appellants contend that Boldt undermined the Lot 1

development by encouraging purchasers of lots in Edgartown

Forest to take legal action to prevent highway access across Lot

407 from the North Bridge development. The property owners

filed a lawsuit in October 1988. Although the litigation

ultimately was unsuccessful, a lis pendens (notice of pending

suit) was placed on Lot 1, prompting the bank that had advanced

funds for the development to demand immediate repayment of its
4 The complaint alleged in Count VII that Boldt violated two

RICO sections, but appellants seek review of only the claim

under 18 U.S.C. § 1962(c). 

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loans. The loss of funding, in turn, caused the development to

fail. North Bridge claims that Boldt urged the meritless suit

so that he could reacquire Lot 1, which he later did at a

mortgagee's sale.

In their complaint, appellants alleged violations of RICO,4

and also brought state law claims for breach of contract, breach

of the implied covenant of good faith and fair dealing, fraud,

and unfair business practices in violation of Mass. Gen. L. ch.

93A. In addition, Angels brought a state-law claim against

Boldt and Boldt Family Trust for lender liability, and a claim

against Smith alleging unjust enrichment. Appellees filed a

motion to dismiss that asserted a variety of defects in the RICO

cause of action, including lack of particularity in the

allegations and a failure to show a pattern of racketeering

activity.

In a two-page decision, the district court ruled in favor

of appellees "[f]or the reasons stated in [their] memorandum."

The court noted that, had the complaint's only problem been its

lack of particularity, appellants might have been given an

opportunity to amend. The court concluded that revision would

be fruitless, however, because "the plaintiff has not, and
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evidently cannot, properly allege the required pattern of

racketeering activity." The court declined to retain

jurisdiction over the pendent state law claims and dismissed

them without prejudice. This appeal followed.

II. Discussion

We begin by examining de novo the court's conclusion that

the complaint as filed is inadequate to support a RICO cause of

action. Bessette v. Avco Fin. Servs., Inc., 230 F.3d 439, 443

(lst Cir. 2000). Because we agree with that determination, we

go on to consider whether appellants should have been afforded

the opportunity to amend their complaint or obtain discovery

before the RICO claim was dismissed with prejudice.

A. The RICO Allegations

To state a claim under section 1962(c), a plaintiff must

allege each of the four elements required by the statute: (1)

conduct (2) of an enterprise, (3) through a pattern (4) of

racketeering activity. Bessette, 230 F.3d at 448; Feinstein v.

Resolution Trust Corp., 942 F.2d 34, 41 (lst Cir. 1991) (citing

Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496 (1985)); see

also 18 U.S.C. § 1962(c). Appellees argue that the complaint in

this case was deficient in multiple respects, but we focus on

the shortcomings in the "pattern" showing because we view them

as both serious and irremediable.
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By statute, a successful RICO plaintiff seeking to establish

a pattern must show at least two predicate acts of "racketeering

activity," conduct that includes mail and wire fraud. Efron v.

Embassy Suites (P.R.), Inc., 223 F.3d 12, 15 (lst Cir. 2000)

(citing 18 U.S.C. § 1961(1)(B), (5)). In addition, the

plaintiff must demonstrate that the "'predicates are related,

and that they amount to or pose a threat of continued criminal

activity,'" id. (quoting H.J. Inc. v. Northwestern Bell Tel.

Co., 492 U.S. 229, 239 (1989)). Acts are "related" if they 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."'"

Id. (quoting H.J., 492 U.S. at 240 (quoting 18 U.S.C. §

3575(e))). To establish continuity, "the plaintiff must show

that the related predicates 'amounted to, or posed a threat of,

continued criminal activity.'" Feinstein, 942 F.2d at 45

(quoting Fleet Credit Corp. v. Sion, 893 F.2d 441, 445-46 (lst

Cir. 1990)).

Plaintiffs specifically allege two predicate acts, both of

which are mailings connected with the time-share scheme. A

letter sent on January 2, 1997, demanded payment of the full sum

due on the Note, plus legal expenses. A second letter was sent

on April 2, after the Note had been paid, stating that Boldt
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would "continue with foreclosure proceedings" if the legal fees

were not paid. Appellants contend that, by demanding

"manufactured legal expenses," these mailings aided the scheme

to unlawfully force Angels into default on the Note, and thus

constituted mail fraud.

Assuming that these two letters are related acts of mail

fraud, they nonetheless fail to support a RICO cause of action

because continuity is wholly lacking. Predicate acts can

satisfy the requirement of continuous criminal activity if they

either comprise a closed series of past conduct that "'extend[s]

over a substantial period of time,'" or indicate a "realistic

prospect" that they will "'extend[] indefinitely into the

future,'" Feinstein, 942 F.2d at 45 (quoting H.J., 492 U.S. at

242); see also Efron, 223 F.3d at 16.

The two 1997 letters are inadequate to establish a closed

period of continuous criminal activity. Both the number of acts

(two) and the span of time over which they extend (four months)

were minimal. See H.J., 492 U.S. at 242 ("Predicate acts

extending over a few weeks or months and threatening no future

criminal conduct do not satisfy this requirement . . . .");

Sion, 893 F.2d at 447 ("Had the number of acts . . . been few or

the period of time short, the predicate acts would not have

amounted to continued criminal activity."). Although appellants
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sought to expand both the length of time and the number of

predicate acts by alleging that Boldt "used the United States

Mail" on at least two occasions in 1988 or later in furtherance

of the Lot 1 fraud, they failed to identify the time, place or

content of any particular mailing. Such vague allegations are

insufficient:

As in any other fraud case, the pleader is required

"to go beyond a showing of fraud and state the time,

place and content of the alleged mail and wire

communications perpetrating that fraud." . . . It is

not enough for a plaintiff to file a RICO claim, chant

the statutory mantra, and leave the identification of

predicate acts to the time of trial.

Feinstein, 942 F.2d at 42 (quoting New England Data Servs., Inc.

v. Becher, 829 F.2d 286, 291 (lst Cir. 1987)).

Nor have appellants shown that the two 1997 mailings

foreshadowed similar acts occurring repeatedly into the future,

thereby establishing "open-ended" continuity and the prospect of

"long-term criminal conduct," H.J., 492 U.S. at 242. The

alleged fraud concluded with the foreclosure of appellants'

time-share units, and they allege neither an ongoing

relationship between themselves and appellees nor any other

similar scheme involving others. The complaint's allegations,

though perhaps supporting fraud and other state-law claims, thus

do not establish the continuity necessary to prove a violation

of the RICO statute.
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B. Discovery, Amendment and Hearing

Appellants invoke our decision in Becher, 829 F.2d at 290-

92, to argue that, even if the district court correctly ruled

that their complaint was deficient, it improperly failed to

grant them the opportunity to remedy the complaint's

shortcomings. They also assert that the court should not have

granted defendants' motion to dismiss without conducting a

hearing.

In Becher, we concluded that the plaintiff's complaint did

not satisfy the requirement of Fed. R. Civ. P. 9(b) that fraud

be pled with particularity, but also ruled that the district

court abused its discretion in dismissing the case without

providing further opportunity for discovery and amendment in

light of the plaintiff's "specific allegations" and the

difficulties of pleading a RICO mail or wire fraud case. See

id. at 292.

We held, in essence, that there are certain

circumstances in the RICO context where the district

court must not only apply Rule 9(b), but must proceed

a step further before granting a motion to dismiss:

In an appropriate case, where, for

example[,] the specific allegations of the

plaintiff make it likely that the defendant

used interstate mail or telecommunications

facilities, and the specific information as

to use is likely in the exclusive control of

the defendant, the court should make a

second determination as to whether the claim

as presented warrants the allowance of
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discovery and if so, thereafter provide an

opportunity to amend the defective

complaint.

Feinstein, 942 F.2d at 43 (discussing and quoting Becher, 829

F.2d at 290).

This is not a case to which the generosity of our approach

in Becher is applicable. The plaintiff there had "assiduously

pursued discovery," Feinstein, 942 F.2d at 43 n.10, its

allegations rendered it likely that the defendants committed

mail or wire fraud, see Becher, 829 F.2d at 292, and the

original allegations likely were deficient only because the

details of the relevant communications were "peculiarly within

defendants' knowledge and difficult to expose," id.

The present case is dissimilar in several respects. First,

appellants never asked for the opportunity to conduct discovery,

even in their opposition to defendants' motion to dismiss.

Second, their complaint does not present "specific allegations"

of additional mail or wire fraud episodes whose details could be

expected to be exclusively within the defendants' knowledge.

Rather, as noted above, appellants broadly allege that at least

two mailings were sent in connection with the Lot 1 fraud, but

they offer no "detailed facts that make it seem likely that

interstate mail or telecommunications facilities were used," id.

at 291. To the contrary, the allegations strongly suggest a

series of verbal communications between Boldt and the purchasers
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of residential lots in the Edgartown Forest development. Though

perhaps aiding a claim of fraud, such conversations would not

bolster appellants' RICO claim. See Sion, 893 F.2d at 445

("[A]cts of common law fraud that do not implicate the mails (or

the wires) do not constitute 'racketeering activity' under the

definition found within the RICO statute."). Finally, it is not

simply details that appellants lack, but the substance of a RICO

claim. The district court was not obliged to give appellants a

second chance to construct a pattern of racketeering activity

out of two separate real estate frauds. See Ahmed v.

Rosenblatt, 118 F.3d 886, 889-90 (lst Cir. 1997) (application

of Becher "second determination" approach "is neither automatic,

nor of right, for every plaintiff").

Appellants also argue that it was impermissible for the

district court to grant the motion to dismiss without conducting

a hearing. It does not appear from the record, however, that

appellants sought a hearing under either Fed. R. Civ. P. 12(d),

which provides for preliminary hearings "on application of any

party," or District of Massachusetts Local Rule 7.1(D), which

provides, in substance, that a party who desires a hearing must

ask for one. Instead, in their 24-page response to appellees'

motion, appellants requested thirty days to file an amended

complaint to cure any defects the court found in their original
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pleading. It can hardly be error for the court to withhold an

opportunity appellants did not request to add to their already

substantial response to the motion. Cf. In Re Thirteen Appeals

Arising Out of San Juan Dupont Plaza Hotel Litig., 56 F.3d 295,

302 (lst Cir. 1995) (key factor in reviewing a refusal to grant

a hearing is whether "'the parties [had] a fair opportunity to

present relevant facts and arguments to the court, and to

counter the opponents' submissions'") (quoting Aoude v. Mobil

Oil Corp., 862 F.2d 890, 894 (lst Cir. 1988)); United States v.

McGill, 11 F.3d 223, 225 (lst Cir. 1993) (motions typically may

be "heard" effectively on the papers).

III. Conclusion

The district court properly found that appellants' complaint

fails to establish a RICO cause of action, and the court acted

within its discretion in refusing to allow plaintiffs a second

chance to generate a pattern of racketeering activity through

discovery and amendment. The lack of a hearing on the dismissal

motion was of no consequence. Having concluded that the RICO

claim was unavailing, the court properly dismissed the pendent

state law claims without prejudice.

Affirmed.