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UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF MICHIGAN – NORTHERN DIVISION 

_________________________ 

EBONY HENDRIX, KELLY SPILLER, and Case No.: 1:15-cv-12364 

FELICIA MCDANIEL, 

 Hon. Thomas L. Ludington 

 Plaintiffs, 

vs. 

CALVIN AKIN, a resident of Wisconsin, and 

PREMIER REAL ESTATE MANAGEMENT, LLC, 

a Wisconsin limited liability company, and 

PREMIER SAGINAW I, LLC 

a Wisconsin limited liability company, and 

ORKIN, LLC 

a Delaware limited liability company, 

 Defendants. 

________________________________________/ 

PLAINTIFFS’ RESPONSE TO DEFENDANTS’ MOTION TO DISMISS 

 NOW COME Plaintiffs, by and through counsel, and pursuant to LR 7.1(c), (d), and 

(e)(1) hereby respond to the defendants’ (excluding Orkin, LLC) motion to dismiss their 

complaint pursuant to F.R.Civ.P. 12(b)(6) stating that they rely upon the facts and law as further 

stated in their Brief in Support attached hereto. 

WHEREFORE Plaintiffs request that this Honorable Court deny the defendants’ motion, award 

them the costs and fees incurred in this matter, and grant other such relief as the Court deems just 

and equitable. 

 September 21, 2015 /s/ Todd H. Nye 

 Todd H. Nye (P59301), Nye & Associates, PLLC 

 Attorney for Plaintiffs 

 3975 W. Federal Hwy., Ste. 1 

 Roscommon, MI 48653 

 (989) 821-1225 tx.; (989) 821-1133 fx. 

 enotice@nyelaw.org 

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UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF MICHIGAN – NORTHERN DIVISION 

_________________________ 

EBONY HENDRIX, KELLY SPILLER, and Case No.: 1:15-cv-12364 

FELICIA MCDANIEL, 

 Hon. Thomas L. Ludington 

 Plaintiffs, 

vs. 

CALVIN AKIN, a resident of Wisconsin, and 

PREMIER REAL ESTATE MANAGEMENT, LLC, 

a Wisconsin limited liability company, and 

PREMIER SAGINAW I, LLC 

a Wisconsin limited liability company, and 

ORKIN, LLC 

a Delaware limited liability company, 

 Defendants. 

________________________________________/ 

PLAINTIFFS’ BRIEF IN SUPPPORT OF THEIR RESPONSE 

TO DEFENDANTS’ MOTION TO DISMISS 

 

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Table of Contents 

 Index of Authorities ............................................................................................. 3 

 Index of Exhibits ................................................................................................... 5 

 Concise Statement of Issues Presented .............................................................. 6 

 Controlling or Most Persuasive Authority ........................................................ 7 

I. Factual Background. .................................................................................................... 8 

II. Law and Argument ....................................................................................................... 9 

 A. Standard of Review for motions under F.R.Civ.P. 12(b)(6) ............................ 9 

 B. Defendants’ affirmative defense of contract waiver and indemnification fail 

 as a matter of law. .............................................................................................. 9 

 1. Landlord Duty Under Michigan Housing Act to Keep Building Free 

 From Vermin ....................................................................................................... 10 

 

a. The vermin agreements are illegal and void ab initio pursuant to 

MCL 125.474 ................................................................................................ 11 

 2. The vermin agreements violate the Michigan Truth in Renting Act ................ 11 

 

a. No Waiver of Alteration of Remedy under MCL 554.139 ............................. 11 

b. No Exculpation of Landlord liability ........................................................... 14 

 

 C. Plaintiffs do not state RICO claims under 18 U.S.C.. §1962(a) or (b) ...... 14 

 D. Plaintiffs do state RICO claims under 18 U.S.C §1962(c) and (d) ................ 15 

 1. Plaintiffs sufficiently allege an “enterprise” under Boyle ............... 16 

 

 2. Defendants are sufficiently distinct under W. Hills Farm LLC 

 and all Defendants meet the “operation or management” test ........ 20 

 3. Plaintiffs allegations satisfy the causation requirements 

 under 18 U.S.C. §1962(c) and (d). ...................................................... 24 

III. Request for Relief .................................................................................................... 26

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Index of Authorities 

Federal Cases Page(s) 

Begala v PNC Bank, Ohio, Na. Ass’n, 214 F.3d 776, 781 (6th Cir. 2000), 20

Boyle v. United States, 556 U.S. 938, 944-45 (2009) 16, 17

Bridge Phoenix Bond & IIndem., Co. 128 S. Ct. 2131, 2145 (2008) 15 

Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158, 161 (2001) 22

De Luce v. Fort Wayne Hotel, 311 F.2d 853 (6th Cir. 1962) 11 

Grange Mut. Cas. Co. v. Mack, 290 F. App'x 832, 835 (6th Cir. 2008) 25 

Heinrich v Waiting Angels Adoption Services, Inc. 668 F.3d 393 (6th Cir. 2012) 16 

Herhold v. Green Tree Servicing, LLC, 608 F. App'x 328, 331 (6th Cir. 2015) 9 

Holmes v. Sec. Investor Prot. Corp., 503 U.S. 258 (1992) 25, 26 

Midwest Grinding Co., v Spitz, 716 F.Supp 1087, 1091 (ND IL, 1989) 15 

Ouwinga v Benistar 419 Plan Servs., 694 F.3d 783, 793 (6th. Cir. 2012) 18, 19 

Reves v Ernst & Young, 507 U.S. 170, 179-183 16, 22 

United States v Sinito, 723 F.2d 1250, 1260 (6th Cir. 1983) 16 

VanDenBroeck v CommonPoint Mortg. Co. 553 U.S. 639 (2008) 16 

West Hills Farms, LLC v. ClassicStar Farms, Inc. 20, 20, 22 

(In re ClassicStar Mare Lease, Litig.), 727 F.3d 473, 492 (6th Cir. 2013) 

 

State Cases 

Calef v W., 252 Mich. App. 443 (2002) 10, 13 

Connors v Benjamin J. Magid, Inc., 353 Mich. 628 (1958) 11 

Federal Statutes 

18 U.S.C. §1961 et seq. 8 

18 U.SC. §1961(4) 16, 17 

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§18 U..S.C. §1962(a) 14, 15 

§18 U.S.C. §1962(b) 14, 15 

§18 U.S.C. §1962(c) 14, 15, 23, 24, 26 

§18 U.S.C. §1962(d) 14, 15, 24, 26 

State Statutes 

MCL 125.474 10, 11, 14 

MCL 554.139 11, 12, 13 

MCL 554.139(2) 13 

MCL 554.139(3) 11 

MCL 554.633 11, 12, 13, 14 

MCL 554.633(a). 13 

MCL 554.633(b) 14 

Federal Court Rules 

F.R.Civ.P. 12(b)(6) 8, 9, 10 

F.R.Civ.P. 56 10 

F.R.Civ.P. 56(a) 10 

 

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Index of Exhibits 

 These exhibits are filed at Doc. 21 under Plaintiffs’ Coversheet for Exhibits 1-18 

1. A page from Premier’s web site

2. 2/26/2015 Hendrix residential lease

3. 5/09/2014 Spiller residential lease

4. 12/29/2014 McDaniel residential lease 

5. 10/10/2008 Certificate of Cancellation for The Crossings 

6. 05/22/2008 Log, Saginaw County Register of Deeds; deed, Crossings to 

 Premier Saginaw I, LLC 

7. 02/25/2015 Vermin addendum (Hendrix) 

8. Orkin Bed Bug Instructions 

9. 06/08/2015 Demand for Possession (Spiller) 

10. 02/12/2015 Orkin invoice, landlord demand for payment (Hendrix) 

11. 01/13/2015 Tenant statement (with Orkin charges) (McDaniel) 

12. 07/01/2015 Statutory Notice to Defendants Re: Truth In Renting Act Violations 

13. 08/27/2015 Affidavit of Ebony Hendrix 

14. 08/27/2015 Affidavit of Kelly Spiller 

15. 08/27/2015 Affidavit of Felicia McDaniel 

16. 01/11/2011 Law Review. Note: Don’t Let Them Bit: Defining the Responsibilities of 

 Landlords and Tenants in the Event of a Bedbug Infestation. 

17. Spring 2011 Article, American Entomologist: The History of Bed Bug Management – 

 with Lessons from the Past 

18. 07/01/2015 Saginaw Housing Commission Five Year Plan 

 

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Concise Statement of Issues Presented 

1. Defendants state that Plaintiffs’ claims are barred by the defendants’ affirmative defense 

of contract waiver and indemnification. Plaintiff responds that the vermin agreements are illegal 

under Michigan law, and therefore those contractual provisions of waiver and indemnification 

are void ab initio and the defendants’ defense fails as a matter of law. 

2. Defendants allege that Plaintiffs fail to state RICO claims under 18 U.S.C.. §1962(a) and 

(b), and Plaintiffs agree. 

3. Defendants allege that Plaintiffs fail to state RICO claims under 18 U.S.C.. §1962(c) and 

(d). Plaintiffs respond that they have plead sufficient allegations for RICO “conduct” and 

“conspiracy” claims, and further, on the specific legal issues raised by the defendants, there 

clearly are sufficient allegations for each of the following specific elements under §1962(c) and 

(d): 

 a. the existence of an “enterprise” under Boyle, supra, 

 b. sufficient distinctness and “operation or management” under West Hills Farm, 

 LLC, supra, 

 c. “direct-injury” proximate causation under Reves, supra and Ouwinga, supra. 

 

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Controlling or Most Appropriate Authority 

MCL 125.474 (Michigan Housing Law) 

MCL 554.139 (Michigan Truth in Renting Act) 

Calef v W., 252 Mich. App. 443 (2002) 

Boyle v. United States, 556 U.S. 938, 944-45 (2009)

De Luce v. Fort Wayne Hotel, 311 F.2d 853 (6th Cir. 1962) 

Grange Mut. Cas. Co. v. Mack, 290 F. App'x 832, 835 (6th Cir. 2008) 

Ouwinga v Benistar 419 Plan Servs., 694 F.3d 783, 793 (6th. Cir. 2012) 

Reves v Ernst & Young, 507 U.S. 170, 179-183 

West Hills Farms, LLC v. ClassicStar Farms, Inc. 

(In re ClassicStar Mare Lease, Litig.), 727 F.3d 473, 492 (6th Cir. 2013) 

 

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I. Factual Background 

 Since the defendants’ motion is under F.R.Civ.P. 12(b)(6), the plaintiffs rely upon the 

facts as alleged in the First Amended Complaint (Doc. 13) and Plaintiff’s Exhibits 1-18 (Doc. 

21) 

 Similarly, Defendants should have relied upon the allegations in the plaintiffs’ First 

Amended Complaint for the purposes of their motion to dismiss for the plaintiffs’ alleged failure 

to state a claim under the Racketeering Influenced and Corrupt Organizations Act (“RICO”) at 

18 U.S.C. §1961 et seq. 

 However, Defendants actually alleged new facts or otherwise alleged facts contrary to 

facts as alleged by the plaintiffs. 

 Hence, Plaintiffs object to the defendants’ recitation of facts, to the extent they are 

inconsistent with or otherwise allege any fact not stated in the First Amended Complaint, 

including, but not limited to: 

 a. Defendants’ allegations about its “reputation” and capital expenditures; 

 b. “Clearly, there was no infestation of bed bugs at the inception of each tenancy.” 

 c. “Plaintiff, each and every one of them, permitted bed bugs to infest their demised 

 premises.” 

 d. Defendants’ implied argument that the plaintiffs’ claims are barred by provisions 

 in the residential leases regarding the plaintiffs’ assumption of the condition of the 

 premises, waiver, and indemnification. 

 Additionally, Plaintiffs’ First Amended Complaint is neither “boilerplate” nor a routine 

state-court, landlord/tenant matter. Plaintiffs are poor people, three single mothers, each with 

children in their inhabitable homes, receiving housing monies from the United States 

government, who state a prima facie claim for racketeering against the sophisticated and wealthy 

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defendants as discussed below, who conduct their enterprise in a uniquely cruel and predatory 

manner. 

II. Law and Argument 

A. Standard of Review for motion under F.R.Civ.P. 12(b)(6) 

Succinctly stated, the standard for a motion under Rule 12(b)(6) is as follows: 

In considering a Rule 12(b)(6) motion, a court "must accept all well-pleaded factual 

allegations of the complaint as true and construe the complaint in the light most 

favorable to the plaintiff." Inge v. Rock Fin. Corp., 281 F.3d 613, 619 (6th Cir. 2002). A 

complaint should only be dismissed if it is clear to the court that "no relief could be 

granted under any set of facts that could be proved consistent with the allegations." 

Trzebuckowski v. City of Cleveland, 319 F.3d 853, 855 (6th Cir. 2003). The factual 

allegations need not be detailed, but must be more than mere "labels and conclusions." 

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 167 L. Ed. 2d 929 

(2007). "Factual allegations must be enough to raise a right to relief above the 

speculative level." Id. A claim is facially plausible when "the plaintiff pleads factual 

content that allows the court to draw the reasonable inference that the defendant is liable 

for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 

L. Ed. 2d 868 (2009). 

 Herhold v. Green Tree Servicing, LLC, 608 F. App'x 328, 331 (6th Cir. 2015) 

B. Defendants’ affirmative defense of contract waiver and indemnification fail 

 as a matter of law

 Oddly, Defendants allege in their factual recitations that “Plaintiffs inspected their 

apartments and signed a notice of acceptance acknowledging that the demised premises were 

suitable for habitation” and that “Plaintiffs were under an affirmative duty to maintain the 

premises in a sanitary manner.” Defendants rely upon the express language of the residential 

lease agreements, presumably, as an absolute defense to the plaintiffs’ claims. 

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 Further, Defendants allege they merely exercised their express “contractual right to 

impose upon the Plaintiffs reasonable costs for the extermination of the bed bugs pursuant to the 

contractual language” in the residential lease. 

 Consequently, because Defendants improperly raised the affirmative defense in a 

“motion to dismiss” the plaintiffs must now substantively respond. 

 First, a motion for summary judgment on affirmative defenses is properly brought under 

F.R.Civ.P. 56(a). Therefore, to the extent that Defendants seek relief under F.R.Civ.P. 56, 

Plaintiffs object because the defendants’ motion and brief is expressly limited to F.R.Civ.P. 

12(b)(6) 

 Nevertheless, even if the defendants seek dismissal on their affirmative defense of waiver 

and indemnification, it fails as a matter of Michigan law. 

1. Landlord Duty Under Michigan Housing Act to Keep Building Free 

 from Vermin 

 The Housing Law of Michigan at MCL 125.474 imposes a statutory duty on the landlord 

to exterminate vermin, to wit: 

Cleanliness of dwellings. Every dwelling and every part thereof shall be kept 

clean and shall also be kept free from any accumulation of dirt, filth, rubbish, 

garbage or other matter in or on the same, or in the yards, courts, passages, areas 

or alleys connected therewith or belonging to the same. The owner of every 

dwelling shall be responsible for keeping the entire building free from vermin. 

The owner shall also be responsible for complying with the provisions of this 

section except that the tenants shall be responsible for the cleanliness of those 

parts of the premises that they occupy and control. 

 Any contract term which violates the Housing Act of Michigan, absent express statutory 

authority, is void ab initio, and cannot be waived by agreement or otherwise. Calef v W., 252 

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Mich. App. 443 (2002) Historically, at law, a bed-bug1 infestation is “vermin” as contemplated 

in the case law and subsequent statutes regarding habitability of a leasehold. (See Exhibit 16 ) 

 a. The vermin agreements are illegal and void ab initio pursuant 

 to MCL 125.474 

 Hence, under Michigan law, the landlord – not a tenant -- has a statutory duty to keep the 

premises free from bed bugs and other vermin. MCL 125.474; See also De Luce v. Fort Wayne 

Hotel, 311 F.2d 853 (6th Cir. 1962); Connors v Benjamin J. Magid, Inc., 353 Mich. 628 (1958) 

 Therefore the vermin addendums in this case, as additional contract terms unlawfully 

imposing the landlord’s duty to ameliorate vermin upon the plaintiffs/tenants, are illegal and void 

ab initio under Michigan law. 

 By the way, as a legal no-brainer, in response to Defendants’ allegations that the 

plaintiffs assumed the condition of vermin by accepting possession of the premises: a tenant’s 

“inspection” does not abdicate the landlord’s duty to comply with the law on habitability. MCL 

554.139(3)2

 2. The vermin agreements violate the Michigan Truth in Renting Act 

 Here, the vermin addendum at Plaintiffs’ Exhibit 7 violates the following paragraphs of 

MCL 554.633 (Michigan Truth in Renting Act), to wit: 

 a. No Waiver or Alteration of Remedy under MCL 554.139 

                                                            

1

   

2 This is the Michigan statutory authority for rejection of the common law principal of caveat lessee which gave way 

to the common law, now statutory rule of an implied duty of a landlord to provide a habitable premises which is free 

of vermin. See Exhibit 16, Note: Don’t Let Them Bite: Defining the Responsibilities of Landlords and Tenants in 

the Event of a Bedbug Infestation, 80 Geo. Wash. L. Rev. 243, fn 61, by Samuel Gilbert (Nov. 2011) (Also an 

excellent general survey of the history and development of bed-bug law.) 

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MCL 554.633 provides that the following provision in a rental agreement is illegal: 

(a) Waives or alters a remedy available to the parties when the premises are in a 

condition that violates the covenants of fitness and habitability required pursuant 

to section 39 of 1846 RS 84, MCL 554.139. 

 In particular, MCL 554.139 provides: 

(1) In every lease or license of residential premises, the lessor or licensor 

covenants: 

(a) That the premises and all common areas are fit for the use intended by the 

parties. 

(b) To keep the premises in reasonable repair during the term of the lease or 

license, and to comply with the applicable health and safety laws of the state and 

of the local unit of government where the premises are located, except when the 

disrepair or violation of the applicable health or safety laws has been caused by 

the tenants wilful or irresponsible conduct or lack of conduct. 

(2) The parties to the lease or license may modify the obligations imposed by 

this section where the lease or license has a current term of at least 1 year.

(3) The provisions of this section shall be liberally construed, and the privilege of 

a prospective lessee or licensee to inspect the premises before concluding a lease 

or license shall not defeat his right to have the benefit of the covenants established 

herein. 

Here, the “vermin agreements” fundamentally alter the landlord’s duties and remedies in the 

event of a tenant’s default under the rental agreement. The “vermin agreement” provides that the 

tenant shall: 

1. be subject to a 30 day notice to quit, 

2. be responsible for the accelerated balance of the contract, 

3. be responsible for “all other charge that are associated with the pest control 

 treatment” and 

4. that the tenant will “be turned over [to] the Attorney and face eviction for Non 

 payment of this agreement” and “be responsible for all attorney, legal and filing 

 fee’s [sic]” incurred by the landlord. 

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However, here, the original residential lease contracts3: 

1. do not provide for summary eviction for costs of vermin abatement, 

2. do not provide for acceleration of debt for failure to pay vermin 

 abatement, and 

3. do not provide for attorney’s fees and costs for the tenant’s failure to pay 

 the landlord for the cost of abatement of vermin. 

Here, the vermin agreement expressly alters the remedies of the tenant on Plaintiffs’ statutory 

right to a habitable premise. For example, Plaintiff Hendrix has a month to month lease. (Exhibit 

2, Hendrix lease) The vermin agreement deprives her of the remedy to enforce the defendants’ 

statutory duty to keep the premises habitable under MCL 554.139 because it imposes the duty of 

habitability as to vermin upon her. Accordingly, the defendants’ coercive use of the vermin 

addendum and its imposition upon Ms. Hendrix of the landlord’s statutory duty to keep the 

premises free from vermin is contrary to MCL 554.139 and hence illegal as a matter of law 

pursuant to 554.633(a). 

 Moreover, the “vermin” contract imposes remedies for the landlord not present in the 

rental agreement, which is contrary to MCL 554.633(a). Here, MCL 554.139(2) requires the 

landlord “to comply with the applicable health and safety laws of the state and of the local unit of 

government” and MCL 125.474 require a landlord to keep the premises free from vermin. 

 Hence, the “vermin addendum” imposes remedies for the landlord (acceleration of rent, 

eviction, payment of costs), which are illegal as a matter of law, as vermin remediation is solely 

the duty of the landlord and cannot be imposed on the tenants as a matter of law. Calef, supra

 Hence, the “vermin agreement” violates the Truth in Renting Act at MCL 554.633(a) by 

making the tenant pay for landlord’s statutory duty under MCL 554.139 duty to remediate 

vermin or suffer dire sanctions not allowed at law. 

                                                            

3 (Exhibits 2, 3, and 4, Plaintiffs’ respective rental contracts)

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 b. No Exculpation of Landlord Liability 

 MCL 554.633 provides that the following provision in a rental agreement is illegal:

(e) Exculpates the lessor from liability for the lessor’s failure to perform, or 

negligent performance of, a duty imposed by law. ... . 

 Here, the “vermin agreement” constructively exculpates the landlord from its legal duty 

under MCL 125.4744

 by imposing the financial liability of vermin remediation on the tenant. 

The “vermin agreement” expressly imposes the costs5

 of the landlord’s breach of duty to keep 

the premises free from vermin directly upon the tenant under penalty of eviction. 

 Hence, the “vermin agreement” violates MCL 554.633(b) by imposing the duty of vermin 

remediation on the tenant and constructively exculpating the landlord’s statutory duty to keep the 

premises free from vermin as required by MCL 125.474. Quite simply, they have no defense. 

C. Plaintiffs do not state a claim under 18 U.S.C. §1962(a) or (b). 

 18 U.S.C. §1962 has four distinct causes of action at paragraphs (a), (b), (c), and (d) 

respectively. First, defendants seek dismissal of Plaintiffs’ RICO §18 U.S.C. §1962(a) and (b). 

 However, in the plaintiffs’ First Amended Complaint, plaintiffs clearly request relief only 

under 18 U.S.C. §1962(a), (c) and (d). (Doc. 13, First Amended Complaint, ¶57, 58, and (59)) 

                                                            

4 MCL 125.474 Cleanliness of dwellings. Sec. 74.Cleanliness of dwellings. Every dwelling and every part thereof 

shall be kept clean and shall also be kept free from any accumulation of dirt, filth, rubbish, garbage or other matter 

in or on the same, or in the yards, courts, passages, areas or alleys connected therewith or belonging to the same. 

The owner of every dwelling shall be responsible for keeping the entire building free from vermin. The owner shall 

also be responsible for complying with the provisions of this section except that the tenants shall be responsible for 

the cleanliness of those parts of the premises that they occupy and control.

5

 (Exhibit 7) The vermin addendum provides that the tenant shall: 

1. be subject to a 30 day notice to quit, 

2. be responsible for the accelerated balance of the contract, 

3. be responsible for “all other charge that are associated with the pest control treatment” and 

4. that the tenant will “be turned over [to] the Attorney and face eviction for Non payment of this agreement” and 

 “be responsible for all attorney, legal and filing fee’s [sic]” incurred by the landlord. 

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 Plaintiffs concede that for claims under both §1962(a) (and (b)) the plaintiffs must allege 

something more than injuries arising from the predicate acts themselves. Succinctly stated: 

In order to allege injury “by reason of” section 1962(a), a RICO plaintiff must 

demonstrate that he was injured “by reason of” the use or investment of the 

income derived form racketeering. Similarly, in order to allege injury “by reason 

of” section 1962(b), a RICO plaintiff must demonstrate that the defendants’ 

acquisition or control of an interstate enterprise injured the plaintiff. 

Midwest Grinding Co., v Spitz, 716 F.Supp 1087, 1091 (ND IL, 1989) 

Here, Plaintiffs do not allege injuries proximately caused by reason of the “use” of the 

racketeers’ money nor as a result of the defendants’ “acquisition or control” of the enterprise. 

 Rather, Plaintiffs allege damages caused in fact by the predicate acts themselves, but 

proximately caused by reason of the conduct of the racketeering operation under §1962(c). 

 Accordingly, the plaintiffs agree that the complaint fails to state a claim under 18 U.S.C. 

§1962(a) (and (b)), and those claims may be dismissed without prejudice. 

D. Plaintiffs do state RICO claims under 18 U.S.C §1962(c) and (d) 

 In a series of disjointed and random arguments, Defendants allege that Plaintiffs have 

failed to state a RICO claim under §1962(c) or (d). 

 The U.S. Supreme Court recently admonished the lower courts that it has “repeatedly 

refused to adopt narrowing constructions of RICO in order to make it conform to a preconceived 

notion of what Congress intended to proscribe.” Bridge Phoenix Bond & Indem., Co. 128 S. Ct. 

2131, 2145 (2008)6

 Defendant properly recites the elements of a claim under §1964(c) are: 

                                                            

6

 “See, e.g., National Organization for Women, Inc. v. Scheidler, 510 U.S. 249, 252, 114 S. Ct. 798, 127 L. Ed. 2d 

99 (1994) (rejecting the argument that "RICO requires proof that either the racketeering enterprise or the predicate 

acts of racketeering were motivated by an economic purpose"); H. J. Inc. v. Northwestern Bell Telephone Co., 492 

U.S. 229, 244, 109 S. Ct. 2893, 106 L. Ed. 2d 195 (1989) (rejecting "the argument for reading an organized crime 

limitation into RICO's pattern concept"); Sedima, S. P. R. L. v. Imrex Co., 473 U.S. 479, 481, 105 S. Ct. 3275, 87 L. 

Ed. 2d 346 (1985) (rejecting the view that RICO provides a private right of action "only against defendants who had 

been convicted on criminal charges, and only where there had occurred a 'racketeering injury'").” Bridge v. Phx. 

Bond & Indem. Co., 553 U.S. 639, 660 (2008) 

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 1. conduct, 

 2. of an enterprise, 

 3. through a pattern, 

 4. of racketeering activity. 

 Heinrich v Waiting Angels Adoption Services, Inc. 668 F.3d 393 (6th Cir. 2012) 

Moreover, Plaintiff must prove that a defendant participated, directly or indirectly, in “some 

part” of the operation or management of the enterprise. Reves v Ernst & Young, 507 U.S. 170, 

179-183 

 “Enterprise” is statutory definition at 18 USC §1961(4), to wit: 

(4) “enterprise” includes any individual, partnership, corporation, association, or 

other legal entity, and any union or group of individuals associated in fact 

although not a legal entity; 

 An association in fact enterprise requires a certain amount of organizational structure, 

which eliminates simple conspiracies from RICO. VanDenBroeck v CommonPoint Mortg. Co. 

553 U.S. 639 (2008) 

 To prove conspiracy, the plaintiff must prove the substantive claim under paragraphs (a), 

(b), or (c), and then “the existence of an illicit agreement to violate the substantive RICO 

provision.” United States v Sinito, 723 F.2d 1250, 1260 (6th Cir. 1983) 

 1. Plaintiffs sufficiently allege an “enterprise” under Boyle 

 Defendant understates and misstates the law on what constitutes a sufficient enterprise for 

a RICO claim. 

 In Boyle, infra the U.S. Supreme Court broadly construed the definition of an 

“enterprise” for a RICO claim, opining: 

The statute does not specifically define the outer boundaries of the "enterprise" 

concept but states that the term "includes any individual, partnership, corporation, 

association, or other legal entity, and any union or group of individuals associated 

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in fact although not a legal entity." § 1961(4). This enumeration of included 

enterprises is obviously broad, encompassing "any . . . group of individuals 

associated in fact." Ibid. (emphasis added). The term "any" ensures that the 

definition has a wide reach, see, e.g., Ali v. Federal Bureau of Prisons, 552 U.S. 

214, 218-219, 128 S. Ct. 831, 169 L. Ed. 2d 680 (2008), and the very concept of 

an association in fact is expansive. In addition, the RICO statute provides that its 

terms are to be "liberally construed to effectuate its remedial purposes." § 904(a), 

84 Stat. 947, note following 18 U.S.C. § 1961; see also, e.g., National 

Organization for Women, Inc. v. Scheidler, 510 U.S. 249, 257, 114 S. Ct. 798, 

127 L. Ed. 2d 99 (1994) ("RICO broadly defines 'enterprise'"); Sedima, S. P. R. L.

v. Imrex Co., 473 U.S. 479, 497, 105 S. Ct. 3275, 87 L. Ed. 2d 346 (1985) "RICO 

is to be read broadly"); Russello v. United States, 464 U.S. 16, 21, 104 S. Ct. 296, 

78 L. Ed. 2d 17 (1983) (noting "the pattern of the RICO statute in utilizing terms 

and concepts of breadth"). 

In light of these statutory features, we explained in Turkette that "an enterprise 

includes any union or group of individuals associated in fact" and that RICO 

reaches "a group of persons associated together for a common purpose of 

engaging in a course of conduct." 452 U.S., at 580, 583, 101 S. Ct. 2524, 69 L. 

Ed. 2d 246. Such an enterprise, we said, "is proved by evidence of an ongoing 

organization, formal or informal, and by evidence that the various associates 

function as a continuing unit." Id., at 583, 101 S. Ct. 2524, 69 L. Ed. 2d 246. 

Notwithstanding these precedents, the dissent asserts that the definition of a RICO 

enterprise is limited to "businesslike entities." See post, at 952, 173 L. Ed. 2d, at 

1279-1282 (opinion of Stevens, J.). We see no basis to impose such an 

extratextual requirement. 

Boyle v. United States, 556 U.S. 938, 944-45 (2009) 

In short, to establish an association-in-fact enterprise Plaintiffs must prove: 

1. an ongoing organization with some sort of framework or superstructure for making 

and carrying out decisions; 

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2. that the members of the enterprise functioned as a continuing unit with established 

duties, and 

3. that the enterprise was separate and distinct from the pattern or racketeering activity 

in which it engaged. 

 Ouwinga v Benistar 419 Plan Servs., 694 F.3d 783, 793 (6th. Cir. 2012) 

Additionally, the enterprise “must have three structural features”: 

 1. a purpose; 

 2. relationships amount those associated with the enterprise, 

 3. longevity sufficient to permit these associates to pursue the enterprise’s purpose. 

 Id. at 794 

 In Ouwinga, the appellate court reversed the trial court’s dismissal of the plaintiff’s 

§1962(c) RICO claim for lack of showing of an enterprise. In reversing the trial court, Judge 

Stanch observed: 

The Amended Complaint alleges an organizational structure that satisfies the 

standard in Boyle. It delineates the specific roles and relationships of the 

Defendants, alleges the enterprise functioned at least five years, and alleges it 

functioned for the common purpose of promoting a fraudulent welfare benefit 

plan to generate commissions and related fees. That pattern of activity is 

sufficient to permit a jury to infer the existence of an enterprise. 

 Id. at 794-795 

 Here, just like the plaintiffs in Ouwinga, Plaintiffs make the following allegations, inter 

alia ̧ in their First Amended Complaint: 

.... 

50. Defendants are an association-in-fact enterprise to wit: 

a. The purpose of the enterprise is to generate additional income and savings from 

poor, disabled, and elderly persons, in excess of their income-based lease payments, 

for the benefit of Defendants, and further to relieve the landlord of the statutory duty, cost 

and burden of exterminating vermin, by imposing those costs on the plaintiffs. The 

enterprise allows Orkin to make non-competitive bids per apartment for vermin 

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abatement, and then Premier REM LLC uses the threats and extortion as stated above, 

to force Plaintiffs to agree to be contractually bound to pay Orkin the monies due, while 

simultaneously relieving Premier REM, LLC of the cost and burden of its statutory duty 

to keep the premises habitable and free of vermin, and thus reducing the operating 

costs and increasing the return on investment for Akin and Premier Saginaw I, LLC. 

b. Defendants have long, interconnected, and overlapping relationships that span 

sufficient duration or indicate a design for continuing or open-ended 

continuity. 

c. The racketeering is of sufficient duration for the enterprise to repeatedly pursue its 

purpose, in that most residential leases, where Defendants are landlords, have terms of 

one year or less, and Defendants have subjected new persons on an annual basis for 

several years to enter into vermin addendums, and the scheme has open-ended continuity 

as new tenants are contracted; and for existing tenants who have recurring bedbugs. For 

example, since this case was filed, consent to a new “vermin addendum” was demanded of 

Ebony Hendrix for further treatment. 

51. The racketeering activity of the defendants is coordinated and ongoing in such a way 

that they function as a continuing unit, to wit: 

a. Calvin Akin and Premier Saginaw I, LLC direct the enterprise; 

b. Premier REM LLC and Orkin knowingly carry out the affairs of the enterprise; 

c. On complaint of a tenant, Orkin inspects and creates an invoice for Premier REM 

 LLC, who in turn, and known to Orkin, uses the extortion methods described above 

 to obtain a contractual agreement from Plaintiff to pay Orkin for its non-

 competitive bid for abatement, while relieving itself of the statutory duty to keep the 

 premises habitable and free of vermin. 

 Here in the case sub judice, just as in Ouwinga, Plaintiffs have made specific allegations 

about: 1) how the enterprise operated, 2) its purpose, and 3) the roles of each of the defendants. 

The allegations are more than conclusory, and allege a deliberate and mechanical method of how 

the defendants work in unison to compel poverty-stricken tenants to pay monies to Orkin for 

abatement of vermin which legally is the landlord’s duty to pay. Further, the allegations clearly 

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20

illustrate the purpose of the enterprise: the landlord saves money, Orkin gets captive customers, 

and the landowner saves on the operating costs for abatement. 

 The Court must deny Defendants’ motion to dismiss because Plaintiffs have sufficiently 

stated and articulated an “enterprise” under RICO. 

 2. Defendants are sufficiently distinct under West Hills Farms, LLC and all 

 Defendants meet the “operation or management” test. 

 Distinctness 

 Defendant alleges that contrary to Begala v PNC Bank, Ohio, Na. Ass’n, 214 F.3d 776, 

781 (6th Cir. 2000), the plaintiffs have failed to allege sufficient distinctness of the non-Orkin 

defendants, to wit: 

Throughout the Complaint, the Plaintiffs refer to Calvin Akin, Premier Saginaw I, 

LLC, and Premier Real Estate Management, LLC as if they are one entity; these 

defendants form an enterprise that consists only of its own subdivisions, agents, or 

members. 

Apparently Defendants argue for dismissal for lack of “distinctness” because Defendant reads 

the complaint as the defendants’ enterprise consisting of “only its own subdivisions, agents, or 

members ... [who] were merely conducting their own affairs” and not that of the enterprise. 

 For example, Defendants argue co-defendant Orkin is merely employed by or associated 

with the other defendants and “took no direction from Defendants; nor is any such direct (sic) 

alleged.” 

 In 2013, the Sixth Circuit Court of Appeals revisited and surveyed 20 years of case law7

on the distinctness requirement. West Hills Farms, LLC, infra at 490-493 Now, a trial court is to 

                                                            

7

 The court noted: “the number of different approaches to the distinctness analysis roughly mirrors the number of 

case that have addressed it. The analysis is so fact-intensive that a generic test is difficult to formulate. The cases 

run the gamut ... . Our approach has not been completely clear.” W. Hills Farms, LLC, infra at 491 “Out of the 

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filter the facts in support of the distinctness requirement through two clearly enunciated legal 

principles, to wit: 

1) individual defendants are always distinct from corporate enterprises 

because they are legally distinct entities, even when those individuals own the 

corporations or act only on their behalf; and 

2) corporate defendants are distinct from RICO enterprises when they are 

functionally separate, as when they perform different roles within the enterprise or 

use their separate legal incorporation to facilitate racketeering activity. 

West Hills Farms, LLC v. ClassicStar Farms, Inc. (In re ClassicStar Mare Lease, 

Litig.), 727 F.3d 473, 492 (6th Cir. 2013) 

 Here, Plaintiff’s complaint makes a prima facie showing of distinctness. First, Calvin 

Akin is plead as an individual, separate from the corporate entities. (Doc. 13, First Amended 

Complaint, ¶¶ 2-5) Therefore, Plaintiffs’ allegations satisfy the first principle. W. Hills Farms, 

LLC, supra 

 Second, the corporate enterprises are plead as being functionally separate within the 

enterprise due to their different roles within the enterprise. For example, at ¶51 of the First 

Amended Complaint the plaintiffs allege: 

b. Calvin Akin and Premier Saginaw I, LLC direct the enterprise; 

c. Premier REM LLC and Orkin knowingly carry out the affairs of the enterprise; 

d. On complaint of a tenant, Orkin inspects and creates an invoice for Premier 

REM LLC, who in turn, and known to Orkin, uses the extortion methods 

described above to obtain a contractual agreement from Plaintiff to pay Orkin 

for its non-competitive bid for abatement, while relieving itself of the 

statutory duty to keep the premises habitable and free of vermin. 

                                                                                                                                                                                               

meandering and inconsistent case law from this and other circuits, as well as the Supreme Court's decision in Cedric 

Kushner, two important principles emerge[d] . ... .” In Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158, 161 

(2001) the court held that: a plaintiff “must allege and prove the existence of two distinct entitles: (1) a ‘person’; and 

(2) an “enterprise that is not simply the same ‘person’ referred to by a different name.” 

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Further allegations about how the defendants’ racket operates and the roles of each defendant can 

be found at ¶50a. of the First Amended Complaint. The litany of acts comprising the affairs of 

the enterprise are enumerated in part at ¶32 of the First Amended Complaint. 

 Clearly, under the principles stated in W. Hills Farms, LLC, supra, Plaintiff did plead 

allegations to support distinctness as a matter of law8. 

 Operation Or Management Test 

 Additionally, Plaintiffs plead Orkin as a distinct legal entity, unrelated (except by the 

enterprise) to Calvin Akin. Defendants try to analogize the accounting firm in Reves, supra, with 

the pest control company (Orkin) in this case, as similarly being a mere, customary business 

association without proof of “operation or management” by the defendant in the enterprise. 

 In Reves v Ernst & Young, 507 U.S. 170 (1993), an accountant failed to note a fatal fact 

regarding the capitalization of an energy investment company on the condensed financial 

statements, although it clearly noted the fatal financial fact in the comprehensive financial 

statement – and the plaintiffs/investors were in fact advised to review the comprehensive report 

                                                            

8

   In fact, the old RICO idea that a parent corporation and its subsidiaries do not satisfy the distinctness 

requirement, almost as an irrebutable presumption, because they necessarily cannot form an enterprise distinct from 

the parent, is a dead rule. As noted by Judge Clay: “ ... [T]he distinctness requirement may be satisfied when the 

parent corporation uses the separately incorporated nature of its subsidiaries to perpetrate a fraudulent scheme. See 

Bucklew v. Hawkins, Ash, Baptie & Co., 329 F.3d 923, 934 (7th Cir. 2003) (finding that a corporate defendant is 

distinct from an enterprise consisting of itself and its subsidiaries when "the enterprise's decision to operate through 

subsidiaries rather than divisions somehow facilitate[s] its unlawful activity"); Securitron Magnalock Corp. v. 

Schnabolk, 65 F.3d 256, 263-64 (2d Cir. 1995) (finding that related corporations with distinct markets and roles in 

the scheme were distinct from the RICO enterprise comprised of each of them together). It would be strange indeed 

to absolve a parent corporation of liability for doing precisely what RICO was designed to prevent: the use of an 

association of legally distinct entities "as a vehicle through which unlawful . . . activity is committed." Cedric 

Kushner, 533 U.S. at 164 (internal quotation marks omitted). W. Hills Farms, LLC, supra at 493 

 In the case sub judice, the plaintiffs do not allege the corporate defendants are necessarily subsidiaries of 

one another nor any one defendant a “parent” corporation. However, admittedly all of the (non-Orkin) corporate 

defendants appear to be connected to the individual defendant, Calvin Akin. 

 Again, to the extent that Calvin Akin claims lack of distinctness from his corporate entities, that fact is 

insufficient by itself to defeat a RICO claim for lack of distinctness. See Cedric Kushner Promotions Ltd., v King, 

533 U.S. 158 (2001) (where “the Court found that the defendant, Don King, was distinct from his wholly owned 

corporation for the purpose of RICO. The court found that because the individual defendant and his corporation 

were separate legal entitles with ‘different rights and responsibilities,” the two were sufficiently distinct. “[W]e can 

fin nothing in [RICO] that requires more ‘separateness’ than that.’” West Hills Farms, LLC, supra, at 492) 

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in any event. Predictably, the investors lost money and sued. The accountant was named a RICO 

defendant. 

 To resolve whether the accountant was a proper RICO defendant, the court interpreted 

the meaning of the words “conduct” and “participate” in §1962(c). The court adopted the 

“operation or management” test. Optimistically noting that the test would be “easy to apply” 

Justice Blackmun explained: 

Once we understand the word "conduct" to require some degree of direction and 

the word "participate" to require some part in that direction, the meaning of § 

1962(c) comes into focus. In order to "participate, directly or indirectly, in the 

conduct of such enterprise's affairs," one must have some part in directing those 

affairs. Of course, the word "participate" makes clear that RICO liability is not 

limited to those with primary responsibility for the enterprise's affairs, just as the 

phrase "directly or indirectly" makes clear that RICO liability is not limited to 

those with a formal position in the enterprise, but some part in directing the 

enterprise's affairs is required. The “operation or management” test expresses this 

requirement in a formulation that is easy to apply. 

Reves, supra, at 179 (1993) 

Here, Plaintiff alleges that Orkin creates invoicing and bidding it knows will be collected 

through the methods of the enterprise, and in fact benefits from the arrangement by its exclusive 

right to sell vermin abatement services to the defendants’ tenants -- and get paid by the tenants 

by the threats of coercion of the landlord. (Doc. 13, First Amended Complaint, ¶¶50-51) 

 Clearly, allegations that Orkin was creating invoicing for tenants, at the direction of the 

landlord, for captive customers, and getting those invoices paid by the coercion of the landlord, 

qualify as “some” part in the operation or management of the enterprise. On the same factual 

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allegations, all of the defendants are sufficiently alleged to have participated in the “operation or 

management” of the enterprise9

. 

 This court must reject Defendants’ arguments that Plaintiffs’ claims fail the distinctness 

test and the operation or management test. 

 3. Plaintiffs allegations satisfy the causation requirements 

 under 18 U.S.C. §1962(c) and (d). 

 Under §1962(c), the plaintiff need only allege damages to her business or property “by 

reason of” “the conduct” of the enterprise’s affairs, which necessarily includes damages from the 

predicate offenses. §1962(c) 

 Accordingly, the plaintiff in Midwest Grinding, supra survived summary judgment on the 

pleadings as to one defendant because it “sufficiently plead the requisite [predicate offenses, in 

that case] mail fraud violations ... .” Id. at 1093 

 §1962(c) provides: 

(c) It shall be unlawful for any person employed by or associated with any 

enterprise engaged in, or the activities of which affect, interstate or foreign 

commerce, to conduct or participate, directly or indirectly, in the conduct of such 

enterprise's affairs through a pattern of racketeering activity or collection of 

unlawful debt. 

Under §1962(c), a plaintiff must show both “but for” causation and proximate cause; and 

under §1962(d), the plaintiff need only show that the defendant agreed “that another 

violated §1962(c) by committing two acts of racketeering activity” to wit: 

A ‘pattern of racketeering activity’ requires at least two acts of ‘racketeering 

activity, ... . Thus, to prove that a defendant violated § 1962(c), it is necessary for 

the plaintiff to prove that the defendant committed two predicate offenses. But to 

                                                            

9 Plaintiffs  believe they have alleged sufficient facts, and the reasonable inferences therefrom in their favor, to

show all of the defendants meet the operation or management test; and are sufficiently agreed by an express or

implied agreement to satisfy the conspiracy claim at §1962(d).  If the allegations are insufficient, then Plaintiffs

note that their affidavits filed  Exhibits 13‐15 recite in much greater detail the interactions of the defendants in

perpetuating their predatory scheme, and would request leave to amend.  

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violate § 1962(d), a defendant need only "agree[] that another violate § 1962(c) 

by committing two acts of racketeering activity." United States v. Joseph, 781 

F.2d 549, 554 (6th Cir. 1986). 

A plaintiff asserting a §1964(c) action must show that the RICO violation she 

alleges caused her injury. Both "but for" and proximate cause are required. 

Holmes v. Sec. Investor Prot. Corp., 503 U.S. 258, 268-69, 112 S. Ct. 1311, 117 

L. Ed. 2d 532 (1992). In terms of proximate causation, "the central question ... is 

whether the alleged violation led directly to the plaintiff's injuries." Anza v. Ideal 

Steel Supply Corp., 547 U.S. 451, 461, 126 S. Ct. 1991, 164 L. Ed. 2d 720 (2006). 

 Grange Mut. Cas. Co. v. Mack, 290 F. App'x 832, 835 (6th Cir. 2008) 

 

 The U.S. Supreme Court discussed the difference between “but for” and proximate 

causation in Holmes, supra. The case involved an insurer10 who had to pay claims against its 

insured stockbrokers for damages arising from the brokers’ wrongful manipulation of stock 

prices. Id. at 261-265 The insurer sued the brokers, to include claims under RICO, because the 

brokers’ breaches of duty triggered the plaintiff’s duty to pay claims to the damaged investors 

and the insurer claimed standing under a right of subrogation to the damaged investors. Id.

 The district court dismissed the plaintiff’s RICO claim, inter alia, for lack of proximate 

cause. Id. at 263-264 The Ninth Circuit Court of Appeals reversed, finding (in effect) sufficient 

“but for” causation, because although the causal relationship between the broker and the 

plaintiff’s injury was weak, the focus should have been on the casual relation between the 

plaintiff’s injury and the acts of the defendants’ co-conspirators. Id at 265 

                                                            

10 Actually, the plaintiff was a private, non‐profit corporation (the  “SIPC”) established under federal law to insure

customers of licensed security dealers, to wit: The Securities Investor Protection Act of 1970 (SIPA) at 15 U.S.C.

§§78aaa‐78lll and the Securities Exchange Act of 1934.

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 On appeal, the Supreme Court reversed on proximate cause and remanded. Id. at 276 

First, the court rejected a singular “but for” analysis because it found it “very unlikel[y] that 

Congress meant to allow all factually injured plaintiffs to recover” under RICO. Id. at 266 

 The court continued in noting that the insured’s claims were based on (ambiguous, but 

accepted for arguendo) a common law right of subrogation, in that having paid the investors’ 

claims for damages caused by the conspiracy, the insured could recover against the broker. Id. at 

271 Hence, since “[t]he general tendency of the law, in regard to damages at least, is not to go 

beyond the first step” the court found the plaintiff/insurer’s damages too attenuated, and thus, 

failing to be a “direct-injury” required for proximate causation. Id. at 272-273 (Interestingly, by 

definition, a subrogation claimant does not suffer a direct injury.) 

 Here, the plaintiffs allege “but for” causation, but importantly, make a multiplicity of 

allegations of specific and direct-injury to support proximate causation. 

 Obviously, “but for” the landlord’s failure to mitigate vermin and forcing the plaintiffs to 

enter into the vermin agreements by their acts of extortion and threats, the plaintiffs would not 

have been damaged by the costs of vermin remediation, the fear of being homeless, and the 

indignity of being forced to live in the defendants’ vermin-infested apartments with their 

children. 

 Here, the plaintiffs allege direct-injury such that their injuries were proximately caused 

by the RICO enterprise. All of the plaintiffs’ allegations are allegations of direct injury – lost 

money, fear of homelessness, loss of personal property, etc. (See e.g., Doc. 13, First Amended 

Complaint, ¶¶52-60) Here, the defendants’ RICO enterprise existed precisely to directly collect 

the cost of vermin abatement directly from the plaintiffs – or they would be directly thrown into 

the road, homeless with children, if they did not pay. 

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 The court must deny the plaintiffs’ motion to dismiss; Plaintiffs have alleged sufficient 

proximate and “but for” causation. 

WHEREFORE Plaintiffs request that this Honorable Court deny the defendants’ motion to 

dismiss Plaintiffs’ RICO claims under §1962(c) and (d), award them the costs and fees incurred 

in this matter, and grant other such relief as the Court deems just and equitable. 

September 21, 2015 /s/ Todd H. Nye 

 Todd H. Nye (P59301) 

 Nye & Associates, PLLC 

 Attorney for Plaintiffs 

 3975 W. Federal Hwy., Ste. 1 

 Roscommon, MI 48653 

 (989) 821-1225 tx. 

 (989) 821-1133 fx. 

 enotice@nyelaw.org 

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