2015 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

6-10-2015

Frederick Foster v. David Denenberg

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Recommended Citation

"Frederick Foster v. David Denenberg" (2015). 2015 Decisions. Paper 582.

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CLD-191 NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

____________

No. 14-2674

____________

FREDERICK FOSTER,

Appellant

v.

DAVID H. DENENBERG; ABRAMSON & 

DENENBERG; ANTOINE GARDINER

__________________________________ 

On Appeal from the United States District Court

for the Eastern District of Pennsylvania

(D.C. Civ. No. 2-13-cv-04478)

District Judge: Michael M. Baylson

__________________________________

Submitted on a Motion for Summary Affirmance 

Pursuant to Third Circuit LAR 27.4 and I.O.P. 10.6

May 7, 2015

Before: FUENTES, GREENAWAY, JR., and VANASKIE, Circuit Judges

(Opinion filed: June 10, 2015)

____________

OPINION*

____________

PER CURIAM

Frederick Foster appeals from an order of the District Court dismissing his 

complaint. For the reasons that follow, we will summarily affirm.

 

* This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not 

constitute binding precedent
2

Foster filed suit in 2010 in the United States District Court for the Eastern District 

of Pennsylvania against David Denenberg, Esquire, Abraham and Denenberg, P.C., and 

Antoine Gardiner. He alleged a violation of the Racketeer Influenced and Corrupt 

Organizations statute (“RICO”), and alleged fraud, conversion, breach of contract, and 

breach of fiduciary duty, among other allegations, in connection with a 2007 real estate 

transaction. That transaction involved properties that Foster owned at 5049-75 Lancaster 

Avenue and 5042-5048 Merion Avenue in Philadelphia, Foster v. Denenberg, et al., E.D. 

Pa. Civ. No. 10-cv-02470. At the time, there was a parallel, ongoing proceeding in the 

Philadelphia Court of Common Pleas involving the same property and transaction, Foster 

v. Gardiner, et al., May Term 2007, No. 1248. The issue of contention in both actions 

was whether Foster’s sale of the property to Gardiner required partitioning of the 

property into two separate properties, so as to allow Foster to retain title to and 

possession of the house located at 5049 Lancaster Avenue and the warehouses located at 

5042-44 Merion Avenue.

The District Court, after vacating an entry of default against Gardiner, dismissed 

the 2010 federal complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) as to all 

defendants on the ground that Foster failed to sufficiently plead his RICO claim. The 

Court reasoned that the allegations involved only a single transaction and failed to 

establish that the defendants posed a threat of continued criminal activity, as necessary 

under RICO’s pattern requirement. Foster appealed, and we summarily affirmed, Foster 

v. Denenberg, et al., C.A. No. 12-1873. In the meantime, Foster’s state court case went 
3

to trial and the jury found in favor of Gardiner on Foster’s breach of contract claim but 

found in favor of Foster on Gardiner’s counterclaim for ejectment.

At issue in this appeal, in 2013, Foster filed another civil action in federal court 

alleging a RICO violation against these same defendants, again in connection with the 

same 2007 real estate transaction. Foster alleged an “ongoing criminal enterprise whose 

modus operandi is real estate theft through misrepresentation and fraud.” Complaint, at ¶ 

6. He specifically alleged that, in 2012, Gardiner, in attempting to secure the rear portion 

of the property located at 5049-75 Lancaster Avenue, broke a hole in the wall that 

enclosed Foster’s backyard. Complaint, at ¶¶ 20-23. Foster’s allegation of a RICO 

violation appears to have been premised on his belief that he, and not Gardiner, owned 

the wall pursuant to the state jury’s verdict.1 Foster further alleged that, on October 22, 

2012, Gardiner and his crew completely knocked down an entire section of the wall. Id.

at ¶ 28. 

The defendants moved to dismiss Foster’s second action pursuant to Rule 

12(b)(6), arguing, in pertinent part, that the doctrine of res judicata barred Foster from 

relitigating what was essentially the same cause of action. The defendants argued in the 

alternative that Foster had once again failed to state sufficient allegations to establish a 

plausible RICO claim. Foster opposed the motion. In an order entered on April 8, 2014, 

the District Court granted the defendants’ motion and dismissed the complaint, holding 

 

1

In his opposition to the appellees’ motion for summary affirmance, Foster states that, as 

a result of the state jury’s verdict, he owns the house at 5049 Lancaster Avenue and the 

warehouses located at 5042-44 Merion Avenue, and Gardiner owns the property located 

at 5051-75 Lancaster Avenue and 5046-68 Merion Avenue.
4

that Foster’s second civil action was barred by the doctrine of res judicata. The Court 

found that the dismissal of Foster’s 2010 action was with prejudice and thus on the 

merits; that the parties were the same in each action; and that the two actions were based 

on the same facts. The Court noted Foster’s argument that he had alleged new predicate 

acts in support of his RICO claim, but held that the new allegations all related back to the 

same 2007 transaction at issue in the prior lawsuit. In the alternative, the District Court 

held that Foster’s allegations did not show sufficiently for purposes of Rule 12(b)(6) that 

the defendants had engaged in a pattern of racketeering, as required to make out a RICO 

violation.

Foster appeals. We have jurisdiction under 28 U.S.C. § 1291. The appellees have 

moved for summary affirmance under Third Cir. LAR 27.4 and I.O.P. 10.6. Foster has 

submitted a response in opposition to summary affirmance.

We will grant the motion for summary affirmance and summarily affirm the order 

of the District Court because no substantial question is presented by this appeal, Third 

Circuit LAR 27.4 and I.O.P. 10.6. We exercise plenary review over res judicata, or claim 

preclusion, dismissals. See Elkadrawy v. Vanguard Group, Inc., 584 F.3d 169, 172 (3d 

Cir. 2009). We also exercise plenary review over a dismissal with prejudice under Rule 

12(b)(6). See Heffernan v. Hunter, 189 F.3d 405, 408 (3d Cir. 1999). 

Res judicata, also known as claim preclusion, applies when there has been (1) a 

final judgment on the merits in a prior lawsuit involving (2) the same parties or their 

privies and (3) a subsequent suit based on the same cause of action. See Lubrizol Corp. 

v. Exxon Corp., 929 F.2d 960, 963 (3d Cir. 1991). Precluding “parties from contesting 
5

matters that they have had a full and fair opportunity to litigate protects their adversaries 

from the expense and vexation attending multiple lawsuits, conserves judicial resources, 

and fosters reliance on judicial action by minimizing the possibility of inconsistent 

decisions.” Montana v. United States, 440 U.S. 147, 153-54 (1979). Here, the District 

Court correctly concluded that Foster’s 2010 action resulted in a final judgment on the 

merits; that the parties in both the 2010 and 2013 actions are the same, and that the 2010 

and 2013 suits are based on the same cause of action. In determining whether a 

subsequent case is based on the same cause of action as a prior case, we will look to 

whether there is an “essential similarity of the underlying events giving rise to the various 

legal claims.” Elkadrawy, 584 F.3d at 173. Here, as held by the District Court, in both 

the first and second actions, Foster alleged fraud in connection with a 2007 real estate 

transaction. The focal point of the “same cause of action” analysis is not whether there 

are new facts occurring after the final judgment, but whether the material facts alleged in 

each suit are the same, and whether the witnesses and documentation required to prove 

the allegations are the same. See United States v. Athlone Industries, Inc., 746 F.2d 977, 

984 (3d Cir. 1984). Here, the right to knock that wall down depends on who owns it, and 

the issue of ownership is determined by reference to the parties’ intentions when they 

negotiated the 2007 transaction. Accordingly, the District Court properly held that 

allegations of a continuation of the same fraudulent activity at issue in the prior action do 

not raise a new or independent RICO cause of action. Foster’s second action is thus 

barred by res judicata.
6

We further agree with the District Court that Foster’s claims, in any event, do not 

state a RICO claim for relief. When considering a motion to dismiss pursuant to Rule 

12(b)(6) for failure to state a claim upon which relief may be granted, a court must accept 

as true all material allegations, read the complaint in the light most favorable to the 

plaintiff, and decide whether, under any reasonable understanding of the complaint, the 

plaintiff may be entitled to relief. See Fleisher v. Standard Ins. Co., 679 F.3d 116, 120 

(3d Cir. 2012). To constitute a RICO violation, there must be a “pattern of racketeering 

activity,” 18 U.S.C. § 1962(a), and to show a pattern of racketeering activity, a plaintiff 

must allege that predicate acts of racketeering pose a threat of continued criminal activity. 

H.J. Inc. v. Northwest Bell Telephone Co., 492 U.S. 229, 239 (1989) (emphasis added). 

Foster’s allegation of a single fraudulent real estate transaction occurring in 2007 does 

not satisfy RICO’s continuity requirement. We note that he has asserted in his opposition 

to summary affirmance that the defendants have engaged in numerous other real estate 

transactions throughout Philadelphia, and that those transactions must necessarily have 

involved fraud, but these assertions are speculative and thus insufficient to survive a Rule 

12(b)(6) motion. See Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (To 

avoid dismissal, a complaint’s “[f]actual allegations must be enough to raise a right to 

relief above the speculative level.”).

For the foregoing reasons, we grant the appellees’ motion and will summarily 

affirm the order of the District Court dismissing the complaint with prejudice.