UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

NETWORK COMMODITIES, LLC, et

al.,

 Plaintiffs,

v.

GOLONDRINAS TRADING CO., LTD.,

et al.,

 Defendants.

Civil No. 11-3119 (NLH/KMW)

OPINION

APPEARANCES:

William A. Riback, Esquire

William Riback, LLC

132 Haddon Ave.

Haddonfield, NJ 08033 

On behalf of Plaintiffs Network Commodities, LLC and

Nebraskaland, Inc.,

Sean J. Kirby, Esquire 

Sheppard Mullin Richter & Hampton LLP

30 Rockefeller Plaza

Suite 2400

New York, NY 10112 

On behalf of Defendants Golondrinas Trading Co., LTD and

Damian Miriello. 

HILLMAN, District Judge

This matter comes before the Court by way of motion by

Defendants Golondrinas Trading Co., LTD (hereinafter,

“Golondrinas”) and Damian Miriello (hereinafter, “Defendant

Miriello”) [Doc. No. 17] seeking to dismiss Plaintiffs’ Second

1

Case 1:11-cv-03119-NLH-KMW Document 27 Filed 04/01/13 Page 1 of 35 PageID: 454
Amended Complaint. Dismissal is sought pursuant to Federal Rule

of Civil Procedure 12(b)(2) for lack of personal jurisdiction and

12(b)(6) for failure to state a claim upon which relief can be

granted. Plaintiffs oppose Defendants’ motion. The Court has

considered the parties’ submissions and decides this matter

pursuant to Federal Rule of Civil Procedure 78. 

For the reasons expressed below, the motion will be granted

in part and denied in part.

I. JURISDICTION

In this action, Plaintiffs assert claims under both federal

and state racketeering laws, specifically the Racketeer

Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§

1961 through 1968, and the New Jersey RICO Statute, N.J.S.A.

2C:41-1 through 2C:41-6. Plaintiffs also allege claims for

breach of contract, fraud in the inducement, and unjust

enrichment. This court exercises both federal question and

diversity subject matter jurisdiction over Plaintiffs’ claims

pursuant to 28 U.S.C. §§ 1331 and 1332. 

II. BACKGROUND

Plaintiffs’ Second Amended Complaint alleges that Defendants

engaged in a deceptive and fraudulent scheme to induce Plaintiffs

to enter into a series of shipping contracts providing for the

2

Case 1:11-cv-03119-NLH-KMW Document 27 Filed 04/01/13 Page 2 of 35 PageID: 455
future shipment of wholesale seafood product from Ecuador in

exchange for cash advances paid by Plaintiffs. With respect to

their business arrangements, Plaintiffs wired cash advances to

Defendants with the expectation that Defendants would ship

seafood product exclusively to the Port of New York, located in

Newark, New Jersey, where Defendants were responsible for paying

all duties, port fees, and entry charges. (Second Am. Compl.

[Doc. No. 24] ¶¶ 50-51, 53, 84-85.) After shipment, Defendants

arranged for transportation of the seafood product to a freezer

storage company in Perth Amboy, New Jersey, known as Preferred

Freezer, by way of a New Jersey common carrier. (Id. ¶¶ 53-55,

86-87.) Defendants allegedly paid the cost of the storage fees

and remained the owners of the seafood product while it was

stored in New Jersey until it was sold to vendors. (Id. ¶¶ 55-

57, 87-88.) It was Defendants’ responsibility to find buyers for

the seafood product shipped into the state of New Jersey, and

after the sale, Defendants would distribute the proceeds of sale

to Plaintiffs. (Id. ¶¶ 64, 69, 90.) 

Plaintiffs allege, though, that after a certain point in

time, Defendants no longer had any intention of actually

performing on these contracts. (Id. ¶¶ 4, 101-102.) Plaintiff

Network Commodities alleges since the time it commenced doing

business with Defendants in late 2006, it advanced a total of

$3.75 million to Defendants with respect to “more than at least

3

Case 1:11-cv-03119-NLH-KMW Document 27 Filed 04/01/13 Page 3 of 35 PageID: 456
ten discrete agreements and shipments over a period of

approximately five years.” (Id. ¶¶ 48, 71.) However, Defendants

apparently failed to ship or deliver any seafood product for all

transactions since October 30, 2008 which correspond to wired

cash advancements by Network Commodities in the amount of

$359,158.40 of the total $3.75 million. (Id. ¶ 72.) Plaintiff

Nebraskaland likewise contends that it advanced a total of $2.7

million to Defendants since early 2008, and while Defendants

shipped and delivered seafood product initially, Defendants

failed to ship or deliver any product since October 15, 2008,

representing a total amount of $628,864.80 in cash advancements

wired by Nebraskaland for which no product was received. (Id. ¶

80, 91, 95.)

Both Plaintiffs contend that at the time they “negotiated

the specific oral agreements, Defendants intended to take Network

Commodities’ [and Nebraskaland’s] money with no intention to ship

any product.” (Id. ¶¶ 73, 92.) Plaintiffs further allege that

“Defendants made these promises without the expectation of

honoring their promises by shipping the seafood product.” (Id. ¶¶

74, 93.) Despite Plaintiffs making respective demands for

repayment of these funds, Defendants have failed to pay

Plaintiffs the funds owed to them. (Id. ¶¶ 76-77, 96-97.) 

Plaintiffs originally filed suit in the Superior Court of

New Jersey, Law Division for Camden County, and Defendants

4

Case 1:11-cv-03119-NLH-KMW Document 27 Filed 04/01/13 Page 4 of 35 PageID: 457
subsequently removed the action to this Court. (Notice of

Removal [Doc. 1] ¶ 1.) Plaintiffs’ Second Amended Complaint

asserts causes of action for breach of contract (Count One),

fraud in the inducement (Count Two), unjust enrichment (Count

Three), violations of the federal RICO statute, 18 U.S.C. § 1691,

et seq. (Count Four), and violations of the New Jersey RICO

statute, N.J. Stat. Ann. § 2C:41-1, et seq. (Count Five). 

(Second Am. Compl. §§ 120-203.) 

III. DISCUSSION

Defendants now seek to dismiss Plaintiffs’ Second Amended

Complaint pursuant to Federal Rule of Civil Procedure 12(b)(2)

for lack of personal jurisdiction as to Defendant Miriello and

12(b)(6) for failure to state a claim upon which relief can be

granted. 

A. Rule 12(b)(2) Standard

Federal Rule of Civil Procedure 12(b)(2) provides for

dismissal of an action when the Court does not have personal

jurisdiction over a defendant. “Once challenged, the plaintiff

bears the burden of establishing personal jurisdiction.” 

O’Connor v. Sandy Lane Hotel Co., Ltd., 496 F.3d 312, 316 (3d

Cir. 2007) (citing Gen. Elec. Co. v. Deutz AG, 270 F.3d 144, 150

(3d Cir. 2001)). In deciding a motion to dismiss for lack of

personal jurisdiction, the Court must “accept all of the

5

Case 1:11-cv-03119-NLH-KMW Document 27 Filed 04/01/13 Page 5 of 35 PageID: 458
plaintiff’s allegations as true and construe disputed facts in

favor of the plaintiff.” Carteret Sav. Bank v. Shushan, 954 F.2d

141, 142 n.1 (3d Cir.), cert. denied, 506 U.S. 817 (1992)

(citations omitted).1

B. Rule 12(b)(6) Standard

In considering Defendants’ motion pursuant to Rule 12(b)(6)

for failure to state a claim, the Court must accept all wellpleaded allegations in the complaint as true and view them in the

light most favorable to the plaintiff. Evancho v. Fisher, 423

F.3d 347, 350 (3d Cir. 2005); see also Phillips v. County of

Allegheny, 515 F.3d 224, 228 (3d Cir. 2008) (“[I]n deciding a

motion under Fed.R.Civ.P. 12(b)(6), [a district court is] ...

required to accept as true all factual allegations in the

complaint and draw all inferences from the facts alleged in the

light most favorable to” the plaintiff). It is well settled that

a pleading is sufficient if it contains “a short and plain

There is a “significant procedural distinction” between a 1

motion pursuant to Rule 12(b)(2) and a motion pursuant to Rule

12(b)(6). Time Share Vacation Club v. Atlantic Resorts, Ltd.,

735 F.2d 61, 66 n.9 (3d Cir. 1984). “A Rule 12(b)(2) motion ... 

is inherently a matter which requires resolution of factual

issues outside the pleadings, i.e. whether in personam

jurisdiction actually lies. Once the defense has been raised,

then the plaintiff must sustain its burden of proof in

establishing jurisdictional facts through sworn affidavits or

other competent evidence. . . . [A]t no point may a plaintiff

rely on the bare pleadings alone in order to withstand a

defendant's Rule 12(b)(2) motion to dismiss for lack of in

personam jurisdiction. Once the motion is made, plaintiff must

respond with actual proofs, not mere allegations.” Id. (citation

omitted).

6

Case 1:11-cv-03119-NLH-KMW Document 27 Filed 04/01/13 Page 6 of 35 PageID: 459
statement of the claim showing that the pleader is entitled to

relief.” FED. R. CIV. P. 8(a)(2). 

A district court, in weighing a motion to dismiss, asks

“‘not whether a plaintiff will ultimately prevail but whether the

claimant is entitled to offer evidence to support the claims[.]’” 

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 563 n.8 (2007) (quoting

Scheuer v. Rhoades, 416 U.S. 232, 236 (1974)); see also Ashcroft

v. Iqbal, 129 S. Ct. 1937, 1953 (2009) (“Our decision in Twombly

expounded the pleading standard for ‘all civil actions[.]’”)

(citation omitted). First, under the Twombly/Iqbal standard, a

district court “must accept all of the complaint’s well-pleaded

facts as true, but may disregard any legal conclusions.” Fowler

v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009) (citing

Iqbal, 129 S. Ct. at 1949). 

Second, a district court “must then determine whether the

facts alleged in the complaint are sufficient to show that the

plaintiff has a ‘plausible claim for relief.’” Fowler, 578 F.3d

at 211 (citing Iqbal, 129 S. Ct. at 1950). “[A] complaint must

do more than allege the plaintiff’s entitlement to relief.” 

Fowler, 578 F.3d at 211; see also Phillips, 515 F.3d at 234 (“The

Supreme Court’s Twombly formulation of the pleading standard can

be summed up thus: ‘stating ... a claim requires a complaint with

enough factual matter (taken as true) to suggest’ the required

element. This ‘does not impose a probability requirement at the

7

Case 1:11-cv-03119-NLH-KMW Document 27 Filed 04/01/13 Page 7 of 35 PageID: 460
pleading stage,’ but instead ‘simply calls for enough facts to

raise a reasonable expectation that discovery will reveal

evidence of’ the necessary element.”) (citing Twombly, 550 U.S.

at 556). “The defendant bears the burden of showing that no

claim has been presented.” Hedges v. U.S., 404 F.3d 744, 750 (3d

Cir. 2005).

IV. ANALYSIS

A. Personal Jurisdiction Over Defendant Miriello

Initially, Defendants argue that Plaintiffs’ Second Amended

Complaint should be dismissed in its entirety as to Defendant

Miriello pursuant to Federal Rule of Civil Procedure 12(b)(2) for

lack of personal jurisdiction. (Br. in Supp. of Defs.’ Partial

Mot. to Dismiss [Doc. No. 17-1] (hereinafter, “Defs.’ Br.”), 4-

6.) Defendant Miriello argues that he is not subject to personal

jurisdiction in this Court because: (1) all of Plaintiffs’ claims

are based upon the contractual relationship between Plaintiffs

and Golondrinas and the allegations directed at Miriello’s

conduct consist of actions taken in his corporate capacity on

behalf of Golondrinas, which are insufficient to establish either

general or specific jurisdiction in New Jersey; (2) Plaintiffs

cannot demonstrate that Miriello had “continuous or systematic

contacts” with New Jersey sufficient to establish general

jurisdiction; (3) Plaintiffs failed to show that Miriello

8

Case 1:11-cv-03119-NLH-KMW Document 27 Filed 04/01/13 Page 8 of 35 PageID: 461
“purposely directed” his activity to New Jersey in order to

establish specific jurisdiction; and (4) Plaintiffs cannot

satisfy the Calder test for jurisdiction because the allegations

of the Second Amended Complaint are insufficient to show Miriello

committed an intentional tort. (Id. at 6-10.) 

Plaintiffs assert that the Court has personal jurisdiction

over Defendant Miriello because he committed fraudulent acts

against a New Jersey company with the knowledge that all effects

and consequences of those acts would be felt in New Jersey. (Mem.

of Law in Opp. of Defs.’ Mot. to Dismiss Pl.’s Comp. [Doc. No.

20] (hereinafter, “Pls.’ Opp’n”) 22-23.) Plaintiffs also contend

that the Court has jurisdiction over Defendant Miriello because

Miriello conducted business in New Jersey, thus availing himself

of the privilege of engaging in business activities in this state

and did so with Network Commodities over the course of several

years. (Pl.’s Opp’n 25.) These contacts, Plaintiff asserts, are

sufficient to confer jurisdiction over Defendant Miriello. (Id.

at 25.) 

Pursuant to Federal Rule of Civil Procedure 4(k) a district

court may only exercise personal jurisdiction over a defendant

according to the law of the state in which it sits. The Third

Circuit has “recognized that ‘New Jersey’s long-arm statute

provides for jurisdiction coextensive with the due process

requirements of the United States Constitution.’” Boyd v.

9

Case 1:11-cv-03119-NLH-KMW Document 27 Filed 04/01/13 Page 9 of 35 PageID: 462
Arizona, 469 F. App’x 92, 97 (3d Cir. 2012) (citing Miller Yacht

Sales, Inc. v. Smith, 384 F.3d 93, 97 (3d Cir. 2004)). Thus,

“[i]n keeping with traditional notions of fair play and

substantial justice, ... due process permits that parties who

have constitutionally sufficient minimum contacts with New Jersey

are subject to suit there.” Boyd, 469 F. App’x at 97 (citations

and internal quotations omitted). In assessing the sufficiency

of a defendant’s contacts with the forum, the Court may exercise

either general or specific jurisdiction. Id. (explaining that

“[t]wo brands of personal jurisdiction, viz., ‘minimum contacts,’

adhere to ... due process principles” – general jurisdiction and

specific jurisdiction.) “[G]eneral jurisdiction—exists ‘when a

defendant has maintained systematic and continuous contacts with

the forum state.’” Id. (citing Kehm Oil Co. v. Texaco, Inc., 537

F.3d 290, 300 (3d Cir. 2008)). “[S]pecific jurisdiction ...

exists ‘when the claim arises from or relates to conduct

purposely directed at the forum state.’” Boyd, 469 F. App’x at 2

97. 

The Third Circuit has delineated a three-part test for

determining whether the Court may exercise specific jurisdiction

While Defendant Miriello argues that his contacts with New 2

Jersey are insufficient to demonstrate either general or specific

jurisdiction, Plaintiffs seemingly only address specific

jurisdiction, apparently conceding general jurisdiction over

Miriello does not lie. Accordingly, the Court does not analyze

whether Miriello’s contacts with New Jersey are continuous and

systematic.

10

Case 1:11-cv-03119-NLH-KMW Document 27 Filed 04/01/13 Page 10 of 35 PageID: 463
over a defendant. First, the defendant must have “‘purposefully

directed [its] activities’ at the forum.” O’Connor v. Sandy Lane

Hotel Co., Ltd., 496 F.3d 312, 317 (3d Cir. 2007) (quoting Burger

King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985)). Second, “the

litigation must ‘arise out of or relate to’ at least one of those

activities.” O’Connor, 496 F.3d at 317 (quoting Helicopteros

Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 (1984));

Grimes v. Vitalink Commc’ns Corp., 17 F.3d 1553, 1559 (3d Cir.

1994)). Third, if the first two prongs are met, then the Court

“may consider whether the exercise of jurisdiction otherwise

‘comport[s] with ‘fair play and substantial justice.’’” Id.

(quoting Burger King, 471 U.S. at 476). To satisfy the

“purposeful availment” prong of the specific jurisdiction test,

the defendant must have deliberately targeted the forum state. 

O’Connor, 496 F.3d at 317. 

In this case, Plaintiff alleges that in 2006, Roy Matthews,

President of Network Commodities, received and reviewed an

unsolicited email from Defendant Miriello and also received many

telephone calls from Miriello. (Pls.’ Opp’n 25.) Defendant

Miriello, however, argues that such communications, without more,

are insufficient to confer specific jurisdiction because he did

not purposefully direct his activities to New Jersey. (Defs.’

Br. 8.) Defendant Miriello further argues that even if such

communications established sufficient contacts, Plaintiffs’

11

Case 1:11-cv-03119-NLH-KMW Document 27 Filed 04/01/13 Page 11 of 35 PageID: 464
jurisdictional proofs concern the alleged contractual

relationship between Plaintiffs and Defendant Golondrinas

Trading, and thus Defendant Miriello is not subject to personal

jurisdiction because he only acted in his corporate capacity as

president of Golondrinas. 

In fact, Defendant Miriello relies quite heavily on the

notion that the Court cannot exercise personal jurisdiction over

him because all of his conduct was performed in his corporate

capacity on behalf of Golondrinas. However, in Educational

Testing Service v. Katzman, 631 F. Supp. 550, 559 (D.N.J. 1986),

after conducting a thorough review of cases from multiple courts

in the Circuit, the District Court concluded that consistent with

New Jersey law “actions taken within the forum state by a

corporate official in his official capacity may be considered for

purposes of establishing jurisdiction over him in his individual

capacity” where the facts of the complaint also support

individual liability on the part of that defendant. See also

Nelligan v. Zaio Corp., No. 10–cv–1408, 2011 WL 1085525, at *4

n.9 (D.N.J. Mar. 21, 2011) (noting cases where “jurisdiction

seems to exist over an individual defendant who is acting in a

‘corporate capacity’ if the defendant is personally involved in

committing a tort, or where an a defendant could be held

statutorily liable as an individual.”); 3A Fletcher Cyc. Corp. §

1296.10 (noting that “personal jurisdiction may be exercised over

12

Case 1:11-cv-03119-NLH-KMW Document 27 Filed 04/01/13 Page 12 of 35 PageID: 465
the officer as an individual defendant where the officer's acts

are sufficient to subject the officer to personal liability,

notwithstanding the fact that those acts were done in a corporate

capacity.”).

A similar concept for the exercise of personal jurisdiction

also exists with respect to the Calder effects test. The Third

Circuit has determined that under the Calder test a plaintiff may

demonstrate personal jurisdiction if he shows: “(1) The defendant

committed an intentional tort; (2) The plaintiff felt the brunt

of the harm in the forum such that the forum can be said to be

the focal point of the harm suffered by the plaintiff as a result

of that tort; (3) The defendant expressly aimed his tortious

conduct at the forum such that the forum can be said to be the

focal point of the tortious activity.” Marten v. Godwin, 499

F.3d 290, 297 (3d Cir. 2007) (citing IMO Indus. v. Kiekert AG,

155 F.3d 254, 265–66 (3d Cir. 1998). Additionally, “[p]ersonal

jurisdiction may be exercised over a non-resident defendant who,

while present in the forum state, makes a deliberate

misrepresentation during the course of negotiations or other

direct oral communications with the plaintiff.” Carteret Sav.

Bank, FA v. Shushan, 954 F.2d 141, 146 (3d Cir. 1992).

Bearing in mind the guidance from the Third Circuit in

Carteret, and the notion that the Court may properly consider

actions taken by Defendant Miriello in the state of New Jersey,

13

Case 1:11-cv-03119-NLH-KMW Document 27 Filed 04/01/13 Page 13 of 35 PageID: 466
even in his corporate capacity, for the purposes of establishing

personal jurisdiction, the Court is satisfied that jurisdiction

over Miriello is proper here. First, as set forth more fully

infra, Plaintiffs have adequately alleged a claim for fraud in

the inducement, and in doing so have demonstrated that Defendant

Miriello is the person who made the misrepresentations which form

the basis of that claim. The facts further demonstrate that

Miriello sought out Roy Matthews of Network Commodities for the

express purpose of forming a business relationship and conducting

future business with Plaintiff by email, telephone, and in-person

meetings in the state of New Jersey, and that he engaged in this

business relationship for several years with the intent to obtain

serial cash advances from Plaintiff. Moreover, given the

extensive nature of the commercial transactions at issue here

where Defendants: shipped seafood product into Newark, New

Jersey; paid all duties and fees in New Jersey; employed a New

Jersey common carrier to transport the goods; stored the goods at

a New Jersey freezer storage facility in Perth Amboy; and

distributed the goods for sale from New Jersey before paying

proceeds back to Network Commodities in New Jersey, all at the

apparent direction and instruction of Miriello as President, the

Court is satisfied that there is no violation of Due Process here

in the exercise of personal jurisdiction over Miriello. 

Engaging in the primary conduct which constitutes the

14

Case 1:11-cv-03119-NLH-KMW Document 27 Filed 04/01/13 Page 14 of 35 PageID: 467
intentional tort of fraud in the inducement by making affirmative

misrepresentations to a New Jersey company operating in the state

is sufficient in this instance to confer jurisdiction over

Defendant Miriello. Miriello cannot be allowed to shield himself

from jurisdiction on the basis of his role as a corporate officer

where allegations of the complaint sufficiently support an

individual claim of liability against him for fraud in the

inducement. Accordingly, Defendants’ motion to dismiss the

Second Amended Complaint against Miriello for lack of personal

jurisdiction is denied.

B. Breach of Contract Claim Against Defendant Miriello

Defendants also move to dismiss Count One of Plaintiffs’

complaint against Defendant Miriello pursuant to Rule 12(b)(6)

alleging that Plaintiffs’ cannot state a claim because Miriello

is not a party to the contract itself, and thus cannot be held

personally liable for any breach of that agreement. (Defs.’ Br.

27-28.) Plaintiffs offer virtually no opposition with respect to

this specific portion of Defendants’ motion. This is likely

because, Miriello, as the agent for a disclosed principal, cannot

be held personally liable on the contracts executed between

Plaintiffs and Defendant Golondrinas. See Bel-Ray Co., Inc. v.

Chemrite (Pty) Ltd., 181 F.3d 435, 445 (3d Cir. 1999). 

Accordingly, Defendants’ motion to dismiss Count One for Breach

of Contract as to Defendant Miriello is granted.

15

Case 1:11-cv-03119-NLH-KMW Document 27 Filed 04/01/13 Page 15 of 35 PageID: 468
C. Fraud Claim

Defendants argue that Count Two of Plaintiffs’ Second

Amended Complaint alleging a claim or fraud in the inducement

must be dismissed pursuant to Federal Rule of Civil Procedure

12(b)(6) because (1) as alleged, the claim is barred by the

economic loss doctrine; and (2) Plaintiffs have failed to

adequately plead each element of fraud with particularity as

required by Federal Rule of Civil Procedure 9(b). (Defs.’ Br.

11-12.) 

According to Defendants, although pled as a claim for fraud

in the inducement of a contract, Count Two is more properly

characterized as a claim for fraud in the performance of a

contract and is therefore barred under the economic loss

doctrine. (Defs.’ Br. 13.) Defendants assert that rather than a

series of shipping contracts between Plaintiffs and Defendants,

the contracts at issue are in fact installment contracts. (Id.

at 14). Defendants argue, then, that because the alleged

misrepresentations were made after each Plaintiff entered into

its respective installment contract, these misrepresentations

were “all made during the course of the performance of the

contracts[.]” (Id. at 15.) According to Defendants, this makes

Count Two a claim for fraud in the performance of these

installment contracts which is barred under the economic loss

doctrine. 

16

Case 1:11-cv-03119-NLH-KMW Document 27 Filed 04/01/13 Page 16 of 35 PageID: 469
Plaintiffs argue that the parties did not enter into

installment contracts in this case “because there were no agreed

upon terms, especially as to quantity or price, prior to

negotiating each of the series of individual agreements[.]”

(Pls.’ Opp’n 8.) Rather, Plaintiffs contend that the parties

entered into a series of isolated shipping contracts and that

“each shipment was separately negotiated by the parties prior to

the Plaintiffs making any cash advances.” (Id. at 7 n.4.) Thus,

the argument goes that each time the parties were negotiating,

Defendants made material misrepresentations prior to the

formation of each shipping contract so the fraud is in the

inducement of each separate contract, not in the performance. 

“The economic loss doctrine ‘prohibits plaintiffs from

recovering in tort economic losses to which their entitlement

only flows from a contract.’” Bracco Diagnostics, Inc. v. Bergen

Brunswig Drug Co., 226 F. Supp. 2d 557, 562 (D.N.J. 2002) (citing

Duquesne Light Co. v. Westinghouse Elec. Co., 66 F.3d 604, 618

(3d Cir. 1995)). Relevant to the application of the economic

loss doctrine in New Jersey is the difference between claims for

fraud in the inducement and fraud in the performance of a

contract because there exists a “conceptual distinction between a

misrepresentation of a statement of intent at the time of

contracting, which then induces detrimental reliance on the part

of the promisee, and the subsequent failure of the promisor to do

17

Case 1:11-cv-03119-NLH-KMW Document 27 Filed 04/01/13 Page 17 of 35 PageID: 470
what he has promised.” Lo Bosco v. Kure Eng'g Ltd., 891 F. Supp. 

1020, 1032 (D.N.J. 1995). Based on this distinction, courts

throughout the District of New Jersey “hold that fraud claims not

extrinsic to underlying contract claims are not maintainable as

separate causes of action.” Gleason v. Norwest Mortg. Inc., 243

F.3d 130, 144 (3d Cir. 2001) (citing Lo Bosco, 891 F. Supp. at

1033); see also Bracco, 226 F. Supp. 2d at 564 (“The pattern that

has emerged in New Jersey decisional law is that claims for fraud

in the performance of a contract, as opposed to fraud in the

inducement of a contract, are not cognizable under New Jersey

law.”).

However, fraud claims that are extrinsic to the underlying

contract claims, such as fraud in the inducement, are not barred

by the economic loss doctrine. See Bracco, 226 F. Supp. 2d at 564

(explaining that “to falsely state that one intends to honor a

promise is a misstatement of present fact and breaches a separate

and extraneous duty not to commit fraud”). A claim for fraud in

the inducement under New Jersey law requires “a material

misrepresentation of a presently existing or past fact, made with

knowledge of its falsity and with the intention that the other

party rely thereon, resulting in reliance by that party to his

detriment.” Gleason, 243 F.3d at 144–45. “[W]here a promise is

given and the promisor knows at the time of promising that he has

no intention of fulfilling it, the promise will constitute a

18

Case 1:11-cv-03119-NLH-KMW Document 27 Filed 04/01/13 Page 18 of 35 PageID: 471
misstatement of present fact and may support an allegation of

fraud[.]” Lo Bosco, 891 F. Supp. at 1031–32 (internal citation

omitted). 

Defendants apparently concede the point that a properly pled

claim for fraud in the inducement is not barred by the economic

loss doctrine. (Defs.’ Reply 3.) To argue that Count Two is

barred by the economic loss doctrine then, Defendants are forced

to classify the Plaintiffs’ respective contracts in this case as

installment contracts such that any alleged misrepresentations

were made after the contracts were initially formed and thus

these misrepresentations amount only to fraud in the performance. 

Defendants rely heavily on certain portions of the Second Amended

Complaint that refer to the so called “master agreements” entered

between the parties.

“While the dividing line between extrinsic and intrinsic

fraud claims may be fuzzy,” see Touristic Enterprises Co. v.

Trane Inc., No. 09–02732, 2009 WL 3818087, at *3 (D.N.J. Nov. 13,

2009), accepting the factual allegations in Plaintiffs’ Second

Amended Complaint as true and drawing all inferences from the

facts alleged in the light most favorable to Plaintiffs, the

Court is satisfied that the parties entered into a series of

separately negotiated shipping contracts and that the allegations

of fraud here are extrinsic to each of those underlying

contracts. 

19

Case 1:11-cv-03119-NLH-KMW Document 27 Filed 04/01/13 Page 19 of 35 PageID: 472
Although Plaintiffs represent that the nature of their

respective business relationships included the entry of a master

agreement to conduct future business, Plaintiffs’ Second Amended 3

Complaint adequately alleges that the terms of these master

agreements provided for the subsequent negotiation of discrete,

isolated shipping agreements where the price, quality, and

quantity terms of the each individual shipping contract were

negotiated independently with respect to every transaction prior

to a wired cash advancement from Plaintiffs. (Sec. Am. Compl. ¶¶

50, 61-62, 73, 80, 92, 123-124, 134, 155-156, 182-183); (see also

Second Am. Compl. ¶¶ 66-67 (alleging that negotiation of the

master “agreement was followed by discrete, isolated agreements

that Network Commodities would wire specific amounts of

advancements for specific amounts of product to be shipped by the

Defendants” and “The price, quality and quantity per individual

agreement would be separately negotiated at the time of entering

into each discrete agreement.”)) 

Parties continuously refer to these so-called master 3

agreements, yet neither Plaintiffs nor Defendants have attached

copies of these master agreements to the pleadings in this case. 

Accordingly, the Court cannot independently evaluate the terms of

these agreements. The Court is bound, on this motion to dismiss,

to accept as true Plaintiffs’ factual assertions that the terms

of these master agreements required the parties to enter into

separately negotiated subsequent agreements. Drawing all

reasonable inferences from these facts in the light most

favorable to Plaintiffs at this stage, it appears plausible that

discovery will reveal evidence supporting this sort of

arrangement and demonstrating that the parties did not enter

installment contracts, as Defendants assert. 

20

Case 1:11-cv-03119-NLH-KMW Document 27 Filed 04/01/13 Page 20 of 35 PageID: 473
These allegations, accepted as true and considered in the

light most favorable to Plaintiffs, are adequate to defeat

Defendants’ argument that the parties’ contracts were in fact

installment contracts. Accordingly, if Plaintiffs have

sufficiently alleged that Defendants falsely stated their intent

to honor a promise made to Plaintiffs, such misstatements of

present fact would qualify as a breach of a separate and

extraneous duty not to commit fraud — a duty beyond those imposed

by the contracts alone. See Bracco, 226 F. Supp. 2d at 564; Lo

Bosco, 891 F. Supp. at 1031–32 (“[W]here a promise is given and

the promisor knows at the time of promising that he has no

intention of fulfilling it, the promise will constitute a

misstatement of present fact and may support an allegation of

fraud” in the inducement). Allegations of such conduct would

support a claim for fraud in the inducement which would not be

barred by the economic loss doctrine. See Bracco, 226 F. Supp.

2d at 564.

In resolving this issue, again, the Court must accept as

true Plaintiffs’ factual assertions that for each discrete and

separate agreement negotiated after approximately October 2008,

Defendants promised at the time of the negotiations to ship

additional seafood product in exchange for additional cash

advancements, but intended, at that same time, to take

Plaintiffs’ money without any intention of shipping any product. 

21

Case 1:11-cv-03119-NLH-KMW Document 27 Filed 04/01/13 Page 21 of 35 PageID: 474
(See Second Am. Compl. ¶¶ 73-74, 92-93, 134) (alleging that

“[W]hen it negotiated the specific oral agreements, Defendants

intended to take Network Commodities’ [and Nebraskaland’s] money

with no intention to ship any product” and “Defendants made these

promises without the expectation of honoring their promises by

shipping the seafood product.”); (see also Id. ¶¶ 155-156, 182-

183) (asserting similarly that “beginning in October of 2008,

Defendant Miriello communicated with Stan Marvel from

Nebraskaland [and Roy Matthews from Network Commodities] on

numerous occasions, promising that if Nebraskaland [and Network

Commodities] advanced additional money, the Defendants would ship

seafood products.”) While this case may fall close to the edge

of that fuzzy dividing line between extrinsic and intrinsic fraud

claims, the Court finds these allegations are sufficient to

demonstrate at the motion to dismiss stage that Plaintiffs are

asserting claims for fraud in the inducement of each separately

negotiated agreement, a claim which is not barred by the economic

loss doctrine. Therefore, the Court rejects Defendants’ attempt

to dismiss Count Two on that basis. 

Alternatively, Defendants seek to dismiss Count Two for

failure to plead this fraud claim with the requisite

particularity required under Federal Rule of Civil Procedure

9(b). The district court may grant a motion to dismiss a fraudbased claim pursuant to Rule 9(b) if the plaintiff fails to plead

22

Case 1:11-cv-03119-NLH-KMW Document 27 Filed 04/01/13 Page 22 of 35 PageID: 475
with the required particularity. FED. R. CIV. P. 9(b). The

heightened pleading standard of Rule 9(b) requires that “in all

averments of fraud or mistake, the circumstances constituting

fraud or mistake shall be stated with particularity.” FED. R. CIV.

P. 9(b). As other courts have explained, plaintiffs asserting

fraud claims must specify “‘the who, what, when, where and how;

the first paragraph of any newspaper story.” DiLeo v. Ernst &

Young, 901 F.2d 624, 627 (7th Cir. 1990). The purpose of this

heightened requirement serves to put the defendants on “notice of

the claims against them, provides an increased measure of

protection for their reputations, and reduces the number of

frivolous suits brought solely to extract settlements.” In re

Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1418 (3d Cir.

1996). In the Third Circuit, plaintiffs may satisfy Rule 9(b)’s

requirement by pleading the “date, place or time” of the fraud,

or through “alternative means of injecting precision and some

measure of substantiation into their allegations of fraud.” 

Seville Indus. Mach. Corp. v. Southmost Mach. Corp., 742 F.2d

786, 791 (3d Cir. 1984). Plaintiffs also must allege who made a

misrepresentation to whom and the general content of the

misrepresentation. See Saporito v. Combustion Eng'g, 843 F.2d

666, 675 (3d Cir. 1988).

To the extent Defendants contend that Plaintiffs’ fraud in

the inducement claim fails because the alleged misrepresentations

23

Case 1:11-cv-03119-NLH-KMW Document 27 Filed 04/01/13 Page 23 of 35 PageID: 476
were made after the contracts were entered between the parties

such that Plaintiffs could not have been fraudulently induced,

the Court has already rejected the underlying basis for that

argument and this contention again fails. However, Defendants

are correct that the specific paragraphs of Plaintiffs’ Second

Amended Complaint cited in their brief are insufficient, standing

alone, to meet the requirements of Rule 9(b). Defendants,

though, appear to disregard numerous other paragraphs of the

complaint and its attached invoices — specifically paragraphs 50,

61-62, 73-74, 80, 92-93, 123-124, 134, 155-156, and 182-183. 

Read together and accepted as true, these paragraphs, along

with the invoices, detail the specific who, what, where, when,

and how of Plaintiffs’ fraud in the inducement claim with

sufficient particularly for purposes of Rule 9(b) to put

Defendants on notice of the alleged misconduct that forms the

basis of the fraud claim. Plaintiffs allege that during the

course of negotiations from October of 2008 through February of

2009 (on the specific dates outline in the invoices), Miriello

made statements to Marvel and Matthews that Defendants would ship

seafood product in exchange for cash advancements, even though

Defendants had no intention to do so, and the Miriello made these

statements and communications for the purpose of convincing

Plaintiffs to wire cash to Defendants. Plaintiffs allege that

Miriello knew at the time of these statements that no such

24

Case 1:11-cv-03119-NLH-KMW Document 27 Filed 04/01/13 Page 24 of 35 PageID: 477
shipments would be made, and these allegations collectively are

sufficient to survive a motion to dismiss under Rule 9(b) at this

time.

D. Unjust Enrichment 

Defendants also argue that Plaintiffs’ unjust enrichment

claim “must be dismissed because the alleged contracts govern the

rights of the parties.” (Defs.’ Br. 19.) Defendants argue that

Plaintiffs’ claims are based on so-called “master agreements” for

the shipment of seafood product and note that Plaintiffs attached

to the Second Amended Complaint copies of the invoices “at the

center of the alleged contractual dispute.” (Id.) Defendants

also contend that Plaintiffs’ claim for damages on its unjust

enrichment claim as alleged in Count Three “is exactly the same

as its claim for damages on its breach of contract claim” for the

amounts set forth in the invoices. (Id. at 19-20.) Therefore,

Defendants argue, Plaintiffs’ unjust enrichment claim must be

dismissed because it expressly arises out of the alleged

contracts between the parities. (Id. at 20.) 

In making this argument, Defendants correctly note that

“[u]nder New Jersey law, ‘recovery under unjust enrichment may

not be had when a valid, unrescinded contract governs the rights

of the parties.’” (Defs.’ Br. 18) (citing Van Orman v. Am. Ins.

Co., 680 F.2d 301, 310 (3d Cir. 1982)). However, Van Orman was

25

Case 1:11-cv-03119-NLH-KMW Document 27 Filed 04/01/13 Page 25 of 35 PageID: 478
an appeal from an order of the district court granting in part

plaintiffs’ motion for summary judgment on the unjust enrichment

claim. 680 F.2d at 314. By contrast, before the Court at this

time is a motion to dismiss, as opposed to a motion for summary

judgment. 

While a plaintiff may ultimately be precluded from

recovering on both a breach of contract claim and on an unjust

enrichment claim, a plaintiff is not precluded from pleading both

claims as alternative theories of recovery at the motion to

dismiss stage. See In re K–Dur Antitrust Litig., 338 F. Supp. 2d

517, 544 (D.N.J. 2004). In this District, multiple courts have

allowed a plaintiff to plead claims under both theories of

recovery in the alternative and have declined to dismiss unjust

enrichment claims at the motion to dismiss stage finding such a

dismissal premature. MK Strategies, LLC v. Ann Taylor Stores

Corp., 567 F. Supp. 2d 729, 736 (D.N.J. 2008) (recognizing that

courts in this District have “regularly permitted claims for both

unjust enrichment and breach of contract to proceed at the motion

to dismiss stage, finding that dismissal of one of these claims

would be premature.”) (citing Dewey v. Volkswagen AG, 558 F.

Supp. 2d 505, 528-29 (D.N.J. 2008); Titan Stone, Tile & Masonry,

Inc. v. Hunt Constr. Group, Inc., No. 05-3362, 2006 WL 2788369,

at *5 (D.N.J. Sept. 26, 2006); Myers v. MedQuist, Inc., No.

05-4608, 2006 WL 3751210, at *8 (D.N.J. Dec. 20, 2006)).

26

Case 1:11-cv-03119-NLH-KMW Document 27 Filed 04/01/13 Page 26 of 35 PageID: 479
To be clear, Defendants seek to dismiss Plaintiffs’ claim

for unjust enrichment strictly on the basis that recovery on this

claim is precluded by virtue of the parties’ express contracts

and do not argue that Plaintiffs have failed to allege the

necessary elements of the claim. Accordingly, the Court finds

that dismissal of Plaintiffs’ unjust enrichment claim on that

basis would be premature at the motion to dismiss stage of these

proceedings. Defendants’ motion to dismiss Count Three of the 4

Second Amended Complaint is therefore denied. 

E. Federal and State RICO Claims 

As explained by the Third Circuit:

The [federal] RICO statute authorizes civil suits by

“[a]ny person injured in his business or property by

reason of a violation of [18 U.S.C. § 1962].” 18

U.S.C. § 1964© (1988). Section 1962 contains four

separate subsections, each addressing a different

problem. Section 1962(a) prohibits “any person who

has received any income derived ... from a pattern

of racketeering activity” from using that money to

acquire, establish or operate any enterprise that

affects interstate commerce. Section 1962(b)

prohibits any person from acquiring or maintaining

an interest in, or controlling any such enterprise

“through a pattern of racketeering activity.” 

 However, at a later stage of this litigation, if it is 4

found that valid contracts exist on the terms Plaintiffs assert,

then the existence of these contracts would preclude Plaintiffs

from recovering on a theory of unjust enrichment. Alternatively,

if it is determined that these contracts are void, Plaintiffs may

then only proceed on their unjust enrichment claim rather than

their breach of contract claim. See Mendez v. Avis Budget Group,

Inc., No. 11–6537, 2012 WL 1224708, at *8 (D.N.J. April 20,

2012). At this time though, Federal Rule of Civil Procedure 8

permits Plaintiffs claims for both breach of contract and unjust

enrichment to be pled in the alternative. 

27

Case 1:11-cv-03119-NLH-KMW Document 27 Filed 04/01/13 Page 27 of 35 PageID: 480
Section 1962© prohibits any person employed by or

associated with an enterprise affecting interstate

commerce from “conduct[ing] or participat[ing] ...

in the conduct of such enterprise's affairs through

a pattern of racketeering activity.” Finally,

section 1962(d) prohibits any person from

“conspir[ing] to violate any of the provisions of

subsections (a), (b), or ©.”

Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1411 (3d

Cir. 1991).

In order to adequately plead a federal RICO violation, a 5

plaintiff must allege: (1) conduct (2) of an enterprise (3)

through a pattern (4) of racketeering activity, and a pattern of

racketeering activity requires at least two predicate acts of

racketeering. Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479,

496 (1985). These predicate acts of racketeering may include,

inter alia, federal mail fraud under 18 U.S.C. § 1341 or federal

wire fraud under 18 U.S.C. § 1343. See 18 U.S.C. § 1961(1). The

federal mail and wire fraud statutes prohibit the use of the mail

or interstate wires for purposes of carrying out any scheme or

artifice to defraud. See 18 U.S.C. §§ 1341, 1343. With respect

The New Jersey Supreme Court has previously recognized the 5

state RICO statute, which was modeled on its federal counterpart,

should be construed in conformity with the federal RICO statute.

See Cetel v. Kirwan Financial Group, Inc., 460 F.3d 494, 510 (3d

Cir. 2006) (citing State v. Ball, 141 N.J. 142, 155–56, 661 A.2d

251 (1995)). Because the same analysis applies to both

Plaintiffs’ state and federal RICO Claims, the Court does not

separately address the sufficiency of Plaintiffs’ state RICO

claims as its finding with respect to the federal claim is

applicable to both Counts Four and Five of the Second Amended

Complaint.

28

Case 1:11-cv-03119-NLH-KMW Document 27 Filed 04/01/13 Page 28 of 35 PageID: 481
to mail and wire fraud, “a scheme or artifice to defraud ‘need

not be fraudulent on its face, but must involve some sort of

fraudulent misrepresentations or omissions reasonably calculated

to deceive persons of ordinary prudence and comprehension.’”

Kehr, 926 F.2d at 1415 (citation omitted). Moreover, although a

scheme to defraud does not require affirmative misrepresentations

be made, “the statutory term ‘defraud’ usually signifies the

deprivation of something of value by trick, deceit, chicane or

overreaching.” Id. (citation and internal quotations omitted).

The Third Circuit has instructed that where a plaintiff

relies on mail and wire fraud as a basis for a RICO violation,

the allegations of fraud must comply with Federal Rule of Civil

Procedure 9(b), which requires that allegations of fraud be pled

with specificity. Kolar v. Preferred Real Estate Investments,

Inc., 361 F. App’x 354, 363 n.8 (3d Cir. 2010) (citing Lum v.

Bank of Am., 361 F.3d 217, 224 (3d Cir.2004)). Accordingly, to

satisfy Rule 9(b), a plaintiff must plead with particularity “the

‘circumstances' of the alleged fraud in order to place the

defendants on notice of the precise misconduct with which they

are charged, and to safeguard defendants against spurious charges

of immoral and fraudulent behavior.” Id. at 223–24. A plaintiff

may satisfy this requirement by pleading the “date, place or

time” of the fraud, or through “alternative means of injecting

precision and some measure of substantiation into their

29

Case 1:11-cv-03119-NLH-KMW Document 27 Filed 04/01/13 Page 29 of 35 PageID: 482
allegations of fraud.” Kolar, 361 F. App’x at 363 n.8 (citing

Lum, 361 F.3d at 224). A plaintiff must “also must allege who

made a misrepresentation to whom and the general content of the

misrepresentation.” Lum, 361 F.3d at 224.

As a threshold matter, Defendants argue that Plaintiffs have

failed to plead the predicate acts of mail and wire fraud with

the particularity required by Rule 9(b). (Defs.’ Br. 24.) In

making this argument, Defendants assert that the Second Amended

Complaint only alleges communications concerning the performance

of the parties’ contracts and does not allege a scheme to defraud

but simply recites the elements of the RICO claims without

providing any factual support. (Id. at 24-25.) The Court

rejects Defendants’ argument with regard to the issue of Rule

9(b) particularity for pleading mail and wire fraud claims under

RICO.

The Third Circuit has required plaintiffs to put defendants

on notice with regard to the misconduct that is alleged by

pleading the “date, place or time” of the fraud, or through

“alternative means of injecting precision and some measure of

substantiation into their allegations of fraud.” As the Court

set forth supra with regard to Plaintiffs’ fraud in the

inducement claim, the Court similarly finds that the allegations

of the Second Amended Complaint meet the Rule 9(b) pleading

standard. Taken as true and viewed in the light most favorable

30

Case 1:11-cv-03119-NLH-KMW Document 27 Filed 04/01/13 Page 30 of 35 PageID: 483
to Plaintiffs, the Second Amended Complaints put Defendants on

notice of the alleged misconduct: i.e., statements made by

Defendant Miriello to Marvel and Matthews by telephone and email

between October 2008 and February 2009 (on the specific dates of

the invoices attached to the complaint) that additional cash

advances from Plaintiffs would result in the shipment of seafood

product, although Miriello never intended to make such shipment,

and that these statements were made for the purpose of obtaining

serial cash advances from Plaintiffs by wire and by mail.

These allegations clearly assert that fraudulent

misrepresentations were repeatedly made by Miriello which were

reasonably calculated and expressly designed to deceive

Plaintiffs into wiring further cash advances by the use of

trickery, deceit, and dishonesty on the part of Miriello. See

Kehr, 926 F.2d at 1415. Plaintiffs allege that Defendants

executed this scheme by fulfilling prior contractual obligations

between the parties to build trust at the inception of their

business relationships in order to subsequently employ dishonest

methods to obtain Plaintiffs’ money. These allegations can

fairly be said to assert specific communications, the dates they

were made, the nature of the communications, how they were made,

who made these communications to whom, and for what purpose. 

Thus, Plaintiffs have thus injected a sufficient amount of

precision and substantiation into their fraud claims. Overall,

31

Case 1:11-cv-03119-NLH-KMW Document 27 Filed 04/01/13 Page 31 of 35 PageID: 484
the Court is satisfied that Rule 9(b) has been met with respect

to the RICO allegations in Counts Four and Five.

Defendants also argue that Plaintiffs’ RICO claims fail to

sufficiently allege a pattern of racketeering activity, or that

there is a threat that the alleged conduct will continue. 

Defendants correctly note that a pattern of racketeering activity

“requires more than the [mere] commission of the requisite number

of predicate acts ... [but requires a] plaintiff must show also

‘that the racketeering acts are related, and that they amount to

or pose a threat of continued criminal activity.’” Kehr, 926

F.2d at 1412. 

The Court accepts for purposes of this motion that the

predicate acts Plaintiffs complain of are sufficiently related

because the allegations of the Second Amended Complaint make

clear that these acts of mail and wire fraud all had similar

purposes (obtaining cash advances by falsely promising to ship

product without any actual intent to do so), results (cash

advancements were wired to Defendants who did not make shipment

and kept Plaintiffs’ money), participants and victims (Miriello,

Marvel, Matthews, Nebraskaland and Network Commodities), and

methods of commission (email and telephone communications from

Miriello to Plaintiffs in order to secure wire transfers). 

However, the Court finds that Plaintiffs’ Second Amended

Complaint fails with respect to the continuity requirement to

32

Case 1:11-cv-03119-NLH-KMW Document 27 Filed 04/01/13 Page 32 of 35 PageID: 485
demonstrate a pattern of racketeering activity. 

In order to comprise a “pattern” under the RICO statute,

Plaintiffs must demonstrate both the “relatedness” and

“continuity” tests. Kehr, 926 F.2d at 1412. With respect to

continuity, “related predicate acts in furtherance of a single

scheme can constitute a pattern if the acts constitute or present

the threat of long-term continuous criminal activity.” Id. More

specifically, “continuity refers ‘either to a closed period of

repeated conduct, or to past conduct that by its nature projects

into the future with a threat of repetition.’” Id. (citation

omitted). Continuity represents a temporal concept and a

“short-term scheme threatening no future criminal activity will

not suffice.” Id. Accordingly, “the length of time over which

the criminal activity occurs or threatens to occur is an

important factor” for the Court to consider and “‘[p]redicate

acts extending over a few weeks or months and threatening no

future criminal conduct do not satisfy this requirement[.]’” Id.

(citation omitted). “Thus, although a single fraudulent scheme

can give rise to RICO liability, when that scheme is short-lived

and directed at a limited number of people, this court has

required some further indication that the defendant's fraudulent

activities are likely to continue.” Id. at 1413. In this

particular case, Plaintiffs’ Second Amended Complaint fails to

allege any further indication these activities are likely to

33

Case 1:11-cv-03119-NLH-KMW Document 27 Filed 04/01/13 Page 33 of 35 PageID: 486
continue.

While it is clear from the Second Amended Complaint and

their opposition that Plaintiffs suspect Defendants have engaged 6

in this same conduct in order to similarly defraud multiple

companies out of millions of dollars, their allegations in this

regard are woefully insufficient to support the continuity

requirement for their RICO claims. Based on the Second Amended

Complaint, it is clear that Defendants’ alleged conduct lasted

only approximately five months from October 2008 through February

2009, a relatively short period of time, and was aimed at a

limited number of entities – the two Plaintiffs in this action. 

Plaintiffs provide no other facts which the Court could accept as

true to infer that other companies were subjected to similar

conduct. Plaintiffs do not allege the names of any other

corporations, business, or individuals aware of Defendants

engaging in similar behavior as alleged here. Nor do Plaintiffs

allege the existence of any other law suits against Defendants

alleging similar conduct, or related criminal or regulatory

investigations. It further appears that both Plaintiffs have

ceased doing business with Defendants and thus no facts in the

See, e.g., (Second Am. Compl. ¶ 12) (“Upon information and 6

belief, Defendants utilized this scheme both before, during, and

after the scheme alleged herein on other persons not parties to

this suit.”); (Pls.’ Opp’n 21-22) (“[B]ased upon the Defendants’

failure to respond to their demands for payment, Plaintiffs

believe that the Defendants’ unlawful activity has continued and

will continue until they are held accountable.”) 

34

Case 1:11-cv-03119-NLH-KMW Document 27 Filed 04/01/13 Page 34 of 35 PageID: 487
complaint exist to indicate Defendants’ fraudulent conduct will

continue or that there exists a threat of ongoing criminal

activity. Accordingly, because Plaintiffs have failed to

demonstrate the continuity requirement of a pattern of

racketeering activity, the Court dismisses Counts Four and Five

of the Second Amended Complaint. 

V. CONCLUSION

For the reasons expressed above, Defendants’ Motion to

Dismiss is granted in part and denied in part. Plaintiffs’ RICO

claims as alleged in Counts Four and Five of the Second Amended

Complaint will be dismissed, as will Count One for breach of

contract against Defendant Miriello. An appropriate Order will

be entered.

Date: March 28, 2013 s/ Noel L. Hillman 

At Camden, New Jersey NOEL L. HILLMAN, U.S.D.J.

35

Case 1:11-cv-03119-NLH-KMW Document 27 Filed 04/01/13 Page 35 of 35 PageID: 488