Opinion ID: 77633
Heading Depth: 2
Heading Rank: 3

Heading: Alternative Grounds to Dismiss Fraud, Conspiracy and RICO Claims

Text: 102 As we noted previously, a court must view a complaint in the light most favorable to the plaintiff and accept all of the plaintiff's well-pleaded facts as true when it considers a motion to dismiss a complaint under Rule 12(b)(6). St. Joseph's Hosp. v. Hospital Corp. of America, 795 F.2d at 954 (11th Cir.1986). Unfortunately, the plaintiffs simply have not asserted that many well-pleaded facts in this case. 103 The Federal Rules of Civil Procedure advise plaintiffs on the general rules of pleading in Rule 8, and the special rules for pleading fraud, mistake, or condition of the mind in Rule 9. Rule 8(a)(2) states that a pleading shall contain a short and plain statement of the claim showing that the pleader is entitled to relief. Fed. R.Civ.P. 8. If the claim alleges fraud, however, as the majority of the insurers' claims do in this case, Rule 9(b) dictates that the circumstances constituting fraud or mistake shall be stated with particularity. Fed.R.Civ.P. 9(b). 104 When we review the insurers' amended complaint against this standard, we find, as the district court did, that many of the claims fail to comport with the requirements of Rule 9(b). None of the claims which allege that the receivership entities aided and abetted insurance fraud (counts IV, VIII, XII, and XVIII) identify the agents or corporate representatives who participated in the alleged fraud. Nor do they identify the dates when the agents rendered assistance or explain how their conduct furthered the commission of insurance fraud. This is particularly problematic since the receivership entities were not even in existence when William Buchner and Jack Johnson are alleged to have committed the acts of insurance fraud that underlie two of the four aiding and abetting claims (those involving AUL and Reassure). See supra note 2. 105 The district court found that the insurers' aiding and abetting claims failed to plead fraud with specificity, and ordered the claims dismissed for failure to state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure. Although we have found that three of the insurers' claims fail because of incontestability clauses in the insurance contracts, 15 the district court's rationale for dismissing these claims provides an alternative independent ground upon which to dismiss counts IV, VIII, and XVIII. We agree with the ruling of the district court on this ground.
106 The elements that a plaintiff must allege for a conspiracy claim are that 1) two or more parties 2) agree 3) to commit an unlawful act. Under Florida law, the gist of a civil conspiracy is not the conspiracy itself but the civil wrong which is done through the conspiracy which results in injury to the Plaintiff. Czarnecki v. Roller, 726 F.Supp. 832, 840 (S.D.Fla.1989) (quoting Buckner v. Lower Florida Keys Hosp. Dist., 403 So.2d 1025, 1027 (Fla.Dist.Ct.App.1981)). Thus, as this Court has noted, a claim that is found not to be actionable cannot serve as the basis for a conspiracy claim. See Posner v. Essex Ins. Co., 178 F.3d 1209, 1217 (11th Cir.1999) (applying Florida law). 107 Insurers VFL, Reassure, Jefferson Pilot and AUL allege that the receivership entities conspired to acquire fraudulently procured policies in violation of the FVSA, Fla. Stat. § 626.99275(1)(a). As we have already noted, however, the FVSA does not govern the receivership entities' actions with respect to the policies named in these claims because they concern out-of-state viators. The insurers cannot invoke the FVSA as the basis for a conspiracy claim in this case. 108 The insurers' civil conspiracy claims also fail to comport with the standards of Rule 9(b). As the district court noted, where a conspiracy claim alleges that two or more parties agreed to commit fraud, the plaintiffs must plead this act with specificity. Here, the insurers provided only conclusory statements. They did not explain how the receivership entities knew that the policies had been procured by fraud. The only explanation offered was that the receivership entities extensively evaluated the health of prospective viators before they tendered settlement offers. This is not sufficient. 109 The insurers also failed to state when the receivership entities and their network of unnamed brokers, agents, investors, and physicians agreed to engage in this fraudulent purchasing scheme or Acquisition Conspiracy. Nor did they allege that the receivership entities sought to acquire these policies after the contestability periods had expired. Accordingly, we find, as the district court suggested, that failure to plead fraud with specificity provides an alternative ground for dismissing the insurers' conspiracy claims.
110 The district court did not provide a reason for dismissing the RICO claims that AUL filed with respect to the Buchner viatical. Nevertheless, we are affirming the court's decision to dismiss all of AUL's fraud claims, including the two RICO claims, because we found the claims were time-barred. The district court dismissed AUL's other fraud claims because they did not conform to the heightened pleading requirements for fraud under Rule 9(b) of the Federal Rules of Civil Procedure. We have said this represents an independent alternative ground upon which to dismiss these particular claims. See supra pp. 1067-68. 111 Once the district court dismissed these two fraud claims, it could have also properly dismissed AUL's RICO claims since such claims cannot be maintained if the underlying predicate acts lack legal validity. And, absent any valid predicate acts, the insurers cannot state a claim for RICO violations. See Green Leaf Nursery v. E.I. DuPont De Nemours & Co., 341 F.3d 1292, 1308 (11th Cir.2003).
112 Ten other insurers also filed RICO claims as part of the amended ancillary complaint, but these insurers did not ground their RICO claims in specific predicate acts, as the law requires. See 18 U.S.C. §§ 1961(1)(a),(b), 1961(5). Instead, they alleged that the receivership entities engaged in an as yet undetermined number of telephone conversations and or mailings involving an undetermined number of fraudulently procured policies. The insurers not only failed to identify the specific policies addressed in these mailings, they also failed to allege that they suffered any particularized harm as a result of the defendants' activities. The district court dismissed these two claims, counts XXII and XXIII, for failure to state a claim and for lack of standing. 16 We affirm the district court's decision on these same grounds. 113