Opinion ID: 78049
Heading Depth: 2
Heading Rank: 1

Heading: RICO Ripeness

Text: Renta first argues that before the Commission can sue him under RICO, it must pursue any contractual remedies under the promissory notes against Baez-Figueroa. Baez-Figueroa is the allegedly responsible party because when he bought Bankinvest, he assumed its liabilities to BanInter. Although Renta labels his argument lack of standing and some cases use the same language, [14] he is really arguing that the Commission's claims are unripethat is, its damages are too uncertain for a claim to have accruedbecause it might get some of its money back elsewhere. Renta relies chiefly on Second Circuit caselaw concluding that a RICO plaintiff's damages must be clear and definite before a claim accrues. See, e.g., Denney v. Deutsche Bank AG, 443 F.3d 253, 267 (2nd Cir.2006) (citation omitted). He argues this heightened standard of certainty in pleading and proving damages prevents accrual of these claims, because BanInter has not yet reached a net loss figure by collecting on the debts. This argument is unpersuasive. First, our opinion in Arabian American Oil Co. v. Scarfone, 939 F.2d 1472, 1478-79 (11th Cir.1991), arguably rejects Renta's premise, as it permits RICO claims even when a breach of contract claim would also lie against the RICO defendant. Other circuits have rejected the clear and definite standard for accrual of a RICO claim outright, holding that a claim may accrue even when the amount of loss may be reduced by other lawsuits. These courts hold that the possibility of recovery on other claims affects the amount of RICO damages, not the accrual of the RICO claim. See, e.g., Grimmett v. Brown, 75 F.3d 506, 516-17 (9th Cir.1996). Even assuming without deciding that the Second Circuit's clear and definite standard is the correct one and is consistent with Arabian American Oil, it does not require the metaphysical certainty in damages that Renta suggests, and he could not obtain relief thereunder. Applying the clear and definite standard, the Second Circuit has concluded that the mere possibility of a state law claim for fraud or breach of contract does not necessarily render RICO claims predicated on fraud unripe. This is particularly true when the underlying debt is unsecured and other recovery is unlikely because the defendant has stripped a corporate defendant of assets. GICC Capital v. Technology Finance Grp., 30 F.3d 289, 293 (2nd Cir.1994). (Contrast that situation to one where a secured debtor-plaintiff has not yet foreclosed on collateral, meaning damages have not yet been incurred or are not ascertainable with the requisite clarity. See Motorola Credit Corp. v. Uzan, 322 F.3d 130, 136-38 (2nd Cir.2003), and First Nationwide Bank, 27 F.3d at 768-69.) In other words, there is no per se rulein this Circuit, the Second Circuit, or elsewherethat a plaintiff must pursue every other avenue of recovery, such as realization on collateral or claims for fraud or breach of contract, before his RICO claim is ripe. Nor is there a per se rule to the contrary. Rather, whether a plaintiff must pursue other remedies before a RICO claim depends on whether those other contingencies are sufficiently likely to mitigate the plaintiff's loss that damages in the RICO case cannot be ascertained, or may not have occurred at all. RICO need not necessarily be the claim of last resort, but neither can a plaintiff seek to treble damages that he did not actually incur. With these principles in mind, we do not believe the Commission's claim is unripe simply because the Commission has not pursued contractual remedies, if any, against Baez-Figueroa. First, the notes probably are not enforceable contracts; they are shams lacking consideration. The notes were issued under highly irregular circumstances, BanInter never took steps to enforce them against Bankinvest before the bank's collapse, and assuming the notes were signed in a signing spree, many of the bank transfers to which they ostensibly corresponded could not have been consideration for the notes. The transactions are more plausibly characterized as conversion than fraudulent inducement of unsecured loans. Even assuming the notes created enforceable contract rights, the damages BanInter suffered at Renta's hands were not so uncertain that threshold dismissal was warranted. Although the ongoing Dominican civil proceedings may result in possible recovery against Baez-Figueroa, who has significant personal assets but is also in jail and facing other claims from the collapse of BanInter, this mere possibility does not render the amount of damages unclear. This is not a case like Motorola, 322 F.3d at 136-38, or First Nationwide Bank, 27 F.3d at 768-69, where it was virtually certain that the amount of a fraudulently induced debt would be reduced by foreclosure on collateral. Recovery on the notes is, at best, a remote and highly contingent possibility. These RICO claims were ripe enough to be tried, under any standard.