Opinion
2:17-CV-00807-CB
06-30-2022
WASHINGTON COUNTY FAMILY ENTERTAINMENT, LLC, Plaintiff, v. RNN ENTERTAINMENT INC, ROMEL MARCUS, DERRICK ROBINSON, JOHN AND JANE DOES 1-10, MING AND SONS, LLC, GOODLIFE ENTERTAINMENT L.L.C., JOHN WARDLOWJR., THE RTD GROUP, LLC, OLUREMI DARAMOLA, SHANE A. HALLS, Defendants,
Honorable Cathy Bissoon United States District Judge via electronic filing Counsel of record via electronic filing Pro se Litigants
Honorable Cathy Bissoon United States District Judge via electronic filing Counsel of record via electronic filing Pro se Litigants
REPORT AND RECOMMENDATION
Cynthia Reed Eddy Chief United States Magistrate Judge
I. RECOMMENDATION
This civil action was initiated in this court on June 16, 2017, by Plaintiff who is the master tenant of a sporting event and entertainment facility known as Wild Things Park (the “Park”), which is located in Washington County, Pennsylvania. Plaintiff's complaint sets forth claims to recover amounts paid and expenses incurred from Defendants, who Plaintiff claims engaged in a fraudulent scheme related to booking concerts by hip-hop artists at the Park. The Second Amended Complaint (“SAC”) sets forth two claims for violations of the Racketeer Influenced and Corrupt Organizations (“RICO”) Act, 18 U.S.C. § 1962(c) and (d), as well as state law tort claims for fraudulent misrepresentation, conversion, unjust enrichment, and civil conspiracy. (ECF No. 164). This court has subject matter jurisdiction over the controversy pursuant to 18 U.S.C. § 1964 and 28 U.S.C. § 1332, and supplemental jurisdiction over the state law claims pursuant to 28 U.S.C. § 1367.
Presently before the court is a partial motion for summary judgment filed by Plaintiff against pro se Defendants Romel Marcus and Shane A. Halls. (ECF No. 256). For the reasons that follow, it is respectfully recommended that Plaintiff's motion be granted.
This is the second partial motion for summary judgment filed against these Defendants. The first partial motion for summary judgment was granted on June 2, 2022. (ECF No. 265). This partial motion for summary judgment is with respect to the two remaining claims, Counts I and II, against the same Defendants.
II. REPORT
a. Background
Plaintiff Washington County Family Entertainment, LLC, is a limited liability company and the master tenant of the Park. Defendants are individuals and organizations that Plaintiff contends played a part in an ongoing conspiracy to defraud Plaintiff of money Plaintiff remitted in its efforts to secure several hip-hop artists to perform at the Park.
Defendants The Bodie Group, LLC (“Bodie”), Gustav Heninburg, II, James G. Evans, and Gannon Wealth Security Partners, LLC “(GWSP”) were dismissed voluntarily on January 19, 2022. (ECF No. 232). Defendants Francisco Cina and FC Consultants, Inc. (“FCC”) were dismissed on November 2, 2021. (ECF No. 224). In addition, Plaintiff obtained default judgments against the following defendants: RNN Entertainment, Inc. (“RNN”) (ECF No. 35), Ming & Sons, LLC (“Ming”) (ECF No. 52), Goodlife Entertainment, LLC (“Goodlife”) (ECF No. 43), John Wardlow, Jr. (ECF No. 42), The RTD Group (“RTD”) (ECF No. 74), and Oluremi Daramola (ECF No. 92). On January 3, 2019, the District Court entered judgment in favor of Plaintiff and against Defendants RNN, Ming, Goodlife, Wardlow, RTD, and Daramola, jointly and severally, in the amount of $1,333,376.40, plus post-judgment interest and attorneys' fees. (ECF No. 130). In addition, Defendant Salim Goitem was dismissed from this case on September 12, 2018. (ECF No. 99). Finally, Plaintiff obtained a default judgment against Defendant Derrick Robinson on September 26, 2019. (ECF No. 176). On February 2, 2022, Plaintiff filed a motion for default judgment against Robinson. (ECF No. 237). On February 4, 2022, this Court ordered any Defendant wishing to file a response to this motion to do so by February 14, 2022. (ECF No. 240). Neither Robinson nor any other defendant has responded to that motion, and that motion is disposed of by separate Report and Recommendation.
The facts relevant to the issues presented in this partial motion for summary judgment are as follows. “In early February 2017, [Evans, Cina, and Heningburg] traveled to Allegheny and Washington Counties, Pennsylvania, and met with [Plaintiff] to propose hosting music concerts at the Park.” Pl.'s Concise Statement of Material Facts (“CSF”) (ECF No. 226) at ¶ 4. “On February 16, 2017, [Plaintiff] received from Evans via email a purported ‘Artist Performance Agreement' for a Wiz Khalifa and Lil Uzi Vert concert at the Park on June 10, 2017.” Id. at ¶ 5. “In the Khalifa/Uzi Vert Agreement, Romel Marcus was specified as the authorized signatory on behalf of Wiz Khalifa and Lil Uzi Vert.” Id. at ¶ 7. “Romel Marcus was not an authorized agent for Khalifa or Lil Uzi Vert.” Id. at ¶ 8. On February 23, 2017, “pursuant to wire instructions on the Khalifa/Uzi Vert Agreement,” Plaintiff “executed a wire transfer in the amount of $111,500.00 to an account at J.P. Morgan Chase Bank, N.A. held by [Ming (which was operated and controlled by Shane A. Halls) as a deposit for the appearances of Wiz Khalifa and Lil Uzi Vert.” Id. at ¶ 11.
Pursuant to Local Rule 7.1.B, Plaintiff filed RICO Case Statement (“RCS”) with the SAC. (ECF No. 177). In RCS, Plaintiff sets forth RICO claims against the following Defendants: Marcus, Robinson, Bodie, Heningburg, Evans, Cina, GWSP, FCC, and Halls (collectively “the CoConspirators”). See RCS (ECF No. 177) at 2.
Marcus signed this agreement on behalf of RNN.
Marcus testified at his deposition that as of February 16, 2017, he had no “written agreement” or “written authority” that he was able to act as a “designated agent and representative for Wiz Khalifa.” Marcus Depo. (ECF No. 225-4) at 3. Marcus testified to the same with regard to Lil Uzi Vert. Id.
Ming was served on August 3, 2017. According to the return of service, the summons was sent to and accepted by “Shane A. Halls, who is designated by law to accept service of Process on behalf of Ming & Sons, LLC.” Plaintiff obtained a default judgment against Ming on November 13, 2017. (ECF No. 45).
Similarly, on March 6, 2017, Plaintiff received “a purported ‘Artist Performance Agreement' for a Migos and Skrillex concert at the Park on August 12, 2017.” Id. at ¶ 16. “In the Migos/Skrillex Agreement, Marcus was specified as the authorized signatory on behalf of Migos and Skrillex.” Id. at ¶ 18. “Marcus was not an authorized agent for Migos or Skrillex.” Id. at ¶ 19. Plaintiff executed a wire transfer of $175,000 to the Ming account, which was controlled by Halls. Id. at ¶ 24. Plaintiff later learned that these entities and individuals were not authorized agents for these artists and was forced to cancel these concerts.
Marcus also testified at his deposition that he had no written authority to enter into an agreement on behalf of Migos or Skrillex. Marcus Depo. (ECF No. 225-4) at 9-10.
This litigation followed, with Plaintiff filing the Complaint against Defendants in June 2017, and then the filing of the SAC on August 30, 2019. (ECF Nos. 1, 164). On October 3, 2019, Marcus filed an answer to the SAC. (ECF No. 178). In October 2019, Halls filed a motion to dismiss the SAC and declaration in support thereof. (ECF Nos. 181, 182). After briefing was completed, on March 6, 2020, this Court filed a report and recommendation recommending, in relevant part, that the motion to dismiss filed by Halls be granted in part and denied in part. (ECF No. 192). Specifically, this Court recommended that Plaintiff's claim for fraudulent misrepresentation against Halls be dismissed, and the motion be denied in all other respects. Id. The District Court adopted this Court's report and recommendation on May 4, 2020. (ECF No. 193). Halls filed an answer to the SAC on June 11, 2020. (ECF No. 196).
Discovery in this matter then commenced, and on December 1, 2021, in compliance with an order of this Court, Plaintiff filed a motion for partial summary judgment. (ECF No. 225). Plaintiff moved for summary judgment against Marcus with respect to its claims for conversion, fraudulent misrepresentation, and unjust enrichment. Plaintiff moved for summary judgment against Halls with respect to its claims for conversion and unjust enrichment. Both Marcus and Halls filed responses. (ECF Nos. 233, 239). On February 16, 2022, this Court recommended that Plaintiff's motion for summary judgment be granted (ECF No. 241), and on June 2, 2022, the District Court entered an order adopting this Court's report and recommendation. (ECF No. 265).
Meanwhile, on April 25, 2022, Plaintiff filed a motion for leave to file a motion for summary judgment against Halls and Marcus with respect to the claims not raised in the initial motion for partial summary judgment. (ECF No. 248). This Court granted that motion, and on April 29, 2022, Plaintiff filed the instant motion and brief in support. (ECF Nos. 251, 256-57). Defendants filed a responses to the motion. This matter is now ripe for disposition.
On June 6, 2022, and June 7, 2022, respectively, Marcus and Halls filed documents. It is not clear whether these documents are in response to the District Court's Memorandum Order or this Court's order for them to respond to the partial motion for summary judgment. (ECF Nos. 266, 267). In either event, upon review of the documents, they do not change this Court's recommendation in this matter.
b. Standard of Review
Summary judgment is appropriate when the moving party establishes “that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. Pro. 56(a). A genuine issue of material fact is one that could affect the outcome of litigation. Willis v. UPMC Children's Hosp. of Pittsburgh, 808 F.3d 638, 643 (3d Cir. 2015) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). However, “[w]here the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial.” N.A.A.C.P. v. North Hudson Reg'l Fire & Rescue, 665 F.3d 464, 475 (3d Cir. 2011) (quoting Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)).
The initial burden is on the moving party to adduce evidence illustrating a lack of genuine, triable issues. Hugh v. Butler Cnty. Family YMCA, 418 F.3d 265, 267 (3d Cir. 2005) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986)). Once the moving party satisfies its burden, the non-moving party must present sufficient evidence of a genuine issue, in rebuttal. Santini v. Fuentes, 795 F.3d 410, 416 (3d Cir. 2015) (citing Matsushita Elec. Indus. Co., 475 U.S. at 587). When considering the parties' arguments, the court is required to view all facts and draw all inferences in the light most favorable to the non-moving party. Id. (citing United States v. Diebold, Inc., 369 U.S. 654, 655 (1962)). The benefit of the doubt will be given to allegations of the nonmoving party when in conflict with the moving party's claims. Bialko v. Quaker Oats Co., 434 Fed.Appx. 139, 141 n.4 (3d Cir. 2011) (citing Valhal Corp. v. Sullivan Assocs., 44 F.3d 195, 200 (3d Cir. 1995)).
Nonetheless, a well-supported motion for summary judgment will not be defeated where the non-moving party merely reasserts factual allegations contained in the pleadings. Betts v. New Castle Youth Dev. Ctr., 621 F.3d 249, 252 (3d Cir. 2010) (citing Williams v. Borough of West Chester, 891 F.2d 458, 460 (3d Cir. 1989)). The non-moving party must resort to affidavits, depositions, admissions, and/or interrogatories to demonstrate the existence of a genuine issue. Guidotti v. Legal Helpers Debt Resolution, L.L.C., 716 F.3d 764, 773 (3d Cir. 2013) (citing Celotex Corp., 477 U.S. at 324).
c. Discussion
This Court will consider Plaintiff's motion for summary judgment filed with respect to each claim: (1) a violation of 18 U.S.C. § 1962(c); and (2) a violation of 18 U.S.C. § 1962(d). (ECF No. 257).
Plaintiff seeks summary judgment against both Marcus and Halls on its RICO claim pursuant to a violation of 18 U.S.C. § 1962(c). The statute provides that “[i]t 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.” 18 U.S.C. § 1962(c). “To prevail on a claim under section 1962(c), [a plaintiff] must show (1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity.” Williams v. Enwereji, 2019 WL 588700, at *3 (E.D. Pa. Feb. 12, 2019).
a. Conduct of an Enterprise
This Court considers the first two elements, conduct of an enterprise, together. “RICO reaches a group of persons associated together for a common purpose of engaging in a course of conduct. An enterprise is proved by evidence of an ongoing organization, formal or informal, and by evidence that the various associates function as a continuing unit.” In re Le-Nature's Inc., 2009 WL 3571331, at *14 (W.D. Pa. Sept. 16, 2009) (internal citations and quotation marks omitted).
According to Plaintiff, the Co-Conspirators were involved in and working together as part of a common entity, with each having different roles and responsibilities. As discussed supra, some Co-Conspirators began the scheme by meeting with representatives of Plaintiff to schedule concerts. Specifically, Marcus testified that he represented in writing that he was an authorized agent for these artists. See Marcus Depo. (ECF No. 225-4). Based upon these representations and agreements, Plaintiff transferred funds related to those agreements to an account controlled by Halls. In fact, Halls admitted that he set up the account. See Halls' Resp. (ECF No. 267). Money from that account was then distributed to other Co-Conspirators. This scheme was repeated at least two times. Taken together, Plaintiff has demonstrated that these individuals and organizations functioned together as a common entity with an ongoing common purpose, and therefore the elements of conduct of an enterprise have been demonstrated by a preponderance of the evidence.
b. Pattern of Racketeering Activity
This Court now considers whether Plaintiff has proven that Defendants “(1) participated in the enterprise's affairs through at least two predicate acts of racketeering activity; and (2) that the acts of racketeering activity constituted a pattern i.e. that the predicate acts were related and amounted to, or threatened the likelihood of, continued criminal activity.” Alitsource S.A.R.L. v. Szumanski, 2022 WL 909872, at *6 (D.N.J. Mar. 29, 2022) (internal quotation marks omitted). “To plead wire fraud as a predicate act, a plaintiff must allege: (1) the existence of a scheme to defraud; (2) the use of the mails [or wires] ... in furtherance of the fraudulent scheme; and (3) culpable participation by the defendant, that is, participation by the defendant with specific intent to defraud.” Id. (internal quotation marks omitted).
Here, as discussed supra, Halls admitted to setting up the account that received at least two separate wire transfers. On February 21, 2017, Plaintiff “executed a wire transfer in the amount of $111,500.00” to the account controlled by Halls. Pl.'s Br. (ECF No. 257) at 4. In addition, “on March 7, 2017, [Plaintiff] executed a wire transfer in the amount of $175,000.00” to the account controlled by Halls. Id. at 6. Neither transfer would have occurred but for Marcus's admittedly false representation to Plaintiff that he was an authorized agent for the artists. Based on the foregoing, Plaintiff has demonstrated by a preponderance of the evidence that both Marcus and Halls engaged in at least two separate wire transfers to defraud Plaintiff. Thus, Plaintiff has demonstrated a pattern of racketeering activity by a preponderance of the evidence.
Based on the foregoing, Plaintiff has established the elements of a section 1962(c) RICO claim against both Marcus and Halls, and it is respectfully recommended that summary judgment be granted in favor of Plaintiff and against Marcus and Halls on this claim.
Plaintiff next contends it is entitled to summary judgment on its claim against Defendants for violating 18 U.S.C. § 1962(d). “Section 1962(d) makes it unlawful to conspire to violate subsections (a) through (c).” Humphrey v. GlaxoSmithKline PLC, 905 F.3d 694, 698 (3d Cir. 2018). “RICO conspiracy is not a mere conspiracy to commit the underlying predicate acts. It is a conspiracy to violate RICO that is, to conduct or participate in the activities of a corrupt enterprise.” Alitsource S.A.R.L., 2022 WL 909872, at *11 (emphasis in original).
Plaintiff contends that Marcus and Halls should be liable under this statute “because they knowingly facilitated the further operation” of this fraudulent enterprise. Pl.'s Br. (ECF No. 267) at 13. Specifically, there is no dispute “that Marcus and RNN [] were not authorized to schedule the artists (as represented) nor is there any dispute that [Plaintiff] paid money through interstate wire transfers and that such monies were dispersed by Halls to the Co-Conspirators.” Id. Based on the foregoing, the elements of a RICO conspiracy have been established, and this Court respectfully recommends that summary judgment be granted in favor of Plaintiff and against Marcus and Halls on the section 1962(d) RICO conspiracy claim.
d. Conclusion
Accordingly, it is respectfully recommended that Plaintiff's motion for summary judgment be granted, and judgment be entered in favor of Plaintiff and against Marcus and Halls on Counts I and II of the SAC.
Accordingly, pursuant to 28 U.S.C. § 636(b)(1)(B)-(C), Federal Rule of Civil Procedure 72, and the Local Rules for Magistrates, the parties have until July 14, 2022, to file objections to this report and recommendation. Unless Ordered otherwise by the District Judge, responses to objections are due on July 28, 2022. Failure to file timely objections may constitute a waiver of any appellate rights. Brightwell v. Lehman, 637 F.3d 187, 193 n. 7 (3d Cir. 2011).
Respectfully submitted,