Automotive Finance Corporation v. DZ Motors, Llc et al

BRIEF in Opposition

D.N.J.December 21, 2016

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY ____________________________________ AUTOMOTIVE FINANCE CORPORATION Plaintiff, Civil Action No. 3:16-cv-07955-MAS-DEA vs. DZ MOTORS, LLC; A TO Z AUTO CONNECTION, INC.; DMITRIY CIVIL ACTION ZHOLOBOV; ELENA V. ZHOLOBOV; RARITAN BAY FEDERAL CREDIT UNION; JOHN DOES 1 to 100 Defendant(s). Motion Returnable: January 3, 2017 ___________________________________ PLAINTIFF AUTOMOTIVE FINANCE CORPORATION BRIEF IN OPPOSITION TO DEFENDANTS MOTION TO DISMISS DONNA L. THOMPSON Attorney for Plaintiff PHYSICAL ADDRESS: 1442 Lakewood Road Manasquan, NJ 08736 SEND ALL MAIL: PO Box 679 Allenwood, NJ 08724 732-292-3000 Phone 732-292-3004 Fax donna.thompson@dlthompsonlaw.com Dated: December 21, 2016 Case 3:16-cv-07955-MAS-DEA Document 18 Filed 12/21/16 Page 1 of 15 PageID: 155 TABLE OF CONTENTS TABLE OF AUTHORITIES……………………………………………… 3 PRELIMINARY STATEMENT………………………………………….. 4 LEGAL ARGUMENT I. Standard of Review: Rule 12(b)(6)……………………… 7 II. Standard of Review: Rule 9(b)…….…………………… 9 III. Plaintiff’s complaint complies with both Rule 12(b)(6) and Rule 9(b)……………………………………………….. 10 IV. Plaintiff’s First Amended Complaint complies with the pleading requirements for a civil RICO claim………….. 12 CONCLUSION……………………………………………………………... 14 2 Case 3:16-cv-07955-MAS-DEA Document 18 Filed 12/21/16 Page 2 of 15 PageID: 156 TABLE OF AUTHORITIES Cases Angelastro v. Prudential-Bache Sec., Inc., 764 F.2d 939 (3d Cir.1985) ........................................ 8 Ashcroft v. Iqbal,556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ..................................... 9 Bartholomew v. Fischl, 782 F.2d 1148 (3d Cir.1986) .................................................................... 8 Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). ............ 9 Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957) ................................................. 8 Craftmatic Sec. Litig. v. Kraftsow, 890 F.2d 628 (3d Cir.1989) ................................................... 10 Ford Motor Co. v. Edgewood Props., 2009 U.S. Dist. LEXIS 4172(D.N.J. Jan. 20, 2009) ........ 13 Glassman v. Computervision Corp., 90 F.3d 617 (1st Cir.1996)). ............................................... 10 Graves v. Lowery, 117 F.3d 723 (3d Cir.1997) .............................................................................. 8 Holder v. City of Allentown, 987 F.2d 188 (3d Cir.1993) .............................................................. 8 In re Burlington Coat Factory Litig., 114 F.3d 1410 (3d Cir.1997)............................................. 10 Jackson Nat'l Life Ins. Co. v. Ligator, 949 F.Supp. 200 (S.D.N.Y.1996) .................................... 11 Mills v. Polar Molecular Corp., 12 F.3d 1170 (2d Cir.1993) ....................................................... 10 Naporano Iron & Metal Co. v. Am. Crane Corp., 79 F. Supp. 29 (D.N.J. 1999) ........................ 15 Papasan v. Allain, 478 U.S. 265, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986) .................................... 8 Phillips v. County of Allegheny,515 F.3d 224 (3d Cir.2008) .......................................................... 9 Quinones v. Szorc, 771 F.2d 289 (7th Cir.1985) ............................................................................ 8 Scheuer v. Rhodes, 416 U.S. 232, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974). ....................................... 8 State v. Ball, 141 N.J. 142 (1995) ................................................................................................. 13 Strange v. Nationwide Mut. Ins. Co., 867 F.Supp. 1209 (E.D.Pa.1994) ...................................... 11 Unger v. National Residents Matching Program, 928 F.2d 1392 (3d Cir.1991) ........................... 8 Statutes N.J. Stat. Ann. § 2C:41-1(a) ......................................................................................................... 14 N.J. Stat. Ann. § 2C:41-1(a)(1)(a)-(o) .......................................................................................... 14 N.J. Stat. Ann. § 2C:41-1(a)(2) ..................................................................................................... 14 N.J. Stat. Ann. § 2C:41-1(d)(1)..................................................................................................... 14 N.J. Stat. Ann. § 2C:41-1(d)(2)..................................................................................................... 14 N.J. Stat. Ann. § 2C:21-12 .............................................................................................................. 6 Rules Rule 12(b)(6) ................................................................................................................................... 8 Rule 9(b) ....................................................................................................................................... 10 3 Case 3:16-cv-07955-MAS-DEA Document 18 Filed 12/21/16 Page 3 of 15 PageID: 157 PRELIMINARY STATEMENT Plaintiff Automotive Finance Corporation (“AFC”) is an Indiana Corporation in the business of providing, inter alia, floor plan financing for used automotive dealers and leasing/rental companies. Defendant DZ Motors, LLC entered into a financing arrangement, whereby AFC financed inventory (purchase of motor vehicles) offered for sale to the general public at their retail location. Under the terms of the financing agreement, AFC was a secured creditor with priority rights to the motor vehicles as collateral for the loans. A to Z Auto Connections, Inc. (believed to be defunct) and Dmitriy Zholobov guaranteed the obligations of DZ Motors, LLC. Through a complex tangled web of forgeries, fraud, and deceit, the employees, owners, managers and other associates of DZ Motors, LLC managed to defraud AFC, numerous consumers, and other lending institutions (some who are parties to this action) out of millions of dollars. As the frauds unraveled, the retail location of the dealership shut down in or about October of 2016, leaving dozens of individual consumers stranded who had paid for cars that they never received title to. A number of banks that had financed vehicles to consumers were left without titles to secure their consumer loans. Purchase money security interest creditor AFC was left unable to locate several million dollars’ worth of collateral, leading to the filing of this suit. As set forth at number 7 to the First Amended Complaint, supported by Exhibit I to the First Amended Complaint, at the time of the filing of the First Amended Complaint there were sixty five “missing” high end luxury vehicles with brands like Mercedes Benz, Porsche, Bentley, and BMW, all financed by AFC and secured with a purchase money security interest, that have simply disappeared. AFC has repossessed and liquidated what collateral it is found for recovery, and is conducting an ongoing internal investigation trying to locate the collateral. The internal investigation is attempting to unravel how DZ Motors, LLC and its representatives managed to 4 Case 3:16-cv-07955-MAS-DEA Document 18 Filed 12/21/16 Page 4 of 15 PageID: 158 perpetrate such a colossal fraud in the face of numerous safeguards put in place by AFC to prevent fraud. These safeguards included continual on-site auditors who view and inspect the collateral vehicles, and constant monitoring of the account by experienced lending professionals trained to spot improprieties which could be signs of potential to dealer fraud. Since the closing of their retail locations, DZ Motors, LLC and its representatives have been completely uncooperative; through legal counsel they have steadfastly refused to reveal the location of the missing secured collateral which is a continuing violation of N.J.S.A. 2C:21-12 (Defrauding secured creditors). AFC has filed this complaint seeking monetary recovery for their losses against not only the guarantors but those individuals that have conspired with the DZ Motors, LLC principals to defraud AFC. The complaint also seeks replevin of the missing vehicles, and damages for common law fraud and violations of New Jersey’s Civil RIOC act. As just one example of the fraud, as alleged in the complaint, Defendant Elena Zholobov, believed to be the wife of Dmitriy Zholobov, is currently enjoying the use of a 2015 Bentley for which AFC holds a priority security interest in. Defendants fraudulently obtained a duplicate title, in contravention of AFC’s security interest, and subsequently borrowed money on the title from co-defendant Raritan Bay Federal Credit Union, representing to Raritan Bay Federal Credit Union that they would enjoy a first priority lien in the 2015 Bentley. Title was transferred by way of fraudulent misrepresentations to obtain duplicate title, in violation of N.J.S.A. 2C:21-4.8, 2C:21-2.1, 2C:21-3, and 2C:21-4, from DZ Motors, LLC to Elena Zholobov, in order to obtain the financing from Raritan Bay Federal Credit Union. As alleged in the First Amended Complaint, approximately sixty-four other high end vehicles (including numerous late models Mercedes Benz, Porsche, BMW, Bentley vehicles) are similarly “missing,” possibly being used by friends, associates, employees, and other representatives of DZ Motors, LLC. 5 Case 3:16-cv-07955-MAS-DEA Document 18 Filed 12/21/16 Page 5 of 15 PageID: 159 As the fraud unraveled, AFC filed its Complaint, then it First Amended Complaint. AFC has been waiting for Defendants DZ Motors, LLC. Dmitriy Zholobov and Elena Zholobov to file an Answer to the First Amended Complaint so a motion for an order to show cause for a replevin order may be made. Instead of filing an Answer and participating in this litigation, DZ Motors, LLC, Dmitriy Zholobov and Elena Zholobov have filed a Motion to Dismiss on the pleadings, clearly for the purpose of delaying as long as possible filing an Answer and the start of the discovery process. The moving papers do not contain any plausible reason for this Court to dismiss at this stage any of the Counts of the First Amended Complaint. In the event this Court rules that any Counts of the Complaint are insufficiently plead, Plaintiff requests leave to file a Second Amended Complaint to correct any deficiencies in the pleadings. 6 Case 3:16-cv-07955-MAS-DEA Document 18 Filed 12/21/16 Page 6 of 15 PageID: 160 LEGAL ARGUMENT I. Standard of Review: Rule 12(b)(6) A motion to dismiss, pursuant to Federal of Civil Procedure 12(b)(6), may be granted only if, accepting all well-pleaded allegations in the complaint as true, and viewing them in the light most favorable to plaintiff, plaintiff is not entitled to relief. Holder v. City of Allentown, 987 F.2d 188, 194 (3d Cir.1993); Bartholomew v. Fischl, 782 F.2d 1148, 1152 (3d Cir.1986). The Court may not dismiss the complaint unless plaintiff can prove no set of facts which would entitle him to relief. See Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); Graves v. Lowery, 117 F.3d 723, 726 (3d Cir.1997); Unger v. National Residents Matching Program, 928 F.2d 1392, 1395 (3d Cir.1991); Angelastro v. Prudential-Bache Sec., Inc., 764 F.2d 939, 944 (3d Cir.1985). "The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974). In setting forth a valid claim, a party is required only to plead "a short plain statement of the claim showing that the pleader is entitled to relief." Fed. R.Civ.P. 8(a). To withstand a motion to dismiss, "a plaintiff is not required to provide evidence of or prove the truthfulness of his complaint." Quinones v. Szorc, 771 F.2d 289, 291 n. 3 (7th Cir.1985). The court, however, is not required to accept conclusory allegations. See Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986). Thus, the complaint "must set forth sufficient information to suggest that there is some recognized legal theory upon which relief may be granted." District of Columbia v. Air Florida, Inc., 750 F.2d 1077, 1078 (D.C.Cir.1984). 7 Case 3:16-cv-07955-MAS-DEA Document 18 Filed 12/21/16 Page 7 of 15 PageID: 161 The Supreme Court clarified the Rule 12(b)(6) standard in two cases: Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), and Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). The decisions in those cases abrogated the rule established in Conley v. Gibson,355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957), that "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim, which would entitle him to relief." In contrast, Bell Atlantic, 550 U.S. at 545, 127 S.Ct. 1955, held that "[f]actual allegations must be enough to raise a right to relief above the speculative level." Thus, the assertions in the complaint must be enough to "state a claim to relief that is plausible on its face," Id. at 570, 127 S.Ct. 1955, meaning that the facts alleged "allow[] the court to draw the reasonable inference that the defendant is liable for the conduct alleged." Iqbal, 129 S.Ct. at 1949; see also, Phillips v. County of Allegheny,515 F.3d 224, 234-35 (3d Cir.2008) (In order to survive a motion to dismiss, the factual allegations in a complaint must "raise a reasonable expectation that discovery will reveal evidence of the necessary element," thereby justifying the advancement of "the case beyond the pleadings to the next stage of litigation."). When assessing the sufficiency of a complaint, the Court must distinguish factual contentions - which allege behavior on the part of the defendant that, if true, would satisfy one or more elements of the claim asserted - from "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements." Iqbal, 129 S.Ct. at 1949. Although for the purposes of a motion to dismiss the Court must assume the veracity of the facts asserted in the complaint, it is "not bound to accept as true a legal conclusion couched as a factual allegation." Id. at 1950. Thus, "a court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth." Id. 8 Case 3:16-cv-07955-MAS-DEA Document 18 Filed 12/21/16 Page 8 of 15 PageID: 162 When a claim is dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6), leave to amend and reassert that claim is ordinarily granted. In re Burlington Coat Factory Litig., 114 F.3d 1410, 1434 (3d Cir.1997). A claim may be dismissed with prejudice, however, if amending the complaint would be futile. Id. "Futile," as used in this context, means that the complaint could not be amended to state a legally-cognizable claim. Id. (citing Glassman v. Computervision Corp., 90 F.3d 617, 623 (1st Cir.1996)). II. Standard of Review: Rule 9(b) Rule 9(b) of the Federal Rules of Civil Procedure requires that all allegations of fraud state the circumstances constituting the fraud "with particularity." The requirements of Rule 9(b) may be satisfied if the complaint describes the circumstances of the alleged fraud with precise allegations of date, time, or place. See Craftmatic Sec. Litig. v. Kraftsow, 890 F.2d 628, 645 (3d Cir.1989) (citing Seville,742 F.2d at 791). Alternatively, plaintiffs must use some means of "injecting precision and some measure of substantiation into their allegations of fraud." Seville, 742 F.2d at 791; see also Saporito, 843 F.2d at 675 (Rule 9(b) requires "detailed allegations" of fraud). Pleadings containing collectivized allegations against "defendants" do not suffice. " Rule 9(b) is not satisfied where the complaint vaguely attributes the alleged fraudulent statements to `defendants'." Eli Lilly, 23 F.Supp.2d at 492 (quoting Mills v. Polar Molecular Corp., 12 F.3d 1170, 1175 (2d Cir.1993)). A plaintiff must plead fraud with particularity with respect to each defendant, thereby informing each defendant of the nature of its alleged participation in the fraud. See, e.g., Seville, 742 F.2d at 791; Strange v. Nationwide Mut. Ins. Co., 867 F.Supp. 1209, 1220 (E.D.Pa.1994)(complaint alleging that defendants' agents made fraudulent representations did not 9 Case 3:16-cv-07955-MAS-DEA Document 18 Filed 12/21/16 Page 9 of 15 PageID: 163 satisfy particularity requirements of Rule 9(b)); see also Jackson Nat'l Life Ins. Co. v. Ligator, 949 F.Supp. 200, 208 (S.D.N.Y.1996) (branding the plaintiffs' failure to distinguish among the "Litigator Defendants" as an egregious example of prohibited "group pleading" under Rule 9(b)). III. Plaintiff’s complaint complies with both Rule 12(b)(6) and Rule 9(b) Clearly the First Amended Complaint, with Exhibits A to I, satisfies the pleading standards under Rule 12(b)(6). The First Amended Complaint contains a clear recitation of the financing arrangement between AFC and DZ Motors, LLC, with copies of all of the signed documentation. The known parties are identified by names and their roles, and the unknown parties are identified as John Does 1-70 (unknown consumers) and John Does 71 to 100 (unknown individuals conspiring to defraud Plaintiff). The Defaults under the Promissory Note and Security Agreement are recited, with specific reference to the pertinent paragraphs in the Note. The prior repossession of eight-two vehicles is recited, and the specifics of sixty five missing vehicles are detailed in Paragraph 7. The complaint is detailed, supported with the appropriate exhibits, and certainly sufficient to put DZ Motors, LLC, Dmitriy Zholobov, and Elena Zholobov on notice of why they are being sued. The First Amended Complaint also complies with the more stringent pleading standards of Rule 9(b). The frauds as currently known, subject to further discovery, are very clearly articulated: 8. On or about September 30, 2015 defendant DZ MOTORS, LLC, through its principal Dmitriy Zholobov, fraudulently transferred title of a 2015 Bentley, VIN SCBFS8ZA0FC049904, to Elena V. Zholobov, and fraudulently (obtained sic) security financing for the transfer from Raritan Bay Federal Credit Union. Said transaction was fraudulent as to Plaintiff’s superior rights in the secured collateral under the terms of the Note. 10 Case 3:16-cv-07955-MAS-DEA Document 18 Filed 12/21/16 Page 10 of 15 PageID: 164 Paragraph 8 gives the date of the fraud (September 30, 2015), the players: DZ Motors, LLC. Dmitriy Zholobov, and Elena V. Zholobov, the specific vehicle identification number of the car at issue, and exactly what these players did: transferred title to a 2015 Bentley, which was secured collateral under AFC’s Note, to Elena V. Zholobov, to fraudulently secure financing from Raritan Bay Federal Credit Union. The allegations of Paragraph 8 of the complaint are crystal clear. Similarly, Paragraph 9 gives specifics about another fraud perpetrated by DZ Motors, LLC and Dmitriy Zholobov: On or about October 5, 2016 defendant DZ MOTORS, LLC, through its principal Dmitriy Zholobov, fraudulently obtained financing on a 2016 G63 Mercedes Benz, VIN WDCYC7DF7GX250462 from Raritan Bay Federal Credit Union by pledging the Vehicle as collateral for a loan. Said transaction was fraudulent as to Plaintiff’s superior rights in the secured collateral under the terms of the Note. Here, the players are identified (DZ Motors, LLC and Dmitriy Zholobov, the date is identified, the make, model and VIN of the vehicle at issue is identified, the other lender, Raritan Bay Federal Credit Union is identified, as well as the fraudulent conduct; obtaining financing in contravention of AFC’s rights as a secured creditor. Paragraph 10 details yet another specific fraud perpetrated by DZ Motors, LLC and Dmitriy Zholobov: On or about December 10, 2013 defendant DZ MOTORS, LLC, through its principal Dmitriy Zholobov, fraudulently obtained financing on a 2014 Mercedes Benz, VIN WDDUG7JB6EA027930 from Raritan Bay Federal Credit Union by pledging the Vehicle as collateral for a loan. Said transaction was fraudulent as to Plaintiff’s superior rights in the secured collateral under the terms of the Note. Once again, the players are identified: DZ Motors, LLC and Dmitriy Zholobov, the vehicle is identified by make, model and VIN, the date is provided, the other lender, Raritan Bay Federal Credit 11 Case 3:16-cv-07955-MAS-DEA Document 18 Filed 12/21/16 Page 11 of 15 PageID: 165 Union is identified, as well as the fraudulent conduct: obtaining financing in contravention of AFC’s rights as a secured creditor. The Fourth Count of the First Amended Complaint alleges that Defendants DZ Motors, LLC, A to Z Auto Connection, Inc., Dmitriy Zholobov, Elena V. Zholobov, and John Does 71 to 100 “knowingly transferred titles to motor vehicles without satisfying Plaintiff’s security interest, and provided deceptive reports to Plaintiff’s auditors in an attempt to conceal their fraudulent transfers.” Besides paragraphs 8, 9 and 10 detailing three specific vehicles that titles were fraudulently transferred on, Exhibit I is a full report of over sixty “missing” high end luxury vehicles for which AFC intends to seek a replevin order, once these Defendants file an Answer. IV. Plaintiff’s First Amended Complaint complies with the pleading requirements for a civil RICO claim. In order to prevail on a New Jersey RICO claim, a plaintiff must show: "(1) the existence of an enterprise; (2) that the enterprise engaged in or its activities affected trade or commerce; (3) that defendant was employed by, or associated with the enterprise; (4) that he or she participated in the conduct of the affairs of the enterprise; and (5) that he or she participated through a pattern of racketeering activity." Ford Motor Co. v. Edgewood Props., 2009 U.S. Dist. LEXIS 4172, at 38-39 (D.N.J. Jan. 20, 2009) (quoting State v. Ball, 141 N.J. 142, 188 (1995)). Under New Jersey law, element one may be satisfied by identifying members of a group and pleading the "kinds of interactions that become necessary when [the] group, to accomplish its goal, divides among its members the tasks that are necessary to achieve a common purpose" and "[t]he division of labor and the separation of functions undertaken by the participants." Ball, 141 N.J. at 162. Element two simply requires the plaintiff to plead that the activities of the enterprise affected 12 Case 3:16-cv-07955-MAS-DEA Document 18 Filed 12/21/16 Page 12 of 15 PageID: 166 trade or commerce. Id. Element three mandates that the defendant associated itself with the enterprise in some form. Id. With respect to element four, New Jersey courts have held that in order to adequately plead a civil RICO claim, the defendant must have "purposefully and knowingly [participated] in the affairs of the enterprise." Id. at 175. With respect to element five, "racketeering activity" is defined as the commission of one of numerous offenses arising out of the laws of any jurisdiction in the United States. N.J. Stat. Ann. § 2C:41-1(a). Among these offenses are forgery and fraudulent practices and all crimes defined in chapter 21 of Title 2C of the New Jersey Statutes. N.J. Stat. Ann. § 2C:41-1(a)(1)(a)-(o). The statute also incorporates all activity defined as "racketeering" under Title 18 of the United States Code. N.J. Stat. Ann. § 2C:41-1(a)(2). A "pattern of racketeering" is defined as "[e]ngaging in at least two incidents of racketeering conduct one of which shall have occurred after the effective date of this act and the last of which shall have occurred within 10 years (excluding any period of imprisonment) after a prior incident of racketeering activity" and "[a] showing that the incidents of racketeering activity embrace criminal conduct that has either the same or similar purposes, results, participants or victims or methods of commission or are otherwise interrelated by distinguishing characteristics and are not isolated incidents." N.J. Stat. Ann. § 2C:41-1(d)(1); N.J. Stat. Ann. § 2C:41-1(d)(2). The Verified Complaint meets the pleading standards for a Civil RICO claim. The Complaint recites a number of fraudulent practices by Defendants DZ Motors, LLC, Elena Zholobov and Dmitriy Zholobov as defined by NJ Statutes, including violations of N.J.S.A. 2C:21-1 (Forgery), N.J.S.A. 2C:21-2.1 (Offenses involving false government documents), N.J.S.A. 2C:21-3 (Frauds relating to public records and recordable instruments), N.J.S.A. 2C:21-4 (Falsifying or tampering with records) N.J.S.A. 2C:21-4.1(destruction, falsification or altering public records), N.J.S.A. 13 Case 3:16-cv-07955-MAS-DEA Document 18 Filed 12/21/16 Page 13 of 15 PageID: 167 2C:21-4.8 (Motor Vehicle Title Offenses), N.J.S.A. 2C:21-12 (Defrauding Secured Creditors), and 2C:21-13 (Fraud in Insolvency). For example, N.J.S.A. 2C:21-12 specifically prohibits the defrauding of secured creditors. The statute states: “A person is guilty of a crime of the fourth degree when he destroys, removes, conceals, encumbers, transfers or otherwise deals with property subject to a security interest with purpose to hinder enforcement of that interest.” The complaint very specifically details AFC’s status as a secured creditor and each of the Defendant DZ Motors, LLC, Dmitriy Zholobov and Elena Zholobov’s involvement in concealing, encumbering and transferring motor vehicles subject to AFC’s security interest, in violation of the statute. There are certainly more than two transactions at issue, paragraphs seven through ten of the First Amended Complaint detail sixty nine high end luxury vehicles that AFC holds a purchase money security interest in that Defendants have absconded with in contravention of AFC’s security interest. The individuals involved, Dmitriy Zholobov and Elena Zholobov, used the DZ Motors, LLC, purposefully and knowingly, as their instrumentality of fraud. CONCLUSION Plaintiff’s First Amended Complaint more than adequately pleads all of the elements of a claim for a violation of N.J.S.A. 2C:41-1 to 6.2, Civil Rico. The First Amended Complaint complies with Rules 12(b)(6) and 9(b). Plaintiff’s motion should be denied. In the event for any reason the Court is dissatisfied with the particularity of the pleadings, the appropriate recourse is for the Court to allow the filing of a Second Amended Complaint. See, e.g., Naporano Iron & Metal Co. v. Am. Crane Corp., 79 F. Supp. 29, 494 (D.N.J. 1999). Accordingly, Plaintiff requests leave to file a Second Amended Complaint in the event the Court determines the First Amended Complaint does 14 Case 3:16-cv-07955-MAS-DEA Document 18 Filed 12/21/16 Page 14 of 15 PageID: 168 not comport with the requirements of Rule 12(b)(6) and Rule 9(b), or fails to adequately state a claim for violation of New Jersey’s Civil RICO statute. Thank you.. Dated: December 21, 2016 /s/ Donna L. Thompson ____________________________ DONNA L. THOMPSON Attorney for Plaintiff PHYSICAL ADDRESS: 1442 Lakewood Road Manasquan, NJ 08736 SEND ALL MAIL: PO Box 679 Allenwood, NJ 08724 732-292-3000 Phone 732-292-3004 Fax donna.thompson@dlthompsonlaw.com 15 Case 3:16-cv-07955-MAS-DEA Document 18 Filed 12/21/16 Page 15 of 15 PageID: 169 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DL THOMPSON LAW, PC Donna L. Thompson, Esq. (030231994) PO Box 679 Allenwood, NJ 08720 donna.thompson@dlthompsonlaw.com 732-292-3000 telephone 732-292-3004 fax UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY ____________________________________ AUTOMOTIVE FINANCE CORPORATION Plaintiff, vs. DZ MOTORS, LLC; A TO Z AUTO CONNECTION, INC.; DMITRIY CIVIL ACTION ZHOLOBOV; ELENA V. ZHOLOBOV; RARITAN BAY FEDERAL CREDIT 3:16-cv-07955-MAS-DEA UNION; ROSSI COLLANTES; SHIEL R. PATEL; UNITED TELETECH FCU; JOHN DOES 1 to 100 Defendant(s). AFFIDAVIT OF SERVICE ___________________________________ On behalf of Plaintiff Automotive Finance Corporation, on December 21, 2016 I served the Brief in Opposition to Defendant’s Motion to Dismiss on all parties via electronic filing. Dated: December 21, 2016 /s/ Donna L. Thompson ____________________________ DONNA L. THOMPSON Attorney for Plaintiff PHYSICAL ADDRESS: 1442 Lakewood Road Manasquan, NJ 08736 SEND ALL MAIL: PO Box 679 Allenwood, NJ 08724 732-292-3000 Phone 732-292-3004 Fax donna.thompson@dlthompsonlaw.com Case 3:16-cv-07955-MAS-DEA Document 18-1 Filed 12/21/16 Page 1 of 1 PageID: 170 DL THOMPSON LAW, PC A Professional Corporation Incorporated in the State of New Jersey Telephone: 732-292-3000 Fax: 732-292-3004 New Jersey Location: Mailing Address for all matters: 1442 Lakewood Road PO Box 679 Manasquan, NJ 08736 Allenwood, NJ 08720 New York Location: Donna L. Thompson, Esq. 422 Retford Avenue Admitted to Practice NY and NJ Staten Island, NY 10312-6108 Anthony Cambria, Of Counsel December 21, 2016 Our File No. Via Electronic Filing Hon. Michael A. Shipp United States District Court 402 East State Street Trenton, NJ 08608 Re: Automotive Finance v. DZ Motors, LLC et al Docket 3:16-07955-MAS-DEA Defendants Motion to Dismiss Returnable January 3, 2016 Dear Judge Shipp: I represent Plaintiff in the above referenced matter. Currently pending before the Court is a Motion to Dismiss, returnable January 3, 2016, filed by Seth Dobbs, Esq. on behalf of Defendants DZ Motors, LLC, Dmitriy Zholobov and Elena Zholobov. My opposition brief was due yesterday, December 20, 2016. I was unable to timely complete and file same. Mr. Dobbs has kindly consented to a one day extension, the brief has been filed today. I apologize for any inconvenience I may have caused the Court. Very truly yours, Donna L. Thompson Donna L. Thompson, Esq. Cc: all parties via electronic filing Case 3:16-cv-07955-MAS-DEA Document 18-2 Filed 12/21/16 Page 1 of 1 PageID: 171