The opinion of the court was delivered by: Hochberg, District Judge.
This matter comes before the Court upon motions by defendants
Summit Bancorp., PNC Bank Corp., K. Hovnanian Enterprises, Mellon
Bank, N.A., Toll Brothers, Inc., Dechert, Price & Rhoads and
individual defendants Harry Hill, Esq., Leonard Cohen, Thomas
Jamieson, Albert C. Barclay., Jr., Florence Winston, William
Barclay, Elizabeth Barclay, Ellen DeBlois, and I. David Barclay
to dismiss plaintiffs' complaint in its entirety for failure to
plead fraud with particularity, lack of jurisdiction, failure
state a claim upon which relief can be granted, failure to join
indispensable parties and failure to provide defendants with a
short plain statement of the claim showing that the pleader is
entitled to relief. See Fed.R.Civ.P. 9(b), 12(b)(1), 12(b)(6),
19(a), 8(a), (e). Also before the Court are plaintiffs' (i)
cross-motion for partial summary judgment, (ii) motion to strike
the reply brief of Mellon Bank and (iii) motion to strike
defendant William S. Barclay's motion to dismiss defendant K.
Hovnanian Enterprises' motion for sanctions. This Court has
reviewed the extensive submissions of the parties, without oral
argument pursuant to Fed. R.Civ.P. 78, and for the reasons stated
below, the defendants' motions to dismiss will be granted.*fn1
Plaintiffs, brothers J. Clark Poling and John C. Poling, are
grandsons of Isaiah and Gladys Barclay. The gravamen of
plaintiffs' Second Amended Complaint is that the 36 defendants
named therein have fraudulently and criminally deprived
plaintiffs of assets rightfully owed them under the wills of
Isaiah and Gladys Barclay. This Court takes judicial notice of
the January 13, 1999 Opinion of Hon. Wilkie D. Ferguson, Jr.,
transferring this case from the United States District Court for
the Southern District of Florida to this Court, which sets forth
the facts of this case as follows:
On December 13, 1995, an action captioned Barclay v. Albert C.
Barclay, Jr., Trustee was filed in the Chancery Division of the
Superior Court of New Jersey. The state court action was brought
against, inter alia, J. Clark and John Poling, the same
plaintiffs as in the instant federal case, seeking partition and
sale of the Chamberlain Farm in East Windsor, New Jersey. On
November 13, 1996, K. Hovnanian Companies of Central New Jersey,
Inc. was joined as a defendant in the New Jersey state court
partition action. On February 24, 1997, the partition action was
consolidated with an action brought by K. Hovnanian Companies of
Central New Jersey, Inc. seeking specific performance of the
contract for purchase of the Chamberlain Farm. On September 24,
1998 the New Jersey Superior Court appointed a partition
commissioner for the Chamberlain Farm. The commissioner was given
plenary authority to manage the property and effect its sale. The
court also empowered the commissioner to negotiate a settlement
or other resolution to the litigation between the parties.
On September 23, 1998, one day before the state court appointed
a partition commissioner, the instant action was filed in
the United States District Court for the Southern District of
Florida by pro se plaintiffs J. Clark Poling and John Poling.
Plaintiffs claim that they are victims of a 30 year embezzlement
scheme to deprive them of a larger inheritance under their
grandparents' wills, which allegedly began in 1965 by the alleged
wrongful termination of a 1946 stock redemption agreement.
Additionally, the plaintiffs claim dissatisfaction with the
entire probate proceeding, related distribution of property, and
the management and sale of assets (principally New Jersey real
estate) under the terms of their grandparents' wills and related
trusts.*fn2 The real property at issue in this action is the
Chamberlain Farm, which is the subject of state court
proceedings, and the sole thrust of plaintiffs' complaint,
dissatisfaction with their inheritance, is the same as in the
state court action.
By Order of January 13, 1999, the instant action was
transferred from the United States District Court for the
Southern District of Florida to this Court. Plaintiffs filed a
Second Amended Complaint on May 3, 1999 (hereinafter the
"Complaint"). The seventeen-count Complaint alleges the following
federal causes of action: (1) violation of the Racketeer
Influenced and Corrupt Organizations Act § 1962(c) and (d)
("RICO") (Count I); (2) civil rights violations under
42 U.S.C. § 1983 (Count III); (3) conspiracy to defraud the United States
(Count XIV); (4) violation of the Sherman Anti-trust Act (Count
XV); (5) violation of the Securities Exchange Act § 10(b) and
Rule 10b-5 (Count XVI); and (6) violation of the Securities
Exchange Act 20(a) (Count XVII). Plaintiffs also ask this Court
to compel arbitration pursuant to 9 U.S.C. § 4 (Count II). The
remaining twelve causes of action are founded upon state law and
include, inter alia, causes of action alleging fraud,
malpractice, civil conspiracy, defamation, negligent and
intentional infliction of emotional distress and tortious
interference with prospective economic advantage.
The thirty-six defendants in this action include, inter alia:
fellow beneficiaries under the wills of Isaiah and Gladys
Barclay; several, but not all, of the trustees and executors (and
their successors) under the wills of Isaiah and Gladys Barclay;
several, but not all, of plaintiffs' fellow Barclays Brothers and
Barclays Farm partners, including various Barclay family estates;
K. Hovnanian Enterprises, Inc., the purported purchaser of the
Chamberlin Farm, which is allegedly owned by the plaintiffs and
several of the defendants as tenants-in-common; Leonard Cohen,
plaintiffs' real estate broker in connection with the sale of the
Chamberlin Farm; Thomas C. Jamison, the court-appointed partition
commissioner in the New Jersey state court proceedings; Toll
Brothers, Inc., a company which was engaged in construction and
granted an easement in 1984 with respect to the Chamberlin Farm;
several attorneys and law firms that allegedly represented either
the plaintiffs or various defendants over the course of the last
thirty years; two insurance companies; the New Jersey Department
of Transportation and the East Windsor Township.
Several of the defendants have moved to dismiss plaintiffs'
complaint pursuant to Fed.R.Civ.P. 9(b) for failure to plead
fraud with particularity, Fed. R.Civ.P. 12(b)(1) for lack of
jurisdiction, Fed.R.Civ.P. 12(b)(6) for failure to state a cause
of action upon which relief can be granted, Fed.R.Civ.P. 19(a)
for failure to join necessary parties to this action and
Fed.R.Civ.P. 8(a) and (e) for failure to provide defendants with
a short plain statement of the claim showing that the pleader is
entitled to relief. Given the plaintiffs' pro se status, and
affording every possible consideration to their 436
paragraph, 111 page complaint, this Court painstakingly reviewed
the extensive submissions of the parties to discern whether
plaintiffs made out even a single cognizable federal claim
against a single defendant.*fn3 They have not. This Court having
concluded that plaintiffs have failed to plead fraud with the
requisite particularity, have failed to state a federal claim
upon which relief can be granted, and it appearing that no
diversity jurisdiction exists here as to those claims premised
upon state law, plaintiffs' complaint is dismissed in its
entirety. The viable aspects of this dispute, if any, are already
where they belong: in the New Jersey Superior Court. That is
where plaintiffs can obtain and are being given a full and fair
airing of all their grievances.
I. Defendants' 12(b)(6) Motions Attacking Substantive
Allegations of Federal Question Claims Alleged in Plaintiffs'
A. Standard of Review of a Fed. R.Civ.P. 12(b)(6) Motion to
In evaluating a Rule 12(b)(6) motion to dismiss for failure to
state a claim, a court may consider only the complaint, exhibits
attached to the complaint, matters of public record, and
undisputedly authentic documents if the plaintiff's claims are
based upon those documents. Pension Benefit Guar. Corp. v. White
Consol. Indus., 998 F.2d 1192, 1196 (3d Cir. 1993), cert.
denied, 510 U.S. 1042, 114 S.Ct. 687, 126 L.Ed.2d 655 (1994).
Motions to dismiss under Fed.R.Civ.P. 12(1)(6) for failure to
state a cause of action result in a determination on the merits
at an early stage of plaintiff's case. Mortensen v. First
Federal Savings and Loan Ass'n, 549 F.2d 884, 891 (3d Cir.
1977). As a result, "plaintiff is afforded the safeguard of
having all its allegations taken as true and all inferences
favorable to plaintiff will be drawn." Id. In order to grant a
12(b)(6) motion to dismiss, the Court must find that plaintiffs
will be unable to prevail even if they prove all of the
allegations in the complaint, basing its decision solely on the
legal sufficiency of the complaint. Id. Only well-pleaded
material allegations are taken as true, however, and conclusions
of law or unwarranted deductions of fact are not admitted. See
Morse v. Lower Merion School District, 132 F.3d 902, 906 (3d
B. Racketeer Influenced and Corrupt Organizations Act,
18 U.S.C. § 1962(c) and (d) (Count I)
1. Elements of a Civil RICO Violation
Plaintiffs allege violations of the Racketeer Influenced and
Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962(c) and (d),
as against each and every of the thirty-six (36) defendants.
Section 1962(c) 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
racketeering activity or collection of unlawful debt." Subsection
(d) of that same statute makes it unlawful for any person to
conspire to violate 18 U.S.C. § 1962 subsections (a) through (c).
In order to survive the defendants' motions to dismiss the RICO
claim, plaintiffs' complaint must adequately set forth the
following elements of civil RICO: (1) conduct (2) of an
enterprise (3) through a pattern (4) of racketeering activity.
Sedima, S.P.R.L., v. Imrex Company, Inc., 473 U.S. 479, 496,
105 S.Ct. 3275, 3285, 87 L.Ed.2d 346 (1985). Additionally,
plaintiffs must allege that they have been injured in their
business or property as a result of the alleged racketeering
A "pattern" of racketeering activity requires at least two
predicate acts of racketeering. See 18 U.S.C. § 1961(5);
Sedima, S.P.R.L. v. Imrex Company, Inc., 473 U.S. at 496 n. 14,
105 S.Ct. at 3285 n. 14. Section 1961 provides an exclusive list
of those acts that can constitute racketeering activity for the
purposes of pleading violation of RICO. See Annulli v.
Panikkar, 200 F.3d 189, 199 (3d Cir. 1999). The predicate acts
that plaintiffs here rely upon in attempting to plead violation
of RICO are mail and wire fraud.*fn4 (See e.g., Complt. ¶¶ 9,
36, 40, 85, 229).
2. Failure to Plead Fraud with Particularity
Where plaintiffs allege mail and wire fraud as the basis of a
RICO violation, the allegations of fraud must comport with the
Fed.R.Civ.P. 9(b)*fn5 heightened pleading standard. Saporito v.
Combustion Engineering Inc., 843 F.2d 666, 673 (3d Cir. 1988),
vacated on other grounds, 489 U.S. 1049, 109 S.Ct. 1306, 103
L.Ed.2d 576 (1989). To plead mail or wire fraud with sufficient
particularity, plaintiffs 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." Seville Indus. Machinery
Corp. v. Southmost Machinery Corp., 742 F.2d 786, 791 (3d Cir.
1984), cert. denied, 469 U.S. 1211, 105 S.Ct. 1179, 84 L.Ed.2d
327 (1985). To satisfy the pleading requirement, plaintiffs may
plead the specific conduct alleged to be fraudulent along with
the "date, place and time" that the alleged fraud occurred or use
some "alternative means of injecting precision and some measure
of substantiation into their allegations of fraud." Id. Vague
or conclusory allegations of fraud will not survive a motion to
dismiss. In re Burlington Coat Factory Securities Litig.,
114 F.3d 1410, 1418 (3d Cir. 1997). Moreover, allegations that
generally allege fraud as against multiple defendants, without
informing each defendant as to the specific fraudulent acts he or
she is alleged to have committed do not satisfy Rule 9(b). See
Mayor & Council of Borough of Rockaway v. Klockner & Klockner,
811 F. Supp. 1039, 1060 (D.N.J. 1993).
Notwithstanding the explicit order of the Court on April 15,
1999, directing plaintiffs to complete the RICO Case Statement
provided for in Appendix O of the United States District Court
Rules for the District of New Jersey, plaintiffs have failed to
file an adequate statement in compliance with the Order of this
Court. Instead, they merely sent a cursory form that did nothing
more than refer back to the same paragraphs of their Complaint
which were deficient in the first place. Plaintiffs' conduct
defied Magistrate Judge Cavanaugh's Order to file a RICO Case
Despite more than ample opportunity offered by federal courts
in Florida and
New Jersey, plaintiffs here have failed to allege mail and wire
fraud with sufficient particularity to "place the defendants on
notice of the precise misconduct with which they are charged,"
Seville, 742 F.2d at 791, and have failed to "adequately
describe the nature and subject of the alleged
misrepresentation[s]" committed by the 36 defendants (id.). In
sweeping terms, the Complaint accuses various defendants of
"knowingly and willfully devis[ing] a scheme" (complt. ¶¶ 128,
129, 132, 133, 231), forging and fabricating documents (complt.
¶¶ 143, 145, 191, 193, 194) and breaching their fiduciary duties
to plaintiffs (complt. ¶¶ 49, 103). Additionally, plaintiffs
assert that "[d]iscovery will prove that each and every letter or
fax written and sent over the past twenty-five years via the U.S.
mail or interstate phone lines with the heading `Albert C.
Barclay, Jr., — Counselor at Law' regarding legal services . . .
was a predicate act of wire and mail fraud in violation of
18 U.S.C. § 1343" (complt. ¶ 36) and that all 36 defendants "had
knowledge of the . . . fraud . . . and willfully participated . .
. using the United States mail and ...