Opinion
No. CV 02-0815008S
February 23, 2005
MEMORANDUM OF DECISION UPON REARGUMENT
Upon reargument, the court's memorandum of decision dated November 29, 2004, granting the motion for summary judgment on Count Nine alleging a violation of RICO 18 U.S.C. § 1962 et seq. is vacated.
It is recognized that despite the language of the statute a number of cases have permitted a RICO action to be brought in our state courts, including the Supreme Court. Tafflin v. Levitt, 493 U.S. 455, 467 110 S.Ct. 792 (1999). This ruling has been followed in a number of our superior court decisions. See Cormier v. Ulster Savings Bank, Superior Court, judicial district of New Britain, Docket No. CV 97 0483639 S (November 8, 2000, Shapiro, J.); Machnicz v. Property Pros, Inc., Superior Court, judicial district of New Haven, Docket No. CV 99 0428587 (November 29, 1999, Alander, J.) ( 26 Conn. L. Rptr. 63); Tavares v. Barbour Threads, Inc., Superior Court, judicial district of Waterbury, Docket No. CV 990153332 (November 9, 1999, Leheny, J.), Eastern Savings Bank, FSB v. Ruffolo, Superior Court, judicial district of Stamford, Docket No. CV 89 0102821 (August 28, 1996, Lewis, J.) Alvarado v. First Constitution Bank, Superior Court, judicial district of New Haven, Docket No. CV 93 345608 (March 6, 1995, Gray, J.) ( 13 Conn. L. Rptr. 582).
As to the merits of count nine, the defendants claim this count must be dismissed because plaintiff is not a financial institution as suggested in Tafflin v. Levitt, supra.
Plaintiff's RICO claim in count nine alleges violation of predicate statutes 18 U.S.C. § 1344. The United States Supreme Court has declined to rule on the issue of whether a plaintiff must satisfy the standing requirements for both RICO and the predicate act on which the plaintiff bases the RICO claim.
In 1992, the Supreme Court majority could have addressed this issue in Holmes, but thought it was inopportune to resolve the issue at that time, and instead resolved the standing question solely on proximate causation grounds. In his concurrence, Justice Scalia argued that a plaintiff has standing under RICO only if he or she fulfills the traditional elements of statutory standing of the predicate statutes on which the RICO claim is based. Justice O'Connor, joined by Justices White and Stevens, rejected Justice Scalia's approach, concluding that RICO does not incorporate the standing requirements of the predicate acts.
Baisch v. Gallina, 346 F.3d 372 (2d Cir. 2003).
Although no courts appear to have expressly allowed individuals to predicate civil RICO claims on bank fraud though 18 U.S.C. § 1344, they have in fact reargued that such claims are proper by hearing them on their merits. See Bressner v. Ambroziak, 379 F.3d 478 (7th Cir. 2004); Crowe v. Henry, 115 F.3d 294 (5th Cir. 1997); Lesavoy v. Lane, 304 F.Sup.2d 520 (S.D.N.Y. 2004); Williams v. Waldron, 14 F.Sup.2d 1334 (N.D.Ga. 1998). Other courts have denied recovery from bank fraud as a predicate act under RICO where the plaintiff was not a financial institution. See Whitehead v. Gateway Chevrolet, United States District Court, Docket No. 03 C 5684 (N.D. Illinois January 30, 2004). The cases permitting these claims to be heard seem to be in the majority and express a view preferred by this court.
Motion for Summary Judgment as to Count Nine is denied.
Wagner, J. Judge Trial Referee