United States District Court, D. Columbia.
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For Ying Qing LU, " Lucy", Oklahoma Shelf Exploration And Development, LLC, (OSED), Bridges Financial, LLC, Afshin Afsharnia, Plaintiffs: Randy McRae, LEAD ATTORNEY, Largo, MD.
For Mark Lezell, doing business as LEZELL LAW, PC, Defendant: Peter L. Goldman, LEAD ATTORNEY, O'REILLY & MARK, P.C., Alexandria, VA.
JAMES E. BOASBERG, United States District Judge.
" It is common knowledge that nothing is more alluring than the expectation of receiving large returns on small investments."
Durland v. United States, 161 U.S. 306, 313, 16 S.Ct. 508, 40 L.Ed. 709 (1896). So it was for Plaintiff Ying Qing Lu, who claims that Defendant Isam Ghosh bilked her out of $100,000 in 2003 and a quarter-million in 2005 with the promise of quick and outsized returns. Lu admits that she succumbed to the same temptation in 2008 in the transactions that precipitated this lawsuit. She alleges here that Ghosh and his co-Defendant, Mark Lezell, violated the Racketeering Influenced and Corrupt Organizations Act and several state laws by a lending scheme to convert her assets to their own use. Amendments to the Complaint have added new Plaintiffs, who also allege that Defendants' similar conduct victimized them. A default judgment having since been entered against Ghosh, Lezell moves here for summary judgment on multiple grounds. With all of the facts now on the record, the Court concludes that Lu's state-law claims are time barred but that the merits of the three Plaintiffs' RICO count are sufficient to proceed to trial.
The Court described the procedural history of this case in some detail in its prior Opinion. See Lu v. Lezell, 919 F.Supp.2d 1, 2-3 (D.D.C. 2013). This time around, it need only recount the highlights, bearing in mind that the facts must be viewed in the light most favorable to Plaintiffs. See Anderson v. Liberty Lobby, 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Plaintiffs filed a Third Amended Complaint on October 31, 2012, alleging that Lu had been the victim of a scam encompassing five separate state-law violations and that Defendants had violated RICO in fraudulently obtaining money from her and three co-Plaintiffs. In particular, Plaintiffs point to four transactions that constitute the relevant acts for RICO purposes:
o In May 2008, Lu wired a total of $50,000 to an escrow account held by Lezell, an attorney assisting Ghosh in his transactions. The purpose of that deposit is not entirely clear from her papers, but she does aver that to date, Ghosh and Lezell have refused to return the money in violation of the terms of their agreement. See Mot., Att. 1 (Deposition of Ying Qing Lu) at 90, 191.
o Later that month, Lu agreed to lend Ghosh and one of his companies, Westin Development, LLC, another $50,000, with the expectation that she would receive $73,000 in return less than a month later. The $50,000 was placed into an escrow account held by Lezell. Although Lezell distributed an $8,000 partial payment to Lu on the appointed date, she never saw another penny. See id. at 72, 90-91, 141; Opp., Exh. A (Declaration of Isam Ghosh), ¶ 3.
o In June 2008, Ghosh received $50,000 from Plaintiff Afshin Afsharnia by way of Lezell's account, see Opp., Exh. B (Letter from Lezell to Mark Albanese, May 22, 2008). after Lezell had represented to Afsharnia that Ghosh would repay Afsharnia $70,000 one month later. Afsharnia was never compensated. See Mot., Att. 5 (Deposition of Afshin Afsharnia) at 64-65.
o In May 2011, Oklahoma Shelf Exploration and Development, LLC (OSED), sent $50,000 to Lezell to help finance another Ghosh project. Lezell received those funds in escrow before delivering them to Ghosh. OSED was never repaid. See Opp., Exh. C (Affidavit of Joseph Shane Jackson), ¶ ¶ 10, 14-15.
After neither Defendant responded to the Complaint, the Clerk entered default. See ECF No. 39. At Defendant Lezell's
request, the Court vacated the default as to him only. See Minute Order of Dec. 19, 2012. (Ghosh never replied, so the entry of default stood as to him.) The Court then proceeded to consider Lezell's Motion to Dismiss the Third Amended Complaint.
In doing so, on January 25, 2013, the Court dismissed the claim of Bridges Financial, another proposed plaintiff, with prejudice, citing res judicata, as the Court had already dismissed a similar claim Bridges had brought in a separate suit. See Lu, 919 F.Supp.2d at 4-5 (citing Bridges v. Lezell Law, PC, 842 F.Supp.2d 261 (D.D.C. 2012)). It also dismissed Lu's claims for breach of contract and breach of fiduciary duty as running afoul of the applicable statutes of limitations and for Lu's failure to allege all required elements of those causes of action. See id. at 4-6. Still standing after that decision were Lu's three state-law counts -- alleging professional negligence, civil conspiracy, and fraud -- and one count, which Lu brought on behalf of herself and the other Plaintiffs, alleging civil RICO violations. On July 19 of that year, because Ghosh had still not defended the suit, the Court entered default judgment in the sum of $486,000 against him, which included treble damages. See ECF No. 68 (Order of July 19, 2013). Defendant Lezell has now filed a Motion for Summary Judgment asking the Court to reject the rest of the state-law claims as time barred and to find that Plaintiffs have not offered sufficient facts on the record that could support their RICO count. On the state-law argument, the Court will oblige. Plaintiffs, however, have done just enough for their RICO claim to survive.
II. Legal Standard
Before the Court can reach Defendant's Motion for Summary Judgment, it must address one procedural issue that will directly affect the analysis. Plaintiffs have asked for leave to file a Sur-Reply to Defendant's Motion. The decision to grant or deny leave to file a sur-reply is committed to the sound discretion of the Court. See Am. Forest & Paper Ass'n, Inc. v. EPA, 1996 WL 509601, at *3 (D.D.C. Sept. 4, 1996). If the movant raises arguments for the first time in his reply to the non-movant's opposition, the Court may either ignore those arguments in resolving the motion or provide the non-movant an opportunity to respond to those arguments by granting leave to file a sur-reply. Ben-Kotel v. Howard Univ., 319 F.3d 532, 536, 355 U.S. App.D.C. 82 (D.C. Cir. 2003); Natural Res. Def. Council, Inc. v. EPA, 25 F.3d 1063, 1071-72 n.4, 306 U.S. App.D.C. 357 (D.C. Cir. 1994). Plaintiffs correctly point out that Defendant raised at least one new issue in his Reply: whether Plaintiffs' Opposition satisfied the requirements of Federal Rule of Civil Procedure 56(c) and Local Rule 7(h). That question bears directly on the Court's summary-judgment analysis, and, as a result, it will grant Plaintiffs' Motion and will consider their Sur-Reply.
Summary judgment may be granted if " the movant shows 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.P. 56(a);
see also Liberty Lobby, 477 U.S. at 247-48; Holcomb v. Powell, 433 F.3d 889, 895, 369 U.S. App.D.C. 122 (D.C. Cir. 2006). A fact is " material" if it is capable of affecting the substantive outcome of the litigation.
See Liberty Lobby, 477 U.S. at 248; Holcomb, 433 F.3d at 895. A dispute is " genuine" if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. See Scott v. ...