Eastern Savings Bank, Fsb v. Papageorge
31 F. Supp. 3d 1
D.D.C.2014Background
- Tort action by Eastern Savings Bank, FSB seeking over $10 million in a decade-long townhouse dispute in DCSE; plaintiff sues Papageorge, Kebede, Banks, Mitchell, nine tort/RICO theories; case is the tenth suit related to the Property; motions to dismiss for lack of subject matter jurisdiction, improper service, and failure to state a claim filed by all defendants; court grants and dismisses with prejudice.
- Property at 2507 33rd St. SE, DC; loan history from 1980, default on 159,000 loan, 1998 refinance for 168,000; alleged fraud in inducing the loan based on claimed tenants not living at the Property; foreclosure followed.
- Litigation history includes prior DC Court of Appeals rulings in Pappas v. Eastern Savings Bank; prior Superior Court landlord/tenant actions; 2012-2013 settlements with Banks and Mitchell; Papageorge’s ongoing suit in Superior Court; no colorable claims remain today.
- Complaint relies on past litigation acts as predicate RICO acts; plaintiff alleges extortion, witness tampering, mail and bank fraud, bribery, and conspiratorial acts in the course of litigation; court finds no viable RICO pattern or causation.
- Court exercises Rule 12(b)(6) dismissal with prejudice; no amendment sought by plaintiff; relief sought is not recoverable under asserted theories.
- Procedural posture and substantial litigation history inform the dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| RICO viability (Counts 1–2) | Plaintiff alleges pattern of racketeering from litigation | Defendants argue no pattern or causation exists | Counts 1–2 dismissed for lack of pattern and causation |
| Fraud viability (Count 3) | Fraudulent misrepresentations alleged in ongoing litigation | Failure to plead with particularity under Rule 9(b) | Count 3 dismissed for lack of particularity and reliance facts |
| Interference with contract and abuse of process (Counts 4–5, 8) | Litigation conduct improper and tortious | Litigation activity protected by Noerr-Pennington; not sham litigation | Counts 4–5, 8 dismissed as no sham litigation; immunity applies |
| Trespass to chattels (Count 6) | Interference with funds and reputation constitutes chattel trespass | Funds and reputational harms are not chattels; real property rights not trespassed | Count 6 dismissed |
| Unjust enrichment and conspiracy to defraud (Counts 7, 9) | Settlement and alleged novel benefits unjustly enriched defendants | Existence of contracts/settlements precludes unjust enrichment; conspiracy fails without underlying unlawful act | Counts 7 and 9 dismissed; unjust enrichment fails due to contracts; conspiracy fails due to deficient unlawful acts |
Key Cases Cited
- Edmondson & Gallagher v. Alban Towers Tenants Ass'n, 48 F.3d 1260 (D.C. Cir. 1995) (defines RICO pattern and proximate causation standards)
- Western Associates, 235 F.3d 629 (D.C. Cir. 2001) (analyzes pattern, relatedness, and continuity requirements for RICO)
- Hemi Group, LLC v. City of New York, 559 U.S. 1 (2010) (proximate cause requires direct relation between injury and predicate acts)
- Holmes v. S. Investor Prot. Corp., 503 U.S. 258 (1992) (conceptual framework for proximate causation in RICO)
- Pendergraft, 297 F.3d 1198 (11th Cir. 2002) (limitation on using litigation as RICO predicate acts)
- Columbia Pictures Indus., Inc. v. Braid, 508 U.S. 49 (1993) (Noerr-Pennington sham litigation standard (objective and subjective))
- Nader v. Democratic Nat’l Comm., 555 F. Supp. 2d 137 (D.D.C. 2008) (Noerr-Pennington immunity applied to common law torts; sham litigation)
- Banks v. E. Sav. Bank, 8 A.3d 1239 (D.C. 2010) (state court findings on tenancy and possession relevance to litigation)
- Kowal v. MCI Communications Corp., 16 F.3d 1271 (D.C. Cir. 1994) (restrictions on pleading with information and belief under Rule 9(b))