Healy v. Fox, 572 F.Supp.3d 730

Bret Healy sued his mother Mary Ann Osborne, brother Bryce Healy, and family attorney Albert S. Fox alleging they created Healy Ranch, Inc. (HRI) with void stock (no valid consideration in 1994) and used HRI to defraud Bret into investing over $2 million.
Key factual allegations: Osborne received 299,348 HRI shares in 1994; HRI acquired the ranch in 1995; Bret bought a one‑third interest in HRI in 2000, served as HRI president for ~17 years, and relied on K‑1s and corporate records when investing.
Bret amended his federal complaint to assert civil RICO claims (mail and bank fraud predicates) after obtaining documents in state‑court discovery in 2017; defendants moved to dismiss.
Defendants argued the federal RICO claim is barred by res judicata (prior South Dakota litigation) and by the four‑year RICO statute of limitations; the South Dakota Supreme Court had previously affirmed summary judgment against Bret on related claims as time‑barred.
The district court granted defendants’ motions to dismiss, concluding Bret’s RICO claim is precluded by res judicata and, alternatively, is time‑barred because Bret knew or should have known of his injury no later than 2000.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Res judicata / claim preclusion	Bret says his federal RICO theory is distinct and arises after discovery in 2017, so prior state judgment should not bar the claim.	Defendants say the RICO claim arises from the same nucleus of operative facts litigated in state court and thus is claim‑precluded.	Court: Res judicata applies under South Dakota law — same underlying facts, final judgment on merits (summary judgment/statute of limitations), same parties, and full/fair opportunity to litigate. Dismissed.
Accrual and statute of limitations for civil RICO	Bret contends his RICO cause of action accrued when he discovered documents in 2017 during state discovery.	Defendants assert the 4‑year RICO limitations began when Bret purchased shares in 2000 or during his long tenure as HRI president (injury discoverable earlier).	Court: RICO has a 4‑year SOL and accrues when plaintiff knew or should have known the injury. Bret knew or should have known by 2000; claim is time‑barred.
Newly discovered evidence / tolling argument	Bret argues later discovery (2017) of documents supporting RICO theory defeats preclusion and limitations defenses.	Defendants respond newly discovered evidence does not excuse failure to raise claims earlier.	Court: Newly discovered evidence during state litigation does not avoid res judicata or revive the SOL here; dismissal affirmed.

Healy v. Osborne, 934 N.W.2d 557 (S.D. 2019) (prior state supreme court decision resolving related claims and finding them time‑barred)
Rotella v. Wood, 528 U.S. 549 (U.S. 2000) (RICO accrual and discovery rule principles)
Semtek Int'l Inc. v. Lockheed Martin Corp., 531 U.S. 497 (U.S. 2001) (effect of a dismissal on the merits and claim‑preclusive effect across jurisdictions)
Migra v. Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75 (U.S. 1984) (federal courts must give state‑court judgments the same preclusive effect they would have under state law)
Ass'n of Commonwealth Claimants v. Movlan, 71 F.3d 1398 (8th Cir. 1995) (civil RICO four‑year statute of limitations)
Rick v. Wyeth, Inc., 662 F.3d 1067 (8th Cir. 2011) (statute of limitations and preclusion analysis where prior dismissal on limitations was litigated to summary judgment)
Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (pleading standard—plausibility requirement)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (Twombly pleading standard on plausible claims)