Irina Maron v. Ray Garcia
21-2773
| 7th Cir. | Mar 16, 2022Background
- In 2006 Bishop Partnership borrowed about $1.6 million from American Enterprise and pledged a Chicago property as collateral; Bishop later defaulted and the bank foreclosed and obtained a deficiency judgment.
- In 2011 American Enterprise sued in Florida to foreclose two condos pledged as collateral; the condos were owned by Bishop’s partners, who contested their collateral status.
- In 2012 the partners filed counterclaims in the Florida suit alleging fraud in violation of Florida’s anti‑racketeering law (the same factual allegations later asserted as RICO claims).
- In 2020 the partners filed a federal suit asserting RICO claims that they concede are identically based on their 2012 Florida counterclaims and seeking to enjoin the Florida proceedings.
- Defendants moved to dismiss for lack of standing and as time‑barred by RICO’s four‑year statute of limitations; the district court dismissed as untimely, and the partners appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing of Fridman | Fridman incurred attorney‑fee liability in Florida litigation and thus suffered an injury to business or property under RICO. | Fridman lacked an ownership interest in the Florida properties and therefore lacked RICO injury/standing. | Court found jurisdiction: Fridman’s attorney‑fee debt arose from the alleged scheme and suffices as injury for RICO standing. |
| Accrual / Statute of Limitations | RICO limitations did not begin in 2012 because litigation and alleged ongoing conduct continued later. | Claims accrued by 2012 when plaintiffs filed Florida counterclaims; RICO has a 4‑year limitations period, so the 2020 suit is untimely. | Accrual occurred by 2012; suit filed in 2020 is time‑barred. |
| §1964(c) criminal‑conviction rule | A 2019 securities‑fraud conviction of an American Enterprise agent delayed the limitations period under §1964(c). | Plaintiffs waived the argument and §1964(c) applies only where a defendant has been convicted; the convicted agent is not a defendant here. | Argument waived; §1964(c) does not save plaintiffs’ claims against these defendants. |
| Equitable tolling / estoppel / continuing violations | Ongoing false statements in the Florida proceedings and settlement efforts excused delay; tolling or estoppel should apply. | Plaintiffs identify no extraordinary concealment or fraudulent conduct that prevented timely filing; continuing‑violations doctrine does not revive pre‑2012 injury. | Plaintiffs failed to show extraordinary circumstances or concealment; continuing‑violations doctrine inapplicable to the pre‑2012 injuries. |
| Leave to amend | Plaintiffs should be allowed to amend if dismissal was premature. | Plaintiffs conceded knowledge of the claims in 2012; amendment would be futile. | Dismissal without leave was proper because amendment would be futile given plaintiffs’ concession. |
Key Cases Cited
- United States v. Molina Healthcare of Ill., Inc., 10 F.4th 765 (7th Cir. 2021) (pleading standard—view allegations in plaintiffs’ favor on appeal)
- Agency Holding Corp. v. Malley‑Duff & Assocs., Inc., 483 U.S. 143 (1987) (recognizes four‑year limitations for civil RICO claims)
- Rotella v. Wood, 528 U.S. 549 (2000) (RICO claim accrues when plaintiff knew or should have known of injury)
- Holmes v. Securities Investor Protection Corp., 503 U.S. 258 (1992) (proximate‑cause requirement for RICO standing/causation)
- Evans v. City of Chicago, 434 F.3d 916 (7th Cir. 2006) (discussion of what constitutes injury to business or property for RICO standing)
- Nat'l R.R. Passenger Corp. v. Morgan, 536 U.S. 101 (2002) (limits on continuing‑violations doctrine)
- Cancer Found., Inc. v. Cerberus Cap. Mgmt., LP, 559 F.3d 671 (7th Cir. 2009) (requirements for equitable estoppel/fraudulent concealment tolling)
- Limestone Dev. Corp. v. Village of Lemont, 520 F.3d 797 (7th Cir. 2008) (application of continuing‑violations principle)
- Vergara v. City of Chicago, 939 F.3d 882 (7th Cir. 2019) (de novo review for dismissals based on statute‑of‑limitations)
- Jauquet v. Green Bay Area Catholic Educ., Inc., 996 F.3d 802 (7th Cir. 2021) (amendment futile where plaintiff’s concessions defeat relief)