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Converdyn v. Blue

January 11, 2008

CONVERDYN, PLAINTIFF,
v.
JAMES NEAL BLUE, HEATHGATE RESOURCES PTY, LTD, GENERAL ATOMIC TECHNOLOGIES CORPORATION, AND NUCLEAR FUELS CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Robert E. Blackburn, Judge

ORDER CONCERNING DEFENDANTS' MOTION TO DISMISS

This matter is before me on Defendants James Neal Blue's, Heathgate Resources Pty Ltd's, General Atomic Technologies Corporation's, and Nuclear Fuels Corporation's Combined Motion and Brief in Support of Motion To Dismiss Plaintiff's Second Amended Complaint [#130], filed March 2, 2007. The plaintiff filed a response, and the defendant filed a reply. I deny the motion in part and grant it in part.

I. MOOT ISSUES

Several of the issues raised by the defendants in their motion to dismiss are moot either because I have granted the defendants' motion for summary judgment on those issues, or because the plaintiff voluntarily has dismissed one of its claims. First, I previously have dismissed the plaintiff's claims under the Racketeer Influenced and Corrupt Organizations Act (RICO) to the extent those claims are based on the alleged interstate transportation of stolen goods as predicate acts. Second, I previously have dismissed the plaintiff's RICO claim against Heathgate under 18 U.S.C. § 1962(a), in which the plaintiff alleges that it was injured by Heathgate's investment of racketeering income. Third, I previously have dismissed the plaintiff's RICO conspiracy claims. Finally, the plaintiff has voluntarily dismissed its claim under the Sherman Act. Each of these claims also is addressed in the defendants' motion to dismiss. Because these claims have been dismissed, the motion to dismiss is denied as moot to the extent it addresses these claims.

II. STANDARD OF REVIEW

When ruling on a motion to dismiss under Rule 12(b)(6), I must determine whether the allegations of the complaint are sufficient to state a claim within the meaning of Fed.R.Civ.P. 8(a). I must accept all well-pleaded allegations of the complaint as true. McDonald v. Kinder-Morgan, Inc., 287 F.3d 992, 997 (10th Cir. 2002). "However, conclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to prevent a motion to dismiss." Fernandez-Montes v. Allied Pilots Association, 987 F.2d 278, 284 (5th Cir. 1993); see also Ruiz v. McDonnell, 299 F.3d 1173, 1181 (10th Cir. 2002) ("All well-pleaded facts, as distinguished from conclusory allegations, must be taken as true."), cert. denied, 123 S.Ct. 1908 (2003). I review the complaint to determine whether it "'contains enough facts to state a claim to relief that is plausible on its face.'" Ridge at Red Hawk, L.L.C. v. Schneider, 493 F.3d 1174, 1177 (10th Cir. July 9, 2007) (quoting Bell Atlantic Corp. v. Twombly, -- U.S. --, 127 S.Ct. 1955, 1969, 1974, -- L.Ed.2d -- (2007)). "Thus, the mere metaphysical possibility that some plaintiff could prove some set of facts in support of the pleaded claims is insufficient; the complaint must give the court reason to believe that this plaintiff has a reasonable likelihood of mustering factual support for these claims." Id. (emphases in original).*fn1

Some of the plaintiff's claims sound in fraud. The plaintiff's fraud claims are subject to the pleading requirements of FED. R. CIV. P. 9(b). "In all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity. Malice, intent, knowledge, and other conditions of mind of a person may be averred generally." FED. R. CIV. P. 9(b). The Tenth Circuit has held that "Rule 9(b) requires only the identification of the circumstances constituting fraud, and that it does not require any particularity in connection with an averment of intent, knowledge or condition of mind." Schwartz v. Celestial Seasonings, Inc., 124 F.3d 1246, 1252 (10th Cir. 1997) (citing Seattle-First Nat. Bank v. Carlstedt, 800 F.2d 1008, 1011 (10th Cir. 1986)). The complaint must set forth the time, place, and content of the false representation, the identity of the party making the false statements, and the consequences of the false statement. Id. at 1252 (citing Lawrence Nat'l Bank v. Edmonds (In re Edmonds), 924 F.2d 176, 180 (10th Cir.1991)).

III. ANALYSIS

This case concerns a contract for the purchase and sale of uranium ore and defendant Heathgate Resources Pty, Ltd's alleged breach of its contractual obligation to deliver certain amounts of uranium to the plaintiff, ConverDyn. ConverDyn asserts a variety of claims based on the events surrounding the alleged breach by Heathgate, including claims under RICO.

A. RICO PREDICATE ACTS

1. Wire Fraud & Mail Fraud

The defendants argue that the plaintiff has not pled adequately the RICO predicate acts of wire fraud and mail fraud on two particular points. First, the defendants argue that the plaintiff has not alleged that certain alleged fraudulent statements by the defendants, and the related amendment of a contract between the plaintiff and a third party, were the proximate cause of any injury suffered by the plaintiff. Applying the relatively lenient standard applicable here, I conclude that the plaintiff adequately has alleged that the fraudulent statements and resultant contract amendment were the proximate cause of the plaintiff's alleged injuries. The defendants' motion to dismiss is denied on this issue.

Second, the defendants assert that the plaintiff has not pled fraudulent statements and concealment by the defendants directed to non-parties with the particularity required by Rule 9(b). As to the plaintiffs' allegations of fraudulent statements to and concealment from non-parties, I conclude that the plaintiff's allegations identify sufficiently the time, place, and content of the alleged false representations, the identity of the parties making the false statements, the consequences ...


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