United States District Court, D. Colorado
OPINION AND ORDER GRANTING MOTIONS TO DISMISS AND
S. Krieger Chief United States District Judge.
MATTER comes before the Court, nominally pursuant to Mr.
Witt's Motion to Dismiss (# 124), to which Mr. Semmens
has filed a response (# 130). The discussion herein also
implicates Mr. Semmens' prior Motion to Dismiss (# 30),
Mr. Witt's response (# 35), and Mr. Semmens' reply (#
42), as well as similar motions filed by other Defendants.
There are a number of other motions pending in this action,
including several filed by Mr. Lane, but for the reasons set
forth herein, the Court need not reach those.
Witt's Amended Complaint (# 27) is a 59-page document
thick with impertinent details. Shorn of its excess, the
factual allegations can be summarized fairly succinctly. Mr.
Witt operated an entity called CCI that engaged in the
business of commercial lending. In 2007, Mr. Witt and CCI
entered into a lending arrangement with Mr. Snider and Mr.
Snider's business, Trico. That arrangement unraveled in
2008, with Mr. Witt and/or CCI bringing suit against Mr.
Snider and/or Trico. Mr. Witt alleges that, at this time, Mr.
Snider “sw[ore] to Witt that he would get revenge
against him for the rest of Witt's life.”
in 2008, Mr. Witt and CCI entered into a business arrangement
with Mr. Lane and his various business
entities. In early 2009, Mr. Lane convinced Mr. Witt
to hire him as an officer of CCI, but that arrangement also
ended acrimoniously shortly thereafter, with Mr. Witt
terminating Mr. Lane and accusing him of attempting to
sabotage CCI and steal its business. As with Mr. Snider, Mr.
Witt alleges that Mr. Lane then threatened to “take
down” CCI and Mr. Witt
filed a bankruptcy petition under Chapter 11 in April 2009; a
Trustee was appointed to represent CCI's estate. Mr. Witt
alleges that Mr. Lane “manipulate[d] the bankruptcy
cases and defame[d] Witt” by filing numerous frivolous
adversary claims in that action, in violation of 11 U.S.C.
§ 152(4). Mr. Witt further alleges that both Mr. Snider
and Mr. Lane jointly agreed at this time to “abuse the
bankruptcy process” and “retaliate against Witt,
” albeit in ways that are largely unspecified. The
Complaint goes on to recite, in great detail, various events
occurring during the course of the bankruptcy case and
“defamatory” statements that Mr. Lane purportedly
made to trustees and other creditors, accusing Mr. Witt of
various acts of fraud or deceit. Little of this detail is
relevant, except perhaps for an allegations that from
approximately 2010 until “late 2012 and 2013, ”
Mr. Lane and Mr. Snider “each . . . made multiple
threats against Witt of violent retaliation and
incarceration, and threatened to continue to destroy
Witt's companies and his reputation, ” unless Mr.
Witt would agree to testify on their behalf in opposition to
an adversary proceeding brought by CCI's Trustee. Mr.
Witt alleges that these threats, for which no additional
detail is supplied, constitute witness tampering in violation
of 18 U.S.C. § 1512 and witness retaliation in violation
of 18 U.S.C. § 1513. Eventually, Mr. Lane and Mr. Snider
settled their adversary claims with CCI's Trustee.
2011, one of the Trustees that had represented a CCI entity
during the bankruptcy proceeding turned around and brought an
adversary suit against Mr. Witt himself, accusing him of
misappropriating CCI assets. Once again, Mr. Witt's
Complaint goes into extensive detail about this proceeding,
but it is unclear what relevance these developments have to
his claims against the Defendants herein. At most, Mr. Witt
appears to allege that Mr. Lane and Mr. Snider were
“leading the creditors who were pressuring [the
Trustee] to sue Witt, ” but otherwise makes no
allegations regarding them in this context. The proceeding
ultimately resulted in a judgment against Mr. Witt in excess
of $1.5 million, a judgment that Mr. Witt unsurprisingly
insists is improper.
point in or about 2014, Mr. Lane and Mr. Snider
“determined the best way to continue advancing their
shared goal of destroying the rest of Witt's life was to
purchase the Judgment” described above. An entity named
Rekon, owned by Mr. Snider and Mr. Lane, offered to purchase
the judgment from the Trustee for $16, 000. The Trustee
provisionally accepted, and although Mr. Witt recites a
wealth of additional information regarding the sale of the
judgment, little of it is significant. It is sufficient to
note that Mr. Witt attempted to purchase the judgment
himself, but the Trustee accepted Rekon's bid of $18, 000
and sold the judgment in February 2014. Thereafter, it
appears that Rekon commenced suit against Mr. Witt in
Arapahoe County, Colorado, accusing Mr. Witt of engaging in
fraudulent transfers to shield his assets from collection on
that judgment. That proceeding is, by all appearances,
on these allegations, Mr. Witt alleges eight claims for
relief: (i) violation of the Racketeer Influenced and Corrupt
Organizations (“RICO”) Act, 18 U.S.C. § 1961
et seq., in that Mr. Lane and Mr. Snider formed a
criminal enterprise in 2009 (and that Mr. Semmens and Mr.
Keil joined it later, as discussed herein) for the purpose of
destroying Mr. Witt and CCI and engaged in a pattern of
racketeering acts including “extortion, bankruptcy
fraud, witness tampering, witness retaliation, and related
tortious acts” to achieve that goal; (ii) violation of
the Colorado Corrupt Organizations Control Act
(“CCOCA”), C.R.S. § 18-17-101 et
seq., on the same facts and others discussed below;
(iii) a common-law tort claim for abuse of process,
apparently under Colorado law, against Mr. Snider, Mr. Lane,
and Mr. Semmens, in that Rekon and Mr. Semmens have commenced
the proceeding in Arapahoe County alleging fraudulent
transfers, all “for no purpose other than to embarrass
Witt”; (iv) common-law defamation against Mr. Keil,
arising primarily from statements Mr. Keil made to Mr.
Witt's co-workers in 2015, accusing Mr. Witt of engaging
in embezzlement; (v) common-law defamation against Mr.
Semmens, apparently on the theory that Mr. Semmens is
vicariously liable for the defamatory statements made by Mr.
Keil, along with statements made by Mr. Semmens in the
Arapahoe County litigation; (vi) and (vii) the same
defamation claim that is alleged against Mr. Semmens, now
alleged against Mr. Snider and Mr. Lane respectively; and
(viii) a tort claim for outrageous conduct, apparently under
Colorado law, against all Defendants, based generally on the
of the four Defendants - all but Mr. Lane -filed motions to
dismiss Mr. Witt's claims against them pursuant to
Fed.R.Civ.P. 12(b)(6). Mr. Lane instead filed a pro
se Answer and Counterclaims (# 84) that runs some 150
pages and asserts a broad range of claims against Mr. Witt,
the other Defendants in this matter, and various third
parties. Before the Court could rule on any motions, Mr. Witt
filed for bankruptcy (# 103) on March 6, 2017, and a Trustee
was appointed to administer his estate. In light of that
appointment, the Court amended the caption of the action to
substitute the Trustee for Mr. Witt and denied all the
pending motions - including the Defendants' motions to
dismiss - until the Trustee could examine Mr. Witt's
claims and decide whether to pursue, modify, or withdraw them
on behalf of the estate (# 106). The record reflects that Mr.
Witt's bankruptcy case was short-lived, however; it was
apparently dismissed by the bankruptcy court on April 26,
2017. The dismissal of the bankruptcy case effectively
terminated the Trustee's control over this case, placing
it back in Mr. Witt's hands. (As a result, the Court has
again amended the caption set forth above to reflect this
state of affairs.)
thereafter, Mr. Witt filed the instant Motion to Dismiss
(# 124), explaining that he had become
convinced that the case would be heard more expeditiously if
pursued in state court. He sought to dismiss his RICO claim
without prejudice, thereby severing the predicate for federal
subject-matter jurisdiction and effectuating the dismissal of
the action in its entirety. Mr. Witt made clear that he
intended to continue to pursue his state-law claims against
the Defendants in a new state-court action. Although the time
to respond to this motion under D.C. Colo. L. Civ. R. 7.1(d)
has not yet run, at least one Defendant, Mr. Semmens, has
already opposed Mr. Witt's requested dismissal. Mr.
Semmens argues that Mr. Witt is engaging in vexatious
litigation designed to cause the Defendants to incur fees,
yet prevent conclusive adjudication of Mr. Witt's (or,
for that matter, the Defendants' state-court) claims. Mr.
Semmens requests, alternatively, that the Court deny Mr.
Witt's request to dismiss the action, that the Court
grant the motion on the condition that Mr. Witt pay the
Defendants' accrued attorney fees in part or whole, that
the Court dismiss Mr. Witt's claims with prejudice to
prevent them from being reasserted, or that the Court revive
and determine the Defendants' prior Rule 12(b)(6)
Court finds that it is sufficiently apprised of the issues
here, and requires no further briefing on Mr. Witt's
Motion to Dismiss to make a determination. D.C. Colo. L. Civ.
Court will not belabor its analysis of Mr. Witt's Motion
to Dismiss under Rule 41(a)(2). Regardless of whether the
Court would be inclined to grant that motion, either
unconditionally or on certain conditions sought by Mr.
Semmens, a curious feature of Rule 41(a)(2) presents an
additional obstacle. Under the Rule, “if a defendant
has pleaded a counterclaim before being served with the
plaintiff's motion to dismiss, the action may be
dismissed over the defendant's objection only if the
counterclaim can remain pending for independent
adjudication.” Here, Mr. Lane has pled a counterclaim
prior to Mr. Witt seeking to dismiss, and although Mr. Lane
has not yet responded to Mr. Witt's motion, one may
reasonably anticipate that Mr. Lane might object to Mr. Witt
dismissing his own action, taking Mr. Lane's
counterclaims down in the process. Thus, the Court is faced
with the question of whether Mr. Lane's counterclaims
can, of their own accord, support federal subject-matter
jurisdiction (and, relatedly, can any such claim that
supports such jurisdiction survive further review under
Fed.R.Civ.P. 8 and 12(b)(6)?).
Court sees little cause to attempt to parse Mr. Lane's
extensive and rambling counterclaims in order to answer that
question. Instead, the Court finds it far easier to accept
Mr. Semmens' invitation for the Court to return to the
Defendants' fully-briefed motions to dismiss Mr.
Witt's claims under Rule 12(b)(6) - specifically
including the RICO claim - and adjudicate those. For the
reasons set forth below, the Court finds that Mr. Witt has
failed to state a cognizable RICO claim. Dismissal of that
claim disposes of the sole basis for federal subject-matter
jurisdiction here, requiring dismissal of the entire action -
the very same relief that the Defendants previously sought
and which Mr. Witt seeks now.
Standard of review
reviewing a motion to dismiss pursuant to Rule 12(b)(6), the
Court must accept all well-pleaded allegations in the Amended
Complaint as true and view those allegations in the light
most favorable to the nonmoving party. Stidham v. Peace
Officer Standards & Training, 265 F.3d 1144, 1149
(10th Cir. 2001) (quoting Sutton v. Utah State Sch. for
the Deaf & Blind, 173 F.3d 1226, 1236 (10th Cir.
1999)). The Court must limit its consideration to the four
corners of the Amended Complaint, any documents attached
thereto, and any external documents that are referenced in
the Amended Complaint and whose accuracy is not in dispute.
Oxendine v. Kaplan, 241 F.3d 1272, 1275 (10th Cir.
2001); Jacobsen v. Deseret Book Co., 287 F.3d 936,
941 (10th Cir. 2002); Dean Witter Reynolds, Inc. v.
Howsam, 261 F.3d 956, 961 (10th Cir. 2001).
is subject to dismissal if it fails to state a claim for
relief that is “plausible on its face.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). To make
such an assessment, the Court first discards those averments
in the Complaint that are merely legal conclusions or
“threadbare recitals of the elements of a cause of
action, supported by mere conclusory statements.”
Id. at 678-79. The Court takes the remaining,
well-pleaded factual contentions, treats them as true, and
ascertains whether those facts (coupled, of course, with the
law establishing the requisite elements of the claim) support
a claim that is “plausible” or whether the claim
being asserted is merely “conceivable” or
“possible” under the facts alleged. Id.
What is required to reach the level of
“plausibility” varies from context to context,
but generally, allegations that are “so general that
they encompass a wide swath of conduct, much of it innocent,
” will not be sufficient. Khalik v. United Air
Lines, 671 F.3d 1188, 1191 (10th Cir. 2012).
Witt's RICO claim is the linchpin that permits this
federal court to exercise subject-matter jurisdiction over
this proceeding pursuant to 28 U.S.C. §1331.
Accordingly, the Court elects to first evaluate all of the
Defendants' motions as directed at the RICO claim.
adequately plead a civil RICO claim, a plaintiff must allege
three elements: (i) conduct, (ii) of an enterprise, (iii)
through a pattern of racketeering ...