Heinrich v. Dean

Background

Mary Heinrich sued as executor of Catherine Butler Muzio’s estate, as trustee and beneficiary of two trusts belonging to Muzio, and in her individual capacity. The complaint alleged that Malayene Dean, Muzio’s caregiver and neighbor, and Charles Yassim worked together to obtain control over Muzio’s financial accounts and take money and other assets. The alleged conduct included obtaining a power of attorney, transferring about $600,000 from the trusts, transferring about $350,000 in other assets, writing checks to themselves, and charging about $150,000 in expenses to Muzio’s credit cards.

The plaintiffs asserted a civil Racketeer Influenced and Corrupt Organizations Act claim, commonly called a civil RICO claim, along with state-law claims for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, fraud and deceit, conversion, gross negligence, aiding and abetting fraud, unjust enrichment, and constructive trust. The plaintiffs had previously withdrawn defamation and intentional-interference claims without prejudice. Morgan Stanley Smith Barney, LLC, Horace Barker, and Citibank were pursuing the plaintiffs’ claims through arbitration, and the case had been stayed as to those defendants. Dean and Yassim moved to dismiss under Rules 12(b)(1) and 12(b)(6), which address federal subject-matter jurisdiction and whether a complaint states a legally sufficient claim.

RICO Claim

The court dismissed the civil RICO claim with prejudice. It explained that a RICO claim based on an association of individuals requires an enterprise with a purpose, relationships among its members, and enough longevity to pursue that purpose. The enterprise must also be separate from both the person conducting its affairs and the pattern of racketeering activity.

The court found that the complaint’s allegations that Dean and Yassim formed an association-in-fact enterprise were conclusory and unsupported by specific facts. The alleged conduct showed Dean and Yassim acting to advance their own interests by taking Muzio’s assets, rather than acting on behalf of a separate eldercare enterprise. The court also found that the alleged eldercare enterprise was not distinct from Dean, who was the only person alleged to have provided eldercare, and was not separate from the alleged theft and fraud involving Muzio.

Because the plaintiffs did not request permission to amend or indicate that they could correct these problems, the court dismissed the RICO claim with prejudice.

State-Law Claims and Disposition

After dismissing the federal claim, the court declined to exercise its authority over the remaining state-law claims. It concluded that no extraordinary circumstances or federal policy concerns required it to retain those claims. The court dismissed the remaining state-law claims without prejudice as to all defendants.

The court also vacated its prior orders enjoining Dean and Yassim from disposing of certain assets and staying the case pending arbitration. The clerk was directed to close the motion at Docket 65, vacate the specified orders, and close the case. The order was entered by Judge Valerie Caproni on February 13, 2023.