NOTE: WA - RICO claim elements needing to be plead

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Terms: (((criminal profiteering act) AND (mortgage)))

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GEORGE FREEMAN, and on behalf of the Estate of SELMA FREEMAN CLARK,

Deceased, Appellant, v. GWENDOLYN M. YOUNG, FLORENCE (a/k/a "Sally") E.
EVANS, TIM BOZE, PACIFIC NORTHWEST TITLE COMPANY OF SPOKANE,
RONALD THOMAS, NATIONAL CITY MORTGAGE, DONNA R.
BERROTERAN, Respondents.

No. 23716-8-III

COURT OF APPEALS OF WASHINGTON, DIVISION THREE

2007 Wash. App. LEXIS 214

February 8, 2007, Filed

NOTICE: [*1] RULES OF THE WASHINGTON COURT OF APPEALS MAY LIMIT CITATION TO
UNPUBLISHED OPINIONS. PLEASE REFER TO THE WASHINGTON RULES OF COURT.

SUBSEQUENT HISTORY: Reported at Freeman v. Young, 137 Wn. App. 1008, 2007 Wash. App. LEXIS 751 (2007)

PRIOR HISTORY: Superior Court County: SPOKANE. Docket No(s): 04-2-01906-5. Judge signing: MICHAEL P.
PRICE. Date filed: December 21, 2004.

CASE SUMMARY:

PROCEDURAL POSTURE: Appellant pro se beneficiary challenged a decision from the Superior Court in Spokane
County (Washington), which entered judgment in favor of respondent attorney in fact by dismissing a case alleging
fraud, breach of fiduciary duty, misrepresentation, failure to exercise reasonable care and diligence, and violations of
the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C.S. §§ 1961-1968.

OVERVIEW: Prior to her mother's death, the attorney in fact executed a statutory warranty deed, which conveyed the
mother's property. The proceeds of the sale was allegedly used to pay off outstanding debts. No money was left for the
beneficiary. Thereafter, the beneficiary filed an action against the attorney in fact, which alleged several causes of
action. The complaint was dismissed for failure to state a claim, and this appeal followed. In affirming, the appellate
court determined that the beneficiary's due process rights under Wash. Const. art. I, § 3 and U.S. Const. amend. XIV, §
1 were not violated when the complaint was dismissed without notifying him of the deficiencies therein; the trial court
did not have the duty to assist him in drafting a claim upon which relief could have been granted. Next, the beneficiary
did not discuss the RICO elements in his complaint. Fraud had to be pled with particularity under Wash. Super. Ct. Civ.
R. 9(b). None of the elements of such were included in the complaint. Finally, the allegedly error about the standard of
proof was meritless since the application of such was not necessary when it was determined that fraud was insufficiently
pled.

OUTCOME: The decision was affirmed.

CORE TERMS: standard of proof, pro se, accounting, falsity, attorney in fact, fraud claims, causes of actions,
assignments of error, failed to state, addressing, ignorance, mortgage, deprived, durable, dismissal order, heading

LexisNexis(R) Headnotes

Civil Procedure > Pleading & Practice > Defenses, Demurrers & Objections > Failures to State Claims
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Civil Procedure > Appeals > Standards of Review > General Overview
[HN1] When reviewing a Wash. Super. Ct. Civ. R. 12(b)(6) dismissal, an appellate court accepts the truth of the factual
allegations of the complaint. Dismissal under Rule 12(b)(6) is appropriate in those cases where the plaintiff cannot
prove any set of facts, consistent with the complaint that would entitle the plaintiff to relief. Rule 12(b)(6) motions
should be granted only sparingly and with care. Any hypothetical situation conceivably raised by the complaint defeats
a Rule 12(b)(6) motion if it is legally sufficient to support the plaintiff's claim.

Constitutional Law > Bill of Rights > Fundamental Rights > Procedural Due Process > Scope of Protection
[HN2] Due process protects individuals against the deprivation of life, liberty, or property. U.S. Const. amend. XIV, §
1; Wash. Const. art. I, § 3. The threshold question in any due process challenge is whether the challenger has been
deprived of a protected interest in life, liberty or property.

Civil Procedure > Pleading & Practice > Defenses, Demurrers & Objections > Failures to State Claims
Civil Procedure > Pleading & Practice > Pleadings > Complaints > Requirements
Civil Procedure > Parties > Self-Representation > Pleading Standards
Legal Ethics > Judicial Conduct
[HN3] A pro se litigant is held to the same standard as an attorney. A plaintiff must state a claim upon which relief may
be granted. Wash. Super. Ct. Civ. R. 8(a). If the plaintiff fails to do so, a defendant may move under Wash. Super. Ct.
Civ. R. 12(b)(6) for dismissal in the interest of fairness and judicial economy. The trial court is not required to assist a
litigant in complying with the court rules, whether the litigant is pro se or an attorney. Such assistance would be unfair
to the other party and would be contrary to Wash. Code Jud. Conduct Canon 3, requiring judges to perform the duties of
their offices impartially and diligently.

Criminal Law & Procedure > Criminal Offenses > Racketeering > Racketeer Influenced & Corrupt Organizations >
Elements
[HN4] The Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C.S. §§ 1961-1968, was enacted to
combat organized crime. Several states, including Washington, have enacted similar provisions. Wash. Rev. Code ch.
9A.82. RICO claim elements are (1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity
(predicate acts) (5) causing injury to the plaintiff's business or property. 18 U.S.C.S. §§ 1964(c), 1962(c).

Civil Procedure > Pleading & Practice > Pleadings > Heightened Pleading Requirements > Fraud Claims
[HN5] Wash. Super. Ct. Civ. R. 9(b) requires a plaintiff averring fraud to set forth the circumstances constituting fraud
with particularity. The well-established elements of fraud are: (1) A representation of an existing fact, (2) its materiality,
(3) its falsity, (4) the speaker's knowledge of its falsity or ignorance of its truth, (5) his intent that it should be acted on
by the person to whom it is made, (6) ignorance of its falsity on the part of the person to whom it is made, (7) the latter's
reliance on the truth of the representation, (8) his right to rely upon it, and (9) his consequent damage.

Civil Procedure > Pleading & Practice > Pleadings > Heightened Pleading Requirements > Fraud Claims
[HN6] The complaining party must plead both the elements and circumstances of fraudulent conduct.

COUNSEL: For Appellant(s): George Freeman, Pro Se.

For Respondent(s): Chad Harrison Freebourn, Attorney at Law, Spokane, WA; Joseph G. Nolan, Attorney at Law,
Seattle, WA; Susan J. Robinson of Robinson Tait PS, Seattle, WA; Donna R. Berroteran, Pro Se.

JUDGES: Written by: STEPHEN M. BROWN. Concurred by: DENNIS J. SWEENEY & JOHN A. SCHULTHEIS.

OPINION BY: STEPHEN M. BROWN

OPINION
BROWN, J.--George Freeman, pro se, sued his half-sister, Gwendolyn M. Young, for her conduct as attorney in fact
under a durable power of attorney (POA) executed by their aging mother, Selma Freeman-Clark. Mr. Freeman amended
his complaint to add Florence E. Evans, Ms. Young's roommate; Pacific Northwest Title Company, Ms. Freeman-
Clark's escrow company involved with a home sale under the POA; Tim Boze, Pacific Northwest's president; National
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City Mortgage, the mortgage company for the buyers; Ronald Thomas, National City's branch manager; and Donna R.
Berroteran, a Notary Public who notarized the POA. For ease of discussion, we refer to the added defendants as the
added parties to distinguish them from Ms. Young. The trial court dismissed Mr. Freeman's complaint under CR 12(b)
(6) [*2] for failure to state a claim upon which relief could be granted. Still pro se, Mr. Freeman appealed. He contends
the court denied him due process, erred in not accepting his Racketeer Influenced and Corrupt Organizations Act
(RICO) claims, erred in dismissing his fraud claims, and applied the wrong standard of proof. Finding no error, we
affirm.
FACTS
On April 16, 1997, Ms. Freeman-Clark executed a durable POA, appointing Ms. Young her attorney in fact. According
to the record, Ms. Young took care of her mother's day-to-day affairs for some 20 years before her mother passed away
in November 2003. On August 27, 2003, Ms. Young executed a statutory warranty deed, conveying Ms. Freeman-
Clark's home to Rick and Judi LaRock for $45,000. The net proceeds less $200 cash was placed in a bank account by
Ms. Young. According to Ms. Young, the money was used to pay off her mother's outstanding debts. No money was
left for the beneficiaries of Ms. Freeman-Clark's will, including Mr. Freeman.
On April 28, 2 004, Mr. Freeman sued Ms. Young, alleging, among other things, fraud. In an amended complaint, Mr.
Freeman added the parties noted above, and alleged additional causes of actions for breach [*3] of fiduciary duty,
misrepresentation, failure to exercise reasonable care and diligence, and failure of accounting amounting to a RICO
violation. Ms. Young successfully asked for CR 12(b)(6) dismissal of all claims.
Mr. Freeman appealed.
ANALYSIS
The issue is whether the trial court erred in granting a CR 12(b)(6) dismissal of all Mr. Freeman's claims against Ms.
Young and the added parties.
[HN1] When reviewing a CR 12(b)(6) dismissal, we accept the truth of the factual allegations of the complaint.
Woodrome v. Benton County, 56 Wn. App. 400, 403, 783 P.2d 1102 (1989). Dismissal under CR 12(b)(6) is appropriate
in those cases where the plaintiff cannot prove any set of facts, consistent with the complaint that would entitle the
plaintiff to relief. Bravo v. The Dolsen Cos., 125 Wn.2d 745, 750, 888 P.2d 147 (1995). CR 12(b)(6) motions should be
granted only "'sparingly and with care.'" Id. (quoting Haberman v. Wash. Pub. Power Supply Sys., 109 Wn.2d 107, 120,
744 P.2d 1032, 750 P.2d 254 (1987)). "'[A]ny hypothetical situation [*4] conceivably raised by the complaint defeats a
CR 12(b)(6) motion if it is legally sufficient to support the plaintiff's claim.'" Bravo, 125 Wn.2d at 750 (quoting
Halvorson v. Dahl, 89 Wn.2d 673, 674, 574 P.2d 1190 (1978)).
Mr. Freeman contends the court erred in granting a CR 12(b)(6) dismissal because the court violated his due process
rights by not notifying him of his complaint's deficiencies and then allowing him to correct them, not addressing his
RICO violation claim, not finding sufficient facts existed to establish fraud, and applying the wrong standard of proof.
We analyze solely the issues related to Mr. Freeman's assignments of error and disregard unrelated arguments. See RAP
10.3(a)(4) (requiring a separate concise statement of each error a party contends the court made, along with the issues
pertaining to the assignments of error).
Due Process. [HN2] "Due process protects individuals against the deprivation of life, liberty, or property." U.S.
CONST. amend. XIV, § 1; WASH. CONST. art. I, § 3. "'The threshold question in any due process challenge is
whether the challenger [*5] has been deprived of a protected interest in life, liberty or property.'" In re Pers. Restraint
of Woods, 154 Wn.2d 400, 411, 114 P.3d 607 (2005) (quoting In re Pers. Restraint of Cashaw, 123 Wn.2d 138, 143,
866 P.2d 8 (1994)). Mr. Freeman has failed to show how his life, liberty, or property has been deprived.
[HN3] A pro se litigant is held to the same standard as an attorney. Westberg v. All-Purpose Structures Inc., 86 Wn.
App. 405, 411, 936 P.2d 1175 (1997). A plaintiff must state a claim upon which relief may be granted. CR 8(a). If the
plaintiff fails to do so, a defendant may move under CR 12(b)(6) for dismissal in the interest of fairness and judicial
economy. The trial court is not required to assist a litigant in complying with the court rules, whether the litigant is pro
se or an attorney. Such assistance would be unfair to the other party and would be contrary to Canon 3 of the Code of
Judicial Conduct, requiring judges to perform the duties of their offices impartially and diligently.
Accordingly, the trial court was not required to assist Mr. Freeman in drafting [*6] a claim upon which relief could be
granted. Furthermore, the court was not required, on its own motion, to allow Mr. Freeman to amend his complaint for
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the third time. We find no deficiency in the notice and opportunity to be heard on the CR 12(b)(6) motion and are not
persuaded that any fair trial principle has been breached. Accordingly, we reject Mr. Freeman's due process failure
arguments.
RICO. In Mr. Freeman's amended complaint, and under the heading "Failure of Accounting," he alleged RICO
violations. Clerk's Papers (CP) at 58. In its dismissal order, the court found Mr. Freeman's complaint failed "to state any
claim . . . upon which relief can be granted." CP at 203 (emphasis added). The court listed several of Mr. Freeman's
claims, but the RICO claim was not listed. On appeal, he argues the court erred by not addressing this claim. But based
on the dismissal order language, the court considered all of Mr. Freeman's allegations in his complaint and found none
justified relief.
Moreover, [HN4] RICO (18 U.S.C. §§ 1961-1968) was enacted to combat organized crime. Winchester v. Stein, 135
Wn.2d 835, 849, 959 P.2d 1077 (1998). [*7] Several states, including Washington, have enacted similar provisions.
See chapter 9A.82 RCW (Washington Criminal Profiteering Act). RICO claim elements are (1) conduct (2) of an
enterprise (3) through a pattern (4) of racketeering activity (predicate acts) (5) causing injury to the plaintiff's business
or property. 18 U.S.C. §§ 1964(c), 1962(c).
Mr. Freeman does not discuss any RICO claim elements in his complaint; instead he merely placed his RICO argument
under the heading of a different cause of action. Thus, Mr. Freeman fails to fix a claim upon which relief could be
granted. Therefore, the trial court correctly determined the claim was deficient.
Fraud. Mr. Freeman contends "[t]he trial court erred in finding no fraud." Appellant's Br. at 5. First, the court did not
weigh the evidence and decided no fraud existed. Rather the court dismissed this claim under CR 9(b) and CR 12(b)(6).
The court concluded fraud was not properly alleged. [HN5] CR 9(b) requires a plaintiff averring fraud to set forth "the
circumstances constituting fraud . . . with particularity." The [*8] well-established elements of fraud are: "(1) A
representation of an existing fact, (2) its materiality, (3) its falsity, (4) the speaker's knowledge of its falsity or ignorance
of its truth, (5) his intent that it should be acted on by the person to whom it is made, (6) ignorance of its falsity on the
part of the person to whom it is made, (7) the latter's reliance on the truth of the representation, (8) his right to rely upon
it, [and] (9) his consequent damage." Kirkham v. Smith, 106 Wn. App. 177, 183, 23 P.3d 10 (2001).
Here, Mr. Freeman fails to mention any fraud element in his trial pleadings. [HN6] "The complaining party must plead
both the elements and circumstances of fraudulent conduct." Haberman, 109 Wn.2d at 165 (citing 3A L. Orland, Wash.
Prac. 129 (3d ed. 1980)). Because Mr. Freeman failed to do so, the trial court did not err in dismissing his fraud claim.
Standard of Proof. Mr. Freeman contends the trial court erred by applying an incorrect standard of proof for fraud.
Fraud must be proved by clear and convincing evidence. Bang Nguyen v. Dep't of Health, 144 Wn.2d 516, 527, 29 P.3d
689 (2001), cert. denied, 535 U.S. 904 (2002). [*9] But the court did not apply any standard of proof when it found
fraud was not sufficiently pleaded. Thus, Mr. Freeman's arguments are off mark.
In sum, Mr. Freeman failed to state any claim upon which relief could be granted. At best, the complaint concerned a
request for Ms. Young to account for the care of Ms. Freeman-Clark's property and states no cognizable claim against
the added parties. Since Mr. Freeman refers to interrogatories answered by Ms. Young concerning her accounting for
the care expenditures, and does not suggest how further litigation is warranted, we do not understand how remand for
further proceedings are justified against Ms. Young within the boundaries of the existing pleadings. Accordingly, Mr.
Freeman has failed to persuade us of any trial court error in dismissing his complaint under CR 12(b)(6).
Affirmed.
A majority of the panel has determined this opinion will not be printed in the Washington Appellate Reports, but it will
be filed for public record pursuant to RCW 2.06.040.
Brown, J.
WE CONCUR:
Sweeney, C.J.
Schultheis, J.