Mr Z asked me to post this. Sunday 10/3/21
TMC Case Update
This past week, U.S. District Court Judge Woods dismissed the complaint we filed against the Eichners and BlueGreen defendants WITHOUT PREJUDICE meaning that it can be amended and refiled in federal court, which we will do.
In dismissing the complaint, Judge Woods did not rule on the substantive merits of any of our allegations, but rather ruled solely on the very narrow, procedural basis that we supposedly failed to plead the allegations of a pattern of fraud and damages suffered by each plaintiff with sufficient detail to give rise to a justiciable federal RICO claim that would provide a basis for federal court jurisdiction. Since all of the other claims asserted in our complaint, e.g., breach of contract, fraud, etc., were based on state law which can be litigated in New York State court, no basis exists for federal jurisdiction over our suit absent a justiciable RICO claim. Judge Woods did not consider any of our state claims.
With respect to the federal RICO claim, Judge Woods ruled that the references to and incorporation in our complaint of the admissions made by the Eichner defendants in the Assurance of Discontinuance (“AOD”) of the wrongful actions they committed against the plaintiffs and other TMC members were insufficient to provide a basis for federal court jurisdiction, and that instead we had to detail the individual allegations of fraud and damages suffered by each plaintiff with specificity, even though these are largely the same for all plaintiffs.
We respectfully disagree with Judge Wood’s ruling and believe that the allegations in the complaint were sufficiently pled to sustain a federal RICO claim, detailing both the nature of the criminal enterprise and the specific frauds that establish the pattern of the defendants’ racketeering activity. TMC, T Park, O. Park, etc., are pawns of the Eichners, and the AOD admits the criminality of the defendants’ RICO “enterprise”.
Our pleading did not detail the individual frauds suffered by each plaintiff because (a) there is legal precedent that permits “group pleading” in RICO allegations where, as in this case, the frauds suffered by the members of the group are common in design and execution, and (b) the AOD admitted the existence and nature of the frauds the defendants committed.
The complaint did more than “dress up state claims for common law fraud and breach of contract as violations of [federal] civil RICO statute” as Judge Woods claims, but rather detailed a pattern of frauds committed in interstate commerce that affected over 14,000 timeshare purchasers and is exactly the kind of case that the federal RICO statute was designed to address. The statute was an attempt by Congress to provide federal jurisdiction over massive patterns of fraudulent activity, including those predicated on underlying violations of state law as in our case.
The dismissal WITHOUT PREJUDICE allows us to continue to pursue this case, and to submit a much lengthier amended complaint that provides the recitation of details Judge Woods has requested. Finally, claims by the real estate industry press such as the Real Deal that Judge Woods decided the substantive merits of this case in favor of Ian Bruce Eicher and his cronies misrepresents the court's ruling. All Judge Woods decided is that he did not want this matter on his docket.
Jean-Marc Zimmerman Zimmerman Law Group 233 Watchung Fork Westfield, NJ 07090 E: jmz@zimllp.com
Steven M. Hoffberg Hoffberg & Associates 29 Buckout Road West Harrison, NY 10604 E: steve@hoffberglaw.com
