United States District Court, D. Massachusetts
ORDER ON DEFENDANTS' MOTION TO DISMISS
LEO T. SOROKIN, District Judge.
Michael Gill brought this action against Cohen Associates LLC and Marc A. Cohen alleging professional malpractice, civil conspiracy, civil violations of the Racketeer Influenced and Corrupt Organizations ("RICO") Act, and violations of Chapter 93A of the Massachusetts General Laws. The defendants have moved to dismiss, arguing that the Complaint fails to state a claim. Because the Court finds that all of the Counts in the Complaint fail to state a claim, the Motion to Dismiss is ALLOWED.
The following factual allegations are drawn from the Complaint and are taken as true for the purposes of resolving the present motion.
Michael Gill is the sole owner of The Mortgage Specialists, Inc. ("MSI"), a New Hampshire corporation, and Michael Gill Racing. Doc. No. 1 ¶¶ 1, 12. Beginning in 2008, and possibly earlier, Gill hired several law firms and accountants to provide services related to corporate and individual taxation issues with federal and state tax authorities. E.g., id. ¶¶ 15, 33. After finding the services provided by these professionals unsatisfactory, Gill, in 2012, retained defendants Cohen Associates LLC and Marc Cohen (collectively, "Cohen") as accountants to both MSI and Gill individually. Id . ¶ 8. Cohen was hired to work on the financial statement and tax returns of MSI and Gill for the tax year 2011. Id . ¶ 9. At some point, Cohen also filed amended tax returns on Gill's behalf for tax years 2008 and 2009. Id . ¶ 15.
Gill alleges that Cohen, after being retained by Gill, informed Gill of an error on "Gill's K-1" and "net operating loss carryback" issues that unnecessarily created significant tax liability for Gill. Id . ¶¶ 28-29, 42. Gill further alleges that, despite informing Gill of these issues, and thus being aware of them, Cohen failed to correct the issues, resulting in the imposition of interest and penalties by federal and state tax authorities. Id . ¶¶ 42, 63.
Gill further alleges that Cohen met with and discussed Gill's tax issues with several of his previously retained lawyers and accountants. Id . ¶¶ 33, 48. Gill asked that Cohen go with him to meet with the United States Attorney for the District of Massachusetts to discuss the "fraudulent actions of Plaintiff's former attorneys and accountants to expose the racketeering and conspiracy." Id . ¶ 52. Apparently, Cohen declined. See id.
Gill brought suit against Cohen alleging malpractice (Count 1), Conspiracy (Count 2); civil RICO claims (Count 3), and violations of Chapter 93A of the Massachusetts General Laws (Count 4).
II. LEGAL STANDARD
To survive a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a complaint must contain sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The Court "must take the allegations in the complaint as true and must make all reasonable inferences in favor of the plaintiff." Watterson v. Page, 987 F.2d 1, 3 (1st Cir. 1993). "[F]actual allegations" must be separated from "conclusory statements in order to analyze whether the former, if taken as true, set forth a plausible, not merely a conceivable, case for relief." Juarez v. Select Portfolio Servicing, Inc., 708 F.3d 269, 276 (1st Cir. 2013) (internal quotations omitted). This highly deferential standard of review "does not mean, however, that a court must (or should) accept every allegation made by the complainant, no matter how conclusory or generalized." United States v. AVX Corp., 962 F.2d 108, 115 (1st Cir. 1992). Dismissal for failure to state a claim is appropriate when the pleadings fail to set forth "factual allegations, either direct or inferential, respecting each material element necessary to sustain recovery under some actionable legal theory." Centro Medico del Turabo, Inc. v. Feliciano de Melecio, 406 F.3d 1, 6 (1st Cir. 2005) (quoting Berner v. Delahanty, 129 F.3d 20, 25 (1st Cir. 1997)).
Cohen moves to dismiss the Complaint, arguing that it fails to state a claim as to any of the Counts alleged.
Looking first to Count 2, this claim alleges that Cohen engaged in a civil conspiracy with other accountants and lawyers. Massachusetts courts recognize two types of civil conspiracy: "true conspiracy" arising from action in unison creating "some peculiar power of coercion over [the] plaintiff" and conspiracy based on section 876 of the Restatement (Second) of Torts, creating vicarious liability for the conduct of others. Grant v. John Hancock Mut. Life Ins. Co., 183 F.Supp.2d 344, 362 (D. Mass. 2002)) (quoting Aetna Cas. Sur. Co. v. P & B Autobody, 43 F.3d 1546, 1564 (1st Cir. ...