IN RE OLICK

uct be "not justifiable under the circumstances"); 18 Pa. Cons. Stat. § 2709 (requiring for violation that person "commit [] acts which serve no legitimate purpose"). Again, the Debtor has not made any factual record from which the court could conclude that whatever Northampton County did was without justification or with no legitimate purpose. Therefore, summary judgment is granted in favor of Northampton County on Count IV.

Count V — Breach of Contract

A cause of action for breach of contract requires proof of (1) the existence of a contract; (2) the breach of a duty imposed by the contract; and (3) resultant damages. E.g., Williams v. Nationwide Mut. Ins. Co., 750 A.2d 881, 884 (Pa. Super. 2000).

The Debtor contends that Northampton County breached the court-approved April 2009 Stipulation of Settlement from the First Adversary Proceeding by accepting payment from Bank of America for the full balance of outstanding taxes. The relevant terms of the April 2009 Stipulation of Settlement provides:

will not take any action of any nature to collect claims for taxes that were due as of the date of filing of the Chapter 13 Bankruptcy Petition and acknowledge that to the extent that those claims are allowed, they will be fully satisfied upon receipt of the amounts allowed by the Bankruptcy Court from the Trustee in Bankruptcy.

It further provides that:

Should the Northampton County . . . take any steps to collect the prepetition claims for taxes, through inadvertence or otherwise, this Stipulation of Settlement shall be deemed a full defense to any such claims or actions and may be presented to specified public agency or authority as proof that all prepetition claims for taxes that are allowed will be satisfied through the bankruptcy process and no other.

(See Adv. No. 08-264, Doc. # 82).

The Debtor has not met his burden on summary judgment because he cannot establish that any breach of the agreement occurred.

Northampton County's essential obligation under the agreement was to comply with the automatic stay, i.e., to take no action to collect its pre-petition tax claim. As explained earlier in the discussion of Count III, there is no evidence that Northampton County made any attempt to collect any of the tax liability. The record reflects only that Northampton County complied with a request for information and then accepted payment from Bank of America.

Even if Northampton County's acceptance of the funds provided by Bank of America was "an action . . . to collect claims" as contemplated by the settlement agreement (and also as explained earlier), the Debtor has produced no evidence he has been damaged by Northampton County actions.

Count VI — Violation of RICO

In Count VI of the Amended Complaint, the Debtor asserts that Northampton County violated RICO. He alleges that Northampton County is an enterprise as defined by RICO and that Northampton County engaged in numerous acts of fraudulent solicitation through the U.S. Mail. (See Pl.'s Am. Compl. ¶¶ 143-144).

The RICO statute provides:

It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt.

See 18 U.S.C. § 1962(c).

A cause of action for a violation of RICO requires a Debtor establish four elements: (1) conduct, (2) of an enterprise, (3) through a pattern, (4) of racketeering activity. See, e.g., Lum v. Bank of Am., 361 F.3d 217, 223 (3d Cir. 2004). In order to recover the treble damages permitted by the RICO statute, plaintiffs must prove all elements of a civil RICO claim. Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479, 496 (1985).

Here, the Debtor's RICO claim, which seems to hinge on mail fraud, likely fails to satisfy every required element. For sake of brevity, I will limit my discussion to two deficiencies.

The Third Circuit has held that where a plaintiff relies on mail fraud as a basis for a RICO violation, the allegations of fraud must comply with Fed.R. of Civ. P. 9(b). See Lum, 361 F.3d at 224-225; Warden v. McLelland, 288 F.3d 105, 114 (3d Cir. 2002); accord Freedom Medical, Inc. v. Gillespie, 634 F. Supp.2d 490, 509 (E.D. Pa. 2007). A plaintiff can satisfy this requirement by pleading the "date, place or time" of the fraud, or through "alternative means of injecting precision and some measure of substantiation into their allegations of fraud."Seville Indus. Mach. Corp. v. Southmost Mach. Corp., 742 F.2d 786, 791 (3d Cir. 1984).

Moreover, to establish a "pattern" the plaintiff must prove at least two (2) acts of racketeering activity within a ten year period. See 18 U.S.C. § 1961(5). Courts have since coined the two acts of racketeering activity, the "predicate acts." Breslin v. Brainard, 2003 WL 22351297, at *11 (E.D. Pa. Oct. 14, 2003). When liability is premised on violations of the federal mail fraud statute as the predicate acts, a plaintiff must establish "(1) the defendant's knowing and willful participation in a scheme or artifice to defraud, (2) with the specific intent to defraud, and (3) the use of the mails or interstate wire communications in furtherance of the scheme." United States v. Antico, 275 F.3d 245, 261 (3d Cir. 2001) (citing United States v. Clapps, 732 F.2d 1148, 1152 (3d Cir. 1984)). "A scheme or artifice to defraud need not be fraudulent on its face, but must involve some sort of fraudulent misrepresentations or omissions reasonably calculated to deceive persons of ordinary prudence and comprehension."Brokerage Concepts, Inc. v. U.S. Healthcare, Inc., 140 F.3d 494, 528 (3d Cir. 1998) (quoting Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1415 (3d Cir. 1991)).

Here, the only conduct grounding the Debtor's mail fraud claim is the single response/communication of Northampton County to Bank of America's routine request for information regarding outstanding tax liability in which Northampton County provided a real estate tax certification. Even if I were to overlook the fact that Debtor has failed to comply with the heightened pleading requirement of Fed.R.Civ.P. 9(b) (an issue that the Defendant has not raised), the Debtor lacks any evidence that there was any misrepresentation within Northampton County's communication, that Northampton County had any illicit objective regarding that communication or that the Northampton County had an intent to defraud by use of that communication. Therefore, I cannot deem this conduct a "predicate act" for purposes of RICO and the Debtor's RICO claim must fail as a matter of law. See Franks v. Food Ingredients Intern., Inc., 2010 WL 3046416, at *4 (E.D. Pa. July 30, 2010) (failure to plead mail fraud with the requisite specificity prevents it from being considered a predicate act).

Summary judgment is also warranted because the record is insufficient to establish the requisite "pattern." The Debtor's reliance on one action is fatal to his RICO claim because he has no evidence of two or more predicate acts that are (1) "related" and (2) "amount to or pose a threat of continued criminal activity." H.J. Inc. v. Northwestern Bell Tel. Co., 492 U.S. 229, 239-40 (1989). Therefore, summary judgment will be entered in favor of Northampton County on Count VI.

The allegations of predicate acts cannot constitute a RICO "pattern" unless both the "relatedness" and "continuity" tests are satisfied. Kehr Packages, 926 F.2d at 1412. In Stoss v. Singer Financial Corp., 2010 WL 678115 (E.D. Pa. Feb. 24, 2010), the court recently explained these two requirements with reference to the Supreme Court's decision in H.J. Inc. v. Northwestern Bell Tel. Co.:

The relatedness inquiry focuses on whether the alleged predicate acts "are interrelated by distinguishing characteristics and are not isolated events." "`Continuity' is both a closed — and open-ended concept, referring either to a closed period of repeated conduct, or to past conduct that by its nature projects into the future with a threat of repetition." The Court observed that "Congress was concerned in RICO with long-term criminal conduct" and ruled therefore that "[p]redicate acts extending over a few weeks or months and threatening no future criminal conduct do not satisfy [the continuity] requirement."

2010 WL 678115, at *7 (internal citations omitted).

Count VII — Filing Fraudulent Creditor Claims

In Count VII, the Debtor alleges a cause of action for the "filing of fraudulent creditors claims" against all Defendants. The allegations appear to assert that Claim No. 7 was "fraudulent" because Northampton County already recovered the allowed tax payments from Bank of America, yet sought double recovery from the Trustee for the satisfaction of the claim.

Assuming arguendo that a private cause of action for damages exists for filing a fraudulent claim in a bankruptcy case, this final count is nothing more than a repackaging of the state law claim for fraud alleged in Count I and fails for the same reasons.

This is a doubtful proposition. See In re Joubert, 411 F.3d 452 (3d Cir. 2005). In light of my disposition of the Debtor's claim on other grounds, I do not decide the issue.

V.

Debtor's theory of liability against EASD is based entirely on the factual premise that Northampton County is an "employee and/or agent" of and is "paid to collect taxes" on behalf of EASD. (Debtor's Ans. to EASD Mot. for Summ. J. at 1). The Debtor contends that EASD admitted in the April 2009 Stipulation of Settlement filed in the First Adversary Proceeding that it employed Northampton County to act as its agent to collect pre-petition taxes of the Debtor and to file Claim No. 7, thus rendering it equally responsible for any and all actions taken by Northampton County. (See Debtor's Resp. to Def. EASD's Ans. To Debtor's Mot. for Summ. J. at 2).

After reviewing the Stipulation in the First Adversary Proceeding, I agree that it includes an admission that Northampton County acts as an agent of the EASD for the collection of taxes. (See Adv. No. 08-264, Doc. # 82) (Stipulation ¶¶ 4, 6). However, there is no evidence in the record that an employer-employee relationship exists or existed between EASD and Northampton County. Therefore, I will not further discuss the Debtor's "respondeat superior" theory.

The doctrine of respondeat superior determines when employers will be held liable for the actions of their employees. CNA v. U.S., 535 F.3d 132, 146 (3d Cir. 2008). Pennsylvania has adopted the Restatement (Second) of Agency's definition of conduct within the scope of employment. Id. (citations omitted); Winward v. Rhodewalt, 203 Pa.Super. 369, 372, 198 A.2d 623, 624 (1964). Section 228 of the Restatement provides in relevant part that the "[c]onduct of a servant is within the scope of employment if, but only if: (a) it is of the kind he is employed to perform; (b) it occurs substantially within the authorized time and space limits; [and] (c) it is actuated, at least in part, by a purpose to serve the master. . . ." Restatement (Second) of Agency § 228(1).

As for the Debtor's agency theory, EASD cannot be liable unless the conduct of its agent, Northampton County, was actionable.See, e.g., Tindall v. Friedman, 970 A.2d 1159 (Pa. Super. 2009) (termination of the claim against the agent extinguishes the derivative claim against the principal). I have already determined that Northampton County is entitled to summary judgment on all of the Debtor's claims. Therefore, to the extent the Debtor's claims against EASD are derivative of his claims against Northampton County, the claims against EASD also fail. Further, because there is nothing in the record suggesting that EASD took any independent action with respect to collecting any claim against the Debtor, EASD is entitled to summary judgment on all of the Debtor's claims.

VI. CONCLUSION

For the reasons set forth above, the summary judgment motions of Defendants EASD and Northampton County will be granted and the Debtor's motion for summary judgment will be denied. Judgment will be entered in favor of both Defendants Northampton County and EASD.

Date: November 9, 2010