New York Criminal Lawyer Blog
The plaintiff in the matter is the Greenview Trading Company. The defendants in the matter are Hershman & Leicher, P.C., Harold M. Hershman, Indu Craft, PLC of New York, Incorporated, and Richard Rottman. The case is being heard in the Supreme Court in the state of New York located in New York County. The acting justice in the case is David B. Saxe.
The question before the court in this case is whether state courts have concurrent jurisdiction with federal courts to hear private civil actions regarding damages under the RICO act, or are these actions only within the federal domain.
Case Background
The lawsuit in this case comes from an agreement between the plaintiff Greenview and the defendant Indu Craft. Under the agreement the plaintiff agreed to assign the lease of their premises to Indu Craft. The premise is located at 1407 Broadway in New York City. Additionally, defendant Indu Craft agreed to pay the plaintiff $15,000 for the furniture and fixtures that are located at the premises.
The escrow agent for this agreement was the defendant Hershman & Leicher, P.C. Hershman & Leicher held the amount of $14,500 for Indu Craft in escrow. This amount was released to the plaintiff Greenview when the lease between the two parties was executed. The lease also allowed for other items that were owned by Greenview to remain on the property until the 15th of September when the plaintiff would have them removed.
Case Discussion and Decision
The eighth paragraph in the contract is the crucial paragraph of the agreement. In this paragraph it states that if the landlord fails to execute a written lease with Indu Craft or if the landlord executes a lease with anyone other than Indu Craft the sum that is held in escrow will be returned to Indu Craft.
The landlord went on to execute a lease with P.L.C. of New York, which is a corporation other than Indu Craft. For this reason, the amount of money that was held in escrow was returned to Indu Craft.
The argument made by the plaintiffs is that P.L.C. is an alter ego of Indu Craft. The plaintiff states that the defendant Indu Craft created the other company for the purpose of creating a fraud against them. The fraud involved having the plaintiff invoke a lease with the other company in order to invoke paragraph 8 of the agreement.
The defendant has moved to have the cause of action against them dismissed stating that they have not violated the RICO act.
RICO was created in order to stop organized crimes (white collar crime) from infiltrating the American economy. The purpose of the law is to remedy racketeering activity used to operate or gain control of a business.
The issue before the court in this matter is whether the state has concurrent jurisdiction in the matter. The court presumes that as a state court they do have this right. However, the Congress may confine jurisdiction in cases such as this to a federal court.
After reviewing the case the court finds that the defendants have not rebutted the presumption in favor of concurrent jurisdiction and the private cause of action by the plaintiffs may be asserted in either a state or federal court.
Stephen Bilkis & Associates offers free consultations to anyone that has a legal matter they would like to discuss, whether it involves petit larceny, grand larceny or fraud . Our offices are located throughout New York City for your convenience. You may call at any time to set up an appointment.