United States District Court, D. Oregon
PHILLIPS SOIL PRODUCTS, INC., an Oregon corporation, Plaintiff,
LESLIE DUTY HEINTZ; JUSTIN TYME HEINTZ; and TIER 1 EXCAVATING, LLC, an Oregon Limited Liability Company, Defendants.
WILLIAM A. KINSEL Kinsel Law Offices, PLLC Attorney for
J. NELSON KEITH A. PITT Slinde Nelson Attorneys for
OPINION AND ORDER
J. BROWN, UNITED STATES SENIOR DISTRICT JUDGE.
matter comes before the Court on the Rule 12 Motions (#15)
Against Plaintiff's Complaint filed by Defendants Leslie
Duty Heintz, Justin Tyme Heintz, and Tier 1 Excavating, LLC.
reasons that follow, the Court GRANTS
Defendants' Rule 12 Motions (#15) against Plaintiff's
RICO claim, DISMISSES Plaintiff's RICO
claim, and GRANTS Plaintiff leave to file
no later June 1, 2018, an amended complaint
as to Plaintiff's RICO claim solely to cure the
deficiencies as set out in this Opinion and Order.
Defendants' response to the amended complaint is due
no later than June 15, 2018. The Court
declines to address those parts of Defendants' Motions
against the state-law claims at this stage without prejudice
to Defendants' right to renew such challenges.
following pertinent facts are taken from Plaintiff's
Plaintiff Phillips Soil Products, Inc., is an Oregon
corporation that sells soil products throughout the western
United States. Leslie Heintz was employed by Plaintiff from
September 24, 2012, through February 29, 2016, in
Plaintiff's accounting department and was responsible for
tracking accounts receivable, cash receivables, and accounts
payable; balancing Plaintiff's bank accounts; and making
daily bank deposits.
Heintz is married to Justin Heintz. Justin Heintz is a
principal of Tier 1 together with his father, Jeffrey Heintz.
Tier 1 is an excavating company with its principal place of
business in Oregon. Leslie Heintz also provided part-time
administrative, billing, and bookkeeping services to Tier 1
during the time she was employed by Plaintiff. Leslie and
Justin Heintz “reside on real property owned by”
Jeffrey Heintz and pay rent to Jeffrey Heintz.
alleges during the time it employed Leslie Heintz she
manipulated her timekeeping records to reflect overtime hours
not actually worked; charged Plaintiff for vacation and
sick-leave hours not earned; and paid herself for vacation,
sick leave, and hourly compensation not earned. Plaintiff
also alleges Leslie Heintz misused a company credit card,
misused company property including a cell phone and computer,
performed work for Tier 1 during “company time, ”
and maintained records for Tier 1 on her work computer.
Plaintiff alleges Leslie Heintz took unauthorized
“draws” by issuing checks to herself without
permission. Plaintiff also alleges Leslie Heintz took cash
receipts obtained by Plaintiff from its customers, purchased
money orders with the receipts from Western Union, and sent
the money orders by United Parcel Service to a personal bank
account in another state held jointly with her husband.
Plaintiff alleges these stolen funds were used to pay Leslie
and Justin Heintz's personal expenses, including payment
of rent to Jeffrey Heintz. Plaintiff also alleges the funds
were used to pay expenses for Tier 1 and to fund its business
activities. In addition, Plaintiff alleges Leslie Heintz
engaged in a “widespread and complicated pattern of
repeated re-allocations of the general ledger account to
which expenses and income were allocated” for the
purpose of concealing her thefts and “to affirmatively
misrepresent” Plaintiff's financial condition.
February 29, 2016, Plaintiff terminated Leslie Heintz's
February 9, 2018, Plaintiff filed a Complaint in this Court
against Defendants alleging a federal claim for violation of
the Racketeer Influenced and Corrupt Organizations Act
(RICO), 18 U.S.C. §§ 1962(a)-(d), and state-law
claims of civil conspiracy, fraud, conversion, breach of
fiduciary duty, and for an accounting.
survive a motion to dismiss a complaint must contain
sufficient factual matter, accepted as true, to “state
a claim for relief that is plausible on its face.”
Bell Atlantic v. Twombly, 550 U.S. 544, 545 (2007).
A claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged. Id. at 556. “The plausibility
standard is not akin to a ‘probability requirement,
' but it asks for more than a sheer possibility that a
defendant has acted unlawfully.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009)(quoting
Twombly, 550 U.S. at 546). When a complaint is based
on facts that are “merely consistent with” a
defendant's liability, it “stops short of the line
between possibility and plausibility of entitlement to
relief.” Iqbal, 556 U.S. at 678 (citing
Twombly, 550 U.S. at 557). See also Bell
Atlantic, 550 U.S. at 555-56. The court must accept as
true the allegations in the complaint and construe them in
favor of the plaintiff. Din v. Kerry, 718 F.3d 856,
859 (9th Cir. 2013).
pleading standard under Federal Rule of Civil Procedure 8
“does not require ‘detailed factual allegations,
' but it demands more than an unadorned,
Iqbal, 556 U.S. at 678 (quoting Twombly,
550 U.S. at 555). See also Federal Rule of Civil
Procedure 8(a)(2). “A pleading that offers
‘labels and conclusions' or ‘a formulaic
recitation of the elements of a cause of action will not
do.'” Id. (citing Twombly, 550
U.S. at 555). A complaint also does not suffice if it tenders
“naked assertion[s]” devoid of “further
factual enhancement.” Id. at 557.
ruling on a 12(b)(6) motion, a court may generally consider
only allegations contained in the pleadings, exhibits
attached to the complaint, and matters properly subject to
judicial notice." Swartz v. KPMG LLP, 476 F.3d
756, 763 (9th Cir. 2007)(citing Jacobson v.
Schwarzenegger, 357 F.Supp.2d 1198, 1204 (C.D. Cal.
2004)). A court, however, "may consider a writing
referenced in a complaint but not explicitly incorporated
therein if the complaint relies on the document and its
authenticity is unquestioned." Id. (quoting
Parrino v. FHP, Inc., 146 F.3d 699, 706
(9th Cir. 1998), superseded by statute on other grounds
as stated in Abrego v. Dow Chem. Co., 443 F.3d 676 (9th
Federal RICO Claim
contend Plaintiff fails to state a plausible federal claim