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Provost v. First Guaranty Bank

United States District Court, E.D. Louisiana

July 26, 2019

WENCELAUS PROVOST, JR.
v.
FIRST GUARANTY BANK, ET AL.

         SECTION A(2)

          ORDER AND REASONS

          JUDGE JAY C. ZAINEY, UNITED STATES DISTRICT JUDGE

         Before the Court is a Motion to Dismiss (Rec. Doc. 45) filed by Defendants, First Guaranty Bank and Glenn Duhon (hereinafter collectively referred to as “Defendants”). Plaintiff Wencelaus Provost, Jr. opposes the motion (Rec. Doc. 46). The motion, set for submission on June 26, 2019, is before the Court on the briefs. Having considered the motion and memoranda of counsel, the record, and the applicable law, the Court finds that Defendants' motion should be DENIED in part and GRANTED in part for the reasons set forth below.

         I. Background

         From 2008 to 2015, Wencelaus Provost applied for various crop loans from First Guaranty Bank to finance the operation of his sugarcane farm. (Rec. Doc. 40 Second Amended Complaint, ¶ 34). Plaintiff brought the instant suit alleging that the Defendants' misconduct dating back to 2007 resulted in the 2015 foreclosure of his farm. (Id. at 120). Plaintiff pleads that Defendants committed various acts of misconduct as a result of racial discrimination in violation of the Equal Credit Opportunity Act (“ECOA”). (Id. at 136-145). Plaintiff also asserts claims pursuant to the Racketeer Influence and Corrupt Organizations Act (“RICO”) and Louisiana state law for unjust enrichment. (Id. at 146-175). Defendants now request this Court to dismiss Plaintiff's ECOA and RICO claims for the failure to state a claim upon which relief can be granted, Federal Rule of Civil Procedure 12(b)(6).

         II. Legal Standard

         The central issue in a Rule 12(b)(6) motion to dismiss is whether, in the light most favorable to the plaintiff, the complaint states a valid claim for relief. Gentilello v. Rege, 627 F.3d 540, 544 (5th Cir. 2010) (quoting Doe v. MySpace, Inc., 528 F.3d 413, 418 (5th Cir. 2008)). To avoid dismissal, a plaintiff must plead sufficient facts to “state a claim for relief that is plausible on its face.” Id. (quoting Iqbal, 129 S.Ct. at 1949). “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. The Court does not accept as true “conclusory allegations, unwarranted factual inferences, or legal conclusions.” Id. (quoting Plotkin v. IP Axess, Inc., 407 F.3d 690, 696 (5th Cir. 2005)). Legal conclusions must be supported by factual allegations. Id. (quoting Iqbal, 129 S.Ct. at 1950).

         In the context of a motion to dismiss the Court must accept all factual allegations in the complaint as true and draw all reasonable inferences in the plaintiff's favor. Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 232 (5th Cir. 2009) (citing Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308 (2007); Scheuer v. Rhodes, 416 U.S. 232, 236 (1974); Lovick v. Ritemoney, Ltd., 378 F.3d 433, 437 (5th Cir. 2004)). However, the foregoing tenet is inapplicable to legal conclusions. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). Thread-bare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. Id. (citing Bell Atlantic Corp. v. Twombly, 550, U.S. 544, 555 (2007)).

         III. Discussion

         Defendants argue that Provost's RICO claims should be dismissed because the claims are (1) time barred as a matter of law, and (2) Provost fails to demonstrate the requisite element that the actions of the alleged RICO “person” are distinguishable from the actions of the alleged “enterprise” defendant. Defendants also argue that Provost's ECOA claims dating prior to September 21, 2013, should be dismissed because they are time barred. (Rec. Doc. 45-1, p. 2).

         A. RICO Statute of Limitations

         RICO lacks an express statute of limitations; therefore, the U.S. Supreme Court established that the civil enforcement provision is subject to a four-year statute of limitations. Agency Holding Corp. v. Malley-Duff & Associates, Inc., 483 U.S. 143, 152, 107 S.Ct. 2759, 2765, 97 L.Ed.2d 121 (1987). Fifth Circuit precedent adopts the “injury discovery rule” under which “a civil RICO claim accrues when the plaintiff discovers, or should have discovered, the injury.” Joseph v. Bach & Wasserman, LLC., 487 Appx. 173, 176 (5th Cir. 2012)(quoting Love v. Nat'l Med. Enters., 230 F.3d 765, 773 (5th Cir. 2000)).

         Defendants argue that Provost fails to state a RICO claim upon which relief can be granted because his RICO claims are time barred. (Rec. Doc. 45-1, p. 3). Defendants assert that Provost discovered or should have discovered his alleged injuries in 2008. (Id.). Specifically, Defendants cite allegations in the Second Amended Complaint that the reduced size of the farm, the farm's substantially less profit, and Plaintiff's outstanding loan balance demonstrated that Provost knew or should have known by the end of 2008 that Defendants were fraudulently manipulating Provost's crop loan applications and awards. (Id. at 4). Defendants also cite the Second Amended Complaint and Provost's allegations regarding the unreasonable and onerous requirements on his 2008 application for a crop loan and First Guaranty Bank's withdrawal from the 2009 crop loan. (Id.).

         Provost opposes the motion on two grounds: the doctrine of fraudulent concealment and the separate accrual rule. The doctrine of fraudulent concealment provides that “the limitations period is tolled until the plaintiff discovers, or with reasonable diligence should have discovered, the concealed fraud.” Joseph, 487 Appx. at 177 (quoting Love, 230 F.3d at 779). “Generally, a litigant seeking equitable tolling bears the burden of establishing two elements: (1) that he has been pursuing his rights diligently, and (2) that some extraordinary circumstances stood in his way.” Credit Suisse Securities (USA) LLC v. Simmonds,566 U.S. 221, 227, 132 S.Ct. 1414, 1419, 182 L.Ed.2d 446 (2012)(quoting Pace v. DiGuglielmo, 544 U.S. 408, 418, 125 S.Ct. 1807, 161 L.Ed.2d 669 (2005)). Fraudulent concealment ...


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