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Coates v. Valeo Financial Advisors LLC

United States District Court, N.D. Indiana, South Bend Division

March 25, 2019

AARON COATES, pro se, Plaintiff,



         Plaintiff Aaron Coates, proceeding pro se, has filed a 51-page, 228-paragraph prolix complaint pertaining to his resignation from Valeo Financial Advisors in late 2014 and a state court lawsuit that followed. The thirty-six named defendants include state court judges and court personnel, a former Indiana state legislator, a local university and its president, Valeo, the law firm that represented it in the state court action, the firm's attorneys, paralegals, and even the wife of one of its partners, just to name a few. Coates mainly claims that Defendants conspired against him in violation of the federal Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1962, 1964. He also alleges several state law unfair competition claims, mixed with a hodge-podge of forgery, obstruction of justice, civil rights, and due process allegations aimed at various parties.

         The Defendants have filed several motions to dismiss this complaint, and those motions are ripe for review. For the reasons stated herein, the Court will dismiss Coates's complaint in its entirety, but with leave to amend.


         Coates's story begins with his 2014 resignation from Valeo, where he had worked as a financial advisor since September 2009. Following his departure, Valeo sought to assess a compensation penalty on Coates for violating provisions of his employment agreement. Coates resisted and so Valeo filed a lawsuit against him in Marion County (Indiana) Superior Court. Valeo was represented in this action by the law firm Hoover Hull. Shortly after the lawsuit began, Valeo successfully sought to have the case transferred to a different judge, and Judge Heather Welch was randomly assigned, setting off a fantastical conspiracy theory that purports to explain why Coates ultimately did not prevail.

         First, the transfer to Judge Welch, in Coates's eyes, poisoned his chances. Judge Welch is a graduate of Valparaiso University Law School, which had been censored by the American Bar Association and announced its plans to close around the time of Valeo's lawsuit. Coates alleges that, because Judge Welch likely aspires to a higher judicial position, the fact that she graduated from a censored law school could reflect poorly on her in the eyes of a judicial selection committee, and so she desired to gain influence with individuals who could stop the school's closing. Conveniently, shortly after Judge Welch took over Valeo's lawsuit, Hoover Hull hired Valparaiso University's president's daughter as an associate attorney. This connection allegedly compromised Judge Welch's judicial independence in favor of her desire to keep the law school open for the sake of her own reputation and future job prospects. According to Coates, she consequently allowed Hoover Hull's attorneys to draft her orders in Valeo's favor and abused Indiana's Rules of Trial Procedure to keep Coates from transferring the litigation to a different judge. Valeo eventually secured judgment against Coates.

         Coates additionally alleges that, during the pendency of the state court action, Valeo induced Gibson Insurance Agency to pump Coates for information about his legal position by funneling business toward Gibson. He also claims that the wife of one of Hoover Hull's partners arranged for then-state legislator David Ober to land the job as the head of the Indiana Utility Regulatory Commission. In exchange, Ober sponsored a piece of legislation that strengthened Valeo's case against Coates. Coates further maintains that court staff at both the trial and appellate levels torpedoed his attempts to appeal by forging court records to his detriment. The Court could go on, but this is enough to convey the tenor of Coates's complaint. Basically, he believes that every person or entity to even have tangentially come into contact with his case conspired with one another to sabotage it.


         In reviewing a motion to dismiss for failure to state a claim upon which relief can be granted under Federal Rule of Civil Procedure 12(b)(6), the Court construes the complaint in the light most favorable to the plaintiff, accepts the factual allegations as true, and draws all reasonable inferences in the plaintiff's favor. Reynolds v. CB Sports Bar, Inc., 623 F.3d 1143, 1146 (7th Cir. 2010).[1] A complaint must contain only a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). That statement must contain sufficient factual matter, accepted as true, to state a claim for relief that is plausible on its face, Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009), and raise a right to relief above the speculative level. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). However, a plaintiff's claim need only be plausible, not probable. Indep. Trust Corp. v. Stewart Info. Servs. Corp., 665 F.3d 930, 935 (7th Cir. 2012). Evaluating whether a plaintiff's claim is sufficiently plausible to survive a motion to dismiss is “‘a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.'” McCauley v. City of Chicago, 671 F.3d 611, 616 (7th Cir. 2011) (quoting Iqbal, 556 U.S. at 678).


         Again, Coates's allegations touch on a number of claims, such as RICO, unfair competition, unspecified constitutional violations, etc. None of his claims that seek to invoke the Court's original jurisdiction, however, satisfy the pleading requirements articulated above. Because of this, the Court will dismiss the instant complaint, without prejudice.

         A. RICO

         To state a claim for a RICO violation, Coates must allege sufficient facts to support each of the following elements: (1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity. Sedima v. Imrex Co., 473 U.S. 479, 496 (1985) (footnote omitted); Goren v. New Vision Int'l, Inc., 156 F.3d 721, 727 (7th Cir. 1998). The Court need not parse the complaint for facts applicable to each of these elements, however, because Coates has failed to adequately allege continuity[2], or a pattern of racketeering.

         In order to satisfy this element, “the alleged acts of wrongdoing must not only be related, but must ‘amount to or pose a threat of continued criminal activity.'” Gamboa v. Velez, 457 F.3d 703, 705 (7th Cir. 2006) (quoting H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 239 (1989)). “This is true whether the misconduct at issue is considered a ‘close-ended' scheme (a completed scheme that, by its duration, can carry an implicit threat of future harm) or ‘open-ended' scheme (a scheme that, by its intrinsic (e.g., business-as-usual) nature, threatens repetition and thus future harm).” Id. at 705-06 (citing Roger Whitmore's Auto. Servs., Inc. v. Lake County, 424 F.3d 659, ...

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