Charles W. Kempe, Liquidator of Dover Insurance Company, Ltd., a Bermuda Corporation v. Monitor Intermediaries, Inc., the Crofton Group, Inc.

Plaintiff/appellant Kempe, liquidator of the Dover Insurance Company, Ltd., alleges a pattern of fraudulent transactions carried out by the defendants in a conspiracy “to defraud Dover and those with whom Dover dealt, including policyholders and insurance companies” in violation of the Racketeer Influenced & Corrupt Organiza tions Act (“RICO”), 18 U.S.C. §§ 1961-1968 (1982), and of various provisions of state law. The district court concluded that Kempe had failed to state a RICO claim and dismissed the action.

The district court found the complaint deficient in three respects: 1) failure to allege any racketeering enterprise injury distinct from the predicate mail and wire fraud acts; 2) failure to allege any link to organized crime on the part of the defendants; 3) failure to specifically allege the required RICO predicate acts of mail and wire fraud within the RICO count.

The first two grounds for dismissal were rejected by the Supreme Court in Sedima S.P.R.L. v. Imrex Co., — U.S. -, 105 S.Ct. 3275, 3284-87 , 87 L.Ed.2d 346 (1985), decided after the district court ruled.

The third ground, Kempe’s failure to incorporate mail and wire fraud allegations within the RICO count…