State Farm Mutual Automobile Insurance Company, Farmers Insurance Exchange v. Roger Ammann

828 F.2d 4 RICO Bus.Disp.Guide 6746 STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Farmers Insurance Exchange, Plaintiff-Appellant, v. Roger AMMANN, Defendant-Appellee. No. 86-6275. United States Court of Appeals, Ninth Circuit. Submitted * Sept. 14, 1987. Decided Sept. 14, 1987. Wehner and Perlman, Charles C. Wehner, Karen A. Rooney, Los Angeles, Cal., for plaintiff-appellant. K. David Olsen, Los Angeles, Cal., for defendant-appellee. Appeal from the United States District Court for the Central District of California. Before KENNEDY and PREGERSON, Circuit Judges, and CROCKER, ** Senior District Judge. PREGERSON, Circuit Judge: The defendant below, Roger Ammann ("Ammann"), had entered guilty pleas to mail fraud on December 21, 1984 for submitting false claims to insurance companies including State Farm Mutual Automobile Insurance Co. ("State Farm") and Farmers Insurance Exchange ("Farmers"), the plaintiffs below. On October 4, 1985, State Farm and Farmers filed a civil complaint seeking treble damages for violation of the Racketeer Influenced and Corrupt Organization Act ("RICO") for the submission of false insurance claims. Ammann moved for summary judgment arguing that the…

The defendant below, Roger Ammann (“Ammann”), had entered guilty pleas to mail fraud on December 21, 1984 for submitting false claims to insurance companies including State Farm Mutual Automobile Insurance Co. (“State Farm”) and Farmers Insurance Exchange (“Farmers”), the plaintiffs below. On October 4,1985, State Farm and Farmers filed a civil complaint seeking treble damages for violation of the Racketeer Influenced and Corrupt Organization Act (“RICO”) for the submission of false insurance claims. Ammann moved for summary judgment arguing that the complaint did not state a claim and that the statute of limitations had run because State Farm and Farmers knew of the fraud as early as 1976. The district court granted summary judgment in a ruling that discussed only the statute of limitations. State Farm and Farmers appeal.

The district court applied a three-year limitation period beginning when the plaintiffs knew or should have known of the injury complained of. Compton v. Ide, 732 F.2d 1429,1433 (9th Cir.1984). The district court granted summary judgment on the ground that State Farm’s and Farmers’ claims were time barred because “the plaintiffs knew this pattern of…

concurring:

I concur in the panel’s opinion, and write separately to explain how the opinion should, in my view, be interpreted in light of other decisions in our circuit.

We hold that as to each injury the civil RICO statute of limitations period begins to run when the plaintiff knows or has reason to know of the injury which is the basis of the action. Ante at 5. This rule of separate accrual has not been announced by the Supreme Court, which specifically declined to address the issue in Agency Holding Corp. v. Malley-Duff & Assocs., — U.S. -, -, 107 S.Ct. 2759, 2767 , 97 L.Ed.2d 121 (1987), nor by our circuit in a published opinion. The closest we have come was in Compton v. Ide, 732 F.2d 1429, 1433 (9th Cir.1984), in which we announced the rule that the RICO cause of action accrues when the plaintiff knows or has reason to know of the injury. Because all the relevant events occurred outside the limitations period in that case, however, see id. at 1432 , we did not have occasion to decide the extent to which separate injuries sustained within the limitations period might be actionable despite the existence of some time-barred causes of action.

The basis for our holding comes…