Jacqueline R. Harrell Michael Harrell v. 20th Century Insurance Company, and Bradley Scott

Jacqueline and Michael Harrell appeal the district court’s dismissal with prejudice of their pendent state-law claims for fraud, breach of the implied covenant of good faith and fair dealing, and civil conspiracy. The Harrells contend the district court abused its discretion by not remanding these claims to state court after dismissing the Harrells’ claims under the Racketeer Influenced and Corrupt Organizations Act (“RICO”) ( 18 U.S.C. § 1962 ), and that the court erred by dismissing the state claims as time-barred under the applicable California statutes of limitation. We affirm in part, reverse in part, and remand for further proceedings.

I. FACTS AND PROCEEDINGS

On November 26, 1986, the Harrells filed an action in California state court alleging nine causes of action; four RICO counts, and one count each under state law for fraud, breach of the implied covenant of good faith and fair dealing, intentional infliction of emotional distress, negligent infliction of emotional distress, and civil conspiracy. The complaint alleged a series of fraudulent activities on the part of the defendants arising out of the sale of Empire Auto Body, Inc. (“Empire”), an automobile repair…