whether to report the claim to the Insurance Crime Prevention Institute (ICPI). D'Imperio, 11/16/87, pp. 31, 83. Claims are referred to the ICPI when the insurance carrier suspects the claim involves fraud. Id. Mr. D'Imperio referred the claim to the ICPI in 1981. Id. at 83.
75. Following the submission of the claim for the July, 1980, accident and some initial payments, totaling approximately $ 14,000, Keystone refused to pay additional benefits. Id. at 32, 81. Keystone refused to tender additional payments for medical benefits because it felt the claim had the "classic symptoms of . . . being a fraudulent case." Id. at 33. For the same reason Keystone also disputed Mr. Cassidy's claim and lawsuit setting forth an uninsured motorist claim. Id. at 35. After March 3, 1981, Keystone ceased all payments. Id. at 32-3; Government Exhibit 18-P.
76. In late 1980 or 1981 Keystone discovered that John Cassidy had made similar claims against other insurance companies. Id. at 82-3.
77. Thus, Keystone knew by late 1980 or, at the latest, by the middle of 1981 that the claim for the July, 1980, accident involved fraud.
78. During the pendency of Donna Livoy-Houghton's claim predicated on the 1977 accident, Keystone disputed the causal relationship between the accident and the alleged injuries. At the same time, Keystone believed that Donna Livoy-Houghton's wage claim lacked the proper substantiation. D'Imperio, 11/16/87, pp. 29-30, 64, 68, 70-2, 128-130.
79. Despite the fact that it agreed to settle Donna Livoy-Houghton's lawsuit in August, 1979, Keystone -- by that time -- had substantial doubts about the legitimacy of the 1977 claim. Id.
L. Facts Concerning Plaintiff's Fraud Claim.
80. Defendants made material misrepresentations and omissions in the various claims, mailings, and communications to plaintiff. Defendants also made material misrepresentations and omissions in depositions related to the accidents.
81. Defendants were not entitled to compensation under the relevant policies because they were not injured in the various accidents.
82. Defendants intentionally made such misrepresentations and omissions.
83. Defendants intended that the plaintiff would rely on these misrepresentations and omissions.
84. Plaintiff justifiably relied on some of these misrepresentations and omissions.
85. Plaintiff was injured by such justifiable reliance on the misrepresentations and omissions in that plaintiff paid monies to the defendants which the defendants were not entitled to.
86. Plaintiff knew or should have known of the fraud in connection to the 1980 accident by the middle of 1981.
87. After a close examination of Mr. D'Imperio's testimony concerning Donna Livoy-Houghton's claim, D'Imperio, 11/16/87, pp. 28-30, 64, 70-2, 128-30, I find that Keystone knew or should have known of the fraud related to the November, 1977, accident by August 30, 1979.
III. CONCLUSIONS OF LAW
1. This court has jurisdiction over this action by virtue of 18 U.S.C. § 1964 and 28 U.S.C. § 1331 and the principle of pendent jurisdiction.
2. Venue is appropriate in this district. 18 U.S.C. § 1965.
A. Plaintiff's RICO Claim.
3. Defendants committed various acts of mail fraud as proscribed by 18 U.S.C. §§ 1341, 2. See Findings of Fact 32-4, 56-7.
4. Defendants constituted an enterprise within the meaning of 18 U.S.C. § 1961. U.S. v. DiGilio, 667 F. Supp. 191.
5. Defendant various acts of mail fraud constituted a "pattern of racketeering activity" as defined in 18 U.S.C. § 1961. Town of Kearny, 829 F.2d 1263; Marshall-Silver, 835 F.2d 63.
6. Defendants' acts of mail fraud described in Findings of Fact 32-4, 56 injured the plaintiff.
7. Plaintiff's civil RICO claim against the defendants is barred by the statute of limitations. Plaintiff knew or should have known of the last injury caused by defendants' predicate acts by mid-1981. This action was filed more than four years after that date.
B. Common Law Fraud Claim.
8. In regards to the July 8, 1980, accident and the subsequent claims, plaintiff has proven that defendants Joseph Houghton, John Cassidy, and Kathleen Cassidy committed fraud in connection with the attempt to prosecute false insurance claims against Keystone.
9. Plaintiff knew or should have known that the 1980 claim was fraudulent by mid-1981.
10. The statute of limitations does not bar plaintiff's claim concerning the bogus 1980 accident since plaintiff filed the lawsuit on July 22, 1986, less than six years after Keystone started making payments to John Cassidy. A.J. Cunningham, 792 F.2d 330.
11. In regards to the November 19, 1977, accident, plaintiff has proven that defendants Joseph Houghton and Donna Livoy-Houghton committed fraud.
12. Plaintiff should have known that the 1977 claim was fraudulent by August 30, 1979.
13. The statute of limitations bars plaintiff's claim with respect to the 1977 accident since plaintiff's complaint was filed more than six years following the accrual of the claim.
14. Accordingly, judgment shall be entered in favor of the defendants on Count One and judgment shall be entered in favor of the plaintiff and against defendants Joseph Houghton, John Cassidy, and Kathleen Cassidy on Count Two in the amount of $ 14,680.36
An appropriate order follows.
AND NOW, this 19th day of April, 1988, upon full consideration of the record before the court, it is hereby Ordered that:
(1) judgment is entered in favor of the defendants on Count One;
(2) judgment is entered in favor of the plaintiff and against Joseph Houghton, John Cassidy, and Kathleen Cassidy on Count Two in the amount of $ 14,680.36 plus interest.
AND IT IS SO ORDERED.