Professional Documents
Culture Documents
Defendants - Appellees.
____________________
BETTY ARHAGGELIDIS,
Defendant - Appellant.
____________________
No. 93-2257
AETNA CASUALTY SURETY COMPANY,
Plaintiff - Appellee,
v.
P&B AUTOBODY, ET AL.,
Defendants - Appellees.
____________________
BETTY ARHAGGELIDIS,
Appellant.
____________________
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. William G. Young, U.S. District Judge]
___________________
____________________
Before
Torruella, Chief Judge,
___________
Boudin, Circuit Judge,
_____________
and Keeton,* District Judge.
______________
_____________________
____________________
*
____________________
December 29, 1994
____________________
-3-
fraudulent
scheme,
insurance claims
five
adjusters.
The
automobile body
purpose of
the
appellants,
defendants
in
the
trial
court,
trial.
The
judgment was
for
Aetna Casualty
and Surety
Betty
Arhaggelidis
on
the
theory
of
civil
the
Tirinkians
and
the
Markarians
(the
five
Organizations
of the
Act ("RICO"),
under 18 U.S.C.
Racketeer Influenced
and costs,
and Corrupt
expenses, disbursements
prejudgment
Markarian,
of the Arsenal
and
Jack
Markarian)
for
separate
and
ch. 93A
Arsenal Auto
Repairs,
Inc.
("Arsenal Auto"),
1989 to
I.
I.
We
jury might
BACKGROUND
BACKGROUND
most favorable to
Santiago, 872 F.2d
________
we view
the verdicts.
a summary of
facts as the
the evidence in
the light
Rivera_______
492
operated
appealed
appellant
the body
by
defendant
the judgment
Petros Arhaggelidis,
against
him.
Betty Arhaggelidis.
He
is
was owned
who
the
has
husband
not
of
the
body
Zareh Tirinkian.
Markarian
of
shops, Arsenal
Auto
(also
an
by appellant
and Peter
Markarian
were employees
of Arsenal
Auto
Peter Markarian
were
1987 to
1989, the
Arsenal defendants,
together
____________________
2
The published version of this Opinion includes only the
background statement of facts (Part I) and discussion of those
issues that may be of
general interest (Parts II-IX and
Conclusion). The remaining portions of the Opinion (Parts X-XIV)
contain a detailed explanation of the sufficiency of the evidence
to support the jury findings and address other issues that do not
appear to have precedential importance. See First Cir. R. 36.2.
___
-5-
with
employees
insurance claims
paid
and
friends,
to Aetna
submitted
ten additional
cars.
other insurance
Aetna
fraudulent
at least
sixteen
upon which
the insured.
the cars
involved in the
Auto,
fraudulent claims
were
appraisers who covered the area where Arsenal Auto and the
for
ten of
defendants
friends)
filed
Cummings
and
the
sixteen fraudulent
(personally
over a
Dexter
or
three-year
submitted
claims
in cooperation
period
that the
with
their
commencing in
1987.
false appraisals
to
help
the
against Cummings and Dexter under RICO for $789,967.24 (being the
amount paid out
Aetna
that
the
by Aetna
jury
on 112 insurance
found
to
be
claims submitted
fraudulent)
trebled
to
to
on the
in costs, disbursements,
-6-
each of
the
the
sixteen
Arsenal defendants
fraudulent claims
and friends
directly
cooperating with
Arsenal defendants
Arsenal
Auto or
repairs in
did not
any other
autobody shop
provide any
other cases,
The jury
At trial,
documentation that
completed any
the claims.
With
of the
respect to
was intentionally
in some
cases defective parts were placed on the cars for the purpose
of
jury found
was liable
for
for
that
each of
the individual
a substantive
participating in
the affairs
Arsenal
RICO violation
of Aetna
under
through a
individual
conspiracy
with the
shops
under
1962(d),
operators of
for RICO
other body
against Cummings
Betty Arhaggelidis
scheme through
Autobody, one
of
the
was associated
her husband,
five
autobody
the owner
shops
with the
of Rodco/P&B
involved.
Betty
-7-
Arhaggelidis owned
her
mother's
name.
These two
Mercedes
was registered in
were involved
in six
that she
centered around
a "civil
Autobody, and
conspiracy"
therefore
was
on
a variety
for
of grounds.
Arsenal Auto
Repairs,
In addition,
Inc.,
each appellant,
appeals the
district
court's
we
consider
among the
the
RICO
issues
counts and
arising
the civil
from
the
conspiracy
II.
II.
at various points,
aspect of
oral argument
the relationships
both in
the jury.
among the
We address
because of
different theories
specific aspects
five different
theories
relevant to
this
inquiry:
claim
the
jury's
Therefore,
or
liability
on
Counts
VIII and
IX.
that on
judgment must
the
finding of
Count IX
stand.
evidence was
is supported
by sufficient
evidence, the
sufficient
for the
jury
reasonably to
find
on Count X.
with respect
deficiency
to
Count
that
VI is
we have
Moreover, because
the individual
The only
an
rejected
we have
regarding
pleading
wholly without
support.
judgment against
by jury findings
Count X, or
both.
The
is also an
finding of
liability on
Count X,
theory.
evidence
Count X.
judgment
by the
against
appellant
jury's finding
conspiracy theory.
Arhaggelidis
of liability
We conclude
on Count
that
is
X, the
the evidence
was
Count X.
From this summary, it is clear that
assertions
is
true:
the
legal
relationships
defendants,
and
claims
are
factually.
A question remains,
one of appellants'
among
complex
transactions,
both
however, as to
legally
and
how, if at all,
-10-
was too
complex for a
an argument that
briefs before
that is quoted
Brief at 59-61,
set of
We have done
so,
any argument
first, to
presented
be certain
we have
not overlooked
as
complex as
issues presented by
that before
us, with
interlocking
by RICO, a
consequences
conspiracy is
in
civil.
by a court.
of
invoking
Even with
relevant statutes
respect to the
and precedents
upon the
theories
of
provide only
limited guidance
with respect to
(1)
single
conspiracy of
many
parties,
multiple
nest
overlapping
conspiracies
of
interlocking
conspiracies
or
conspiracies
smaller,
that
discrete
may
inner
not all
result of
this
range of
possible
interpretations of
the
explaining the law to the jury, is difficult and "is probably not
susceptible to an abstract answer unrelated to context."
United States v. Oreto, No. 91-1769, slip
______________
_____
op. at 19 (1st Cir. Oct. 4, 1994).
The persons
alleged to be RICO
conspirators in the present case, like those charged under a nonRICO conspiracy theory in Oreto
_____
have engaged in a series of transactions
that could be viewed as a set of separate
conspiracies, or one overall conspiracy
embracing numerous wrongful transactions,
or . . . both an overarching conspiracy
and
a
nest
of underlying
smaller
conspiracies.
Partly this is a problem
of proof and
inference; partly
the
problem arises from trying to squeeze
into the conceptual cubbyhole of "an
of
theory,
consequences,
though
including
the
choice
those incident
may
be
to
the
is allowed some
burdened
law of
with
double
jeopardy.
In a
some choice
also, may
civil context,
of theory.
But
be burdened with
in the
be allowed
civil context
consequences -- a point
to which we
return below.
In this
case, added
relationships
among
relationships
between different
layers of complexity
theories exist,
not
conspiracy
only
incident to
because of
counts --
the
Count IX
(RICO
conspiracy) and
Count
X (civil
conspiracy) --
because of the
alleging
substantive
RICO
Also, as in criminal
op.
violations (Counts
VII
at 19, an answer as to
but also
counts
and
VIII).
91-1769, slip
theories as
choice at least
court.
alternative contentions,
this case
until late
presents may
be allowed
stages of proceedings
to defer
in the
trial
in a civil
-13-
to be
is closed,
made about
the
about instructions
either
"special
to the jury.
question"
may require
verdict to
some
be used
in
R. Civ. P. 49 -- and
least
instruction
not request
submitting
has the
associated consequence of
limit
See, e.g.,
__________
procedural
rule, in
the scope
Fed.
R.
Civ.
this instance)
of
choice by
attached
to each of the
complete
freedom of choice.
almost certainly
omitted theory of
P. 49.
The
allows choice,
defining
makes a
law
(a
but it
may
consequences that
are
party making
a choice
of this
course, a
submission to
trial
court may
jury
of
two
in some
or
more
circumstances
theories,
with
The
different
compatible
submitted
-may
theories submitted
that
be
is,
to
Also,
may
be
sustaining all
however,
the
conspiracy submitted to a
a jury
verdict
permissible.
sustaining that
incompatible that
the
jury's choice is
limited to finding
one or another
of the
to
"general
be
submission
verdict,"
examination,
R.
Civ.
P.
against each
as a
theory
Fed.
it, discloses
general verdict of
claim
"special questions,"
with
49(a).
no
Closer
colloquies about
each claim
under
on
matter
alleged in
required only
P. 49(b), as to
of claims
rejected the
(the association-in-fact
Count VII) or
Aetna elected
conspiracy
not
to request
submission of
jury to report
allegedly
a separate
an answer as to
fraudulent
claims
question requiring
necessary
the
of the 176
because
disputed
RICO
conspiracy
and
the
alleged
RICO
substantive
theory,
transactions
but
also with
was
within
substantive violation.
of
the judgment
to
The
respect
the
scope
to
of
whether
the
each of
the
conspiracy
or
be entered,
even
though the
the terms
trial
judge
determined
(supportably,
we
have
concluded)
that no
genuine
plaintiff
against
the
appellants
are
supported
by
the
-16-
III.
III.
A.
__
SUFFICIENCY OF PROOF
SUFFICIENCY OF PROOF
Standard of Review
__________________
against them.
They argue
that the
for judgment as
a matter of law.
matter
of
law only
if, after
reasonable inferences
the
nonmovant," it
reasonable
person
examining
the evidence
to only
one
and all
most favorable to
evidence could
conclusion,"
lead a
favorable to
the
movant.
Gallagher v. Wilton Enterprises, Inc., 962
_________
_________________________
F.2d
120,
124 (1st
Cir. 1992)(quoting
Hendricks & Associates, Inc. v. Daewoo Corp.,
____________________________
____________
923 F.2d 209, 215 (1st Cir. 1991)).
A
denial of judgment
which
as a matter
of law is
"reviewed de novo,
__ ____
Id. at 125.
___
supported,
first,
the finding
liable
on a theory of
the
enterprise
finding that
theory of
that all
under
each of
individual Arsenal
(Count
RICO
two jury
conspiracy
under
VIII)
findings --
defendants are
with Aetna as
and, second,
IX).
the
on a
With
the judgment in
the amount
of $373,857.28 is
supported by
the
B.
__
substantive charge
alleging Aetna
court
matter of
law
on
alleging
an
association-in-fact
defendants),
granted defendants'
the
Count VII
district
(the
court
as the
enterprise, and
for
substantive
enterprise
should
judgment as
have
violation
including
granted,
all
also,
VII.
trial court as
a matter of law on
to
Count VI,
a scheme
Thus, no
of a smaller
scope than
that
be made
Appellants do
their preclusion
argument.
Reading
legal premises of
generously to
appellants,
at least
implicitly if not
explicitly suggested.
of
It
alleges a
is true
that
each of
fraudulent scheme
Counts
VII, VIII,
and
the body
IX
shops.
These three theories have the same "scope" in the sense that each
asserts
theories
Counts
the amount
has
but
different.
distinctive
all of
VII and
1962(c),
of $2,369,901.72.
the elements
VIII
the
theory,
allege RICO
entities
and
of any
Nevertheless, each
none
of the
other of
the three.
substantive violations
alleged
as
the
three
under
enterprise
are
1962(d).
-19-
Since
elements of
that
each
of
proof, the
the dismissal
the three
counts
appellants are
of one
of these
requires
incorrect when
counts, namely
different
they say
Count VII,
fails as a matter of
law,
we proceed
to
consider
the
possibility
of
some
other
patently incorrect
statement of law.
One
argument
is
premise
that
in
that
may be
order
to
inferred
prove
from
Count
appellants'
VIII,
the
RICO
were essential to
Count VII.
alleged in
associated-in-fact
1961(4).
Thus
partnership, corporation . .
although
to satisfy
not a
the purposes
legal
group of individuals
entity."
18
U.S.C.
of a
RICO
legal entity,
individuals
were
such as
a corporation, or
__
associated-in-fact.
Since
that a
Aetna
group of
is
if there is no
proof of an
association-in-
fact enterprise.
In
contrast,
Count
VII
-20-
requires
proof
of
an
association-in-fact
enterprise.
enterprise
"ongoing
is
"function[ing]
apart
an
as a
from the
association-in-fact
organization,"
continuing
pattern of
An
unit," which
racketeering in
with
members
is "separate
which
and
it engages."
no
party has
challenged
the district
court's
of law
plaintiff
to prove
an
different from
Aetna.
Since
different
of
consistent
law
with
enterprise.
an association-in-fact enterprise
an enterprise
different kinds of
matter
association-in-fact
that is
proof is
a legal
required to
entity, like
establish these
in
favor of
the
the
court's
defendants
determination
on
Count
VII is
that
fact
issues
possible
articulated or acknowledged
premise,
which
is
not
explicitly
by the appellants, is
that in order
proof
of
an
not valid.
association-in-fact
enterprise.
not
Any
1961 an enterprise
Aetna as
the victim
legal entity
racketeering activity.
This
-21-
court has
both
1962(c) and
a RICO
to prove
necessarily an
hand,
some
kind
of
enterprise
of
association-in-fact enterprise.
that
scope,
In the
not
case at
sufficient.
theory of
the victim
enterprise)
and of
1962(d)
conspiracy (with
individual defendant to
with
Aetna
as
RICO
violation
enterprise,
the
commerce,
with
1962(c),
for a
substantive
that (1)
under
be liable
conduct
of
the
enterprise's
defendant's participation
activity.
28 U.S.C.
and
(4)
that
this
of racketeering
1962(c).
We consider,
prove each of these
affairs,
whether
the evidence
was sufficient
to
defendants the
Aetna is
of RICO
is to
from infiltration by
act,
the meaning of
racketeers.
states,
and
casualty
Aetna's conduct
of
The major
as used in
See
___
United States
_____________
2524 (1981).
insurer doing
its
affecting
business enterprises
"Enterprise"
corporations.
1962(c).
protect legitimate
includes legitimate
major
an "enterprise
business
this
v.
Since Aetna is a
business
"affects
in
many
interstate
commerce."
See
United
States
v.
South-Eastern
___
________________
_____________
Underwriters Ass'n, 322 U.S. 533 (1944) (a
___________________
fire insurance company
that conducts
a
substantial part of its business transactions
across state lines is engaged in "commerce
among the several states" and is subject to
regulation under the Commerce Clause).
Appellants
"enterprise" because
argue
that
Aetna
cannot
constitute
the
Aetna.
In United States
_____________
of Boston
police
v. Boylan, this
______
detectives who
-23-
by
illegally
participating
in the
affairs
of
the Boston
Police
case, the
of
affairs
the enterprise
In
were
Boylan, as in this
______
undermined
by
the
illegal activity.
See also Yellow Bus Lines, Inc. v. Drivers
___ ____ ______________________
_______
Chauffeurs & Helpers Local Union 639, 913
_______________________________________
F.2d 948, 952 (D.C. Cir. 1990), cert. denied,
____________
501 U.S. 1222 (1991)("Section 1962(c) nowhere
requires proof regarding the advancement of
the enterprise's affairs by the defendant's
activities or proof that
the enterprise
itself is corrupt . . . .");
United States v. Provenzano, 688 F.2d 194
_____________
__________
(3rd Cir.), cert. denied, 459 U.S. 1071
_____________
(1982)(RICO is not limited to racketeering
activities that advance
or benefit
the
enterprise, but also encompasses racketeering
activities that work to the detriment of the
enterprise).
Second Element.
_______________
Aetna, attempt
Boylan
______
to distinguish
the defendants
constituted
the
were employees
RICO enterprise.
not employees of
pointing
of the
Appellants
out that
in
organization that
argue that
the
statute prohibits
affairs
through
detriment of
are
employees
a
pattern
of
affairs
with the
to
its
conducting
racketeering
merely associated
enterprise's
from
an
enterprise's
activity
detriment through
to
the
persons who
conducting the
a
pattern
of
racketeering activity.
The
proposed
distinction
is
not
supported
18 U.S.C.
by
the
employed by
1962(c)(emphasis
-24-
added).
by precedent.
See, e.g., United States v. Yonan, 800 F.2d
_________ _____________
_____
164 (7th Cir. 1986) cert. denied, 479 U.S.
____________
1055 (1987)(upholding conviction of attorney,
who was not an employee of the enterprise, a
prosecutor's office, for violating RICO by
conducting the affairs of the prosecutor's
office through bribery);
United States v. Bright, 630 F.2d 804, 830_____________
______
31 (5th Cir. 1980) (upholding RICO conviction
also
enterprise
because
the defendants
they
argue that
were
not
even
outsiders and, as
said
to "have participated
This
is an argument more
Aetna as the
"associates"
of
in the conduct"
of words than
cannot be
the
be
of Aetna's affairs.
substance.
The statute
In ordinary usage,
the solidarity
of
that enterprise,
for protection
against
to have
shop involved
in repairing
-25-
automobiles insured
by Aetna.
Three of
were both
claimant,
appellants was
in a
or a
body
shop
operator,
contractual relationship
"associated
Aetna
evidence
because
each of
each body
an
the
with Aetna.
As
The
operators were
shop
about
which
conducted
appraisals and
where cars
that
were the
subject of
Appellants
argue that
no reasonable
defendants
management
did
not
"participate
in
the
operation
Reves v.
_____
or
evidence
to
for a
defendants'
activities
adopted by
the Supreme
"operation
or
allegedly
paying
the
met
reasonable
management"
damaged vehicles
assertion,
jury
the definition
Court in
automobile insurance
business.
appellants'
test.
and
to
of
Reves, which
_____
Id.
___
at
there
was
find that
the
"participation"
is known
1172.
as the
Appraising
investigating, processing,
claims are
vital parts
and
of Aetna's
of Aetna.
The
Supreme
Court
in
Reves
_____
interpreted
the phrase
-26-
"conduct of the
direction," which
directing
was
enterprise's affairs" to
the court
described as
sufficient to support a
defendants'
direction of
activities
not have
be
affected,
in
made.
The Court
part in
The evidence
material
degree,
the
Appellants'
to do so
to
as in this
1962(c) for
Id. at 1170.
___
of
taking "some
indicate a "degree
Id.
___
was sufficient
enterprise
also might
'associated with'
operated
be
Id. at 1173.
___
the plaintiff,
or
managed by
others
it as,
in support of
the verdict
in
to approve false
their
was sufficient
exerted control
over
to
support a
the enterprise,
finding that
if
not by
The
appellants
bribery
(the
-27-
example given
by the
Court in Reves),
_____
methods of inducement.
some
aspect
least by
then at
the
enterprise's
other
find that
part in
affairs,
the
appellants'
actions
could
be
found
to
have
satisfied
the
"through a pattern of
establish a
show
that
defendant's participation
racketeering activity."
committed
two
of ten years.
In order to
acts of
racketeering
are
these
terms
refer to
the beyond-reasonable-doubt
plaintiff in
civil RICO
action
burden
criminal
of
may prove
offenses to
proof applies,
these
acts by
RICO proceedings);
see also Moss v. Morgan Stanley, Inc., 553
___ ____ ____
____________________
F. Supp. 1347 (S.D.N.Y.), aff'd 719 F.2d 5
_____
(2nd Cir. 1983), cert. denied sub nom. Moss
____________ _________ ____
v. Newman, 465 U.S. 1025 (1984) (although
______
proof
in
civil proceedings
under RICO
requires
only
a
preponderance of
the
evidence, which is a lower standard of proof
than in criminal proceedings, the standard
does not relate to the elements of the
predicate crimes, but to the burden that the
plaintiff bears in showing the elements).
The
defraud and
scheme.
The
use of
the mails
to execute
or further
this
plaintiff alleged
that each
defendant committed
predicate
intentional
filing of
false insurance
claims or
mails but
only that the defendant acted "with knowledge that the use of the
circumstances] where
such use
can be
reasonably foreseen."
399 (1974).
In this case,
insured, a
claimant, a body
or [acted
of
of
the mails
these uses
shop or an appraiser
to send payments
the mails
were
in
to the
or that
recipients.
furtherance of
the
predicate
activity.
established by
to proof of
at least two
evidence of "continuity"
acts
Boylan,
______
constitute
898
proving that
F.2d
predicate acts,
sufficient to show
"pattern"
at
250.
the predicate
of
that
racketeering
Continuity
acts "form a
may
be
closed
period
of repeated conduct" or
a regular way of
evidence
of the
ongoing
succession
of fraudulent
claims
appellants
claim is an act of
to
constitute
Similarly,
do
not dispute
that
the appellants
offense
do
necessary to
activity.
The
not contend
the
is sufficient
RICO
that the
statute.
fraudulent
or so dissimilar as to
establish
appellants
under
each fraudulent
simply
a "pattern"
contend
of racketeering
that there
-30-
lack the
was
no
We have
D.
__
In
addition
individual
Arsenal
Aetna as
the enterprise,
the
Arsenal defendants
1962(d).
to
jury
finding
the
also found
each
of
the
individual
by showing
the enterprise,
racketeering activity by
commit, or
in
F.2d at 241.
Even
though no
party
objected
(on grounds
alleged
RICO conspiracy
(as well
as
relevant
the elements of
the elements
of the
In arriving at
in
this circuit
used
the phrase
"knowingly
enterprise."
United States v. Angiulo, 847 F.2d 956, 964
_____________
_______
(1st Cir.), cert. denied, 488
U.S. 928
joined the
_____________
(1988);
United States v. Winter, 663 F.2d 1120,
______________
______
1136 (1st Cir. 1981), cert. denied, 460 U.S.
____________
1011 (1983).
-31-
In Boylan,
______
the court
first
used this
same phrase
("knowingly
following shortly
thereafter referred to
whether the
Boylan
______
(and
perhaps
the
earlier
cases
as
well),
this
was so in Boylan
______
indisputably
alleged
employees
enterprise.
of
In the
the
Boston
Police Department,
present case,
on the
the
other hand,
For this reason we have addressed the issue more precisely in our
formulation, stated above, of the elements
of a RICO conspiracy,
conclude that
the issue
we must
consider is
not
conclude that
defendants
knowingly
the evidence
joined
is sufficient
in that Opinion)
conspiracy.
to support a
the
We
finding
1962(d) RICO
conspiracy.
The alleged
conspiracy to violate
IX) was a
1962(c).
between a
-32-
violation of
of
1962(d) based on
to violate
1962(c).
defendant violated
prove two
1962(d),
that two
898 F.2d
difference
is of
in contrast, this
To prove a violation of
predicate offenses be
at 252.
In the
no practical
present
committed.
case, this
consequence because
See
___
latter
we conclude
assertion,
perhaps
is that, in order
conspiracy
(a
implicit
to prove each
1962(d)
violation),
in
the appellants'
plaintiff
was
which each of
the
one
Arsenal
defendants
conspired
directly with
or
more
assertion
is
incorrect
to prove a RICO
of
because
it
depends
It is
true
violate a subsection of
1962.
It is
details or
the
full extent
of
the conspiracy,
-33-
including
the
Moreover,
it
is
not
plausibly
interdependence
States v.
______
defendant
be
inferred
of
activities
necessary
for
words,
and
persons
actions,
and
involved.
the
from
each
he
the
United
______
In this
each
defendant knew
fraudulent scheme.
that
For
he or
she
was a
part
of a
larger
supported a
finding that each of the Arsenal defendants was well aware of the
fraudulent business
practices of
the jury
could find that all of the Arsenal defendants knew they were part
of a larger conspiracy
to their
own of fraudulent
appraisals by
uses similar
Dexter, Cummings,
or
both.
A
defendant
conspiratorial
who
sweep"
is
does
not
nevertheless
know
jointly
Using a
the
and
"entire
severally
in furtherance of the
that Cummings
-34-
providing the
to
all the
which all
body shops
individual defendants.
overall
and most,
if
not all
of the
and
Betty Arhaggelidis.
We need
not
consider
well.
two
of the
extensive dealings of
all other
appellants with Cummings and Dexter, the jury could have inferred
an
agreement,
to
defraud
Aetna,
Through
among
all
of
the
Arsenal
evidence
of
each
individual
Arsenal
defendant's actions, the jury could infer that each defendant had
the
for a RICO
conspiracy violation --
knowing participation.
See
Boylan, 898
F.2d at
242 ("[The
___
______
plaintiff] may prove [a RICO conspiracy]
through the use of circumstantial evidence,
so long as the total evidence, including
reasonable
inferences, is
sufficient to
warrant [the jury's findings].").
The appellants do not
conspired
Through Dexter
-35-
to
all the
conspiracy.
agreed
to
other
defendants who
commission
were
found liable
two
predicate
for
RICO
committed or
offenses,
each
although
it
was
not
necessary
for
the
of defendants from
directly
with them, the evidence was sufficient for the jury to infer that
this
was in
fact
testified that
the
case.
he frequently
For
example,
Zareh
other social
denied discussing
that
the
reported nearly
obtained
practice of
body
unusually similar.
his
The
shops'
body shops
identical types
all
considered
activities
of fraudulent claims,
along
with
evidence
defrauded Aetna,
similarities,
Although
filing fraudulent
racketeering
Tirinkian
were
they
and they
Evidence of these
other
evidence,
was
Defendant
liable
Arsenal
Auto
Repairs, Inc.
was
not
held
for civil
challenge
the jury's
conspiracy.
this finding
The appellants'
against
Arsenal Auto
insufficiency of the
evidence.
discussion of
conspiracy concerns
civil
For
Auto
was
brief does
on
not
the basis
of
following
Arhaggelidis's
appeal
only.
Appellant Arhaggelidis challenges the
against her for
of the
evidence.
conspired
with
The plaintiff
her
fellow
alleged that
Rodco/P&B
Autobody
judgment entered
of insufficiency
Ms. Arhaggelidis
defendants
to
defraud Aetna.
The
required
those
nature
of
"civil conspiracy"
applying to
conspiracies in
the
proof
criminal conspiracies
particular.
and
generally and
Under Massachusetts
to RICO
law, either of
action in
coercive type.
Mass. 1985).
Massachusetts" for
See Jurgens v.
___ _______
a "very limited
"civil conspiracy"
of a
1386 (D.
of] civil
conspiracy,
unison,
plaintiff
must
allege that
defendants,
acting in
they would not have had if they had been acting independently."
Id. (quotations omitted)(citing Fleming v.
___
_______
Dane, 22 N.E.2d 609 (Mass. 1939)).
____
Plaintiff,
complaint,
in
does allege
paragraph
a
480
of
Count
circumstance that,
of
if proved,
its
might
-37-
constitute such
is
that
"defendants
were
collectively
able
The allegation
to
negate
the
accomplishing a
fraud of this
type."
(App.
609).
Despite the
state a
fact that
sufficient to
conspiracy is more
akin to a theory
in tort.
It
is
in Massachusetts, the
is,
person for
on
the concept
is invoked
to
support liability
this basis,
there
must be,
first, a
of one
design or
an
876 cmt.
be jointly
Supreme
Massachusetts
common
876 (1977).
Judicial
Court
has
law
civil
conspiracy
of
implied
that
the
encompasses
liability are
876(a) of the
on civil
conspiracy, stated:
The essence of conspiracy is that the person
agreed with one or more other persons [to
commit an unlawful act] . . . .
Plus for
conspiracy . . . somebody has to do something
to attempt to make it come about.
(App. 4817-18).
Although
this
Restatement
instruction
876,
is
not
the appellant
precisely
has
not
in
accord
with
presented any
the instruction.
In any
issue
event, she
did,
by her
however, challenge
motion for
judgment as
the
sufficiency
a matter
of the
of law.
We
conclude, nevertheless,
that we
state
under
any plausible
reasonably could
with
her
formulation
find that
husband and
the precise
of Massachusetts
law, a
fellow
Rodco/P&B
jury
in concert
Autobody defendant
to
defraud Aetna.
The
Rodco/P&B
jury,
with
Autobody was
support
in
associated with
evidence,
found
that
thirty-seven fraudulent
Arhaggelidis
also
that Ms.
"acted in
concert"
with her
-40-
All
six claims
claimed damage
six
of the
represented
pursuant to a
was connected
defendant.
many
of Rodco/P&B Autobody,
appraisals by Mr.
to
Aetna that
Evidence
the repairs
All
Cummings, a co-
was received
had
involved
Autobody.
common
been made.
repaired
that she
Also,
evidence
Mr. Arhaggelidis:
found
to be
totalling
bribes.
he was a claimant
fraudulent, and
he made
payments to
Mr. Cummings
could infer an
jury,
Arsenal defendants
instead
of
the thirty-three
claims
claims
submitted to
involving
the
The appellants
were made to Aetna; the other seventeen claims were made to other
insurance
companies
(except
for
Tareh
Tirinkian's
worker's
compensation claim).
Aetna
insurance claims
recovered
paid by
damages
for the
Aetna -- claims
-41-
sixteen
automobile
to be
fraudulent.
The trial
seventeen claims
court
For example,
companies duplicated
or
admitted evidence
more instances,
damage that
district
was
correct
insurance
at trial,
In one
in one
with another
admitting
claims to other
to Aetna in connection
On this appeal
this
to the determination
alleged accident.
corresponding to
the other
many of the
court
of
the
evidence
their briefs
in
this court
have not
the appellants
argue that
the
verdict form
should not have asked the jury to determine whether each of these
seventeen other claims was
fraudulent.
We will
assume, without
issues of fact
whether each
element
that had to
of some
claim
be decided
or defense
to
was
proved.
Since the appellants do
an argument for prejudicial
they
were in fact
prejudiced in
any way
by the
that
submission of
these
to the jury,
we have no
-42-
court
arguments
did consider
that
they
and
were
reject
prejudiced
evidence
evidence
because
it tended
the Arsenal
by
the
to support
issue
regarding
admissibility
of
defendants'
jury's
hearing
finding of
The
well.
the
a common
find extended to
is
properly
It is true that
note, however,
that an
argument can
be made,
appellee does
not advance it
view of other
on appeal (and
although the
need not do
so in
if found to
for the
the enterprise.
related, fraudulent
and
one
was
For
submitted
to
another
that two
submitted to Aetna
insurance
company,
would
affairs of Arsenal
Auto.
the scope
of our
review of the
insurance claims, we
evidence to
Aetna
sufficient evidence to
the sixteen
defendants violated
fraud.
V.
V.
acts
Mass.
or
L. ch.
practices in
Gen.
L. ch.
93A
the conduct
2.
The
of
any trade
or deceptive
or commerce."
statute provides
for treble
damages
jury
found
Markarian's
that
Zareh
Tirinkian, Jack
deceptive business
Markarian,
and
practices constituted
The
Peter
a willful
personal and
that
not
violate this
statute,
are
correct in
asserting that
the phrase
individuals acting
in a
business context.
See
___
Lantner v.
_______
these
three
defendants were
acting
in
jury to
business
business practices in
Zareh
Tirinkian
was an
-44-
and Jack
and
Peter
Markarian performed
members
and friends
repair work.
of
these
submitted
Auto.
family
fraudulent
appraised
of the repair
Many of the
"Arsenal Auto
found that
defendants submitted
performed at Arsenal
The jury
work completion
to these claims
Repairs," certifying
forms
completed
conclude that
the
evidence was
ample to
support
defendants used
deceptive business
From
practices in
their dealings
addition
JURY INSTRUCTIONS
JURY INSTRUCTIONS
to
arguing
that
the
evidence
U.S.C.
1962(c) and
was
individual
1962(d), the
on these counts.
-45-
The
court
'participate
in
instructed
the
conduct
the
of an
jury
that
enterprise'
"[t]he
term
includes
the
the enterprise."
instruction on
or indirectly
The
this
successfully making
this ground
at trial.
appellants contend
Fed. R. Civ.
that they
P. Rule 51.
objected to this
Although the
instruction, the
most that can be said is that they objected to the "RICO -- Aetna
as the enterprise" charge on
the
enterprise as a matter
See App.
___
4833.
be
The record
for judgment
as a
matter of law.
interpreted
sufficient
that.").
as
In any
an objection
case, even
to
to preserve an issue
"state distinctly
the matter
the
App. 4834
Of course you
instruction,
objected to
support of
See
___
object to
saved as
and
were to
it
is
be
not
it does not
the grounds
for
objection."
Fed. R. Civ. P. Rule 51;
see also Jordan v. United States Lines,
___ ____ ______
_____________________
-46-
and not
to the
definition of "participate
of
in the
conduct
of the affairs."
objected to the
any alternative
to the instruction
the Reves
_____
given by
the
judge.
Although this
broader interpretation,
jury instruction
it
is
also
is arguably open
reasonably
in order to
"participate
itself."
in the
Reves,
_____
be liable under
operation or
113
S.Ct.
to
Court's language in
RICO, a defendant
management of
at
understood
to a
1173.
must
the enterprise
"Because
of
the
1994).
Poulin v. Greer, 18
______
_____
should be
to prevent
omitted).
a clear
The
miscarriage of
alleged error
in this
justice." Id.
___
instruction
of the
determined
entered
bifurcation of
jury
court properly
of material
fact remained
the sense
legal
that reasonable
standard could
amount
of damages
factfinders applying
come to
to be
but one
awarded under
the correct
determination as
the jury's
to the
findings on
liability.
Precedents
guidance
regarding
summary judgment
provide useful
by
the parties,
summary
judgment
is warranted
Anderson v.
Liberty Lobby,
Inc., 477
when
no
___ ________
____________________
U.S.
242
(1986)(summary
judgment
is
appropriate when there are no disputed issues
of material fact);
see also Plaisance v. Phelps, 845 F.2d 107
___ ____ _________
______
(5th Cir. 1988)(plaintiff did not have an
absolute right to a jury trial where there
was no genuine issue of material fact, since
the function of a jury is to try disputed
material facts);
-48-
"including
Fed.
the elimination
R. Civ.
P. 16.
to formulate and
of
Rule
frivolous
16 also
defenses."
authorizes courts
to take
confirm
the power
issues" without
Id.
___
of the
awaiting a
court
to "identify
[] litigable
summary judgment.
damages to
liability.
court stated
trial
if
be
awarded was
the
jury trial
on
At the conference
on damages held
its intention to
enter a judgment
without another
no genuine
dispute of
determination remained.
stated,
made after
fact
material to
the damages
has held
that a district
court may
grant
4 F.3d
53,
55 (1st
Cir. 1993).
make an accurate
issue
material
of
fact
determination of
[exists]."
Id.
___
whether a
(citation
genuine
omitted).
-49-
evidence."
losing party
foot
. . . received
forward."
a fair opportunity to
It was complete.
before
an opportunity
entering
opportunity to file
The appellants
to be heard.
judgment,
allowed
The
the
And a
district
parties
an
their
post-trial memorandum,
the
as they make
appellants made
to determine
how much
that reported
losses
a jury trial on
of
damages was
each fraudulent
were merely
claim was
exaggerated, and
between
to the appellant.
law, Aetna
on
fraudulent claims,
regardless of any
been shown
portion of
to be supportable
if no
the claims
fraudulent
appellants violated
in the Aetna
here
were
precedent has
that
made
policies at issue
under
coverages.
collision coverage.
explicitly determined
The
claims at issue
No
Massachusetts
in policy
any
prediction about
whether the
clause applies to
In
Supreme
collision
matter
in order
to
this
case.
prediction on
We
assume
in
coverage.
The "cooperation
provision concerning
clause," of
course, is not
the only
insureds and
claimants
the obligations of
-51-
after
an
accident or
loss.
Other
provisions
concern giving
making a
provisions of
contend
that
or another
fraudulent claim
the policy under
one
is a
various
violation of
which the
of
claim is
any of
the
made.
One
is that
on
of
the
jury,
calculation
of
fraudulent claim.
every
the
claim
damages
included
award
has
in
the
been
trial
found
court's
to
be
appellant
scope of a RICO
Arhaggelidis was
held
liable
was within
the
claimant,
in
making
fraudulent
claim,
was
This is
of any claim under the policy by any other person entitled by the
terms of the policy to make a claim under the policy.
A
breach
as
fundamental as
this
is
bar to
the party
the
See
___
It applies
Appellants
preclusion doctrines
contend
developed
that
one or
another
distinctively in
of
various
insurance
law
case.
This contention
jury findings in
the
detrimental
characteristic of
choice of an
estoppel in
have
election beyond
by
that
is characteristic of
is
stretched
their classic
election in
is
the
informed and
cases
waiver,
meaning to favor
that
the voluntary
of a less
characteristic of
doctrines of
the classic
claimant
bargainer
precedents
reliance
option that
classic sense,
unequal
is characteristic of waiver in
in
which
estoppel, and
a disadvantaged
insured.
See generally id. at 92-102, 319-23, 586___ _________ ___
92;
John S. Ewart, Waiver Distributed Among the
____________________________
Departments:
Election, Estoppel, Contract,
_____________________________________________
Release, 7-9, 84-87 (1917);
_______
John S. Ewart, Waiver or Election, 29 Harv.
__________________
L. Rev. 724 (1916).
Appellants
have
not
cited
rights in
precedent,
in
establishing
any
favor
insurance claimants
These terms
-53-
as
well
as
coverage.
its clauses
Indeed,
in
substantive violation
need
granting
view
of
and
the jury
with Aetna as
or occasion to invoke
defining
finding
victim, if
more congenial
of
there were
of
RICO
any
the scope
to preclusion
against a
fraudulent claimant
of any
the parties
have not
Massachusetts precedent
cited
and we
directly determining
recovery
decisions
this
to which
on analogous
case.
the
insurer
is entitled,
issues support
For example,
are not
measure
Massachusetts
the judgment
Massachusetts courts
the
entered in
have held
in a
either in obtaining a
policy or in making a
Glaz
____
of good faith
297
appellants do
paid out
on the
the jury
the
policies were
that the
ever in
amounts that
dispute.
These
court's judgment.
to
not contend
existence
Although
and
material to the
extent
of
any
actual
dispute as
losses
by
the
defendants, any dispute about these facts was not material to the
any
a jury trial.
certain to
properly made
The
court's determinations
be awarded against
the defendants
were
submission to a jury.
VIII.
VIII.
As
court
a part of the
awarded $1,500,000 in
attorneys'
judgment,
fees
each
to
ATTORNEYS' FEES
ATTORNEYS' FEES
judgment in this
the plaintiff.
individual
Arsenal
Under
defendant
the
terms of
the
jointly
and
is
of it
that the
Arsenal
appellants argue
that
the
-55-
district
court
improperly held
them
liable for
not
only the
attorneys' fees
fees
expended in
expended in
Surety Co. v.
__________
case").
In
Inc. and
this case
related case
but also
entitled
a part
the attorneys'
of the
"Sport
_____
same conspiracy
to
defraud Aetna, which included Arsenal Auto and the other autobody
shops.
The Sport case was consolidated with this case on May 17,
_____
1992.
appellants
argument
fails
because
18
U.S.C.
the
judgment
Sport
_____
was
case
entered
individual Arsenal
was consolidated
against
the
with
Sport
_____
18 U.S.C.
this
1964(c).
action and
defendants
and
the
the
entire
unconvincingly,
did not extend
suit.
Arsenal
appellants
argue,
but
PREJUDGMENT INTEREST
PREJUDGMENT INTEREST
Raising
damages
are punitive
in
nature
and not
the
compensatory,
the
defendants.
first
statement
behalf of
of
this
behalf
alone.
by
new
circumstances,
counsel
representing
him
In
these
for appeal.
American Automobile Manufacturers Assoc. v.
________________________________________
Commissioner,
31 F.3d 18, 25 (1st Cir.
____________
1994)(appellant failed to preserve issue for
appeal when the argument was first raised in
his reply brief);
Frazier v. Bailey, 957 F.2d 920, 932 n.14
_______
______
(1st. Cir. 1992)(same);
Pignons S.A. de Mecanique
v. Polaroid
____________________________
________
Corp., 701 F.2d 1, 3 (1st Cir. 1983)(same);
_____
see also McCoy v. Massachusetts Institute
________ _____
________________________
of Technology, 950 F.2d 13, 22 (1st. Cir.
______________
1991), cert. denied, 112 S.Ct. 1939(1992)("It
____________
is hornbook law that theories not raised
squarely in the district court cannot be
surfaced for the first time on appeal.").
brief for
the scope of
3.
in
appellee
reply
brief,
the
opportunity
to respond.
F.2d 83, 87
deprived
of
parties.
Id.
__
the
See Sandstrom
___ _________
benefit
of
issues appealed."
not
given
an
adequate
Moreover, the
court of appeals is
written submissions
by
all
the
-57-
This
court
has
recognized
an issue may be
that
if
exceptional
exceptional circumstances
compelling
as virtually
arguments
that
include arguments
to insure
must be
that are
the appellant's
ruled upon
to
avoid a
"so
success" or
miscarriage of
justice.
Johnston v. Holiday Inns, Inc.,
________
___________________
890, 894 (1st Cir. 1992).
The
not
one
argument presented by
that
decision to
satisfies
this
595 F.2d
standard.
A district
court's
RICO is ordinarily
recognize
argument
that
that
there
the
is
district
some
force
court
in
abused
the
its
discretion
reasons
in
that
awarding
treble
prejudment
damages
under
interest.
RICO
The
constitute
appellant
punitive
-58-
may reasonably
be
primarily compensatory
argued, however,
that
RICO damages
are
prejudgment interest
____________
U.S. 917 (1989)("Although there is some sense
in which RICO treble damages are punitive,
they are largely compensatory in the special
sense that they ensure that wrongs will be
redressed
in
light
of the
recognized
difficulties of itemizing [the damages caused
from racketeering activity].").
Thus,
the
that
miscarriage of justice.
summary, we
appeal
conclude
supports
that none
reversal
of
any
of the
arguments
aspect
of
the
-59-
fashioned
a jury in the
first phase.
on liability
to be
tried
In post-verdict proceedings
analogous
to a
hearing on
district court
fact
correctly determined
remained for
should be
a motion
jury
entered for
liability, and on
for summary
that no genuine
determination and
Aetna on the
judgment, the
dispute of
that final
jury verdict,
judgment
establishing
court's pretrial
proceedings
were
order for
phasing and
well-tailored
to
the
its post-
distinctive
the merits.
Proceeding in
parties
and the
court
adjudication of all
system, an
this fashion,
strongly
-60-