UNITED STATES DISTRICT COURT
        WESTERN DISTRICT OF NORTH CAROLINA
	BRYSON CITY DIVISION

        ____________________________________________
                                                   |
             WILLIAM C. HAMMEL,                    |
             ALAN J. BELLAMENTE,                   |
             et al.,                               |      MEMORANDUM ON
                                                   |  THE EXTORTION SCHEME
                  Plaintiffs                       |          AND
                                                   |     THE HOBBS' ACT
                   vs.                             |     (Attachment 3)
                                                   |
             STATE FARM MUTUAL AUTOMOBILE          |
             INSURANCE CO.,                        |      No. 2:99:CV-44-T
             STATE FARM INDEMNITY COMPANY,         |
             et al.                                |
                                                   |
                  Defendants                       |
        ___________________________________________|


	MEMORANDUM ON THE THE EXTORTION SCHEME and THE HOBBS ACT


        PRELIMINARIES:

	The core of Hobbs, 18 USC 1951(a) is:

	Whoever in any way or degree obstructs, delays, or affects
	commerce or the movement of any article or commodity in commerce,
	by robbery or extortion or attempts or conspires so to do, or
	commits or threatens physical violence to any person or property
	in furtherance of a plan or purpose to do anything in violation of
	this section shall be fined under this title or imprisoned not
	more than twenty years, or both.

	The statement of the alternative, appropriate to insurers, of
	those acts implied to be unlawful in this paragraph is:

	Whoever in any way or degree obstructs, delays, or affects
	commerce by robbery or extortion or attempts or conspires so to do,
	... shall be fined ....


	First, the meanings of the words of paragraph (a) above examined,
	then how the unlawful acts can be applied to an insurer is examined
	taking into account the special relationship that exists between
	insurer and the insured; how these acts will affect commerce
	generally is examined, and finally, how the facts of this case
	fit the legal model are examined and alleged in detail.


	In 18 USC 1951(b)(2) - (Hobbs), "Extortion" is defined as,
	"the obtaining of property from another, with his consent,
	induced by wrongful use of actual or threatened force,
	violence or fear, or under color of official right."

	The inclusion of the element of simple fear is important; it
	is that which distinguishes the extortion as defined by Hobbs
	from "blackmail", where a well defined fear of a definite action
	is required to have been communicated.  From the statutory language,
	it would appear that fear alone should be considered as sufficient
	inducement; and, in Evans v. US 504 US, 255 (1992)
	the Court reconstructs the ambiguous wording and grammar of the
	statute on the basis of Congressional intent and the principle
	of lenity, saying:

		The more natural construction is that the verb
		"induced" applies to both types of extortion described
		in the statute.  Thus, the unstated "either" belongs
		after "induced": "The term `extortion' means the
		obtaining of property from another, with his consent,
		induced either [1] by wrongful use of actual or
		threatened force, violence, or fear, or [2] under color
		of official right." This construction comports with
		correct grammar and standard usage by setting up a
		parallel between two prepositional phrases, the first
		beginning with "by"; the second with "under."

	Thus, fear itself is still sufficient to induce the victim to
	relinquish property willingly to the extortioner.  Whether or
	not the victim's fear is causally related to acts or intentions
	of the extortioner, is not required to be known or proven.
	Though this may seem too broad a sufficient condition, it
	directly allows more subtle, and more pernicious forms of
	extortion that would, in fact, prevent or hamper due process.
	Intent, when not directly expressed, must be inferred.  Since
	the mind is not directly available for observation, a finder
	of fact is left free to consider a body of evidence which may
	or may not be consistent, to an appropriate degree of belief,
	with the proposition that the extortioner has in some way
	caused, or even exploited, any known or obvious fear possessed
	by the victim.

	The word "wrongful", in 18 USC 1951(b)(2), means that the
	extortioner has no lawful claim to the property obtained.

	In attempted extortion, where the property in point has not
	actually been taken, intent is an important element, Carbo
	v. US, 314 F 2d 718 (9th Cic. 1983).


        I.           APPLYING HOBBS TO AUTOMOBILE INSURANCE


	Automobile Insurance is an agreement between two parties, the
	insurer and the insured, with the necessary elements of contract,
	whereby the insurer agrees to indemnify the insured against one
	or more kinds of loss associated with the use of an automobile
	in return for periodic payments of premiums.

	The insured enters into such an agreement with a reasonable
	expectation, and indeed trust, that when the conditions of the
	policy as contract are met, that the insurer will meet its
	obligations under the contract with honor and integrity.

	The insurer owes a policy holder a fiduciary duty to perform,
	both traditionally and logically.

		Fiduciary Relationship:
		"A relationship requiring the highest duty of care and
		arising between parties usually in one of four situations:
		(1) when one person places trust in the faithful integrity
		of another, who as a result gains superiority or influence
		over the first, (2) when one person assumes control and
		responsibility over another, (3) when one person has a
		duty to act for or give advise to another on matters
		falling within the scope of the relationship, or (4) when
		there is a specific relationship that has traditionally
		ben recognized as involving fiduciary duties, as with a
		lawyer and a client or a stockbroker and a customer."

			-- Black's Law Dictionary

	An insured enters into agreement with an insurer by instrument
	of a policy precisely because the losses against which the insured
	is supposed to be indemnified are of a catastrophic nature to
	the insured; else, the indemnification is absent in the case
	of willful premeditated fraud on the part of the insured.

	If the situations under which a fiduciary relationship exists,
	as cited above, are examined, it follows:

	Under situation (1), when an insurer has collected premiums over
	a substantial period of time, taking money from the insured, it
	gains financial superiority and influence by being the holder of
	purse strings in the event of a loss covered by the policy.
	Under situation (3), an insurer has the duty to act (to indemnify)
	the insured for losses covered under the policy which is the
	instrument of the relationship between insured and insurer.

	Under situation (4), traditionally, an insurer does have a
	fiduciary duty to its insureds.

	When an insured, satisfies the conditions of policy, and the
	the insurer refuses to act in accordance with the policy in
	a manner consistent with its fiduciary duty it has breached its
	fiduciary duty, as well as the contract.  Such refusal is not
	only fear inducing, but is the possibly deliberate induction
	of fear in the insured of sustaining his losses.

	There may also be induced fear to continue paying premiums to
	the insurer in a desperate placation of the insurer to reinstate
	the benefits of a policy, which the insurer had withheld.

	It is almost tautological reality that any catastrophic loss begets
	yet more loss, that is, until all is lost.  This is a fact that
	is, or certainly should be known to any insurer.  An insurer's
	refusal to act while having evidence of the severity of losses,
	thus induces further fear of consequent additional losses.
	As the denial of benefits is systematically prolonged through
	an additional scheme of delaying tactics, compounding the
	initial breaches of contract and fiduciary duty, the induced
	fear in the insured naturally increases.

	When the insurer has evidence of catastrophic losses that will
	likely have further losses that are permanent and debilitating,
	this is a malicious and deliberate endangerment of the insured's
	business, property, and personal well being, in all aspects of
	his being.

	Whether or not an insurer may, by its decisions regarding medical
	benefits, be practicing medicine without a license, if the evidence
	in the insurer's possession indicates the reality of damages by
	competent medical opinion, and reasonable consequences of losses,
	it must be presumed to have investigated in accordance with its
	fiduciary duty to have discovered that evidence of potential
	threats of further, and/or permanent losses exists.

	By denying necessary medical benefits, in particular, in the
	face of evidence of serious injury with potential for further
	permanent injury, the insurer is most certainly inducing an
	egregious amount of fear and anxiety in the insured, and it
	does this with malice, calculation and deliberation.

	Under this condition of extreme fear, the insured can be induced
	to sign documents that he would otherwise not have signed, which
	inure to the benefit of the insurer by depriving the insured
	of the actual property as money that he would have been entitled
	to under the limits of the policy.

	Under such a condition of extreme fear, and losses continuing, the
	insured is naturally induced to engage an attorney willingly,
	thus depriving the insured, in principle, of approximately One
	Third (1/3) of the policy limits for which he has paid.

	While an insurer is deliberately using its improper denials of
	benefits, inducing fear in the insured which it can then exploit,
	it is also earning interest on money that should rightfully belong
	to the insured.  It is depriving the insured of that use and/or
	interest.

	When there are medical people and healthcare givers not being
	paid by the insurer, fear is induced in these people also.  Out
	of fear of litigation and its expenses arising from nonpayment,
	they too become willing to accept less than their billed amount,
	and allow that the insurer earn and keep interest on money that
	is rightfully theirs.

	Most people do not live in the atmosphere of court rooms and
	judges, and the law.  Yet these people, who do not, are the
	majority of those insured.  There is quite reasonably a fear
	in these people of that atmosphere, if only because it is not
	familiar, but often because it is not understood.  This fear,
	insurers are, or should be aware of, and exploit in
	denying a valid claim.  Many valid claims are not taken to
	litigation, some because they are small; and, the insurer keeps
        what is rightfully their insureds' by exploiting the insureds'
	fear so that they simply give up.
	

	THEREFORE: a wrongful denial or termination of benefits by an
	insurer is not only a breach of various aspects of the
	relationship between insurer and insured, but is also the
	instrument of fear induction, by which the insurer seeks to
	gain property which rightfully belongs to the insured in many
	ways, some of which are described above.  When property of
	the insured is relinquished or given to the insurer out of
	deliberately induced fear, or any such fear is exploited for
	profit, this is extortion, actionable under Hobbs.

	When the property is taken or withheld without the insured's
	consent and with this element of fear and intimidation, it is
	outright Robbery, 18 USC 1951(a)(1), also actionable under
	Hobbs.

	When in addition to property or business losses, such Robbery
	inflicts bodily harm upon the insured, the insurer has committed
	Aggravated Robbery as commonly defined in Black's Law Dictionary.

	When an insurer unlawfully denies or terminates the benefits to
	which an insured is entitled under policy, by virtue of the
	special relationship between insurer and insured and also by
	virtue of the special meaning and catastrophic consequences
	that should be known by the insurer, the insurer is attempting
	to extort the insured, as well as robbing the insured.  The
	extortion being attempted arises from the naturally induced
	fear of further losses being exploited to induce the insured
	to accept offers and settlements which he would otherwise not
	accept.

	When an insurer succeeds in unlawfully obtaining property that
	rightfully belongs to the insured, by settlement of less than
	what rightfully belongs to him, through the naturally induced
	fear of further losses of property or harm to his person or
	others, the insurer is extorting the the insured.  At the same
	time, by unlawfully taking what rightfully belongs to the
	insured before that, having control and use of the insured's
	property, without his consent, thereby unjustly enriching itself,
	the insurer is also robbing the insured of that enrichment
	and use which would otherwise have been his.


        II.              CONSPIRACIES, HOBBS & RICO

	Conspiracy to commit any act requires at least two persons.
	Individual persons who are agents, servants or employees of
	an insurer may participate in a conspiracy, as may an insurer
	together with a wholly owned, incorporated subsidiary of that
	insurer.  Both these last entities possess "personhood" by
	virtue of their legally recognized incorporation.

	When an insurer conspires with a physician to produce an
	Independent Medical Examination that is a fabrication whose
	purpose is as an instrument wrongfully to deny the insured that
	which is rightfully his, these two persons have committed
	a Conspiracy to Commit Robbery.

	If the either the insurer or the physician are aware of the
	possibility of physical harm ensuing as a result of the
	conspiracy which actually results in the robbery itself,
	these two persons have committed a Conspiracy to Commit
	Aggravated Robbery, actionable under Hobbs.


	18 USC 1951(b)(3) defines commerce by:

            The term "commerce" means commerce within the District
            of Columbia, or any Territory or Possession of the United
	    States; all commerce between any point in a State,
	    Territory, Possession, or the District of Columbia and any
	    point outside thereof; all commerce between points within
	    the same State through any place outside such State; and
	    all other commerce over which the United States has
	    jurisdiction.

	Leaving the simple meaning of commerce, "the exchange of goods
	and services", to be understood.  There is no indication in the
	statutory language that the underlying simple meaning of
	"commerce" or that specifically defined in paragraph (b)(3)
	should be necessarily be construed on a large scale.

	Yet, when an insurer is involved, these methods are employed
	as part of its "business practices" it is difficult to see
	how commerce is not routinely obstructed, delayed and affected.
	Reference is made to the quoted findings of the Honorable
	William B. Bohling in Campbell v. State Farm Mutual Automobile
	Insurance Co., No. 890905231, slip op. at 53
	(Third Judicial Dist., Salt Lake City, Utah, Aug. 3, 1998),
	upon which Plaintiffs have written an accompanying Memorandum
	on the Racketeering Nature of the Misconduct of State Farm
	Mutual Automobile Insurance Company, where the relevant finding
	is quoted, from paragraphs 82 and 83, of the Campbell Court's
	opinion.

	When violations of Hobbs are used as instantiations of the
	prohibited acts of 18 USC 1961 (RICO), the word "affects"
	is used in both Statutes, and in both cases, it should be
	reasonable and logical to construe this usage to mean,
	"affects deleteriously"; a salubrious effect would hardly
	contribute to the criminality of the violations.

	When violations of Hobbs are used as instantiations of the
	prohibited acts of 18 USC 1961 (RICO), the meanings ascribed
	to the words "person", and "commerce" must be reconciled.
	Unless otherwise defined in Hobbs, when Hobbs is used as a
	defining predicate act of RICO, word meanings in Hobbs should
	be inherited from statutory language and case law of RICO.


	THEREFORE, when violations of Hobbs 18 USC 1951 are used as
	predicate acts in allegations of RICO violations, when the
	defendants' acts involve an insured and insurer, the above
	should reasonably apply.


	Respectfully Submitted:


        William C. Hammel                     Alan J. Bellamente
        A-11 Moose Branch Road,               A-11 Moose Branch Road,
	Sweetwater Apartments 1A,             Sweetwater Apartments 8A,
        Robbinsville, NC 28771                Robbinsville, NC 28771
        (828) 479-1547                        (828) 479-1547


                    /S/                                 /S/
        -------------------------------      ------------------------------
        William C. Hammel                     Alan J. Bellamente

        DATE: February 4, 2000                DATE: February 4, 2000