This is our Response to Defendants' State Farm Mutual Automobile Co. (SFM), and State Farm Indmnity Co. (SFI), Motion to Dismiss or Stay. our initial Complaint.
In addition, we have submitted to the Court a Motion to Ammend with a Memorandum in Support of that Motion, together with an Amended Complaint. First, I've outlined the salient points as they exist in the Defendants' Memorandum.
To start at the beginning go the DIARY PAGE.
UNITED STATES DISTRICT COURT WESTERN DISTRICT OF NORTH CAROLINA BRYSON CITY DIVISION ____________________________________________ | WILLIAM C. HAMMEL, | ALAN J. BELLAMENTE, | et al., | RESPONSE | TO DEFENDANT'S MOTION Plaintiffs | TO DISMISS, OR IN | THE ALTERNATIVE vs. | TO STAY | STATE FARM MUTUAL AUTOMOBILE | INSURANCE CO., | No. 2:99:CV-44-T STATE FARM INDEMNITY COMPANY, | et al. | | Defendants | ___________________________________________| SHORT CAPTION: HAMMEL v STATE FARM RESPONSE TO DEFENDANTS' MOTION TO DISMISS, OR IN THE ALTERNATIVE TO STAY Preliminaries: Since the original construction of Plaintiffs' Complaint, and even since the filing some six months later, conditions and circumstances have changed, and new information has come to light. An amended complaint has become necessary and is allowed under FRCP rule 15(a), and has been allowed by the Court's leave. In accordance with those conditions and circumstances, as well as the objections in Defendants' Memorandum in Support of Dismissal, Plaintiffs submit this memorandum in support of their opposition for dismissal of parts of their original Complaint, and matters addressed in that Motion for Dismissal still relevant to the submitted amended complaint. Before addressing the specifics of Defendants' Memorandum in Support of dismissal, Plaintiffs cite, more generally: Defendants have made a Motion to Dismiss, or in the Alternative to Stay. The Court is obliged under the Federal Rules of Civil Procedure to consider the issues in the light most favorable to the Plaintiffs, the nonmoving parties. In re Stac Elecs. Sec. Litig., 89 F3d 1399, 1403 (9th Cir, 1996); Doe v. Hillsboro ISD, 81 F 3d 1395, 1401 (5th Cir. 1996): Only if no possible construction of the alleged facts will entitle plaintiffs to relief should the court grant defendants' motion to dismiss. In re Hishon v. King Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 2232 (1984); Conley v. Gibson, 355 U.S. 41, 45046, 78 S.Ct. 99, 102 (1957): If the factual allegations in plaintiffs' complaint support any legal theory that entitles plaintiffs to some relief, the court should overrule defendants' motion for dismissal. More Specifically: Defendants' Memorandum in Support of Motion to Dismiss, ..., opens with, "Plaintiffs ... have filed this action Pro Se, literally seeking to transform a litany of complaints about the handling of an automobile accident claim into a federal case under the Racketeer Influenced and Corrupt Organizations Act 18 U.S.C. 1962.". (RICO) Plaintiffs seek no such transformation. Indeed, State Farm Mutual Automobile Insurance Company, (SFM) and its progeny underwent their own transformation approximately 25 years ago, from the legitimate business of insurance to a maleficent profit center of racketeering. Plaintiffs allege that they have suffered an instantiation of the pattern of racketeering activities that is these Defendants' way of doing business, a way of doing business that has existed over these many years, and Plaintiffs further claim that this intransigent pattern of racketeering shows no sign of abatement. Plaintiffs also allege business, property, personal and future damages based on theories of RICO, State Statutes and Common Law, and that these damages are a result of the transactions of enterprises which will, in the Amended Complaint consist of persons named as defendants together with their various nexi of relationships. All theories and definitions of extortion exclude the case where the primary act is legal: to sell a thing which may legally be sold is obviously legal, but to do so fraudulently, and in so doing to create a fear of loss and attendant physical anxiety is unlawful. With this reasoning, Plaintiffs allege fraud both in the selling of an insurance policy, and in handling claims, and therefore allege extortion in that Plaintiffs were unreasonably and fraudulently denied benefits of the insurance policy, and had no recourse but willingly to enter litigation, first on the State level merely for performance of contract and then on the Federal level to recover damages from both the induced fear, and the development and realization of that which was feared, thus depleting the benefits to which Plaintiffs were legally entitled. Plaintiffs have indeed experienced the fear of deprivation in their loss of: business and property; inability to earn income; bodily functions; their existence as normally independent and productive individuals, peace of mind requiring medication and psychotherapy and realizations of their well founded fear. Plaintiffs allege that the trauma, both physical and psychological, deliberately inflicted on Plaintiffs is no less than that which would be normal under The Spanish Inquisition, and that it is enough to have caused permanent and disabling, business, property, physical and psychological damage. 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), a third party action on grounds of Bad Faith, the Court found ample evidence for its racketeering activities. Plaintiffs reference here their accompanying Memorandum On The Racketeering Nature Of State Farm's Misconduct. Thus, there exists reason for Plaintiffs allegements of these three aspects required in RICO; to amass and present the thousands of pages of evidence within such a short time to prove the existence of these aspects would be unduly burdensome on Plaintiffs, unnecessary according to the Federal Rules, at this early stage of pleadings, and burdensome to the Court. While SFM and State Farm Indemnity (SFI) are legally distinct entities, each, under corporate law and under RICO, entitled to personhood, they confuse themselves in practice, as the correspondence, internal documents of SFM and SFI, and pleadings in the New Jersey matters will show. Each engages itself in the affairs of the other. Given this, it is unlikely that the misconduct of SFI is inherently different from that of SFM. Regarding Defendants' arguments that this case should be dismissed, which may be outlined as: I. Plaintiffs have settled and dismissed their Claims against State Farm Plaintiffs' action is barred by two fundamental legal doctrines: accord and satisfaction and res judicata. II. Plaintiffs have failed to state a RICO claim. Must allege: (1) that defendant (2) through the commission of two acts (3) constituting a pattern of (4) racketeering activity (5) directly or indirectly invests in, or maintains an interest in, or participates in (6) an "enterprise," (7) the activities of which affect interstate or foreign commerce 18 U.S.C 1962(a)-(c). (A) Plaintiffs lack standing under RICO because they have not alleged injury in their business or property. (B) Plaintiffs have failed to adequately plead predicate criminal acts. (C) Plaintiffs have failed to plead a "pattern" of "racketeering." (D) Plaintiffs have not plead a RICO "enterprise". (E) Plaintiffs RICO claim should be dismissed. III. In the alternative, this action should be Stayed pending the outcome of the "limited issue of underinsured motorist benefits." Plaintiffs address I. and III. here, referencing this outline, while II. is addressed by the substance of the amended complaint, except for Defendants' quoting in II-D that "that a 'person' is not distinct from an 'enterprise' when a corporation and its wholly owned subsidiary are involved." Defendant's specific arguments for dismissal can be divided into two classes, those of law and those of legal form. The arguments based on form are reparable, and Plaintiffs submit that such repair is present in their Amended Complaint. I. Regarding Defendants' arguments for dismissal which are the legal doctrines of Res Judicata, Accord and Satisfaction, and a principle of Comity: Regarding Res Judicata Defendants apparently intend Res Judicata in its restricted sense of issue preclusion or collateral estoppel, while many courts understand it to include both issue preclusion and claims preclusion. Plaintiffs will address Res Judicata in its broader understanding, as the Fourth Circuit has, and relate it to this action. Following In Re Varat Enterprises Inc., 81 F.3d 1310 (4th Cir. 1996), where this broader analytical position is taken; from In Re Varat, excluding footnotes: "Under res judicata principles, a prior judgment between the same parties can preclude subsequent litigation on those matters actually and necessarily resolved in the first adjudication. See Restatement (Second) of Judgments, '' 13 et seq. (1982); Allen v. McCurry, 449 U.S. 90, 94 (1980); Federal Deposit Ins. Corp. v. Jones, 846 F.2d 221, 234-35 (4th Cir. 1988). The doctrine encompasses two concepts: claim preclusion and issue preclusion, or collateral estoppel. Allen, 449 U.S. at 94. Rules of claim preclusion provide that if the later litigation arises from the same cause of action as the first, then the judgment bars litigation not only of every matter actually adjudicated in the earlier case, but also of every claim that might have been presented. Nevada v. United States, 463 U.S. 110, 129- 30 (1983); Wallis v. Justice Oaks II, Ltd. (In re Justice Oaks II, Ltd.), 898 F.2d 1544, 1549 n.3 (11th Cir.), cert. denied, 498 U.S. 959 (1990). Issue preclusion is more narrow and applies when the later litigation arises from a different cause of action. Nevada, 463 U.S. at 130 n.11. It operates to bar subsequent litigation of those legal and factual issues common to both actions that were 'actually and necessarily determined by a court of competent jurisdiction' in the first litigation. Montana v. United States, 440 U.S. 147, 153 (1977); Combs v. Richardson, 838 F.2d 112, 114 (4th Cir. 1988)." ... "Generally, claims are part of the same cause of action when they arise out of the same transaction or series of transactions, Harnett v. Billman, 800 F.2d 1308, 1314 (4th Cir. 1986), cert. denied, 480 U.S. 932 (1987), or the same core of operative facts, Heritage Hotel, 160 B.R. at 377-78." ... Also, from Black's Law Dictionary 6th Edition: res judicata ---- A matter adjudged; a thing judicially acted upon or decided; a thing or matter settled by judgment. Rule that a final judgment rendered by a court of competent jurisdiction on the merits is conclusive as to the rights of the parties and their privies, and, as to them, constitutes an absolute bar to a subsequent action involving the same claim, demand or cause of action. Matchett v. Rose, 36 Ill.A;.3d 638, 344 N.E.2d 770, 779. And to be applicable, requires: identity in thing sued for as well as identity of cause of action, of persons and parties to action, and of quality in persons for or against whom claim is made. The sum and substance of the whole rule is that a matter once judicially decided is finally decided. Also, "The federal Courts have traditionally adherered to the related doctrines of res judicata and collateral estoppel. Under res judicata, a final judgement on the merits of an action precludes the parties or their privies from relitigating the issues that were or could have been raised in that action." Allen v. McCurry, 449 U.S. 90, 101 S. Ct. 411, 415, 66 L.Ed.2d 308. Generally, claim preclusion occurs when three conditions are satisfied: 1) the prior judgment was final and on the merits, and rendered by a court of competent jurisdiction in accordance with the requirements of due process; 2) the parties are identical, or in privity, in the two actions; and, 3) the claims in the second matter are based upon the same cause of action involved in the earlier proceeding. Kenny v. Quigg, 820 F.2d 665, 669 (4th Cir. 1987); see also Justice Oaks, 898 F.2d at 1550 (listing the same criteria as four elements). "Generally, claims are part of the same cause of action when they arise out of the same transaction or series of transactions", Harnett v. Billman, 800 F.2d 1308, 1314 (4th Cir. 1986), cert. denied, 480 U.S. 932 (1987), or the same core of operative facts, Heritage Hotel, 160 B.R. at 377- 78. The transactions among and between the Defendants acting within a RICO enterprise do not concern the matter of Plaintiffs' specific insurance claims treated in the New Jersey matters, any more than a specific allegation of fraud or bad faith is concerned with an insurance claim itself. In Christiansen v. First Insurance Company of Hawai'i Ltd., et al., Intermediate Court of Appeals, No. 19968, on appeal from the Fifth Circuit Court, Civ. No. 93-0238, the Court Held that Bad Faith and Breach of Contract are torts outside of an insurance policy in a first-party action, and are therefore not bound by any limitations or agreements of the policy. The body of law that governs insurance policies is the insurance law of the State, while, generally, Bad Faith and Breach of Contract are not insurance law. When all of the requirements for claim preclusion are satisfied, the judgment in the first case acts as an absolute bar to the subsequent action with regard to every claim which was actually made and those which might have been presented. Justice Oaks, 898 F.2d at 1552. Yet, here, the requirements for claims preclusion are not met in this action. The Joined State Cases have SFI as sole defendant, while the Defendants in this single Federal action have additional Defendants who are altogether related through their activities within enterprises and schemes. It must be understood that were it not for the MVA of September 16, 1994, Plaintiffs would not have been exposed to an already existing pattern of racketeering activities of SFM that masquerades as "claims handling", nor would they have been immediately exposed to the very same pattern exhibited by SFI, and, in all probability by the entire "family of State Farm Companies", since they all seem bear the same relation to SFM as does SFI, being wholly owned incorporated subsidiaries. The claims, here, arise from patterns of racketeering activities and violations of Statutes and common law of the State of North Carolina, and not from an MVA, nor any lawful handling of claims. Plaintiffs complain, in part, in this Federal action, of the behavior and tactics of State Farm Indemnity (SFI) in New Jersey and those of SFM in North Carolina within the very litigation process itself. Since the subject matter of of a given action cannot be the action itself, it is clear that the two joined State actions and the single Federal action do not have the same subject matter. Plaintiffs do not complain here of injuries sustained in the accident, but rather of those injuries and their permanency that arise from transactions within RICO enterprises that include specific tactics of denials and delays of legitimate claims; persistence in such denials and delays in the face of an illegitimacy and illogic that has been repeatedly brought the attention of Defendants SFM and SFI. Plaintiffs refer here to their Memorandum on Causality and Damages. 1) The only remedies available to Plaintiffs by law in the State of New Jersey are those of performance on an insurance policy. The cause of action in New Jersey is then, necessarily, nonperformance under terms of the policy, and the New Jersey claim is only for performance. The language of the New Jersey complaints was in substantive error and at odds with existing State Law. Although New Jersey law apparently does not explicitly forbid remedies other than performance in PIP actions, they do not exist, in fact, and are not supported by statute, nor were they supported by a body of case law. The expanded remedies available to Plaintiffs under Federal Law, are based on criminal acts. Nonperformance is not, per se, a criminal act. The causes of action in this Federal action arise from the nexus of criminal acts discovered subsequent to nonperformance. The claims are then damages resulting from these causes of action. Therefore, between the New Jersey State actions and the Federal action, the claims as well as the issues or causes of action are distinct. 2) The original separate complaints against State Farm, filed in New Jersey in October of 1996 did contain allegations of Bad Faith and demand for punitive damages; the Court dismissed the punitive damages on April 18, 1997, on grounds of the unavailability of the punitive damages by Statute under New Jersey law. These issues were moot even before the complaints were filed, and dismissal was not based on the merits. At issue was whether or not punitive damages were available under New Jersey Law. In raising the issue of Bad Faith in in Federal District Court, Plaintiffs do not seek to enhance the Statutory Law of New Jersey, but seek to avail themselves of available Statutes and Common Law under North Carolina Law, which are different claims altogether. Plaintiff Hammel notes that at the time of dismissal of punitive damages specifically under PIP actions, the court granted Plaintiff's attorney's Cross Motion to amend the complaint for Compensatory damages in place of Punitive damages, in recognition of the nonexistence of the punitive damages of Bad Faith, and the possible existence of compensatory damages. While this action alleges criminal acts, neither of Plaintiffs' New Jersey complaints so allege. An action for performance under an insurance policy pursuant to the policy and State insurance laws is hardly equivalent in claims or issues to a Federal action spanning three States and alleging a racketeering enterprise that continues by deceit and trickery over a period of approximately five years to the continuing and now unstoppable detriment of both Plaintiffs. Therefore, Res Judicata should not be applied on the basis of these dismissals of punitive damages under PIP in the State of New Jersey. 3) The application of Res Judicata, in this action, would require that Plaintiffs are only now raising issues that they could have raised properly under New Jersey State Law. a) Clearly, raising the issue of Bad Faith was not properly available to Plaintiffs in New Jersey, and although tortious, Bad Faith is not criminal. b) Equally clearly, issues of federal RICO violations could not have been raised, because a State Court is not competent to hear such issues, especially when no State RICO statute is available; New Jersey does not have a RICO statute as do, e.g., Nevada and North Carolina, Georgia. Therefore Res Judicata should not be applied to this action in a plenary manner. 4) The cause of action is not being split here, since the causes of action in the matters in New Jersey arose under an insurance policy and are exactly matters of performance; put another way, they arose seminally from the purchase of an insurance policy as a single continuing transaction between Plaintiffs and, originally State Farm Mutual Automobile Insurance Co., and then State Farm Indemnity Co., terminating in March 1996, after many years. Here, the causes of action arise from a series of transactions, involving the Plaintiffs and Defendants of the Amended Complaint, in which Plaintiffs allege a nexus of more than sufficiently many violations of RICO within the enterprises of associations between these Defendants, to warrant RICO standing. 5) Between the joined New Jersey matters and this action, Plaintiffs argue: a) The causes of action i) have different Defendants ii) have different time frames iii) involve different acts yielding new evidence since the first filing of Plaintiffs' complaint b) The issues are distinct Issue preclusion applies only to issues actually and necessarily resolved in the first case. The only issue of fact and/or law decided by a competent court of jurisdiction in the NJ matters was that punitive damages were not available under PIP actions in New Jersey. This was a matter of a paucity of case law and statute, and not decided on the merits. c) Neither the PIP releases nor the Judicial Orders in New Jersey decide or resolve any issue of Plaintiffs' current action. Moreover, Plaintiffs allege in their amended complaint that SFI entered the contract that is the release, with the same fraudulent intent and behavior that it had previously exhibited, making that contract now an issue of controversy in the amended complaint. d) The Court in the NJ matter lacks jurisdiction over over the claims in this Federal action; and, Plaintiffs would be prejudiced in their theories and remedies in this action, being denied due process in presenting their evidence and claims, if Res Judicata were applied. e) Res Judicata does not act as a bar when the conduct giving rise to the later suit post-dates the conclusion of the first suit. [Restatement (Second) of Judgments 24 cmt. f (1982)]. Defendants argue that somehow an issue has been resolved in PIP which acts to bar this Federal action. Plaintiffs present claim is further based on acts post-dating the fraudulent PIP settlement which reflects back on the understanding of intent in actions prior to the central post-dated acts. f) Moreover, Defendant SFI through its attorney, Melli have, in writing, already claimed that in its PIP settlement, has "admitted nothing" regarding its liability in its PIP settlement. Therefore the matter of SFI's liability is, according to SFI still open and not at all resolved. If that is not at all resolved than the central PIP question of liability and whether Plaintiffs have been properly indemnified is still open, despite Plaintiff's expectations to, and understanding of, the contrary. Therefore Res Judicata should not be applied to bar this action. Regarding Accord and Satisfaction The signed PIP releases have already been submitted to the Court through the affidavit of Michelle Wall, allowing Plaintiffs to discuss them without separate submission. Though an insurance policy is a contract of adhesion, a settlement agreement entered into freely by both parties is an agreement of a standard contractual nature. These releases have all the required elements of a contract. 1) These releases were signed under physical and emotional duress as well as a coercion of fact that the PIP case must be settled before action on UIM could be taken. Defendants have exploited both this circumstance and Plaintiffs' fear of yet further damaging delays in receiving even the smallest amount of money due them under the terms of the policy. 2) These releases were understood by Plaintiffs as specific releases in consideration for PIP payments, some of which had been then recently, suddenly and inexplicably made before the fact. Said payments by SFI, made without further medical investigation, since SFI declined medical investigation after Plaintiffs' cervical surgeries, and at the time of Plaintiffs' depositions, can be, and were understood by Plaintiffs and their attorneys as admission that these payments should have been paid without the necessity of litigation. If payments are not made over a period of years, they are not made because: 1) the claims are determined not to be real 2) the damage is not covered by the policy 3) the insurer is seeking profit by retaining money due the claimant 4) the insurer is being malicious 5) the insurer is being capricious and arbitrary or any combination of these. In cases 1) and 2), the insurer has an obligation to investigate fraud, or state and prove the damage not to be covered. The rest are unlawful. When an insurer suddenly after these 4 years pays bills, and maintains that it has not acted unlawfully, then it automatically waives cases 1) and 2), for these are assertions that should have been made and resolved years ago. Defendant SFI should be barred from maintaining any other reason than it had "no reason" for denial, by the principle of equitable estoppel. Any legitimate reason should have been raised long ago. The only excuses given are the invalid ones given in the initial denial letters. In the case of Plaintiff Hammel, the single denial was based on the statement that "in the doctor's opinion, no further treatment was necessary"; it was accompanied by Doctor Linder's second IME report in which no such opinion was expressed directly or indirectly. Communications, immediately upon receipt and numerous times thereafter by Plaintiff Hammel on this point, were ignored. The first response was by Savastano in a telephone conversation with Plaintiff Hammel on or about July 31, 1995; when questioned on the denial of medical benefits said, "Don't worry, it's just a formality", a statement upon which Plaintiffs relied. Thereafter, there was no response to the point, nor has there been any since. What Defendant SFI did was wait until the second suggested time of treatment had expired and then issued a denial letter without requesting the appropriate IME. Then fifty-six (56) days later, SFI sent an IME request letter, with the usual threats of denial of benefits for failure to comply. The IME was with Dr. Harry Merliss, and orthopedic surgeon. Plaintiff Hammel had not yet seen an orthopedist of any kind yet. The provisions of the policy provides that SFI might from time to time seek second opinions, which this clearly was not. After Plaintiff Hammel had actually made an appointment with Dr. Merliss, he discovered through contacts in the medical profession that Dr. Merliss was, in fact, a medical whore who sold his a priori "medical opinions" to insurers. Plaintiff Hammel, promptly canceled his appointment with Dr. Merliss and reported to SFI that Merliss was unacceptable as an IME physician. It was then clear what SFI was attempting to do. Plaintiff Hammel had read and understood similar purpose in IME reports by Drs. Fremed and Wagle, and thereafter investigated any IME physician declared by SFI, finding the same continuing pattern. In the case of Plaintiff Bellamente, Defendant SFI sent two denial letters for neurological and psychological benefits. These letters, on which the decisions to deny were based, were secured through unlawful means. No letter of denial of chiropractic benefits was ever sent, SFI simply, unlawfully, refused to pay for Plaintiff Bellamente's necessary and continuing chiropractic care. Defendant SFI conspired with both IME physicians Fremed and Wagle to commit extortion upon Plaintiff Bellamente by having him attend sham IMEs; conspired to commit extortion on Plaintiff Bellamente by having sham IME reports written to present as excuses for depriving him of benefits due a legitimate claimant. Since this denial was indeed effected, Defendants SFI, Fremed and Wagle did coerce Plaintiff Bellamente into attending these IMEs, they have committed extortion. Since the IME reports were written and used as excuses to deny benefits, and benefits were denied, they have also committed robbery in depriving him of the benefits due him, which has caused grievous and permanent damage to his business, property and person. Defendants SFI, Fremed and Wagle have also committed conspiracy to commit fraud through the conspiracy to purport that the IMEs were indeed "independent medical examinations". These same Defendants have committed fraud upon Plaintiff Bellamente by purporting that the IMEs were indeed "independent medical examinations", upon which Plaintiff Bellamente relied, to his detriment by having his benefits denied through this scheme of unlawful acts. The Accord of the PIP releases is understood by Plaintiffs to cover the PIP claims and only the PIP claims, which SFI is to satisfy. Any understanding of satisfaction by Plaintiffs regarding the Accord is based on Plaintiffs' Good Faith and Reasonable Expectations that satisfaction will be met in the future. In reality, such satisfaction has not been met, in that, out of pocket expenses for which bills have been repeatedly submitted, have not yet been paid or even acknowledged, and Plaintiffs see little chance that they will be. 3) Since the signing of these release contracts, SFI has been in default of their agreement, exactly as they were in default of their agreement under the so called insurance policy and remain in breach of their fiduciary duties that extended through the arduous litigation process which was, and still is, highly destructive to Plaintiffs. Only after service of the RICO complaint, was there some attempt to make good appearance of SFI's word in these releases by what appeared to be an unconvincing kind of deathbed repentance. There was a prior attempt by Michelle Wall to settle the PIP matter in a letter to both Plaintiffs' attorneys dated November 19, 1998, but for some reason that could only have its origin in edict by SFI, this attempt suddenly came to a halt. On information and belief Carole Rickelmann of SFI's Complex Claims Unit was involved in this malicious edict. 4) The consistency with which SFI has dishonored its word in policy, fiduciary duty and agreement leaves very little doubt that these releases, as contracts, were entered into with no intent other than to continue their racketeering activities. Plaintiffs question whether they should be bound by their agreements to these releases, since SFI has behaved in a manner indicating that it assumed it was not so bound. In being so bound Plaintiffs are being punished for Good Faith, while SFI is being rewarded for its racketeering activities. 5) Under the doctrine of Reasonable Expectations, Plaintiffs had been insured by State Farm insurance since 1986, and had minor claims, and none with liability - plaintiffs had reasonable expectations of being insured, and of the policy being honored; Plaintiffs at all times behaved prudently, and accordingly, were completely surprised at SFIs, behavior. 6) SFI, agreed to considerations in releases in order to secure dismissal of the PIP actions. SFI paid Plaintiffs' Medicaid liens and outstanding medical bills, even before the releases were signed, tacitly acknowledging that said PIP payments were legitimate, that the denials of all medical benefits was improper, and therefore that it had failed in performance. After securing Plaintiff Hammel's release and paying his PIP claims, SFI then sought to relitigate the causation of damages from the MVA by procuring a "paper review" of Plaintiff Hammel's medical reports which comes to the not very surprising conclusion that the MVA caused no damages at all. This review written by SFI's espoused expert witness Eric L. Fremed, M.D. for a UIM arbitration, arrives at his conclusion by contrived selections and omissions from every medical report stated to have been reviewed, and by wholly ignoring those from which nothing that suited his purpose could be harvested. It takes no great medical expertese, in comparing Dr. Fremed's Reviews with the actual medical reports of Plaintiffs' treating physicians, and with the objective radiological reports, to see that these reviews are complete fabrications in furtherance of the continuation of SFI's egregiously privative actions. Its statements and reasoning are a farce of ridiculous proportions. That such a Review could be constructed without the direct or indirect coaxing by SFI would stretch anyone's credulity. Dr. Fremed was paid approximately $1000.00 for these reviews according to SFI's internal records. Referenced here is Plaintiffs' accompanying Memorandum On Medical Paper Reviews and an IME Report by Defendant Eric L. Fremed. In principle, these reviews should be barred in the New Jersey Courts on the basis of equitable estoppel. These objections notwithstanding, the purpose of Defendant SFI was further delay, and denial of benefits of the policy that should have been paid years ago, and furtherance of fraud and the pattern of racketeering, which is perfectly consistent with SFI's prior behavior and tactics. One Review by Dr. Fremed even extends to an unwarranted ad hominem, medically unprofessional and legally inappropriate attack on Plaintiff Hammel. In the other review of Plaintiff Bellamente's medical records, the same conclusion that no injuries were caused by the MVA is reached. Dr. Fremed has an advantage here, however, since he is the neurologist to whom SFI sent Plaintiff Bellamente, in order to obtain an excuse to deny neurological benefits. Dr. Fremed seems not to agree with any treating physician. The Complaint sent to the New Jersey Department of insurance, details Dr. Fremed's alleged 15 minute neurological examination. For these reasons, Dr. Fremed and his P.C. have now also been included as named Defendants in this RICO action, separately and as agents, servants and/or employees of SFI, as has SFI's other co-conspirator Dr. Sharad Wagle, and his P.C. 7) These releases were understood by Plaintiffs as contracts for future performance. Defendant SFI has already indicated fraudulent intent regarding performance in two matters: regarding payment of out of pocket medical expenses, in the matter of Plaintiff Hammel's contract (release) leaving future performance reasonably not to be expected; and regarding their attempted switch in position on the attribution of injuries to the MVA. This violates intent and understanding of the release, and is an exercise in trickery and deceit in furtherance of the pattern of racketeering. 8) Regarding 5(f) under Res Judicata, the stated position of defendant SFI is, now, after the fact of the PIP settlement that SFI has admitted nothing and apparently paid some medical bills for some capricious reason unknown to Plaintiffs or their NJ attorneys. In this action, can the accord be considered satisfied, as it had, not, according to SFI, anything to do with the requirement of the policy, but is now supposed to be understood as some arbitrary act, by SFI's own assertion, through its attorneys, Melli, for which Plaintiffs are now supposed to obey and be satisfied, according to whatever interpretation SFI attributes to this act at any particular moment. The legal concept for this is "tortious interference with contract." Therefore, the principle of Accord and Satisfaction should not be applied to bar this action. Regarding Comity Given the above arguments disputing the applicability of Res Judicata, in all of its requirements, the question of Comity cannot arise; if it could, in such a case, no Federal law would be permitted to exist that covers any area of law where a State law also covers that area. From a legal standpoint, this is an untenable extreme solution to the problems of localism conflicts. To Plaintiffs' knowledge, this extreme solution had not been accepted or adopted by any Court of the United States. II. Addressed in Plaintiffs' Amended Complaint Except for D, which Plaintiffs now address. 1) In Defendant's Memorandum, they note failure on the part of Plaintiffs properly to distinguish between SFM and SFI, make a few assumptions and then cite NCNB: National Bank of North Carolina v. Tiller, 814 F.2d 931, 936 (4th Cir. 1987), as holding "that a 'person' is not distinct from an 'enterprise' when a corporation and its wholly owned subsidiary are involved." This confusing and vague quote creates even more confusion when followed through to the actual case, and was ultimately misapplied there: a) In NCNB, the Court was actually quoting the Court's opinion in U.S. v. Computer Sciences Corp, 689 F.2d, 1181 b) In NCNB, Appellee NCNB was an UNINCORPORATED subdivision of Appellee NCNB Corporation. c) In Computer Sciences, once again Infonet is an UNINCORPORATED division of CSC. d) In Computer Sciences, 1190  the Court opines: "There is, however, the remaining problem, restricted to CSC, of whether Congress ever intended, in 18 U.S.C. 1962, that the statute prohibit activities by a person where the activities are described as occurring with any enterprise when there was identity between the person, on the one hand, and the enterprise, on the other. We conclude that 'enterprise' was meant to refer to a being different from, not the same as or part of, the person whose behavior the act was designed to prohibit, and failing that, to punish. To be sure, the analogy between individuals and fictive persons such as corporations is not exact. Still, we would not take seriously, in the absence, at least, of very explicit statutory language, an assertion that a defendant could conspire with his right arm, which held, aimed and fired the fatal weapon. A corporation, in common parlance, is not regarded as distinct from its unincorporated divisions either." e) In Computer Science the Court maintained that the "person" under RICO must always be different or distinct from the "enterprise". e) However, in Busby v. Crown, the court reverses itself allowing that under an allegement of 1962(a) the person and the enterprise may be identical, while maintaining the requirement that the enterprise and person must be distinct under allegement of 1962(c). f) In Busby, the Court notes that the distinction between enterprise and person is followed by all Circuit Courts excepting the 11th Circuit; U.S. v. Hartley, 678 F.2d 961, 987-90 (11th Cir. 1982). In summary, as Defendant's state, in allegements of 1962(c), the person must be distinct from the enterprise; however, in allegements of 1962(a) they may be identical. Plaintiff's have already alleged and do so again in their amended complaint that SFI is an INCORPORATED wholly owned subsidiary of SFM. The citation prohibiting the separation of person and enterprise "when a corporation and its wholly owned subsidiary are involved" is taken, in both Computer Sciences and in NCNB, out of the context of the issue of unincorporated wholly owned subsidiaries. In common corporate parlance "wholly owned subsidiary" is understood as incorporated, so it is easy to see how, without a careful reading of the issues in NCNB and Computer Sciences, the unfortunate phraseology of the Court might be misinterpreted. In Busby and NCNB, the Courts do not find that a 'person' is not distinct from an 'enterprise' when a corporation and its incorporated wholly owned subsidiary are involved. The issue is one of the degree of separateness of person as defined 18 USC 1961(3), "includes an individual or entity capable of holding a legal or beneficial interest in property". Any holding or possession of an unincorporated wholly owned subsidiary of a corporation is, per force, the property of the corporation. The unincorporated subsidiary is not a legal person and is not capable of holding a legal or beneficial interest of its own, exclusively, being too closely bound to the corporation itself. An incorporated wholly owned subsidiary, however, has by law, the normal sense of person and is indeed legally capable of holding a legal and beneficial interest in property. Therefore, Defendant's have misinterpreted and misapplied this aspect of the Courts' holdings in NCNB, and Computer Sciences. III. Regarding Defendants' Alternative Motion to Stay 1) Should compensatory damages actually be awarded in the remaining UIM matter, they would only be a compensation for the pain and suffering endured by Plaintiffs during the time of protraction in performance of Defendant SFI, and not compensation sought here for permanent business, property and bodily losses, and their consequential damages, which will continue until Plaintiffs' demise. The claims and relief sought here are distinct from those sought in the New Jersey State actions brought under State Insurance Law. There is no attempt to relitigate the same claims, nor do Plaintiffs seek double recovery. Plaintiffs have not, however, been made whole. Quite the contrary, and it is this for which compensation is sought. The RICO patterns defined in this federal complaint, are the cause of permanent damages to both Plaintiffs. Since the business and property of both Plaintiffs are also by law, personal, the formal restriction to business and property extends by law to personal damages. Plaintiff Hammel was, at the time of the MVA, engaged in businesses that were d/b/a's, meaning that legally, his business was indeed personal. Plaintiff Bellamente was engaged as conservator of an elderly aunt's estate; his business was then also purely personal. So, in this particular case the usual distinction between "business and property" damages and personal damages does not apply. By reference, the accompanying Memorandum on Causality and Damages. is included in entirety with all of it paragraphs. This Federal action is distinct from the two joined matters in New Jersey. Should SFI give Plaintiffs reason by their further behavior in litigation in New Jersey, Plaintiffs will supplement this Federal complaint. 2) Nothing that may be resolved in the New Jersey matters will have meaning here, excepting that one pattern alleged may have changed its status from open to closed. The only other consequences of not staying this action in regard to the New Jersey matters are that Plaintiffs may be forced to submit supplements to the complaint. 3) To stay this action pending the outcomes in New Jersey would give SFI direct control over delays in this Federal Court. SFI has successfully delayed the New Jersey claims for five years, and the cases for three years using the very same tactics outlined in Campbell and independently in Plaintiffs' Complaints to the New Jersey Department of Insurance. SFI's "investigations" of Plaintiffs' claims will be shown to be mere shams and fabrications, whose sole intention was and is to deny Plaintiffs that to which they have rightful claim, and that these shams are patterns of racketeering masquerading as "claims handling". 4) It would be intolerable for any RICO enterprise to be given permission by the Court to prevent, interfere with, or delay, indeterminately by its own activities, litigation against that very enterprise. 5) If, in Defendants' words, the issue of underinsured motorists benefits are so "limited" and one assumes by inference, relatively trivial, this action should not be stayed. Defendants give no substantive reason why it should. 6) No matter the UIM arbitration panel's decision, it can not negate the RICO violations; nor can it negate the violations of the Statutes and common law of North Carolina of which Plaintiffs complain in their Amended Complaint. THEREFORE, neither Res Judicata nor Accord and Satisfaction, nor Comity, should be applied to bar or dismiss this action; nor should this action be stayed pending any resolution of the UIM arbitration in New Jersey. 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
Hammel v. State Farm Diary
Uncivilization and its Discontents