State Farm Mutual Automobile Insurance Company, Farmers Insurance Exchange v. Roger Ammann ( 1987 )

PREGERSON, Circuit Judge:

The defendant below, Roger Ammann (“Ammann”), had entered guilty pleas to mail fraud on December 21, 1984 for submitting false claims to insurance companies including State Farm Mutual Automobile Insurance Co. (“State Farm”) and Farmers Insurance Exchange (“Farmers”), the plaintiffs below. On October 4,1985, State Farm and Farmers filed a civil complaint seeking treble damages for violation of the Racketeer Influenced and Corrupt Organization Act (“RICO”) for the submission of false insurance claims. Ammann moved for summary judgment arguing that the complaint did not state a claim and that the statute of limitations had run because State Farm and Farmers knew of the fraud as early as 1976. The district court granted summary judgment in a ruling that discussed only the statute of limitations. State Farm and Farmers appeal.

The district court applied a three-year limitation period beginning when the plaintiffs knew or should have known of the injury complained of. Compton v. Ide, 732 F.2d 1429,1433 (9th Cir.1984). The district court granted summary judgment on the ground that State Farm’s and Farmers’ claims were time barred because “the plaintiffs knew this pattern of racketeering long before three years before filing the complaint on October 4,1985____ [They knew] back in 1982, ’76, ’75; long before the complaint was filed October 4, 1985.”

The Supreme Court decided Agency Holding Corp. v. Malley-Duff & Associates, — U.S. -, 107 S.Ct. 2759, 97 L.Ed.2d 121 (1987), after the district court granted summary judgment. Although the Court did not rule on when the civil RICO limitations period begins, it did establish a uniform four-year limitations period. Because the district court applied a three-year period, and because it is possible that the district court would have decided differently if it applied a four-year period, we reverse and remand for a disposition of the motion for summary judgment in accordance with Malley-Duff and Compton, 732 F.2d at 1433 (as to each injury civil RICO limitations period “begins to run when the plaintiff knows or has reason to know of the injury which is the basis of the action”).

REVERSED and REMANDED.