IN THE COURT OF APPEALS
STATE OF GEORGIA
SECURITY LIFE INSURANCE
COMPANY OF AMERICA,
Appellant,
v.
GORDON B. CLARK and CLARICE J. CLARK,
Appellees.
APPEAL CASE NO. A97A1136
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BRIEF OF THE GEORGIA TRIAL LAWYERS ASSOCIATION
AS AMICUS CURIAE
To address a single issue of broad importance
raised by Appellant, the Georgia Trial Lawyers Association respectfully
requests that the Court consider its Brief as Amicus Curiae.
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STATEMENT OF INTEREST OF AMICUS CURIAE
The Georgia Trial Lawyers Association’s
members typically represent consumers and individuals who have no
trade association or other organization to protect their interests.
When the GTLA appears as Amicus Curiae, its intent is to assist the
Court in its research and in its resolution of important issues when
they arise.
In this appeal, Appellant has raised one argument that causes serious
concerns for the interests of consumers and individuals: that even
when a party has been proven to have violated the Georgia RICO statute,
that party nonetheless should have immunity from the civil liability
under RICO that any other person would face, so long as the offending
party’s misconduct occurs in the offering of insurance. Amicus
Curiae demonstrates below that this argument is contrary to the law.
ARGUMENT AND CITATION OF AUTHORITY
Once a party’s conduct is proven
to have been fraudulent and to have violated the Georgia RICO statute,
that party is not immune to civil liability under RICO or any other
theory, regardless whether that misconduct also violates an insurance
contract or insurance statute. The Legislature has spoken clearly
and has provided for no such immunity or exemption in the RICO statute
or any other applicable statute. Appellant’s argument for such
an exemption seeks not to have the Court apply these statutes but
to re-write them, which only the Legislature can constitutionally
do. Any request for a single-industry exemption from RICO liability
must be addressed to the General Assembly.
I. The Critical Question of Broad Importance.
This Amicus Brief addresses only the second of two
major questions raised in this appeal. The first is whether the evidence
was sufficient to support the jury’s findings that Appellant,
through the fraud and deception alleged, engaged in RICO predicate
offenses and that the additional elements of a RICO violation (e.g.,
"enterprise" and "pattern") were proven. That
question depends on settled legal principles concerning sufficiency
of the evidence, and the proper degree of deference to the verdict
and the factfinder’s resolution of disputed factual issues.
This Brief concerns a second question, of far broader importance:
whether Appellant should escape civil liability under RICO even if
the jury properly found that it violated the RICO statute, simply
because Appellant’s misconduct occurred in the offering of insurance.
Although Appellant phrases this question more benignly in its Enumeration
II (B), this is the exemption that Appellant requests.
II. There is No Basis for the RICO Exemption Appellant Seeks
Well-established legal principles and the plain language
of the statutes involved preclude any such single-industry exemption
or immunity from RICO liability.
A. The Same Conduct Can Violate More Than One Statute or Legal Duty.
It is axiomatic that (1) a party’s misconduct
not only may violate the party’s contractual obligations; but
(2) if deception is used, it may also give rise to tort liability
for fraud and deceit; and (3) if the misconduct violates a criminal
statute, it also gives rise to criminal liability; and (4) if the
misconduct involves certain crimes, a "pattern," and other
elements specified by the Legislature in the RICO statute, it also
gives rise to liability under the RICO statute. The worse the misconduct,
the greater the potential liabilities.
Thus, as a general rule, there is no limitation on the number or
types of theories of liability that may apply to one party’s
misconduct. Appellant must demonstrate that the Legislature has
plainly expressed an intention to establish such a limitation or
exemption before one can apply.
B. RICO Expressly Applies to All Defendants and Provides
Supplemental Remedies to All Remedies Otherwise Available.
In enacting the 1980 RICO statute, the Legislature
chose the broadest language possible to cover all categories of
defendants and transactions. It expressly made the statute apply
to all parties, without limitation or exclusion of any particular
industry or type of transaction. O.C.G.A. § 16-14-4 comprehensively
prohibits "any person" from violating the statute. (Emphasis
supplied). Similarly, the Legislature made RICO’s civil remedies
available to "[a]ny person who is injured by reason of any
violation of Code Section 16-14-4," again with no limitation
or exemption for any industry or type of transaction. O.C.G.A. §
16-14-6 (c) (emphasis supplied).
Further eliminating any doubt that RICO’s civil remedies are
available notwithstanding the existence of any other remedy, the
Legislature plainly said so in section 16-14-9. That section is
titled, "Civil remedies as supplemental and not mutually exclusive."
That provision states: "The application of one civil remedy
under this chapter shall not preclude the application of any other
remedy, civil or criminal, under this chapter or any other provision
of law. Civil remedies under this chapter are supplemental and not
mutually exclusive." Id. (emphasis supplied).
In short, RICO’s express terms exempt no one from being subject
to its civil remedies. RICO is as comprehensive in scope as any
statute the Legislature could have drafted. It plainly covers every
conceivable defendant who has engaged in the specified prohibited
conduct. (section 16-14-2) contains no evidence of any legislative
intent to exclude any industry or transaction from its application.
C. No Insurance Statute Precludes or Avoids Application
of the RICO Statute.
It is impossible to point to any provision of the Georgia Insurance
Code that precludes application of RICO in insurance transactions.
Neither Appellant nor any of the Amici supporting Appellant have pointed
out any such statutory language. They simply assert, ipse dixit, that
O.C.G.A. § 33-4-6 establishes an "exclusive," contractual
remedy. That statute, however, simply does not address whether or
not the Legislature intended to make an exception to the general common
law rule that an injured party may pursue more than one theory of
liability, much less somehow intended to bar application of the later-enacted
RICO statute.
There is no "exclusive," contractual remedy. For decades
before RICO’s enactment, the Georgia courts had consistently
held that other theories of recovery are also available in insurance
cases. See, e.g., United States Fidelity & Guaranty Co. v. Evans,
116 Ga. App. 93, 94, 156 S.E.2d 809, 811 (1967) (tort theory of bad
faith refusal to settle permitted; court rejected insurer’s argument
that suit was in contract and that predecessor to § 33-4-6 provided
sole remedy), aff’d, 223 Ga. 789, 158 S.E.2d 243 (1967); Bankers
Health & Life Insurance Co. v. Plumer, 67 Ga. App. 720, 726-27,
21 S.E.2d 515 (1942) (fraud theory permitted against insurer; court
rejected proposition that predecessor to § 33-4-6 provided sole
remedy); Interstate Life & Accident Co. v. Brewer, 56 Ga. App.
599, 193 S.E. 458 (1937) (tort theory of intentional infliction of
emotional distress permitted). See also cases listed in Appellee’s
Brief at 25.
Since RICO’s passage, this Court has similarly held that RICO’s
remedies are available in the insurance setting. Olukoya v. American
Ass’n of Cab Companies, Inc., 219 Ga. App. 508, 510, 465 S.E.2d
715, 717 (1995), cert. denied (April 12, 1996). The Legislature has
never amended section 33-4-6 or its predecessors in response to these
decisions, or in response to the 1980 RICO statute, to provide any
hint that it intended to create any exemption or immunity from any
theories of liability in insurance cases.
D. The RICO Statute’s Plain Language Controls
and Does Not Exempt Insurance Transactions.
As shown above, the RICO statute’s plain language
dictates that its remedies apply without limitation to all persons,
regardless of the existence of other possible remedies (such as section
33-4-6). See O.C.G.A. §§ 16-14-4, 16-14-6(c). Consequently,
the general rule applies that "the use of plain and unequivocal
language in a legislative enactment obviates any necessity for judicial
construction, and indeed forbids an interpretation of the words employed
by the General Assembly." Board of Trustees v. Christy, 246 Ga.
553, 554, 272 S.E.2d 288, 290 (1980); Gazan v. Heery, 183 Ga. 30 (1),
187 S.E. 371 (1936). See also O.C.G.A. § 1-3-1(b) ("In all
interpretations of statutes, the ordinary signification shall be applied
to all words, except words of art or words connected with a particular
trade or subject matter . . . ."). Moreover, as the RICO statute
was the "last expression of the General Assembly on [this] subject,"
Christy, 246 Ga. at 555, 272 S.E.2d at 290, "the courts are to
be guided by [it]." Id. There is no basis for any further "construction"
of these statutes.
In contrast, adopting Appellant’s proposed immunity for one industry
from RICO liability would violate many established rules of statutory
construction. First, there has been no expression of legislative intent
to create any such exemption that favors one industry to the exclusion
of all others and deprives one class of victims of RICO violations
of the remedies established by the Legislature. See O.C.G.A. §
1-3-1(a) (legislative intent must be followed). Second, express statutory
terms override "implied" ones, and RICO’s express language
creating this remedy negates any "implied" terms in any
other statute purportedly limiting that remedy. See, e.g., Undercofler
v. Capital Automobile Co., 111 Ga. App. 709, 714, 143 S.E.2d 206,
210 (1965) ("Expressum facit cessare tacitum": that which
is expressed makes that which is implied to cease).
Third, implying such an exemption would be in derogation of the common
law rule that a party may pursue more than one theory of recovery.
See, e.g., International Indemnity Co. v. Bakco Acceptance, Inc.,
172 Ga. App. 28, 32, 322 S.E.2d 78, 81 (1984) ("[w]here a law
is capable of two constructions, the construction which conforms with
the common law should be adopted"). Fourth, Appellant’s
argument also would require the Court to force a conflict between
the two statutes, where none exists if the remedies are considered
supplemental. See Sanderson v. State, 217 Ga. App. 51, 52, 456 S.E.2d
667, 668 (1995) ("Statutes should be harmonized whenever possible").
Fifth, reading in such a conflict between the statutes would "result
in unreasonable or absurd consequences not contemplated by the Legislature,"
City of Brunswick v. Atlanta Journal & Constitution, 214 Ga. App.
150, 153, 447 S.E.2d 41, 44 (1994), aff’d, 265 Ga. 413, 457 S.E.2d
176 (1995), by creating a single-industry exemption from RICO liability.
Lawsuits seeking similar, judge-made exemptions for other industries
would follow, perhaps citing the principle that the Equal Protection
Clause is "intended to prevent extraordinary benefits or burdens
from flowing to any one group." Bickford v. Nolen, 240 Ga. 255,
256, 240 S.E.2d 24, 26 (1977). Moreover, criminal RICO defendants
would also welcome any such judge-made restrictions on RICO’s
plain language as precedent to undermine law enforcement’s use
of RICO in criminal cases. Each of these unreasonable results is avoided,
however, if the Court refuses Appellant's request to re-write these
two statutes, a function which under the separation of powers doctrine
is reserved to the Legislature.
Applying RICO’s plain language poses no danger
to insurers who are law-abiding, since RICO applies only to criminal
acts. See Mullen v. Nezhat, 223 Ga. App. 278, 283, 477 S.E.2d 417,
421 (1996) (non-criminal acts not actionable under RICO). Enforcing
RICO’s remedies when all RICO elements are proved furthers the
Legislature’s purpose of protecting the public (all of whom need
insurance) from potentially devastating consequences of intentional
wrongdoing. Appellant’s contrary argument should be rejected.
This _____ day of July, 1997.
/s/ Michael A. Sullivann
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