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


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.

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