Statute of Limitations Key to Alleged Insurance Fraud Case

Many laws or actions include a statute of limitation which provides for a certain length of time for claims to be brought. After that time runs out, the claim can no longer be brought in court. The case of Joseph v. Bach & Wasserman illustrates just how important the statute of limitations can be to a case.

The case arose out of an alleged insurance fraud regarding several retail food trailers in Jean Laffite. The Josephs alleged that Wasserman defrauded them by charging them rent from properties he had illegally possessed from them. They also allege that Wasserman was supposed to place them on the insurance policy for the properties in question, but never did despite charging them insurance premiums. Wasserman in turn claimed that the Josephs owed him $375,000 in back payments. In 2004, the Josephs state that they found out that they did not owe Wasserman any back payments and he had charged them exorbitant fees. They filed suit in Orleans Parish in December 2004. In January 2005, the state court found deficiencies in the Josephs’ claim and gave them fifteen days to correct the problems, but the Josephs failed to respond and their state claim was dismissed with prejudice.

In 2011, the Josephs filed a complaint in federal district court alleging violations of the Racketeer Influenced and Corrupt Organizations Act (RICO) and various state law claims. On February 8, 2012, the federal district court granted Wasserman’s motion to dismiss and declined to exercise jurisdiction over the state law claims. This case deals with the Joseph’s appeal of the district court’s decision.

The federal district court dismissed the RICO claim on the basis that the statute of limitations had run out prior to the case being brought in federal district court. Civil RICO claims have a four year statute of limitations that begins running “when the plaintiff discovers, or should have discovered, the injury.” The Fifth Circuit also follows something called the “separate accrual rule” which means that a new RICO claim can be made for each injury the plaintiff discovers.

The Josephs argued that there claim was not barred by the statute of limitations for three different reasons. First, they claimed that Wasserman’s alleged concealment of information from the Josephs was itself a new injury for statute of limitation purposes. This fraudulent concealment would theoretically prevent the statute of limitations from running out. Second, the Josephs argued that Wasserman’s continuing illegal possession of their property was a separate tort that kept the statute of limitations from running out. Lastly, the Josephs argued that they did not find out that Wasserman had failed to place them on the insurance until 2011 when they contacted an insurance company to find out the status of a 2005 lawsuit filed against them by two people injured on the property. They argued that this was the time when they discovered their ongoing injury.

The Fifth Circuit pointed out several salient factors in dismissing both of the Josephs’ arguments. First, the Court points out that the Josephs waited over six years to file their RICO claims. Second, despite their argument that they were still suffering new injuries as of 2012, they alleged no new injuries after March 2004 in either their complaint or their brief to the court. Third, the Josephs were not able to show that they had suffered any injuries from Wasserman’s alleged illegal possession of their property within the statute of limitations. The Court points out that it is the initial illegal taking of property that would constitute an injury under RICO, and not the continuing illegal possession. Furthermore, the Court points out that the Josephs stopped paying Wasserman in 2004. Finally, the Court dismisses the Josephs’ argument regarding their status as insureds by pointing out that they should have been aware of their status back in 2005 when the lawsuit against them was initially filed.

All told, the Court was unpersuaded by the arguments made by the Josephs. The Court found that the Josephs suffered no injuries after 2004, and subsequently the statute of limitations on their RICO claims ran out back in 2008. The Court affirmed the district court’s dismissal of the Josephs’ lawsuit.

In the end this case illustrates the importance of the statute of limitations. If you file a claim after the statute of limitations, your case can be thrown out. Quality representation is vital in making sure that your case is brought to court in a timely fashion and the best arguments are made for your side. The Berniard Law Firm has a reputation for providing top notch representation in a variety of legal matters. If you, or someone you know, needs legal assistance, please contact our firm.