___________

No. 95-1373

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Association of Commonwealth *

Claimants, an unincorporated *

association, *

*

Appellant, *

*

v. *

*

James Moylan; Alfred H. Adams; *

Douglas G. Alford; Darrell D. *

Anderson; Denis K. Appelbee; *

Roy L. Ashcraft; William C. *

Beckman; Kenlon L. Hake; * Appeal from the United States

Allan C. Roemmich; Timothy R. * District Court for the 

Spoeneman; Kenneth A. Wellman; * District of Nebraska.

Dennis O'Neal; Commerce Savings,*

Columbus, Inc.; Commerce *

Savings, Lincoln, Inc.; *

Commerce Savings, Scottsbluff, *

Inc.; Commerce Group, Inc.; *

First National Bank, of Grand *

Island, Inc.; Provident *

Federal Savings Bank, Inc.; *

Union National Bank & Trust *

Company, Inc.; First National *

Bank, of Omaha, Inc., *

*

Appellees. *

___________

 Submitted: October 16, 1995

 Filed: December 6, 1995

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Before FAGG, BOWMAN, HANSEN, Circuit Judges.

___________

BOWMAN, Circuit Judge.
 The Honorable Lyle E. Strom, United States District Judge for 1

the District of Nebraska.

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This is one of several cases spawned by the failure of Commonwealth

Savings Company (Commonwealth), a state-chartered industrial loan and

investment company located in Lincoln, Nebraska. The issue presented in

this appeal is whether the District Court erred when it held that

1

appellant's Racketeer Influence and Corrupt Organization (RICO) claim, 18

U.S.C. §§ 1961-1968 (1988), is barred by the statute of limitations. We

affirm the judgment of the District Court.

The appellant, Association of Commonwealth Claimants (ACC), is an

unincorporated association representing creditors and depositors of the

failed industrial thrift. ACC is the assignee of the receiver of

Commonwealth. Appellees are the executive director and former members of

the board of directors of the Nebraska Depository Institution Guaranty

Corporation (NDIGC), the financial institutions that employed those

directors, and the corporate owners of those employers. Two other

corporate appellees were not employers of NDIGC directors but are alleged

to be co-conspirators of the other appellees. 

ACC filed this RICO action against the appellees on December 8, 1988.

The gravamen of the complaint is that the appellees used the NDIGC as a

RICO "enterprise" to engage in fraudulent activity that ultimately led to

the collapse of Commonwealth and bilked depositors out of several million

dollars. In January 1989, the appellees moved to dismiss the complaint as

time-barred under Federal Rule of Civil Procedure 12(b)(6), but ACC filed

a motion to stay the action while related litigation between the parties

was pending before this Court. The District Court granted ACC's motion to

stay the proceedings on March 9, 1989. When the related litigation was

resolved, the appellees moved the court to lift the stay order and renewed

their motion to dismiss
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the complaint. The District Court lifted its stay order and dismissed the

complaint as time-barred. This appeal followed. 

I.

This case has a long and complicated procedural history. It is

necessary to review the preceding twelve years of litigation in this case

because the accrual of the statute of limitations requires this Court to

determine what the parties knew and when they knew it. 

A. Proceedings Initiated By The Receiver

Commonwealth was declared insolvent in 1983. On November 1, 1983,

the Nebraska Department of Banking and Finance (Department) took possession

of Commonwealth. On November 8, 1983, the district court for Lancaster

County, Nebraska, placed Commonwealth into receivership and appointed the

Department receiver for Commonwealth (Receiver). At the time of its

insolvency, Commonwealth was a member institution of the NDIGC--a statechartered private corporation modeled after the Federal Deposit Insurance

Corporation to guarantee deposits and shareholdings of member institutions.

See Nebraska Depository Institution and Guaranty Corporation Act, Neb. Rev.

Stat. §§ 21-17,127 to 21-17,145 (1991). The NDIGC originally guaranteed

deposits up to $10,000 and subsequently increased that amount to $30,000.

The $30,000 guarantee was in effect at the time Commonwealth was declared

insolvent. 

On December 23, 1983, the Receiver filed an action with the State

Claims Board (Board) against the State of Nebraska under the State Tort

Claims Act, Neb. Rev. Stat. §§ 81-8,209 to 81-8,239.06 (1981 & Supp. 1983),

on behalf of all creditors to recover $56 million in losses sustained by

Commonwealth creditors, alleging negligence of the Department in the

regulation and supervision of Commonwealth. The Receiver alleged that the

Department's employees
 The Receiver subsequently increased the amount sought to

2

$65.7 million. 

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caused the creditors' losses by conspiring with officers and directors of

the NDIGC to deceive the creditors of Commonwealth. The Receiver then

filed an amended tort claim with the Board on January 10, 1984, for $56.4

million. The amended claim was similar to the first tort claim, except

2

that it was brought on behalf of a special class of creditors--those

certificate of indebtedness holders whose accounts were guaranteed by the

NDIGC. The purpose of the amended claim was to recover the $30,000 NDIGC

guarantee on behalf of each certificate of indebtedness holder. In the

amended claim, the Receiver alleged once again that the Department's

employees caused losses by fraudulently conspiring with officers and

directors of the NDIGC. Consequently, even though the two tort claims were

directed primarily at the acts and omissions of the employees of the

Department, many of the Receiver's allegations focused on an alleged

conspiracy between employees of the Department and NDIGC officers and

directors--the same NDIGC individuals who are named as defendants in this

RICO action. While these state tort actions were proceeding, the NDIGC

itself collapsed due to severe under-capitalization of the NDIGC fund. The

NDIGC met its untimely demise on January 4, 1985, without having satisfied

its guarantee obligations to Commonwealth depositors. 

The Board heard the Receiver's claims on February 13, 1984. In the

proposed work-out plan submitted by the Receiver to the Board, the Receiver

estimated a shortfall in NDIGC funds of approximately $57 million. At that

time, the Receiver estimated NDIGC funds were a mere $1.2 million. On

February 29, 1984, the Board found that there was a strong possibility that

the State of Nebraska may be liable for the Department's actions with

respect to the Nebraska Depository Institution Guaranty Corporation Act.

Based on its findings, the Board decided that the state should
 At the request of both sides, Judge Strom took judicial

3

notice of this case and other closely related cases. Consequently,

we may properly consider them when reviewing this motion to

dismiss. See Henson v. CSC Credit Services, 29 F.3d 280, 284 (7th

Cir. 1994) (holding public documents filed in earlier state court

case were properly considered when deciding motion to dismiss for

failure to state claim).

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compromise and settle the claims. In accordance with state law, the

Receiver submitted the Board's decision to the Lancaster County district

court for approval. After a hearing, the district court rejected the

Board's settlement decision for numerous reasons. See In the Matter of the

State Tort Claim of the Department of Banking and Finance of the State of

Nebraska, Receiver of Commonwealth Savings Co., Docket 380, Page 10, Order

at 30 (Neb. Dist. Ct. March 16, 1984). In its thirty page opinion, the

3

district court pointed out that the Board had received into evidence two

reports prepared by John Miller, the interim director for the Department,

and David A. Domina. These reports, commonly known as the Miller-Domina

reports, were highly critical of Paul Amen, the former state banking

director. The reports concluded that Mr. Amen did not exclude weak

industrial thrifts like Commonwealth from the NDIGC fund because he feared

that such action would expose the fact that the NDIGC had inadequate funds

to cover guarantees of the members' accounts, which, in turn, would create

a domino-like series of failures throughout the state's other industrial

thrifts.

After rejecting the proposed settlement, the district court remanded

the matter to the Board, which issued a second decision recommending a

compromise settlement once again. After conducting a hearing, the district

court also rejected this second Board decision. See In the Matter of the

State Tort Claim of the Department of Banking and Finance of the State of

Nebraska, Receiver of Commonwealth Savings Co., Docket 380, Page 10, Order

at 46 (Neb. Dist. Ct. July 27, 1984). The district court then remanded the

matter to the Board yet again to allow the Receiver to withdraw the claim

and to file suit on the claim. The Receiver
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filed suit against the State of Nebraska on March 20, 1985, in Lancaster

County district court, alleging numerous acts of wrongful and negligent

conduct by the Department in failing to supervise, regulate, and examine

Commonwealth, including wrongful and negligent conduct of the Department's

director in admitting Commonwealth as a member of the NDIGC. Nine days

later, the parties sought approval of an $8.5 million compromise

settlement. The state district court subsequently approved this settlement

agreement.

 

B. Proceedings Initiated By ACC

ACC was formed in 1985. In 1986, ACC filed its first RICO action in

federal court against the former director of the state banking department

and others as assignee of the causes of action of more than 2,600

Commonwealth creditors. See Complaint, Weimer v. Amen, No. 86-L-248 (D.

Neb. March 24, 1986). An amended complaint was filed in 1987. A short

time later, ACC also initiated a state law fraud action in Lancaster County

district court with similar factual allegations against the same

defendants, but without RICO allegations. The defendants in these cases

asserted that ACC lacked standing to bring suit, claiming that the causes

of action belonged to the Receiver. While these standing issues were

pending before the federal and state courts, ACC obtained an assignment

from the Receiver on December 2, 1988, which purported to assign all of the

Receiver's remaining causes of action to ACC. ACC then filed this present

RICO action on December 8, 1988, based upon the assignment from the

Receiver; this action incorporates the identical RICO claim as alleged in

the first RICO action, but cures the standing defect by alleging an

assignment of the Receiver's causes of action against the appellees. A new

state court fraud action also was filed on December 5, 1988, based upon the

assignment. Appellees filed joint motions to dismiss the new suits, but,

at the request of ACC, these
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new actions were stayed pending final decisions in the original suits. 

In 1990, the Nebraska Supreme Court held that ACC lacked standing in

the original state fraud case. Weimer v. Amen, 455 N.W.2d 145, 153 (Neb.

1990). Following the lead of the Nebraska Supreme Court, the District

Court also held that ACC lacked standing in the original RICO action.

Weimer v. Amen, No. 86-L-248, slip op. at 7 (D. Neb. Aug. 24, 1990). We

subsequently affirmed that ruling on appeal, Weimer v. Amen, No. 87-2331,

slip op. at 3 (8th Cir. Jan. 22, 1992), and certiorari was denied, Weimer

v. Amen, 113 S. Ct. 74 (1992). ACC then sought leave to file a second

amended complaint to incorporate an assignment from the Receiver to cure

the standing defect. The District Court denied this motion, and we

affirmed on appeal. Weimer v. Amen, No. 93-1410, slip op. at 3 (8th Cir.

Dec. 15, 1993).

After the courts entered final orders in the original suits, the

stays were lifted in the second set of suits. In 1994, the Nebraska

Supreme Court held that the second state fraud action was barred by

Nebraska's four-year statute of limitations. ACC v. Moylan, 517 N.W.2d 94,

101 (Neb. 1994). Similarly, the District Court dismissed the second RICO

suit (this action) on January 5, 1995, as time-barred under the four-year

limitations period applicable to civil RICO actions. ACC v. Moylan, No.

88-690, slip op. at 9 (D. Neb. Jan. 5, 1995). The District Court reasoned

that the Receiver, and ACC by assignment, had discovered more than four

years before the filing of this suit that the NDIGC was without sufficient

funds to make good on its account guarantees. Relying on the state tort

claims filed by the Receiver in December 1983 and later in January 1984,

the District Court determined that the Receiver, and ACC by assignment, had

discovered or reasonably could have discovered all of the elements of the

RICO cause of action no later than July 1984. ACC timely appeals. 
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II.

We review de novo the granting of a motion to dismiss under Rule

12(b)(6). Dover Elevator Co. v. Arkansas State University, 64 F.3d 442, 445

(8th Cir. 1995).

The issue before us is whether ACC's second RICO action was filed

within the time allotted by the statue of limitations. In making this

determination, we are mindful that ACC stands in the shoes of its assignor-

-the Receiver of Commonwealth. The rights ACC acquired by assignment are

no greater than those possessed by the Receiver. See State Securities Co.

v. Daringer, 293 N.W.2d 102, 105 (Neb. 1980) (holding assignee acquires

only rights of assignor). Accordingly, the facts known to the Receiver

that are relevant to accrual must be imputed to ACC. This means that ACC

cannot maintain this action if the statute of limitations defense would

have been good against the Receiver. The critical inquiry thus becomes

what did the Receiver know and when did the Receiver know it.

Civil RICO actions are governed by a four-year statute of

limitations. Agency Holding Corp. v. Malley-Duff & Assocs., 483 U.S. 143,

156 (1987). As noted above, this case was filed on December 8, 1988. To

fall within the four-year limitations period, the RICO claim must not have

accrued prior to December 8, 1984. With respect to each independent injury

to the plaintiff, a civil RICO cause of action accrues "as soon as the

plaintiff discovers, or reasonably should have discovered, both the

existence and source of his injury and that the injury is part of a

pattern." Granite Falls Bank v. Henrikson, 924 F.2d 150, 154 (8th Cir.

1991) (quoting Bivens Gardens Office Bldg., Inc. v. Barnett Bank of

Florida, Inc., 906 F.2d 1546, 1555 (11th Cir. 1990), cert. denied, 500 U.S.

910 (1991)). 
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We conclude that the facts of this case demonstrate that prior to

December 8, 1984, the Receiver had knowledge of both the existence and

source of its injury and that the injury was part of a pattern. In the

first state tort claim filed by the Receiver on December 23, 1983--nearly

five years before this suit was filed--the Receiver alleged that state

employees conspired with NDIGC officers and directors to defraud

Commonwealth creditors. Less than a month later, in the amended state tort

claim filed on January 10, 1984, the Receiver alleged once again that state

employees conspired with NDIGC officers and directors to defraud

Commonwealth depositors. Even though the Receiver failed to make NDIGC

directors defendants in those state tort actions, the Receiver believed

that the NDIGC directors--who are appellees in this case--were part of a

conspiracy. 

The documentary evidence submitted as part of these state tort

proceedings also shows that the Receiver knew of the NDIGC's anemic

financial condition more than four years before this suit was filed. The

Receiver attached a work-out plan as part of these state tort proceedings

that showed a shortfall in the NDIGC fund of approximately $57 million.

After the state district court rejected this plan, a second petition showed

that the Board estimated a NDIGC shortfall in the range of $15 million to

$45 million. Finally, the Miller-Domina reports showed that the failure

of a major industrial thrift like Commonwealth would cause the collapse of

the NDIGC. 

In light of the facts and circumstances known to the Receiver through

the state tort proceedings and the corresponding documentation, it is

apparent that the Receiver had knowledge of the existence and source of the

injury before December 8, 1984. The Receiver was also aware that the

injury was part of pattern prior to December 8, 1984, because the Receiver

refers throughout these documents to the "schemes," "conspiracies," and

"frauds" conducted by the appellees. We agree with the District Court that
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these "statements demonstrate that the Receiver was, at a minimum, aware

of a vague pattern sufficient to satisfy the accrual requirements of

Granite Falls Bank." ACC v. Moylan, No. 88-690, slip op. at 9 (D. Neb.

Jan. 5, 1995). Accordingly, the Receiver, and ACC by assignment, knew of

the existence, source, and pattern of injury more than four years before

this suit was filed. The action is therefore time-barred. 

ACC attempts to bring its stale claim within the statute of

limitations by arguing that Commonwealth depositors suffered a new and

independent injury when the NDIGC collapsed on January 4, 1985. In other

words, ACC argues that the collapse of NDIGC is a second injury for which

the statute of limitations begins to run anew because, under Granite Falls,

each independent RICO injury accrues separately. ACC complains that the

District Court failed to realize that there were two economic injuries.

This novel argument is fatally flawed for three reasons. 

First, the second injury theory is not alleged anywhere in the

complaint; it is an entirely new contention. Second, even if this theory

were adequately pleaded and even if the NDIGC's inability to satisfy the

guarantees may be considered a distinct and separate injury with respect

to the depositors, the Nebraska Supreme Court has already determined that

any claim arising from such a second injury accrued on November 8, 1983,

when Commonwealth was declared insolvent. ACC v. Moylan, 517 N.W.2d at

101. Third, the allegations made in the complaint (and throughout the

course of the twelve years of litigation) run counter to this second injury

argument. ACC alleges that Commonwealth creditors and depositors were

damaged by predicate acts, all of which occurred prior to November 1, 1983.

These same actions are also alleged in the complaint to have had a

"pervasive, debilitating, and ultimately fatal impact" on the NDIGC.

Complaint at ¶ 20. Even though ACC now claims that it was not injured

until January 4, 1985, these same injuries formed the basis of the state

tort claims filed by
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the Receiver in December 1983 and January 1984. Indeed, the Receiver's

January 10, 1984 tort claim specifically addressed the losses of the

depositors' $30,000 account guarantees--the same injury that ACC now claims

did not even occur until nearly a year later when the NDIGC closed. The

insolvency of Commonwealth, and the consequent insolvency of the NDIGC,

were at the very heart of the Receiver's allegations in the state tort

claims. 

Undeterred, ACC asserts that even if the Receiver knew of the NDIGC's

insolvency in January 1984, the limitations period did not begin to run

until the account guarantees became "uncollectible" on January 4, 1985,

when the NDIGC finally shut its doors. ACC claims that until the NDIGC

actually closed, there was a possibility that some fractional portion of

the depositors' guarantees might be honored. This argument reflects a

misunderstanding of the governing law. The Granite Falls test, properly

applied, does not postpone accrual of a RICO claim until the injured

party's damages can be ascertained with mathematical precision. Instead,

the limitations period begins to run even though the injured party, knowing

he has suffered an injury, may not yet know the full extent of his

injuries. Cf. Pace Indus., Inc. v. Three Phoenix Co., 813 F.2d 234, 240

(9th Cir. 1987) ("[U]ncertain damages, which prevent recovery, are

distinguishable from uncertain extent of damage, which does not prevent

recovery. . . . The question of whether there is a right to recovery is

not to be confused with the difficulty in ascertaining the scope or extent

of the injury."). ACC has confused knowledge of the existence of its

injury with knowledge of the exact amount of its injury. In regard to

injury, all that is required to start the running of the clock on a RICO

claim is knowledge of the fact of injury, not knowledge of the precise

quantum of damages.

For the foregoing reasons, the judgment of the District Court is

affirmed.
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A true copy.

Attest:

CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.