___________ No. 95-1373

___________ 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

___________ Before FAGG, BOWMAN, HANSEN, Circuit Judges.

___________ BOWMAN, Circuit Judge.

### The Honorable Lyle E. Strom, United State s District Judge for 1 

### the District of Nebraska.
-2- This is o ne of several cases spawned by the failure of Commonwealth Sav ings Company (Commonwealth), a state-chartered industrial loan an d investment company located in Lincoln, Nebraska. The issue presented in thi s appeal is whether the District Court erred when it held tha t 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 a ppellant, Association of Commonwealth Claimants (ACC), is a n uninc orporated association representing creditors and depositors of th e failed i ndustrial thrift. ACC is the assignee of the receiver o f Commonwealth. Appell ees are the executive director and former members of the bo ard of directors of the Nebraska Depository Institution Guarant y Corporation (NDIGC), the financial institutions that employed thos e director s, and the corporate owners of those employers. Two othe r corporate appellees w ere 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 gra vamen 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 Commo nwealth and bilked depositors out of several million dollars. In January 1989, the appellees moved t o dismiss the complaint as time-barred under Fed eral 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 Cou rt granted ACC's motion to stay the proceedings on March 9, 1989. When the related litigation wa s 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 st ay order and dismissed the complaint as time-barred. This appeal followed.

I.

This case has a long and complicated procedural history. It i s necessary to review t he 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

Commonwe alth was declared insolvent in 1983. On November 1, 1983 , the Nebraska Department of Banking and Finance (Department) took possessio n of Commonwealth. On November 8, 1983, the district court for Lancaste r County, Nebraska, pla ced Commonwealth into receivership and appointed the Depa rtment receiver for Commonwealth (Receiver). At the time of it s insolvency, Commonwealth was a member institution of the NDIGC--a statechartered private cor poration 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 $10,00 0 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 Stat e Claims Board (Board) against the State of Nebraska under the State Tor t 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 Co mmonwealth creditors, alleging negligence of the Department in th e regulation and supervision of Commonwealth. The Receiver alleged that the Department's employees

### The Receiver subsequently increased the amount sought t o 2 

### $65.7 million.
-4- caused the creditors' losses by conspiring with officers and directors of the N DIGC to deceive the creditors of Commonwealth. The Receiver the n filed an amended tort claim with the Board on January 10, 1984, for $56.4 milli on. The amended claim was similar to the first tort claim, excep t

2 that it was brought on behalf of a special class of creditors--thos e certificate of indebt edness holders whose accounts were guaranteed by the NDIGC. The purpose o f the amended claim was to recover the $30,000 NDIGC guarantee on behalf of each certificate of indebtedness holder. In th e amende d claim, the Receiver alleged once again that the Department' s
em ployees caused losses by fraudulently conspiring with officers an d directors of the NDIGC. Consequently, even though the two tort claims wer e dire cted primarily at the acts and omissions of the employees of th e Depart ment, many of the Receiver's allegations focused on an allege d conspi racy between employees of the Department and NDIGC officers an d directors--the same N DIGC individuals who are named as defendants in this RICO action. While these state tort actions were proceeding, the NDIG C itself collapsed due to severe under-capitalization of the NDIGC fund. Th e NDIGC met its untimely demise on January 4, 1985 , without having satisfied its guarantee obligations to Commonwealth depositors.

The Boardheard the Receiver's claims on February 13, 1984. In the proposed work-out plan submitted by the Receiver to the Board, the Receive r estimated a shortfall in NDIGC funds of approximately $57 million. At tha t time, the Receiver estimated NDIGC funds were a mere $1.2 million. O n February 29, 1984, the Board found that there was a strong possibility tha t the State of Nebraska may be liable for the Department's actions wit h 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 judicia l 3 

### notice of this case and other closely related cases. Conseq uently, we may properly consider them when reviewing this motion t o dismiss. See Henson v. CSC Cr edit 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).
-5- comp romise and settle the claims. In accordance with state law, th e Receiver submitted the Board's decision to the Lancaster County district court for approval. After a hearing, the district court rejected th e Board's settlement decision for numerous reasons. See In the Matter of th e State Tort Claim of t he 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, th e 3 district court pointed out that the Board had received into evidence two reports prepared by J ohn Miller, the interim director for the Department, and David A. Domina. These reports, commonly known as the Miller-Domina repo rts, were highly critical of Paul Amen, the former state bankin g director. The reports concluded that Mr. Amen did not exclude wea k industrial thrifts like Commonwealth from the ND IGC fund because he feared that such action would expose the fact that the NDIGC had inadequate funds to cover guarantees of the members' accounts, wh ich, in turn, would create
a domino-like series of failures throughout the state's other industrial thrifts.
After rejecting the proposed settlem ent, the district court remanded the m atter to the Board, which issued a second decision recommending a compromise settlement once again. After conducting a hearing, the distric t court also rejected t his second Board decision. See In the Matter of the State Tort Claim of t he 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 th e matter to the Board y et 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 negligen t conduct by the Department in failing to supervise, regulate, and examine Commonwealth, including wrongful and negligent c onduct of the Department's director in admitting Commonwealth as a member of the NDIGC. Nine day s later, the parties sought approval of an $8.5 million compromis e settlement. The state district court subsequently approved this settlemen t agreement.

B. Proceedings Initiated By ACC

ACC was formed in 1985. In 1986, AC C 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 2,60 0 Commonwealth creditors. See Complaint, Weimer v. Amen , No. 86-L-248 (D. Neb. March 24, 1986). An amended complaint was filed in 1987. A shor t time later, ACC also initiated a state law fraud action in Lancaster Count y distri ct court with similar factual allegations against the sam e defendants, but without RICO allegations. The defendants in these cases asserted that ACC lac ked standing to bring suit, claiming that the causes of action belonged to the Receiver. While these standing issues wer e pen ding before the federal and state courts, ACC obtained an assignmen t from the Receiver on December 2, 1988, which purported to assign all of th e Receiver's remaining causes of action to ACC. A CC then filed this present RICO acti on on December 8, 1988, based upon the assignment from th e Receiver; this actionincorporates the identical RICO claim as alleged in the first RICO action, but cures the standing defect by alleging a n assignment of the Receiver's causes of action against the appellees. A ne w state court fraud action also was filed on December 5, 1988, based upon th e assignment. Appellee s 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 fr aud case. Weimer v. Amen , 455 N.W.2d 145, 153 (Neb. 1990)

. Following the lead of the Nebraska Supreme Court, the Distric t 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 affirmedthat ruling on appeal, Weimer v. Amen , No. 87-2331, slip op. at 3 (8th Ci r. Jan. 22, 1992), and certiorari was denied, Weimer

v. Amen , 113 S. Ct. 74 (1992). ACC then sought leave to file a secon d amended complaint to incorporate an assignment from the Receiver to cure the stand ing defect. The District Court denied this motion, and w e affirmed on appeal. Weimer v. Amen , No. 93-1410, slip op. at 3 (8th Cir. Dec. 15, 1993).

Af ter the courts entered final orders in the original suits, th e stays were lifted in the second set of suits. In 1994, the Nebrask a Supreme C ourt held that the second state fraud action was barred b y Nebraska's four-year statute of limitations. ACC v. Moylan , 517 N.W.2d 94 , 101 (Neb. 1994). Sim ilarly, the District Court dismissed the second RICO suit (this action) onJanuary 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). T he District Court reasoned that the Receiver, and ACC by assignment, had discovered more than fou r years before the filing of this suit that the ND IGC 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, ha d discovered or reasona bly could have discovered all of the elements of the RICO cause of action no later than July 1984. ACC timely appeals.

### -8- II.

We review de novo the granting of a motion to dismiss under Rul e 12(b)(6). Dover Elevator Co. v. Arkansas State University , 64 F.3d 442, 44 5 (8th Cir. 1995).

The issue before us is whether ACC's second RICO action was file d within the time allotted by the statue of limitations. In making thi s determination, we are mindful that ACC stands in the shoes of its assignor

- -the Receiver of Comm onwealth. 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 acquire s only rights of assignor). Accordingly, the facts known to the Receive r that are relevant to accrual must be imputed to ACC. This means that ACC
can not maintain this action if the statute of limitations defense woul d have been good against the Receiver. The critical inquiry thus become s what did the Receiver know and when did the Receiver know it.

Civil RICO actions are governed by a four-year statute o f limitations. Agency Holding Corp. v. Malley-Duf f & Assocs. , 483 U.S. 143, 156 (1987). As notedabove, this case was filed on December 8, 1988. To fall within the four-year limitations period, th e RICO claim must not have accrued prior to December 8, 1984. With respect to each independent injur y to the p laintiff, a civil RICO cause of action accrues "as soon as th e plain tiff discovers, or reasonably should have discovered, both th e existence a nd 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 o f Florida, Inc. , 906 F.2d 1546, 1555 (11th Cir. 1990), cert. denied , 500 U.S

. 910 (1991)).

### -9- We conclude that the facts of this case demonstrate that prior t o Decem ber 8, 1984, the Receiver had knowledge of both the existence an d
sou rce of its injury and that the injury was part of a pattern. In th e first state tort clai m filed by the Receiver on December 23, 1983--nearly five years before this suit was filed--the Receiver alleged that stat e employ ees conspired with NDIGC officers and directors to defrau d Commonwealth creditors. Less than a month later, in the amended state tor t claim filed on January 10, 1984, the Receiver alleged once again that stat e employ ees conspired with NDIGC officers and directors to defrau d Com monwealth depositors. Even though the Receiver failed to make NDIG C direct ors defendants in those state tort actions, the Receiver believe d that the NDIGC directors--who are appellees in this case--were part of a conspiracy.

The documentary evidence submitted as part of these state tor t proceedings also shows that the Receiver knew of the NDIGC's anemi c financial condition m ore than four years before this suit was filed. The Receiver attached a w ork-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 showe d that the Board estima ted 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 w ould cause the collapse of the NDIGC.
In light of the facts and circumstances known to the Receiver t hrough the st ate tort proceedings and the corresponding documentation, it i s apparent that the Receiver had knowledge of the existence and source of th e inj ury before December 8, 1984. The Receiver was also aware that th e injury was part of pattern prior to December 8, 1984, because the Receiver refers throughout these documents to the "schemes," "conspiracies," an d "frauds" conducted by the appellees. We agree with the District Court tha t

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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 o f Grani te Falls Bank ." ACC v. Moylan , No. 88-690, slip op. at 9 (D. Neb

. Jan. 5, 1995). Accor dingly, 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 att empts to bring its stale claim within the statute o f limita tions by arguing that Commonwealth depositors suffered a new an d independent injury when the NDIGC collapsed on January 4, 1985. In other words, ACC argues tha t 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 Dis trict 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 th e complaint; it is an e ntirely 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, th e 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 a t 101. Third, the allegations made in the complaint (and throughout th e
course of the twelve years of litigation) run counter to this second injur y argume nt. ACC alleges that Commonwealth creditors and depositors wer e 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 "p ervasive, debilitating, and ultimately fatal impact" on the NDIGC

. Comp laint at ¶ 20. Even though ACC now claims that it was not injure d 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 Janu ary 10, 1984 tort claim specifically addressed the losses of th e depositors' $30,000 account guarantees--the same injury that ACC now claim s did not even occur until nearly a year later when the NDIGC closed. The insolv ency of Commonwealth, and the consequent insolvency of the NDIGC , were at the very heart of the Receiver's allegations in the state tor t claims.

Undeterred, ACC asserts that even if the Receiver knew of the N DIGC's insolvency in January 1984, the limitations period did not begin to ru n until the account guarantees became "uncollectible" on January 4, 1985 , when th e NDIGC finally shut its doors. ACC claims that until the NDIG C 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 appl ied, does not postpone accrual of a RICO claim until the injure d party's damages can b e ascertained with mathematical precision. Instead, the limitations period begins to run even though the injured party, knowin g he has suffe red an injury, may not yet know the full extent of hi s injuries. Cf

. Pace Indus., Inc. v. Three Phoenix Co. , 813 F.2d 234, 240 (9th Cir. 1987) ("[U]ncertain damages, which prevent recovery, ar e distin guishable from uncertain extent of damage, which does not preven t recovery. . . . The question of whether there is a right to recovery is not to be confused with the difficulty in ascert aining the scope or extent of the injury."). ACC has confused knowledge of the existence of it s injury w ith knowledge of the exact amount of its injury. In regard t o injury, all that is required to start the running of the clock on a RICO claimis knowledge of the fact of injury, not knowledge of the precis e quantum of damages.

Fo r the foregoing reasons, the judgment of the District Court i s affirmed.

### -12- A true copy.

Attest:

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