Opinion ID: 686425
Heading Depth: 2
Heading Rank: 5

Heading: Civil Conspiracy--Count X

Text: 138 Defendant Arsenal Auto Repairs, Inc. was not held liable under any RICO theory. The judgment against Arsenal Auto rests instead, upon the jury's finding that Arsenal Auto was liable for civil conspiracy. The appellants' brief does not challenge this finding against Arsenal Auto on the basis of insufficiency of the evidence. For this reason, the following discussion of civil conspiracy concerns Arhaggelidis's appeal only. 139 Appellant Arhaggelidis challenges the judgment entered against her for civil conspiracy on the ground of insufficiency of the evidence. The plaintiff alleged that Ms. Arhaggelidis conspired with her fellow Rodco/P & B Autobody defendants to defraud Aetna. 140 The nature of a civil conspiracy and the proof required to invoke this type of claim differ significantly from those applying to criminal conspiracies generally and to RICO conspiracies in particular. Under Massachusetts law, either of two possible causes of action may be called civil conspiracy. 141 First. There is precedent supporting a very limited cause of action in Massachusetts for civil conspiracy of a coercive type. See Jurgens v. Abraham, 616 F.Supp. 1381, 1386 (D.Mass.1985). In order to state a claim of [this type of] civil conspiracy, plaintiff must allege that defendants, acting in unison, had some peculiar power of coercion over plaintiff that they would not have had if they had been acting independently. 142 Id. (quotations omitted) (citing Fleming v. Dane, 304 Mass. 46, 22 N.E.2d 609 (1939)). 143 Plaintiff, in paragraph 480 of Count X of its complaint, does allege a circumstance that, if proved, might constitute such a peculiar power of coercion. The allegation is that defendants were collectively able to negate the safeguards that would have prevented any one group of defendants, acting alone from accomplishing a fraud of this type. (App. 609). 144 Despite the fact that the pleading was sufficient to state a claim of this type of civil conspiracy, however, Count X was tried and the jury was ultimately instructed on a second and quite different civil conspiracy cause of action. 145 Second. This second type of civil conspiracy is more akin to a theory of common law joint liability in tort. It is explicitly recognized in Massachusetts law. 146 See Gurney v. Tenney, 197 Mass. 457, 84 N.E. 428, 430 (1908); 147 see also Phelan v. Atlantic Nat'l Bank, 301 Mass. 463, 17 N.E.2d 697, 700 (1938) ([A]verment of conspiracy does not ordinarily change nature of cause of action [sounding in tort] nor add to its legal force.). 148 In the civil context, both elsewhere and in Massachusetts, the word conspiracy is frequently used to denote vicarious liability in tort for concerted action. 149 See W. Page Keeton, Prosser and Keeton on Torts 322 (5th ed. 1984); 150 Restatement (Second) of Torts Sec. 876 cmt. b (1977). 151 That is, the concept is invoked to support liability of one person for a tort committed by another. For liability to attach on this basis, there must be, first, a common design or an agreement, although not necessarily express, between two or more persons to do a wrongful act and, second, proof of some tortious act in furtherance of the agreement. 152 See Restatement (Second) of Torts Sec. 876 cmt. b. 153 Where two or more persons act in concert, each will be jointly and severally liable for the tort. 154 See id.; 155 see also New England Foundation Co. v. Reed, 209 Mass. 556, 95 N.E. 935, 935 (1911) (The gist of a civil action of this sort is not the conspiracy, but the deceit or fraud causing damage to the plaintiff, the combination being charged merely for the purpose of fixing joint liability on the defendants.). According to the Restatement: 156 For harm resulting to a third person from the tortious conduct of another, one is subject to liability if he (a) does a tortious act in concert with the other or pursuant to a common design with him.... 157 Restatement (Second) of Torts, Sec. 876 (1977). 158 The Supreme Judicial Court has implied that the Massachusetts common law of civil conspiracy encompasses liability of this nature, even if the elements of liability are not in all respects identical to those defined in this section of the Restatement. 159 Kyte v. Philip Morris, Inc., 408 Mass. 162, 556 N.E.2d 1025, 1027 (1990) (citing Gurney, 84 N.E. 428, and declining to pause to determine whether the principles of Sec. 876 and the law of the Commonwealth are, in all respects, in complete accord because the parties accepted this section as governing the principles of civil conspiracy in the Commonwealth); 160 see also Gurney, 84 N.E. at 430 (alluding to concert of action theory similar to Sec. 876(a)); 161 Payton v. Abbott Labs, 512 F.Supp. 1031, 1035 (D.Mass.1981) (The concert of action theory in Massachusetts tracks Sec. 876(a) of the Restatement.). 162 The district court, in this case, instructing the jury on civil conspiracy, stated: 163 The essence of conspiracy is that the person agreed with one or more other persons [to commit an unlawful act].... Plus for conspiracy ... somebody has to do something to attempt to make it come about. 164 (App. 4817-18). 165 Although this instruction is not precisely in accord with Restatement Sec. 876, the appellant has not presented any issue before this court regarding the instruction. In any event, she would be precluded from doing so here, not having objected to the instruction in the district court. Fed.R.Civ.P. Rule 51. 166 She did, however, challenge the sufficiency of the evidence by her motion for judgment as a matter of law. We conclude, nevertheless, that we need not determine the precise state of Massachusetts law on concerted action in tort, because under any plausible formulation of Massachusetts law, a jury reasonably could find that Betty Arhaggelidis acted in concert with her husband and fellow Rodco/P & B Autobody defendant to defraud Aetna. 167 The jury, with support in evidence, found that Rodco/P & B Autobody was associated with thirty-seven fraudulent claims that were submitted to Aetna, and that Betty Arhaggelidis was directly involved in six of those claims. 168 From the evidence at trial, the jury reasonably could find also that Ms. Arhaggelidis acted in concert with her husband, the owner of Rodco/P & B Autobody, pursuant to a common design. All six claims with which she was connected involved claimed damage purportedly repaired at Rodco/P & B Autobody. All six claims were supported by appraisals by Mr. Cummings, a codefendant. Her husband, Petros Arhaggelidis, allegedly repaired many of the cars personally. Evidence was received that she represented to Aetna that the repairs had been made. Also, evidence was received of other fraudulent conduct on the part of Mr. Arhaggelidis: he was a claimant on several claims the jury found to be fraudulent, and he made payments to Mr. Cummings totalling over $35,000, which the jury could have inferred to be bribes. From the evidence as a whole, the jury could infer an agreement between Betty Arhaggelidis and her husband, under which they played different roles, but nevertheless acted together with a common design to defraud Aetna.