Georgia Supreme Court Reverses Lower Court That Said Insurance Contract’s Appraisal Clause Precluded RICO Claims

I saw this post by Steve Brostoff of Insurance Week a few days ago and have been wanting to comment.  I read the case, McGowan v. Progressive Preferred Insurance, and the court’s decision doesn’t look too controversial under Georgia law.  It merely says that the appraisal clause of an auto policy doesn’t preclude fraud and RICO claims against the insurer, State Farm, and the case goes back for determination of those issues.  What is more interesting is trying to figure out the basis for the RICO charges.  Allegedly, insurers conspired with an appraisal service to intentionally undervalue auto damage claims.  But you can’t have a RICO conspiracy without a RICO criminal enterprise, and this has to be a structure that is independent of the other businesses, with its own hierarchy and decision-making ability.  Lots of times, litigants throw RICO charges around like someone flashing a money roll, but the key is whether the $100 bill on the outside of the roll is wrapped around more $100 bills or green paper. 

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