Allstate Ins. Co. v. Benhamou

• Decision Date: 02 June 2016
• Docket Number: CIVIL ACTION NO. 4:15-CV-00367
• Parties: Allstate Insurance Company, et al, Plaintiffs, v. Elias Benhamou, M.D., et al, Defendants.
• Court: U.S. District Court — Southern District of Texas

190 F.Supp.3d 631

Allstate Insurance Company, et al, Plaintiffs,
v.
Elias Benhamou, M.D., et al, Defendants.

CIVIL ACTION NO. 4:15-CV-00367

United States District Court, S.D. Texas, Houston Division.

Signed June 2, 2016

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David Kassabian, Kassabian Doyle et al., Arlington, TX, for Plaintiffs.

David Burke Harberg, Attorney at Law, Keith Walton Lapeze, Lapeze & Johns, PLLC, Kenneth B. Tomlinson, Attorney at Law, Ronald C. Lewis, Marshall & Lewis LLP, Houston, TX, for Defendants.

OPINION AND ORDER

MELINDA HARMON, UNITED STATES DISTRICT JUDGE

Plaintiffs, Allstate Insurance Company, Allstate Indemnity Company, Allstate Property and Casualty Insurance Company, Allstate County Mutual Insurance Company, and Allstate Fire and Casualty Insurance Company (collectively, "Allstate" or "Plaintiffs") bring this action against Defendants, Elias Benhamou, M.D. ("Benhamou"), Mobeen Choudhri, M.D. ("Choudhri"), Greater Houston Interventional Pain Associates, PA (f/n/a Elias Benhamou, M.D., P.A.) ("GHIPA"), and Bayou City Pain Consultants, LLC ("BCPC"), (collectively, "BCPC Defendants"), and Steven Sanderson, CRNA ("Defendant Sanderson" or "Sanderson"), (collectively, "Defendants"), for operating a Racketeer Influenced and Corrupt Organizations Act ("RICO") enterprise in violation of 18 U.S.C. § 1962(c), engaging in a RICO conspiracy in violation of 18 U.S.C. § 1962(d), and for fraud, conspiracy, and unjust enrichment in violation of Texas state law. Pending before the Court are the following motions: BCPC Defendants' Motion to Dismiss (Doc. 11), BCPC Defendants' Motion for a More Definite Statement (Doc. 12), and Defendant Sanderson's Motion to Dismiss and, in the Alternative, Motion for a More Definite Statement (Doc. 13). Having considered the motions, responses, replies,¹ and the applicable law, the Court finds that Defendants' motions should be granted in part and denied in part.

I. BACKGROUND

Plaintiffs filed this action against Defendants on February 10, 2015, seeking to recover "sums fraudulently procured by Defendants from Plaintiffs from 2010 through 2013, by means of bodily injury claims based on medical billings for unnecessary and unreasonable examinations and consultations and surgical injection procedures." Doc. 1 at ¶ 1. On the RICO claims, Plaintiffs allege repeated violations of the federal mail fraud statute, 18 U.S.C. § 1341, as the predicate acts. Id. at ¶ 119. The first count of the complaint alleges mail fraud violations by an association-in-fact enterprise consisting of GHIPA, Benhamou, and Choudhri. Id. at 104–111. The second count alleges mail fraud violations by the GHIPA "center enterprise," with Defendants Benhamou, Choudhri, BCPC, and Sanderson as the "enterprise persons." Id. at ¶¶ 104–115. The third count alleges that Defendants conspired to violate

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18 U.S.C. § 1962(c), in violation of 18 U.S.C. § 1962(d). Id. at ¶¶ 279–280. The fourth, fifth, and sixth counts state claims for common-law fraud, conspiracy, and unjust enrichment. Id. at ¶¶ 281–299.

BCPC Defendants filed a motion to dismiss under Fed. R. Civ. P. 12(b)(6) and 9(b) contending that Allstate failed to adequately plead:

1. Plaintiffs have standing;

2. predicate acts that support a "pattern of racketeering activity," and with particularity on the fraud allegations;

3. the existence of a RICO enterprise or enterprise persons;

4. a RICO conspiracy claim; and

5. common-law fraud or conspiracy with particularity and, therefore, also fail to articulate a claim upon which an unjust-enrichment claim can lie.

Doc. 11 at ¶¶ 15–52.

As an alternative to its 12(b)(6) motion, BCPC Defendants filed a motion for a more definite statement. Doc. 12.

Defendant Sanderson also filed a motion to dismiss pursuant to Rules 12(b)(6) and 9(b) and, in the alternative, a motion for a more definite statement. Doc. 13. Defendant Sanderson alleges that Allstate fails adequately to plead:

1. Plaintiffs have standing;

2. Sanderson participated in the operation or management of the enterprises;

3. Sanderson committed a single violation of the mail fraud statute;

4. Sanderson made any fraudulent misrepresentation;

5. Sanderson "caused use of the mails to further a fraudulent scheme;"

6. Sanderson engaged in a pattern of mail fraud or "the predicate acts are related to each other and that they constitute or threaten long-term criminal activity;"

7. the association-in-fact enterprise had a separate purpose;

8. the association-in-fact enterprise "is an ongoing organization or that it functions as a continuing unit as shown by a hierarchical or consensual decision-making structure,"

9. Sanderson knew of and agreed to the overall objective of the "RICO offense;"

10. the alleged fraud caused legal injury; and

11. common-law fraud or conspiracy with particularity and, therefore, also fail to articulate a claim upon which an unjust-enrichment claim can lie.

Id. at pp. 10–16.

Defendants move the Court to dismiss Plaintiffs' claims pursuant to Federal Rules of Civil Procedure 12(b)(6) for failure to state a claim for which relief may be granted and 9(b) for failure to plead fraud with particularity. As an alternative to their motions to dismiss, Defendants ask this court to order Plaintiffs to provide a more definite statement of their claims under Fed. R. Civ. P. 12(e). Plaintiffs respond to the pending motions by arguing that the pleadings are sufficient to survive the motions to dismiss and seeking leave to file an amended complaint if this Court disagrees.

II. LEGAL STANDARDS

A. Federal Rule of Civil Procedure 12(b)(6)

Federal Rule of Civil Procedure 12(b)(6) allows the court to dismiss a claim that "fails to state a claim upon which relief may be granted." Fed. R. Civ. P. 12(b)(6). In reviewing a motion to dismiss for failure

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to state a claim, the court must accept as true all well-pleaded facts in the complaint, and must view the allegations as a whole in the light most favorable to the non-movant. Scanlan v. Texas A & M Univ. , 343 F.3d 533, 536 (5th Cir.2003). Although Federal Rule of Civil Procedure 8 mandates only that a pleading contain a "short and plain statement of the claim showing that the pleader is entitled to relief," this standard demands more than unadorned accusations, "labels and conclusions," "a formulaic recitation of the elements of a cause of action," or "naked assertion[s]" devoid of "further factual enhancement." Bell Atl. v. Twombly , 550 U.S. 544, 555–57, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Thus, to survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face." Id. at 570, 127 S.Ct. 1955.

Facial plausibility is satisfied when the plaintiff pleads factual content that allows the court to draw a reasonable inference that the defendant is liable for the misconduct alleged. Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 (citing Twombly , 550 U.S. at 555, 127 S.Ct. 1955 ). Although the plausibility standard "is not akin to a ‘probability requirement,’ " there must be "more than a sheer possibility that a defendant has acted unlawfully." Id. (quoting Twombly , 550 U.S. at 556, 127 S.Ct. 1955 ). Thus, "where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not ‘shown’—‘that the pleader is entitled to relief.’ " Id. at 679, 129 S.Ct. 1937 (quoting Rule 8(a)(2) ). Determining whether a complaint states a plausible claim for relief is a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. Id.

B. Federal Rule of Civil Procedure 9(b)

When a complaint alleges claims sounding in fraud, Rule 9(b) requires that plaintiffs plead the underlying factual circumstances with particularity. Fed. R. Civ. P. 9(b). Accordingly, Rule 9(b)'s particularity requirement applies to the pleading of mail fraud as a predicate act in a RICO case. Landry v. Air Line Pilots Ass'n Intern. AFL – CIO , 901 F.2d 404, 430 (5th Cir.1990) ; Williams v. WMX Techs., Inc. , 112 F.3d 175, 177 (5th Cir.1997) ; Tel – Phonic Servs., Inc. v. TBS Int'l, Inc. , 975 F.2d 1134, 1139 (5th Cir.1992). Rule 9(b) states that "[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally." Fed. R. Civ. P. 9(b). Under Rule 9(b), a plaintiff must plead the particulars of time, place, and contents of the false representations, as well as the identity of the person making the misrepresentation and what he obtained thereby. Benchmark Elecs. v. J.M. Huber Corp. , 343 F.3d 719, 724 (5th Cir.2003) (quoting Tel – Phonic Servs. , 975 F.2d at 1139 ). Put simply, plaintiffs must plead the "who, what, when, where, and how" of the alleged fraud. United States ex rel. Williams v. Bell Helicopter Textron Inc. , 417 F.3d 450, 453 (5th Cir. 2005)...