Cox v. Marcus & Millichap, Inc.
| Decision Date | 09 May 2022 |
| Docket Number | 8:18-cv-381-WFJ-AAS |
| Parties | THE ESTATE OF SHIRLEY T. COX, by and through BETTY M. SMITH, Personal Representative, JOHN E. BALLEW, by and through JUDITH A. BALLEW, Attorney-in-Fact, and THE ESTATE OF ROGER J. LAPP, by and through MARK F. LAPP, Personal Representative, Plaintiffs, v. MARCUS & MILLICHAP, INCORPORATED, et al., Defendants. |
| Court | U.S. District Court — Middle District of Florida |
Defendants Marcus & Millichap Incorporated (MMI) and Michael Boker (collectively, the defendants) separately move to dismiss Plaintiffs, the Estate of Shirley T. Cox, by and through Betty M. Smith, Personal Representative, John E. Ballew, by and through Judith A. Ballew, Attorney-in-Fact, and the Estate of Roger J. Lapp, by and through Mark J. Lapp Personal Representative's (collectively, the plaintiffs) Amended Complaint. (Docs. 89, 92). The plaintiffs oppose the defendants' motions to dismiss. (Doc. 121). After considering the parties' briefs, oral argument, and supplemental filings it is RECOMMENDED that the defendants' motions to dismiss (Docs. 89, 92) be GRANTED.[1]
I. PROCEDURAL HISTORY
The plaintiffs filed this action in the Circuit Court of the Thirteenth Judicial Circuit, in and for Hillsborough County Florida. (Doc. 1). Mr. Bokor and MMI removed the action to this court under the Class Action Fairness Act of 2005, 28 U.S.C. § 1332. (Docs. 1, 2). MMI and Mr. Bokor then moved to dismiss the plaintiffs' complaint for lack of subject matter jurisdiction and failure to state a claim. (Docs. 13, 17). The plaintiffs then moved to remand this action back to state court. (Doc. 31). The court stayed resolution of the defendants' motions to dismiss pending the court's resolution of the plaintiffs' motion to remand. (Doc. 32).
The court granted the plaintiffs' motion and remanded the action to state court. (Doc. 46). Mr. Bokor appealed the remand order. (Doc. 49). The Eleventh Circuit issued an opinion reversing and remanding the proceedings to this court. (Doc. 67). The plaintiffs moved to file an amended complaint, which the court granted. (Docs. 80, 81). The amended complaint mooted the defendants' pending motions to dismiss. The plaintiffs filed an essentially unchanged amended complaint. (See Docs 1, 82).
MMI and Mr. Bokor now move to dismiss the plaintiffs' amended complaint. (Docs. 89, 92). If the court denies Mr. Boker's motion to dismiss, Mr. Bokor requests that the court strike exhibits D, E1-E3, F, G, H1-H7, and I to the plaintiffs' amended complaint. (Doc. 93). Also, in the event the court denies MMI's motion to dismiss, MMI requests that the court stay the action pending administrative review. (Doc. 90). In response, the plaintiffs requested leave to file a second amended complaint. (Doc. 113). Mr. Bokor and MMI responded in opposition to the plaintiffs' motion to amend. (Docs. 116, 117).
The court denied the plaintiffs' motion for leave to file a second amended complaint and directed the plaintiffs to respond to the defendants' pending motions to dismiss, MMI's motion to stay pending administrative review, and Mr. Boker's motion to strike exhibits to the plaintiffs' amended complaint. (Doc. 118). The plaintiffs responded to the defendants' pending motions. (Docs. 108, 121, 122).
II. BACKGROUND
The plaintiffs were short term residents at three skilled nursing facilities in Florida.[2] The plaintiffs allege the three facilities skilled nursing facilities, and nineteen other short term skilled nursing facilities, had operational structures where one entity owned the land and buildings, a second entity held the operating license, and a third entity managed the facility.[3] (Doc. 82, ¶¶ 64, 66, 76, 84, 91). The plaintiffs allege the twenty-two skilled license facilities improperly obtained licenses from the Agency for Health Care Administration (AHCA) by omitting from their license applications that the facilities were operated by management companies-first Southern SNF Management, Inc. (SNF Management), then, Reliant Health Care Services, Inc. (Reliant) (Id. at ¶¶ 91, 92, 99). The plaintiffs allege they were injured because they paid for services at the “unlicensed” facilitates. (Id. at ¶ 104).
Mr. Bokor owns the management companies that managed the twenty-two skilled nursing facilities, including SNF Management and Reliant. The plaintiffs allege Mr. Bokor submitted the incorrect licensing applications on behalf of the facilities. (Id. at ¶¶ 88-112). MMI acted as the commercial broker that marketed the facilities on behalf of non-party landlords, who were part of a network of affiliated companies owned by Eliezer Scheiner and Teddy Lichtschtein. (Id. at ¶¶ 4, 44, 63-64). The plaintiffs allege MMI marketed the facilities, despite “knowing” that the facilities were not properly licensed. (Id. at ¶¶ 113-27).
The plaintiffs' amended complaint raises these causes of action against the defendants: (1) Aiding and Abetting Breach of Fiduciary Duties against MMI and Mr. Boker (Counts I, II); (2) Violations of Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §1962, et seq., against MMI and Mr. Boker (Count III, IV); and (3) Civil Conspiracy against MMI (Count V). (Doc. 82, pp. 42-60). In response, Mr. Boker and MMI separately move to dismiss the plaintiffs' amended complaint. (Docs. 89, 92).
The parties requested oral argument on the defendants' motions to dismiss. (Docs. 94, 123). Acknowledging oral argument would be beneficial, the undersigned heard oral argument and allowed the parties additional time to provide updated caselaw addressing the issues raised in the motions to dismiss. (Doc. 133). The plaintiffs and Mr. Boker provided supplemental caselaw. (Docs. 134, 135).
III. STANDARD OF REVIEW
Rule 12(b)(6) of the Federal Rules of Civil Procedure authorizes a motion to dismiss an action on the ground that the allegations in the complaint fail to state a claim upon which relief can be granted. “When considering a motion to dismiss, all facts set forth in the plaintiff's complaint ‘are to be accepted as true and the court limits its consideration to the pleadings and exhibits attached thereto.'” Grossman v. Nationsbank, N.A., 225 F.3d 1228, 1231 (11th Cir. 2000) (per curiam) (quoting GSW, Inc. v. Long Cnty., 999 F.2d 1508, 1510 (11th Cir. 1993)).
The court must draw “all reasonable inferences in the plaintiff's favor.” St. George v. Pinellas Cnty., 285 F.3d 1334, 1337 (11th Cir. 2002). However, the court need not accept a plaintiff's legal conclusions. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
Federal Rule of Civil Procedure 12(b)(6) is read in consideration of Federal Rule of Civil Procedure 8(a)(2), which requires “'a short and plain statement of the claim showing that the pleader is entitled to relief,' in order to ‘give the defendant fair notice of what the ... claim is and the grounds upon which it rests.'” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). Although Federal Rule of Civil Procedure 8 does not require detailed factual allegations, it does demand “more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Iqbal, 556 U.S. at 678.
IV. ANALYSIS
Although MMI and Mr. Boker filed separate motions to dismiss, the undersigned will jointly address overlapping issues raised in the motions and response. (See Docs. 89, 92, 121).
Federal courts are courts of limited subject matter jurisdiction. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) (citations omitted). The party invoking subject matter jurisdiction bears the burden of proving Article III standing. Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1547 (2016). To establish standing, “[t]he plaintiff must have (1) suffered an injuryin-fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Id.
Here, the issue is the first element of standing-injury-in-fact. The plaintiffs must clearly and specifically set forth facts showing an injury-in-fact; conclusory allegations will not suffice. Muransky v. Godiva Chocolatier, Inc., 979 F.3d 917, 924-25 (11th Cir. 2020) (citation omitted). To establish injuryin-fact, the plaintiffs must show they suffered “an invasion of a legally protected interest” that is “concrete and particularized” and “actual or imminent, not conjectural or hypothetical.” Spokeo, 136 S.Ct. at 1548 (citation and internal quotation marks omitted). A particularized injury is one that affects the plaintiff “in a personal individual way.” Id. For the injury to be concrete, the injury must be “real, ” meaning that “it must actually exist” and not “abstract.” Id.
The plaintiffs allege “[t]he non-party licensees, operators, managers, consultants, and owners of the [f]acilities have unlawfully charged the [p]laintiffs and similarly situated class members in excess of nine hundred million dollars ($900, 000, 000.00) for the provision of unlicensed skilled nursing services.” (Doc. 82, ¶ 2) (emphasis added). The only particularized, concrete injury the plaintiffs allege is paying for services received at facilities that held a license, but that the plaintiffs claim the license was improperly obtained or legally void.[4] (Id. at ¶ 104).
The plaintiffs' amended complaint asserts that the plaintiffs suffered injuries based on these alleged wrongdoings: (1) that certain non-party license holders “extract[e]d as much profit as possible” out of the facilities (Id. at ¶ 67); (2) that the facilities provided “substandard levels of care” (Id. at ¶ 69); (3) that the facilities improperly filed claims with Medicare and Medicaid (Id. at...
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