Eqmd, Inc. v. Farm Bureau Gen. Ins. Co. of Mich.
| Decision Date | 05 March 2021 |
| Docket Number | Case No. 19-13698 |
| Parties | EQMD, INC., Plaintiff, v. FARM BUREAU GENERAL INSURANCE COMPANY OF MICHIGAN, FARM BUREAU MUTUAL INSURANCE COMPANY OF MICHIGAN, LIBERTY MUTUAL FIRE INSURANCE COMPANY, LIBERTY MUTUAL INSURANCE CORPORATION, SAFECO INSURANCE COMPANY OF ILLINOIS, STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendants. |
| Court | U.S. District Court — Eastern District of Michigan |
OPINION AND ORDER GRANTING DEFENDANTS' MOTIONS TO DISMISS (ECF NOS. 22, 25, 26), DENYING PLAINTIFF'S MOTION FOR LEAVE TO FILE SUPPLEMENTAL COMPLAINT (ECF No. 57), AND GRANTING STATE FARM'S MOTION FOR LEAVE TO FILE SUPPLEMENTAL AUTHORITY (ECF NO. 66)
This is a civil dispute brought under the federal Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1962 ("RICO") and 42 U.S.C. § 1985(3), and others, with additional state law claims for abuse of process and civil conspiracy. (ECF No. 1). Plaintiff EQMD, Inc. ("EQMD"), a pharmacy management/software company, contends that its services entitle it to personal protection insurance benefits under Michigan's No-Fault Act, Mich. Comp. Laws § 500.3157, and that Defendants, several insurance companies, have conspired to rob EQMD of these benefits by falsely claiming in filings in Michigan state courts that EQMD has been operating as an unlicensed pharmacy, thereby rendering it ineligible to recover benefits under the Act. (ECF No. 1, PageID.5-7).
Before the court are three motions to dismiss filed respectively by State Farm Mutual Automobile Insurance Company ("State Farm") (ECF No. 22); Farm Bureau General Insurance Company of Michigan and Farm Bureau Mutual Insurance Company of Michigan ("Farm Bureau") (ECF No. 25); and Liberty Mutual Fire Insurance Company, Liberty Mutual General Insurance Company, Liberty Mutual Insurance Corporation, and Safeco Insurance Company of Illinois ("Liberty Mutual") (ECF No. 26); and EQMD's motion to supplement the complaint (ECF No. 57). EQMD filed responses to Defendants' motions to dismiss (ECF Nos. 35, 36, 42). State Farm (ECF No. 52), Farm Bureau (ECF No. 51), and Liberty Mutual (ECF No. 53) filed their respective replies. And State Farm (ECF No. 64) and Farm Bureau (ECF No. 65) filed responses to EQMD's motion to supplement. EQMD declined to file a reply. The court held a hearing on the motions on August 26, 2020 and took them under advisement. On December 15, 2020, State Farm also filed Motion for Leave to Submit Supplemental Authority, attaching the case Harbi v. State Farm Mutual Auto. Ins. Co., No. 352139, 2020 WL 7302375 (Mich. Ct. App. Dec. 10, 2020). Liberty Mutual (ECF No. 67) and Farm Bureau (ECF No. 68) joined in support of the motion. EQMD responded (ECF No. 69), and State Farm replied (ECF No. 70).
For the reasons set forth below, the court GRANTS Defendants' motions to dismiss (ECF Nos. 22, 25, 26), DENIES EQMD's motion to supplement the complaint (ECF No. 57), and GRANTS State Farm's motion for leave to file supplemental authority (ECF No. 68).
EQMD is a pharmacy management/software company. (ECF No. 1, PageID.5). The company "works with dispensing practitioners in multiple states (including Michigan) to enable them to more easily manage their orders of medications from properly licensed pharmacies/manufacturers and/or wholesale distributors through the use of EQMD's proprietary software program." (Id.) Once these physician groups "lawfully prescribe, order, receive and dispense medications," EQMD handles the billing and collection for those drugs. (Id. at PageID.6). EQMD underscores that it does not provide medications. (Id.)
According to EQMD, in various No-Fault cases in which claimants submitted bills to Defendant insurers, Defendants filed motions for summary disposition, and in one case a motion in limine, to dismiss EQMD's bills, without notice to EQMD. (Id. at PageID.25-26). As a result, EQMD alleges that its claims have been extinguished without its knowledge, and, even when it has realized that Defendants have filed motions, it has been prohibited from defending itself at oral argument because the claims have already been dismissed. (Id.)
Furthermore, EQMD argues that Defendants have falsely claimed in their motions that EQMD has been operating as an unlicensed pharmacy, thereby rendering it ineligible to recover benefits under the Act. (ECF No. 1, PageID.5-7). In particular, EQMD asserts that Defendants made these false claims after an investigation by the Michigan Department of Licensing and Regulatory Affairs ("LARA"). On April 24, 2018, Farm Bureau filed a complaint with LARA alleging that EQMD was acting as an "unlawful pharmacy service" from 2015 to 2018. (ECF No. 1-1, PageID.42). After an investigation, LARA found on February 21, 2019 that "a violation of the Public Health Code could not be established." (ECF No. 1-3, PageID.158). EQMD argues that Defendants continued to represent in state court that EQMD was unlawfully rendering pharmacy services under Michigan's Public Health Code—even after LARA issued its determination declaring otherwise. (ECF No. 1, PageID.8).
It is because of these alleged misrepresentations that EQMD brings the instant federal lawsuit. (Id. at PageID.4). It filed its complaint on December 16, 2019. The complaint alleges seven Counts: RICO Violation, 18 U.S.C. § 1961, et seq. (Count I); Conspiracy to Interfere with Civil Rights, 42 U.S.C. § 1985(3) (Count II); Declaratory Judgment, 28 U.S.C. § 2201 (Count III); Injunction, Fed. R. Civ. P. 65 (Count IV); Fraud Upon the Court (Count V); Abuse of Process (Count VI); and Civil Conspiracy, Mich. Comp. Laws § 750.157a (Count VII). Defendants seek dismissal of all these claims.
As a preliminary matter, the court will address State Farm's Motion for Leave to Submit Supplemental Authority (ECF No. 66) because it has some effect on the analysis of this case. It provides a recent Michigan Court of Appeals case involving EQMD and itself: Harbi v. State Farm Mutual Auto. Ins. Co., No. 352139, 2020 WL 7302375 (Mich. Ct. App. Dec. 10, 2020). In response, EQMD opposes the motion because (1) the opinion is unpublished and, therefore, not binding; (2) if the court considers outside matters, a motion to dismiss must be construed as a motion for summary judgment; and (3) the court of appeals and the trial court erred by not completely considering relevant testimony in violation of Michigan Rule of Evidence 106. (ECF No. 69). EQMD also notes that the opinion's persuasive authority is further diminished because it intends to appeal that decision, claiming that it "has a fair chance of overturning the Court of Appeals in the Michigan Supreme Court." (Id. at PageID.4158, 4169). Nevertheless, the court finds consideration of the opinion appropriate.
First, while the court agrees with EQMD that Harbi is not binding, this court may still consider the opinion because it may offer persuasive value. See Marku v. Ashcroft, 380 F.3d 982, 988 (6th Cir. 2004) (). Second, while a court cannot, as a general rule, consider matters outside the four corners of the complaint when ruling on a motion to dismiss under Rule 12(b)(6), Clark v. Walt Disney Co., 642 F. Supp. 2d 775, 781 (S.D. Ohio 2009), exceptions to this rule exist. For example, under Rule 10(c), copies of written instruments attached as exhibits to a pleading are a part of that pleading for all purposes; therefore, the court may consider any documents that the plaintiff has attached to the complaint. The court may also consider documents that a defendant attaches to a motion to dismiss if the documents are referred to in the complaint and are central to the plaintiff's claims. Weiner v. Klais & Co., Inc., 108 F.3d 86, 89 (6th Cir. 1997). And, of particular relevance here, the court may consider public records and matters of which a court may take judicial notice. See Jackson v. City of Columbus, 194 F.3d 737, 745 (6th Cir.1999), abrogated on other grounds, Swierkiewicz v. Sorema, 534 U.S. 506 (2002). Thus, the court may take judicial notice of Harbi, a public record, without transforming Defendants' motions to dismiss into ones for summary judgment.
Third, the court fails to see how a possible violation of MRE 106 precludes it from considering Harbi; at best, any such faults may affect the opinion's persuasive value. And finally, while EQMD suggested it was going to appeal Harbi, the court has found no indication of any successful appeal to the Michigan Supreme Court. See Appellate Docket Sheet, Harbi v. State Farm Mutual Auto. Ins. Co., No. 352139, 2020 WL 7302375 (Mich. Ct. App. Dec. 10, 2020), https://courts.michigan.gov/opinions_orders/case_search/Pages/default.aspx?SearchType=1&CaseNumber=352139&CourtType_CaseNumber=2. Rather, EQMD has only filed a motion for reconsideration, which was denied. (Id.) And, according to its response, EQMD had until December 31, 2020 to appeal (ECF No. 69, PageID.4158); since that time has passed, it appears no appeal will be forthcoming. As a result, the motion is GRANTED.
Defendants bring their motions to dismiss under Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction and 12(b)(6) for failure to state a claim upon which relief can be granted.
A Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction "can challenge the sufficiency of the pleading itself (facial attack) or the factual existence of subject matter jurisdiction (factual attack)." Cartwright v. Garner, 751 F.3d 752, 759 (6th Cir. 2014) (citing United States v. Ritchie, 15 F.3d 592, 598 (6th Cir. 1994)). ...
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