Nationwide Mut. v. Ft. Myers Total Rehab Center

Decision Date13 August 2009
Docket NumberCase No. 2:08-cv-766-FtM-29DNF.
Citation657 F.Supp.2d 1279
PartiesNATIONWIDE MUTUAL COMPANY, Plaintiff, v. FT. MYERS TOTAL REHAB CENTER, INC., Peter Reiter, DC, David Pinto, Defendants.
CourtU.S. District Court — Middle District of Florida

Robert A. Kingsford, Marshall, Dennehey, Warner, Coleman & Goggin, Orlando, FL, for Plaintiff.

Crystal L. Eiffert, Eiffert & Associates, PA, Orlando, FL, for Defendants.

OPINION AND ORDER

JOHN E. STEELE, District Judge.

This matter comes before the Court on defendant Fort Myers Total Rehab Center, Inc.'s Motion to Dismiss (Doc. # 10), defendant David Pinto's Motion to Dismiss (Doc. # 18), and defendant Peter Reiter, D.C.'s Motion to Dismiss (Doc. #31). Plaintiff filed a Memorandum of Law in Opposition (Docs. #16, 22, 32) to each motion. The motions are now ripe for review.

I.

All defendants challenge the subject matter jurisdiction of the court. The Court will address this issue first.

Plaintiff Nationwide Mutual Company (plaintiff or Nationwide) sues Fort Myers Total Rehab Center, Inc. (FMTRC), Peter Reiter, D.C. (Dr. Reiter), and David Pinto (Pinto) (collectively "defendants") for illegal and fraudulent billing in excess of $75,000.00. Diversity of citizenship is not contested, but defendants argue that the amount in controversy, properly computed, does not exceed the $75,000 jurisdictional limit in 28 U.S.C. § 1332. This challenge is based upon the factual allegations in the Complaint, and is therefore a facial attack under FED. R. CIV. P. 12(b)(1). Morrison v. Amway Corp., 323 F.3d 920, 924 n. 5 (11th Cir.2003). As such, the court takes the allegations in the complaint as true in deciding the motion. Id.

In material part, the Complaint (Doc. # 1) alleges that Nationwide issued automobile insurance policies with No-Fault, Personal Injury Protection (PIP) Benefits or Medical Payments Coverage to fifteen individuals identified in Exhibit A (Doc. # 1-2). Each of these fifteen persons became involved in separate automobile accidents on various dates between July 9, 2005 and April 12, 2006. Each of these persons was treated at FMTRC by Dr. Reiter, and claims were submitted to Nationwide by FMTRC pursuant to assignments from the insureds/patients. Nationwide paid a total of $140,658.43 on these fifteen claims, but no individual claim exceeded $13,752.00.

Nationwide alleges that the billing claim forms submitted by defendants were fraudulent. Nationwide alleges that the claims were submitted pursuant to a planned and organized pattern and practice of deception which included recruiting and paying drivers and insured patients to stage vehicle collisions to make fraudulent insurance claims; authorizing bills for treatments that were upcoded, unbundled, not performed, or for unlicensed massage therapy; failing to keep adequate and legible records; permitting unlicensed and improperly trained and supervised staff to perform the treatments; and treating all patients similarly regardless of level of injury to maximize insurance reimbursements. Nationwide further alleges that the payment of benefits for treatment of nonexistent injuries and the unlawful billing was approved and agreed to by Dr. Reiter and Pinto. Nationwide seeks damages in the amount of $140,658.43 for common law fraud (Count I), unjust enrichment (Count II), unfair and deceptive trade practices under FLA. STAT. § 501.201 (Count III), negligent supervision (Count IV), and civil conspiracy (Count V), and seeks declaratory relief (Count VI).

Defendants first argue that jurisdiction is lacking by virtue of 28 U.S.C. § 1359, which provides that "[a] district court shall not have jurisdiction of a civil action in which any party, by assignment or otherwise, has been improperly or collusively made or joined to invoke the jurisdiction of the court." 28 U.S.C. § 1359. While defendants read this statute to relate to a joinder of claims, it clearly relates only to the joinder of parties. None of the insureds has been named as defendants, and therefore none has been "made or joined" as parties in this action at all. There is no suggestion that any of the actual defendants have been improperly joined for jurisdictional purposes. Additionally, there is no indication that any party was not "made or joined" in order to invoke diversity jurisdiction. E.g., Ambrosia Coal & Constr. Co. v. Morales, 482 F.3d 1309, 1313-16 (11th Cir.2007). Therefore, § 1359 does not preclude diversity jurisdiction in this case.

Defendants next argue that FLA. STAT. § 627.736 gives Nationwide a right to individually challenge each PIP claim at issue, and that this statute does not allow for the aggregation of claims. However, federal courts sitting in diversity are required to apply state substantive law and federal procedural law. Erie R.R. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). The manner in which the amount in controversy is calculated and the joinder of claims against an opposing party is a matter of federal procedural law. "Rule 18(a) of the Federal Rules of Civil Procedure grants the plaintiffs complete freedom to join in a single action all claims that they may have against any of the defendants." In re Beef Indus. Antitrust Litig., 600 F.2d 1148, 1168 (5th Cir. 1979).1 A single plaintiff is permitted to aggregate all of his or her claims against a single defendant, regardless of relation to one another, when calculating the jurisdictional minimum. Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 585, 125 S.Ct. 2611, 162 L.Ed.2d 502 (2005) ("This Court has long held that, in determining whether the amount-in-controversy requirement has been satisfied, a single plaintiff may aggregate two or more claims against a single defendant, even if the claims are unrelated." (citation omitted)); Snyder v. Harris, 394 U.S. 332, 335, 89 S.Ct. 1053, 22 L.Ed.2d 319 (1969). Federal Rule of Civil Procedure 18 governs aggregation, and does not require that the aggregated claims be factually related. Wolde-Meskel v. Vocational Instruction Project Cmty. Servs., Inc., 166 F.3d 59, 62 (2d Cir.1999).

Defendants rely heavily on Deajess Med. Imaging, P.C. v. Allstate Ins. Co., 381 F.Supp.2d 307 (S.D.N.Y.2005) for the proposition that aggregation of claims that individually do not meet the amount in controversy is improper. Deajess is the opposite situation from this case. In Deajess, medical providers, as assignees, brought suit against insurers to recover no-fault benefits owed to the insured individuals. The Court found that the medical providers could not aggregate claims that arose from unrelated car accidents and which had been denied for varying reasons under individual policies. Here, the insurer may properly aggregate its claims against a single medical provider.

The Court finds that Nationwide's claims against defendants properly include the aggregated amounts from the fifteen insurance claims. Since the aggregated amount satisfies the jurisdictional requirement, the motions to dismiss for lack of jurisdiction will be denied.

II.

All defendants raise a variety of issues as to the viability of the specific counts. In deciding a Rule 12(b)(6) motion to dismiss, the Court must accept all factual allegations in a complaint as true and take them in the light most favorable to plaintiff. Erickson v. Pardus, 551 U.S. 89, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007); Christopher v. Harbury, 536 U.S. 403, 406, 122 S.Ct. 2179, 153 L.Ed.2d 413 (2002). "To survive dismissal, the complaint's allegations must plausibly suggest that the [plaintiff] has a right to relief, raising that possibility above a speculative level; if they do not, the plaintiff's complaint should be dismissed." James River Ins. Co. v. Ground Down Eng'g, Inc., 540 F.3d 1270, 1274 (11th Cir.2008) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). The former rule—that "[a] complaint should be dismissed only if it appears beyond doubt that the plaintiffs can prove no set of facts which would entitle them to relief," La Grasta v. First Union Sec., Inc., 358 F.3d 840, 845 (11th Cir.2004)— has been retired by Twombly. James River Ins. Co., 540 F.3d at 1274. Thus, the Court engages in a two-step approach: "When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Ashcroft v. Iqbal, ___ U.S. ___, 129 S.Ct. 1937, 1950, 173 L.Ed.2d 868 (2009). Additionally, dismissal is also warranted under FED. R. CIV. P. 12(b)(6) if, assuming the truth of the factual allegations of plaintiff's complaint, there is a dispositive legal issue which precludes relief. Neitzke v. Williams, 490 U.S. 319, 326, 109 S.Ct. 1827, 104 L.Ed.2d 338 (1989); Brown v. Crawford County, 960 F.2d 1002, 1009-10 (11th Cir.1992).

A. Statutory Preemption

All defendants argue that plaintiff's causes of action for common law fraud, unjust enrichment, and negligent supervision are preempted by Florida Statute Section 627.736(12), which provides:

An insurer shall have a cause of action against any person convicted of, or who, regardless of adjudication of guilt, pleads guilty or nolo contendere to insurance fraud under s. 817.234, patient brokering under s. 817.505, or kickbacks under s. 456.054, associated with a claim for personal injury protection benefits in accordance with this section. An insurer prevailing in an action brought under this subsection may recover compensatory, consequential, and punitive damages subject to the requirements and limitations of part II of chapter 768, and attorney's fees and costs incurred in litigating a cause of action against any person convicted of, or who, regardless of adjudication of guilt, pleads guilty or nolo contendere to insurance fraud under s. 817.234, patient brokering under s....

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