Oudeh v. Goshen Med. Ctr.

• Decision Date: 29 December 2022
• Docket Number: 5:22-CV-193-D
• Parties: IBRAHIM OUDEH, and TERESA SLOAN-OUDEH, Plaintiffs, v. GOSHEN MEDICAL CENTER, INC., Defendant
• Court: U.S. District Court — Eastern District of North Carolina

IBRAHIM OUDEH, and TERESA SLOAN-OUDEH, Plaintiffs, v. GOSHEN MEDICAL CENTER, INC., Defendant

No. 5:22-CV-193-D

United States District Court, E.D. North Carolina, Western Division

December 29, 2022

ORDER

JAMES C. DEVER III United States District Judge

On April 7, 2022, Ibrahim Oudeh and Teresa Sloan-Oudeh (collectively, “plaintiffs”) filed a complaint in Cumberland Country Superior Court against Goshen Medical Center, Inc. (“Goshen” or “defendant”) alleging breach of contract and other state law claims concerning Goshen's alleged failure to perform in accordance with a $1,400,000 promissory note related to the sale of plaintiffs' medical practice to Goshen. See ID.E. 1-1]. On April 22, 2022, Goshen interpleaded North Carolina and the United States (collectively, “governments”). See [D.E 1-2] 12-18. On May 16,2022, the United States removed the action to this court. See [D.E. 1] 3-6.

On June 24, 2022, plaintiffs moved to dismiss the governments and remand the action to Cumberland County Superior Court. See [D.E. 18]. On December 8, 2022, the court denied plaintiffs' motion to remand [D.E. 27].

On August 16, 2022, Goshen moved to dismiss plaintiffs' complaint for failure to state a claim upon which relief can be granted, or in the alternative, moved for judgment on the pleadings [D.E. 23] and filed a memorandum in support [D.E 24]. On September 6, 2022, plaintiffs responded in opposition (D.E. 25]. On September 20, 2022, Goshen replied [D.E. 26]. As explained below the court grants Goshen's motion to dismiss and dismisses with prejudice plaintiffs' complaint based on claim preclusion and judicial estoppel arising from 2018 litigation involving plaintiff; and Goshen.

I.

In 2022, plaintiffs filed a second complaint concerning the same promissory note that was the subject of litigation in this court in 2018. See [D.E. 1-1], In 2018, plaintiffs filed an unsuccessful complaint alleging breach of contract concerning the promissory note that Goshen issued as part of plaintiffs' medical practice. See Oudeh v. Goshen Med. Ctr., Inc., 5:18-CV-576 (E.D. N.C. Dec. 4, 2018) (“2018 Action”), [D.E. 1].

Before the 2018 Action, the governments sued plaintiffs on January 12, 2018, for violating the False Claims Act (“FCA”), and the court authorized the issuance of prejudgement writs of garnishment prohibiting Goshen from making any payments to plaintiffs regarding the sale of plaintiffs' medical practice. See United States v. Oudeh et al., 5:18-CV-9 (E.D. N.C. Jan. 12, 2018) (“2018 FCA Action”), [D.E. 24]. In light of the writs of garnishment, Goshen interpleaded the governments into the 2018 Action, and the governments removed the 2018 Action to this court on December 4, 2018. See 2018 Action, [D.E. 1].

On April 28, 2020, plaintiffs and the governments reached a settlement agreement on the FCA claims (“FCA Settlement Agreement''). See 2018 FCA Action, [D.E. 126]. Pursuant to the FCA Settlement Agreement, plaintiffs relinquished their interest in $l,471,312 derived from the cash payments due under the Goshen purchase agreement. Id.; see also id., [D.E. 123-25]. Following the parties' joint submission informing the court of the FCA Settlement Agreement, the court dismissed with prejudice plaintiff;' 2018 Action as moot. See 2018 Action, [D.E. 44].

Plaintiffs moved to reconsider the dismissal order, challenging the court's dismissal of the action with prejudice, and filed a memorandum in support. See id., [D.E. 45-46]. On August 26, 2020, Goshen responded in opposition. See id., [D E. 47], On October 15, 2020, the court adopted Goshen's position in its response and denied plaintiffs' motion for reconsideration. See id., [D.E. 50]. Plaintiffs appealed. See id., [D.E. 51-53]

On March 22, 2022, the United States Court of Appeals for the Fourth Circuit affirmed the court's order dismissing the 2018 Action as moot. See Oudeh v. Goshen Med. Ctr. Inc., No. 20-2238,2022 WL 683361, at *1 (4th Cir. Mar. 8, 2022) (per curiam) (unpublished). The Fourth Circuit, however, modified the court's judgment to be a dismissal without prejudice because the court lacked subject-matter jurisdiction following the FCA Settlement Agreement and the order implementing the FCA Settlement Agreement. See id.

II.

A motion to dismiss under Rule 12(b)(6) tests the complaint's legal and factual sufficiency. See Ashcroft v. Iqbal, 556 U.S. 662, 677-80 (2009); Bell Atl, Corp, v. Twombly, 550 U.S. 544, 554-63 (2007); Coleman v. Md. Court of Appeals, 626 F.3d 187,190 (4th Cir. 2010), affd, 566 U.S. 30 (2012); Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008). To withstand a Rule 12(b)(6) motion, a pleading “must contain sufficient factual matter, accepted as true, to state a claim . to relief that is plausible on its face.” Iqbal, 556 U.S. at 678 (quotation omitted); see Twombly, 550 U.S. at 570; Giarratano, 521 F.3d at 302. In considering the motion, the court must construe the facts and reasonable inferences “in the light most favorable to the [nonmoving party].” Massey v, Ojaniit, 759 F.3d 343, 352 (4th Cir. 2014) (quotation omitted); see Clatterbuck v. City of Charlottesville, 708 F.3d 549,557 (4th Cir. 2013), abrogated on other grounds by Reed v. Town of Gilbert, 576 U.S. 155 (2015). A court need not accept as true a complaint's legal conclusions, “unwarranted inferences, unreasonable conclusions, or arguments.” Giarratano, 521 F.3d at 302 (quotation omitted); see Iqbal, 556 U.S. at 678-79. Rather, a plaintiff's factual allegations must “nudge[ ] [his] claims,” Twombly, 550 U.S. at 570, beyond the realm of “mere possibility” into “plausibility.” Iqbal, 556 U.S. at 678-79.

When evaluating a motion to dismiss, a court considers the pleadings and any materials “attached or incorporated into the complaint.” E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435,448 (4th Cir. 2011); see Fed.R.Civ.P. 10(c); Goines v. Valley Cmty. Servs, Bd., 822 F.3d 159,166 (4th Cir. 2016); Thompson v. Greene, 427 F.3d 263,268 (4th Cir. 2005). A court may also consider a document submitted by a moving party if it is “integral to the complaint and there is no dispute about the document's authenticity.” Goines, 822 F.3d at 166. Additionally, a court may take judicial notice of public records without converting a motion to dismiss into a motion for summary judgment. See, e.g., Fed.R.Evid. 201; Tellabs, Inc, v. Makor Issues & Rts., Ltd., 551 U.S. 308,322 (2007); Philips v. Pitt Cnty, Mem'l Hosp., 572 F.3d 176,180 (4th Cir. 2009).

Goshen asks the court to take judicial notice of the filings in the 2018 Action and the 2018 FCA Action. See [D.E. 24] 2. When evaluating a motion to dismiss, a court may take judicial notice of public records, including court filings. See Goldfarb v. Mayor of Balt., 791 F.3d 500,508 (4th Cir. 2015); Witthohn v. Fed. Ins. Co., 164 Fed.Appx. 395, 397 (4th Cir. 2006) (per curiam) (unpublished). Plaintiffs do not object to the court taking judicial notice of these filings. See [D.E. 25] 8. Thus, the court takes judicial notice of the filings in the 2018 Action and the 2018 FCA Action.

A

Goshen seeks dismissal on two grounds. First, Goshen argues that this court's dismissal of the 2018 Action precludes plaintiffs from bringing this action. See [D.E. 24] 9-13. Second, Goshen contends that plaintiffs' filings in the 2018 FCA Action, including the FCA Settlement Agreement, contain judicial admissions that bind plaintiffs in this action and bar plaintiffs from bringing this action. See [D.E. 24] 12.

Plaintiffs respond that issue preclusion does not bar their current action because plaintiffs' breach of contract claims were “expressly carved out as permissible by [this court's] Order” of April 28, 2020. [D.E. 25] 9. Plaintiffs also argue that this action concerns only damages and attorney's fees arising from Goshen's alleged breach of the promissory note and that the disputed funds are not subject to garnishment under the FCA Settlement Agreement. See id. at 11. Moreover, plaintiffs argue that because this action is allowed under the “guidance and authority” of this court's order of April 28,2020, then judicial estoppel does not apply. Id.

The doctrine of “collateral estoppel” or “issue preclusion” is a subset of res judicata. See In re Microsoft Corp. Antitrust Litig., 355 F.3d 322, 326 (4th Cir. 2004); SEC v. Peters, No. 5:17-CV-630, 2021 WL 1112387, at *3 (E.D. N.C. Mar. 22, 2021) (unpublished). “Applying collateral estoppel forecloses the relitigation of issues of fact or law that are identical to issues which have been actually determined and necessarily decided in prior litigation in which the party against whom collateral estoppel is asserted had a full and fair opportunity to litigate.” In re Microsoft Corp., 355 F.3d at 326 (cleaned up); see Sedlack v. Braswell Servs. Grp., Inc., 134 F.3d 219,224 (4th Cir. 1998). Collateral estoppel applies if the proponent demonstrates that:

(1) the issue or fact is identical to the one previously litigated; (2) the issue or fact was actually resolved in the prior proceeding; (3) the issue or fact was critical and necessary to the judgment in the prior proceeding; (4) the judgment in the prior proceeding is final and valid; and (5) the party to be foreclosed by the prior resolution of the issue or fact had a full and fair opportunity to litigate the issue or fact in the prior proceeding.

In re Microsoft Corp., 355 F.3d at 326; see E. Assoc. Coal Co. v. Dir., Off. of Worker's Comp. Programs, 578 Fed.Appx. 165,173 (4th Cir. 2014) (per curiam) (unpublished); Collins v. Pond Creek Mining Co., 468 F.3d 213,217 (4th Cir. 2006); Tuttle v. Arlington Cnty. Sch. Bd., 195 F.3d 698, 703 n.6 (4th Cir. 1999); Sedlack, 134 F.3d at 224.

Collateral estoppel can “bar relitigation... of subject-matter jurisdiction.” Barna...