Reinschmidt v. Exigence LLC, 1:14-cv-00997-MAT-HBS
| Decision Date | 25 February 2019 |
| Docket Number | No. 1:14-cv-00997-MAT-HBS,1:14-cv-00997-MAT-HBS |
| Parties | Jonathan Reinschmidt, M.D., Plaintiff, v. Exigence LLC (Del), Buffalo Emergency Associates, L.L.P., Exigence Medical of Hornell P.L.L.C., Exigence Medical of Binghamton P.L.L.C., Austin Immediate Care, P.L.L.C., Exigence Medical of New York P.L.L.C., Exigence of Fremont L.L.C., Exigence New Jersey L.L.C. (N.J.), Exigence of New Jersey L.L.C. (N.J.), Exigence New York L.L.C., Nyamekye North America L.L.C., Exigence Management Company, Inc., Exigence Pennsylvania L.L.C., Exigence of Bradford P.L.L.C., Exigence of Sunbury L.L.C., Exigence LP (Pa.), Exigence, L.L.C. (Pa.), Exigence Healthcare Solutions of Nevada L.L.C., Exigence Hospitalist Services of Western New York, PLLC, Exigence Hospitalist Services of Olean, PLLC, Nyamekye Hospitalist Services of Erie County, PLLC, Exigence Health Plan, Inc., Lakeway Emergency Management Services L.L.C., Multistate Holdings L.L.C. (Del.), Multistate Holdings Partnership, Western New York Immediate Medical Care L.L.C., Pulse Occupational Medicine, L.L.C., Exigence Arizona L.L.C., Irving H. Levy, FMB Holdings L.L.P., Joseph Divincenzo, Esq. and Gregory F. Daniel, M.D., Defendants. |
| Court | U.S. District Court — Western District of New York |
This case is before the Court upon the Report and Recommendation ("R&R") (Dkt #41) issued by United States Magistrate Judge Hugh B. Scott on January 19, 2016. The R&R recommends denying in part and granting in part the Motion to Dismiss (Dkt #21, replacing Dkt #8) by defendants Exigence L.L.C. (Del.); Exigence New Jersey, L.L.C.; Exigence New York, L.L.C.; Nyamekye North America L.L.C.; Exigence Pennsylvania, L.L.C.; Exigence of Sunbury L.L.C.; Exigence Healthcare Solutions of Nevada L.L.C.; Exigence Hospitalist Services of Western New York, PLLC; Exigence Hospitalist Services of Olean, PLLC; Nyamekye Hospitalist Services of Erie County, PLLC; Exigence Health Plan, Inc.; Lakeway Emergency Management Services, L.L.C.; Multistate Holdings L.L.C. (Del.); Multistate Holdings Partnership; Exigence Arizona L.L.C.; Irving H. Levy ("Levy"); FMB Holdings L.L.P.; Joseph DiVincenzo, Esq. ("DiVincenzo"); and Gregory F. Daniel, M.D. ("Daniel") (collectively, "the Connors Defendants").1 The R&R also recommends denying in part and granting in part the Motion to Dismiss (Dkt #20, replacing Dkt #7) by Buffalo Emergency Associates, L.L.P., Exigence Medical of Hornell P.L.L.C., Exigence Medical of Binghamton P.L.L.C., Austin Immediate Care P.L.L.C., ExigenceMedical of New York P.L.L.C., Exigence of Fremont L.L.C., Exigence Management Company, Inc., Exigence of Bradford, P.L.L.C., Western New York Immediate Medical Care, L.L.C., and Pulse Occupational Medicine, P.L.L.C. (collectively, "the Harris Beach Defendants").
Plaintiff filed his original Complaint (Dkt #1) on November 26, 2014. Both sets of defendants filed Motions to Dismiss (Dkt ##7 & 8) on April 1, 2015. Pursuant to Fed. R. Civ. P. 15(a)(1)(B), Plaintiff filed an Amended Complaint (Dkt #13) on April 22, 2015, asserting seventeen causes of action. The well-pleaded allegations in the Amended Complaint are taken as true for purposes of Fed. R. Civ. P. 12(b)(6) and are summarized briefly below.
After completing his residency at University of Buffalo Medical School, Plaintiff accepted a position of employment with Buffalo Emergency Associates, L.L.P. ("Buffalo Emergency Associates") as an emergency room physician. Plaintiff signed a partnership agreement with Buffalo Emergency Associates on June 11, 2001, becoming a general partner in 2004. Plaintiff subsequently obtained interests in four other entities connected with Buffalo Emergency Associates: Multistate Holdings Partnership ("Multistate"), Western New York Immediate Medical Care, L.L.C. ("WNY Immediate Care"); Exigence Medical of Hornell PLLC ("Exigence Hornell"); and Exigence Medical of Binghamton PLLC ("Exigence Binghamton"). Buffalo Emergency Associates, along with Multistateand WNY Immediate Care, control the twenty-some-odd remaining defendant entities listed in the caption. Plaintiff refers to these entities collectively as the "Exigence Group." Levy acts as the chief financial officer, and DiVincenzo acts as corporate counsel and compliance officer for Exigence Group. Daniel, in addition to being the chief executive officer of Buffalo Emergency Associates, was purportedly a partner, officer, and architect of the Exigence Group.
Sometime prior to December 2010, Plaintiff began inquiring about withdrawing from the Exigence Group in order to move to Tennessee for reasons not specified in the Amended Complaint. Plaintiff announced his intention of leaving in December 2010, and then began winding down his involvement. As part of this process, he signed an "exit letter" agreeing to sell his interest in Multistate, in April 2011. His last shift working as an emergency room physician for Buffalo Emergency Associates was in July 2011. In August 2011, he signed more "exit letters" agreeing to sell his interests in Buffalo Emergency Associates and WNY Immediate Care. At the end of August of 2011, he had completed his exit and moved to Tennessee. For a total capital contribution to the Exigence Group of $252,000, Plaintiff received approximately $2,253,000 when he withdrew—a nearly ten-fold return on investment.
On May 1, 2012, more than a year after Plaintiff gave notice that he was leaving, Exigence Group was acquired by non-partyTeamHealth, Inc. ("TeamHealth"). According to Plaintiff, this move was very lucrative for physicians who remained a part of the Exigence Group.
On November 25, 2013, Plaintiff commenced his first federal lawsuit, Reinschmidt v. Buffalo Emergency Associates, LLP, et al., No. 1:13-cv-1153-RJA-McCarthy). This case was dismissed on May 19, 2014, because there was incomplete diversity of citizenship, and therefore subject matter jurisdiction was lacking.
Approximately t a year later, on November 26, 2014, Plaintiff then instituted this lawsuit, in which he reprises his assertions, raised in the previous case, that he was not provided with critical information about the TeamHealth acquisition by the Exigence Group's leadership, which he claims was being contemplated months before he inquired about the value of his shares or gave notice of his intention to withdraw. He also asserts that the Exigence Group's leadership finalized their intention to proceed with the acquisition in October of 2011. Plaintiff contends if he had been informed that this acquisition was being negotiated by his partners, he would have retained his interest in Exigence Group, which he believes would have been worth in excess of $4 million at the time of the acquisition.
After Plaintiff filed his Amended Complaint, both sets of defendants renewed their Motions to Dismiss (Dkt ##20 & 21). The Connors Defendants moved to dismiss Counts One and Three (fraud byomission); Four and Five (conversion); Six (negligent misrepresentation); Seven, Eight, and Nine (breach of fiduciary duty); Ten (breach of contract); Fourteen (unjust enrichment); Fifteen (accounting); and Sixteen (commission of civil RICO violation) and Seventeen (conspiracy to commit civil RICO violation). See Dkt #21. The Harris Beach Defendants moved to dismiss Count Two (fraud by omission); Four and Five; Ten, Eleven, Twelve, and Thirteen (breach of contract); and Fourteen, Sixteen, and Seventeen. See Dkt #20.
The R&R recommended denying the motions with regard to Counts Eleven, Twelve, Thirteen, and Fifteen; denying the motions with respect to Count Ten as to the individual defendants (DiVincenzo, Levy, and Daniel) and Buffalo Emergency Associates, WNY Immediate Care, Pulse Occupational Medicine PLLC ("Pulse Medicine"), Multistate, Exigence Hornell, and Exigence Binghamton; granting the motions as to Count Ten for all other defendants, but dismissing that count without prejudice with leave to replead after discovery; and granting the motions with regard to Counts One, Two, Three, Four, Five, Six, Seven, Eight, Nine, Sixteen, and Seventeen as to all defendants and dismissing those counts with prejudice. In addition, the R&R recommended dismissing Exigence New Jersey, L.L.C. (N.Y.); Exigence, LP (Pa.); and Exigence L.L.C. (Pa.) because, although Plaintiff had named them in the originalComplaint, he did not include them in the Amended Complaint. See Dkt #41 at 55-56.
On February 12, 2016, the Harris Beach Defendants filed Objections (Dkt #46) to the R&R, as did Plaintiff (Dkt #47) and the Connors Defendants (Dkt #48). On February 29, 2016, the Harris Beach Defendants submitted a Reply/Response to Plaintiff's Objections (Dkt #49), Plaintiff filed a Response to the Connors Defendants' Objections (Dkt #50) and a Response to the Harris Beach Defendants' Objections (Dkt #51), and the Connors Defendants submitted a Response to Plaintiff's Objections (Dkt #52). On March 16, 2016, the Harris Beach Defendants filed a Reply in Further Support of Their Objections (Dkt #53), Plaintiff filed a Response to Defendants' Responses to Plaintiff's Objections (Dkt #54), and the Connors Defendants filed a Reply/Response in Further Support of Their Objections (Dkt #55).
Magistrate Judge Scott requested further briefing on the Connors Defendants' argument, asserted in their Objections, that the Court would be divested of subject-matter jurisdiction if it were to accept the R&R. See Dkt #57. The Connors Defendants pointed out that if, as the R&R suggested, Plaintiff did not actually withdraw from Buffalo Emergency Associates, WNY Immediate Care, Pulse Medicine, Multistate, Exigence Hornell, and Exigence Binghamton, those defendants must be deemed citizens of the sameState as Plaintiff as a matter of partnership law, thereby eliminating complete diversity of citizenship.
On June 2, 2016, Plaintiff filed his Reply/Response (Dkt #58) to the request for further briefing on the issue of subject-matter jurisdiction. On ...
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