State Farm Mut. Auto. Ins. Co. v. Angelo
| Decision Date | 02 May 2022 |
| Docket Number | 19-10669 |
| Parties | STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Plaintiff, v. MICHAEL ANGELO, et al., Defendants. |
| Court | U.S. District Court — Eastern District of Michigan |
Plaintiff State Farm Mutual Automobile Insurance Company (“State Farm”) brought this action under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1962(c) and (d), and also asserted state law claims of fraud and unjust enrichment. (ECF No. 1, PageID.55-63.) State Farm alleged that Defendant Michael Angelo and others submitted fraudulent bills for medically unnecessary services and prescriptions rendered to patients involved in automobile accidents. (Id., PageID.2, 4, 54.)
After extensive litigation, the parties entered into a settlement agreement, requiring, among other provisions, Angelo to dismiss or release particular categories of claims against State Farm. (ECF No. 118, PageID.6676; ECF No. 126 PageID.7132.) The court retained jurisdiction to enforce the terms of their agreement. (ECF No. 114, PageID.6176.) State Farm subsequently filed a motion to enforce the parties' settlement agreement. (ECF No. 118.) State Farm argued that Angelo was in breach of their agreement by virtue of his role as a relator in a qui tam action against State Farm brought under the False Claims Act (“FCA”). State Farm argued that Angelo must “immediately cease and desist from taking any further action to prosecute the Quit Tam Lawsuit” and “take all necessary steps to secure dismissal of the Qui Tam Complaint.” (ECF No 118, PageID.6668.) The court found that the Qui Tam Action fell within the scope of the settlement agreement and held that the agreement required Angelo to “‘take all necessary steps . . . to secure the discontinuance of' the Qui Tam Action” as against State Farm. (ECF No. 149, PageID.8080-81.) The opinion's ultimate, narrow holding was that Angelo must “solicit the government's consent to dismiss” State Farm from the Qui Tam Action. (Id. PageID.8081.) The court made clear that if “the government decides it does not consent to dismissal, then that is the end of the matter, ” as the court would not have authority to mandate anything further. (Id., PageID.8079.) Now before the court is Angelo's “Motion for Reconsideration, or in the Alternative, Motion to Amend the Order.”[1] (ECF No. 150.) The motion has been fully briefed (ECF Nos. 150, 153, 154), and a hearing is unnecessary. E.D. Mich. LR 7.1(f)(1)-(2).
Under Eastern District of Michigan Local Rule 7.1(h)(2), a party may move for reconsideration of a non-final order, although they are “disfavored” and may be brought only upon specific grounds. Angelo advances his motion under Rule 7.1(h)(2)(A), which requires a three-part showing that: “[t]he court made a mistake, correcting the mistake changes the outcome of the prior decision, and the mistake was based on the record and law before the court at the time of its prior decision.” See Burn Hookah Bar, Inc. v. City of Southfield, No. 2:19-CV-11413, 2022 WL 730634, at *1 (E.D. Mich. Mar. 10, 2022) (Murphy, J.). Motions for reconsideration “should not be used liberally to get a second bite at the apple.” United States v. Lamar, No. 19-CR-20515, 2022 WL 327711, at *1 (E.D. Mich. Feb. 3, 2022) (Goldsmith, J.) (quoting Oswald v. BAE Indus., Inc., No. 10-12660, 2010 WL 5464271, at *1 (E.D. Mich. Dec. 30, 2010)). They are “not an opportunity to re-argue a case” or “‘raise [new] arguments which could, and should, have been made' earlier.” See Burn Hookah Bar, 2022 WL 730634, at *1 (alteration in original) (quoting Bills v. Klee, No. 15-cv-11414, 2022 WL 447060, at *1 (E.D. Mich. Feb. 14, 2022)); cf. Sault Ste. Marie Tribe of Chippewa Indians v. Engler, 146 F.3d 367, 374 (6th Cir. 1998) (citing FDIC v. World Univ. Inc., 978 F.2d 10, 16 (1st Cir.1992)) ( that a Rule 59(e) motion to alter or amend a judgment is “not an opportunity to re-argue a case” and is aimed at reconsideration, not initial consideration).
Angelo makes five arguments: (1) the court misinterpreted the settlement agreement, (2) the court's prescribed action is not within the scope of the agreement to “take all steps necessary, ” (3) the court's interpretation runs contrary to public policy and renders the settlement agreement unenforceable, (4) the order is unconstitutional under the compelled speech doctrine, and (5) the proper venue to adjudicate the Qui Tam Action is before the Qui Tam Action's judge.
First, the court already determined that the Qui Tam Action falls within the scope of the settlement agreement-thus, although Angelo contends the court made a “mistake, ” his arguments largely reflect a mere disagreement with the court's interpretation of the settlement agreement.[2] (See ECF No. 149, PageID.8069-72.) Indeed, Angelo advances the same arguments that he did before, particularly as it pertains to the court's interpretation of the phrase “arising from” as written in the settlement agreement. (See, e.g., ECF No. 146, PageID.8019, 8032, 8035.) The court considered these arguments and disagreed. While Angelo may have had additional sources of knowledge for the claims advanced in the Qui Tam Action, the court has already discussed why the original and amended complaint “arise from” the particular services specified in the settlement agreement; although Angelo for a second time attempts to refute it, reading the complaints as a whole demonstrates a causal connection between the Qui Tam Action and services rendered by Angelo to State Farm insureds. (ECF No. 149, PageID.8071-72.) As the court previously explained, the amended complaint establishes that the claims “arise from the provision of medical services to individuals insured by [State Farm], ” further showing that Angelo had “direct knowledge of Medicare and/or Medicaid beneficiaries that are also insureds of [State Farm] or claimants [who] are entitled to coverage under Michigan law, who sought treatment at his or other facilities, but for whom the [State Farm] refused to pay claims.” (Id., PageID.8071-72.) Now, to rebut this, Angelo relies heavily on his argument that an exemplar patient, R.S., was actually a “claimant” and not an “insured, ” thus falling outside of the settlement agreement's terms.[3] But even if this were true, R.S. was only one example of a patient that would trigger the settlement agreement's Dismissal and Release provisions. Thus, “correcting the mistake” would not “change[] the outcome of the prior decision.” E.D. Mich. L.R. 7.1(h)(2)(A).
In any event, as noted in the court's order enforcing the settlement agreement, Angelo has advanced positions that apparently contradict. The court found that the Qui Tam Action's original complaint clearly fell within the scope of the settlement agreement, particularly where both this case and the Qui Tam Action's original complaint “require a court to assess the propriety of treatment that [Angelo] or his facilities rendered to insured patients and whether the bills are legitimate.” (ECF No. 149, PageID.8070.) To avoid dismissal, Angelo argued in his supplemental briefing that there was no relationship between the original complaint and the amended complaint and thus the new, operative complaint was not subject to the settlement agreement. But, at the same time, relying on Federal Rule of Civil Procedure 15(c)(1)(B), Angelo argued that the amended complaint was the only relevant complaint and “relates back” to the original. (ECF No. 146, PageID.8035-36.) This rule states that an amendment relates back to the original when “the amendment asserts a claim or defense that arose out of the conduct, transaction, or occurrence set out-or attempted to be set out-in the original pleading.” Fed.R.Civ.P. 15(c)(1)(B) (emphasis added). Thus, Angelo apparently conceded that at least some of the factual allegations within the amended complaint “arise out of” the facts alleged in the original complaint.[4] (ECF No. 149, PageID.8071 n.3.)
Second, Angelo essentially argues the court's determination requiring him to “at least request the government's consent to dismiss the claims against [State Farm]” constituted an improper interpretation of the settlement agreement. Angelo's arguments essentially rehash prior arguments and express disagreement with the court's interpretation, as opposed to contending that the court made a “mistake” based on the record and law before it. (ECF No. 150, PageID.8103-05.) While Angelo maintains that requesting the government's consent to dismiss the Qui Tam Action would not be “necessary” as defined under the settlement agreement, the court disagrees, as already explained in its previous order. (ECF No. 149, PageID.8077-78.)
Next Angelo makes new public policy and constitutional arguments, all of which could have and should have been made earlier. Indeed, the court considered the public policy implications at stake and found that its holding would “not conflict with the underlying public policies of the FCA.” (ECF No. 149, PageID.8079-80.) Now, Angelo claims, inter alia, that enforcement of the settlement agreement is tantamount to concealing a crime or stifling a prosecution, which renders the agreement void; Angelo even suggests that following the court's order would subject him to criminal liability under Mich. Comp. Laws § 750.149. (ECF No. 150, PageID.8106-08.) Even if the court considered these supplemental arguments, nothing in the court's order restricted Angelo's ability to offer “cooperation, evidence, or assistance” in a criminal prosecution as he contends. (Id., PageID.8108.) Rather, the court's order required Angelo to...
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