United States ex rel. Maharaj v. Estate of Zimmerman

• Decision Date: 05 August 2020
• Docket Number: Case No.: DLB-18-2998
• Parties: UNITED STATES ex rel. SUSAN V. M. MAHARAJ, Relator, v. ESTATE OF CHARLES HOWARD ZIMMERMAN, et al., Defendants.
• Court: U.S. District Court — District of Maryland

UNITED STATES ex rel. SUSAN V. M. MAHARAJ, Relator, v. ESTATE OF CHARLES HOWARD ZIMMERMAN, et al., Defendants.

Case No.: DLB-18-2998

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

August 5, 2020

MEMORANDUM OPINION

In this qui tam action, relator Dr. Susan Maharaj filed suit against her neighbors, Robert Clayton Stevens and George C. Stevens, and the former owner of their property, the Estate of Charles Howard Zimmerman, asserting that they fraudulently claimed ownership of six acres of land located between her farm and their farm and received federal funds in connection with that land even though they do not own it. She filed this qui tam action against them on behalf of the United States and Maryland, seeking to recover the funds the defendants allegedly fraudulently obtained from the government by falsely claiming they owned land that Dr. Maharaj claims belongs to her. Pending is defendants' motion for judgment on the pleadings, ECF No. 26, which the parties fully briefed, ECF Nos. 35, 37, as well as the relator's motion for leave to file an amended complaint, ECF No. 42, which the parties also fully briefed, ECF Nos. 44, 45. A hearing is not necessary. See Loc. R. 105.6. Because the proposed amended complaint contains sufficient allegations to survive defendants' motion as to Counts I and II but not Counts III and IV, the Court will grant Dr. Maharaj's motion in part and deny it in part, and grant defendants' motion for judgment in part and deny it in part.

I. Background

On November 7, 2000, farm owner Charles Zimmerman enrolled 37.3 acres of what he asserted was his property in Frederick County, Maryland in the Conservation Reserve Enhancement Program ("CREP"), a federal land conservation program through which private farmers and ranchers receive annual rent and other incentives from the government in exchange for preserving land.¹ Am. Compl. ¶ 10 & n.1, ¶ 19, ECF No. 42-1. The same day, Zimmerman signed a United States Department of Agriculture Conservation Reserve Program contract ("CRP Contract"), claiming ownership of all 37.3 acres. Compl. ¶¶ 20-21 & Ex. D, ECF No. 1-4. The CRP Contract ran from January 1, 2001 to September 30, 2015. Compl. ¶ 20. After Mr. Zimmerman passed away in 2011, Robert Stevens served as personal representative for the Estate of Charles Howard Zimmerman (the "Estate"). Id. ¶ 7. In that capacity, he revised the CRP Contract on August 1, 2011 to list the Estate as the participant and he continued to enroll the property in CREP. Am. Compl. ¶¶ 10, 13, 20, 26. "Participant" is defined in the document as "the undersigned owners, operators, or tenants." Am. Compl. Ex. F, ECF No. 1-6. On April 18, 2012, the Estate conveyed 5.515 acres of the property that had been Zimmerman's to Robert and George Stevens as tenants in common, reserving a life estate for "Robert Stevens and Diane Cole Stevens, husband and wife; and William E. Moxley and Joan Moxley, husband and wife." Id. ¶ 28. The Estate conveyed the remaining 162.33 acres of Zimmerman's property to Robert and George Stevens as joint tenants on January 1, 2013. Id. ¶ 29. Robert and George Stevens revised the contract again on January 16, 2013 to list themselves as participants and continued to enroll the property in CREP.² Am Compl. ¶¶ 10, 13, 29, 30 & Ex. I, ECF No. 1-9 (Jan. 16, 2013 CRP Contract).

Their neighbor to the west, Dr. Susan Maharaj, claims ownership of six of the enrolled acres that border her and her husband's farm. Id. ¶¶ 11-12. On September 28, 2018, she filed this qui tam action on behalf of the United States and Maryland, alleging that defendants Robert and George Stevens and the Estate of Charles Howard Zimmerman violated the False Claims Act ("FCA"), 31 U.S.C. §§ 3729 et seq., and the Maryland False Claims Act ("MFCA"), Md. Code, Gen. Prov. §§ 8-101 et seq. by applying for and receiving government funds for the disputed land through CREP.³ Compl., ECF No. 1. Her original complaint included four counts: knowingly presenting or causing presentment of a false or fraudulent claim for payment to the United States in violation of 31 U.S.C. § 3729(a)(1)(A) (Count I), knowingly making or using a false or fraudulent record "to get the false or fraudulent claims paid or approved by the Government" in violation of 31 U.S.C. § 3729(a)(1)(B) (Count II), knowingly causing a false record or false statement to be made or used to avoid an obligation to refund money to the United States in violation of 31 U.S.C. § 3729(a)(1)(G) (Count III), and presenting or causing presentment of a false claim for payment to Maryland in violation of Gen. Prov. §§ 8-101 et seq. (Count IV). Compl. ¶¶ 65, 69, 73, 77.

The United States and Maryland declined to intervene in this action. U.S. Notice, ECF No. 2; Md. Mot., ECF No. 18. Maryland moved to dismiss the MFCA claim because "[t]he Maryland False Claims Act does not allow a relator to pursue an action in which the State has declined to intervene." Md. Mot.; see also Md. Code Ann., Gen. Prov. § 8-104(a)(7) ("If the governmental entity does not elect to intervene and proceed with the action . . . , the court shall dismiss the action."). On August 4, 2019, Defendants filed a motion to dismiss for failure to state a claim. ECF No. 12. On December 12, 2019, Judge Hollander entered a comprehensive memorandum opinion and order dismissing Dr. Maharaj's claim under the MFCA and dismissing "Counts I, II, and III, to the extent they allege violations of the FCA committed before" September 28, 2012, the beginning of the six-year statute of limitations period. United States ex rel. Maharaj v. Estate of Zimmerman, 427 F. Supp. 3d 625, 651 (D. Md. 2019). On January 5, 2020, defendants filed an answer. ECF No. 24.

On January 14, 2020, defendants filed the pending motion for judgment on the pleadings, seeking judgment in their favor on the claims that Judge Hollander did not dismiss and arguing for the first time that the relator failed to plead fraud with particularity, as Rule 9(b) requires. ECF No. 26. Dr. Maharaj filed an opposition on February 14, 2020, ECF No. 35, and defendants filed a reply on February 27, 2020, ECF No. 37.

Four months later, on June 26, 2020, Dr. Maharaj filed the pending motion for leave to file an amended complaint, asserting that the motion was timely by operation of the Court's Standing Order No. 2020-07, which extended all deadlines by 84 days.⁴ ECF No. 42. Relator insists that the amendment would not prejudice defendants because it provided the particularity they sought and did not add any claims or parties. Id.

In her proposed amended complaint, Dr. Maharaj alleges the same four counts that she alleged in her original complaint. See Am. Compl. ¶¶ 64, 68, 72, 76). She asserts essentially the same allegations. She claims that the defendants submitted documents to the government in which they falsely represented themselves as owners or operators of the disputed land when they knew they were not. As a result of these false claims or submissions of false records, the government disbursed funds to them for their enrollment in the CREP program. For purposes of the pending motions, the Court finds it useful to list the specific false claims or records identified in the Amended Complaint:

• On November 27, 2000, Charles Zimmerman completed, signed, and submitted "a Conservation Program Worksheet ('CRP Worksheet')" to "appl[y] to place 37.3 acres of real property into the CREP." Am Compl. ¶ 19. He "represent[ed] that he was a producer of all 37.3 acres of real property," even though they included the disputed land. Id.

• On November 27, 2000, Charles and Mildred Zimmerman entered into "a United States Department of Agriculture Conservation Reserve Program Contract ('CRP Contract')" with the Commodity Credit Corporation ("CCC"), which would run from November 27, 2000 until September 30, 2015. Id. ¶ 20. On the CRP Contract, "Charles and Mildred Zimmerman represented that Charles was the '100%' owner, rather than an operator, of the 37.3 acres for enrollment." Id.

• On July 11, 2007, following Mildred Zimmerman's death on March 17, 2007, Charles Zimmerman revised the CRP Contract to name himself as the sole participant. Id. ¶ 25.

• On August 11, 2011, as personal representative of the Estate of Charles Howard Zimmerman, who died earlier that year, Robert Stevens revised the CRP Contract to name the Estate as the participant. Id. ¶ 26.

• On January 16, 2013, after the Estate conveyed the property to Robert and George Stevens, they executed a revised CRP Contract, listing themselves as participants. Id. ¶ 30.

Dr. Maharaj also alleges generally that false claims and records were submitted to the government annually from 2000 through 2015 in connection with the CRP Contract. Beginning "[o]n November 27, 2000, and upon information and belief annually thereafter, Defendants certified, under oath, that Defendants 'underst[oo]d that an inaccurate certification could result in a payment reduction or loss of program benefits.'" Am. Compl. ¶ 24. Likewise,

[f]ollowing Mr. Zimmerman's death in 2011, upon information and belief, Robert Clayton Stevens, in his individual capacity and capacity as the Personal Representative of the Estate of Charles Howard Zimmerman Estate, and George C. Stevens, in his individual capacity, submitted documents to the United State[s] government attesting, under oath, that he "underst[oo]d that an inaccurate certification could result in a payment reduction or loss of program benefits."

Id. Relator also alleges that, "[u]pon information and belief, Charles Howard Zimmerman and/or Defendants submitted and/or re-submitted sworn applications, documents and/or worksheets to re-enroll the Dispute Property into CREP each and every year from 2001 through 2015." Id. ¶ 31. Dr. Maharaj alleges that, in 2013, 2014, and 2015, Robert and George Stevens "unlawfully received and kept annual payments and benefits from the United States and/or the State of Maryland." Id. ¶ 50.

On July 8,...