United States ex rel. Elliott v. Brickman Grp. Ltd.

• Decision Date: 12 January 2012
• Docket Number: Case No. 1:10–cv–392.
• Citation: 845 F.Supp.2d 858
• Parties: UNITED STATES of America ex rel. Mark ELLIOTT, Plaintiff, v. BRICKMAN GROUP LTD., LLC, Defendant.
• Court: U.S. District Court — Southern District of Ohio

845 F.Supp.2d 858

UNITED STATES of America ex rel. Mark ELLIOTT, Plaintiff,

v.BRICKMAN GROUP LTD., LLC, Defendant.

Case No. 1:10–cv–392.

United States District Court,

S.D. Ohio,

Western Division.

Jan. 12, 2012.

Leslie Williams, Charles Theodore Lester, Jr., Eric C. Deters & Assocs., Independence, KY, for Plaintiff.

Kevin L. Murphy, Graydon Head & Ritchey, LLP, Ft. Mitchell, KY, for Defendant.

OPINION & ORDER

MICHAEL R. BARRETT, District Judge.

This matter is before the Court on Defendant Brickman Group Ltd., LLC's (“Brickman”) Motion to Certify Interlocutory Appeal and Stay Proceedings (Doc. 26).¹ This motion requests an order permitting an immediate appeal of this Court's November 21, 2011, Order (Doc. 25) denying Brickman's Motion for Reconsideration, and the Court's August 25, 2011, Order (Doc. 20) denying Brickman's Motion to Dismiss. Brickman also moves for a stay of proceedings pending the outcome of any interlocutory appeal. Plaintiff Mark Elliott ² filed a response in opposition (Doc. 27), and Defendant has filed a reply in support (Doc. 28).

This case is a civil action brought under the False Claims Act, 31 U.S.C. § 3729 et seq. The False Claims Act imposes liability on any person who presents a false or fraudulent claim for payment to the government. 31 U.S.C. § 3729(a)(1). It authorizes private individuals to bring civil actions in the government's name, referred to as qui tam actions, and for individuals to collect a portion of any amount recovered. 31 U.S.C. § 3730(b)(1); see also U.S. ex rel. Summers v. LHC Group, Inc., 623 F.3d 287, 291 (6th Cir.2010). Here, Plaintiff brings two counts against Defendant. Count one alleges violations of the False Claims Act, and count two alleges False Claims Act retaliation. (Doc. 13 ¶¶ 49–60.) Both counts survived Defendant's previously filed motion to dismiss (Doc. 20, 21, 30) and Defendant's more recently filed motion to reconsider (Doc. 25, 20, 21). This matter is ripe for review.

I. Background

The following facts are repeated verbatim from the Court's Order denying Defendant's motion to dismiss. (Doc. 20, 2–6.) They are included here solely for convenience sake.

The following facts come from Plaintiff's Amended Complaint. Defendant disputes these facts, but as it concedes (Doc. 15, 2), the Court must accept them as true on this motion to dismiss, see Bassett v. NCAA, 528 F.3d 426, 430 (6th Cir.2008). Plaintiff Mark Elliott was an employee of Brickman from November 2004 until January 2010. (Doc. ¶ 10.) Brickman is a national commercial-landscaping firm that performs multimillion-dollar landscaping contracts with large real-estate firms, one of which is Duke Realty. Duke Realty, in turn, has a multimillion-dollar, real-estate building contract with the federal government. (Doc. 13 ¶ 11.)

Mr. Elliott worked for Brickman as a branch manager and as a regional sales manager/business development associate. (Doc. 13 ¶ 14.) During the first two-and-a-half years Mr. Elliott worked for Brickman, he served directly under regional manager Mark Davis. At that time, Mr. Elliott was the branch manager of Brickman's Great Lakes Region. (Doc. 13 ¶ 15.) In that position, Mr. Elliott oversaw the operational, financial, and administrative activities of Brickman's landscape-maintenance branch. Brickman's largest client within Mr. Elliott's branch was Duke Realty. (Doc. 13 ¶ 17.)

Duke Realty is a publicly traded, commercial-real-estate firm. It leases office, industrial, and retail properties to a wide array of private and governmental entities. (Doc. 13 ¶ 18.) Brickman handled all of Duke Realty's landscaping business in the Cincinnati, Ohio, area from 2001 onward. (Doc. 13 ¶¶ 19, 20.)

During the two-and-a-half years Mr. Elliott worked under Mark Davis, from November 2004 to the spring of 2007, Mr. Davis ordered Brickman employees not to perform or to perform at a reduced rate specific landscaping work it was contractually obligated to perform for Duke Realty. This resulted in significant financial gains for Brickman. This underperformed work included applying fertilizer and mulch, pruning, flower installations, and various other tasks typically associated with the landscaping business. (Doc. 13 ¶ 21.)

Mr. Davis, as regional manager, also directed Brickman managers to delete specific line items within the estimates it had contractually agreed to perform for Duke Realty without Duke Realty's knowledge or authorization. (Doc. 13, ¶ 22.) During one incident, Mr. Davis directed Mr. Elliott and others to remove over 4,000 hours of contractually obligated services from the Duke Realty estimates to meet certain profit margins, known as “budget directives,” that Brickman's lead management set. Plaintiff alleges that these budget directives were ordered by Jeff Herold, Brickman's chief operating officer. (Doc. 13 ¶ 25.) Despite these changes, which led to services either not being performed or being performed at reduced levels, the amount of services billed to Duke Realty was never changed. (Doc. 13 ¶ 27.) As the Amended Complaint states, “Duke Realty was never made aware of the deletion and reductions in services and, therefore, paid for services which were either not fulfilled or not completely fulfilled.” (Doc. 13 ¶ 28.) Plaintiff further alleges that Brickman never displayed any intention of informing Duke Realty of these changes. (Doc. 13 ¶ 28.) Plaintiff states that this deletion or reduction in services was repeated for each of the years Mr. Elliott worked under Mr. Davis. (Doc. 13 ¶ 29.)

Plaintiff also claims that Mr. Davis manipulated “work orders,” which were for work performed by Brickman in additionto the original contractual obligations it owed to its clients. These work orders were allegedly manipulated to meet bottom-line profit margins. (Doc. 13 ¶ 31.) As a result, substantial amounts of landscaping materials were purchased for work to be done on Duke Realty properties, but without Duke Realty's knowledge, unused materials were resold, resulting in large profits for Brickman. (Doc. 13 ¶ 32.)

Plaintiff also alleges that Brickman marked up bills for snow removal services and billed for unused snow removal materials. (Doc. 13 ¶ 33.) Mr. Elliott and other Brickman managers were repeatedly told that their bonuses relied on how much profit they could squeeze from clients' snow removal bills. As the Amended Complaint alleges, “they were instructed to ‘use their thumbs' when billing for snow removal services.” (Doc. 13 ¶ 34.) Plaintiff alleges that every year he worked under Mr. Davis, large quantities of salt were improperly added to Duke Realty's snow removal bills. Duke Realty would occasionally complain about these bills, and Defendant would accept reduced payments on these occasions, but Brickman's profit margin was still well above what would have otherwise resulted without the overbilling. (Doc. 13 ¶ 35.)

Duke Realty's largest tenant within the Cincinnati area was the General Services Administration (“GSA”), a federal agency that acts as the landlord for the federal government. (Doc. 13 ¶ 37.) When private companies, such as Duke Realty, lease property to the U.S. government, the actual lessee is the GSA. (Doc. 13 ¶ 38.) Plaintiff alleges that Brickman's inflated billing estimates were incorporated into bids Duke Realty made to the GSA and which the GSA ultimately accepted. As a result, Plaintiff alleges that because of its inflated estimates, Brickman has repeatedly defrauded the federal government. (Doc. 13 ¶ 42.) The federal properties in question include the Fort Campbell Military Base in Kentucky; the Bureau of Worker's Compensation at Governor's Hill in Mason, Ohio; the Fort Drum Army Base in New York; and several industrial sites leased by the Internal Revenue Service and co-run by Prologis and Brickman. Plaintiff's Amended Complaint also refers to a criminal investigation of this matter that has been referred to the Cincinnati Division of the Federal Bureau of Investigation. (Doc. 13 ¶ 43.)

In the spring of 2007, Brickman moved Mr. Elliott to a newly created job under the title of “Business Development Associate.” Shortly thereafter, Mr. Elliott informed two Brickman divisional managers, Chris Hayes and Gary Kuykendall, of Brickman's allegedly fraudulent billing practices. (Doc. 13 ¶ 44.) These disclosures apparently prompted an investigation, but Mr. Elliott claims that no one at Brickman ever informed him of the progress of this investigation or consulted him for additional information. (Doc. 13 ¶ 45.)

In the summer of 2009, Mr. Elliott was reassigned to again work under Mark Davis. In this new position, Mr. Elliott and Mr. Davis had numerous verbal arguments, which resulted in Mr. Davis stating that he knew of Mr. Elliott's reports to Mr. Hayes and Mr. Kuykendall. Mr. Davis allegedly threatened Plaintiff by telling him that he “would ‘pay for that oversight’ and that Plaintiff's ‘days were counted.’ ” (Doc. 13 ¶ 46.)

In December 2009, Mr. Elliott approached Mr. Hayes and requested reassignment to a position away from Mr. Davis. Mr. Hayes allegedly told him that he would contact Plaintiff once he determined where he could be reassigned. However, Mr. Hayes never contacted Mr. Elliott again regarding his requested reassignment. (Doc. 13 ¶ 47.)

Mr. Elliott resigned “under duress” on January 21, 2010. (Doc. 13 ¶ 48.) He alleges that the duress came from Mr. Davis' verbal threats and a written reprimand issued by Mr. Davis on January 20, 2010. Plaintiff brought this suit against Brickman approximately six months later, on June 16, 2010. (Doc. 1.) The government was given the opportunity to intervene in this action, but it declined to do so. (Doc. 9.)

Count one of Plaintiff's Amended Complaint alleges violations of the False Claims Act, and count two alleges False Claims Act retaliation. (Doc. 13 ¶¶ 49–60.) More specifically, Plaintiff alleges that Brickman knowingly presented false or fraudulent claims for payment to the government and knowingly...