Allstate Insurance Company et al v. Vizcay et al
ORDER denying 256 Motion for summary judgment; denying 262 Motion for summary judgment; denying 263 Motion for summary judgment; granting in part and denying in part 264 Motion for summary judgment. Vizcay's motion for summary judgment is granted insofar as it seeks summary judgment of Counts IV through VII. The motion is denied in every other respect. Signed by Judge Elizabeth A. Kovachevich on 9/30/2013. (SN)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ALLSTATE INSURANCE COMPANY,
CASE NO. 8:1 l-cv-804-T-17TBM
SARA VIZCAY, M.D., et al.,
This cause is before the Court on Defendant, Sara C. Vizcay, M.D.'s Motion for
Summary Judgment and Memorandum of Law and Request for Oral Argument (Dkt. 264),
Defendants, Best Care Medical Center, Inc., Florida Rehabilitation Practice, Inc. (f/k/a Dana
Medical Center, Inc.), and P.V.C. Medical Center, Inc.'s, Motion for Summary Judgment (Dkt.
256), Defendants, Caleb Healthcare, Global Diagnostics, Personal Medical Center, and Regional
Enterprises for Health's, Motions [sic] for Summary Judgment (Dkt. 262), and Allstate's Motion
for Summary Judgment as to Vizcay and the Medical Director Clinic Defendants and
Memorandum of Law (Dkt. 263). As discussed below Sara C. Vizcay, M.D.'s motion is
GRANTED IN PART and DENIED IN PART; all other motions are DENIED.
The plaintiffs ("Allstate")1 brought this action against Dr. Vizcay and seven health care
clinics to avoid several million dollars worth of No-Fault Personal Injury Protection ("PIP")
claims that Allstate alleges are not properly payable to the health care clinics. Specifically,
Allstate alleges that defendants engaged in fraudulent billing practices, in addition to failing to
comply with the licensing requirements of the Florida Health Care Clinic Act ("HCCA").
Consequently, according to Allstate, all claims for services performed by the health care clinics
in violation of the HCCA are not properly payable.
In 2003, the Florida Legislature enacted the HCCA to strengthen the regulation of health
care clinics as a measure to protect consumers. See Fla. Stat. § 400.990(2) ("The Legislature
finds that the regulation of health care clinics must be strengthened to prevent significant cost
and harm to consumers."). "The purpose of [the HCCA] is to provide for the licensure,
establishment, and enforcement of basic standards for health care clinics and to provide
administrative oversight by the Agency for Health Care Administration." Id. The HCCA
expanded the scope of the licensing requirements and placed additional regulations on the
operation of health care clinics, i.e., background checks, inspections, increased licensing fees,
and fiscal accountability. All health care clinics in Florida must now obtain and operate under a
license or qualify for one of the limited exemptions. For example, a health care clinic is exempt
from the licensing requirement if it is "wholly owned by one or more licensed health care
practitioners." Fla. Stat. § 400.9905(4). Allstate alleges that the health care clinics: (1)
Six related Allstate entities joined as plaintiffs in this lawsuit: Allstate Insurance Company;
Allstate Indemnity Company; Allstate Property and Casualty Insurance Company; Allstate Fire
and Casualty Insurance Company; Allstate Vehicle and Property Insurance Company (f/k/a
Deerbrook Insurance Company Successor By Merger to Northbrook Indemnity Company). The
plaintiffs will be referred to collectively in this order as "Allstate."
concealed their true owners, who are not licensed physicians, in order to qualify for the "wholly
owned" exemption under the HCCA, and (2) failed to comply with the requirements that they be
properly supervised by a medical director. Compliance with the HCCA is critical because "[a]ll
charges or reimbursement claims made by or on behalf of a clinic that is required to be licensed
under this part, but that is not so licensed, or that is otherwise operating in violation of this part.
are unlawful charges, and therefore are noncompensable and unenforceable." Fla. Stat. §
400.9935(5). Put simply, this dispute largely centers on whether the ownership structure and
operation of the health care clinics complies with the HCCA such that Allstate is obligated to pay
for the claims submitted by the defendants.
Certain facts are undisputed. Dr. Vizcay is a licensed medical doctor in the state of
Florida, and was licensed at all times material to this case. (Dkt. 257, ffi| 1, 2). It is also
undisputed that Dr. Vizcay is listed as the owner of four of the seven health care clinic
defendants—Caleb Health Care, Inc. ("Caleb"), Global Diagnostic Center, Inc. ("Global"),
Personal Medical Center, Inc. ("PMC"), and Regional Enterprises for Health Corporation
("Regional"). (Dkt. 378, ffl] v-gg). Each of these four companies applied for and obtained a
certificate of exemption from the Agency for Health Care Administration ("AHCA"), claiming
to be "wholly owned by a licensed practitioner." (Dkt. 378, ffi[ v-gg). The remaining defendant
health care clinics—Best Care Medical Center, Inc. ("Best Care"), Florida Rehabilitation
Practice, Inc. ("Dana"), and P.V.C. Medical Center, Inc. ("P.V.C")—were admittedly not owned
(in whole or in part) by a chiropractor or licensed physician and, therefore, did not receive a
licensing exemption. (Dkt. 378, (1) U*j q-u). Instead, Best Care, Dana, and P.V.C. listed Dr.
Vizcay as their medical director. (Dkt. 378, (1) | | hh-jj).
It is also undisputed that all payments made by Allstate were paid to the seven health care
clinics. Specifically, Allstate already paid the following amounts: (1) $158,335.83 to Best Care;
(2) $62,733.32 to Caleb; (3) $375,051.18 to Dana; (4) $96,508.99 to Global; (5) $129,885.98 to
P.V.C; (6) $101,895.40 to PMC; and (7) $18,482.31 to Regional. (Dkt. 378, (1) fi b, d, f, h,j, 1,
and n). Similarly, all unpaid invoices for services rendered were submitted to Allstate by the
seven health care clinics. Allstate has been billed, but has not paid, the following amounts: (1)
$317,685.98 by Best Care; (2) $385,783.57 by Caleb; (3) $491,155.46 by Dana; (4) $198,951.54
by Global; (5) $120,290.08 by P.V.C; (6) $470,934.70 by PMC; and (7) $161,076.88 by
Regional. (Dkt. 378, (1) ffi| c, e, g, i, k, in, and o). Notably, there is no evidence that Dr. Vizcay
personally billed Allstate for any of the services.
Other, quite material, facts remain in dispute. As Allstate acknowledges, the parties
dispute whether Dr. Vizcay, despite being listed as the sole owner, in fact wholly owned and
supervised the business activities of Caleb, Global, PMC, and Regional. (Dkt. 378, (11) fflf 1, 2).
The parties also dispute whether Dr. Vizcay discharged her duties as medical director of the
remaining three health care clinics. (Dkt. 378, (11)^3, 4). Also disputed is whether any of the
defendants fraudulently or negligently misrepresented the corporate structure and billing
practices as it relates to claims submitted to Allstate. (Dkt. 378, (11) ffl| 5-9). As explained
below, these factual issues necessarily preclude the entry of summary judgment with respect to
many of the claims.
STANDARD OF REVIEW
Federal Rule of Civil Procedure 56 provides that summary judgment shall be granted if
the pleadings, depositions, answers to interrogatories and admissions on file, together with
affidavits, if any, show that there is no genuine issue of material fact and that the moving party is
entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Anderson v. Liberty Lobby, Inc., All
U.S. 242, 249 (1986). The moving party bears the initial burden of stating the basis for its
motion and identifying those portions of the record demonstrating the absence of genuine issues
of material fact. Celotex Corp. v. Catrett, All U.S. 317, 323-24 (1986). That burden can be
discharged if the moving party can show the Court that there is "an absence of evidence to
support the nonmoving party's case." Id. at 323, 325. When the moving party has met this initial
burden, the nonmoving party must then designate specific facts showing that there exists some
genuine issue of material fact in order to defeat summary judgment. Id. al 324.
Issues of fact are "genuine" only if a reasonable jury, considering the evidence
presented, could find for the nonmoving party. Anderson, All U.S. at 249. Material facts are
those that will affect the outcome of the trial under governing law. Id. at 248; Hickson Corp. v.
Crossarm Co., 357 F.3d 1256, 1259-60 (1 lth Cir.2004). In determining whether a material issue
of fact exists, the court must consider all evidence in the light most favorable to the nonmoving
party. Sweat v. Miller Brewing Co., 708 F.2d 655 (1 lth Cir.1983). If the determination of the
case hinges on which competing version of the facts or events is true, the case should be
submitted to the trier of fact and the motion for summary judgment denied. Rollins v.
TechSouth, Inc., 833 F.2d 1525, 1531 (1 lth Cir.1987). The weighing of evidence and the
consideration of the credibility thereof are issues of fact to be determined by the jury at trial. See
Warrior Tombigbee Transp. Co. v. M/VNan Fung, 695 F.2d 1294, 1299 (1 lth Cir. 1983).
At their core, the pending motions for summary judgment are properly distilled into the
following issues: (1) whether Florida law provides Allstate with a judicial remedy to avoid
payments to the health care clinics in the event it is shown that the defendants failed to comply
with the HCCA; (2) if such a judicial remedy exists, whether there exists a genuine issue of
material fact with regards to the allegations of noncompliance with the HCCA and other
allegations of fraud and material misrepresentation; (3) whether Dr. Vizcay can be held liable for
unjust enrichment without proof of a direct benefit that flowed to her individually; and (4)
whether Allstate is entitled to seek a declaratory judgment against Dr. Vizcay for unpaid
invoices.1 Each will be discussed in turn.
Under Florida law, an insurer is entitled to seek a judicial remedy to
recover past payments, and avoid future payments due on
outstanding invoices, when health care clinics fail to comply with the
licensing requirements of the HCCA.
Each defendant argues that Allstate is not permitted to challenge the licenses of the health
care clinics under the licensing regulations prescribed by the HCCA. See (Dkls. 256, pp. 6-11;
262, pp. 7-13; 264, pp. 17-18). At bottom, this line of reasoning rests entirely on the premise
that insurers are not permitted to challenge a health care clinic's compliance with the HCCA in
order to avoid unlawful charges. That argument was rejected by the Eleventh Circuit in a recent
unpublished opinion. See State Farm Fire & Casualty Co. v. Silver Star Health and Rehab, Inc.,
_ Fed. App'x _, 2013 WL 3989107 (1 lth Cir. Aug. 6, 2013).2
Some of the defendants seek summary judgment based on the expiration of the statute
of limitations on certain bills. (Dkt. 256). However, all of the claims in this action are based, at
least in pari, on the alleged fraudulent conduct or negligent concealment by the defendants. As
the moving defendants point out, however, "there is an issue as to when the facts giving rise to
the causes of action were discovered or should have been discovered with the exercise of due
diligence and thus a fact issue may exist." Id. at n. 8. The Court agrees. See Davis v. Monahan,
832 So. 2d 708, 709-10 (Fla. 2002).
Of course,"[i]n this Circuit, 'unpublished opinions are not binding precedent but they
may be cited as persuasive authority.'" Suntree Tech., Inc. v. Ecosense Intern., Inc., 693 F.3d
1338, 1349 (1 lth Cir. 2012) (internal citations omitted). This Court finds the reasoning of the
Silver Star case persuasive.
In StiverStar, the appellant argued that because the HCCA does not expressly authorize
courts to determine whether health care clinics arc in compliance with the licensing requirement,
the district court erred by not dismissing the lawsuit. Id. at *2. Like the defendants in this case,
the appellants suggested the licensing provisions are only enforceable by criminal and
administrative penalties, not by insurers to whom claims for payment are made. Id.
Acknowledging the absence of an express reference to a judicial remedy in the HCCA, and after
canvassing the applicable portions of the statute that exempt insurers from paying unlawful
charges,3 the Eleventh Circuit held that "it would make no sense" to read into the statute a
provision that the courts are powerless to enforce the licensing provisions in the HCAA. Taking
it a step further, the only way the statute can be read to make any sense at all, is to hold that
insurers may rely on the licensing provisions of the HCAA to challenge any unlawful bills
submitted by health care clinics. Insofar as the defendants base their motions on the premise that
Allstate cannot challenge the health care clinic's compliance with the HCAA to avoid payment,
each is denied.
3"All charges or reimbursement claims made by or on behalf of a clinic that is required
to be licensed under this part, but that is not so licensed, or that is otherwise operating in
violation of this part, are unlawful charges, and therefore arc noncompcnsablc and
unenforceable." Fla. Stat. § 400.9935(3). Furthermore, Florida's no fault PIP statute states "[a]n
insurer ... is not required to pay a claim or charges ... [f]or any service or treatment that was
not lawful at the time rendered ...," id. § 627.736(5)(b)l.b., and it defines "lawful" as "in
substantial compliance with all relevant applicable criminal, civil, and administrative
requirements of state and federal law related to the provision of medical services and treatment,"
id. § 627.732( 11) (emphasis added).
Disputed issues of material fact preclude summary judgment with
regards to Counts I, II, III, and VI.
That Allstate is permitted to challenge whether the defendants complied with the
statutory requirements of the HCCA does not resolve the matter in Allstate's favor on summary
judgment. Specifically, Allstate is seeking summary judgment against Best Care, Dana, P.V.C,
and Dr. Vizcay on Count I (Negligent Misrepresentation), Count II (Common Law Fraud), Count
III (Unjust Enrichment), and Count VI (Declaratory Relief as to Failure to Comply with Medical
Director Duties/Violation of Florida Statutes §§ 400.9935 & 627.736 Regarding the Medical
Director Clinics). By these claims, Allstate seeks to show that the health clinics (only Best
Care, Dana, and P.V.C, for the purposes of this motion), along with Dr. Vizcay, were unlawfully
operating and thus Allstate is not required to pay the outstanding bills and it should be
reimbursed for those bills already paid.
In support of its motion, Allstate submits the expert testimony of Connie G. Coleman,
L.P.N., C.P.C, C.H.C, A.C.A., a licensed practical nurse and certified professional coder. After
performing a "file by file review" of the medical bills, Coleman ultimately concluded that the
bills were not properly coded, rendering the bills fraudulent and unlawful and, therefore, not
compensable. Coleman also concluded that Dr. Vizcay failed to comply with the statutory
requirement of conducting a systematic review of the bills to ensure they were not fraudulent and
unlawful. Allstate, however, fails to appreciate the existence of record evidence to the contrary.
Dr. Vizcay declared that she complied with the statutorily prescribed obligations of a medical
director. See (Dkt. 256-5, ffl| 22-33); see also (Dkt. 257, ffl[ 39-52). While the Court recognizes
that the declaration is fairly conclusory in nature the Court must also balance that with the
practical difficulty that is inherent in proving a negative. This is especially true in a case such as
this when the proof that must be overcome is in the form of expert opinion. In essence, Coleman
will be testifying that she reviewed various records and, in her opinion, Dr. Vizcay could not
have reviewed the bills and complied with her statutory obligations. Ostensibly, Dr. Vizcay will
testify that she did. It will ultimately be up to the jury to determine whether to give more weight
to Coleman's expert opinion or Dr. Vizcay's fact testimony. In any event, summaryjudgment is
not properly entered with respect to Counts I, II, III, and VI.
Florida law does not require a "direct benefit" to How to a defendant
in order to be liable for unjust enrichment.
Dr. Vizcay seeks summary judgment as to the unjust enrichment claim (Count III)
principally on the grounds that Dr. Vizcay did not receive a "direct benefit" from Allstate. See
(Dkt. 264, p. 10). It is true that in order to maintain a claim for unjust enrichment under Florida
law, a plaintiff must have conferred a direct benefit on the defendant. See Peoples Nat. Bank of
Commerce v. First Union Nat. Bank ofFlorida, N.A., 667 So. 2d 876, 879 (Fla. 3d DCA 1996).
As my colleague, Judge Presnell, illustrated in State Farm Fire & Casualty Co. v. Silver Star
Health and Rehab, Inc., 2011 WL 6338496, at *7 (M.D. Fla. Dec. 19, 2011), any determination
of a benefit flowing to Dr. Vizcay is largely dependent on the disputed factual issues surrounding
the ownership status of the health care clinics. Dr. Vizcay's remaining arguments are meritless
and can be summarily rejected without further discussion. Accordingly, Dr. Vizcay's motion for
summary judgment is denied as to Count III.
Dr. Vizcay is not personally liable for unpaid invoices.
Dr. Vizcay also moves for summary judgment as to Counts IV-VII, because these counts
are based on contractual fee agreements between Allstate and the health care clinics, not Dr.
Vizcay individually. (Dkt. 263). As Dr. Vizcay points out, it is the health care clinics that hold
the assignment of benefits; it is the health care clinics that submitted the claims to Allstate for
payment; and it is the health care clinics, consequently, that have the expectation (or perhaps
more appropriately, the entitlement) to be paid on these claims; Dr. Vizcay claims nothing.
Notwithstanding, Allstate argues that Dr. Vizcay was one of the wrongful actors in this scheme
and, ultimately, the beneficiary of any payment by Allstate to the healthcare clinics on the
disputed claims. (Dkt. 280, pp. 19-20). Allstate is conflating Dr. Vizcay's role as an individual
participant in the overall scheme with the role of the health care clinics as the beneficiaries of the
Allstate's response to Dr. Vizcay's motion for summary judgment reveals that Allstate
implicitly recognizes that Dr. Vizcay is not properly named a defendant in the declaratory
judgment actions. See (Dkt. 280, p. 20) ("[T]he Court should look beyond the mere corporate
form and consider VIZCAY's actions in the determination of the questions presented by
ALLSTATE's declaratory judgment actions, i.e., whether ALLSTATE has any obligation to pay
the bills coming from the Defendant Clinics because VIZCAY's actions ... are in the heart of
the determination as to whether the clinics operated without a proper license.") (emphasis
added). To be sure, the complaint only seeks a declaration that Allstate is not obligated to make
payments on the bills submitted by the health care clinics. See (Dkt. l,ffl| 124 ("ALLSTATE is
uncertain as to whether the charges billed by the DE FACTO CLINICS to ALLSTATE are
properly payable ... ."); 163 ("This action ... seeks to determine ALLSTATE's payment
obligations . .. related to bills submitted by the MEDICAL DIRECTOR CLINICS ... ."); 177
("This action . .. arises out of a dispute . .. with respect to ALLSTATE's payment obligation for
rendered services ... related to bills submitted by the CHIROPRACTIC CLINICS
("This action . . . seek[s] to determine . . . ALLSTATE's payment obligations . . . relating to bills
submitted by each of the CLINICS . ..."). It is of no consequence that Dr. Vizcay may receive
some form of benefit from the receipt of payments by the health care clinics should they prevail
in this action. What matters, and what is clear from the pleadings and record evidence, is that
Allstate is not obligated to make any payments directly to Dr. Vizcay and, likewise, Dr. Vizcay
has no legal right to collect payments from Allstate. Accordingly, the Court will grant Dr.
Vizcay's motion for summary judgment insofar as it relates to Counts IV through VII. See, e.g.,
Silver Star, 2011 WL 6338496, at *5 (M.D. Fla. Dec. 19, 2011). Accordingly, it is
ORDERED that Defendant, Sara C. Vizcay, M.D.'s Motion for Summary Judgment and
Memorandum of Law and Request for Oral Argument (Dkt. 264) is GRANTED IN PART and
DENIED IN PART. Vizcay's motion for summary judgment is granted insofar as it seeks
summary judgment of Counts IV through VII. The motion is denied in every other respect.
IT IS FURTHER ORDERED that Defendants Best Care Medical Center, Inc., Florida
Rehabilitation Practice, Inc. (f/k/a Dana Medical Center, Inc.), and P.V.C. Medical Center, Inc.'s
Motion for Summary Judgment (Dkt. 256) is DENIED.
IT IS FURTHER ORDERED that Defendants, Caleb Healthcare, Global Diagnostics,
Personal Medical Centerand Regional Enterprises for Health's Motions [sic] for Summary
Judgment (Dkt. 262) is DENIED.
IT IS FURTHER ORDERED that Allstate's Motion for Summary Judgment as to
Vizcay and the Medical Director Clinic Defendants and Memorandum of Law (Dkt. 263) is
DONE AND ORDERED in Chambers in Tampa, Florida thisSffiay of September,
Copies furnished to: All Counsel ol Record
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