Allstate Insurance Company et al v. Vizcay et al
Filing
526
ORDER Granting in Part and Denying in Part 496 Defendants' Motion for Directed Verdict. This Order also addresses the Parties' oral Motions for Directed Verdict and Judgments as a Matter of Law argued April 18, 2014. See Order for Details. Signed by Judge Elizabeth A. Kovachevich on 4/24/2014. (rjm)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
ALLSTATE INSURANCE COMPANY;
ALLSTATE INDEMNITY COMPANY;
ALLSTATE PROPERTY AND CASUALTY
INSURANCE COMPANY; ALLSTATE FIRE
AND CASUALTY INSURANCE COMPANY;
and ALLSTATE VEHICLE AND PROPERTY
INSURANCE COMPANY (F/K/A DEERBROOK
INSURANCE COMPANY, SUCCESSOR BY
MERGER TO NORTHBROOK INDEMNITY
COMPANY),
Plaintiffs,
v.
Case No. 8:11-CV-804-EAK-EAJ
SARA C. VIZCAY, M.D.; BEST CARE MEDICAL
CENTER, INC.; CALEB HEALTH CARE, INC.;
FLORIDA REHABILITATION PRACTICE, INC.
(F/K/A DANA MEDICAL CENTER, INC.);
GLOBAL DIAGNOSTIC CENTER, INC.;
PERSONAL MEDICAL CENTER, INC.; P.V.C.
MEDICAL CENTER, INC.; and REGIONAL
ENTERPRISES FOR HEALTH CORPORATION,
Defendants.
/
ORDER
This cause comes before the Court on Defendants’, Best Care Medical Center, Inc., Florida
Rehabilitation Practice, Inc., and P.V.C. Medical Center, Inc. (the “Medical Director Clinics”),
Rule 50(a) Motion for Judgment as a Matter of Law, (Doc. # 484), and oral motion for judgment
as a matter of law, Defendants’, Caleb Health Care, Inc., Global Diagnostic Center, Inc., Personal
Medical Center, Inc., Regional Enterprises for Health Corporation (the “Wholly Owned Clinics”),
and Sara C. Vizcay, oral motions for judgment as a matter of law, and Plaintiffs’ oral motion for
judgment as a matter of law.
BACKGROUND
The Plaintiffs brought this action against Dr. Vizcay and seven health care clinics to dispute
and avoid the payment of No-Fault Personal Injury Protection ("PIP") claims. Plaintiffs argue the
PIP payments are not properly payable to the defendant health care clinics. Specifically, Plaintiffs
allege the 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. During the appropriate times at trial, the parties moved for
judgments as a matter of law, and this Court deferred ruling. On April 18, 2014, the Court held
oral argument on the following issues after the parties submitted their respective motions.
I.
The Medical Directors Clinics
1. Can the Medical Director Clinics be Held Liable for Sara C. Vizcay’s Alleged
Failure to Comply with Florida Statute § 400.9935(1)(G)?
Defendants argue that after they appointed Sara C. Vizcay the medical director of the
Medical Director Clinics, any liability under the HCCA ceased, as Florida Statute 400.9935(1)
only requires the clinics to appoint a medical director, and the HCCA does not require the clinics
to ensure the medical director substantially comply with the requirements of the HCCA. Plaintiffs
oppose this argument, and contend the clinics can ultimately be held liable, as the bills were
allegedly fraudulent. Consistent with State Farm Fire & Casualty Company v. Silver Star Health
& Rehab, 739 F.3d 579, 583 (11th Cir. 2013), State Farm Mutual Auto Insurance Company v.
Altamonte Springs Diagnostic Imaging. Inc.. 2011 WL 6450769 (M.D. Fla. 2011), and Active
Spine Centers. LLC v. State Farm Fire & Casualty Company. 911 So.2d 241 (Fla. 3d DCA 2005),
the clinics can be held liable for fraudulent or unlawful bills. Accordingly, this request is
DENIED.
2. Does the Court Have Subject Matter Jurisdiction or Violate Separation of Powers
if an Administrative Finding from the Florida Agency for Health Care
Administration Determined that Defendants Were in Substantial Compliance
with the HCCA Requirements?
Defendants next argue that because the Florida Agency for Health Care Administration
(“AHCA”)—an executive body—determined the Medical Director Clinics were in substantial
compliance with the HCCA, any finding from the judiciary, including a jury verdict, would violate
the separation of powers under Article II, Section 3, of the Florida Constitution. Plaintiffs oppose
this argument, and contend Allstate and other entities have a private right of action to recover
payments for otherwise unlawful bills. Consistent with Silver Star. Altamonte Springs, and Active
Spine, this Court finds it has subject matter jurisdiction, and the HCCA provides a private right of
enforcement. Accordingly, this request is DENIED.
3. Have Plaintiffs Presented Sufficient Evidence at Trial to Prove Negligent
Misrepresentation and Fraud?
Defendants next argue Plaintiffs failed to present sufficient evidence at trial to prove
negligent misrepresentation and fraud against the Medical Director Clinics; specifically: 1) Sara
C. Vizcay accepted sole responsibility for complying with the HCCA; 2) Plaintiffs did not present
evidence that Sara C. Vizcay failed to comply with her duties; and 3) Plaintiffs did not present any
evidence that the Medical Director Clinics made any misrepresentations. Plaintiffs oppose this
argument, and respectively contend: 1) courts have found the clinics liable for a director’s failure
to comply with the HCCA; 2) by submitting the bills and responding to 6(b) requests, the Medical
Director Clinics represented the bills were lawful; and 3) Sara C. Vizcay testified she did not know
the number of patients seen at each clinic, and even admitted during testimony that she may not
have reviewed the bills as closely as she should have. The Court agrees with Plaintiffs’ recitation
of the evidence adduced at trial, and application thereof, and finds the evidence was sufficient to
submit the claim to the jury. Accordingly, this request is DENIED.
4. Have Plaintiffs Presented Sufficient Evidence at Trial to Prove Unjust
Enrichment?
Defendants next argue Plaintiffs failed to present sufficient evidence at trial to prove unjust
enrichment against the Medical Director Clinics; specifically: 1) Plaintiffs did not identify a single
bill that was unlawful or in violation of any Florida Statute; and 2) Plaintiffs failed to introduce
any evidence to suggest the Medical Director Clinics had any requisite knowledge that the bills
were unlawful. Plaintiffs oppose this argument, and contend Sara C. Vizcay’s testimony was clear
that she did not review the bills as closely as she should have, the reviews were insufficient to
comply with the “systematic review” requirement, and based on these deficiencies, the Medical
Director Clinics received a benefit they otherwise should not have received. The Court agrees
with Plaintiffs’ recitation of the evidence and accompanying case law, and finds the evidence was
sufficient to submit the claim to the jury. Accordingly, this request is DENIED.
5. Are Plaintiffs Claims or Damages Subject to the Statute of Limitations, and if so,
Which Claims or Damages are Barred?
On April 22, 2014, the parties were instructed to file substantive memorandum of law on
this issue on or before April 28,2014. The Court reserves ruling on the statute of limitations, and
will issue an order on same after the parties comply with the Court’s instructions.
6. Can Plaintiffs Recover Monetary Damages for Unpaid Claims?
At oral argument on April 18, 2014, Plaintiffs conceded they may not recover monetary
damages for unpaid claims. Accordingly, this request is GRANTED.
7. Have Plaintiffs Presented Sufficient Evidence at Trial to Prove Count VI?
Defendants reincorporate their previous arguments and next argue Plaintiffs failed to
present sufficient evidence at trial to prove Count VI of their Complaint—declaratory relief for
Sara C. Vizcay’s failure to comply with her medical director duties. Plaintiffs reincorporate their
arguments and contend the evidence was sufficient. Consistent with the analysis above, this Court
finds Plaintiffs presented sufficient evidence at trial to submit Count VI of the Complaint to a jury.
Accordingly, consistent with previous rulings, this request is DENIED.
8. Have Plaintiffs Presented Sufficient Evidence at Trial to Prove Kickbacks and
Fee-Split Agreements?
Prior to the jury receiving the charge and jury instructions, the Court orally ruled Plaintiffs
failed to present sufficient evidence to prove kickbacks and fee-split agreements, and declined to
present the instruction to the jury. Consistent with the Court’s ruling, this request is GRANTED.
9. May Plaintiffs Recover without Complying with Florida Statute § 627.736(7)(a)?
Defendants next argue Plaintiffs may not recover due to their failure to comply with Florida
Statute § 627.736(7)(a)—Plaintiffs failed to obtain a medical report or investigate the claims prior
to withholding PIP benefits and payments to the Medical Director Clinics. Plaintiffs oppose this
argument, and contend Florida Statute § 627.736(5) renders the bills unlawful per se, and therefore
the § 627.736(7)(a) requirement is inapplicable. In accord with Eleventh Circuit Rule 36-2, the
Court finds State Farm Mutual Auto Insurance Company v. Williams. 2014 WL 1465726 (11th
Cir. 2014) persuasive. Accordingly, this request is DENIED.
10. Have Plaintiffs Presented Sufficient Evidence to Prove Civil Conspiracy?
Prior to the jury receiving the charge and jury instructions, the Court orally denied Plaintiffs
Federal Rule of Civil Procedure 15(b) Motion to Allege Civil Conspiracy, and did not instruct the
jury on civil conspiracy. Consistent with the Court’s ruling, this request is GRANTED.
II. The Wholly Owned Clinics
1. Does the Court Have Subject Matter Jurisdiction or Violate Separation of Powers
if an Administrative Finding from the Florida Agency for Health Care
Administration Determined that Defendants Were in Substantial Compliance
with the HCCA Requirements?
Consistent with the Court’s ruling above in Section 1-2, this request is DENIED.
2. Have Plaintiffs Presented Sufficient Evidence at Trial to Prove Negligent
Misrepresentation and Fraud?
At oral argument on April 18, 2014, the Wholly Owned Clinics Defendants adopted the
Medical Director Clinics’ arguments with respect to negligent misrepresentation and fraud, and
further argued Plaintiffs failed to present sufficient evidence at trial to prove negligent
misrepresentation and common law fraud. Plaintiffs similarly oppose this argument, and contend
the Wholly Owned Clinics and Sara C. Vizcay made representations that Sara C. Vizcay both
owned the clinics and supervised the business activities at each clinic. The Court agrees with
Plaintiffs’ recitation of the evidence adduced at trial and application thereof, and finds the evidence
was sufficient to submit the claim to the jury. Accordingly, this request is DENIED.
3. Have Plaintiffs Presented Sufficient Evidence at Trial to Prove Unjust
Enrichment Against Sara C. Vizcay?
At oral argument on April 18, 2014, the Wholly Owned Clinics Defendants adopted the
Medical Director Clinics’ arguments with respect to unjust enrichment, and further argued
Plaintiffs failed to present any evidence that Sara C. Vizcay received any payments. Plaintiffs
oppose this argument, and contend an indirect benefit—for instance free rent, office space, and
salary, among other evidence presented at trial—is sufficient.
Florida law is clear: unjust
enrichment requires the benefit be direct to the litigant—in this case Sara C. Vizcay. Kopel v.
Kopel. 117 So.3d 1147 (Fla. 3d DCA 2013). Therefore, as Plaintiffs conceded the benefit proved
at trial was indirect, this request is GRANTED and the jury’s determination of guilt against Sara
C. Vizcay for unjust enrichment is VACATED.
4. Are Plaintiffs Claims or Damages Subject to the Statute of Limitations, and if so,
Which Claims or Damages are Barred?
On April 22, 2014, the parties were instructed to file substantive memorandum of law on
this issue on or before April 28,2014. The Court reserves ruling on the statute of limitations, and
will issue an order on same after the parties comply with the Court’s instructions.
5. Does Florida Statute § 400.9905(4)(g) Require Sara C. Vizcay to Supervise the
Business Activities at the Wholly Owned Clinics?
On April 9,2014, this Court ruled Florida Statute § 400.9905(4)(g) required Sara C. Vizcay
to not only wholly own, but also supervise the business activities at the Wholly Owned Clinics.
(Doc. # 478). Consistent with that order, this request is DENIED.
6. Have Plaintiffs Presented Sufficient Evidence at Trial to Prove Kickbacks and
Fee-Split Agreements?
Consistent with the Court’s ruling above in Section 1-8, this request is GRANTED.
7. May Plaintiffs Recover without Complying with Florida Statute § 627.736(7)(a)?
Consistent with the Court’s ruling above in Section 1-9, this request is DENIED.
8. Have Plaintiffs Presented Sufficient Evidence to Prove Civil Conspiracy?
Consistent with the Court’s ruling above in Section 1-10, this request is GRANTED.
III. The Plaintiffs
1. Are Plaintiffs Entitled to a Directed Verdict as to Whether Sara C. Vizcay Wholly
Owned and Supervised the Wholly Owned Clinics?
Plaintiffs argue Sara C. Vizcay testified she “had no reason to supervise” the clinics
because she “was just a doctor.” Defendants oppose this argument, and contend there was
sufficient evidence for the jury to make this determination. The Court agrees with Defendants’
recitation of the evidence adduced at trial and application thereof, and finds the evidence was
sufficient to submit the determination to the jury. Accordingly, this request is DENIED.
2. Are Plaintiffs Entitled to a Directed Verdict as to Whether Sara C. Vizcay
Systematically Reviewed the Medical Bills?
Plaintiffs next argue Sara C. Vizcay testified her reviews of the medical bills at the Medical
Director Clinics was “random,” and that a representative from AHCA testified that random
reviews were not systematic. Defendants oppose this argument, and contend there was sufficient
evidence for the jury to make this determination. The Court agrees with Defendants’ recitation of
the evidence adduced at trial and application thereof, and finds the evidence was sufficient to
submit the determination to the jury. Accordingly, this request is DENIED.
DONE and ORDERED in Chambers, in Tampa, Florida, this 23d day of April, 2014.
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