The Estate of Juanita Amelia Jackson v. Sandnes et al

Filing 94

ORDER: Defendants GTCR Fund VI, L.P.; GTCR Golden Rauner, LLC; and GTCR Partners VI, L.P.'s Motion to Dismiss 32 is GRANTED. The Complaint is dismissed without prejudice and with leave to amend by February 14, 2014, if the Jackson Estate so chooses. See Order for details. Signed by Judge Virginia M. Hernandez Covington on 2/3/2014. (KAK)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
THE ESTATE OF JUANITA AMELIA
JACKSON, by and through CATHY
JACKSON-PLATTS, Personal
Representative,
Plaintiff,
v.

Case No. 8:13-cv-1133-T-33MAP

MICHAEL SANDNES, as Court
Appointed Receiver for Trans
Healthcare, Inc.; ALAN M.
GROCHAL, as Court Appointed
Receiver for Trans Healthcare,
Inc.; TYDINGS & ROSENBERG, LLC;
GENERAL ELECTRIC CAPITAL
CORPORATION; GTCR GOLDER
RAUNER, LLC; GTCR FUND VI,
L.P.; GTCR PARTNERS VI, L.P.;
VENTAS REALTY, LIMITED
PARTNERSHIP; and VENTAS, INC.,
Defendants.
/
ORDER
This matter comes before the Court pursuant to Defendants
GTCR Fund VI, L.P.; GTCR Golden Rauner, LLC; and GTCR Partners
VI, L.P.’s Motion to Dismiss (Doc. # 32), filed on June 19,
2013, to which the Jackson Estate responded on July 1, 2013
(Doc. # 36), and to which the GTCR Defendants replied on July
19, 2013. (Doc. # 46). Defendants Ventas, Inc. and Ventas
Realty, Limited Partnership joined in the Motion on August 26,
2013 (Doc. # 56), and the Jackson Estate responded to the
Ventas Defendants’ joinder in the Motion on September 9, 2013.

(Doc. # 60).

As explained in more detail below, the Court

grants the Motion.
I.

Background
A.

The $110,000,000 Judgment

Juanita Amelia Jackson was a nursing home resident at
Auburndale Oaks Healthcare Center in Polk County, Florida from
August 23, 2002, through December 1, 2002, and again on March
27, 2003, until May 30, 2003. (Doc. # 1 at ¶ 5).

Non-parties

Trans Healthcare, Inc. (“THI”) and Trans Health Management,
Inc. (“THMI”) operated and managed the nursing home during
Jackson’s residency.

(Id.).

Jackson suffered from abuse and

neglect at the nursing home and died. (Id. at 1).
On July 30, 2004, the Jackson Estate filed suit against
THI and THMI in the Circuit Court for Polk County, Florida for
personal injuries and wrongful death resulting from abuse and
neglect during Jackson’s nursing home residency.
38).

(Id. at ¶

“At the time the Jackson Estate filed its claim against

THI and THMI, these combined, vertically integrated companies
were the largest private nursing home management chain in
America, with revenues of over a billion dollars.” (Id. at ¶
39).

However, in February of 2006, “the stock of THMI was

allegedly sold to a company with the name Fundamental Long
Term Care, Inc. for the discounted sum of $100,000.” (Id. at
2

¶ 90).

As for THI, as a result of “unlawful and wrongful

transfers in 2006, THI was left with only a small group of
unprofitable subsidiaries and property, which were gradually
sold off.” (Id. at ¶ 114).
On January 8, 2009, a Maryland state court appointed
Michael Sandnes as Receiver of THI and authorized Sandnes to
employ Tydings & Rosenberg as counsel for the Receiver. (Id.
at ¶¶ 134-137).

Thereafter, on July 27, 2010, Alan Grochal,

Esq. was appointed as a substitute Receiver for THI. (Id. at
¶ 138).1

The Receiver directed counsel for THI and THMI to

withdraw representation of THI and THMI and to cease defending
against the Jackson Estate’s claims in the Florida state
court. (Id. at ¶¶ 170-173). In accordance with the Receiver’s
directive, counsel moved to withdraw on April 29, 2010, and
the state court granted the motion on June 4, 2010. (Id. at ¶¶
171, 174).

As of June 25, 2010, after THI and THMI failed to

secure new counsel and failed to attend a pretrial conference,
the Jackson Estate moved for a default, which the state court
granted on July 7, 2010. (Id. at ¶¶ 177-178).

The case

proceeded to a three day jury trial, and on June 22, 2010, a

1

In the Complaint, the Jackson Estate refers to both
Sandnes and Grochal as “the Receiver.” The Court will do the
same herein.
3

final judgment in the amount of $110,000,000 was entered
against THI and THMI.

(Id. at ¶¶ 179-180).

No appeal was

taken. (Id. at ¶ 181).
B.

The Jackson Estate’s Present Collection Effort

The

Jackson

judgment

“was

Estate

indicates

uncollectable

that

against

THI

the
and

$110,000,000
THMI”

and

characterizes THI and THMI as “empty shells with no assets.”
(Id. at ¶ 182).

Thus, the Jackson Estate has cast a wide net

in its efforts to redeem its judgment.2
On April 26, 2013, the Jackson Estate filed the present
action seeking damages against all Defendants for violation of
civil rights under 42 U.S.C. § 1983 (count 1) and for civil
conspiracy under Florida law (count 2).

2

The basis of the

See, e.g., Estate of Jackson v. Trans Health Mgmt., Inc.,
et al., Case No. 8:10-cv-2937-T-33TGW (United States District
Court, Middle District of Florida); Estate of Jackson v. Trans
Health Mgmt., Inc., et al., Case No. 8:13-cv-2453-T-23TBM
(United States District Court, Middle District of Florida);
Estate of Jackson v. Trans Health Mgmt., Inc., et al., Case
No. 2004-CA-3229 (Circuit Court, Polk County, Florida); Estate
of Jackson v. McGraw Hill Companies, Inc., Case No. 8:13-cv850-T-23MAP (United States District Court, Middle District of
Florida). The Jackson Estate also filed an involuntary chapter
7 bankruptcy petition against Fundamental Long Term Care, Inc.
(the 100% owner of THMI’s stock) on December 5, 2011, in the
United States Bankruptcy Court for the Middle District of
Florida. (In re: Fundamental Long Term Care, Inc., Case No.
8:11-bk-2258-MGW). That case has spawned a number of related
adversary proceedings, including among many others Case No.
8:13-ap-893-MGW, which was filed on October 1, 2013.
4

Complaint is that the Receiver, counsel for the Receiver
(Tydings & Rosenberg), as well as a host of other Defendants
(including General Electric Capital Corporation; GTCR Fund VI,
L.P.; GTCR Golden Rauner, LLC; GTCR Partners VI, L.P.; Ventas,
Inc.; and Ventas Realty, Limited Partnership) “conspired to
defeat the Plaintiff’s claims by liquidating the assets of the
former

nursing

home

operators,

concealing

them

in

newly

created entities, and leaving behind liability-ridden empty
shells.” (Doc. # 1 at 2).
The Complaint details a very intricate scheme in which
the Receiver, allegedly joined by the private Defendants,
looted the THI entities and then set forth on a massive
litigation campaign designed to frustrate the Jackson Estate’s
judgment collection efforts.

The Jackson Estate specifically

contends that Defendants’ actions “have violated Plaintiff’s
rights to due process of law guaranteed by the Constitution of
the

United

States

under

the

Fourteenth

Amendment,

the

Privileges and Immunities Clause of Article VI, and the Equal
Protection

Clause

as

applied

through

the

Fourteenth

Amendment.” (Id. at ¶ 280).
At this juncture, the GTCR Defendants seek dismissal of
the Complaint pursuant to Rule 12(b)(6), Fed. R. Civ. P.

5

II.

Rule 12(b)(6) Legal Standard
On a motion to dismiss, this Court accepts as true all

the allegations in the complaint and construes them in the
light most favorable to the plaintiff.

Jackson v. Bellsouth

Telecomms., 372 F.3d 1250, 1262 (11th Cir. 2004).

Further,

this Court favors the plaintiff with all reasonable inferences
from the allegations in the complaint.

Stephens v. Dep’t of

Health & Human Servs., 901 F.2d 1571, 1573 (11th Cir. 1990)
(“On a motion to dismiss, the facts stated in [the] complaint
and all reasonable inferences therefrom are taken as true.”).
However, the Supreme Court explains that:
While a complaint attacked by a Rule 12(b)(6)
motion to dismiss does not need detailed factual
allegations, a plaintiff’s obligation to provide
the grounds of his entitlement to relief requires
more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action
will not do. Factual allegations must be enough to
raise a right to relief above the speculative
level.
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)(internal
citations omitted).

Further, courts are not “bound to accept

as true a legal conclusion couched as a factual allegation.”
Papasan v. Allain, 478 U.S. 265, 286 (1986).
In

accordance

with

Twombly,

Federal

Rule

of

Civil

Procedure 8(a) calls for “sufficient factual matter, accepted
as true, to ‘state a claim to relief that is plausible on its
6

face.’” Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009)(quoting
Twombly, 550 U.S. at 570).

A plausible claim for relief must

include “factual content [that] allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged.” Id.
III. Analysis
Section 1983, the basis of this Court’s jurisdiction,
provides a cause of action for damages against any person who,
under color of state law, deprives another person of any
“rights, privileges, or immunities secured by the Constitution
and laws.” 42 U.S.C. § 1983.

In the Complaint, the Jackson

Estate asserts its § 1983 claim against all Defendants.

This

Court has dismissed the Receiver and Counsel for the Receiver
for lack of jurisdiction under the Barton Doctrine (Doc. #
30). Accordingly, the Jackson Estate’s sole federal claim can
survive only if the Complaint allegations plausibly support
that one or more of the remaining Defendants (all private
actors) was a state actor.
“[T]he

under-color-of-state-law

element

of

§

1983

excludes from its reach merely private conduct, no matter how
discriminatory or wrongful.” Focus on the Family v. Pinellas
Suncoast Transit Auth., 344 F.3d 1263, 1277 (11th Cir. 2003).
Private parties can be deemed state actors for § 1983 purposes
7

“only in rare circumstances.” Harvey v. Harvey, 949 F.2d 1127,
1130 (11th Cir. 1992).

For the private Defendants to be

deemed state actors in this case, one of the following
conditions must be met:
(1) The State coerced or at least significantly
encouraged the action alleged to violate the
Constitution (“State compulsion test”); (2) the
private parties performed a public function that was
traditionally the exclusive prerogative of the State
(“public function test”); or (3) the State had so
far
insinuated
itself
into
a
position
of
interdependence with the [private parties] that it
was
a
joint
participant
in
the
enterprise
(“nexus/joint action test”).
Rayburn v. Hogue, 241 F.3d 1341, 1347 (11th Cir. 2001).

The

Jackson

the

Estate

argues

nexus/joint action test.
A.

that

the

Complaint

satisfies

The Court disagrees.

Temporal Relationships

Identifying any allegations tending to show that the
private Defendants were joint participants with the Maryland
Receiver and counsel for the Receiver is no easy task for a
number of reasons.

While some of the Jackson Estate’s

allegations are tethered to reality via temporal references,
many are not.

Those Complaint allegations to which the

Jackson Estate has ascribed a temporal reference appear to
predate both the Receiver’s appointment, which occurred on
January 8, 2009, and the entry of the judgment, which occurred

8

on June 22, 2010.

For example, pages 10 through 24 of the

Complaint, under the heading “Statement of Operative Facts,”
weave a complex tale involving illegal campaign contributions,
Medicare fraud, fraudulent financial statements by THI, and
other “rumors of fraud” transpiring between 2004 and 2008.
(Doc. # 1 at ¶¶ 38-133).

Plainly, any allegations describing

conduct by the private Defendants prior to the appointment of
the

Receiver

cannot

constitute

state

action

for

§

1983

purposes.
In addition, the crux of the Jackson Estate’s claim is
that the Defendants conspired to prevent collection of the
June 22, 2010, judgment: “to date, nearly three years after
its

entry,

the

Plaintiff

has

yet

to

collect

the

final

judgment.” (Id. at ¶ 283). The Jackson Estate alleges a
“constitutionally protected property” interest by virtue of
“the final judgment” in the underlying wrongful death action.
(Id. at ¶ 269). Prior to the entry of that judgment, however,
the Jackson Estate had a mere “expectation” which cannot
support a § 1983 action. See Bd. of Regents v. Roth, 408 U.S.
564, 576 (1972)(property interests under the Constitution are
“interests that a person has already acquired”); Adams v.
Bainbridge-Decatur Cnty. Hosp. Auth., 888 F.2d 1356, 1363
(11th

Cir.

1989)(Fourteenth

Amendment
9

property

interest

requires “more than a unilateral expectation; the individual
must possess a legitimate claim of entitlement.”).

Thus, any

Complaint allegations predating entry of the judgment would
also have little, if any relevance to the § 1983 claim.3
As noted, much of the Complaint is devoted to describing
nefarious events that transpired years prior to both the
Receiver’s appointment and the entry of the $110,000,000
judgment.

This leaves the Court at a great disadvantage in

its quest to identify relevant “state action” by the remaining
private party Defendants.

The fact that the Complaint often

lumps all Defendants together and does not set forth separate
and specific allegations regarding each individual Defendants’
alleged participation in the purported scheme to harm the
Jackson

Estate

makes

the

Court’s

task

that

much

more

difficult.
Beginning at Complaint paragraph 143, the Jackson Estate
alleges that “the Defendants designed the Receivership” to
“avoid bankruptcy” proceedings, “mislead creditors”, and “buy
time.” (Doc. # 1 at ¶¶ 143-145, 151). The Complaint also
describes with great detail the litigation conduct undertaken

3

If the Jackson Estate is claiming an injury that extends
beyond collection of the judgment, it is not apparent to the
Court.
10

by the Receiver with the allegedly unfair result of rendering
the Jackson Estate’s judgment an uncollectible one, including
entering into a settlement agreement and seeking the Maryland
Court’s

approval

of

the

same. (Id.

at ¶¶ 198-199). The

Complaint further alleges:
The Receiver, Tydings, GECC, GTCR, and Ventas
conspired to seize the assets of former nursing
home operators, conceal them in newly created
entities, and leave behind empty shells to defraud
their Florida creditors, including Plaintiff.
As part of the conspiracy, the Receiver and
GECC colluded to place THI into an invalid Maryland
state court receivership for the specific purpose
of avoiding payment to the creditors of THI,
including the Plaintiff, without due process of
law.
While acting under color of law and misusing
established Maryland state court procedure, the
Receiver diverted the assets of THI to other
insiders, including Tydings, GECC, GTCR, and
Ventas, thereby dissipating Plaintiff’s property
rights without due process of law.
The Receivership did not make any payments to
the creditors of THI, including vendors.
The only payments made by the Receivership
were to Defendants and co-conspirators, GECC, the
Receiver, and Tydings.
Such payments were unlawful and in furtherance
of the conspiracy.
With the Receivership, the Receiver, Tydings,
GECC, Ventas, and GTCR were able to keep millions
of dollars worth of assets they had fraudulently
received and avoided any liability to creditors
like the Plaintiff.
11

(Id.

at

¶¶

249-255).

As

noted,

these

accusations

are

unanchored by allegations of time and place, rendering the
Court’s

mission

of

identifying

relevant

“state

action”

Estate

pursued

impossible.4
The

Court

observes

that

the

Jackson

similar claims in Jackson-Platts v. Mcgraw-Hill Companies, No.
8:13-cv-850-T-23MAP.

Among other allegations, the Jackson

Estate contended that “[Rubin] Schron, along with GTCR Golden
Rauner, LLC, GTCR Fund VI, L.P., GTCR Partners VI, L.P.
(collectively ‘GTCR’), General Electric Capital Construction
(‘GECC’), Ventas Realty, L.P., and Ventas, Inc. (collectively
‘Ventas’), conspired for their own self-interest, to loot the
assets of nursing homes to the direct detriment of nursing
home residents, including the Jackson Estate.” (Id. at Doc. #
1, ¶ 3).

There, in dismissing the complaint with leave to

amend, the court noted:
[T]he
complaint
is
a
confusing,
ambiguous,
generalized,
conclusory,
uninformative
(and
intermittently melodramatic) paper. The complaint

4

In addition, general allegations, such as the
allegation that General Electric Capital, the GTCR Defendants,
and the Ventas Defendants “knowingly and intentionally
conspired and participated with the Receiver acting under
color of state law to deprive Plaintiff’s federally protected
constitutional rights” (Doc. # 1 at ¶¶ 14, 26, 32) are nothing
more than legal conclusions masquerading as factual
allegations, and do not support “joint action.”
12

requires considerable energy to read with patience
and to attempt to understand with confidence.
Although alleging an encompassing, malevolent, and
predatory scheme, the complaint provides to the
disinterested reader little or nothing on which to
conclude that the allegations arise from a sound
factual basis or, more to the point, that the
pleader has even the least notion that the
allegations arise from a sound factual basis. The
constant attribution of acts to “the Defendants”
and
“the
Co-Conspirators”
disguises
much
information necessary to glean the meaning, if any,
of the allegations. The almost entire absence of
allegations of time, place, and manner and the
pertinent absence of the identity of the particular
actors is wholly disabling to the disinterested
reader. These omissions are so impairing and so
obvious that the disinterested reader tends to
doubt their inadvertence.
(Id. Doc. # 43 at 9-10).

The Jackson Estate’s present

Complaint suffers from many of the same infirmities.

As

articulated in more detail below, the Court grants the Jackson
Estate the opportunity to file an amended complaint to cure
the deficiencies, if it chooses to do so.
B.

Litigation Privilege

In addition, it appears to this Court that much of the
conduct alleged in the Complaint is privileged litigation
conduct, and thus could not provide a foundation for a § 1983
action.

“The Supreme Court of Florida . . . has stated ‘the

litigation privilege applies across the board to actions in
Florida, both to common-law causes of action, those initiated
pursuant to a statute, or of some other origin.
13

Absolute

immunity must be afforded to any act occurring during the
course of a judicial proceeding so long as the act has some
relation to the proceedings.” Gaisser v. Portfolio Recovery
Assocs., LLC, 571 F. Supp. 2d 1273, 1279-80 (S.D. Fla.
2008)(quoting Echevarria, McCalla, Raymer, Barrett & Frappier
v. Cole, 950 So. 2d 380, 384 (Fla. 2007)).5
Federal law provides a similar protection. The First
Amendment to the United States Constitution guarantees the
right

to

“petition

the

Government

grievances.” U.S. Const. Amend. I.

for

a

redress

of

As explained in Atico

International U.S.A. v. Luv N’ Care, Limited., No. 09-60397,
2009 U.S. Dist. LEXIS 73540, at *7 (S.D. Fla. Aug. 19, 2009),
“a form of litigation immunity akin to the immunity provided
by the Noerr-Pennington doctrine applies to non-antitrust
cases . . . Thus, a complaint that alleges only pre-litigative
and litigative activities cannot state a cause of action.”
See also Campbell v. PMI Food Equip. Group, Inc., 509 F.3d
776,

790

(6th

Cir.

2007)(“Although

the

Noerr-Pennington

doctrine was initially recognized in the antitrust field, the
federal courts have by analogy applied it to claims brought

5

“Maryland applies the rule of lex loci delicti in tort
cases, that is the law of the state where the harm occurred.”
Yang v. Lee, 163 F. Supp. 2d 554, 561 (D. Md. 2001).
14

under both state and federal laws.”).6
The Court tends to agree with Defendants that litigation
conduct

(such

as

petitioning

the

Maryland

Court

for

a

receivership, settling claims and seeking Court approval of
such settlement, and filing and defending against litigation
in state and federal court, etc.) is immune conduct and cannot
be relied upon by the Jackson Estate to constitute “state
action” in violation of a federal right.
IV.

Conclusion
The Court grants the Motion to Dismiss because the

Jackson Estate’s sole federal claim, and the basis of this
Court’s jurisdiction, fails to contain pertinent allegations
which state a claim entitling the Jackson Estate to relief.
In the interests of fairness, however, the Court will allow
the

Jackson

Estate

the

opportunity

to

file

an

amended

complaint on or before February 14, 2014, if it so chooses, in
accordance with the foregoing analysis.
Accordingly, it is hereby

6

See E. R.R. Presidents Conf. v. Noerr Motor Freight,
Inc., 365 U.S. 127 (1961)(granting antitrust immunity for
publicity campaign designed to spur the adoption of monopolyfacilitating legislation); United Mine Workers v. Pennington,
381 U.S. 657, 670 (1965)(noting that Noerr shielded a
defendant from antitrust liability for “efforts to influence
public
officials
even
though
intended
to
eliminate
competition.”).
15

ORDERED, ADJUDGED, and DECREED:
(1)

Defendants GTCR Fund VI, L.P.; GTCR Golden Rauner, LLC;
and GTCR Partners VI, L.P.’s Motion to Dismiss (Doc. #
32) is GRANTED.

(2)

The Complaint is dismissed without prejudice and with
leave to amend by February 14, 2014, if the Jackson
Estate so chooses.
DONE and ORDERED in Tampa, Florida, this 3rd day of

February, 2014.

Copies to:

All Parties and Counsel of Record

16