State Farm Mutual Automobile Insurance Company et al v. Physicians Group of Sarasota, L.L.C. et al
Filing
42
ORDER denying 5 motion to dismiss. The defendants have ten days to answer the complaint in this case and the parties have up to and including April21,2014 to file a case management report. Signed by Judge Elizabeth A. Kovachevich on 3/25/2014. (SN)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY and STATE
FARM FIRE & CASUALTY COMPANY
Plaintiffs,
vs.
CASE NO.
8:13-CIV-1932-17-TGW
PHYSICIANS GROUP OF SARASOTA, L.L.C.,
PHYSICIANS GROUP, L.L.C. a foreign Delaware
corporation, GARY KOMPOTHECRAS, DAVID
BALOT, DB MEDICAL CONSULTING, INC.,
W.S. MEDIA, INC. a foreign Delaware corporation,
W.S. MARKETING, INC., and WILLIAM SIGELAKIS,
Defendants.
/
ORDER ON DEFENDANT’S MOTION TO DISMISS
THIS CAUSE is before the Court on Defendants’, Physicians Group of Sarasota, LLC,
Physicians Group, LLC, Gary Kompothecras, David Balot, DB Medical Consulting, Inc., W.S.
Media, Inc., W.S. Marketing, Inc., and William Sigelakis (collectively “Defendants”), Motion
to Dismiss (Doc. 5) and Plaintiffs’, State Farm Mutual Automobile Insurance Company and
State Farm Fire & Casualty Company (collectively “State Farm”), response (Doc. 14). The
facts set forth here are taken as true from the complaint only for the purpose of resolving the
motion.
BACKGROUND AND PROCEDURAL HISTORY
This dispute arises from State Farm’s allegations that Defendants have orchestrated a
fraudulent referral scheme to unlawfully collect automobile accident victims’ Personal Injury
Protection and Medical Payment Coverage benefits for treatment services rendered at
Physicians Group clinics throughout Florida.
The elaborate patient referral system revolves around Gary Kompothecras,
1-800-ASK-GARY (“ASK GARY”), and the Physicians Group clinics. According to the
complaint, Kompothecras was, and State Farm alleges still is, the Gary behind ASK GARY, as
well as the principal interest-holder in Physicians Group; ASK GARY is promoted as an
independent medical and legal referral service, when in actuality it refers all patients to
Physicians Group clinics.
The other co-Defendants each fill their own role in perpetuating the scheme: there are
shell companies, W.S. Marketing and W.S. Media, created to insulate Kompothecras and
Physicians Group from ASK GARY; a nominee owner, Sigelakis, to further the appearance of
independent control of ASK GARY; an independent contractor, David Balot operating through
DB Medical Consulting, to handle the day-to-day operations and coordination with the ASK
GARY referral service; all allegedly organized and controlled by Kompothecras. The purpose
of the operation is to maintain a high volume of automobile accident victims entering
Physicians Group clinics for treatment services.
State Farm alleges that such services were unlawfully rendered, therefore relieving both
the patients and State Farm of responsibility for the costs of these services under Florida Statute
Section 627.736(5)(b)(l)(b), based on Defendants’ alleged violations of the Patient Brokering
Act (Fla. Stat. § 817.505), the Patient Self-Referral Act (Fla. Stat. § 456.053), the
Anti-Kickback Statute (Fla. Stat. § 456.054), the Deceptive and Unfair Trade Practices Act
(Fla. Stat. § 501.201 etseq.) (“FDUTPA”), the laws concerning grounds for disciplinary action
against chiropractors related to advertising and solicitation (Fla. Stat. § 460.413 (d), (f), and (1)),
and administrative rules prohibiting the same (Fla. Admin. C. R. 64B2-15.001(2)(a), (b), and
(k)). State Farm’s complaint asserts five counts: (I) common law fraud/fraudulent
misrepresentation against all Defendants; (II) unjust enrichment against all Defendants; (III)
violation of the FDUTPA against all Defendants; (IV) violation of the Patient Self-Referral Act
against Physicians Group and Kompothecras; and (V) declaratory relief under 28 U.S.C.
Section 2201.
STANDARD OF REVIEW
Federal Rule of Civil Procedure 8(a)(2) requires that a complaint contain “a short and
plain statement of the claim showing that the pleader is entitled to relief.” However, the
complaint must include more than “labels and conclusions, and a formulaic recitation of the
elements of a cause of action.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 577 (2007). In
order to withstand a motion to dismiss, “a complaint must contain sufficient factual material,
accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). Twombly's plausibility standard
requires that the allegations be more than merely conceivable. Twombly, 550 U.S. at 570. A
factually sufficient complaint “allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678.
The Court must view the complaint in the light most favorable to the plaintiff, accept all
factual allegations as true, and limit its consideration to the pleadings and any attached exhibits
when determining whether to grant or deny a motion to dismiss. Jackson v. Okaloosa Cnty.,
Fla., 21 F.3d 1531,1534 (11th Cir. 1991); Fed. R. Civ. P. 10(c).
DISCUSSION
In their motion to dismiss, Defendants ask this Court to exercise its permissive power of
abstention and dismiss the complaint in its entirety. Additionally, Defendants claim that the
Rooker-Feldman doctrine requires dismissal of Counts I-IV. Finally, Defendants argue that the
complaint fails to state a cause of action upon which relief can be granted under Federal Rule of
Civil Procedure 12(b)(6) for Counts I-V.
In regards to abstention, this Court finds no doctrine that compels dismissal of the
complaint and the Rooker-Feldman doctrine is similarly inapplicable. State Farm’s complaint
meets the Iqbal standard as to the merits of each claim presented. Accordingly, the Defendants’
Motion to Dismiss Counts I-V is DENIED.
A. Abstention
A District Court may decline to exercise jurisdiction only if the circumstances
surrounding a dispute fit within the “extraordinary and narrow exception” of the abstention
doctrine. Colo. River Water Conserv. Dist. v. United States, 424 U.S. 800, 813 (1976).
“Abstention from the exercise of federal jurisdiction is the exception, not the rule[,]” and is
justifiable only in “exceptional circumstances.” Id. Courts have recognized a number of
abstention doctrines, and the Defendants ask this court to employ the Thibodaux,
Wilton!Brillhart, and Colorado River doctrines in finding abstention appropriate here.
1. Thibodeaux Doctrine
Application of the Thibodaux doctrine is appropriate when the District Court is
presented with “cases raising issues intimately involved with the States’ sovereign prerogative,
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the proper adjudication of which might be impaired by unsettled questions of state law.”
Quakenbush v. Allstate Ins. Co., 517 U.S. 706,717 (1996) (referencing La. Power & Light Co.
v. City o f Thibodaux, 360 U.S. 25,28 (1959)). The key question on the appropriateness of
Thibodaux is whether “the exercise of federal jurisdiction would disrupt states’ attempts to
establish a coherent policy with respect to a matter of substantial public concern.” Paradigm
Ins. Co. v. Carter, 944 F. Supp. 883, 885 (M.D. Fla. 1996) (internal quotations omitted); see
also Burford v. Sun Oil Co., 319 U.S. 315, 347 (1943). Although policy matters of substantial
public concern are tangentially related to accusations brought in this complaint, adjudication of
this dispute in federal court would not act upon state policy or co-opt state prerogatives.
Defendants argue that ruling on this dispute would infringe upon Florida’s, and the
Florida Bar’s, interests in establishing a coherent policy regarding the regulation of legal and
medical referral services. The Florida Bar has recognized that non-lawyer-owned referral
services are not regulated by either the Bar or the state. (Doc. 1-3-1-4) But the issues raised in
State Farm’s complaint do not implicate the regulation of such referral services. Counts I—
IV
rely on alleged violations of state statutes and rules that govern referral and advertising
practices of medical and chiropractic care providers (Fla. Stat. §§ 817.505,456.053,456.054,
and 460.413 (d), (f), and (1)); Fla. Admin. C. R. 64B2-15.001(2)(a), (b), and k)) and FDUTPA
to trigger a payment exception under Florida’s Personal Injury Protection insurance statute,
Section 627.736(5)(b)(l)(b). Enforcing existing state policies does not mean disrupting those
policies. See State Farm Fire & Casualty Co. v. Silver Star Health & Rehab Inc., 2011 WL
6338496 (M.D. Fla. Dec. 19, 2011) {aff’dsub nom. State Farm Fire & Casualty Co. v. Silver
Star Health & Rehab, 739 F. 3d 579 (11th Cir. 2013)); Allstate Ins. Co. v. Vizcay, 2011 WL
5870016 (M.D. Fla. Nov. 22,2011). Accordingly, Defendant’s motion for abstention under
Thibodaux is DENIED.
2.
WtttonlBrillhart Doctrine
Defendants next request this Court to abstain based upon the doctrines defined in
Brillhart v. Excess Ins. Co. o f America, 316 U.S. 491,494— (1942) (“Ordinarily, it would be
495
uneconomical as well as vexatious for a federal court to proceed in a declaratory judgment suit
where another suit is pending in a state court presenting the same issues, not governed by
federal law, between the same parties.”) and Wilton v. Seven Falls Co., 515 U.S. 277,289
(1995) (deciding that Brillhart's discretionary standard, rather than the “exceptional
circumstances” test from Colorado River, 424 U.S. at 818 and Moses H. Cone Memorial
Hospital v. Mercury Constr. Co., 460 U.S. 1,16 (1983) applies in instances where only
declaratory relief is sought). If State Farm’s complaint included only a request for declaratory
judgment, Brillhart's highly discretionary standard would apply. However, since coercive
relief is being sought as well, a question arises as to the applicable abstention standard.
Circuits are split as to whether the Brillhart doctrine can be applied when a plaintiff
requests mixed forms of relief including a declaratory judgment; “[t]his issue has received
different treatment in the courts of appeal that have addressed it.” Regions Bank v.
Commonwealth Land Title Ins. Co., 2012 WL 1135844 (S.D. Fla. Apr. 4, 2012) (quoting R.R.
Street & Co. v. Vulcan Materials Co., 569 F.3d 711,715 (7th Cir. 2009)). However, Florida’s
Southern District has held the Wilton!Brillhart doctrine inapplicable in similar instances. E.g.
Mega Life and Health Ins. Co. v. Tordion, 399 F. Supp. 2d 1366, 1369 (S.D. Fla. 2005) (“A
federal court does not have such broad discretion [as in Wilton] when a plaintiff seeks coercive
relief. . . in addition to a declaration under the Declaratory Judgment Act.”); Vizcay, 2011 WL
5870016 at *5 (Though the Vizcay court does not mention Wilton!Brillhart, it uses the
Colorado River/Cone doctrine in its abstention analysis over mixed claims.).
The Defendants urge this Court to follow the Southern District of Alabama’s lead and
employ a “heart of the action” test to decide if declaratory relief sought in the complaint
predominates over coercive relief. Lexington Ins. Co. v. Rolison, 434 F. Supp. 2d 1228,1237
(S.D. Ala. 2006). This heart of the action rule allows the court to “[cut] through the rhetorical
fog” and determine whether a case’s mixed claims are merely the sheep’s clothing on a
declaratory judgment wolf. Id. at 1238. But even using Rolison as a guide, the circumstances of
this case do not call for Wilton!Brillhart analysis. The Rolison complaint requested a
declaratory judgment; the only claims for monetary relief appeared in a counterclaim, a
counterclaim filed by the same party arguing against abstention. Furthermore, in the instant
case, Counts I-IV can stand independent of Count V. The circumstances of this case are more
analogous to Vizcay and the more stringent Colorado River abstention doctrine should be
applied. The Defendants motion for abstention under the Wilton!Brillhart doctrine is DENIED.
3. Colorado River Doctrine
“Abstention from the exercise of federal jurisdiction is the exception, not the rule.”
Colo. River, 424 U.S. at 813. Under this doctrine, only “exceptional” circumstances constitute
the “extraordinary and narrow exception to the duty of a District Court to adjudicate a
controversy properly before it.” Id. This Court must find a critical reason to surrender
jurisdiction, rather than a substantial justification to exercise it. Moses H. Cone Hosp. v.
Mercury Constr. Corp., 460 U.S. 1, 25-26 (1983); Northern Ins. Co. ofN.Y. v. David Nelson
Constr. Co., 41 F. Supp. 2d 1332,1338 (M.D. Fla. 1999). Colorado River provides four factors
to consider in deciding whether to relinquish a matter to state court when faced with parallel
litigation: (1) which court first assumed jurisdiction over property; (2) the federal forum’s
inconvenience for the parties; (3) the relative importance in avoiding piecemeal litigation; and
(4) which forum exercised jurisdiction first. Cone, 460 U.S. at 15. The court in Cone added two
more factors: (5) which law, state or federal, shall be applied; and (6) the state court’s adequacy
in protecting the parties’ rights. Id. at 26. The six-factor test is a balancing test and “[t]he weight
to be given any one factor may vary greatly depending on the case; however, the balance is
‘heavily weighted’ in favor of the federal court exercising jurisdiction. Vizcay, 2011 WL
5870016 at *5 (citing American Bankers Ins. Co. v. First State Ins. Co., 891 F.2d882,884 (11th
Cir. 1990)).
The first factor is irrelevant to the instant case. Factor two falls against abstention
because the “over 1,000 pending cases” (Doc. 5 at 7) referenced by the Defendant are all in
Florida and pose no greater inconvenience to the parties than federal litigation in Tampa. With
the exception of the federal Declaratory Judgment Act claim, all counts sound in state law, so
factor five weighs in favor of abstention. Consideration of factors three, four, and six illustrates
the importance of parallelism when conducting an abstention analysis.
Parallelism of parties is lacking. District courts in this Circuit have denied abstention
when federal litigants are not parties in the state court proceeding. See Nacol v. Keith Wood
Agency, Inc., 750 F. Supp. 1128, 1130-1131 (M.D. Fla. 1990) (finding differences in parties
and issues between state and federal actions weighed against abstention); Regions Bank v.
Commonwealth Land Title Ins. Co., 2012 WL 1135844 (S.D. Fla. Apr. 4, 2012) (“Here, the
Court finds that the state court action is not truly parallel because Commonwealth is not a
litigant in the state court proceeding.”); Amerisure Ins. Co. v. R.L. Lantana Boatyard, Ltd.,
2010 WL 4676503 (S.D. Fla. Nov. 9,2010) (concluding that there was no need for the court to
consider abstention—though under Brillhart—because there were differences in both parties
and issues between the state and federal suits). The cases in state court involve suits by
Physicians Group of Sarasota, L.L.C. against State Farm seeking to recover the difference
between the Personal Injury Insurance coverage payments State Farm has paid and what
4)
Physicians Group claims is owed. (Eg. Doc. 41-1 at 1— No evidence of the other named
Defendants’ appearance in these state suits has been provided. The state cases and this federal
controversy lack parallelism of issues as well. Some facts are the same: automobile accident
victims, insured by State Farm, have received treatment from Physicians Group clinics and
State Farm disputes the bills. Yet the legal issues raised in these two jurisdictions do not
overlap. The question of parallel litigation was addressed in the Defendants’ Notice of
Supplementary Authority (Doc. 37) and State Farm’s Response to Defendants’ Notice of
Supplemental Authority (Doc. 41). Defendants point to State Farm’s “Set-Off/Recoupment”
affirmative defense in eight of the pending state court actions as proof that the unlawful
referral/solicitation claims brought in State Farm’s federal complaint are already being litigated
in state court. (Doc. 37 at 1-2) State Farm responds that this defense does not allege unlawful
services, but rather provides for a set-off in the instance that State Farm has paid bills for
services later deemed illegal. (Doc. 41 at 1-3) The clearest statement of the issues being
litigated, or not, in state court comes from Physicians Group of Sarasota’s “Facts of the Case”
in their Partial Motion for Partial Summary Judgment (Sarasota County, Case No.:
2012-CC-007013-NC):
Furthermore, the Defendant has made no allegation that the
medical treatment; the medical supplies or medical services were
unlawfully rendered has been made nor that Assignor was
unlawfully referred to the Plaintiff by any person or entity
involving this claim. Please see Affidavit o f David Balot.
(emphasis in original)
(Doc. 41-1T113) Insufficient overlap of parties or issues exists to implicate abstention in any of
the remaining three factors; the dissimilarity of the disputes dispenses with the threat of
piecemeal litigation, the question of which court obtained jurisdiction first, and the issue of the
state court’s adequacy to protect the parties’ rights. The Defendants’ motion for abstention is
DENIED.
B. Rooker-Feldman Doctrine
The Rooker-Feldman doctrine prevents the federal district court from being used an
alternate appellate jurisdiction; its use “is confined to . . . cases brought by state-court losers
complaining of injuries caused by state-court judgments rendered before the district court
proceedings commenced and inviting district court review and rejection of those judgments.”
Nicholson v. Shafe, 558 F.3d 1266,1273 (11th Cir. 2009) (quoting Exxon Mobil Corp. v. Saudi
Basic Indus. Corp., 544 U.S. 280,284 (2005)). With its ruling in Exxon Mobil, the Supreme
Court limited the preclusive action of Rooker-Feldman to those suits filed in federal court “after
the state proceedings ended[.]” Exxon Mobil, 544 U.S. at 291. The Eleventh Circuit has defined
the three scenarios of a state proceeding reaching its end: “(1) when the highest state court in
which review is available has affirmed the judgment below and nothing is left to be resolved;
(2) if the state action has reached a point where neither party seeks further action; or (3) if the
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state court proceedings have finally resolved all the federal questions in the litigation, but state
law or purely factual questions (whether great or small) remain to be litigated.” Lozman v. City
o f Riviera Beach, Fla., 713 F.3d 1066,1072 (11th Cir. 2013) (citing to Nicholson, 558 F.3d at
1275).
Defendants have presented no evidence to this court of a state court proceeding that has
reached such an end point. Defendants’ motion to dismiss based on the Rooker-Feldman
doctrine is DENIED.
C. Rule 12(b)(6) Motion to Dismiss
1. Count One, Fraud
Under Florida law, common-law fraud consists of five essential elements: “(1) a false
statement of fact; (2) known by the person making the statement to be false at the time it was
made; (3) made for the purpose of inducing another to act in reliance thereon; (4) action by the
other person in reliance on the correctness of the statement; and (5) resulting damage to the
other person.” Perry v. Cosgrove, 464 So. 2d 664,666 (Fla. 2d DCA 1985). Federal Rule of
Civil Procedure 9(b) requires a plaintiff to “state with particularity the circumstances
constituting fraud or mistake.” Defendants move to dismiss Count I for failure to comply with
Rule 9(b)’s elevated pleading standard for fraud.
In State Farm Mut. Auto. Ins. Co. v. Altamonte Springs Diagnostic Imaging, Inc.,
2011 WL 6450769 (M.D. Fla. Dec. 21,2011), the insurer predicated a common-law fraud claim
on violations Florida’s No-Fault statute, specifically, “that no statement of medical services
may include charges for medical services of a person or entity that performed such services
without possessing the valid licenses required to perform such services.” Id. at *4 (internal
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quotations omitted); Fla. Stat. § 627.736(5)(d). For the purposes of ruling on a motion to
dismiss, the Altamonte Springs court held that the insurer’s allegations of secret ownership of
the medical practice in violation of Florida Statute Section 400.9905(4)(g)—exempting health
care clinics owned by licensed health care practitioners from more stringent and expensive
licensing requirements— coupled with an accounting of bills submitted from clinic to insurer
satisfied the Rule 9(b) pleading requirements. Altamonte Springs, 2011 WL at **3-4.
State Farm has alleged facts sufficiently particular at the pleading stage to establish the
plausibility of violations of the Patient Brokering Act, Patient Self-Referral Act, Anti-Kickback
Act, and FDUTPA, namely, the relationships between co-defendants and the roles played by
each to conceal the nature of those relationships in order to ensure a continued supply of
referrals to Physicians Group clinics. Similar to the allegations of violations of Florida Statute
Section 627.736(5)(d), the alleged violations of the above-referenced statutes satisfy the first
four elements of fraud for the purposes of Rule 9(b). Exhibit three of State Farm’s complaint
(Doc. 1-5) satisfies element five of fraud, detailing each relevant claim by claim number, date,
and amount. Compare Altamonte Springs, 2011 WL *4 with U.S. ex rel. Clausen v. Lab. Corp.
o f America, Inc., 290 F.3d 1301,1306-1307 (11th. Cir. 2002) (affirming dismissal of False
Claims Act suit based on “failure to identify a single fraudulent claim by date filed, amount or
claim number that was actually submitted to the govemment[]”) (internal quotations omitted).
Defendant’s motion to dismiss Count I is DENIED.
2.
Unjust Enrichment
A claim for unjust enrichment must satisfy four essential elements: (1) the plaintiff must
confer a benefit upon the defendant; (2) the defendant must have knowledge of the benefit; (3)
12
the defendant accepts and retains the benefit; and (4) the circumstances are such that it would be
inequitable for the defendant to retain the benefit without paying the value thereof.
Jackson-Jester v. Aziz, 48 So. 3d 88, 90 (Fla. 2d DC A 2010). Defendants argue that State
Farm’s unjust enrichment claim must fail as a matter of law because no benefit was conferred
on any Defendant other than Physicians Group and Physicians Group exchanged adequate
consideration for any benefit it enjoyed. (Doc. 5 at 19)
“[T]he cause of action for unjust enrichment does not require that Defendant[s]
individually receive payments directly from Plaintiffs.” Metrahealth Ins. Co. v. Anclote
Psychiatric Hosp., Ltd., 1997 WL 728084 (M.D. Fla. Oct. 23,1997); State Farm Mut. Auto. Ins.
Co. v. Kugler, 2011 WL 4389915 (S.D. Fla. Sept. 21,2011). It can be reasonably inferred that
individuals intimately involved with the organization and operation of the entity that directly
received a benefit have benefitted themselves so as to support a claim for unjust enrichment
against them “in their individual capacities.” State Farm Mut. Auto. Ins. Co. v. Physicians
Injury Care Ctr., Inc., A ll F. App’x 714, 722-723 (11th Cir. 2011). “Florida law does not
require a ‘direct benefit’ to flow to a defendant in order to be liable for unjust enrichment.”
Vizcay, 2013 WL at *4. It can be reasonably inferred that the co-Defendants other than
Physicians Group benefitted if Physicians Group was unjustly enriched.
As a general rule, “[w]hen a defendant has given adequate consideration to [a plaintiff]
for the benefit conferred, a claim of unjust enrichment fails.” American Safety Ins. Serv., Inc. v.
Griggs, 959 So. 2d 322,331-332 (Fla. 5th DCA 2007). Unlawfully rendered services, however,
cannot qualify as adequate consideration. According to the Eleventh Circuit, Florida law
supports a cause of action for unjust enrichment upon a defendant’s acceptance and retention of
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a benefit “that it is not legally entitled to receive in the first place[.]” Silver Star, 739 F.3d at 584
(affirming insurer’s claim for unjust enrichment against medical clinic operating in violation of
Florida Statute Section 400.9905(4)(g)); see also Altamonte Springs, 2011 WL at *5 (holding
that insurer did not bargain for unlawfully rendered medical services, and provider’s retention
of payments for these services was sufficient to support cause of action for unjust enrichment).
If Physicians Group’s treatment services were unlawfully rendered, State Farm was under no
obligation to pay for these services under Florida Statute Section 627.736(5)(b)(l)(b);
Physicians Group’s retention of these payments can therefore substantiate a claim for unjust
enrichment.
Defendants’ motion to dismiss Count II is denied.
3. FDUTPA
The purpose of FDUTPA is “protect the consuming public and legitimate business
enterprises from those who engage in unfair methods of competition, or unconscionable,
deceptive, or unfair acts or practices in the conduct of any trade or commerce.” Rollins, Inc. v.
Butland, 951 So. 2d 860, 869 (Fla. 2d DCA 2006); Fla. Stat. § 501.202(2). An unfair practice is
one that “offends established public policy and when the practice is immoral, unethical,
oppressive, unscrupulous or substantially injurious to consumers, or competitors or other
businessmen.” MJS Music Publications, LLC v. Hal Leonard Corp., 2006 WL 1208015 (M.D.
Fla. May 4,2006). The FDUTPA is to be liberally construed, Fla. Stat. § 501.202, and courts,
therefore, apply a “broad reading” of the practices that run afoul of the Act. Furmanite Am., Inc.
v. T.D. Williamson, Inc., 506 F. Supp. 2d 1134,1147 (M.D. Fla. 2007); MJS Music, 2006 WL at
*2 (declaring that courts have applied an “extremely broad” concept of liability under
14
FDUTPA).
Section 501.212(4)(a), Florida Statutes, states that “[a]ny person or activity regulated
under laws administered by . . . The Office of Insurance Regulation of the Financial Services
Commission” falls outside the reach of FDUTPA. Defendants urge this Court to dismiss Count
III based on this section. However, other courts that have addressed the question of whether
Personal Injury Protection fraud can sustain a claim under the Act have answered in the
affirmative. See Physicians Injury Care Ctr., A ll Fed. App’x at 723; Kugler, 2011 WL at *12.
In the absence of additional authority, Defendants’ motion to dismiss Count III is DENIED.
4.
Patient Self-Referral Act
Defendants argue that Florida’s Patient Self-Referral Act does not provide a private
right of action. The provision in dispute states, “[n]o claim for payment may be presented . . .
for a service furnished pursuant to a referral prohibited under this section.. . . If an entity
collects any amount that was billed in violation of this section, the entity shall refund such
amount on a timely basis to the payor or individual, whichever is applicable.” Fla. Stat. §
456.503(5)(c)-(d). In determining whether a statute provides a private cause of action, the court
must determine whether the statute purports to establish civil liability or “merely makes
provision to secure the safety or welfare of the public[.]” Villazon v. Prudential Health Care
Plan, Inc., 843 So. 2d 842, 852 (Fla. 2003). In answering this question, the intent of the
legislature should be the court’s primary consideration. Murthy v. N. Sinha Corp., 644 So. 2d
983, 985-986 (Fla. 1994). There also exists an assumption that the legislature does not create a
statutory right absent some means of enforcing it, “for where a statute gives a right, there,
although in express terms it has not given a remedy, the remedy which by law is properly
15
applicable to that right follows as an incident.” Smith v. Piezo Tech. & P rof’IAdm ’ 427 So. 2d
r,
182,184 (Fla. 1983).
The language of Section 456.503(5)(d) clearly establishes a payor’s right to a refund,
and the provision cannot rightfully be considered as a tool to ensure the public’s safety or
welfare. Accordingly, Defendants’ motion to dismiss Count IV is DENIED.
5. Declaratory Judgment Act
State Farm asks this Court for, “a judgment declaring that all outstanding claims or
charges submitted by Physicians Group to State Farm for No-Fault Benefits are not owed
because they are for services and treatments that were not lawfully rendered.” (Doc. 1 f 148)
No legal bar exists to State Farm’s present claim for declaratory judgment. The cases cited by
the Defendant stand for the proposition that federal district courts have subject-matter
jurisdiction in declaratory judgment actions when the plaintiff could otherwise file a coercive
action under federal law. Household Bank v. JFS Group, 320 F.3d 1249,1259 (11th Cir. 2003);
Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 671-672 (1950) (holding that the
Declaratory Judgment Act did not enlarge or modify the jurisdiction of the federal district
courts). State Farm is not using the declaratory judgment claim to attempt to establish federal
jurisdiction.
Defendants’ motion to dismiss Count V is DENIED. Accordingly, it is
ORDERED that the Motion to Dismiss (Doc. 5) filed by Physicians Group of Sarasota,
LLC, Physicians Group, LLC, Gary Kompothecras, David Balot, DB Medical Consulting, Inc.,
W.S. Media, Inc., W.S. Marketing, Inc., and William Sigelakis be DENIED. The Defendants
16
have ten days to answer the complaint in this case and the parties have up to and including April
21,2014 to file a case management report.
^
DONE and ORDERED in Chambers, in Tampa, Florida, thi s ^ ^ ^ day of March,
2014.
Assigned Magistrate Judge
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