Mansour, M.D. et al v. Freedom Health, Inc. et al
Filing
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ORDER granting 111 Motion to Compel Arbitration of Count IV of the Second Amended Complaint. The instant case is stayed only as to Count IV pending resolution of the arbitration process. Signed by Judge William F. Jung on 2/12/2024. (LG)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
GEORGE MANSOUR, M.D.; and
GEORGE MANSOUR, M.D., P.A.,
Plaintiffs,
v.
Case No. 8:22-cv-595-WFJ-AEP
FREEDOM HEALTH, INC.; and
PHYSICIAN PARTNERS, LLC,
Defendants.
_________________________________/
ORDER
Before the Court is Physician Partners, LLC’s (“PPC”) Motion to Compel
Arbitration (Dkt. 111). George Mansour, M.D. (“Dr. Mansour”) and George
Mansour, M.D., P.A. (“Mansour, P.A.”) (collectively, “Plaintiffs”) have responded
in opposition (Dkt. 116). PPC has replied (Dkt. 119). Upon careful consideration,
the Court grants PPC’s Motion and stays proceedings in this case as to Count IV of
Plaintiff’s Second Amended Complaint (Dkt. 110).
BACKGROUND
As the Court explained in its previous Order (Dkt. 93) denying Defendants’
Motions to Dismiss (Dkt. 36; Dkt. 37), the instant case arises from a failed quasiemployment relationship between Plaintiffs and Defendants. Plaintiffs allege that,
while Dr. Mansour was working as a physician for PPC, Defendants conspired to
artificially increase the risk-adjustment scores of Freedom Health Inc.’s
(“Freedom”) Medicare Advantage enrollees. Dkt. 110 at 12. Plaintiffs further claim
that, upon learning of Dr. Mansour’s refusal to “play ball,” Defendants
orchestrated a scheme to retaliate against him while retaining his patients. Id. at 42.
Following the aforementioned Order, Plaintiffs sought leave to file a second
amended complaint which included a new breach of contract claim against PPC.
Dkt. 105 at 5. Plaintiffs elaborated that the new contract claim arises from the same
Physician Affiliate Agreement (the “Agreement”) discussed in the Amended
Complaint (Dkt. 23) as well as the same reassignment of Dr. Mansour’s former
patients. Id. at 5. Defendants did not object. Dkt. 107 at 1; Dkt. 108 at 1. The Court
consequently granted Plaintiffs’ request on January 1, 2024. Dkt. 109.
Two days later, Plaintiffs filed their Second Amended Complaint. Dkt. 110.
The factual contentions asserted therein largely mirror those made in Plaintiffs’
Amended Complaint. Compare Dkt. 110, with Dkt. 23. Plaintiff nevertheless
brings two claims against PPC instead of one: Count I—unlawful retaliation under
the False Claims Act (“FCA”), 31 U.S.C. § 3730(h); and Count IV—breach of
contract under Florida common law. Dkt. 110 at 53–54, 58–59.
On January 16, 2024, PPC moved to compel arbitration of Plaintiffs’ new
breach of contract claim pursuant to the Agreement’s arbitration clause. Dkt. 111.
Plaintiffs respond that PPC has waived its right to compel arbitration of this claim
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by participating in motion practice related to the unlawful retaliation claim asserted
in Plaintiffs’ Amended Complaint. Dkt. 116.
LEGAL STANDARD
“Federal law establishes the enforceability of arbitration agreements, while
state law governs the interpretation and formation of arbitration agreements.”
Emps. Ins. of Wausau v. Bright Metal Specialties, Inc., 251 F.3d 1316, 1322 (11th
Cir. 2001). Under the Federal Arbitration Act (“FAA”), arbitration agreements are
“valid, irrevocable, and enforceable, save upon such grounds as exist at law or in
equity for the revocation of any contract.” 9 U.S.C. § 2. Further, “any doubts
concerning the scope of arbitrable issues should be resolved in favor of arbitration,
whether the problem at hand is the construction of the language itself or an
allegation of waiver, delay, or a likely defense to arbitrability.” Moses H. Cone
Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24–25 (1983); see also
Milestone v. Citrus Specialty Grp., Inc., No. 8:19-cv-2341-T-02JSS, 2019 WL
5887179, at *1 (M.D. Fla. Nov. 12, 2019) (stating that “[a] strong policy exists in
favor of resolving disputes by arbitration”).
The Court considers the following factors in determining whether to compel
arbitration: “1) whether a valid written agreement to arbitrate exists; 2) whether an
arbitrable issue exists; and 3) whether the right to arbitrate has been
waived.” Williams v. Eddie Acardi Motor Co., No. 3:07-cv-782-J-32JRK, 2008
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WL 686222, at *4 (M.D. Fla. Mar. 10, 2008) (citations omitted). “[T]he Court may
consider matters outside the four corners of the complaint” in ruling on these
issues. KWEST Commc'ns, Inc. v. United Cellular Wireless Inc., No. 16-20242CIV, 2016 WL 10859787, at *5 (S.D. Fla. Apr. 7, 2016), report and
recommendation adopted, No. 16-20242-CIV, 2016 WL 10870449 (S.D. Fla. June
28, 2016). And, when deciding whether the parties have agreed to arbitrate certain
matters, the Court generally applies state law principles governing contract
formation. Am. Express Fin. Advisors, Inc. v. Makarewicz, 122 F.3d 936, 940 (11th
Cir. 1997) (citation omitted).
DISCUSSION
In the instant case, Plaintiffs do not dispute the validity of the Agreement or
the fact that Count IV is technically arbitrable. See generally Dkt. 116. This makes
sense for obvious reasons. Plaintiffs’ breach of contract claim is based on the
Agreement and the Agreement provides that:
Any dispute relating to this Agreement shall be settled exclusively by
binding arbitration in Sarasota County, Florida by a single arbitrator,
chosen from a panel of licensed attorneys having at least ten years of
managed care-related experience, pursuant to the American Health
Lawyers Association’s Dispute Resolution Rules then in effect.
Judgment upon the award rendered by the arbitrator may be entered in
any court of competent jurisdiction and enforced accordingly. The
arbitrator may grant injunctive relief in a form similar to that which a
court of law would otherwise grant. The arbitrator shall be bound by
applicable law and shall not award exemplary or punitive damages.
Discovery shall be permitted in accordance with the Federal Rules of
Civil Procedure. The cost of any arbitration shall be borne equally by
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both parties and the parties shall each bear their respective legal and
related fees. This Section 6 shall survive the termination of this
Agreement.
Dkt. 110-1 at 2. The only question, then, is whether PPC has waived its right to
compel arbitration of Count IV under the Agreement by participating in motion
practice related to Count I.
Collado v. J. & G. Transp., Inc., 820 F.3d 1256 (11th Cir. 2016) answers
this question. There, the plaintiff brought a collective action under the Fair Labor
Standards Act alleging that a defendant failed to pay overtime. Collado, 820 F.3d
at 1258. The defendant waived its right to compel arbitration of this federal claim,
“but when [the plaintiff] amended his complaint to add state law claims for breach
of contract and quantum meruit, [the defendant] moved to compel arbitration as to
those new claims.” Id. The district court denied the motion to compel because “the
addition of the state law claims did not unexpectedly change the scope or theory of
the litigation” and “fairness did not compel reviving [the defendant’s] right to elect
arbitration.” Id. at 1258–59.
The Eleventh Circuit reversed. After distinguishing a prior case that focused
on a change in the scope of litigation,1 the court explained that:
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See Krinsk v. SunTrust Banks, Inc., 654 F.3d 1194, 1203–04 (11th Cir. 2011) (finding a revival
of arbitration rights where the “new class definition in the Amended Complaint . . . greatly
broadened the potential scope of [the] litigation by opening the door to thousands” of new class
plaintiffs).
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[t]he change wrought by the amendment in this case was not in the
number of plaintiffs but in the type of claim asserted. The case began
as one asserting a federal claim. Only after [defendant] had waived by
litigation its right to arbitrate that claim did [plaintiff] file the
amendment changing the case to one asserting both federal and state
claims. Waiver of the right to arbitrate a federal claim does not extend
to later asserted state claims. Some cases speak of revival of a waived
right to arbitrate. In these circumstances, however, it is more accurate
to say that there was never a waiver of the right to arbitrate the state
claims in the first place.
Id. at 1260 (internal citations omitted). The Eleventh Circuit went on to state that
“knowing that a potential claim may lurk in the shadows of a case is not the same
as litigating against a claim that has been brought out into the open in a pleading”
and that “[a] defendant is not required to litigate against potential but unasserted
claims.” Id. at 1261. Accordingly, “a defendant will not be held to have waived the
right to insist that previously unasserted claims be arbitrated once they are
asserted[;]” for, “[a]ny other rule would put a defendant in an awkward if not
absurd position.” Id.
This case is materially indistinguishable from Collado. Plaintiffs brought a
federal FCA retaliation claim against PPC, which PPC litigated. See generally Dkt.
36. Plaintiffs then brought a state law claim for breach of contract in their Second
Amended Complaint which was arguably lurking in the shadows of Plaintiffs’
Amended Complaint. Compare Dkt. 110, with Dkt. 23. PPC now moves to
arbitrate this new state law claim. Dkt. 111. The Court consequently declines to
hold that PPC “waived the right to insist that [this] previously unasserted claim[]
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be arbitrated” now. Collado, 820 F.3d at 1261. Such a ruling would fly in the face
of Eleventh Circuit precedent.
Notwithstanding the foregoing, Plaintiffs contend that Collado is nondispositive. Plaintiffs make three arguments on this point: (1) Morgan v. Sundance,
Inc., 596 U.S. 411 (2022) renders Collado inapplicable in determining waiver of
arbitration rights; (2) even if Collado is applicable following Morgan, the instant
case is distinguishable; and (3) PPC waived its right to arbitrate Count IV under
Florida law, which properly controls this issue following Morgan. See generally
Dkt. 116. The Court will address these arguments in turn.
Morgan did not render Collado inapplicable by mandating state law control
over the issue of waiver. In Morgan, the Supreme Court “granted certiorari to
decide whether the FAA authorizes federal courts to create . . . arbitration-specific
procedural rule[s]” such as a prejudice requirement. Morgan, 596 U.S. at 414. The
Majority answered this question in the negative and, in so doing, explicitly stated
that:
[w]e decide today a single issue, responsive to the predominant
analysis in the Courts of Appeals, rather than to all the arguments the
parties have raised. In their briefing, the parties have disagreed about
the role state law might play in resolving when a party's litigation
conduct results in the loss of a contractual right to arbitrate. The
parties have also quarreled about whether to understand that inquiry as
involving rules of waiver, forfeiture, estoppel, laches, or procedural
timeliness. We do not address those issues. The Courts of Appeals,
including the Eighth Circuit, have generally resolved cases like this
one as a matter of federal law, using the terminology of waiver. For
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today, we assume without deciding they are right to do so. We
consider only the next step in their reasoning: that they may create
arbitration-specific variants of federal procedural rules, like those
concerning waiver, based on the FAA's “policy favoring
arbitration.” They cannot.
Id. at 416–17 (emphasis added). The Supreme Court went on to analyze the subject
prejudice-based waiver issue under federal law without ever addressing or alluding
to the issue of waving future claims under standard principles of federal waiver
law. Id. at 417–19. As a result, Morgan did not overrule Collado or call its
reasoning into question unless Collado created an arbitration-specific procedural
rule. See Garrett v. Univ. of Alabama at Birmingham Bd. of Trustees, 344 F.3d
1288, 1292 (11th Cir. 2003) (“While an intervening decision of the Supreme Court
can overrule the decision of a prior panel of our court, the Supreme Court decision
must be clearly on point.”).
Collado did not create an arbitration-specific procedural rule. The Eleventh
Circuit’s “waiver doctrine is typically implicated when parties have ‘invoked the
litigation machinery’ before reversing course and claiming that arbitration was the
proper avenue all along.” Payne v. Savannah Coll. of Art & Design, Inc., 81 F.4th
1187, 1201 (11th Cir. 2023) (quoting Gutierrez v. Wells Fargo Bank, NA, 889 F.3d
1230, 1236 (11th Cir. 2018)). This is because, under such circumstances, “the party
has acted inconsistently with the arbitration right” it once had. Warrington v.
Rocky Patel Premium Cigars, Inc., No. 22-12575, 2023 WL 1818920, at *2 (11th
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Cir. Feb. 8, 2023) (internal quotations and citation omitted). Collado did not
change this reasoning or apply it differently to an arbitration claim. Rather, it
applied the same standard waiver inquiry in a situation where one invoked the
litigation machinery as to an asserted federal law claim only to be later met with
previously unasserted state law claims. See Collado, 820 F.3d at 1259–1261. The
Eleventh Circuit found that the earlier waiver did not apply to the later asserted
state law claims because “a defendant will not be held to have waived the right to
insist that previously unasserted claims be arbitrated.” Id. at 1261 In other words,
the Collado defendant’s litigation of the previously asserted federal law claim was
not inconsistent with its arbitration rights concerning the later asserted state law
claims. Id. (citing Morewitz v. W. of Eng. Ship Owners Mut. Prot. & Indem. Ass'n,
62 F.3d 1356 (11th Cir. 1995) in parenthetical for the notion that “[w]aiver occurs
when a party seeking arbitration substantially participates in litigation to a point
inconsistent with an intent to arbitrate”). Collado is still good law following
Morgan.
The Court is also unpersuaded by Plaintiffs’ attempt to distinguish the
instant case from Collado through Singh v. MEDNAX Servs. Inc., No. 17-61792CIV, 2018 WL 5098962 (S.D. Fla. Aug. 28, 2018). As an initial matter, the
amendment in Singh involved adding claims under Title VII of the Civil Rights
Act to a complaint which already contained claims under the Equal Pay Act. Singh,
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2018 WL 5098962, at *1. Thus, unlike Collado, Singh involved no later assertion
of a state law claim to supplement a complaint involving only federal law claims.
More importantly, though, Singh explicitly rejected Collado on the grounds that
“the new claims were expected by [d]efendants and [were] similar to, and [were]
necessarily factually intertwined with, the original claim.” Id. at *6. This, however,
is the exact reasoning that the Eleventh Circuit overturned in Collado. See Collado,
820 F.3d at 1258 (explaining that the “district court denied the motion to compel
arbitration, finding that the addition of the state law claims did not unexpectedly
change the scope or theory of the litigation”). The Court declines to follow Singh.
Finally, the Court notes that, for the reasons explained above, there is no
need to consider whether PPC waived its right to arbitrate Count IV under Florida
law. This matter is controlled by federal law under current Supreme Court and
Eleventh Circuit precedent. Morgan, 596 U.S. at 416–17; see Amargos v. Verified
Nutrition, LLC, 653 F. Supp. 3d 1269, 1274 (S.D. Fla. 2023) (explaining that
binding precedent dictates that the question of waiver is one of federal law after
Morgan); S & H Contractors, Inc. v. A.J. Taft Coal Co., 906 F.2d 1507 (11th Cir.
1990) (“Our determination of whether S & H waived its right to arbitration, as
opposed to whether the contract is void under Alabama law, is controlled solely by
federal law.”), abrogated on other grounds by Morgan, 596 U.S. 411 (2022).
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CONCLUSION
Accordingly, it is hereby ORDERED and ADJUDGED:
(1) PPC’s Motion to Compel Arbitration and to Stay Proceedings of Count
IV Pending Arbitration (Dkt. 111) is GRANTED.
(2) The instant case is stayed only as to Count IV pending resolution of the
arbitration process.
DONE AND ORDERED at Tampa, Florida, on February 12, 2024.
/s/ William F. Jung
WILLIAM F. JUNG
UNITED STATES DISTRICT JUDGE
COPIES FURNISHED TO:
Counsel of Record
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