State Farm Mutual Automobile Insurance Company v. Performance Orthopaedics & Neurosurgery, LLC et al
ORDER granting in part and denying in part 60 Motion to Dismiss for Failure to State a Claim; granting in part and denying in part 61 Motion to Dismiss for Failure to State a Claim. Signed by Chief Judge K. Michael Moore on 9/25/2017. (bvr)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 1:17-CV-20028-KMM
State Farm Mutual Automobile
Performance Orthopaedics &
Neurosurgery, LLC, et al.,
ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANTS’ MOTIONS TO DISMISS AMENDED COMPLAINT
THIS CAUSE came before the Court upon the following motions: Defendant
Metropolitan Health Community Services Corporation’s Motion to Dismiss (ECF No. 60), and
Defendants Performance Orthopaedics & Neurosurgery, LLC, Physicians Central Business
Office, LLC, Mark Cereceda, and Brian Mevorah’s Motion to Dismiss (ECF No. 61), to which
Defendants, Omni Neurological, Orthopedic & Spine Center, Inc. and Sergio Triana filed a
Notice of Joinder (ECF No. 63).1 Both motions are fully briefed and now ripe for review. For the
reasons that follow, both motions to dismiss are GRANTED IN PART AND DENIED IN PART.
Defendant Surgery Center of Coral Gables, LLC (“Coral Gables”) also filed a Motion to
Dismiss (ECF No. 62), but Plaintiff and Coral Gables filed a Joint Stipulation (ECF No. 131)
dismissing Coral Gables from this action. The Court subsequently dismissed Coral Gables from
this case and denied Coral Gables’ pending Motion to Dismiss as moot. See September 25, 2017
Paperless Order (ECF No. 132).
In its Amended Complaint, State Farm Mutual Automobile Insurance Company
(“Plaintiff” or “State Farm”) alleges a “scheme” involving Defendants Performance
Orthopaedics & Neurosurgery, LLC d/b/a Calhoun Orthopaedics & Neurosurgery (“Calhoun”),
Omni Neurological, Orthopedic & Spine Center, Inc. (“Omni”), Metropolitan Health Community
Services Corporation d/b/a Metropolitan Hospital Of Miami (“Metropolitan”), Surgery Center Of
Coral Gables, LLC d/b/a Coral Gables Surgery Center (“Coral Gables”), Physicians Central
Business Office, LLC (“CBO”), Mark Cereceda, D.C. (“Cereceda”), Sergio Triana, D.C.
(“Triana”), and Brian Mevorah, D.C. (“Mevorah”) (collectively, “Defendants”). See Amended
Complaint (“Am. Compl.”) (ECF No. 56) ¶ 1.
This scheme consisted of two allegedly “unlawful referral arrangements,” id. ¶ 121. The
first such arrangement (the “Metropolitan Arrangement”) took place from early 2012 through
April 2014. Id. ¶ 6. During that time, Calhoun, a medical practice which specialized in
orthopedic treatment and surgery, referred patients to Metropolitan, a surgical facility where
Calhoun’s physicians would perform surgery. Id. ¶ 6. Prior to treatment, Calhoun required each
patient to execute a Letter of Promise (or “LOP”), which provided that Calhoun would be paid
from any settlement, judgment, or verdict rendered in connection with the patient’s personal
injury claim. Id. ¶ 60; see also id. ¶¶ 39–40. For each referred surgical procedure performed on
Calhoun’s patients, Calhoun paid Metropolitan an all-inclusive pre-arranged price in full
satisfaction of the patient’s surgical facility charges. Id. ¶ 6. The amount Calhoun paid was
The following background facts are taken from Plaintiff’s Amended Complaint (ECF No. 56)
(“Am. Compl.”) and are accepted as true for purposes of ruling on a Motion to Dismiss. See
Florida Family Policy Council v. Freeman, 561 F.3d 1246 (11th Cir. 2009).
typically pre-negotiated and based on a price list that assigned a specific dollar amount to
particular procedures. Id.
Despite this pre-arranged price, however, Metropolitan prepared and sent invoices to
Calhoun which reflected an amount for Metropolitan’s services that “greatly exceeded” the
amount Calhoun actually paid to Metropolitan. Id. These invoices purportedly reflected itemized
charges for each of the supplies and services rendered. Id. ¶ 71. These invoices did not include
any reference to, or deduction for, the amount that Calhoun actually paid Metropolitan. Id. ¶ 6.
Rather, the “invoices” showed the total amount of Metropolitan’s itemized charges as an unpaid
“balance.” Id. ¶ 71.
CBO, a company which performed billing and collections for Calhoun, transmitted the
Metropolitan invoices to Calhoun’s patients’ personal injury attorneys on Calhoun’s behalf for
inclusion in settlement demands to State Farm. Id. ¶ 6. In its transmittals, Calhoun did not make
any reference to, or deduction for, the amount that Calhoun actually paid to Metropolitan. Id.
State Farm alleges that it was unaware of this payment arrangement, and was therefore deceived
and injured because it made settlement payments based on the “inflated” invoices resulting from
this arrangement. Id. ¶ 7; see generally id. ¶¶ 2, 4, 5, 26, 27, 106–08.3
The second allegedly unlawful referral arrangement (the “Coral Gables Arrangement”)
began in April 2014, when Metropolitan closed. Id. Omni referred patients to Coral Gables,
where Omni’s physicians performed ophthalmic and spine surgeries. Id. ¶ 6, 25, 3–5, 104–105.
Omni continued to require its patients to execute LOPs before rendering any treatment. Id. ¶ 60.
In early 2014, Calhoun split into two entities—non-party Waterford Orthopedics Inc.
(“Waterford”) and Omni—both of which continued the “scheme” with Metropolitan. Id. While
Waterford continued to employ CBO for transmitting bills to Plaintiff, Omni submitted its bills
to the Plaintiff’s attorneys directly. Id. ¶ 6, 20. After one and a half months, Waterford merged
into Omni. Id. ¶ 6.
Under the LOPs, Omni’s patients did not have to pay Omni for medical services and agreed to
later pay Omni from any settlement, judgment, or verdict in connection with the patient’s
personal injury claim. Id. In exchange for referrals, Coral Gables allegedly provided Omni with
invoices reflecting Coral Gable’s “usual and customary” surgical facility charges, which “never
accounted for the fact that Coral Gables agreed to a pre-arranged price from Omni” for the
services it provided. Id. ¶¶ 70, 107. Omni did not pay the “usual and customary” charges and
instead negotiated with Coral Gables to pay fixed, all-inclusive prices for the various types of
surgical procedures performed by Omni’s physicians. Id. ¶¶ 2, 4, 5, 107. These fixed prices were
substantially less than the “usual and customary” charges reflected on Coral Gables’ invoices. Id.
Omni submitted the following materials directly to its patients’ personal injury attorneys
for the inclusion in settlement demands against State Farm: a cover letter on Omni’s letterhead,
Omni’s account ledger reflecting Omni’s charges for the professional component of rendered
services, and a line item for the surgical charges incurred at Coral Gables, and the operative
report. Id. ¶¶ 5, 109–111. The line item on Omni’s account ledger for Coral Gables surgery
charges reflected the full “usual and customary” amount, but did not disclose the lower, allinclusive fixed price that the parties allegedly negotiated. Id. ¶¶ 105–107. This resulted in an
“enormous difference” between what Omni paid to Coral Gables and “the surgical facility
‘charges from Coral Gables listed on Omni’s ledger.’” Id. ¶ 108
Under both the Metropolitan Arrangement and the Coral Gables Arrangement, the
patients’ personal injury attorneys utilized the packages from Omni and CBO to create demand
packages, and sent those packages to State Farm. Id. ¶¶ 85, 112. The demand packages included
a letter allegedly crafted to exert pressure on State Farm to settle the claims within a short time
by threatening bad faith claims.4 Id. ¶¶ 86–90, 113. Thereafter, State Farm evaluated the
settlement demands, as well as the medical records, invoices and the other documentation
supplied to substantiate the claims. Id. ¶ 91, 114–121, 130. State Farm alleges it was unaware of
the payment arrangements between the Medical Practices5 and the Surgical Facilities.6 Id. ¶ 5,
118. As a result, State Farm alleges it was deceived because it based its settlement offers and
payments on the higher “usual and customary” rate. Id. ¶¶ 2, 4, 5, 26, 27, 92 106–08.
As a result of both arrangements, State Farm alleges damages in excess of $3.8 million.
Id. ¶ 167. State Farm settled claims totaling more than $3.6 million pursuant to the Metropolitan
Scheme and $300,000 pursuant to the Coral Gables Scheme. Id. ¶ 10. Under both of these
referral arrangements the Medical Practices benefitted by receiving payment from their patients’
settlements with State Farm based on the amounts listed in the Surgical Facilities invoices—
which were “significantly higher” than the amount that the Medical Practices actually paid the
Surgical Facilities. Id. ¶ 5. The Surgical Facilities, in exchange for providing “inflated” invoices
to the Medical Practice, benefitted by receiving a steady flow of patients and guaranteed cash
flow from the Medical Practices. Id. ¶¶ 5–7. As a result of their ownership interests,7 Triana,
Mevorah, and Cereceda (the “Individual Defendants”) benefited from the allegedly unlawful
referral arrangements. Id. ¶¶ 21–23.
If an insurer declines to settle within policy limits, it may be found liable for “bad faith,” and be
required to pay compensatory and consequential damages, attorney's fees and punitive damages.
See generally Fla. Stat. § 624.155.
The “Medical Practices” refers to Calhoun and Omni.
The “Surgical Facilities” refers to Metropolitan and Coral Gables.
Defendant Triana has an ownership interest in Defendants Calhoun and Omni. Id. ¶ 23.
Defendant Mevorah has an ownership interest in Defendant Calhoun. Id. ¶¶ 20, 22. Defendant
Cereceda has an ownership interest in Defendants Calhoun and CBO, as well as in non-party
Waterford. Id. ¶¶ 20–21.
Against this backdrop, State Farm seeks damages under the Florida Deceptive and Unfair
Trade Practices Act (“FDUTPA”), Fla. Stat. §§ 501.201–501.213 (Counts I and II) and under the
common law theories of fraud and unjust enrichment (Counts III and IV, respectively).
Additionally, State Farm seeks a declaration that it is not liable for payment on any as-yet unpaid
claims generated by the scheme under the Declaratory Judgment Act, 28 U.S.C. § 2201 (Count
The defendants moved to dismiss Plaintiff’s Amended Complaint, arguing that Plaintiff
has failed to state a claim upon which relief can be granted. See Metropolitan’s Motion to
Dismiss (“Metropolitan’s Motion”) (ECF No. 60); Calhoun, CBO, Mevorah, and Cereceda’s
Motion to Dismiss (“Calhoun’s Motion”) (ECF No. 61).8 Additionally, the Calhoun Defendants9
argue that the case should be dismissed because Plaintiff failed to join necessary parties. See
Calhoun’s Motion at 19.
Plaintiff filed a response, in which it maintains that it has sufficiently pled facts to survive
the Motion to Dismiss and that it did not fail to join any necessary parties. See Plaintiff’s
As previously noted, Coral Gables also filed a Motion to Dismiss (ECF No. 62), but Plaintiff
and Coral Gables filed a Joint Stipulation (ECF No. 131) dismissing Coral Gables from this
action. The Court subsequently dismissed Coral Gables from this case and denied Coral Gables’
pending Motion to Dismiss as moot. See September 25, 2017 Paperless Order (ECF No. 132).
Although Coral Gables’ Motion to Dismiss (“CG’s Motion”) is now moot, the arguments made
within CG’s Motion and within Coral Gables’ Reply in Support (“CG’s Reply”) (ECF No. 77)
are considered by the Court to the extent they are applicable to the remaining defendants.
For purposes of this Order, “Calhoun Defendants” refers to those defendants who filed the
Calhoun Motion (ECF No. 61), along with Omni and Triana because they adopted the motion.
See Notice of Joinder (ECF No. 63). Because Omni and Triana have filed a Notice of Joinder
(ECF No. 63) concerning Calhoun’s Motion to Dismiss and a Notice of Joinder (ECF No. 78)
concerning Calhoun’s Reply in Support of its Motion to Dismiss, any disposition to any claim
applicable to Omni and/or Triana as a result of this Court’s adjudication of Calhoun’s Motion
will also apply to Omni and Triana. See Sec. & Exch. Comm’n v. Levin, No. 1:12-CV-21917-UU,
2014 WL 11878357, at *1 (S.D. Fla. Oct. 6, 2014) (considering arguments raised in a motion “to
the extent they are applicable” to the party that had filed notice of joinder to that motion).
Combined Response in Opposition to Defendants’ Motions to Dismiss Amended Complaint
(“Opp.”) (ECF No. 68). Defendants replied. See Metropolitan’s Reply in Support of Its Motion
to Dismiss Amended Complaint (“Metropolitan’s Reply”) (ECF No. 75); Calhoun Defendants’
Reply Memorandum in Support of Motion to Dismiss First Amended Complaint (“Calhoun’s
Reply”) (ECF No. 61).
A motion to dismiss for failure to state a claim merely tests the sufficiency of the
complaint; it does not decide the merits of the case. Milburn v. United States, 734 F.2d 762, 765
(11th Cir. 1984). On a motion to dismiss, the Court must accept the factual allegations as true
and construe the complaint in the light most favorable to the plaintiff. SEC v. ESM Group. Inc.,
835 F.2d 270, 272 (11th Cir. 1988), cert. denied sub nom. Peat Marwick Main & Co. Tew, 486
U.S 1055 (1988).
“To survive a motion to dismiss, a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim for relief that is plausible on its face.’” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (quoting Bell Atl. v. Twombly, 550 U.S. 544, 570 (2007)). A complaint
must contain enough facts to indicate the presence of the required elements. Watts v. Fla. Int’l
Univ., 495 F.3d 1289, 1302 (11th Cir. 2007). “[C]onclusory allegations, unwarranted deductions
of fact or legal conclusions masquerading as facts will not prevent dismissal.” Oxford Asset
Mgmt. Ltd. v. Jaharis, 297 F.3d 1182, 1188 (11th Cir. 2002). However, as long as the allegations
rise above a speculative level, a well-pleaded complaint will survive a motion to dismiss “even if
it appears that a recovery is very remote and unlikely.” Conley v. Gibson, 355 U.S. 41, 45–46
(1957) (overruled on other grounds by Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955, 1959–60
(2007) (internal quotation marks and citation omitted)).
A. Standard Medical Billing Practice
At the outset, the Court addresses Metropolitan’s argument that each of Plaintiff’s claims
fail because the “scheme” in the Amended Complaint actually describes a common medical
billing practice. See Metropolitan’s Motion at 5–7. The Court also considers the similar
argument that the FDUTPA claims fail because the Amended Complaint “describes the usual
and customary practices of medical billing.” CG’s Motion at 8 n.4. These arguments fail for two
First, “[i]n evaluating whether a complaint should be dismissed under Rule 12(b)(6) for
failure to state a claim, a court is generally limited to reviewing what is within the four corners of
the complaint.” Hayes v. U.S. Bank Nat’l Ass’n, 648 Fed. Appx. 883, 887 (11th Cir. Apr. 21,
2016); see also Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007) (“courts
must consider the complaint in its entirety, as well as . . . documents incorporated into the
complaint by reference, and matters of which a court may take judicial notice.”). Notably,
“[i]ndustry custom and practice” cannot “be the subject of judicial notice” in the absence of
evidence or agreement by the parties. See Nadherny v. Roseland Prop. Co., Inc., 390 F.3d 44,
51–52 (1st Cir. 2004).
Metropolitan attempts to evade this restriction by couching its argument in the language
found in Ashcroft v. Iqbal, 556 U.S. 662 (2009) and Bell Atl. Corp. v. Twombly, 550 U.S. 544
(2007). See Metropolitan’s Motion at 5. Specifically, Metropolitan argues it is “implausible” that
Plaintiff would not be aware that the method of billing featured in the Amended Complaint is a
common practice. See id. However, a “claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Iqbal, 556 U.S. at 678 (emphasis added). “The plausibility standard
. . . asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (emphasis
added). In other words, the plausibility assessment on a motion to dismiss concerns whether it is
plausible that a defendant has acted in a certain way. Simply put, it is not proper for a court, on a
motion to dismiss, to speculate as to a Plaintiff’s knowledge as to the pervasiveness of a certain
Relatedly, the Court rejects the argument that Plaintiff’s FDUTPA claim fails because
Plaintiff—as an experienced insurance company—should be aware of the “usual and customary”
billing practices alleged and thus Plaintiff has failed to “reasonably avoid the injury.” See CG
Motion at 8 n.4 (citing Porsche Cars N. Am., Inc. v. Diamond, 140 So. 3d 1090, 1096 (Fla. 3d
DCA 2014)). The Eleventh Circuit has made clear that FDUTPA does not require “subjective
proof of deception” wherein a “plaintiff could not secure FDUTPA relief” solely because it
“knew the defendant’s business well enough to manage the risk.” Democratic Republic of the
Congo v. Air Capital Grp., LLC, 614 F. App’x 460, 471 (11th Cir. 2015). In fact, the Eleventh
Circuit explicitly rejected the “subjective element” that some courts (including the Porsche Cars
Court) “have injected” into FDUTPA, and, instead, adopted the “objective” standard set forth by
the Florida Supreme Court in PNR, Inc. v. Beacon Prop. Mgmt., Inc., 842 So. 2d 773, 777 (Fla.
2003). Id. at 471 n.7.
The Court also rejects Metropolitan’s attempts to have the court judicially notice instances in
other cases where courts have ruled on motions in limine either to exclude documents evincing
amounts actually paid or to include documents evincing the “full amount of the charges . . . .”
See Metropolitan Motion at 7 (citing Exhibit 1 at 2–3). The highly fact-specific evidentiary
determinations cited by Metropolitan do not convince this Court to upend settled jurisprudence
regarding what may be considered on a motion to dismiss.
As a result, the “law now permits recovery if the plaintiff proves she was injured by an
objectively deceptive act or statement.” Id. at 471. “Whether [specific] conduct constitutes an
unfair or deceptive trade practice is a question of fact for the jury to determine.” Nature’s Prod.,
Inc. v. Natrol, Inc., 990 F. Supp. 2d 1307, 1322 (S.D. Fla. 2013); see also Felice v. Invicta Watch
Co. of Am., Inc., No. 16-CV-62772-RLR, 2017 WL 3336715, at *4 (S.D. Fla. Aug. 4, 2017) (on
motion to dismiss, rejecting argument that a reasonable plaintiff would not have been deceived
by misrepresentations); Nationwide Mut. Co. v. Ft. Myers Total Rehab Ctr., Inc., 657 F. Supp. 2d
1279, 1290–91 (M.D. Fla. 2009) (“The argument that plaintiff should have reasonably foreseen
the deception and mitigated damages is, at best, an affirmative defense which will not support a
motion to dismiss.”).11 Similarly, the Florida Supreme Court eliminated the requirement that
reliance be “reasonable” or “justifiable” for a Plaintiff to prevail on a fraud claim. See Butler v.
Yusem, 44 So. 3d 102, 105 (Fla. 2010) (emphasis added). Thus, Metropolitan’s assertion that it is
implausible for State Farm to have been misled by the invoices or demand packages is simply
irrelevant to this Court’s analysis at this stage.
Second, even if the alleged billing practice were common, such prevalence would not be
dispositive as to its legality. Cf. Grace & Co. v. City of Los Angeles, 278 F.2d 771, 774 (9th Cir.
1960) (“Observance of a custom or practice . . . does not conclusively establish the legal
standard.”); Emmenegger v. Bull Moose Tube Co., 33 F. Supp. 2d 1127, 1137 (E.D. Mo. 1998)
(finding that certain billing practice is unlawful despite it being the “prevailing practice in this
Moreover, the prevalence of a billing practice—or even awareness of it—does not inform the
Court whether the practice is objectively deceptive. See James D. Hinson Elec. Contracting Co.
v. BellSouth Telecommunications, Inc., 275 F.R.D. 638, 646 (M.D. Fla. 2011) (Class members’
“alleged awareness that BellSouth was charging indirect costs, however, is simply not relevant to
the issue of whether BellSouth was deceptive by charging amounts that it was not entitled to
recover under Florida law.”).
and most other areas”); United States v. Khamsouk, 54 M.J. 742, 747 n.2 (N-M. Ct. Crim. App.
2001), decision set aside on other grounds, 57 M.J. 282 (C.A.A.F. 2002) (“We recognize that
simply because this is common practice does not mean that the practice is legally correct.”).
Defendants have cited no caselaw supporting a contrary position, and the Court is aware of none.
Accordingly, the Court rejects, at this stage in the proceedings, arguments for dismissal premised
on the allegation that the billing practices at issue are “usual and customary.”
B. Common Law Fraud (Count III)
Defendants argue that dismissal of Plaintiff’s common law fraud claim is appropriate for
two reasons. First, Defendants argue the Amended Complaint fails to plead fraud with the
particularity required by Federal Rule of Civil Procedure 9(b). Second, the Calhoun Defendants
argue that the fraud claim fails because it seeks to create a private right of action for statutes that
otherwise do not provide for one. For the reasons set forth below, the Court grants in parts and
denies in part Defendants’ motions to dismiss the fraud claim.
Whether Fraud Claim is Plead with the Particularity Required by Rule 9(b)
Defendants move to dismiss Count III because Plaintiff does not plead the required
elements for fraud with sufficient particularity to comply with Federal Rule of Civil Procedure
9(b). Under Florida law,12 the essential elements of common law fraud are: “(1) a false statement
concerning a material fact; (2) the representor’s knowledge that the representation is false; (3) an
intention that the representation induce another to act on it; and (4) consequent injury by the
party acting in reliance on the representation.” Butler v. Yusem, 44 So. 3d 102, 105 (Fla. 2010)
(citation and internal quotations omitted). In certain circumstances, “[f]raud also includes the
As the Court has jurisdiction through diversity of citizenship, it “is bound to apply the
substantive law of the state in which it is located.” Shapiro v. Associated Int'l Ins. Co., 899 F.2d
1116, 1118 (11th Cir. 1990).
intentional omission of a material fact.” Ward v. Atl. Sec. Bank, 777 So. 2d 1144, 1146 (Fla. 3d
As Defendants note, the Federal Rules of Civil Procedure require a plaintiff to “state with
particularity the circumstances constituting fraud or mistake.” See Fed. R. Civ. P. 9(b). Under
Rule 9(b), a fraud-plaintiff must allege (a) the precise statements, documents, or
misrepresentations made; (b) the time, place, and person responsible for the statement; (c) the
content and manner in which these statements misled the plaintiffs; and (d) what the defendants
gained by the alleged fraud. Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364,
1380–81 (11th Cir. 1997).
For the reasons set forth below, the Court finds that the Amended Complaint contains
sufficient allegations to satisfy both the Rule 9(b) requirements and the common law fraud
elements as to Defendants CBO, Calhoun, Omni, and Metropolitan. Because the same
allegations support both analyses, the Court addresses the common law fraud elements within the
Rule 9(b) framework.
a) The Precise Statements, Documents, or Misrepresentations Made
Plaintiff alleges two different sets of misrepresentations. First, the Amended Complaint
states that the Metropolitan and Coral Gables created invoices, which contained false and/or
materially misleading statements. See Am. Compl. at ¶¶ 4–6, 67, 70–72, 103, 105, 107, 108, 120.
Second, the Amended Complaint states that Calhoun, Omni, and CBO created demand packages,
which contained false and/or materially misleading statements. Id. at ¶¶ 74–83, 102–111, 158.
For the reasons below, the Court finds that the Amended Complaint alleges sufficient
details concerning the misrepresentations made by Metropolitan, Omni, CBO, and Calhoun.13 In
addition to identifying the precise misrepresentation made, these same allegations satisfy the first
two elements of common law fraud.
Plaintiff alleges that Metropolitan’s invoices itemized charges for each patient’s surgery
and reflected charges for each of the supplies and services purportedly rendered. Id. ¶ 71. The
invoices showed the total amount of Metropolitan’s charges as an “unpaid balance.” Id. ¶ 71.
These invoices did not reflect any adjustments or credits to the patient’s account for Calhoun’s
payments or indicate that Metropolitan had been paid by Calhoun and accepted such payments as
payment in full. Id. Notably, these invoices affirmatively represented that there were no
“adjustments” or “payments” which could have affected the “balance.” See Ex. 5 to Am. Compl.
at 3. The Complaint includes specifics pertaining to the discrepancy between the amount claimed
and the amount actually paid—which sometimes exceeded an order of magnitude. For example,
Calhoun performed a surgical procedure on patient M.C.’s neck. Am. Compl. ¶ 72. In connection
with this procedure, Metropolitan’s invoice reflected charges of $101,938.93, but Calhoun only
paid Metropolitan $8,063 for its services. Id.
In addition to identifying the precise misrepresentation made, these allegations satisfy the
first two elements of common law fraud. First, Metropolitan allegedly made a false statement of
material fact regarding the “balance” owed for its services. Second, drawing all reasonable
The Court does not address the alleged misrepresentations made by Coral Gables as they have
been dismissed from this action.
inferences in Plaintiff’s favor,14 the allegations show that Metropolitan knew the falsity of its
misrepresentation because it was already paid a lesser amount for its services prior to generating
these invoices purportedly reflecting the “balance.” See Am. Compl. ¶ 70.
CBO (on behalf of Calhoun)’s Demand Packages
After receiving Metropolitan’s invoices, CBO, on behalf of Calhoun, would package
them for transmission to the patients’ personal injury attorneys. See Am. Compl. ¶ 74. Calhoun
instructed CBO via a Surgery Check List to include in each package, a cover letter, “all ledgers:
hospital, professional, and implant” and the operative report. Id. ¶¶ 76–82. CBO followed these
instructions and provided packets to patients’ attorneys, which typically included a cover letter
on Calhoun’s letterhead, Metropolitan’s invoice, and Calhoun’s account ledger reflecting
Calhoun’s charges. Id. ¶ 82–83. CBO and Calhoun “knew the purpose” of these packages was to
provide information for the patients’ attorneys to use in demands to insurance companies, and
thereby “stake” Calhoun’s claim to money from any settlements or judgments the patients
obtained. Id. ¶ 75.
The cover letters written on Calhoun letterhead explained: “Please find the attached
surgical bills and operative report for your client [ ]. The total charges are divided into two parts:
hospital and surgeon’s fee. The hospital bill includes . . . all services rendered. . . . Your office
will not receive additional billing from any other facility regarding this surgery.” Id. ¶ 83;
Exhibit 7. These letters did not disclose the amount Calhoun actually paid Metropolitan. Id. ¶ 67,
84. In fact, the example letter attached to the Amended Complaint includes the same amount
under hospital fees as is reflected in the “balance” of Metropolitan’s invoice. See Ex. 7 to Am.
Compl. Because Plaintiff is entitled to all reasonable inferences that can be drawn from the well14
See, e.g., Am. Dental Ass’n v. Cigna Corp., 605 F.3d 1283, 1288 (11th Cir. 2010).
pleaded allegations of the Amended Complaint, these communications misleadingly “suggested
that [Calhoun] was simply charging the insurers the actual amount that [it] would ultimately pay
[Metropolitan].” United States v. Sharp, 749 F.3d 1267 (10th Cir. 2014) (finding that a similar
misleading suggestion was sufficient to show fraudulent misrepresentation in a criminal case).
In addition to identifying the precise misrepresentation made, these allegations also
satisfy the first two elements of common law fraud as to Calhoun and CBO.15 They explain that
CBO, at the behest of Calhoun, made “a false statement of material fact” regarding the “balance”
owed for Metropolitan’s services. Additionally, the allegations show that Calhoun knew the
falsity of its misrepresentation because it had already paid a lesser amount prior to generating
these invoices purportedly reflecting the “balance.” See Am. Compl. ¶ 70. While plaintiff
provides only general allegations that CBO made those statements knowing they were false, id. ¶
158, “Rule 9(b) permits states of mind, including knowledge, to be pled generally.” W. Coast
Roofing & Waterproofing, Inc. v. Johns Manville, Inc., 287 F. App’x 81, 88 (11th Cir. 2008).
Omni’s Demand Packages
After receiving Metropolitan’s and Coral Gables’ invoices, Omni would package those
invoices for transmission to the patients’ personal injury attorneys. See Am. Compl. ¶ 102–105.
In both cases, Omni and its owners “knew” these invoices were being delivered so that Omni
Even though Calhoun did not create the misleading invoices, these allegations reveal sufficient
involvement in the alleged creation of the invoices such that the fraud claim against Calhoun
survives dismissal. See, e.g., Altamonte Springs, 2011 WL 6450769 at *4 (reasoning that the
complaint sufficiently alleged the individual defendant’s “personal involvement in the alleged
scheme”); KJ Chriopractic Center, 2014 WL 12617566, at *4 (finding plaintiff had alleged
“specific instances of conduct sufficient to inform each Defendant of its individual role in the
alleged scheme,” where it alleged that the individual defendants had “loaned their names and
chiropractic licenses so that the clinics would appear to be legitimate” and legal).
could attempt to collect the stated charges from the patients after the patients’ personal injury
attorneys included such charges in a demand to an insurer. Id. ¶ 103, 107.
Omni included Metropolitan’s invoices, which purported to show the total amount of
Metropolitan’s charges as an unpaid “balance.” Id. ¶¶ 102–103. Metropolitan’s invoices did not
reflect any adjustments or credits to the patient’s account for Calhoun’s payments or indicate that
Metropolitan had been paid by Calhoun and accepted such payments as payment in full. Id. ¶
103. Notably, Metropolitan’s invoices affirmatively represented that there were no “adjustments”
or “payments” which could have affected the “balance.” See Exhibit 5 at 3. Omni’s payment to
Metropolitan was a “fraction” of the amount stated in the invoice that Omni caused to be
submitted to State Farm. Id. ¶ 102.
Similarly, after receipt of Coral Gables’ invoices, which “purported to reflect the surgical
facility’s usual and customary charges for the services provided” and “never accounted for the
fact that Coral Gables agreed to a pre-arranged price from Omni” for the services it provided, id.
¶ 107, Omni provided packets to patients attorneys. Id. ¶ 109. These packets typically included a
cover letter and Omni’s account ledger reflecting Omni’s charges and a line entry for the charges
at Coral Gables. Id. ¶ 109. The packages sent by Omni included the full amount of Coral Gables’
bills as a line item in the total amount purportedly due and owing. Id. ¶ 111. As a result, the
“surgical facility ‘charges from Coral Gables listed on Omni’s ledger’” were “enormous[ly]
differen[t]” from what Omni actually paid to Coral Gables. Id. ¶ 108. The cover letters, which
were on Omni letterhead, disclosed that Omni purchased Coral Gables’ receivables. Id. ¶ 108,
110; see also Ex. 10 to Am. Compl. However, the letters did not disclose the amount Omni
actually paid to Coral Gables was, in at least one case, about one-tenth of the now-claimed
amount. Id. ¶ 108, 110.16
In addition to identifying the precise misrepresentation made, these allegations satisfy the
first two elements of common law fraud as to Omni. They show that Omni made “a false
statement of material fact” regarding the amount the patient owed for Coral Gables’ and
Metropolitan’s services. See, e.g., Am. Compl. ¶ 111 (“the packages sent by Omni included the
full amount of Coral Gables’ bill as a line item in the total amount purportedly due and owing”).
Because Plaintiff is entitled to all reasonable inferences that can be drawn from the well-pleaded
allegations, Omni’s communications plausibly “suggested that [it] was simply charging the
insurers the actual amount that [it] would ultimately pay [Coral Gables or Metropolitan].” United
States v. Sharp, 749 F.3d 1267 (10th Cir. 2014) (finding that a similar misleading suggestion was
sufficient to show fraudulent misrepresentation in a criminal case).17 Additionally, the
allegations create the reasonable inference that Omni knew the falsity of its misrepresentation
because it already paid a lesser amount for the line-item charge prior to generating these demand
packages purportedly reflecting the balance. See Am. Compl. ¶¶ 108, 110; see also id. at 158
(“Defendants knew the invoices and supporting documentation contained false representations
and omissions of material fact.”).
The example package includes $24,516 in hospital fees in both its cover letter and as a lineitem in the ledger. Ex. 10 to Am. Compl. at 1–2. However, Omni only paid Coral Gables $2,500
for Coral Gables’ services. Id. ¶ 108.
It would not be appropriate, at this stage in the litigation, for the Court to conclude that the
practice of paying a discounted price but billing based on usual and customary costs is a practice
so common that a reasonable insurer would not have been misled by these statements. See
Section III.A. supra.
b) The Time, Place, and Person Responsible for the Statement
Defendants next argue that Plaintiff has failed to specify with particularity the
circumstances as to “who, what, when, where, and how the fraudulent claim was submitted or
the false record or statement made.” See Calhoun’s Motion at 11–14 (citing Hopper v Solvay
Pharms. Inc., 588 F.3d 1318, 1324 (11th Cir. 2009)); see also Metropolitan’s Motion at 4–5, 8.
The purpose of the particularity rule in fraud actions is to “alert defendants to the
precise misconduct with which they are charged and [to] protect defendants against spurious
charges of immoral and fraudulent behavior.” Ziemba v. Cascade Int’l, Inc., 256 F.3d 1194, 1202
(11th Cir.2001) (quotations and citations omitted). Courts recognize, however, that if alleged
fraudulent conduct occurs over an extended period of time, and the acts are numerous, the
specificity requirements of Rule 9(b) are applied less stringently to avoid “substantial unfairness
to private litigants who could not possible have detailed knowledge of all the circumstances
surrounding the alleged fraud.” MeterLogic, Inc. v. Copier Sols., Inc., 126 F. Supp. 2d 1346,
1361 (S.D. Fla. 2000) (holding that plaintiff “need not provide the exact time and place”).
Moreover, “a court considering a motion to dismiss for failure to plead fraud with particularity
should always be careful to harmonize the directives of rule 9(b) with the broader policy of
notice pleading” found in Rule 8. Hill v. Morehouse Med. Assocs., Inc., No. 02-14429, 2003 WL
22019936, at *3 (11th Cir. Aug. 15, 2003) (quoting Friedlander v. Nims, 755 F.2d 810, 813 n. 3
Although the Amended Complaint provides some information regarding the time and
place of the misleading deceptive claim submissions, it does not allege the exact date and time
every false statement was made. However, the Amended Complaint and its attached exhibits,
provide patients’ initials, claim numbers, the dates of settlements, settlement amounts, the
corresponding charges from the Medical Practices and the Surgical Facilities, along with
example invoices and demand letters, which include alleged misrepresentations. See, e.g.,
Exhibits 1, 3–5, 7–11. Taken together, this information is sufficient to “alert” Defendants to the
charges they are being accused of fraudulently inflating.
Although Amended Complaint alleges that Metropolitan, CBO, Calhoun, and Omni
created false statements, see Section III.B.1.a, supra, Plaintiff admits it does not know the
specific persons “employed or utilized by the entity Defendants to make the fraudulent
representations.” See Opp. at 11. Plaintiff argues that such allegations are unnecessary at this
time. Opp. at 11.
While the Court agrees that such allegations are unnecessary to establish liability for
fraud against the entity defendants here, it disagrees that the fraud claim survives against the
Triana, Cerceda, and Mevorah (the “Individual Defendants”). Simply put, there are no wellpleaded allegations specifically claiming that the Individual Defendants created any false
statements. Rather, all references to the Individual Defendants are conclusory. See, e.g., Am.
Compl. ¶ 160 (“Defendants are jointly liable for the false representations and omissions of
material facts contained in the invoices and supporting documentation generated by the Medical
Practice because they each played an essential role as the orchestrators of the Unlawful Referral
The cases that Plaintiff cites—State Farm Mutual Automobile Ins. Co. v. Altamonte
Springs Diagnostic Imaging, Inc., No. 611-cv-1373, 2011 WL 6450769, at *4 (M.D. Fla. Dec.
21, 2011) and Gov’t Emps. Ins. Co. v. KJ Chiropractic Ctr. LLC, No. 6:12-cv-1138, 2014 WL
12617566, at *4 (M.D. Fla. Mar. 6, 2014))—are inopposite and do not remedy this defect. In
Altamonte Springs, the court specifically found that the complaint sufficiently alleged the
individual defendant’s “personal involvement in the alleged scheme.” 2011 WL 6450769 at *4.
Similarly, in KJ Chriopractic Center, the Court found that the plaintiff had alleged “specific
instances of conduct sufficient to inform each Defendant of its individual role in the alleged
scheme,” including alleging that the individual defendants had “loaned their names and
chiropractic licenses so that the clinics would appear to be legitimate” and legal. 2014 WL
12617566, at *4. By contrast, there are no well-pleaded allegations here that the Individual
Defendants involved themselves in the scheme in any way other than through their ownership
interests in the entity defendants.18
Accordingly, Count III is DISMISSED WITHOUT PREJUDICE against Mevorah,
Cereceda, and Triana.
c) The Content and Manner in Which These Statements Misled the
The Amended Complaint details how the misrepresentations discussed in section
III.B.1.a, supra, misled State Farm. State Farm received demand packages from its customers’
attorneys, which included materials generated by Metropolitan, CBO (on behalf of Calhoun), and
Omni.19 See, e.g., Am. Compl. ¶¶ 85, 88, 92, 109–113. State Farm relied upon these
representations in evaluating settlements of claims identified in Exhibit 11, while unaware of the
arrangements undergirding the claims. See, e.g., id. ¶¶ 113–120. The representations “grossly
inflated the value of the patients’ personal injury claims and caused State Farm to pay significant
settlement amounts based upon false information.” Id. ¶ 7. Significant sums were paid within
Additionally, although not argued, the Court declines to pierce the corporate veil here. See
Krinsk v. SunTrust Banks, Inc., No. 8:09-CV-909-T-27EAJ, 2010 WL 11475608, at *6 (M.D.
Fla. Jan. 8, 2010) (declining to pierce corporate veil where plaintiff has not plead facts
supporting shareholder had domination and control over corporate defendant).
Notably, there is no allegation that State Farm has ever received Coral Gables’ bills because
Omni did not include them in the demand package. See Am. Compl. ¶¶ 109–113.
available policy limits to avoid the risk of exposing State Farm insureds to potential excess
verdicts, as well as to avoid the threat of bad faith lawsuits. Id.
In addition to detailing the manner in which Plaintiff was deceived, the Amended
Complaint also contains sufficient allegations to satisfy the last two elements of common law
fraud. First, the same allegations supporting the manner in which Plaintiff was misled readily
demonstrate the “consequent injury by the party acting in reliance on the representation,” Butler,
44 So. 3d at 105, which is the fourth element of common-law fraud. Specifically, Plaintiff made
settlement payments based on misrepresentations found in the invoices and demand packages.
Second, the Court finds that the Amended Complaint also satisfies the third element of
common law fraud—an intention that the representation induce another to act on it—against
Metropolitan, Calhoun, CBO, and Omni. The Amended Complaint alleges that Defendants
created these invoices and caused them to be submitted to State Farm in order to “induce State
Farm to pay claims” based upon the misrepresentations contained therein. Am. Compl. ¶ 159.
Defendants’ “intent to injure, defraud, or deceive” Plaintiff is also readily inferred from the
allegations of the Amended Complaint. See, e.g., Am. Compl. at ¶ 26 (“to accomplish their
common purpose of defrauding State Farm through the scheme . . . .”); id. ¶ 55 (“Calhoun, its
owners, CBO (on behalf of Calhoun), and Metropolitan knew that these invoices were being
delivered so Calhoun could deliver them to the patients’ personal injury attorneys to be included
in a demand package to an insurer such as State Farm.”). Because “[m]alice, intent, knowledge,
and other conditions of a person’s mind may be alleged generally,” Fed. R. Civ. P. 9(b), the
Court finds these allegations sufficient to satisfy the third element of common-law fraud.
d) What Defendants Gained by the Alleged Fraud
The Amended Complaint alleges that the Surgical Facilities received a guaranteed, albeit
secret, cash flow. See, e.g., Am. Compl. (ECF No. 56) at ¶¶ 5, 6, 24, 25, 66–70, 99, 102–107,
133, 140, 145, 151, 156, 157, 160, 163, 166. It also alleges that the Medical Practices received
the ability to take possession of the Surgical Facilities bills and, upon settlement, recoup profit
over and above the amount of the secret payments it made. (Id. at ¶¶5, 6, 57, 60–62, 67, 70, 72,
75, 78, 83, 99, 102, 103, 105–108, 110–112, 133, 140, 145, 151, 160, 166, & Exhs. 6–7, 10). The
higher the purported medical expenses, the more likely the insurers would settle the claim for
higher amounts. Am. Compl. ¶¶1, 40, 59–61, 70, 73, 75–83, 103, 107, 110, 130, Ex. 3, Ex. 6, Ex.
7, Ex. 10. Had State Farm been aware of the arrangements, it would not have paid the
settlements featured in Exhibit 11 because, at a minimum, it would have evaluated the claims
based on the amounts paid by the Medical Practice to the Surgical Facilities instead of the stated
“artificial amounts included in the demand packages.” Am. Compl. ¶ 121.
Whether the Lack of Statutory Private Right of Action Bars Fraud Claim
The Calhoun Defendants next argue that the fraud claim fails because it seeks to create a
private right of action for statutes that otherwise do not provide for one. See Calhoun’s Motion at
6–8. The Court disagrees. Under Florida law, “[w]hether a statutory remedy is exclusive or
merely cumulative depends upon the legislative intent as manifested in the language of the
statute.” Thornber v. City of Ft. Walton Beach, 568 So.2d 914, 918 (Fla. 1990). “Even where the
legislature acts in a particular area, the common law remains in effect in that area unless the
statute specifically says otherwise.” State v. Ashley, 701 So.2d 338, 341 (Fla.1997); see also
Essex Ins. Co. v. Zota, 985 So.2d 1036, 1048 (Fla.2008) (“A statute . . . . designed to change the
common law rule must speak in clear, unequivocal terms, for the presumption is that no change
in the common law is intended unless the statute is explicit in this regard.” (quoting Carlile v.
Game & Fresh Water Fish Comm’n, 354 So.2d 362, 364 (Fla.1977))). “Unless a statute
unequivocally states that it changes the common law, or is so repugnant to the common law that
the two cannot coexist, the statute will not be held to have changed the common law.” Thornber,
568 So.2d at 918. None of the statutes featured in the Amended Complaint explicitly precludes
an insurer from bringing a claim for common law fraud.20 In fact, some expressly provide the
opposite. See, e.g., Fla. Stat. § 817.505(7) (“The provisions of this section are in addition to any
other civil, administrative, or criminal actions provided by law and may be imposed against both
corporate and individual defendants.”). Nor is any statute “so repugnant to the common law that
the two cannot coexist.” Thornber, 568 So.2d at 918.
Accordingly, the Court declines to dismiss Plaintiff’s Count III on those grounds, and it
survives as to Defendants CBO, Calhoun, Metropolitan, and Omni.
C. Florida Deceptive and Unfair Trade Practices Act (Counts I and II)
Plaintiff lodges two claims under the Florida Deceptive and Unfair Trade Practices Act
(or “FDUTPA”), Fla Stat. § 502.201 et seq. The first is against Calhoun, Omni, Metropolitan,
CBO, Cereceda, Triana, and Mevorah (Am. Compl. ¶¶ 131–142); the second is against Omni,
Triana, and Coral Gables (Am. Compl. ¶¶ 143–153).
Defendants argue that Plaintiff’s FDUTPA claims fail for three reasons. First,
Metropolitan argues that FDUTPA does not apply to the conduct at issue because such conduct
Although the insurance fraud criminal statute, Fla. Stat. § 817.234(5), provides that an insurer
may bring an action upon an adjudication of guilt under that statute, “nothing in this statute
provides that a cause of action exists only if there is a conviction, or that other causes of action
are pre-empted.” Nationwide Mut. Co. v. Ft. Myers Total Rehab Ctr., Inc., 657 F. Supp. 2d 1279,
1287 (M.D. Fla. 2009) (discussing Fla. Stat. Ann. § 627.736(12), which similarly provides an
insurer a “cause of action against any person convicted of, or who, regardless of adjudication of
guilt, pleads guilty or nolo contendere to insurance fraud under s. 817.234”).
does not constitute “trade or commerce.” Second, Metropolitan and Calhoun Defendants argue
that the FDUTPA claims fail because they lack a statutory predicate. Third, Calhoun Defendants
argue that the FDUTPA claim fails because the Amended Complaint fails to plead with the
particularity required by Rule 9(b). For the reasons discussed below, dismissal of the FDUTPA
claims (Counts I and II) against Metropolitan, CBO, Calhoun, and Omni is inappropriate, but
dismissal of those Counts is appropriate against Cereceda, Triana, and Mevorah.
Whether Conduct at Issue Constitutes “Trade or Commerce”
Metropolitan argues that FDUTPA does not apply to the conduct alleged in the Amended
Complaint because conduct in pursuit of legal remedies, such as a settlement, is not ‘trade or
commerce’ under FDUTPA. Metropolitan’s Motion at 13.
FDUTPA prohibits “[u]nfair methods of competition, unconscionable acts or practices,
and unfair or deceptive acts or practices in the conduct of any trade or commerce.” Carriuolo v.
Gen. Motors Co., 823 F.3d 977, 983 (11th Cir. 2016) (alteration in original) (quoting Fla. Stat. §
501.204(1)). FDUTPA defines “[t]rade or commerce” as “the advertising, soliciting, providing,
offering, or distributing, whether by sale, rental, or otherwise, of any good or service, or any
property, whether tangible or intangible, or any other article, commodity, or thing of value,
wherever situated.” Fla. Stat. Ann. § 501.203(8). “As such language clearly indicates, the
definition of ‘trade or commerce’ is quite broad.” Alvi Armani Med., Inc. v. Hennessey, 629 F.
Supp. 2d 1302, 1305 (S.D. Fla. 2008). Additionally, FDUTPA requires that its provisions “be
construed liberally” to, inter alia, “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.” Fla. Stat. §
Heeding these provisions of FDUTPA, accepting the facts alleged in the Amended
Complaint as true, and construing all reasonable inferences therefrom in the light most favorable
to Plaintiff, the Court finds that the conduct alleged in the Amended Complaint falls within the
definition of “trade or commerce.” The Medical Practices and Surgical Centers provide
healthcare to patients in exchange for a portion of their patients’ legal recovery (in the form of
settlement or otherwise) under the Letters of Protection. Am. Compl. ¶ 60–62. The Medical
Practices and the Surgical Facilities have an arrangement under which the Medical Practices
provide referrals to the Surgical Facilities in exchange for, inter alia, “inflated” invoices. Id. ¶
70. As far as Plaintiff knows, this arrangement is neither disclosed to its patients (i.e. consumers)
nor to State Farm. Id. ¶ 69, 102, 105, 116, 118, 120–121. The Surgical Facilities’ inflated
invoices are sent to the Medical Practice, which then sends them to either the accident victims’
attorneys, or to CBO who then sends them to the accident victims’ attorneys. Id. ¶¶ 6, 20, 62, 67,
70, 74, 75, 82–86. The Medical Practices and CBO omit any reference to the much smaller
amount they actually paid the Surgical Centers. Id. ¶¶ 2, 4, 5, 107, 133. The attorneys then
provide these bills as part of a settlement package to State Farm. Id. ¶¶ 75, 112.
At a minimum, the Surgical Centers’ creation of the inflated bill pursuant to an alleged
arrangement with the Medical Centers involves commerce. See James D. Hinson Elec.
Contracting Co., Inc., 642 F. Supp. 2d 1318 (finding “bill” sent by utility to excavator for repair
of underground cable, that did not disclose corporate overhead and claims processing charges,
was in “trade and commerce,” as required for claim under FDUTPA); see also State Farm Mut.
Auto. Ins. Co. v. Med. Serv. Ctr. of Florida, Inc., 103 F. Supp. 3d 1343, 1354 (S.D. Fla. 2015)
(“Fraudulent conduct in the context of billing for PIP benefits qualifies as a deceptive act for
purposes of FDUTPA.” (citations omitted)); Baker v. Baptist Hosp., Inc., 115 So. 3d 1123, 1126
(Fla. Dist. Ct. App. 2013) (“[B]illing practices are considered part of ‘trade or commerce.’”).
Additionally, the rendering of healthcare services also falls within the definition of “trade or
commerce.” See, e.g., State Farm Mut. Auto. Ins. Co. v. Med. Serv. Ctr. of Florida, Inc., 103 F.
Supp. 3d 1343, 1354 (S.D. Fla. 2015) (“Defendants engaged in unfair and deceptive acts and
practices in the conduct of their trade and commerce by unlawfully operating medical clinics, in
violation of Florida law.”); see also Fla. Stat. § 501.203(8) (defining “[t]rade or commerce” as
the “providing” of “any . . . service”).
The Court rejects Metropolitan’s arguments to the contrary, which invoke cases that
either do not stand for the broad proposition claimed, or are entirely inapposite. For example,
Metropolitan relies on Kelly v. Palmer, Reifler, & Assocs., P.A., 681 F. Supp. 2d 1356, 1376
(S.D. Fla. 2010), for the proposition that the solicitation or offer of a legal release in exchange
for money does not equate to a “thing of value” as that term is used in the “trade or commerce”
provision of FDUTPA. See Metropolitan’s Motion at 13. However, the gravamen of the Kelly
complaint was “the Palmer Law firm collects information from its retail clients and, utilizing
sophisticated software, automatically generates misleading demand letters, calculates demand
amounts and affixes a local attorney’s signature to the demand letter, all without attorney
review.” Id. at 1363.21 By contrast, the Amended Complaint focuses on the underlying conduct
of entities that rendered a service and then created misleading bills. Id. at 1374. Moreover, unlike
In Kelly, plaintiffs received civil theft demand letters from a law firm, which threatened to file
a lawsuit if payments were not made. Kelly, 681 F. Supp. 2d at 1363–64. Recipients of those
letters filed a class action suit against the law firm alleging, among various claims, a violation of
FDUTPA by that law firm. The district court granted summary judgment for the law firm on
claims of FDUTPA violations, concluding that the plaintiffs did not satisfy the “‘trade or
commerce’ element of FDUTPA.” Id. at 1374.
the Kelly plaintiff, Plaintiff here does not contend the patients’ lawyers did anything to distort the
information that had been provided by the defendants.
Accordingly, the Court does not find it appropriate to dismiss Plaintiff’s FDUTPA claims
on the basis that the conduct alleged in the Amended Complaint does not involve “trade” or
Whether FDUTPA Claims Fail Because They Lack a Statutory Predicate
Metropolitan and Calhoun Defendants argue that the FDUTPA claims22 fail because none
of the four violations of Florida law alleged in the Amended Complaint can serve as a statutory
predicate for a FDUTPA claim. Metropolitan and Calhoun Defendants’ argument is predicated
on a misunderstanding of the statute.
A FDUTPA claim does not necessarily require the violation of a predicate statute. In
order to state a FDUTPA claim, a plaintiff “must allege (1) a deceptive act or unfair trade
practice; (2) causation; and (3) actual damages.” Dolphin LLC v. WCI Communities, Inc., 715
F.3d 1243, 1250 (11th Cir. 2013). The first element may be satisfied in one of two ways: a per se
violation or a traditional violation. See, e.g., Parr v. Maesbury Homes, Inc., No. 609CV-1268ORL-19GJK, 2009 WL 5171770, at *7 (M.D. Fla. Dec. 22, 2009). In their motions, Metropolitan
and Calhoun Defendants focus only on the first way: the per se FDUTPA violation, which
requires a violation of a predicate statute. See Fla. Stat. § 501.203(3)(c) (a violation of any “law,
statute, rule, or ordinance which proscribes unfair methods of competition, or unfair, deceptive,
or unconscionable acts or practices” may serve as a predicate for a FDUTPA claim). However, a
Although the Metropolitan Motion and the Calhoun Motion are not filed by any defendants
involved in the second FDUTPA claim (Omni, Triana, and Coral Gables), the Court considers
the arguments presented by Metropolitan and Calhoun Defendants against both FDUTPA counts
because (1) Omni and Triana joined the Calhoun Motion (ECF No. 63), and (2) as Calhoun
Defendants note, “the two claims are essentially identical,” Calhoun Motion at 8 n.2.
FDUTPA plaintiff may also satisfy the first element by showing a traditional violation, alleging
defendants engaged in “[u]nfair methods of competition, unconscionable acts or practices, and
unfair or deceptive acts or practices in the conduct of any trade or commerce.” See Fla. Stat. §
Here, Plaintiff alleges that Defendants violated four statutes,23 and also details the
allegedly deceptive acts and practices of Defendants, see, e.g., id. ¶¶ 133–139, 145–150; see also
Section I, supra. The Court finds that Plaintiff’s factual allegations establish traditional FDUTPA
claims. Accordingly, the Court need not address arguments concerning a whether a per se claim
is pled in order to determine whether the FDUTPA claims should be dismissed for failure to state
Although the statute does not define “unfair and deceptive act or practice,” the provisions
of the act are to be “construed liberally.” Intercoastal Realty, Inc. v. Tracy, 706 F. Supp. 2d
1325, 1333 (S.D. Fla. 2010) (quoting Fla. Stat. § 501.202(2)). A practice is unfair under the
FDUTPA if it “offends established public policy” or is “immoral, unethical, oppressive,
unscrupulous, or substantially injurious to consumers.” Beacon Prop. Mgmt., Inc., 842 So.2d at
777. A deceptive act occurs when a defendant makes “a representation, omission, or practice that
is likely to mislead the consumer acting reasonably in the circumstances, to the consumer’s
detriment.” Caribbean Cruise Line, Inc. v. Better Bus. Bureau of Palm Beach Cty., Inc., 169 So.
3d 164, 169 (Fla. Dist. Ct. App. 2015) (citing Beacon Prop. Mgmt., 842 So.2d at 777).
Importantly, “deception may be accomplished by innuendo” and through omissions “rather than
Specifically, Plaintiff asserts that Defendants’ conduct violates Florida Statutes §§ 817.505
(Patient Brokering Statute), 456.054 (Anti-Kickback Statute), 395.0185 (Anti-Rebate Statute)
and 817.234 (Insurance Fraud). See Amended Complaint (ECF No. 56) ¶¶ 9, 51, 123–130.
outright false statements.” Millennium Commc’ns & Fulfillment, Inc. v. Office of Attorney Gen.,
Dep’t of Legal Affairs, State of Fla., 761 So. 2d 1256, 1264 (Fla. Dist. Ct. App. 2000).
For the reasons discussed in Section III.B., supra, the Court concludes that the Amended
Complaint sufficiently pleads that CBO, Calhoun, Metropolitan, and Omni have engaged in
fraudulent practices via their invoices. Courts have held misrepresentations regarding invoices
may support FDUTPA claims. See, e.g., James D. Hinson Elec. Contracting Co., Inc., 796 F.
Supp. 2d at 1353 (inclusion of unrecoverable charges for “claims processing” in costs of damage
to underground facilities billed to excavators); Turner Greenberg Assocs., Inc. v. Pathman, 885
So. 2d 1004, 1008 (Fla. 4th DCA 2004) (furniture store’s collection of a freight/insurance charge
in connection with financed furniture sales was a deceptive and unfair trade practice; fee was in
reality a customer surcharge); Latman v. Costa Cruise Lines, N.V., 758 So. 2d 699, 703 (Fla. 3d
DCA 2000) (charges invoiced as “port charges” but kept as profit held to violate FDUTPA).
Although not raised by Defendants, the Court notes that the causation and damages
prongs for a FDUTPA claim are also satisfied here. Defendants allegedly submitted surgical
charges for more than $3.8 million pursuant to the Metropolitan Arrangement and more than
$172,000 pursuant to the Coral Gables Arrangement. Am. Compl. ¶ 10; see also Ex. 1 to Am.
Compl. (containing chart of charges and settlements pursuant to each arrangement). State Farm
claims representatives relied on the representation that the patients owed the amounts listed on
the Medical Practice and/or Surgical Facilities’ invoices or in the medical records, even though
due to the scheme, the patient did not owe those amounts. Am. Compl. ¶ 116.24 If State Farm had
known the truth of the arrangements among the Defendants, State Farm would have refrained
from paying the settlement amounts that it paid because, inter alia, it would have evaluated the
claims based on the amounts actually paid by the Medical Practice to the Surgical Facilities
instead of the amounts stated in the invoices and demand packages. Am. Compl. ¶ 121. As a
result of both allegedly unlawful referral arrangements, State Farm has been misled into paying
millions of dollars of settlements. Id. ¶ 167; see also Exhibit 1.
Accordingly, the FDUTPA claims do not fail for a lack of statutory predicate.
Whether the Amended Complaint Pleads with Sufficient Particularity
Calhoun Defendants and Coral Gables argue that the FDUTPA claims should be
dismissed because they are not pled with the particularity required by Rule 9(b).
Where a claim is grounded in fraud, the complaint must also comply with the heightened
pleading requirements of Federal Rule of Civil Procedure 9(b). See Curtis Inv. Co., LLC v.
Bayerische Hypo-und Vereinsbank, AG, 341 Fed. Appx. 487 (11th Cir. 2009) (unpub). Federal
district courts have split as to whether FDUTPA claims are subject to Rule 9(b). Compare Costa
v. Kerzner Int'l Resorts, Inc., No. 11–60663–Civ, 2011 WL 2519244, at *2 (S.D. Fla. June 23,
2011) (finding Rule 9(b) does not apply) with Llado–Carreno v. Guidant Corp., No. 09–20971,
2011 WL 705403, at *5 (S.D. Fla. Feb. 22, 2011) (finding that Rule 9(b) does apply). However,
where the gravamen of the claim sounds in fraud, as here, the heightened pleading standard of
Rule 9(b) applies. See, e.g., Blair v. Wachovia Mortg. Corp., No. 5:11-CV-566-OC-37TBS, 2012
See also Exhibit 4 to Am. Compl. (showing a non-exhaustive list of pre-arranged prices for a
number of common surgical procedures that Calhoun and Omni doctors performed at
Metropolitan); Exhibit 5 (Metropolitan invoice); Exhibit 7 (Calhoun letter describing “attached
surgical bills and operative report for your client”); Exhibit 10 (Omni letter describing “attached
surgical bills and operative report for your client”); Exhibit 8 (copy of demand letter).
WL 868878, at *3–4 (M.D. Fla. Mar. 14, 2012); Llado, 2011 WL 705403 at *5 ( “the
particularity requirement of Rule 9(b) applies to all claims that sound in fraud, regardless of
whether those claims are grounded in state or federal law.”)
Here, Plaintiff’s Amended Complaint “sounds in fraud,” Llado, 2011 WL 705403 at *5.
The gravamen of the Amended Complaint is that Defendants engaged in a “fraudulent scheme”
to “grossly inflate” the value of their patients’ personal injury claims so that State Farm would
“pay significant settlement amounts based upon false information.” See, e.g., Am. Compl. ¶¶ 6–
7. Accordingly, Rule 9(b) requires the allegations supporting the FDUTPA Counts to be pleaded
For the reasons discussed in Section III.B.1 and III.C.2, the Court finds that the FDUTPA
claims are adequately pled under Rule 9(b) against CBO, Metropolitan, Calhoun, and Omni.
However, there are no well-pleaded allegations detailing the Individual Defendants’ participation
in any unfair or deceptive act. Rather, all references to the Individual Defendants are conclusory.
See, e.g., Am. Compl. ¶ 160. Accordingly, the FDUTPA claims survive as to CBO,
Metropolitan, Calhoun, and Omni but are DISMISSED WITHOUT PREJUDICE as to Cereceda,
Triana, and Mevorah.
D. Unjust Enrichment (Count IV)
Plaintiff lodges an unjust enrichment claim against all Defendants. Id. ¶¶ 162–168. To
state a cause of action for unjust enrichment, a complaint must allege that: (1) the plaintiff has
conferred a benefit on the defendant; (2) the defendant has knowledge of the benefit; (3) the
defendant has accepted or retained the benefit conferred; and (4) the circumstances are such that
it would be inequitable for the defendant to retain the benefit without paying fair value for it.
Merle Wood & Assocs., Inc. v. Trinity Yachts, LLC, 714 F.3d 1234, 1237 (11th Cir. 2013)
Metropolitan and Calhoun Defendants argue that the claim fails for four reasons. First,
Metropolitan and Calhoun Defendants argue that the claim fails because it relies on statutes
which do not provide for a private right of action. Second, Metropolitan argues that the claim
fails to state a claim because the Amended Complaint never alleges that it conferred any benefits
to Metropolitan. Third, Calhoun Defendants argue that Plaintiff cannot pursue a quasi-contract
claim for unjust enrichment because an express contract exists concerning the same subject
matter. Fourth, Calhoun Defendants argue that the unjust enrichment claim fails because Plaintiff
has received adequate consideration for the benefit conferred—namely the release of claims by
Whether the Lack of Statutory Private Right of Action Bars Unjust
Defendants argue that Plaintiff cannot base its unjust enrichment claim on conduct that
violates statutes for which there is no private right of action. However, “even though the statutes
in question do not create private rights of action, Plaintiff may proceed with common law or
other statutory causes of action that exist if the elements of those claims are properly stated.”
Pincus v. Speedpay, Inc., 161 F. Supp. 3d 1150, 1156 (S.D. Fla. 2015). The Eleventh Circuit has
permitted an unjust enrichment claim to lie even where the statute allegedly violated by
defendants does not expressly provide for a judicial remedy. See State Farm Fire & Casualty Co.
v. Silver Star Health & Rehab, 739 F.3d 579, 583–84 (11th Cir. 2013) (permitting claim of
unjust enrichment to lie where “the Act does not expressly refer to a judicial remedy”).
A review of the Amended Complaint reveals that Plaintiff does not attempt to assert a
private cause of action for Defendants’ violation of the Patient-Brokering, Anti-Kickback, Anti32
Rebate, or Insurance Fraud Statutes, but rather contends that Defendants’ conduct in violation of
these statutes is unjust such that it would be wrong for them to retain benefits they received as a
result of their wrongful conduct. See, e.g., Am. Compl. ¶¶ 123–130; 162–168. Accordingly, the
fact that Plaintiff alleges conduct in violation of statutes, which do not provide for a private right
of action, is not fatal to Plaintiff’s unjust enrichment claim.
Whether Complaint Alleges a Benefit Inequitably Accepted and Retained
Plaintiff alleges that it conferred a benefit upon Defendants by making payments on
claims “which were not owed because they were the product of the Unlawful Referral
Arrangement orchestrated by the Defendants.” Am. Compl. ¶ 163. Essentially, State Farm argues
that it “owed absolutely nothing for Defendants’ services,” Opp. at 34, because such services are
“the product of an arrangement prohibited by Florida Statutes §§ 395.0185, 456.054, 817.505,
502.201 et. seq., and 817.234,” Am. Compl. ¶ 174; see also id. ¶ 121 (alleging that the “unlawful
nature of the brokering . . . makes all such claims not compensable.”).
On first blush, Plaintiff’s unjust enrichment theory fits within the framework outlined in
Silver Star, 739 F.3d at 583–84. In that case, the Eleventh Circuit found that a defendant’s
violation of a licensing statute could provide a basis for an unjust enrichment claim because the
defendant “accepted payments” that it was “not entitled to under Florida law” due to its violation
of that statute. Id. The Court noted that the statute explicitly provided that “[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.” Id. at 583. The Court
reasoned that because the plain language of the statute provided that any charge or
reimbursement claim by an unlicensed clinic was “unlawful . . . noncompensable and
unenforceable,” it “would make no sense to read into” the statute a “provision that courts lack
the authority to decide the crucial question on the lawfulness, compensability and enforceability”
of such a claim. Id.
However, on a motion to dismiss, Plaintiff’s legal conclusions are “not entitled to the
assumption of truth,” Iqbal, 556 U.S. at 680, including Plaintiff’s assertion that these statutes
make any amount paid by State Farm to Defendants “not owed,” Am. Compl. ¶ 163. Assuming
without deciding that the Amended Complaint sufficiently alleges violations of each of those
statutes, the Court does not agree that Plaintiff owed nothing for Defendants’ services merely
because of these violations.
As mentioned previously, the Court in Silver Star permitted an unjust enrichment claim
to stand because the statute at issue expressly provided that a claim from an unlicensed medical
provider “is an unlawful charge and is noncompensable and unenforceable.” Fla. Stat.§
400.9935(3); see Silver Star, 739 F.3d at 583. However, unlike the statutes undergirding the
Silver Star plaintiff’s unjust enrichment claim, none of the statutes in question here provide that
“[a]ll charges or reimbursement claims made” in violation of these statutes, are “unlawful” or
“noncompensable” or “unenforceable,” Silver Star, 739 F.3d at 583. Plaintiff does not cite any
authority standing for the proposition that any services provided by a party violating one of the
statutes in question are not owed or otherwise not enforceable.25
The cases Plaintiff cites all address other statutes. See Opp. at 27–28 (citing State Farm Mutual
Auto. Ins. Co. v. Silver Star Health & Rehab, 739 F.3d 579 (11th Cir. 2013) (violation of the
Florida Health Care Clinic Act); Pincus v. Speedpay, Inc., 161 F. Supp. 3d 1150 (S.D. Fla. 2016)
(violations of sections 5.1.0117 and 560.204(1)); State Farm Mutual Auto. Ins. Co. v. B&A
Diagnostics, Inc., 104 F. Supp. 3d 1366, 1372 (S.D. Fla. 2015) (violations of the Health Care
Clinic Act and the Radiological Personnel Certification Act))
There are many statutes in which the legislature has made the determination to make
certain charges noncompensable and unenforceable—including in the insurance context.26
However, because the statutes in question do not provide for such relief, the Court concludes that
the legislature did not intend for it to exist here. See Buell v. Direct Gen. Ins. Agency, Inc., 267 F.
App’x 907, 910 (11th Cir. 2008) (declining to find that contract was void for violating a statute
which did not so provide where “certain other provisions of the Insurance Code specifically
provide that violations render the ensuing contracts or policy terms void”). The fact that the
Florida legislature “chose to impose” such a remedy in certain circumstances but not others
“indicates a deliberate congressional choice with which the courts should not interfere.” See
Cent. Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A., 511 U.S. 164 (1994).
Because Plaintiff has not alleged a benefit conferred and accepted, which would be unjust
for Defendants to retain, Plaintiff fails to state a claim for unjust enrichment. Accordingly,
Plaintiff’s claim for unjust enrichment (Count IV) is DISMISSED WITHOUT PREJUDICE.
E. Declaratory Relief (Count V)
Plaintiff lodges a claim for declaratory relief pursuant to 28 U.S.C. § 2201 against
Calhoun, Omni, Metropolitan, and Coral Gables. Am. Compl. ¶¶ 169–174. Specifically, State
Farm seeks a judgment declaring that any “unpaid charges of the Medical Practice and the
Surgical Facilities that have been submitted or are submitted during the pendency of this
See, e.g., Fla. Stat. Ann. § 627.736(5)(b)(1)(c) (“An insurer or insured is not required to pay a
claim or charges . . . To any person who knowingly submits a false or misleading statement
relating to the claim or charges;”). In fact, in another subsection of one of the statutes Plaintiff
cites (Fla Stat. 817.234) the legislature determined that “[c]harges for any services rendered by
any person who violates this subsection in regard to the person for whom such services were
rendered are noncompensable and unenforceable as a matter of law.” See Fla. Stat. Ann. §
817.234(8)(d) (pertaining to soliciting business from a person involved in a motor vehicle
litigation for services rendered pursuant to the Unlawful Referral Agreement, as alleged herein,
are not owed because they are the product of an arrangement prohibited by Florida Statutes
§§ 395.0185, 456.054, 817.505, 502.201 et. seq., and 817.234.” Id. ¶ 174.
The Florida Supreme Court held that “an insurer may pursue a declaratory action which
requires a determination of the existence or nonexistence of a fact upon which the insurer’s
obligations under an insurance policy depend.” Higgins v. State Farm Fire & Casualty Co., 894
So.2d 5, 12 (Fla. 2004). However, for the reasons discussed in Section III.D., supra, Plaintiff has
failed to establish that Defendant in fact is owed nothing for its services, even accepting all of the
allegations in the Amended Complaint as true. Accordingly, Plaintiff’s claim for declaratory
relief (Count V) is DISMISSED WITHOUT PREJUDICE.
F. Joinder of Necessary Parties
The Calhoun Defendants argue that the Amended Complaint should be dismissed,
pursuant to Federal Rules of Civil Procedure 12(b)(7) and 19, for failure to join indispensable
parties—the accident victims with pending claims. First, Calhoun Defendants argue the accident
victims are a necessary party because they were “active participants,” Calhoun’s Motion at 3, 19.
Second, Calhoun Defendants contend that the accident victims with pending claims are “parties
required to be joined in the action” because “their ability to protect their interests is impeded or
impaired if they are not joined in the action. . . .” Calhoun’s Motion at 19 (citing Fed. R. Civ. P.
19(a)(1)(B)(i)). Third, Calhoun Defendants appear to argue that the Court cannot “accord
complete relief among the existing parties” without joining the accident victims with pending
claims. Id. (citing Fed. R. Civ. P. 19(a)(1)(A)).
Dismissal under Rule 12(b)(7) is a “two-step inquiry.” Molinos Valle Del Cibao, C. por
A. v. Lama, 633 F.3d 1330, 1344 (11th Cir. 2011). First, the party moving to dismiss an action
for failure to join an indispensable party must establish the absent party is a “required” party as
defined by Federal Rule of Civil Procedure 19(a). Id. The moving party “bears the burden of
proof in establishing that the non-party is needed for a just adjudication.” Rodriguez v. Niagara
Cleaning Servs., Inc., No. 09-22645-CIV, 2010 WL 11505477, at *4 (S.D. Fla. Jan. 11, 2010).
“Generally, an absent party is not required simply because its joinder would be convenient to the
resolution of the dispute.” Clay v. AIG Aerospace Ins. Servs., Inc., 61 F. Supp. 3d 1255, 1266
(M.D. Fla. 2014). Instead, an absent party is required where (1) the court cannot accord complete
relief among the existing parties; (2) prejudice would result to the absent party's ability to protect
itself in the instant action; or (3) the nonparty’s absence would create a substantial risk that the
existing parties would incur inconsistent or duplicative obligations. Raimbeault v. Accurate
Mach. & Tool, LLC, 302 F.R.D. 675, 682–83 (S.D. Fla. 2014); see also City of Marietta v. CSX
Transp., Inc., 196 F.3d 1300, 1305 (11th Cir. 1999).
Second, if the court determines that the absent party is required, it “must order that party
joined if its joinder is feasible.” Raimbeault, 302 F.R.D. at 682; see also Fed. R. Civ. P. 19(a)(2).
If for some reason the party cannot be joined, i.e., if joining the party would deprive the court of
subject matter jurisdiction, “the court must analyze the factors outlined in Rule 19(b) to
determine whether ‘in equity and good conscience the action should proceed among the parties
before it, or should be dismissed, the absent person thus regarded as indispensable.’” Laker
Airways, Inc. v. British Airways, PLC, 182 F.3d 843, 847 (11th Cir. 1999) (quoting Fed. R. Civ.
P. 19(b)). Conversely, if the court determines the absent party is not required under Rule 19(a),
the lawsuit continues. Id.
Whether Accident Victims Are “Active Participants”
The Court rejects Calhoun Defendants’ argument that the accident victims are a
necessary party because they were “active participants,” Calhoun’s Motion at 19. Calhoun
Defendants contend that the accident victims are active participants simply because State Farm’s
settlements with the accident victims were negotiated “under considerable threats from the
patients’ personal injury attorneys.” See id. (quoting Am. Compl. ¶¶ 85–91).
The case Calhoun Defendants cite for this argument—Laker Airways Inc., 182 F.3d at
848—does not support their contention that the accident victims were active participants here.
Rather, Laker Airways held that an absent party will be considered a necessary party when it is a
“joint tortfeasor” and has actively participated in the allegations made in the complaint. Id. at
848 (citing Haas v. Jefferson National Bank, 442 F.2d 394, 398 (5th Cir. 1971)). For example, in
Laker Airways, the missing party in that case was alleged to have “conspired” with one of the
defendants and to have played an essential role in the conspiracy. Id. (“[The absent party] is the
only entity that can allocate slots at Gatwick Airport. Without [absent party], [Defendant] would
not be able to manipulate . . . the slot allocation process.”). There are no allegations that the
accident victims participated in any alleged tortious acts here. In fact, the Amended Complaint
expressly alleges that Plaintiff is “unaware of any patient ever being informed of” the scheme.
See Am. Compl. ¶¶ 102, 105.
Accordingly, the Court does not find that the accident victims are necessary parties under
the “active participant” rule articulated in Laker Airways.
Whether Accident Victims’ Ability to Protect Their Interests Is Impeded If
They Are Not Joined
The Court also rejects Calhoun Defendants’ argument that the accident victims with
pending claims are “required to be joined in the action” because “their ability to protect their
interests is impeded or impaired if they are not joined” in the action. Calhoun’s Motion at 19
(citing Fed. R. Civ. P. 19(a)(1)(B)(i)).
Joinder pursuant to Rule 19 section (a)(1)(B)(i) is “contingent [ ] upon an initial
requirement that the absent party claim a legally protected interest relating to the subject matter
of the action.” Northrop Corp. v. McDonnell Douglas Corp., 705 F.2d 1030, 1043 (9th Cir.
1983), cert. denied, 464 U.S. 849, 104 S.Ct. 156, 78 L.Ed.2d 144 (1983); see also United States
v. Janke, No. 09-14044-CIV, 2009 WL 2525073, at *2 n.1 (S.D. Fla. Aug. 17, 2009) (same).
Here, the accident victims have not claimed a legally protected interest relating to the
subject matter of this action. “Quite simply, where the individual insureds do not claim an
interest . . . [Calhoun Defendants] cannot claim one for them.” W. Coast Life Ins. Co. v. Life
Brokerage Partners, LLC., No. 08-80897-CIV, 2009 WL 10668605, at *2 (S.D. Fla. Nov. 9,
2009), report and recommendation adopted sub nom. W. Coast Life Ins. Co. v. Life Brokerage
Partners, LLC, No. 08-80897, 2010 WL 11504833 (S.D. Fla. Jan. 7, 2010).
Accordingly, Calhoun Defendants cannot invoke the necessary party rule set forth in
Rule 19(a)(1)(B). See, e.g., ConnTech Dev. Co. v. Univ. of Connecticut Educ. Properties, Inc.,
102 F.3d 677, 683 (2d Cir. 1996) (rejecting Defendant’s “self-serving attempts to assert interests
on behalf of” absent party).
Whether the Court Can Accord Complete Relief Among the Existing Parties
Without Joining the Accident Victims with Pending Claims
Finally, the Court rejects Calhoun Defendants’ argument that the accident victims are
necessary parties under Rule 19(a)(1)(A) because the Court “cannot accord complete relief
among existing parties.” Calhoun’s Motion at 19 (citing Fed. R. Civ. P. 19(a)(1)(A)).
Calhoun Defendants have the burden of demonstrating that the accident victims qualify
as “necessary” under 19(a)(1). Liberty Mut. Fire Ins. Co. v. Int’l Video Distributors, L.L.C., No.
14-60955-CIV, 2014 WL 11776959, at *3 (S.D. Fla. July 2, 2014). However, in support of their
argument, Calhoun Defendants conclusorily cite Rule 19(a)(1)(A) without addressing whether
the Court can accord complete relief among existing parties in the absence of the accident
victims. Calhoun Defendants, therefore, have not met their burden under this prong of Rule 19.
See Combe v. Flocar Inv. Group Corp., 977 F. Supp. 2d 1301, 1305 (S.D. Fla. 2013) (finding
that the defendants did not meet their burden because they failed to explain why the court could
not accord complete relief among the parties).
Moreover, Plaintiff seeks only monetary relief in the remaining claims in this action—
Fraud (Count III) and FDUTPA (Counts I and II).27 The Calhoun Defendants do not contend that
the Defendants already in this action would be unable to pay the amount sought were they found
liable. See Winn-Dixie Stores, Inc. v. Dolgencorp, LLC, 746 F.3d 1008, 1039 (11th Cir. 2014)
(“The district court could award all of the requested relief without haling the [absent party] into
court because [defendant] was fully able to pay damages and comply with injunctions.”);
Molinos Valle del Cibao, 633 F.3d at 1345 (“[M]oney is fungible; the recipient cares not from
whence it came.”). Accordingly, the Court rejects Calhoun Defendants’ arguments for dismissal
predicated on Plaintiff’s failure to join the accident victims as defendants in this action.
For the foregoing reasons, it is hereby ORDERED AND ADJUDGED that
(1) Defendant Metropolitan’s Motion to Dismiss (ECF No. 60) is GRANTED IN PART
AND DENIED IN PART;
Plaintiff’s claims for unjust enrichment (Count IV) and Declaratory Relief (Count V) have
been dismissed. See Sections III.D. and III.E., supra, respectively.
(2) Calhoun Defendants’ Motion to Dismiss (ECF No. 61) is GRANTED IN PART AND
DENIED IN PART;
(3) All Counts are DISMISSED WITHOUT PREJUDICE as to Defendants Merovah,
Cerceda, and Triana;
(4) Counts IV and V of the Amended Complaint are DISMISSED WITHOUT
(6) Plaintiff has 30 days from the date of this order to file an amended complaint curing
the deficiencies described above.
DONE AND ORDERED in Chambers at Miami, Florida, this ____ day of September,
K. MICHAEL MOORE
CHIEF UNITED STATES DISTRICT JUDGE
cc: All counsel of record
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