KARTOZIA et al v. SERVICE 1ST MORTGAGE INC et al

Filing 187

ORDER denying 154 Motion for Certificate of Appealability; denying 157 Motion for Certificate of Appealability; vacating in part 150 Order, lifting the stay of discovery, and setting a deadline of 2/9/2022 for submission of the proposed discovery Order. Ordered by US DISTRICT JUDGE CLAY D. LAND on 1/12/2022 (tlf).

Case 4:18-cv-00194-CDL Document 187 Filed 01/12/22 Page 1 of 3

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
COLUMBUS DIVISION
UNITED STATES OF AMERICA, ex
rel. GEORGE KARTOZIA,

*
*

Plaintiffs,
*
vs.

CASE NO. 4:18-CV-194 (CDL)

*
RMK FINANCIAL CORPORATION, et
al.,

*

Defendants.

*
O R D E R

In

light

of

Relator’s

Third

Amended

Complaint

(ECF

No.

186), the portion of the Court’s October 8, 2021 order (ECF No.
150) dismissing Relator’s claims against Loandepot.com, LLC and
Freedom Mortgage Corp. is vacated.
its

January

7,

2022

order

(ECF

As the Court explained in

No.

185),

the

Third

Amended

Complaint sufficiently states False Claims Act claims against
Loandepot.com, LLC and Freedom Mortgage Corp.
Presently

pending

before

the

Court

are

two

motions

for

certification of the Court’s October 8, 2021 order (ECF No. 150,
as modified by this order) for immediate appeal (ECF Nos. 154 &
157).

Those

Mortgage,
Armour

motions

Inc.,

Settlement

proximate

Robert

are
Cole

Services,

causation

standard

denied.

Defendants

(together,
LLC
is

“Service

(“Armour”)
not

Service

clear

1st

1st”),

and

contend
for

that

“cause

to

the
be

presented” and “cause to make or use documents material to a

Case 4:18-cv-00194-CDL Document 187 Filed 01/12/22 Page 2 of 3

claim” False Claims Act claims.
the

causation

standard

The Court carefully considered

recently

announced

in

Ruckh

v.

Salus

Rehabilitation, LLC, 963 F.3d 1089 (11th Cir. 2020), a False
Claims

Act

case

where

there

was

sufficient

evidence

for

a

reasonable jury to conclude that a management service provider
knowingly caused skilled nursing facilities to submit fraudulent
Medicare and Medicaid claims to the Government.
service

provider

did

not

submit

the

claims

The management
itself,

but

its

conduct (including pressuring facility employees to engage in
upcoding) was a substantial factor in inducing the facilities to
submit

false

claims

for

reimbursement,

and

the

management

service provider anticipated the submission of the false claims
for reimbursement as a result of its conduct.

Id. at 1106-08;

accord United States ex rel. Kartozia v. Freedom Mortg. Corp.,
No. 4:18-CV-194 (CDL), 2021 WL 4721066, at *9 (M.D. Ga. Oct. 8,
2021) (examining Ruckh).

The standard articulated in Ruckh is

not unclear.
To convince the Court that certification under 28 U.S.C.
§ 1292(b) is appropriate here, Defendants argue that Relator did
not allege facts to suggest that they assisted or participated
in the claim process.
legal

issue.

And

But this is a factual issue, not a pure

the

Court

previously

concluded

that

the

complaint’s allegations—taken as true and drawing all reasonable
inferences

in

favor

of

Relator—establish

2

a

sufficient

nexus

Case 4:18-cv-00194-CDL Document 187 Filed 01/12/22 Page 3 of 3

between the conduct of Armour and Service 1st and the false
claims submitted by the lenders.
*9.

Kartozia, 2021 WL 4721066, at

So, although these Defendants may not have completed an

application for a loan guaranty or authored any documents that
were directly submitted to the Department of Veterans Affairs,
Relator alleges that they were knowing, crucial participants in
a scheme to charge impermissible fees to veterans but falsely
certify

to

charged.
to

the

Id.

accept

as

VA

that

no

such

impermissible

to

had

been

Under these facts, which the Court was required
true

at

the

motion-to-dismiss

proximate causation standard was met.
point

fees

authority

suggesting

Id.

stage,

the

Ruckh

Defendants did not

disagreement

on

this

point.

Instead, their main quarrel is with the Court’s characterization
of

the

factual

allegations.

Under

these

circumstances,

the

extraordinary remedy of certification for interlocutory appeal
under 28 U.S.C § 1292(b) is unwarranted.
The stay of discovery is lifted.

The parties shall submit

a proposed scheduling order in compliance with the Rules 16/26
Order by February 9, 2022.
IT IS SO ORDERED, this 12th day of January, 2022.
S/Clay D. Land
CLAY D. LAND
U.S. DISTRICT COURT JUDGE
MIDDLE DISTRICT OF GEORGIA

3