Svete v. Wunderlich et al

Filing 16

ORDER that Clerk of Court shall file complaint and issue summons. Signed by Magistrate Judge George Foley, Jr on 4/20/11. (Copies have been distributed pursuant to the NEF - cc: plaintiff and USM - EDS)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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DAVID W. SVETE,

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Plaintiff,
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vs.
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HOWARD F. WUNDERLICH, et al.,
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Defendants. )
__________________________________________)

Case No. 2:09-cv-00345-JCM-GWF
ORDER

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This matter is before the Court on Plaintiff David W. Svete’s Complaint (#1-3), filed February
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DISCUSSION
On August 2, 2010, the Court granted Plaintiff’s application to proceed in forma pauperis. (#6).

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Upon granting a request to proceed in forma pauperis, a court must screen a complaint pursuant to 28

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U.S.C. § 1915(e). Specifically, federal courts are given the authority to dismiss a case if the action is

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legally “frivolous or malicious,” fails to state a claim upon which relief may be granted, or seeks

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monetary relief from a Defendant who is immune from such relief. 28 U.S.C. § 1915(e)(2).

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A complaint, or portion thereof, should be dismissed for failure to state a claim upon which

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relief may be granted “if it appears beyond a doubt that the plaintiff can prove no set of facts in support

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of his claims that would entitle him to relief.” Buckey v. Los Angeles, 968 F.2d 791, 794 (9th Cir.

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1992); see also Denton v. Hernandez, 504 U.S. 25, 33 (1992). A complaint may be dismissed as

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frivolous if it is premised on a nonexistent legal interest or delusional factual scenario. Neitzke v.

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Williams, 490 U.S. 319, 327–28 (1989). Moreover, “a finding of factual frivolousness is appropriate

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when the facts alleged rise to the level of the irrational or the wholly incredible, whether or not there are

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judicially noticeable facts available to contradict them.” Denton, 504 U.S. at 33. When a court

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dismisses a complaint under § 1915(e), the plaintiff should be given leave to amend the complaint with

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directions as to curing its deficiencies, unless it is clear from the face of the complaint that the

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deficiencies could not be cured by amendment. See Cato v. United States, 70 F.3d 1103, 1106 (9th Cir.

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1995). Allegations in a pro se complaint are held to less stringent standards than formal pleadings

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drafted by lawyers. See Hughes v. Rowe, 449 U.S. 5, 9 (1980); Haines v. Kerner, 404 U.S. 519, 520-21

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(1972) (per curiam). While the standard under Rule 12(b)(6) does not require detailed factual

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allegations, a plaintiff must provide more than mere labels and conclusions. Bell Atlantic Corp. v.

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Twombly, 550 U.S. 544, 553-57 (2007). A formulaic recitation of the elements of a cause of action is

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insufficient. Id.; see Papasan v. Allain, 478 U.S. 265, 286 (1986).
All or part of a complaint filed by a prisoner may therefore be dismissed sua sponte if the

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prisoner’s claims lack an arguable basis either in law or in fact. This includes claims based on legal

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conclusions that are untenable (e.g. claims against defendants who are immune from suit or claims of

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infringement of a legal interest which clearly does not exist), as well as claims based on fanciful factual

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allegations (e.g. fantastic or delusional scenarios). See Neitzke v. Williams, 490 U.S. 319, 327-28

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(1989); see also McKeever v. Block, 932 F.2d 795, 798 (9th Cir. 1991)

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1.

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In the present complaint, Plaintiff David W. Svete asserts claims against Howard F. Wunderlich,

Background

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M.D., Isaac Corney, M.D. and Rani Whitfield, M.D., alleging that they failed to provide the required

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level of diligence when working as medical experts. (#1-3). According to the complaint, in the 1990s,

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Svete founded a company called LifeTime Capital, Inc. (“LCI”) that purchased the life insurance

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policies of terminally or chronically ill policyholders in exchange for lump sum payments. (#1-3 at 3).

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LCI contracted with a Nevada company, Medical Underwriting, LLC (“MUL”), to determine which

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policies should be purchased. (Id. at 4-5). MUL administered the medical underwriting process,

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secured medical records and contracted with Defendants as medical experts to review medical records

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and determine a reasonable life expectancy for policyholders. (Id. at 4-5). According to the complaint,

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Svete assisted MUL in obtaining medical experts and was a party to the Physician Retainer Agreements

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entered into by defendants. (#1-3 at 22).

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The Complaint states that LCI and Svete, individually, relied upon the defendants’ review of the

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insured’s life expectancies, which in many cases turned out to be inaccurate. (Id. at 8-9). These

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inaccuracies allegedly occurred because Defendants did not review the insured’s medical records as

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required by contract, but instead reviewed the policyholder’s medical summaries. (Id. at 22).

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According to the complaint, the doctors submitted evaluations based on these summaries to LCI, which

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included misrepresentations about the thoroughness of the doctors’ underwriting protocol. (Id. at 14-

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15). Svete did not discover the alleged inaccuracies and misrepresentations until February 2005. (#1-3

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at 15). Until that time, Plaintiff argues that he and LCI reasonably relied on Defendants’ evaluations

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and that the resulting inaccuracies and misrepresentations in Defendants’ medical analysis have resulted

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in ongoing damages to LCI and Svete. (Id. at 10-11).

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Based on these factual allegations, Plaintiff asserts claims for a) breach of contract, b)

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negligence, c) negligent misrepresentation, d) breach of fiduciary duty, e) unfair and deceptive trade

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practices, f) products liability, g) gross negligence, h) misrepresentation, i) common law fraud and j)

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negligent infliction of emotional distress. Plaintiff is seeking damages, indemnification and injunctive

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relief based on the defendants’ alleged actions and omissions. (#1-3).

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Upon review of the complaint, the Court finds that Plaintiff has stated viable claims for relief.
Accordingly,

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IT IS HEREBY ORDERED that the Clerk of the Court shall file the Complaint (#1-3).

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IT IS FURTHER ORDERED that the Clerk of the Court shall issue summons to the

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defendants named in the complaint and deliver the summons to the U.S. Marshal for service. The

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Plaintiff shall have twenty (20) days to furnish to the U.S. Marshal the required USM-285 forms. After

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Plaintiff receives copies of the completed USM-285 forms from the U.S. Marshal, he has twenty (20)

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days to file a notice with the court identifying which defendants were served and which were not

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served, if any. If the Plaintiff wishes to have the U.S. Marshal attempt service again on any unserved

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defendant, then a motion must be filed with the court identifying the unserved defendant, specifying a

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more detailed name and address, and indicating whether some other manner of service should be used.

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Pursuant to the Federal Rules of Civil Procedure Rule 4(m), service must be accomplished within one

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hundred twenty (120) days from the date that the complaint was filed.
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IT IS FURTHER ORDERED that henceforth, Plaintiff shall serve upon Defendants, or their

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attorney if they have retained one, a copy of every pleading, motion, or other document submitted for

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consideration by the court. Plaintiff shall include with the original paper submitted for filing a

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certificate stating the date that a true and correct copy of the document was mailed to the Defendant or

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their counsel. The court may disregard any paper received by a district judge, magistrate judge, or the

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Clerk which fails to include a certificate of service.

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DATED this 20th day of April, 2011.

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______________________________________
GEORGE FOLEY, JR.
United States Magistrate Judge

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