This cause comes before the Court without oral argument on a Motion to Dismiss (Doc. 27) filed by Defendants Altamonte Springs Diagnostic Imaging, Inc. d/b/a Mid Florida Imaging, Inc. and Premier Medical Imaging, and Ronald Landau, M.D. (collectively, "Defendants"); and the Response (Doc. 28) filed by Plaintiffs State Farm Mutual Automobile Insurance Company, and State Farm Fire & Casualty Company (collectively, "State Farm").
This case involves $1 Million worth of alleged illegal and fraudulent claims for No-Fault Personal Injury Protection ("PIP") benefits submitted to State Farm by Defendants. The First Amended Complaint (Doc. 18) alleges, in material part, that Defendant Ronald Landau, M.D., ("Landau"), a licensed physician, is held out as the "sole owner" of Altamonte Springs Diagnostic Imaging, Inc. ("ASDI").*fn1 Despite this title, State Farm claims that ASDI was actually owned and operated, at least in part, by Defendant Brad Fremed ("Fremed") and his company Fremco. Since Fremed is not a licensed physician, his partial ownership of ASDI violates relevant provisions of the Florida Heath Care Clinic Act ("HCCA"). FLA. STAT. § 400.900, et seq.
In 2004, the Florida Legislature enacted the HCCA to strengthen the regulation of health care clinics throughout the state. In addition to expanding the types of businesses required to obtain licenses, it requires, inter alia, background checks for all owners, clinic inspection and certifications, proof of financial responsibility, and higher fees to obtain licensure. (Doc. 18, ¶ 21). This case however, turns on an exception to these requirements in FLA. STAT. § 400.9905(4)(g). It states, in relevant part, that "the licensure requirements of this part do not apply to . . . [businesses] . . . which are wholly owned by one or more licensed health care practitioners . . . ." FLA. STAT. § 400.9905(4)(g).
It is undisputed that in November 2007, Defendant Ronald Landau, M.D. ("Landau"), entered into a Joint Venture Agreement (the "Joint Venture Agreement" or "Agreement") with Defendant Brad Fremed ("Fremed") and his "management company" Fremco. The Agreement provides that Fremed was responsible for the day to day management, but that "Landau is the sole owner of ASDI." State Farm points out that the Agreement makes the true intent of the parties clear: the Parties [Landau and Fremed] acknowledge that the reason for ASDI to be owned solely by Landau is due to the AHCA*fn2 licensing rules and regulations, which impose less stringent regulations, because he is a physician; and, in the absence of such rules and regulations, it would be the desire for Landau and Fremed to equally own ASDI . . . . (Doc. 18, ¶ 35). The First Amended Complaint asserts that ASDI was "secretly co-owned" by Fremed, evidenced by the fact that he controlled "virtually every aspect of ASDI's operations." (Doc. 18 at ¶ 26).
According to Florida law, "it is unlawful to provide services that require licensure . . . without first obtaining . . . a license." FLA. STAT. § 408.804. Further, Florida's no-fault insurance law provides that, "[a]n insurer or insured is not required to pay a claim or charges . . . [f]or any service or treatment that was not lawful at the time rendered . . . ." FLA. STAT. § 627.736(5)(b)(1)(b). Therefore, State Farm seeks the repayment of all PIP benefits submitted by ASDI while it was in violation of the relevant Florida licensing provision.
The First Amended Complaint asserts five causes of action. Count I asserts a claim for common law fraud against all Defendants. Count II asserts a claim for unjust enrichment against all Defendants. Count III asserts a claim under the Florida Deceptive and Unfair Trade Practices Act, ("FDUTPA"), FLA. STAT. § 501.201, et seq., against all Defendants. Finally, Counts IV and V assert RICO claims under 18 U.S.C. § 1962(c) and (d) against Defendants Landau and Fremed only. Defendants filed the instant Motion to Dismiss (Doc. 27) on October 21, 2011.
In ruling on a motion to dismiss, the Court must view the complaint in the light most favorable to the Plaintiff, see, e.g., Jackson v. Okaloosa County, Fla., 21 F.3d 1531, 1534 (11th Cir. 1994), and must limit its consideration to the pleadings and any exhibits attached thereto. FED. R. CIV. P. 10(c); see also GSW, Inc. v. Long County, Ga., 999 F.2d 1508, 1510 (11th Cir. 1993). The Court will liberally construe the complaint's allegations in the Plaintiff's favor. Jenkins v. McKeithen, 395 U.S. 411,421 (1969). However, "conclusory allegations, unwarranted factual deductions or legal conclusions masquerading as facts will not prevent dismissal." Davila v. Delta Air Lines, Inc., 326 F.3d 1183, 1185 (11th Cir. 2003).
In reviewing a complaint on a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), "courts must be mindful that the Federal Rules require only that the complaint contain 'a short and plain statement of the claim showing that the pleader is entitled to relief.' " U.S. v. Baxter Intern., Inc., 345 F.3d 866, 880 (11th Cir. 2003) (citing FED. R. CIV. P. 8(a)). This is a liberal pleading requirement, one that does not require a plaintiff to plead with particularity every element of a cause of action. Roe v. Aware Woman Ctr.for Choice, Inc., 253 F.3d 678, 683 (11th Cir. 2001). However, a plaintiff's obligation to provide the grounds for his or her entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 554-555 (2007). The complaint's factual allegations "must be enough to raise a right to relief above the speculative level," Id. at 555, and cross "the line from conceivable to plausible." Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1950-1951 (2009).
A. The Joint Venture Agreement
Defendants assert that each claim is barred by the Joint Venture Agreement which states, inter alia, "Landau is the sole owner of ASDI." (Doc. 27 at 2). Although Defendants admit that Fremed shared in the profits and partly controlled the business, they argue that the issue of ownership is settled by the fact that Landau owned all ADSI stock. Accordingly, "[w]hile control and sharing of profits may be useful factors to consider . . . where no stock has been issued[,] . . . it serves no purpose in the present case." (Doc. 27 at 3) (citing Mirabilis Ventures, Inc. v. Palaxar Group, LLC., 2010 WL 5582878 at *11 (M.D. Fla. Dec. 15, 2010). At this stage in the proceedings however, this argument must fail. State Farm has alleged that ...