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Fines Enterprises v. Ruark

United States District Court, M.D. Florida, Orlando Division

April 7, 2017




         In the instant action, Defendants Haven Home Health Care II, LLC, Kevin Ruark, Breanna Saagman, Matthew Saagman, Michael Moses, Matthew Ruark, and Jamin Ruark's move for dismissal of the Amended Complaint. (Doc. 43.) For the reasons set forth below, the motion is due to be granted and the Amended Complaint is due to be dismissed.

         I. Procedural History

         Plaintiff-a home health care agency-initiated this action under the Racketeer Influence and Corrupt Organizations (“RICO”) Act on July 11, 2014. (Doc. 1.) On October 24, 2016, the Court dismissed Plaintiff's initial complaint without prejudice and permitted repleader. (Doc. 37.) Plaintiff did so on November 4, 2016. (Doc. 40 (“Amended Complaint”).) Defendants now seek dismissal of the Amended Complaint on the ground that it fails to state a claim upon which relief can be granted. (Doc. 43 (“MTD”).) Plaintiff filed an untimely response (Doc. 46 (“Response”)), and the matter is ripe for the Court's consideration.[1]

         II. Pleading Standards

         A. General Pleading Requirements

         A pleading must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). “[D]etailed factual allegations” are not required, but “[a] pleading that offers ‘labels and conclusions' or ‘a formulaic recitation of the elements of a cause of action will not do.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). Rather, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Id. (quoting Twombly, 550 U.S. at 570). “A claim has facial plausibility when the plaintiff pleads factual content that allows [a] court to draw the reasonable inference that defendant is liable for the misconduct alleged.” Id. at 678; see also Bailey v. Wheeler, 843 F.3d 473, 480 (11th Cir. 2016).

         Under Federal Rule of Civil Procedure 12(b)(6), a party may request dismissal of a pleading that falls short of these pleadings requirements. In resolving such motions, courts limit their consideration to the face of the complaint, its attachments, “documents incorporated into the complaint by reference, and matters of which a court may take judicial notice.” See Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322-23 (2007); see also Hoefling v. City of Miami, 811 F.3d 1271, 1277 (11th Cir. 2016). Dismissal is warranted if, assuming the truth of the factual allegations of the complaint in a plaintiff's favor, there is a dispositive legal issue which precludes relief. Neitzke v. Williams, 490 U.S. 319, 326 (1989).

         B. The RICO Act

         The federal RICO Act provides a private right of action for anyone injured in his business or property by a violation of 18 U.S.C. § 1962. See 18 U.S.C. § 1964(c). Subsections 1962(a), (b), (c) impose liability on those who engage in a pattern of racketeering if they also do the following: (1) invest income derived from a pattern of racketeering activity of an enterprise engaged in interstate commerce (§ 1962(a)); (2) acquire or maintain, through a pattern of racketeering activity, any interest in or control over such an enterprise (§ 1962(b)); or (3) conduct or participate in the conduct of the affairs of such an enterprise through a pattern of racketeering activity (§ 1962(c)). See Simpson v. Sanderson Farms, Inc., 744 F.3d 702, 705 (11th Cir. 2014). Section 1962(d) makes it a crime to conspire to violate the preceding sections.

         Pleading a “pattern of racketeering activity” is essential to the survival of a claim under any of the RICO subsections. To that end, a plaintiff must charge that: (1) the defendant committed two or more predicate acts; (2) the predicate acts were related to one another; and (3) the predicate acts demonstrate criminal conduct of a continuing nature. See Jackson v. BellSouth Telecomm., 372 F.3d 1250, 1264-65 (11th Cir. 2004). “Racketeering activity” includes, inter alia, such predicate acts as mail and wire fraud. See 18 U.S.C. § 1961(1).

         III. Analysis

         The Amended Compliant falls short of alleging plausible RICO claims. At best, Plaintiff sketches only the outline of a scheme to defraud premised on Defendants inducing Plaintiff into agreements, whereby Defendants would manage Plaintiff's day-to-day operations, including billing the Medicare Program[2] under Plaintiff's Medicare Provider Number (“Management Agreements”). (See Doc. 40, ¶¶ 16-19, 22.) Such access enabled Defendants to allegedly bill Medicare for medically unnecessary services, for which they received partial payment at the time of service (“Medicare Payments”). (See Id. ¶¶ 22, 33.) Thereafter, Defendants and Plaintiff engaged in telephone and email communications concerning “payroll, IT matters, marketing, contract negotiations, and other business related matters” and communicated about the “promise of a business relationship.”[3] (Id. ¶ 37.) According to Plaintiff, Defendants' billing practice resulted in overpayments, for which Plaintiff remains financially responsible. (Id. ¶ 22.)

         But such conclusory allegations do not identify a single misrepresentation made to Plaintiff that would substantiate mail or wire fraud.[4]See United States v. Ward, 486 F.3d 1212, 1221-22 (11th Cir. 2007) (discussing the elements required to establish mail and wire fraud). Plaintiff's allegations of facially benign conversations evidence routine discussions germane to any business. (See Doc. 40, ¶¶ 37-39.) Confusingly, Plaintiff points to Defendants' practice of billing for medically unnecessary services (Id. ΒΆ 22) but does not identify if such a practice is part of the scheme to defraud or the result of it. To the extent that Plaintiff relies on the alleged fraudulent ...

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