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Synergy Billing, LLC v. Priority Management Group, Inc.

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

October 31, 2017




         This matter comes before the Court on the Motion to Quash and Motion to Dismiss (Doc. 3) filed by Defendant Carlo Cioffi; the Motion to Dismiss (Doc. 11) filed by Defendant Priority Management Group; and the Responses (Docs. 20, 21) filed by Plaintiffs Synergy Billing LLC and Michael Jayson Meyer.


         The gravamen of the Complaint in this action is that Defendants-Priority Management Group Inc. (“PMG”) and Carlo Cioffi (“Cioffi”)-engaged in a campaign to defame and discredit Plaintiffs-Synergy Billing, LLC (“Synergy”) and Michael Meyer (“Meyer”)-by accusing them of participating in a fraudulent scheme committed by Johnathan Dunning (“Dunning”), a non-party to this action. (Doc. 2).

         I. The Parties

         Plaintiff Meyer is a resident of Ormond Beach, Florida and the CEO of Synergy, a revenue cycle management (“RCM”) firm that works exclusively with Federal Qualified Health Centers (“FQHCs”). (Id. ¶ 2-3). Defendant Cioffi is a resident of Lincoln, Rhode Island and the former Vice President of PMG, which also focuses exclusively on providing RCM for FQHCs. (Id. ¶¶ 4-5).

         II. Meyer Becomes a Victim of Dunning's Fraudulent Scheme

         Prior to the formation of Synergy, Meyer was the CEO of a medical billing company named WorkSmart MD, Inc. (“WorkSmart”). (Id. ¶¶ 14-15). In 2005, Dunning, the former CEO of Birmingham Health Center (“BHC”), approached Meyer and requested that WorkSmart perform billing for BHC. (Id. ¶ 14). “As WorkSmart . . . achieved great success for [BHC], ” Meyer created Synergy as a d/b/a of WorkSmart. (Id. ¶ 15). Dunning never became an employee, owner, or shareholder of Synergy. (Id. ¶ 16).

         In 2008, Dunning approached Meyer again and suggested that they work together to expand RCM for FQHCs in Alabama. (Id.) Dunning then formed his own two companies-Synergy Billing Solutions and Synergy Medical Solutions. (Id.) Despite promising to work together, however, Dunning brought in no new clients. (Id.)

         Meyer continued to provide billing services to BHC through 2012, but discontinued service when he received no payment for his work. (Id. ¶ 17). Sometime thereafter, Meyer received a 1099 from BHC and was “shocked” to see an amount far greater than the revenue he collected from BHC. (Id.). Around that same period, the United States Attorney's Office (“Government”) contacted Meyer and the FBI interviewed him in reference to Dunning. (Id.). The FBI then “informed Meyer that Dunning [had] been receiving payments for Meyer's services, ” and the U.S. Department of Justice “identified Meyer as a victim of Dunning's scheme” to pocket federal dollars. (Id. ¶¶ 17, 18).

         In February 2015, the Government charged Dunning with over one hundred counts of federal crimes, including wire fraud, bank fraud, money laundering, and conspiracy. (Id. ¶ 18). To assist the Government with its case, Meyer testified against Dunning, who was convicted of ninety-eight charged counts in 2016. Dunning is now serving an eighteen-year sentence in federal prison and must repay $13.5 million in restitution. (Id. ¶ 20).

         III. Defendants Accuse Plaintiffs of Being a Part of Dunning's Fraudulent Scheme

         During the pendency of Dunning's case, Synergy acquired a contract to provide Northeast Florida Health Services (“NFHS”) with RCM services. (Id. ¶¶ 22-23). Synergy was awarded the contract over its competitor, PMG. (Id.). After procuring the contract with NFHS, Plaintiffs learned that Cioffi had instigated a smear campaign aimed at tarnishing their reputations.[2] (Id.).

         In July 2015, Cioffi emailed several NFHS representatives, including Todd Aldrich (“Aldrich”), and falsely alleged that Synergy had been a part of Dunning's fraudulent scheme. (Doc. 2, ¶¶ 22-23; Doc. 2-1 at 1-2). Specifically, Cioffi stated:

I wanted to send one last email and say [t]hank you for all the time you folks invested in working with PMG to see if we are a fit for your organization. I heard from [Aldrich] that you folks went in another direction and decided that PMG was not a fit and why.
I shared with [Aldrich] that I would still try to connect with the leadership at Samuel Rodgers. The call would be less of a reference on PMG but more of what you might avoid or pitfalls to avoid in working with . . . their old vendor who will be your vendor going forward.
Again, I can't say why they switched vendors, they can share that with you if they are inclined. In addition, I have attached a document that is a HRSA report in which on page 28 they indicate a company named Synergy Billing Solutions coded visits for increased reimbursement.
I have also attached a PDF in which . . . [the] U.S. Government has a case against Jonathan Dunning and his firms - one of which is named Synergy Billing Solutions. I know that folks at that firm indicate they are not the same firm. We have spoken to the Attorney General[']s [O]ffice in Alabama and they indicate they are the same firm.
My hope is that this does not come across as sour grapes for PMG not being awarded the work at [NFHS] but rather as a buyer beware message. Best of luck going forward and providing your service area the health care they deserve

(Doc. 2-1 at 1-2 (the “NFHS Email”)).

         Upon receipt of Cioffi's email, Aldrich contacted Synergy, seeking to discuss Cioffi's accusations. (See Id. at 1; Doc. 2 ¶ 23). Shortly thereafter, NFHS terminated its relationship with Synergy. (Doc. 2, ¶ 23). Even after NFHS cut ties with Synergy, Cioffi continued to provide false information about Plaintiffs to the media, government officials, and the National Association of Community Health Centers (NACHC)[3] -the leading national advocacy organization for community based health centers. (Id. ¶¶ 13, 28-30, 32-33).

         Using the pseudonym “Ronald Tides, Jr., ” Cioffi sent an email to Clayton Park (“Park”), the business editor of the Daytona Beach News-Journal, on May 12, 2014, insisting that Plaintiffs were working with Dunning and that Dunning had in interest in Synergy.[4] (Doc. 2-1 at 5; Doc. 2 ¶ 30). When Park doubted Cioffi's accusations, Cioffi continued to insist that there was a connection and suggested that Park investigate the matter. (Doc. 2-1 at 4). Heeding Cioffi's advice, Park contacted Jeanette Duerr (“Duerr”), Synergy's Vice President of Communications, to inquire whether there was any connection between Synergy and Dunning's company-Synergy Billing Solutions. (Id.). After Synergy responded to Park's inquiry, the Daytona Beach News-Journal ultimately decided not run with Cioffi's story. (Doc. 2, ¶¶ 31, 32).

         Cioffi then used the same pseudonym to send emails to three government officials: Joe Forte (“Forte”), the City Manager of Holly Hill; John Penny, the Mayor of Holly Hill; and Rob Ehrhardt, the Director of Economic Development for Volusia County. (See Doc. 2, ¶ 32). In his email to Forte, Cioffi claimed that Meyer was associated with Dunning. (Doc. 2-1 at 9). He also claimed that he had no interest in the purported relationship between Meyer and Dunning, but that he was simply outraged by “Dunning and all his associates” because his family was treated at various health centers affected by Dunning's criminal acts. (Id.) Cioffi then concluded his email by criticizing Forte's handling of the matter and warned Forte that he had sent emails to every local and national news outlet in an effort “to expose all corruption.” (Id.).

         IV. Synergy's Relationship with the NACHC is Fractured

         In addition to the false and defamatory statements spread by Defendants, Plaintiffs allege that the NACHC began “circulating negative comments in the industry in an attempt to discredit [Plaintiffs] and to tie Synergy [them] to Dunning.” (Doc. 2, ¶¶ 26). The NACHC also attempted to persuade one of Synergy's prospective clients to partner up with PMG. (Id. ¶ 24). Plaintiffs allege that a former employee of PMG-Gervean Williams-began working for the NACHC in March of 2016, “which is right around the time that Synergy learned that NACHC was pushing certain community health centers toward PMG.” (Id. ¶ 25).

         Synergy lodged numerous complaints with the NACHC, but the NACHC assured Synergy that it was against their policy to promote one member over another or to disparage a member. (Id. ¶ 26). Despite the NACHC's purported policy, “the negative comments continued” and one of Synergy's potential clients stopped communicating with Synergy. (Id.). In July 2016, “Synergy lost two potential accounts due to the actions of PMG, Cioffi, and NACHC.” (Id. ¶ 27). A month later, the NACHC cancelled Synergy's reserved space at the largest industry conference and assigned Synergy a booth secluded from the attendees. (Id. ¶¶ 34, 35). “Synergy eventually learned that” the NACHC took this action “so that it could further investigate the relationship between [Plaintiffs] and Dunning.” (Id.). Duerr made several attempts to speak with the Chief Operating Officer of the NACHC to resolve its concerns, but her attempts were unsuccessful. (Id. ¶ 37).

         V. This Action

         Based on the foregoing facts, Plaintiffs brought suit against Defendants asserting claims for “defamation libel” (Count I), “defamation per se” (Count II), “tortious interference with advantageous business relationships” (Count III), “civil conspiracy” (Counts IV and V), and “violation of Florida's Deceptive and Unfair Trade Practices Act” (Count VI). Defendants have filed separate motions seeking to dismiss Plaintiffs' claims for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). (Doc. 3, 11). In addition, Cioffi moves to dismiss the Complaint for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2) and to quash service of process. (Docs. 3).

         Cioffi's Motion to Dismiss for Lack of Personal Jurisdiction

         I. Legal Standard ...

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