United States District Court, M.D. Florida, Orlando Division
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY and STATE FARM FIRE AND CASUALTY COMPANY, Plaintiffs,
FAMILY PRACTICE AND REHAB, INC. and GILSON MORTIMER, Defendants.
ANTOON II UNITED STATES DISTRICT JUDGE
Farm Mutual Automobile Insurance Company ("State Farm
Mutual") and State Farm Fire and Casualty Company
("State Farm Fire") (collectively "State
Farm") bring the instant action for fraud, unjust
enrichment, and declaratory judgment against Family Practice
and Rehab, Inc. ("Family Practice") and Gilson
Mortimer. State Farm now moves for summary judgment
against Gilson Mortimer. (Doc. 36). As set forth below, State
Farm's motion is granted in part and denied in part.
care clinics operating in Florida are required to be licensed
by the Agency for Health Care Administration
("AHCA") unless they qualify for an exemption. Fla.
Stat. § 400.991 (2012). A clinic does not lawfully
provide services if it does so without obtaining required
licenses or meeting the standards for an exemption. Section
400.9905(4)(g), Florida Statutes, provides an exemption for
clinics that are "wholly owned by one or more licensed
health care practitioners ... if one of the owners who is a
licensed health care practitioner is supervising the business
activities and is legally responsible for the entity's
compliance with all federal and state laws." A Florida
statute pertaining to personal injury protection
("PIP") benefits also provides exemptions to
licensing requirements for entities "wholly owned"
by a physician licensed under chapters 458 or 459, or by a
chiropractic physician licensed under chapter 60. ]d §
627.736(5)(h). "An insurer or insured is not required to
pay a claim or charges ... for any service or treatment that
was not lawful at the time rendered [or] [t]o any person who
knowingly submits a false or misleading statement relating to
the claim or charges." Id, §
Practice was incorporated in Florida in March 2012 with Dr.
Charles Richard-a doctor of osteopathic medicine-as the
corporation's president and Mortimer- a non-physician-as
its vice president. (Mortimer Dep. Ex. 2). Family Practice
operated as a chiropractic clinic in Orlando, Florida, until
2015, when it was dissolved. (Mortimer Dep. at 20, 116;
Richard Decl. at 3). Family Practice was not licensed by
AHCA, instead asserting entitlement to an exemption based on
Dr. Richard's purported whole ownership of the clinic.
Farm Mutual and State Farm Fire are insurers who routinely
pay medical providers for services rendered to their insureds
under PIP policies. While Family Practice was in operation,
State Farm Mutual paid $377, 846.72 and State Farm Fire paid
$6, 549.52 to Family Practice for such services. (Mortimer
Dep. at 125). In this lawsuit, State Farm claims that
Mortimer was an owner of Family Practice and that therefore
Family Practice was not exempt from AHCA licensure under
Florida law. State Farm thus contends that it had-and has-no
obligation to pay Family Practice, and State Farm seeks to
recover the sums that it did pay. State Farm further asserts
that because Mortimer admitted to retaining the benefits from
State Farm's payments to Family Practice, State Farm may
recover all payments from Mortimer directly.
Summary Judgment Standards
court shall grant summary judgment if the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law."
Fed.R.Civ.P. 56(a). The Court must construe the facts and all
reasonable inferences therefrom in the light most favorable
to the nonmoving party. Reeves v. Sanderson Plumbing
Prods.. Inc.. 530 U.S. 133, 150 (2000). However, when
faced with a "properly supported motion for summary
judgment, [the nonmoving party] must come forward with
specific factual evidence, presenting more than mere
allegations." Gargiulo v. G.M. Sales. Inc.. 131
F.3d 995, 999 (11th Cir. 1997). "[A]t the summary
judgment stage the judge's function is not himself to
weigh the evidence and determine the truth of the matter but
to determine whether there is a genuine issue for
trial." Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 249 (1986).
[are not] required to submit a question to a jury merely
because some evidence has been introduced by the party having
the burden of proof, unless the evidence be of such a
character that it would warrant the jury in finding a verdict
in favor of that party .... [I]n every case, before the
evidence is left to the jury, there is a preliminary question
for the judge, not whether there is literally no evidence,
but whether there is any upon which a jury could properly
proceed to find a verdict for the party producing it, upon
whom the onus of proof is imposed.'" Id. at
251 (quoting Improvement Co. v. Munson. 14 Wall.
442, 448 (1872)). The inquiry is "whether the evidence
presents a sufficient disagreement to require submission to
the jury or whether it is so one-sided that one party must
prevail as a matter of law." Id. at 251-52.
Summary judgment may be granted if no "reasonable jury
could return a verdict for the nonmoving party."
Id. at 248.
Farm argues that it is entitled to summary judgment on the
question of ownership of the clinic because there is no
genuine issue of material fact as to whether Family Practice
was "wholly owned" by one or more licensed health
care practitioners. The record evidence establishes that
State Farm is correct. Mortimer-who claims to have been the
Family Practice office manager-admits that there are no
texts, emails, documents, or other forms of records to
substantiate any of his assertions of non-ownership.
Mortimer's evidence against ownership is his own
deposition testimony, which is riddled with contradictory
statements and evasive answers. Further, Mortimer's
deposition directly contradicts his answers to
interrogatories on many issues. Even viewing Mortimer's
statements and their discrepancies in the light most
favorable to him, as the Court must, there is not evidence of
a "sufficient disagreement to require submission to the
jury" on the issue of ownership. Anderson, 477
U.S. at 251-52.
Farm does not need to show that Mortimer was the sole owner
of Family Practice in order to prove that the clinic was
providing services unlawfully. State Farm only needs to show
that Mortimer-or another non-physician-was, in reality, a
partial owner of Family Practice such that Dr. Richard-a
physician-was not the sole owner. State Farm has done so.
627.732(17), Florida Statutes, defines "entity wholly
owned" to mean an entity "in which licensed health
care practitioners are the business owners of all aspects of
the business entity, including, but not limited to, being
reflected as the business owners on the title or lease of the
physical facility, filing taxes as the business owners, being
account holders on the entity's bank account, being
listed as the principals on all incorporation documents
required by this state, and having ultimate authority over
all personnel and compensation decisions relating to the
entity." Courts have provided additional factors to aid
in determining whether an entity is "wholly owned"
by licensed health care practitioners, including financial
factors such as whether a non-physician signed company
checks, used company checks and debit cards for personal
expenses, wrote company checks to themselves and family
members, withdrew cash from business accounts for personal
use, directed payments to other businesses that the
individual owned or their businesses' vendors, or had the
company pay for a personal vehicle. See State Farm Mut.
Auto. Ins. Co. v. First Care Sol., Inc., 232 F.Supp.3d
1257, 1263-67 (S.D. Fla. 2017); State Farm Mut. Auto Ins.
Co. v. Med. Serv. Ctr. of Fla., 103 F.Supp.3d 1343,
1351-53 (S.D. Fla. 2015).
factors that courts have considered relate to incorporation
and corporate control, such as whether a non-physician: made
capital investments in the entity, received profits or
suffered losses, had the ability to sell or dissolve the
business, had authority to retain and direct the activities
of attorneys, hired the company's accountants,
participated in the preparation and filing of tax returns,
owned equipment in the facility, handled the winding up of
the business and storage of equipment and patient records, or
actively participated in management and control of the
business. See State Farm Fire & Cas. Co. v. Silver
Star Health & Rehab, 739 F.3d 579, 585 (11th Cir.
2013); First Care, 232 F.Supp.3d at 1263-67;
Med. Serv. Ctr.. 103 F.Supp.3d at 1351-53.
Additionally, courts have listed factors more related to the
management of daily clinic activities, such as whether a
non-physician: possessed keys and alarm codes for the
facility, was responsible for vendor bills, was involved in
day-to-day operational activities, determined amounts billed
to insurers, controlled payroll, maintained patient records,
or dictated office policies and decisions pertaining to
pricing, advertising, and personnel. See Silver
Star, 739 F.3d at 585; Med. Serv. Ctr., 103
F.Supp.3d at 1351-53; First Care, 232 F.Supp.3d at
most indicative of Mortimer's ownership of Family
Practice is his use and control of the finances of the
business. As described in more detail below, Mortimer (1) was
a signer on the clinic's bank account, (2) used company
checks and debit cards for personal expenses, (3) wrote
company checks to himself and family members, (4) withdrew
cash for personal use, (5) directed payments to other
businesses that he owned and those businesses' vendors,
and (6) had the company pay for his personal vehicle.
claims Family Practice had no bookkeeping system and that he
kept no payroll or other financial records relating to Family
Practice's obligations to him, his wife, or his other
personal businesses. (Mortimer Dep. at 54, 72-79, 92-93). Yet
he paid himself, his wife, and at least four of his other
personal businesses large sums of money that he states were
for backpay, repayment of his loans to the business, and
services rendered by his other businesses. He does not
dispute that he used Family Practice's bank account to
withdraw $62, 139.50, spend $113, 661.26 in debit card
transactions, write $37, 500 in checks to himself and his
personal entities, and pay $64, 538.48 to his wife.
(Id at 126-29). He even directly paid vendors to
whom his personal businesses-unrelated to Family
Practice-owed money. Id, at 96-99). On the other
hand, Dr. Richard avers he never signed any checks on behalf
of the clinic,  (Richard Decl. at 2), and Dr.
Richard's total withdrawals from the clinic's bank
account were $15, 788.15; total debit card transactions were
$23, 912.12; and total check payments were $12, 000,
including all payment for services he rendered as a
chiropractor at the clinic. (Mortimer Dep. Ex. 39).
are also $1, 235, 156.53 in unspecified withdrawals that
Mortimer does not have accountings for; he claims he gave
money to Dr. Richard because Dr. Richard was going through a
divorce and did not want the funds tracked back to him.
(Mortimer Dep. at 127). Oddly, this account of events is
first introduced by Mortimer at the very end of his
repeatedly used Family Practice's bank account to pay for
personal expenses, including the down payment on his Land
Rover. (Id. at 94). He used his Family Practice
debit card to make personal purchases at places like Red
Lobster, Advance Auto Parts, Victoria's Secret, Guess,
Publix, Burlington, Armani Exchange, and several hotels.
(Id, at 105-10). After reviewing bank records
showing charges at Publix and other entities, Mortimer was
Q: And then towards the bottom of the page, there's a
charge on your account for Victoria's Secret; correct?
Q: And those are all for personal or household transactions;