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State Farm Mutual Automobile Insurance Co. v. Health and Wellness Services, Inc.

United States District Court, S.D. Florida

December 19, 2019

State Farm Mutual Automobile Insurance Company and State Farm Fire & Casualty Company, Plaintiff,
v.
Health and Wellness Services, Inc. and others, Defendants.

          OMNIBUS ORDER

          Robert N. Scola, Jr. United States District Judge

         State Farm Mutual Automobile Insurance Company and State Farm Fire & Casualty Company (together, “State Farm”) have sued three healthcare clinics-Health & Wellness Services, Inc., Medical Wellness Services, Inc., and Pain Relief Clinic of Homestead, Corp. (collectively the “Clinics”)-and nine individuals associated with the clinics: Beatriz Muse; her brother, Lazaro Muse; her husband, Noel Santos (collectively the “Muse Family”); and six doctors- Drs. Hugo Goldstraj, Manuel Franco, Angel Carrasco, Jorge Rafael Coll, Jesus Lorites, and Jose Gomez-Cortes.[1] According to State Farm, the Muse Family orchestrated a scheme to defraud State Farm through the unlawful operation of the Clinics. In effecting their scheme, according to State Farm, the Defendants, together, fraudulently obtained insurance payments from State Farm in excess of $4.7 million dollars. State Farm's complaint includes ten counts: three counts of fraud; three counts under the Florida Deceptive and Unfair Trade Practices Act; three counts of unjust enrichment; and one request for declaratory relief. Each Defendant faces at least one count of fraud, one count under FDUTPA, and one count of unjust enrichment. State Farm's request for declaratory relief is lodged only against the Clinics.

         Now before the Court are several motions:

(1) Medical Wellness and the Muse Family's motion to reopen discovery to take two depositions (ECF No. 143);
(2) State Farm's motion for leave amend the complaint (ECF No. 148);
(3) Medical Wellness and the Muse Family's motion for leave to amend their affirmative defenses, file a third-party complaint, and file a cross claim (ECF No. 230);
(4) Lorites's motion to disqualify counsel (ECF No. 166);
(5) Lorites's motion to quash a third-party subpoena (ECF No. 190);
(6) State Farm's motion to compel compliance with a third-party subpoena (ECF No. 229);
(7) Medical Wellness and the Muse Family's motion to “reveal the deal(s)” between State Farm and Carrasco and Coll (ECF No. 188); and (8) Medical Wellness and the Muse Family's motion regarding the Coll and Carrasco affidavits (ECF Nos. 187, 198).

         The Court held a hearing on these motions on December 18, 2019, at which counsel, Defendants Beatriz Muse, Lazaro Muse, Noel Santos, and Medical Wellness Services, Inc., and Plaintiff State Farm all appeared.[2] As stated in open court, the Court finds most of these motions to be without merit and sets forth its rulings in more detail below.

         1. The Court largely denies the motions involving modifications of the Court's scheduling order as untimely (ECF Nos. 143, 148, 230).

         With respect to Medical Wellness and the Muse Family's motion to reopen discovery (ECF No. 143), the Court finds the Defendants have not established the due diligence necessary to support their motion to extend the discovery deadline. These Defendants had well over ten months to take the depositions of their co-defendants, Carrasco and Coll. They complain, however, that, until they learned these defendants would be cooperating with State Farm, they had no reason to do so. But even before learning of their cooperation, the moving defendants should have been well aware that these defendants had substantial information regarding the schemes alleged by State Farm. Further, the moving defendants should have also been cognizant of the possibility, or even likelihood, that these co-defendants' interests in this litigation were not necessarily aligned with their own. For Coll's part, he had already set forth an affirmative defense regarding the apportionment of any fault with people or entities over whom Coll had no control. Further, Carrasco failed to respond to the complaint and, ultimately, State Farm ended up cancelling both of their depositions. Under Federal Rule of Civil Procedure 16(b), a scheduling order will only be modified upon a showing of good cause, requiring a demonstration that the deadline “cannot be met despite the diligence of the party seeking the extension.” Sosa v. Airprint Sys., Inc., 133 F.3d 1417, 1418 (11th Cir. 1998) (quoting Fed.R.Civ.P. 16 advisory committee's note). The moving Defendants have not made such a showing and thus the Court denies their motion (ECF No. 143).[3]

         In the same vein, the Court also denies State Farm's request for leave to amend its complaint (ECF No. 148) and, to a large extent, Medical Wellness and the Muse Family's motion for leave to amend their affirmative defenses and to submit additional pleadings (ECF No. 230). State Farm asks the Court for permission to amend its complaint in order to add claims that the Defendants violated additional Florida Statute sections by failing to collect co-payments or deductibles from their patients. The Defendants, at the same time, seek to amend their response to the complaint to assert a statute-of-limitations affirmative defense, to plead claims against Carrasco and Coll, and to add Defendants Coll ...


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