United States District Court, E.D. Michigan, Southern Division
OPINION AND ORDER DENYING DEFENDANTS' JOINT
MOTION TO DISMISS.
V. PARKER U.S. DISTRICT JUDGE.
State Farm Mutual Automobile Insurance Company (“State
Farm”) brings this action against multiple defendants
that it alleges engaged in a scheme to submit fraudulent
bills and false documentation for treatment and services that
were never performed or were not medically necessary. State
Farm alleges the following claims in its Complaint: (1)
common law fraud; (2) unjust enrichment; (3) violations of
the Racketeer Influenced and Corrupt Organizations Act
(“RICO”), 18 U.S.C. § 1962(c); (4) RICO
conspiracy in violation of 18 U.S.C. § 1962(d); and (5)
declaratory judgment under 28 U.S.C. § 2201 with respect
to State Farm's obligation to pay unpaid claims and
charges submitted by Defendant Vital Community Care, P.C.,
Advanced Pain Specialists PLLC, Affiliated Diagnostic of
Oakland, LLC, Insight Diagnostics LLC, and Get Well Medical
Transport Company. (ECF No. 1.)
matter presently is before the Court on Defendants' joint
motion to dismiss, filed pursuant to Federal Rule of Civil
Procedure 12(b)(6). (ECF No. 21.) The parties have fully
briefed the motion. (ECF Nos. 24, 27.) Finding the facts and
legal arguments sufficiently presented in the parties'
briefs, the Court is dispensing with oral argument with
respect to Defendants' motion pursuant to Eastern
District of Michigan Local Rule 7.1(f).
Standard of Review
12(b)(6) motion to dismiss tests the legal sufficiency of the
complaint. RMI Titanium Co. v. Westinghouse Elec.
Corp., 78 F.3d 1125, 1134 (6th Cir. 1996). Under Federal
Rule of Civil Procedure 8(a)(2), a pleading must contain a
“short and plain statement of the claim showing that
the pleader is entitled to relief.” Where a pleading
alleges fraud, the Federal Rules of Civil Procedure impose a
heightened pleading requirement. See Fed. R. Civ. P.
9(b) (providing that “[i]n alleging fraud or mistake, a
party must state with particularity the circumstances
constituting fraud or mistake.”). To meet Rule
9(b)'s particularity requirement, a complaint must
“(1) specify the statements that the plaintiff contends
were fraudulent, (2) identify the speaker, (3) state where
and when the statements were made, and (4) explain why the
statements were fraudulent.” Frank v. Dana
Corp., 547 F.3d 564, 570 (6th Cir. 2008) (internal
quotations and citations omitted).
survive a motion to dismiss, a complaint need not contain
“detailed factual allegations, ” but it must
contain more than “labels and conclusions” or
“a formulaic recitation of the elements of a cause of
action . . ..” Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 555 (2007). A complaint does not “suffice
if it tenders ‘naked assertions' devoid of
‘further factual enhancement.'” Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009) (quoting
Twombly, 550 U.S. at 557). The “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 the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Id. (citing
Twombly, 550 U.S. at 556). The plausibility standard
“does not impose a probability requirement at the
pleading stage; it simply calls for enough facts to raise a
reasonable expectation that discovery will reveal evidence of
illegal [conduct].” Twombly, 550 U.S. at 556.
deciding whether the plaintiff has set forth a
“plausible” claim, the court must accept the
factual allegations in the complaint as true. Erickson v.
Pardus, 551 U.S. 89, 94 (2007). This presumption,
however, is not applicable to legal conclusions.
Iqbal, 556 U.S. at 668. Therefore,
“[t]hreadbare recitals of the elements of a cause of
action, supported by mere conclusory statements, do not
suffice.” Id. (citing Twombly, 550
U.S. at 555).
a court is presented with a Rule 12(b)(6) motion, it may
consider the [c]omplaint and any exhibits attached thereto,
public records, items appearing in the record of the case and
exhibits attached to [the] defendant's motion to dismiss,
so long as they are referred to in the [c]omplaint and are
central to the claims contained therein.” Bassett
v. Nat'l Collegiate Athletic Ass'n, 528 F.3d
426, 430 (6th Cir. 2008).
Farm is an insurance corporation that does business in
Michigan. In this action, State farm is suing fifteen
defendants it claims played a role in the alleged insurance
fraud scheme: (1) Vital Community Care, P.C.
(“Vital”); (2) Amanda Makki, a/k/a Amanda Bazzi,
a/k/a Amale Bazzi (“Bazzi”); (3) Namir D.
Zukkoor, M.D.; (4) Martin Bloda, M.D.; (5) Mark J. Brennan,
M.D.; (6) Affiliated Diagnostic of Oakland, LLC
(“Affiliated”); (7) Insight Diagnostics, LLC
(“Insight”); (8) Warren J. Ringold, M.D.; (9)
Nesreen Bazzi; (10) Ahmad Makki, a/k/a Mike Makki; (11)
Advanced Pain Specialists, PLLC (“Advanced
Pain”); (12) Ricardo D. Borrego, M.D.; (13) Jason A.
Bitkowski, D.O.; (14) Hala Moussa, a/k/a Hala Makki
(“Moussa”); and (15) Get Well Medical Transport
Company (“Get Well”).
to State Farm, Bazzi and Borrego are at the center of the
alleged scheme and created and/or rely on the remaining
defendants to carry out the scheme. The scheme is executed
pursuant to-what State Farm has coined-a “Predetermined
Protocol.” In accordance with this Predetermined
Protocol, patients eligible for No-Fault Insurance Benefits
are examined, diagnosed, and referred for treatment, testing,
devices, and services to recoup the maximum possible payments
from insurance companies, rather than their necessity to
address the unique medical needs of the patient.
Farm alleges that Bazzi created Vital in January 2014, to
examine, re-examine, diagnose, and refer persons eligible for
No-Fault Benefits for services from other providers owned and
controlled by Bazzi or from whom she receives unlawful
kickbacks or has fee-splitting arrangements. Zukkoor is
identified on paper as Vital's owner; however, State Farm
contends that this is to conceal Bazzi's actual ownership
and control of the entity. Zukkoor, Bloda, and other doctors
work at Vital, examining, diagnosing, and referring patients
under the alleged fraudulent insurance scheme.
physicians refer Vital's patients for physical therapy,
to Affiliated and Insight for magnetic resonance imaging
services (“MRIs”), and to Brennan for
electro-diagnostic tests (“EDX Tests”). Ringold
and Nesreen Bazzi (Amanda Bazzi's daughter) own
Affiliated and Insight; however, State Farm alleges that
Bazzi secretly owns and/or controls both entities. Mike
Makki, Amanda Bazzi's brother, manages the day-to-day
operations of Affiliated and Insight.
doctors also refer patients to Advanced Pain for pain
management consultations, where Borrego and Bitkowski were
employed. State Farm alleges that “[t]hese pain
management consultations served as a pretext for providing
electro-acupuncture devices (“P-STIM Devices”) to
patients, which were billed to State Farm each time at a rate
of approximately $5, 000. State Farm provides that, pursuant
to a kickback agreement, Bazzi and Vital received twenty
percent (20%) of the amounts Advanced Pain collected for
these pain management consultations and P-STIM Devices. State
Farm alleges that it was billed for similar unnecessary
medical consultations and devices from numerous other medical
practices not named in this lawsuit, but related to Bazzi.
working for Vital also routinely found patients to be
disabled from various activities of daily living, including
driving, which enabled Get Well to bill for transportation
services provided to the patients. In public filings, Hala
Makki is identified as Get Well's sole owner, officer,
and manager; however, in bankruptcy proceedings, Makki
represented that she has only a one-third interest in the
company. Makki previously was married to Amanda Bazzi's
Farm claims that it has paid Defendants more than $750, 000
in No-Fault Benefits for services, testing, devices, and
treatments that were medically unnecessary or not performed
at all. Attached to the Complaint are various charts State
Farm prepared to identify the medically unnecessary services
performed (or purportedly performed) by Defendants, which
were billed to State Farm. State Farm also has been billed by
Vital, Advanced Pain, Affiliated, Insight, and Get Well for
additional charges, which State Farm has not paid.
Complaint, State Farm refers to other lawsuits it or other
insurance companies have filed against entities-some of which
were connected to Amanda Bazzi-allegedly engaged in similar
fraudulent No-Fault Benefits billing schemes. (See,
e.g., Compl. ¶ 6, n.2.) In their briefs, the
parties refer to additional similar lawsuits. (See,
e.g., Defs.' Br. in Supp. of Mot. at 1, ECF No. 21
at Pg ID 333; Pl.'s Resp. Br. at 4, ECF No. 24 at Pg ID
585.) Defendants contend that “in an attempt to
circumvent the Michigan No-Fault system … State Farm
filed numerous proforma lawsuits against Michigan medical
practitioners who treat injured automobile victims alleging
[the same claims asserted in the pending case].”
(Defs.' Br. in Supp. of Mot. at 1, ECF No. 21 at Pg ID
333.) Defendants never identify any of those other lawsuits
by name or case number, with the exception of a case pending
before the Honorable Paul Borman: State Farm Mutual
Automobile Insurance Co. v. Pointe Physical Therapy,
LLC, et al., No. 14-11700 (E.D. Mich. filed April 29,
2014) (“Pointe Case”).
Analysis of Defendants' Arguments for Dismissal
argue that the Court should abstain from deciding State
Farm's declaratory judgment claim under various
abstention doctrines. The Court begins its analysis of those
arguments by noting the Supreme Court's and Sixth
Circuit's warning that “abstention is an
‘extraordinary and narrow exception to the duty of a
District Court to adjudicate a controversy properly before
it, '” and that “‘only the clearest of
justifications' will warrant abstention.” Rouse
v. DaimlerChrysler Corp., 300 F.3d 711, 715 (6th Cir.
2002) (quoting Colorado River Water Conservation Dist. v.
United States, 424 U.S. 800, 813-819 (1976)). The Court
further notes that because they are contesting jurisdiction,
Defendants bear the burden of proving that abstention is
proper. Answers in Genesis of Ky., Inc. v. Creation
Ministries Int'l, Ltd., 556 F.3d 459, 467 (6th Cir.
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