Court Opinion

ID: 5123669
Source: CourtListenerOpinion
Date Created: 2021-11-05 14:01:01.389409+00
Date Added: 2024-06-11T08:22:35.462179
License: Public Domain

USCA11 Case: 21-10297    Date Filed: 11/05/2021   Page: 1 of 12

                                         [DO NOT PUBLISH]
                          In the
         United States Court of Appeals
               For the Eleventh Circuit

                 ____________________

                        No. 21-10297
                 Non-Argument Calendar
                 ____________________

GOVERNMENT EMPLOYEES INSURANCE CO.,
GEICO INDEMNITY COMPANY,
GEICO CASUALTY COMPANY,
GEICO GENERAL INSURANCE COMPANY,
                                          Plaintiffs-Appellees -
                                          Counter Defendants,
versus
QUALITY DIAGNOSTIC HEALTH CARE, INC., et al.,

                                                   Defendants,
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2                     Opinion of the Court               21-10297

JORGE E. MARTINEZ,
LUIS ANIBAL QUERAL, M.D.,
MOULTON KEANE, M.D.,
IVELIS GARCIA,
MICHEL VIERA, LMT,

                                 Defendants-Appellants-Counter
                                 Claimants.

                   ____________________

          Appeal from the United States District Court
              for the Southern District of Florida
             D.C. Docket No. 1:18-cv-20101-JEM
                   ____________________

Before JORDAN, GRANT, and EDMONDSON, Circuit Judges.

PER CURIAM:

      In this case based on diversity jurisdiction, Luis Queral,
M.D., Moulton Keane, M.D., Ivelis Garcia, Michel Viera, and Jorge
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21-10297                 Opinion of the Court                            3

Martinez (“Defendants”) 1 appeal the district court’s grant of sum-
mary judgment in favor of Government Employees Insurance Co.,
GEICO Indemnity Co., GEICO General Insurance Co., and
GEICO Casualty Co. (collectively, “GEICO”). Defendants also
challenge the district court’s denial of their motion to amend or to
alter the judgment pursuant to Fed. R. Civ. P. 59(e). No reversible
error has been shown; we affirm.

I.     Background

       This appeal arises from claims -- submitted by Defendants to
GEICO -- for reimbursement under the Florida Motor Vehicle No-
Fault Law, Fla. Stat. §§ 627.730-627.7405. Florida’s No-Fault Law
requires automobile insurance policies to include personal-injury
protection (“PIP”) coverage to provide persons injured in automo-
bile accidents with benefits for medical treatment. Pursuant to a
valid assignment of PIP benefits by the insured, the healthcare pro-
vider may submit claims directly to the insurance company to re-
ceive payment for medical services rendered.
       An insurance company is not required to pay a claim for re-
imbursement under certain circumstances, including to a “person
who knowingly submits a false or misleading statement relating to

1 Quality Diagnostic Health Care, Inc. was also named as a defendant but is
not a party to this appeal.
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4                          Opinion of the Court                      21-10297

the claim or charges,” “[f]or any treatment or service that is up-
coded,” 2 or for charges that do “not substantially meet the applica-
ble” statutory requirements. See Fla. Stat. § 627.736(5)(b). Flor-
ida’s No-Fault Law also prohibits reimbursement for services -- in-
cluding physical therapy services -- performed by massage thera-
pists. See Fla. Stat. § 627.736(1)(a)(5); Geico Gen. Ins. Co. v. Bea-
con Healthcare Ctr. Inc., 298 So. 3d 1235, 1239 (Fla. Dist. Ct. App.
2020) (concluding that the plain language of Florida’s No-Fault Law
precludes reimbursement for physical therapy services performed
by a massage therapist).
       GEICO contends that Defendants were involved in fraudu-
lent billing practices through Quality Diagnostic Health Care, Inc.
(“Quality”), a Florida health care clinic that purported to provide
patient examinations and physical therapy services to patients in-
jured in car accidents. GEICO says Defendants submitted or
caused to be submitted fraudulent insurance claims that were non-
reimbursable under Florida’s No-Fault Law.
       GEICO sought to recover insurance payments already made
to Quality (about $145,000) and sought a declaration that GEICO
owed no legal obligation to pay the remaining outstanding claims
submitted by Quality (about $79,000). In pertinent part, GEICO
asserted against Defendants claims for declaratory judgment, com-
mon law fraud, unjust enrichment, and for violation of the Florida

2 “Upcoding” is defined as “an action that submits a billing code that would
result in payment greater in amount than would be paid using a billing code
that accurately describes the services performed.” See Fla. Stat. § 627.732(14).
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21-10297                   Opinion of the Court                               5

Deceptive and Unfair Trade Practices Act (“FDUTPA”), Fla. Stat.
§§ 501.201-501.213. 3
        The district court granted GEICO’s motion for summary
judgment. The district court found to be undisputed these facts:
(1) Defendants submitted bills to GEICO that inflated falsely the
level of service provided during initial and follow-up patient exam-
inations and, thus, were upcoded; (2) all physical therapy services
billed to GEICO had been performed by an unsupervised massage
therapist not licensed to practice physical therapy (Defendant
Viera); and (3) the bills submitted to GEICO represented falsely
that physical therapy services had been provided by or under the
direct supervision of a licensed physician (Defendant Keane).
        In the light of these facts, the district court determined that
none of Quality’s bills to GEICO were eligible for reimbursement
under Florida’s No-Fault Law. The district court thus granted sum-
mary judgment on GEICO’s claims for declaratory judgment and
for unjust enrichment. Given Defendants’ knowing false misrep-
resentations, the district court also granted summary judgment on
GEICO’s claims for common law fraud and for violation of
FDUTPA. The district court later denied Defendants’ Rule 59(e)
motion to amend or alter the judgment.

3 GEICO also asserted against Defendants claims for violation of the Racket-
eer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1962(c),
and for violation of the Florida Civil Remedies for Criminal Practices Act, Fla.
Stat. §§ 772.101-772.19. GEICO, however, later dismissed those claims.
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6                      Opinion of the Court                 21-10297

II.     Discussion

       We review de novo a district court’s grant of summary judg-
ment, applying the same legal standards as the district court. What-
ley v. CNA Ins. Cos., 189 F.3d 1310, 1313 (11th Cir. 1999). Sum-
mary judgment is appropriate when the evidence, viewed in the
light most favorable to the nonmoving party, presents no genuine
issue of material fact and compels judgment as a matter of law.
Holloman v. Mail-Well Corp., 443 F.3d 832, 836-37 (11th Cir. 2006).

      A. Common Law Fraud

       Under Florida law, a plaintiff asserting a claim for fraud must
show “(1) a false statement of fact; (2) known by the person making
the statement to be false at the time it was made; (3) made for the
purpose of inducing another to act in reliance thereon; (4) action
by the other person in reliance on the correctness of the statement;
and (5) resulting damage to the other person.” See Gandy v. Trans
World Comput. Tech. Grp., 787 So. 2d 116, 118 (Fla. Dist. Ct. App.
2001).
       That Defendants made knowingly false statements to
GEICO is undisputed. Defendants admitted the claims billed to
GEICO (1) inflated falsely the level of service provided and, thus,
were upcoded and (2) represented falsely that the physical therapy
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21-10297                  Opinion of the Court                             7

services had been provided by or under the direct supervision of a
licensed physician. 4
        Defendants, however, contend that GEICO cannot show
justifiable reliance because GEICO knew or should have known
that Defendants’ claims misrepresented the nature and extent of
the patient examinations. According to Defendants, the billing de-
ficiencies were “obvious” from the underlying treatment records
and accident reports (to which GEICO had access) and, thus,
GEICO was on notice that Defendants’ representations on their in-
voices for reimbursement were false. In a similar way -- because
GEICO paid Defendants’ insurance claims despite having notice of
their falsity -- Defendants contend the misrepresentations were not
“material.”
        The district court rejected properly these arguments. Under
Florida law, a person “may rely on the truth of a representation,
even though its falsity could have been ascertained had he made an
investigation, unless he knows the representation to be false or its
falsity is obvious to him.” Besett v. Basnett, 389 So.2d 995, 998 (Fla.
1980) (concluding that property buyers were justified in relying on
a seller’s misrepresentations about the size of land offered for sale
(5.5 acres vs. 1.44 acres) and the age of the building’s roof (brand

4 On appeal, Defendants contend that the district court erred in determining
that the charges were upcoded based on a finding that Dr. Keane falsified his
notes and diagnosis. The district court, however, made no finding that Dr.
Keane falsified his treatment notes. Moreover, Defendants admitted that the
charges submitted to GEICO were upcoded.
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8                       Opinion of the Court                  21-10297

new vs. old and leaking) even though an investigation might have
revealed the falsity of those representations). A falsity is “obvious”
when “a mere cursory glance would have disclosed the falsity of
the representation” or when a “cursory examination or investiga-
tion” would make “patent” the falsity. See id. (citing the Restate-
ment (Second) of Torts, §§ 540-41 (1976)).
        In the insurance context, we have said that -- absent “some
circumstance which directs attention to them” -- information
somewhere in an insurer’s records is insufficient to put an insurer
on notice of the falsity of representations made to it. See Schrader
v. Prudential Ins. Co., 280 F.2d 355, 362 (5th Cir. 1960) (explaining
that an “insurer is entitled to rely on the representations of an in-
sured, without checking all its files to determine if the insured is
committing a fraud.”).
        Under the circumstances presented in this case, we cannot
conclude that the falsity of Defendants’ misrepresentations was
“obvious”: the falsity was not readily observable upon a cursory
examination. GEICO was thus entitled to rely on Defendants’ mis-
representations made in their invoices for reimbursement, even if
a more thorough investigation of the full treatment records and ac-
cident reports might have uncovered the falsity of Defendants’
statements.
        Defendants’ argument about materiality also fails because
nothing evidences that GEICO paid the insurance claims despite
actual knowledge of Defendants’ fraud. Moreover, Florida’s No-
Fault Law allows expressly for an insurer to challenge the validity
of a claim for PIP benefits even after the claim is paid. See Fla. Stat.
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21-10297                Opinion of the Court                          9

§ 627.736(4)(b)(6). Thus, that GEICO paid initially Defendants’ PIP
claims establishes nothing about the materiality of Defendants’
misrepresentations.

   B. Unjust Enrichment & FDUTPA

       To state a claim for unjust enrichment under Florida law, a
plaintiff must prove three elements: “(1) the plaintiff has conferred
a benefit on the defendant; (2) the defendant voluntarily accepted
and retained that benefit; and (3) the circumstances are such that it
would be inequitable for the defendants to retain it without paying
the value thereof.” Virgilio v. Ryland Grp., Inc., 680 F.3d 1329,
1337 (11th Cir. 2012). A cause of action for unjust enrichment ex-
ists when “an entity accepts and retains benefits that it is not legally
entitled to receive in the first place.” State Farm Fire & Cas. Co. v.
Silver Start Health & Rehab Inc., 739 F.3d 579, 584 (11th Cir. 2013).
       Here, GEICO paid Defendants over $145,000 as reimburse-
ment for patient examinations and for physical therapy services
purportedly rendered by Quality. That Defendants’ claims -- as
submitted -- were non-reimbursable under Florida’s No-Fault Law
is undisputed. Because Defendants had no legal entitlement to the
reimbursement payments, the district court committed no error in
granting GEICO summary judgment on its claim for unjust enrich-
ment.
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10                        Opinion of the Court                      21-10297

        To establish a claim for violation of the FDUTPA, a plaintiff
must show “(1) a deceptive act or unfair trade practice; (2) causa-
tion; and (3) actual damages.” See Dolphin LLC v. WCI Cmtys.,
Inc., 715 F.3d 1243, 1250 (11th Cir. 2013). The district court con-
cluded that GEICO was entitled to summary judgment because (1)
Defendants engaged in “deceptive acts” or “unfair trade practices”
when they upcoded charges and represented falsely that Dr. Keane
performed or directly supervised the physical therapy services and
(2) a causal connection existed between Defendants’ deceptive acts
and GEICO’s payment of the PIP claims.
        On appeal, Defendants make a conclusory argument that --
because supposedly genuine issues of material fact exist on
GEICO’s fraud claim -- GEICO is unentitled to summary judgment
on its claims for unjust enrichment and for violation of FDUTPA.
Defendants also contend that GEICO cannot recover under
FDUTPA because GEICO had notice of Defendants’ deception.
These arguments are entirely without merit. 5
        We have already determined that GEICO was entitled to
summary judgment on its claim for fraud. In addition, the record
contains no evidence sufficient to show that GEICO had adequate

5 About unjust enrichment, Defendants also assert that GEICO submitted pay-
ments only to Quality and thus conferred no direct benefit on the individual
Defendants. Because Defendants first raised this argument in their Rule 59(e)
motion, the argument is not properly before us in this appeal. See Arthur v.
King, 500 F.3d 1335, 1343 (11th Cir. 2007) (a Rule 59(e) motion may not be
used to raise an argument that could have been raised before the entry of judg-
ment).
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21-10297               Opinion of the Court                       11

notice of Defendants’ deceptive acts. Nor is proof of actual reliance
an element of a claim under FDUTPA. See State Office of the Att’y
Gen. v. Commerce Commercial Leasing, LLC, 946 So. 2d 1257,
1258 (Fla. Dist. Ct. App. 2007) (noting that “unlike fraud, a party
asserting a deceptive trade practice claim [under FDUTPA] need
not show actual reliance on the representation or omission at is-
sue”).

   C. Rule 59(e) Motion

       We review the denial of a Rule 59 motion under an abuse-
of-discretion standard. See Arthur v. King, 500 F.3d 1335, 1343
(11th Cir. 2007). A Rule 59 motion may be granted only when
there is “newly-discovered evidence or manifest errors of law or
fact.” Id. “A Rule 59(e) motion cannot be used to relitigate old
matters, raise argument or present evidence that could have been
raised prior to the entry of judgment.” Id. (alterations omitted).
       The district court abused no discretion in denying Defend-
ants’ motion to alter or to amend the judgment. In their Rule 59(e)
motion, Defendants argued for the first time that the physical-ther-
apy services performed by the massage therapist were supervised
indirectly by Dr. Keane. Because Defendants could have raised
that argument earlier, that argument was no grounds for a Rule
59(e) motion. See can Defendants demonstrate a manifest error of
fact or law on the issue of supervision. Florida courts have deter-
mined that the plain language of Florida’s No-Fault Law precludes
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12                        Opinion of the Court                      21-10297

reimbursement for physical therapy services provided by massage
therapists without regard to the level of supervision. See Beacon
Healthcare Ctr. Inc., 298 So. 3d at 1239. 6

       AFFIRMED.

6 To the extent Defendants characterize Beacon Healthcare Ctr. Inc. as dealing
only with physical therapy services provided by entirely unsupervised massage
therapists, they are mistaken. The decision in Beacon Healthcare Ctr. Inc. ad-
dressed expressly massage therapists who -- like the circumstances involved in
this case -- provided physical therapy services with no on-site direct supervi-
sion. See 298 So. 3d at 1237.