Court Opinion

ID: 2656211
Source: CourtListenerOpinion
Date Created: 2014-03-11 15:32:23.134377+00
Date Added: 2024-06-11T09:12:23.966580
License: Public Domain

NOTE: This disposition is nonprecedential.

  United States Court of Appeals
      for the Federal Circuit
                ______________________

  NICHOLE MEDICAL EQUIPMENT & SUPPLY,
                 INC.,
                Plaintiff,

                         AND

                DOMINIC ROTELLA,
                 Plaintiff-Appellant,

                           v.

                  UNITED STATES,
                  Defendant-Apellee.
                ______________________

                      2013-5101
                ______________________

    Appeal from the United States Court of Federal
Claims in No. 12-CV-0364, Senior Judge Eric G. Brug-
gink.
               ______________________

               Decided: March 11, 2014
               ______________________

    DOMINIC ROTELLA, of Hazle Township, Pennsylvania,
pro se.
2                         NICHOLE MEDICAL EQUIPMENT    v. US

     JAMES SWEET, Trial Attorney, Commercial Litigation
Branch, Civil Division, United States Department of
Justice, of Washington, DC, argued for defendant-
appellee. With him on the brief were STUART F. DELERY,
Assistant Attorney General, JEANNE E. DAVIDSON, Direc-
tor, and STEVEN GILLINGHAM, Assistant Director.
                ______________________

    Before PROST, CLEVENGER, and REYNA, Circuit Judges.
PER CURIAM.
    Dominic Rotella appeals from an order of the United
States Court of Federal Claims that dismissed his com-
plaint alleging that the Government breached a settle-
ment agreement concerning the Medicare billing of
Nichole Medical Equipment & Supply, Inc. Because
Rotella has failed to state a claim upon which relief can be
granted, we affirm the Court of Federal Claims’s decision.
                       BACKGROUND
    In 2003, the United States filed a civil action against
Nichole Medical Equipment & Supply, Inc., and its owner
Dominic Rotella, (together, “Nichole”) alleging that
Nichole had knowingly submitted false and fraudulent
requests for payments for incontinence supplies. In 2006,
Nichole and the United States entered into a settlement
agreement (“Settlement Agreement”). Under the Settle-
ment Agreement, Nichole agreed to pay the Government
$750,000 in installment payments.         The Settlement
Agreement also stated that if Nichole defaulted on those
payments, and failed to cure that default, the United
States could offset any remaining balance from any
amounts due and owing to Nichole by any department,
agency, or agent of the United States. Nichole also agreed
to comply with the terms of an integrity agreement (“In-
tegrity Agreement”). The Integrity Agreement required
Nichole to, among other things, maintain a compliance
NICHOLE MEDICAL EQUIPMENT    v. US                         3

program, provide training to its employees, and provide
implementation reports to the Government.
    In exchange, the Government released Nichole from
any civil or administrative monetary claims for “Covered
Conduct,” defined as “claims for incontinence supplies
during the period from January 1996 to February 2000.”
J.A. 32. “[R]eserved and excluded from the scope and
terms of” the Settlement Agreement was “[a]ny liability to
the United States . . . for any conduct other than the
Covered Conduct.” J.A. 39.
    Meanwhile, Nichole was investigated for overpay-
ments for wheelchairs and hospital beds (the “wheel-
chair/bed action”). As a result of this investigation, and to
offset the alleged prior overpayments, a contract payment
intermediary withheld payments to Nichole. Ultimately,
though, it was determined that those payments should
not have been withheld and that Nichole was owed
$101,201.44.
    After making only a few payments, Nichole defaulted,
leaving a balance of $577,354.52. Under the default
provision of the Settlement Agreement, the Government
directed the contract payment intermediary not to reim-
burse the $101,201.44 due Nichole from the wheel-
chair/bed action.
    Nichole then sued the United States, alleging that the
Government’s intermediary contractors violated Medicare
regulations, and that such violations breached the Set-
tlement Agreement. According to Nichole, “[i]n the Set-
tlement Agreement the [Government] expressly or
impliedly warranted, represented and/or agreed to con-
duct business with Nichole Medical within the applicable
legal and regulatory structure.” Nichole alleges that this
representation was false. Nichole further alleges that:
    After entering into the Settlement Agreement,
    [the Government], its constituent agencies, de-
4                         NICHOLE MEDICAL EQUIPMENT   v. US

    partments and contractors, . . . conducted improp-
    er and illegal raids, audits, and/or reopenings of
    investigations violated applicable statutes and
    regulations, and improperly suspended and/or
    setoff payments to Nichole Medical, . . . in viola-
    tion of the duty of good faith and fair dealing[.]
J.A. 27.
    Nichole requests that the court void the Settlement
Agreement and require the Government to return all
payments made under the Settlement Agreement and
reimburse Nichole the withheld funds from the wheel-
chair/bed action.
    In a comprehensive opinion, the Court of Federal
Claims dismissed the complaint for failure to state a
claim. This appeal followed.
    Since the filing of this appeal, Counsel for Appellants
has withdrawn and Nichole Medical Equipment & Sup-
ply, Inc., as an unrepresented corporation, has been
removed from this appeal. Rotella is proceeding pro se.
                       DISCUSSION
    “We review de novo a decision to dismiss a complaint
for failure to state a claim under RCFC 12(b)(6), just as
we do dismissals under Federal Rule of Civil Procedure
12(b)(6).” Indian Harbor Ins. Co. v. United States, 704
F.3d 949, 954 (Fed. Cir. 2013). “A complaint must be
dismissed under Rule 12(b)(6) when the facts asserted do
not give rise to a legal remedy.” Id. “[A] complaint must
allege facts ‘plausibly suggesting (not merely consistent
with)’ a showing of entitlement to relief.” Acceptance Ins.
Cos. v. United States, 583 F.3d 849, 853 (Fed. Cir. 2009)
(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557
(2007)).
    According to Rotella, dismissal was wrong for the fol-
lowing reason:
NICHOLE MEDICAL EQUIPMENT   v. US                        5

   The Settlement Agreement (“SA”) between the
   Plaintiffs-Appellants and the United States in-
   cludes terms relating to the resolution of allega-
   tions relating to past transactions, and
   incorporates by reference an Integrity Agreement
   which relates to all future transactions. When
   viewed in their entirety, Plaintiffs-Appellants
   could have plausibly understood it had resolved
   all prior payment actions and both parties were
   agreeing to stricter regulatory compliance with
   regard to future transactions.
Appellant’s Br. 14.
    But Rotella’s argument on appeal fails for several rea-
sons. First, as to “future transactions,” the complaint
does not adequately allege that the Integrity Agreement
required the Government’s future activities to comply
with Medicare law. Indeed, the Integrity Agreement only
imposes an obligation on Nichole—and not the Govern-
ment—to comply with Medicare law. See, e.g., J.A. 135
(“Nichole/Rotella shall post in a prominent place, accessi-
ble to all patients and Covered Persons a notice detailing
its commitment to comply with all Federal health care
program requirements in the conduct of its business.”).
And Rotella’s argument that it would be unfair to read
the Integrity Agreement as requiring Nichole—and not
the Government—to comply with Medicare law is irrele-
vant. As the Government points out, “The issue is wheth-
er [Rotella] plausibly alleged that there is a contractual
obligation for the Government’s future activities to com-
ply with Medicare law, not whether it was fair for there to
be no such obligation.” Appellee’s Br. 16.
    Second, as to “past transactions,” Rotella does not
plausibly allege that the Settlement Agreement resolved
all past disputes. According to its express terms, the
Settlement Agreement only resolved allegations related to
Covered Conduct—that is, allegations related to the
6                          NICHOLE MEDICAL EQUIPMENT     v. US

incontinence supplies action, but not the wheelchair/bed
action.
    Third, even if Rotella “understood” that the Settle-
ment Agreement resolved all of “its problems,” such a
unilateral understanding is insufficient to support his
claims. See, e.g., Andersen Consulting v. United States,
959 F.2d 929, 934 (Fed. Cir. 1992) (the “‘subjective unex-
pressed intent of one of the parties’ to a contract is irrele-
vant”).
   Accordingly, we affirm the decision of the Court of
Federal Claims.
                        AFFIRMED
                           COSTS
    Each party shall bear its own costs.