Achille Frantz v. Rosa Walled

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 12-12185
Non-Argument Calendar
________________________
D.C. Docket No. 1:10-cv-23346-JLK
ACHILLE FRANTZ,
Plaintiff- Appellant,
versus
ROSA WALLED,
RAFAEL WALLED,
GREGORY DELATOUR,
SUNTRUST BANK,
1400 NW 20 Street, Miami, FL 33142
R.G.R. MEDICAL MANAGEMENT CORP.,
FIRST COAST SERVICE OPTIONS, INC.,
Defendants -Appellees.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(March 18, 2013)
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Before CARNES, BARKETT, and HULL, Circuit Judges.
PER CURIAM:
Plaintiff-Appellant Achille Frantz , pro se, appeals the district court’s
dismissal of his amended complaint and the denial of his motion for
reconsideration. In the amended complaint, Plaintiff Frantz brings claims under
the Racketeering Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C.
§§ 1961 et seq. and Florida common law against Defendants Rosa Walled,
Gregory Delatour, First Coast Service Options, Inc. (“First Coast”), and Suntrust
Bank (“Suntrust”). After review, we affirm.
I. BACKGROUND
A. The Criminal Case
In this civil appeal, Frantz’s claims involve conduct for which he was
prosecuted and convicted along with other defendants. We thus discuss Frantz’s
criminal case first.
In 2006, a federal grand jury in the Southern District of Florida indicted
Plaintiff Frantz, charging him with one count of conspiracy to commit health care
fraud in violation of 18 U.S.C. § 1349 and seven counts of health care fraud and
aiding and abetting in violation of 18 U.S.C. §§ 1347 and 2. 1 The grand jury
1
In his criminal case, Plaintiff Frantz is referred to as “Frantz Achille.” The record does
not contain any explanation for this discrepancy. To avoid confusion, we refer to him by the
name used throughout this civil case.
2
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alleged that Frantz, a licensed physician, joined a conspiracy with Walled and
Delatour, to fraudulently obtain federal Medicare funds. In furtherance of the
conspiracy, Walled and Delatour (not physicians) established two medical clinics
in Miami, Florida. 2 Walled and Delatour hired Frantz to provide treatment at the
clinics. The indictment alleged that Frantz worked at one clinic from January 2005
to April 2005 and at the other clinic from April 2005 to July 2005.
According to the indictment, the conspirators recruited to the clinic
Medicare recipients who were not infected with HIV. There, the Medicare
recipients provided blood samples, which the conspirators biologically altered so
that the samples looked like they came from individuals infected with HIV. Frantz
then prescribed unnecessary medications to these Medicare recipients. Thereafter,
the medical clinics sought and obtained Medicare reimbursements exceeding two
million dollars for these unnecessary treatments.3
In 2006, Frantz was arrested. In 2007, a jury found Frantz guilty of
conspiring to commit health care fraud, and guilty as to five of the seven health
care fraud counts. The district court sentenced Frantz to a total of 78 months’
2
Walled and Delatour marketed the clinics as treatment centers for individuals diagnosed
with Human Immunodeficiency Virus (“HIV”).
3
The indictment does not make clear whether the patients ever actually received the
prescribed treatments.
3
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imprisonment. This Court affirmed Frantz’s convictions and sentence. See United
States v. Achille, 277 F. App’x 875 (11th Cir. 2008) (per curiam).
B. The Original Civil Complaint
Subsequently in 2010, Frantz, pro se, filed his original civil complaint in this
case against: (1) Walled and Delatour, his criminal co-conspirators described
above; (2) First Coast, which processed the Medicare payments; and (3) Suntrust,
where the clinic, Walled, and Delatour had bank accounts. 4
Each defendant filed a motion to dismiss under Rule 12(b)(6) for failure to
state a claim. Before the district court ruled, Frantz moved for leave to file an
amended complaint which he attached. The district court agreed with Defendants
about the inadequacy of the original complaint and, on July 27, 2011, dismissed it
without prejudice. At the same time, however, the district court deemed Frantz’s
amended complaint filed and ordered Defendants to respond to the amended
complaint within 20 days of the order.
4
Additionally, Frantz brought claims against a fifth defendant, Rafael Walled. However,
Frantz did not timely serve this defendant. Frantz does not appeal the district court’s refusal to
consider the claims against Rafael Walled.
4
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C. The Amended Civil Complaint
Plaintiff Frantz’s amended complaint attempted to assert, inter alia, federal
civil RICO claims and various state common law claims. Each defendant filed a
motion to dismiss the amended complaint on multiple grounds. On February 21,
2012, a magistrate judge’s report recommended granting the motions to dismiss.
The magistrate judge concluded that Frantz’s amended complaint, construed
liberally, invoked federal subject matter jurisdiction. Nevertheless, the magistrate
judge advised that the district court should dismiss the amended complaint because
it: (1) failed to comply with pleading requirements in Rule 8(a); and (2) contained
claims that were facially time-barred by the applicable statutes of limitations.
Because Frantz had already received one opportunity to correct his complaint’s
deficiencies, the magistrate judge recommended that the district court dismiss the
amended complaint with prejudice.
Frantz objected to the magistrate judge’s report. The district court overruled
the objections, adopted the report, and dismissed the amended complaint with
prejudice. Frantz then filed a motion for reconsideration which the district court
denied. Frantz timely appealed.
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II. DISCUSSION
A. Subject Matter Jurisdiction
As the magistrate judge’s report noted, Frantz asserted claims under RICO
and invoked federal question jurisdiction under 28 U.S.C. § 1331. 5 Defendant
First Coast, however, argues that: (1) it acted as the government’s agent when it
took the alleged actions referenced in Frantz’s amended complaint; (2) that as a
government agent, First Coast is entitled to sovereign immunity; and (3) thus the
district court lacked subject matter jurisdiction over Frantz’s claims against First
Coast.6
When the alleged events occurred, First Coast was operating under a
contract with the Center for Medicare and Medicaid Services (“CMS”), a division
of the United States Department of Health and Human Services. CMS administers
the Medicare program, “a federally subsidized, voluntary enrollment health
insurance program.” Gulfcoast Med. Supply, Inc. v. Sec’y, Dep’t of Health &
Human Servs., 468 F.3d 1347, 1348–49 (11th Cir. 2006).
5
We are “obligated to inquire into subject matter jurisdiction sua sponte whenever it may
be lacking.” Bochese v. Town of Ponce Inlet, 405 F.3d 964, 975 (11th Cir. 2005) (internal
quotations marks omitted). Not only must we, as an appellate court, satisfy ourselves of our own
jurisdiction, “but also of that of the lower court[] in a cause under review.” Id. (internal
quotation marks omitted).
6
We note that a question of sovereign immunity is a jurisdictional issue; unless there is an
applicable statutory waiver, a district court lacks subject matter jurisdiction to hear a suit against
the United States. United States v. Mitchell, 445 U.S. 535, 538, 100 S. Ct. 1349, 1351 (1980).
6
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In doing so, CMS enters into agreements with “medicare administrative
contractors” (“MACs”) like First Coast. See 42 U.S.C. § 1395u(a). First Coast, as
a MAC, performs a variety of functions, including: (1) receiving Medicare funds
and disbursing them to health care providers for services rendered to eligible
individuals; (2) determining the amounts owed to such health care providers; and
(3) auditing claims for Medicare reimbursement. See 42 C.F.R. §§ 421.200,
421.214.
MACs, like First Coast, are typically entitled to sovereign immunity. See
Peterson v. Blue Cross/Blue Shield of Tex., 508 F.2d 55, 57–58 (5th Cir. 1975).7
This is because, when fulfilling obligations to CMS, a MAC functions as the
government’s agent. See id. The government is obligated to indemnify the MAC
for any adverse judgment rendered against it. See id.; see also 42 C.F.R. §
421.5(b) (“[MACs] act on behalf of CMS . . . . Accordingly, their agreements and
contracts contain clauses providing for indemnification with respect to actions
taken on behalf of CMS and CMS is the real party of interest in any litigation
involving the administration of the program.”). However, when the government is
not obligated to indemnify a MAC, such as when the MAC is liable for criminal or
fraudulent conduct, the MAC is not entitled to sovereign immunity. See Anderson
v. Occidental Life Ins. of Calif., 727 F.2d 855, 856–57 (9th Cir. 1984) .
7
This Court adopted as binding precedent all Fifth Circuit decisions prior to October 1,
1981. Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc).
7
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Here, Frantz alleges that First Coast engaged in criminal and fraudulent
conduct, and that such conduct gives rise to liability under RICO. Thus, the
government would not be required to indemnify First Coast for any recovery
against it, eliminating the basis for sovereign immunity. The district court,
therefore, properly exercised subject matter jurisdiction over Frantz’s claims
against First Coast.
B. Motions to Dismiss
“We review de novo the district court’s grant of a Rule 12(b)(6) motion to
dismiss for failure to state a claim, accepting the complaint’s allegations as true
and construing them in the light most favorable to the plaintiff.” Chaparro v.
Carnival Corp., 693 F.3d 1333, 1335 (11th Cir. 2012) (per curiam) (internal
quotation marks omitted).
In considering a Rule 12(b)(6) motion, we are mindful that Rule 8(a)
“require[s] only that the complaint contain ‘a short and plain statement of the claim
showing that the pleader is entitled to relief[.]’” United States v. Baxter Int’l, Inc.,
345 F.3d 866, 880 (11th Cir. 2003) (quoting Fed. R. Civ. P. 8(a)(2)). This is
because Rule 8(a)’s purpose is to “give the defendant fair notice of what the claim
is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 555, 127 S. Ct. 1955, 1964 (2007) (internal quotation marks omitted).
Therefore, “a complaint’s factual allegations must be enough to raise a right to
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relief above the speculative level.” Davis v. Coca-Cola Bottling Co. Consol., 516
F.3d 955, 974 (11th Cir. 2008) (internal quotation marks and alterations omitted).
Construing the amended complaint liberally in light of Frantz’s pro se status,
we nevertheless conclude that the district court properly dismissed the amended
complaint as a “shotgun” pleading. A shotgun pleading “incorporate[s] every
antecedent allegation by reference into each subsequent claim for relief or
affirmative defense.” Wagner v. First Horizon Pharm. Corp., 464 F.3d 1273, 1279
(11th Cir. 2006). This Court has repeatedly condemned shotgun pleadings. See
Davis, 516 F.3d at 979. This is because, from a shotgun pleading, “it is virtually
impossible to know which allegations of fact are intended to support which
claim(s) for relief.” Anderson v. Dist. Bd. of Trs. of Cent. Fla. Cmty. Coll., 77
F.3d 364, 366 (11th Cir. 1996).
Frantz’s amended complaint contains 25 counts, each without any legal or
factual support. These 25 counts are followed by 109 paragraphs of factual
allegations and sporadic, unexplained legal citations. There is no logical
connection between the conclusory statements of legal violations and the factual
allegations. The amended complaint’s failure to link factual allegations to specific
counts makes it a quintessential shotgun pleading. As such, it does not comply
with Rule 8(a), and the district court properly dismissed it.
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Alternatively, even assuming arguendo that Frantz’s amended complaint
satisfied Rule 8(a), we still affirm the dismissal because Frantz’s claims, to the
extent that we can decipher them, are time-barred by the applicable statutes of
limitations. 8
Civil RICO claims are subject to a four-year statute of limitations. Agency
Holding Corp. v. Malley-Duff & Assocs., Inc., 483 U.S. 143, 156, 107 S. Ct. 2759,
2767 (1987). A civil RICO claim accrues and the four-year limitations period
begins to run “when the injury was or should have been discovered, regardless of
whether or when the injury is discovered to be part of a pattern of racketeering.”
Maiz v. Virani, 253 F.3d 641, 676 (11th Cir. 2001) (citing Rotella v. Wood, 528
U.S. 549, 555, 120 S. Ct. 1075, 1080 (2000)).
Frantz alleges that he was injured by actions that he identifies as occurring
primarily between March 2005 and August 2005; however, construed liberally,
Frantz’s amended complaint also mentions in places conduct in 2006. On August
11, 2006, Frantz was arrested for participating in the Medicare fraud scheme. On
that date, Frantz knew, or should have known, of Defendants’ wrongdoing and his
resulting injury. Therefore, his civil RICO claims accrued at that time.
8
We review de novo a district court’s decision to dismiss a complaint based on a statute
of limitations. Brotherhood of Locomotive Eng’rs & Trainmen Gen. Comm. of Adjustment CSX
Transp. N. Lines v. CSX Transp., Inc., 522 F.3d 1190, 1193–94 (11th Cir. 2008). “A Rule
12(b)(6) dismissal on statute of limitations grounds is appropriate only if it is apparent from the
face of the complaint that the claim is time-barred.” Id. (internal quotation marks omitted).
10
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Because Frantz’s civil RICO claims accrued, at the latest, on August 11,
2006, he needed to bring such claims by August 11, 2010 for them to be
considered timely. Frantz did not file his original complaint until September 15,
2010. Frantz’s civil RICO claims were, therefore, untimely. Frantz’s state law
claims were also subject to a four-year statute of limitations. Fla. Stat. §
95.11(3)(j). Therefore, they too were untimely filed.
We recognize that Frantz alleges, and we accept as true, that he suffered
additional injuries after his August 11, 2006 arrest for Medicare fraud, including:
being convicted of federal offenses, being incarcerated, and losing his medical
license. If a single RICO violation gives rise to multiple “new and independent
injur[ies]”, a new civil RICO claim may accrue with each injury, regardless of
when the original acts occurred. See Bivens Gardens Office Bldg., Inc. v. Barnett
Bank of Fla., Inc., 906 F.2d 1546, 1552 (11th Cir. 1990), abrogated on other
grounds by Rotella, 528 U.S. at 555, 120 S. Ct. at 1080. However, when a
subsequent injury is not “new and independent” of the original injury, the plaintiff
must bring his claim alleging the subsequent injury within four years of when he
knew or should have known of his original injury. Pilkington v. United Airlines,
112 F.3d 1532, 1537–38 (11th Cir. 1997).
Frantz’s additional injuries—health care fraud conviction, incarceration, and
medical license loss—were not “new and independent” of his being arrested for
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committing health care fraud, but were directly related to that fraud. See
Pilkington, 112 F.3d at 1537–38. Consequently, no new civil RICO claims
accrued based on these subsequent injuries.
To the extent that Frantz argues that he was eligible for equitable tolling, this
argument fails. “Equitable tolling is defeated . . . when it is shown that
indisputably the plaintiff[] had notice sufficient to prompt [him] to investigate and
that, had [he] done so diligently, [he] would have discovered the basis for [his]
claims.” Pac. Harbor Capital, Inc. v. Barnett Bank, N.A., 252 F.3d 1246, 1252
(11th Cir. 2001) (internal quotation marks omitted).
C. Motion for Reconsideration
We review for abuse of discretion a district court’s denial of a motion for
reconsideration. Corwin v. Walt Disney Co., 475 F.3d 1239, 1254 (11th Cir.
2007). A motion for reconsideration under Rule 59(e) should be granted only on
the basis of newly discovered evidence or a manifest error of law or fact. Arthur v.
King, 500 F.3d 1335, 1343 (11th Cir. 2007). Rule 59(e) is not an appropriate
vehicle to “relitigate old matters, raise argument or present evidence that could
have been raised prior to the entry of judgment.” Michael Linet, Inc. v. Village of
Wellington, Fla., 408 F.3d 757, 763 (11th Cir. 2005).
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Frantz based his motion for reconsideration on purported newly discovered
evidence pertaining to a criminal conviction of a former First Coast employee. 9
“[W]here a party attempts to introduce previously unsubmitted evidence on a
motion to reconsider, the court should not grant the motion absent some showing
that the evidence was not available during the pendency of the motion.” Mays v.
U.S. Postal Serv., 122 F.3d 43, 46 (11th Cir. 1997). A Rule 59(e) motion based on
newly discovered evidence should not be granted unless the movant demonstrates
the materiality of the new evidence. See, e.g., Briscoe v. Cnty. of St. Louis, Mo.,
690 F.3d 1004, 1015 (8th Cir. 2012); DiMarco-Zappa v. Cabanillas, 238 F.3d 25,
34 (1st Cir. 2001); see also Waddell v. Hendry Cnty. Sheriff’s Office, 329 F.3d
1300, 1309 (11th Cir. 2003) (setting forth the materiality requirement for a Rule
60(b) motion).
Frantz’s proffered evidence did not meet these criteria. Frantz admits he
actually received the evidence on February 27, 2012, before the district court
dismissed his amended complaint on March 15, 2012. In any event, the proffered
evidence is immaterial. There is nothing in Frantz’s motion for reconsideration
showing that this former First Coast employee was at all involved with the
9
Frantz also argued that the district court’s failure to consider the purported newly
discovered evidence would result in a manifest injustice. However, we do not construe this
argument as asserting a separate grounds for granting the motion for reconsideration.
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conspiracy at issue here, much less how that employee’s conduct is connected to
the claims in his shotgun complaint.
III. CONCLUSION
In light of the foregoing, we affirm the district court’s orders dismissing
Frantz’s amended complaint with prejudice and denying his motion for
reconsideration.
AFFIRMED.
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