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

> District Court, S.D. Florida · March 5, 2020

URL: https://www.frixlaw.com/law-library/cases/10643481

## Case

- **Court:** District Court, S.D. Florida
- **Decided:** March 5, 2020
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10643481

## How later opinions describe it (automated extraction)

- stating that a district court may disregard materials submitted by a nonmoving party who fails to comply with the local rules regarding opposition to a movant’s statement of facts

## Opinion text

United States District Court
for the
Southern District of Florida

State Farm Mutual Automobile )
Insurance Company and State Farm )
Fire & Casualty Company, Plaintiff, )
)
v. ) Civil Action No. 18-23125-Civ-Scola
)
Health and Wellness Services, Inc. )
and others, Defendants. )

Omnibus Order on Motions for Summary Judgment
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;1 Beatriz’s husband, Noel Santos (together, the “Muse Family”); and six
doctors—Drs. Hugo Goldstraj, Manuel Franco, Angel Carrasco, Jorge Rafael
Coll, Jesus Lorites, and Jose Gomez-Cortes. According to State Farm’s
complaint, 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 claims of fraud; three claims
under the Florida Deceptive and Unfair Trade Practices Act; three claims 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 three motions for summary judgment:
(1) State Farm’s motion for partial summary judgment (ECF No. 184);
(2) Medical Wellness and the Muse Family’s (together, the “Muse
Defendants”) motion for summary judgment (ECF No. 172); and
(3) Dr. Lorites’s motion for summary judgment (ECF No. 205).

1 In order to differentiate between the Muse siblings, the Court refers to them by their first
names.
The Court has considered the concomitant responses and replies, along with
the parties’ statements of material facts and their associated filings. After
careful review, and for the following reasons, the Court: grants in part State
Farm’s motion for partial summary judgment (ECF No. 184) and denies both
the Muse Defendants’ motion (ECF No. 172) as well as Dr. Lorites’s motion
(ECF No. 205).
1. General Background
State Farm’s allegations in this case arise out of claims for auto
insurance benefits submitted by the Clinics, all licensed healthcare clinics in
Florida, for services State Farm claims were unlawfully rendered. The claims at
issue here were submitted to State Farm by the clinics between 2007 and
2018. State Farm maintains the Defendants, collectively and in concert,
perpetrated a large-scale scheme to obtain no-fault or personal injury
protection (“PIP”) insurance benefits by misrepresenting to State Farm that the
medical services billed for were lawfully rendered when they were not.
By way of background, Florida’s Motor Vehicle No-Fault Law requires
automobile insurers, like State Farm, to provide PIP coverage to victims of car
accidents “for reasonable, necessary, related and lawful treatment, without
regard to fault.” State Farm Mut. Auto. Ins. Co. & State Farm Fire & Cas. Co. v. B
& A Diagnostic, Inc., 145 F. Supp. 3d 1154, 1163 (S.D. Fla. 2015) (Moore, C. J.)
(citing Fla. Stat. §§ 627.730–627.7405). Covered medical benefits include
reimbursement only for “services and care that are lawfully provided,
supervised, ordered or prescribed.” Fla. Stat. § 627.736(1)(a)(1). To that end,
Florida’s No-Fault Law provides that “[a]n insurer . . . is not required to pay a
claim or charges . . . [f]or any service or treatment that was not lawful at the
time rendered.” Fla. Stat. § 627.736(5)(b)(1)(b). Further, under Florida’s No-
Fault Law, “[a] statement of medical services may not include charges for
medical services of a person or entity that performed such services without
possessing the valid licenses required to perform such services.” Fla. Stat. §
627.736(5)(d). An insurer is not required to pay a claim that is “not
substantially” compliant with this requirement. Fla. Stat. § 627.736(5)(b)(1)(d).
State Farm’s complaint, here, alleges common law fraud, FDUTPA
violations, and unjust enrichment. The final count is for a declaratory
judgment regarding bills that have been submitted to State Farm by the three
Clinics but not yet paid. The following chart breaks down each count and the
defendants to which they apply:
Count Claim Clinic Individuals Doctors
1 Common Law Health & Beatriz and Goldstraj2 and
Fraud Wellness Lazaro Franco3
2 Common Law Medical Beatriz, Lazaro, Carrasco and
Fraud Wellness and Santos Coll4
3 Common Law Pain Relief Beatriz and Lorites and
Fraud Lazaro Gomez-Cortes5
4 FDUTPA Health & Beatriz and Goldstraj and
Wellness Lazaro Franco
5 FDUTPA Medical Beatriz, Lazaro, Carrasco and
Wellness and Santos Coll
6 FDUTPA Pain Relief Beatriz and Lorites and
Lazaro Gomez-Cortes
7 Unjust Health & Beatriz and Goldstraj and
Enrichment Wellness Lazaro Franco
8 Unjust Medical Beatriz, Lazaro, Carrasco and
Enrichment Wellness and Santos Coll
9 Unjust Pain Relief Beatriz and Lorites and
Enrichment Lazaro Gomez-Cortes
10 Declaratory All three NA NA
Judgment Clinics
According to State Farm, the bills submitted by the Clinics were unlawful
on any number of bases: patient treatments were administered by employees
who were not properly licensed to perform those services; none of the Clinics
complied with Florida’s record-keeping laws; the prescriptions for treatment the
Clinics issued were invalid and unlawful; and the medical directors of the
clinics did not comply with their legal obligations to prevent unlawful billing or
ensure that the clinics engaged in a good faith effort to collect co-payments and

2 Dr. Goldstraj is proceeding pro se. (Order, ECF No. 213.)
3 The Clerk has entered a default against Dr. Franco with respect to all the counts against him
(counts 1, 4, and 7). (Clerk’s Def., ECF No. 73).
4 The Clerk has entered a default against Dr. Carrasco with respect to all the counts against
him (counts 2, 5, and 8). (Clerk’s Def. 73.) State Farm and Coll settled the dispute between
them and filed a joint stipulation of dismissal as to the counts against Coll (counts 2, 5, and 8).
(Jt. Stip., ECF No. 140.)
5 The Clerk has entered a default against Dr. Gomez-Cortes with respect to all of the counts
against him (counts 3, 6, and 9). (Clerk’s Def., ECF No. 146).
deductibles. State Farm maintains that all the Defendants, in one way or
another, participated with perpetrating the scheme and benefited from the
improper payments that resulted. More particularly, in the complaints, Beatriz
and Lazaro are implicated in counts one through nine; Drs. Goldstraj and
Franco and Health & Wellness are implicated in counts 1, 4, and 7; Santos, Dr.
Carrasco, and Medical Wellness are implicated in counts 2, 5, and 8; Drs.
Lorites and Gomez-Cortes and Pain Relief are implicated in counts 3, 6, and 9;
and, finally, all three clinics are implicated in count 10, for declaratory relief.
2. Legal Standard
Under Federal Rule of Civil Procedure 56, “summary judgment is
appropriate where there ‘is no genuine issue as to any material fact’ and the
moving party is ‘entitled to a judgment as a matter of law.’” See Alabama v. N.
Carolina, 130 S. Ct. 2295, 2308 (2010) (quoting Fed. R. Civ. P. 56(a)). At the
summary judgment stage, the Court must view the evidence in the light most
favorable to the nonmovant, see Adickes v. S.H. Kress & Co., 398 U.S. 144,
158-59 (1970), and it may not weigh conflicting evidence to resolve disputed
factual issues, see Skop v. City of Atlanta, Ga., 485 F.3d 1130, 1140 (11th Cir.
2007). Yet, the existence of some factual disputes between litigants will not
defeat an otherwise properly grounded summary judgment motion; “the
requirement is that there be no genuine issue of material fact.” Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Where the record as a whole
could not lead a rational trier of fact to find in the nonmovant’s favor, there is
no genuine issue of fact for trial. Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 587 (1986).
“[O]nce the moving party has met its burden of showing a basis for the
motion, the nonmoving party is required to ‘go beyond the pleadings’ and
present competent evidence designating ‘specific facts showing that there is a
genuine issue for trial.’” United States v. $183,791.00, 391 F. App’x 791, 794
(11th Cir. 2010) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986)).
Thus, the nonmoving party “may not rest upon the mere allegations or denials
of his pleadings, but [instead] must set forth specific facts showing that there is
a genuine issue for trial.” See Anderson, 477 U.S. at 248 (citation omitted).
“Likewise, a [nonmovant] cannot defeat summary judgment by relying upon
conclusory assertions.” Maddox-Jones v. Bd. of Regents of Univ. of Ga., 2011
WL 5903518, at *2 (11th Cir. Nov. 22, 2011). Mere “metaphysical doubt as to
the material facts” will not suffice. Matsushita, 475 U.S. at 586.
3. The Court grants, in part, State Farm’s motion for partial summary
judgment.
State Farm seeks the entry of partial summary judgment on all but its
fraud claims, set forth in counts 1 through 3. Medical Wellness and the Muse
Family, together, jointly oppose State Farm’s motion. (Muse Defs.’ Resp., ECF
No. 195.) Health & Wellness and Dr. Goldstraj (as best the Court can discern)
have adopted and joined the Muse Defendants’ opposition. (ECF Nos. 211,
209.) Separately, Pain Relief has filed its own opposition. (Pain Relief’s Resp.,
ECF No. 202). Dr. Lorites has adopted Pain Relief’s response, as well as its
“Statement of Disputed Facts, Affidavits of Gomez-Cortes, Collazo, and Diana
Hernandez.” (ECF No. 203.) State Farm has submitted replies, separately
addressing the issues raised in the Muse Defendants’ and Pain Relief’s
responses. (ECF Nos. 221, 226.)
In addition to the Defendants identified above, State Farm also seeks
summary judgment against Defendants Drs. Franco, Carrasco, and Gomez-
Cortes. As previously noted, however, the Clerk has entered defaults against
these three Defendants. (ECF Nos. 73, 146.) State Farm offers no argument or
support justifying the entry of summary judgment against these defaulting
Defendants. Indeed, State Farm does not even acknowledge any procedural
impediment to lumping in the defaulting Defendants together with the non-
defaulting Defendants in a motion for summary judgment. This seems to reflect
“a misunderstanding of the consequences of a clerk’s default.” Great Am. Ins.
Co. v. Delphini Constr. Co., 614CV1412ORL41DAB, 2016 WL 11565619, at *1–2
(M.D. Fla. Mar. 9, 2016). “[A] defendant’s default does not in itself warrant the
court[’s] entering a default judgment. There must be a sufficient basis in the
pleadings for the judgment entered.” Nishimatsu Constr. Co. v. Hous. Nat’l
Bank, 515 F.2d 1200, 1206 (5th Cir. 1975)6 (emphasis added). Here, State
Farm “has provided no authority [that would] allow the Court to look beyond
the pleadings in determining the propriety of default judgment.” Great Am. Ins.
Co. v. Delphini Constr. Co., 614CV1412ORL41DAB, 2015 WL 13791707, at *2
(M.D. Fla. Sept. 28, 2015). The Court finds the more appropriate practice, then,
would be for State Farm, once liability as to all the other Defendants has been
resolved, to seek default judgments, as provided for by Federal Rule of Civil
Procedure 55(b), against Drs. Franco, Carrasco, and Gomez-Cortes. As a
preliminary matter, then, Court denies State Farm’s motion for summary
judgment with respect to these three Defendants.

6 The Eleventh Circuit has adopted, as binding precedent, all decisions of the former Fifth
Circuit handed down prior to close of business on September 30, 1981. Bonner v. City of
Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc).
A. The allegations State Farm sets forth in its statement of facts are
largely either undisputed or deemed undisputed.
The parties have also separately filed statements of material facts and
various responses and replies thereto. As State Farm points out, though, the
Defendants have largely failed to controvert State Farm’s factual statements.
The Local Rule, in effect at the time of the parties’ summary judgment briefing,
requires parties to support their factual statements with “specific references to
pleadings, depositions, answers to interrogatories, admissions, and affidavits.”
L. R. 56.1(a)(2). Similarly, Federal Rule of Civil Procedure 56(c)(1)(A), requires
parties to “cit[e] to particular parts of materials in the record.” Fed. R. Civ. P.
56(c)(1)(A). Further, unless an opposing party properly controverts a movant’s
material facts, the Court will deem that fact admitted—so long as the statement
is otherwise supported by evidence in the record. L. R. 56.1(b).
The vast majority of the Defendants’ responses to State Farm’s statement
of material facts fails to comply with either the Local Rules or the Federal Rules
of Civil Procedure. For the most part, the Defendants have offered only
conclusory, unsupported, and self-serving declarations in attempting to
generate genuine issues of material fact. In many instances, the Defendants
also fail to cite to any record evidence or, instead, they cite to entire
documents, spanning multiple pages, without specifying where in the
document the supporting evidence can be found.
For instance, in Dr. Lorites’s response in opposition to State Farm’s
statement of facts, Dr. Lorites “denies” each of State Farm’s allegations but
cites only generally to his affidavit. He provides no direction to the Court as to
where amongst the over 200 entries on the docket the Court might find the
affidavit, nor does he provide any guidance as to which specific part of his
affidavit supports his position. As such, Dr. Lorites’s opposition to State Farm’s
statement of facts is deficient. The Court declines Dr. Lorites’s counsel’s
invitation to do her work for her. The Court has no obligation to itself sift
through the record in order to root out issues of material fact that the parties
themselves have not bothered to identify. Dr. Lorites’s “failure to comply with
the Local Rules essentially leaves the Court with ‘the functional analog of an
unopposed motion for summary judgment.’” Lugo v. Carnival Corp., 154 F.
Supp. 3d 1341, 1343 (S.D. Fla. 2015) (Moore, C.J.) (quoting Reese v. Herbert,
527 F.3d 1253, 1268 (11th Cir. 2008)).
Turning to Pain Relief’s opposition to State Farm’s statement of facts, the
Court again deems admitted all of State Farm’s supported allegations. To begin
with, none of the affidavits Pain Relief cites to in support of its opposition are
properly before the Court. First, Pain Relief relies on an affidavit supplied by
Dr. Gomez-Cortes, one of the defaulting defendants in this case. But, despite
diligent efforts, State Farm was precluded from obtaining any discovery from
Dr. Gomez-Cortes. Even in the face of the threatened penalty of default, Dr.
Gomez-Cortes refused to comply with the Court’s order that he provide
discovery responses, produce documents, and appear for deposition. (Mag. J.’s
Order Granting Mot. to Compel, ECF No. 114.) The Court will not consider the
affidavit of a witness who is effectively a defendant’s corporate representative
but who refused to participate in discovery in any way. (Pain Relief’s Resp. to
Pls.’ Mot. to Strike ¶ 3, ECF No. 249 (“Cortes is the corporate employee with the
most knowledge regarding (a) Pain Relief’s compliance with the Clinic Act—
Cortes is the medical director—and (b) why the treatment at issue was
prescribed. Thus, Pain Relief cannot defend itself without Cortes.”).) Indeed,
Pain relief “will not be permitted to glean an unfair advantage over [State Farm]
by relying on [a] witness to whom [State Farm] did not have access during
discovery.” Inmuno Vital, Inc. v. Telemundo Group, Inc., 203 F.R.D. 561, 566
(S.D. Fla. 2001) (Moore, J.); see also Henriquez v. Total Bike, LLC, 13-20417-
CIV, 2013 WL 6834656, at *6 (S.D. Fla. Dec. 23, 2013) (Moreno, J.) (“[C]ourts
have consistently held that the affidavit of a witness cannot be used to support
or oppose summary judgment where the other party did not have the ability to
depose the witness.”).
Next, Pain Relief also offers the affidavits of witnesses Yaqueline Reyes
and Diana Hernandez. Pain Relief never disclosed either witness, however, as
individuals with knowledge which may be used to support a claim or defense
as required under Federal Rule of Civil Procedure 26(a)(1)(A)(i). Instead, Pain
Relief merely identified these two witnesses as its employees in response to
State Farm’s interrogatory. That is insufficient. Pain Relief’s failure to properly
disclose these witnesses was neither substantially justified nor harmless. See,
e.g. Rigby v. Phillip Morris USA Inc., 717 F. App’x 834, 835 (11th Cir. 2017)
(affirming the striking of an affidavit where a party failed to describe the
subject of the witness’s knowledge under Fed. R. Civ. P. 26(a)(1)(A)(i): “Plaintiffs’
failure to disclose the contact information was perhaps excusable, but the
failure to include a description of the witness’s discoverable information was
not. Defendants were not required to blindly search for suit-related information
that Plaintiffs possessed but failed to disclose.”). Certainly, without the
disclosure, State Farm had no way of knowing that Pain Relief intended to use
the knowledge possessed by these witnesses. Id.
Pain Relief also relies on an affidavit submitted by Daniel Collazo, an
owner of Pain Relief. This affidavit, however, fails to comport with either
Federal Rule of Civil Procedure 56 or Local Rule 56.1. Instead, the affidavit is
wholly conclusory, self-serving, and fails to “set out facts that would be
admissible in evidence.” Fed. R. Civ. P. 56(c)(4); Mursten v. Caporella, 14-
60014-CIV, 2014 WL 4954118, at *6 (S.D. Fla. Oct. 2, 2014) (Cohn,
J.), aff'd, 619 Fed. App’x 832 (11th Cir. 2015) (unpublished) (disregarding
affidavit testimony where the court found the assertions therein were
“untethered to any specific facts” and therefore “no more than unsupported
legal conclusions and characterizations”). For example, in his affidavit, Collazo
states that “insurance carriers do not pay medical insurance claims unless the
treatment records are submitted with the billing.” (Collazo Aff. ¶ 4, ECF No.
200-1, 1.) He also sets forth a number of issues in this case that he says State
Farm “had notice of,” for example: “the clinical findings of the treating
physician”; “the therapy modalities”; the identities of the service provider of the
therapy; the lack of x-ray results; and “whether or not the therapist followed
the doctor’s treatment plan.” (Id. at ¶¶ 5–7.) Further, Collazo maintains,
through his affidavit, that State Farm, in paying Pain Relief’s claims without
objection, failed to acknowledge any of the deficiencies it now complains of. (Id.
at ¶ 8.) Collazo also asserts that Lazaro, “as a consultant for Pain Relief, . . .
did not review, [or have] access to, patient medical records.” (Id. at ¶ 10). In
making these representations, Collazo fails to provide any foundation for his
personal knowledge and is primarily opining about what he believes State Farm
was aware of. Furthermore, Collazo pointedly admits in his affidavit that he
does “not handle billing and collections” and instead only has “basic knowledge
regarding how insurance claims are submitted.” (Id. at ¶ 4.) As such, his
conclusory allegations have no probative value and cannot support Pain Relief’s
statement of facts.
Lastly, Pain Relief also attempts to rely upon its amended written
responses to State Farm’s first request for production to counter State Farm’s
statement of facts. But Pain Relief has provided these amended responses long
after the close of discovery. In doing so, Pain Relief fails to show that the late
disclosure is either substantially justified or harmless. Permitting Pain Relief to
rely on these amended written responses would be highly prejudicial to State
Farm. In sum then, the Court disregards the totality of the record relied upon
by Pain Relief in its opposition to State Farm’s statement of facts as well as its
own statement of additional facts. Without any other record evidence set forth
by Pain Relief, State Farm’s facts, so long as they are supported by the record,
are also deemed admitted with respect to Pain Relief’s opposition to State
Farm’s motion for summary judgment.7
Medical Wellness and the Muse Family’s opposition to State Farm’s
statement of facts fared slightly better in attempting to controvert State Farm’s
allegations, but not by much. Much like Dr. Lorites, many of the Medical

7 In addition to filing his own opposition, Dr. Lorites also adopted Pain Relief’s opposition to
State Farm’s statement of facts. (ECF No. 203).
Wellness and Muse Family Defendants’ attempts to dispute State Farm’s
allegations either failed to cite to the record at all or cited to lengthy documents
in their entirety. For this reason, and to the extent State Farm’s allegations are
properly supported by the record it has provided in moving for summary
judgment, the Court deems the following paragraphs admitted as to the
Medical Wellness Defendants: 6, 13, 22, 25, 26, 30, 36–41, 43, 44–48, 49–50,
52–55, 57, 60, 62, 63, 65, 68–71, 75–78. (Pls.’ Stmt. of Facts, ECF No. 183.) In
other instances, the Medical Wellness and Muse Family Defendants have cited
to a specific part of the record (or, at least, only one page of it) but they have
nonetheless failed to actually controvert the fact presented. For example, in
response to State Farm’s allegation that Lazaro’s $1000 per month car
payment is made out of Pain Relief’s operating account, the Defendants
complain State Farm has improperly implied the payment was made “without
consideration.” (Muse Defs.’ Stmt. of Facts Resp. ¶ 29, ECF No. 193, 4.) This
does not controvert State Farm’s allegation. Medical Wellness and the Muse
Family’s opposition to paragraph 51, 56, 58–59, 62, 67 is similarly deficient in
that the cited material does not in any way refute State Farm’s actual
allegation. To the extent the remaining paragraphs are disputed, they are
discussed below, in the following section.
Finally, Health & Wellness’s opposition to State Farm’s statement of facts
fails, with very few exceptions, to comply with either Local Rule 56.1’s or Rule
56’s requirement that specific evidentiary support be presented where the
movant’s facts are challenged. Further, in the two instances where Health &
Wellness did manage to supply a record citation, the citations were not
responsive to the facts State Farm alleged. (Health & Wellness’s Stmt. of Facts
Resp. ¶¶ 51, 56.) Accordingly, to the extent State Farm’s allegations are
supported by its record evidence, they are all deemed admitted as to Health &
Wellness as well.8
B. Factual Background
Although the Court deems admitted many of State Farm’s submitted
facts, the “[C]ourt must still review the movant’s citations to the record to
determine if there is, indeed, no genuine issue of material fact.” Mann v. Taser
Int’l, Inc., 588 F.3d 1291, 1303 (11th Cir. 2009). “This requirement provides the
Court an opportunity to address the merits of the motion.” Lugo, 154 F. Supp.
3d at 1343. Where a fact was properly controverted, the Court will address it
below. In assessing the facts deemed admitted, the Court confines its review to

8 State Farm’s allegations as to Dr. Goldstraj are also deemed admitted, to the extent they are
supported by the record, because he failed to file any opposition whatsoever to State Farm’s
statement of facts.
the evidentiary materials relied upon by State Farm in support of its motion for
summary judgment, but declines to consider the improperly submitted record
relied upon by the Defendants. Reese, 527 F.3d at 1270 (stating that a district
court may disregard materials submitted by a nonmoving party who fails to
comply with the local rules regarding opposition to a movant’s statement of
facts). In light of the above, and taking into account the many facts State Farm
alleges that are affirmatively admitted or undisputed by the Defendants, the
Court presents the facts as follows.
During the relevant time periods, the Clinics were all active Florida
corporations, licensed as healthcare clinics to treat patients who were injured
in car accidents. (Pls.’ Stmt. of Facts ¶¶ 1, 6, 10;.)
Prior to Lazaro’s involvement with any of the Clinics, in 2001, he formed
Muse Medical Center, Inc., despite not having any medical background or
experience. (Id. at ¶ 13.) Lazaro ran Muse Medical, providing treatment to
patients who were injured in car accidents. (Id.) Shortly after starting Muse
Medical, Lazaro formed MARR Building Company, with three other people. (Id.
at ¶ 14.) Thereafter, MARR purchased a commercial office building located at
2128 W. Flagler Street, in Miami, Florida. (Id. at ¶ 15.) A number of healthcare
clinics, also treating car-accident patients, maintained their principal places of
business at that office building. (Id.) While he owned the Flagler building,
Lazaro became the administrator of another clinic, Injury Pain Release Center,
Inc. (Id. at ¶ 16.) Injury Pain Release was also a tenant in the Flagler building
and treated patients with PIP insurance. (Id.) While the administrator at Injury
Pain Release, Lazaro hired and trained his sister, Beatriz, to work as the
receptionist. (Id. at ¶¶ 3, 17.)
Lazaro and Beatriz worked at Injury Pain Release until shortly before it
closed in 2009. (Id. at ¶ 18.) Before Injury Pain Release closed, however, Lazaro
gave Beatriz $50,000 to start Health & Wellness (one of the defendant Clinics),
in 2007. (Id.) Health & Wellness also rented space from MARR at Lazaro’s
Flagler building. (Id.) In getting Health & Wellness up and running, Beatriz
used additional money from an account she shared with Santos, her husband.
(Id. at ¶¶ 2, 18.) At the same time, Lazaro, through another company he
owned—Advance Total Services, Inc.—worked as a consultant at Health &
Wellness, advising the company on all aspects of the business. (Id. at ¶ 19.)
Despite Lazaro’s position as a consultant, Medical Wellness and the Muse
Defendants dispute State Farm’s claim that Lazaro hired Dr. Goldstraj as
Health & Wellness’s medical director.9 (Id.)

9 Although Medical Wellness and the Muse Family improperly cited to Lazaro’s entire affidavit,
the document itself is only two-pages long and the relevant testimony is readily identifiable.
The Court thus accepts Lazaro’s testimony that he “did not hire any of the medical directors for
Two years after Health & Wellness was formed, Santos formed Medical
Wellness, using $60,000 from an account he shared with Beatriz. (Id. at ¶20.)
Beatriz advised Santos regarding various aspects related to opening the clinic.
(Id.) Like he did for Health & Wellness, Lazaro provided services as a business
consultant for Medical Wellness. (Id.) Again, though, Lazaro denies hiring Dr.
Carrasco.10 (Id.)
After Health & Wellness was opened, another one of Lazaro’s associates
formed Pain Relief, yet another clinic. (Id. at ¶ 21.) An additional company
owned by Lazaro, Better Life Home Health, was identified as Pain Relief’s
registered agent. (Id.) And, further, as he did for Health & Wellness and Medical
Wellness, Lazaro served as Pain Relief’s business consultant. (Id.)
All three Clinics—Health & Wellness, Medical Wellness, and Pain Relief—
employed Anet Perez, upon Lazaro’s recommendation, as their Florida Agency
for Health Care Administration “consultant.” (Id. at ¶22.) All three Clinics also,
at various times, availed themselves of the services of Lazaro’s accountant. (Id.)
Additionally, both Health & Wellness and Medical Wellness employed
Confidence Billing & Collections, Inc.—another company created by Beatriz
and which identified Lazaro’s company Better Life Home Health as its
registered agent—to handle their billing services. (Id. at ¶¶ 23, 24.)
In 2010, Beatriz formed the Healing Hands Institute. (Id. at ¶ 25.) Lazaro
is both a co-owner of Healing Hands and serves as its “outside administrator”
as well. (Id.) Beatriz formed Healing Hands in order to train massage
therapists. (Id.) Healing Hands works with its graduates to find job placements.
(Id.) Indeed, Healing Hands has placed a number of massage therapists from
its program in positions at Health & Wellness. (Id.) Collazo, one of the Pain
Relief owners, said he used Healing Hands, upon Lazaro’s advice, to renew his
massage therapist’s department-of-health licenses. (Id. at ¶ 26.)
Aside from the companies identified above, Lazaro also owns at least two
other companies with ties to the Clinics: Advance Total Services, Inc. and Fresh
Water Aquaculture, Inc. (Id. at ¶ 27.) During the time periods relevant to this
case, the Clinics collectively paid hundreds of thousands of dollars to various
companies owned by Lazaro: Health & Wellness paid $99,540 to Advance Total
and $500 to Fresh Water; Medical Wellness paid $201,337.67 to Advance Total,
$21,966.90 to Fresh Water, and $3,300 to Better Life; and Pain Relief paid

any of th[e] three clinics” as properly disputing State Farm’s allegation on this point. (Lazaro
Aff. ¶ 5, ECF No. 194-1, 2.) This disputed fact, however, ultimately has no effect on the Court’s
ultimate resolution of State Farm’s motion.
10 See note 9.
$203,381.46 to Advance Total. (Id. at ¶28.) Additionally, Pain Relief makes
payments of over $1000 a month for Lazaro’s car. (Id. at ¶ 29.)
Similarly, Beatriz and Santos, or companies they own, have also received
money from Health & Wellness and Medical Wellness. In addition to the
companies listed above, Beatriz also owns Florida Society of Phlebotomy
Technicians. Health & Wellness has paid: $136,025.13 to Confidence Billing;
$14,328.40 to Healing Hands; $8000 to Beatriz herself; and $10,498.30 to
Florida Society. (Id. at ¶¶ 31–34.) Medical Wellness, in turn, has paid:
$189,010.06 to Confidence Billing; $26,880.00 to Healing Hands; $23,307.85
directly to Beatriz; and $171,162.98 directly to Santos. (Id. at ¶¶ 31–33, 35.)
Health & Wellness paid Drs. Goldstraj and Franco weekly while they served as
medical director. (Id. at ¶ 76.) Likewise, Medical Wellness paid Drs. Carrasco
and Coll weekly while they served as well. (Id. at ¶ 77.) Finally, Pain Relief
periodically paid Dr. Lorites. (Id. at ¶ 78.)
All three Clinics submitted medical records to State Farm purporting to
have provided mechanical traction, gait training, neuromuscular re-education,
and therapeutic exercises to various patients alleged to have been involved in
car accidents. (Id. at ¶ 36.) The only health-care practitioners the Clinics
employed to perform these treatments, however, were licensed massage
therapists. (Id. at ¶ 37.) Additionally, not only were therapy prescriptions
issued by the Clinics not followed, but in some instances, patients received
treatment that had not even been prescribed. (Id. at ¶ 38.) Even the
Defendants’ medical expert noted instances where a doctor ordered a therapy
but the therapy was not actually ever administered. (Id. at ¶ 39; Suite Dep.
265:10–12.)
State Farm has identified several concerns regarding the Clinics’
recordkeeping. For instance, at Medical Wellness, neither medical director—
that is, neither Dr. Coll nor Dr. Carrasco—was familiar with all the
requirements identified in the Florida statute that sets forth a clinic’s
recordkeeping requirements. (Pls.’ Stmt. of Facts at ¶ 40.) Medical Wellness
never provided Dr. Coll with any education regarding the law or regulations
that apply to medical directors in Florida and Dr. Coll did not understand the
full scope or intricacies of his responsibilities. (Id. at ¶ 41) Medical Wellness
also never gave him any training; nor did it provide him with any of its policies.
(Id.) Further, the Medical Wellness initial evaluation form only allows a
patient’s pain to be reported as “severe, moderate, and mild,” rather than the
standard one-through-ten pain scale. (Id.) The form also does not allow an
examining provider space to identify a patient’s specific areas of muscular or
spinal pain. (Id.) Importantly, the Medical Wellness therapy order forms do not
allow for an examining practitioner to document: the type of therapeutic
exercise to be prescribed; the types of manual therapy to be prescribed; the
frequency or amplitude of the EMS or TENS therapies that should be applied;
the type of mechanical traction that should be provided; or the length of time
or the number of units that should be applied for each modality. (Id. at ¶ 44;
Coll. Aff. ¶ 14(f)–(k); Carrasco Aff. ¶ 12(h)–(m).) Finally, the identified Medical
Wellness patients’ treatment plans lacked any documentation regarding the
amount of time or the number of units each modality was to be applied. (Pls.’
Stmt. of Facts at ¶ 46.)
The state of Pain Relief and Health & Wellness’s records was similar.
Pain Relief had no policies reflecting its record-keeping standards. (Id. at ¶ 47.)
Nor did Pain Relief’s identified patient treatment plans include any information
regarding the amount of time or the number of units each modality was to be
applied. (Id. at ¶ 50.) Neither Health & Wellness medical director—that is,
neither Dr. Franco nor Dr. Goldstraj—was familiar with all the requirements
identified in the Florida statute that sets forth a clinic’s recordkeeping
requirements. (Id. at ¶ 40.) Moreover, Dr. Franco, who has been Health &
Wellness’s medical director since 2013, did not know whether the clinic had
maintained any records for the past five years. (Id. at ¶¶ 5, 52.) And both Drs.
Franco and Goldstraj acknowledged that some of Health & Wellness’s records
were not legible. (Id. at ¶ 53.) Moreover, Dr. Goldstraj was unaware of any
record-keeping policies and procedures Health & Wellness had in place and Dr.
Franco said he did not know whether the clinic followed a policy regarding the
preparation of medical records. (Id. at ¶ 55.) Additionally, Dr. Goldstraj
admitted he was unfamiliar with any of Florida’s record-keeping laws. (Id. at ¶
56.)
Furthermore, Lazaro reviewed patient medical records for all three
Clinics even though he was not responsible for doing so. (Id. at ¶¶ 43, 48, 54.)
Additionally, none of the Clinics’ records documented the results of patient x-
rays or, accordingly, whether the results of the x-rays were ever used in
prescribing or developing the patients’ treatments. (Id. at ¶¶ 45, 49, 57.)
There is also no evidence that Health & Wellness or Pain Relief collected
or even attempted to collect co-payments or deductibles from their patients.
Andrelvis Perez, the Health & Wellness corporate representative, testified that
he was not aware of the clinic’s having ever accepted payments of any kind
from any patients directly. (Id. at ¶ 58.) Indeed, Health & Wellness did not
accept cash and did not have a credit card reader; nor had it ever sent a bill to
any of its patients. (Id. at ¶¶ 59, 62.) Medical directors from Health & Wellness
testified they had never seen any patient pay a co-payment or a deductible. (Id.
at ¶ 60.) Neither Health & Wellness nor Pain Relief had any policies that
instructed staff on how to actually collect co-payments or deductibles. (Id. at
¶¶ 61, 70.) In sum, there is no evidence that either Health & Wellness or Pain
Relief made any real effort to collect co-payments or deductibles. (Id. at ¶¶ 61,
70.)
Similarly, Medical Wellness has no documentation reflecting its collection
of co-payments or deductibles. (Id. at ¶ 64.) And the medical directors at
Medical Wellness testified they never saw any patient pay a co-payment or
deductible. (Id. at ¶ 63.) Nor does Medical Wellness have any policies that
instruct staff on how to actually collect co-payments or deductibles. (Id. at ¶
65.) Indeed, like Health & Wellness, Medical Wellness never sent a single bill to
any of its patients. (Id. at ¶ 66.) Santos additionally testified that he himself
was unable to differentiate between a co-payment and a deductible. (Pls.’ Stmt.
of Facts at ¶ 67.) Nonetheless, Santos also testified that he personally told
every single Medical Wellness patient they needed to pay twenty percent of
their bill and that many of these patients paid that amount in cash, directly to
him. (Santos Vol. 1, 71:9–10; Dep. Vol. 2, 47:12–14, 48:9–15.) Conversely,
Santos further testified that the front-desk personnel at the clinic were
responsible for informing patients about and collecting the twenty percent (Id.
at Vol. 2, 46:13 – 15, 47:7–11.)
In order to have their patients’ claims processed, the Clinics submitted
standardized “CMS 1500” forms to State Farm to obtain payment for the
insureds’ benefits. (Pls.’ Stmt. of Facts at ¶ 72.) Health & Wellness has been
submitting these forms to State Farm since 2007 and has continued to do so
through the filing of this case; Pain Relief has been submitting these forms
since 2010 and has also continued to do so through the filing of this case; and
Medical Wellness submitted these forms from 2009 through 2017. (Id. at ¶ 73.)
Based on the representations in these forms, State Farm paid a total of
$1,580,414.15 to Health & Wellness. (Id. at ¶¶ 74, 76.) Plaintiff State Farm Fire
paid $315,902.55 of this amount ($306,958.92 during Dr. Goldstraj’s tenure;
and $8,943.61 during Dr. Franco’s). (Id. at ¶¶ 74, 76.) And Plaintiff State Farm
Mutual paid the remaining $1,263,511.60 ($1,070,337.35 during Dr.
Goldstraj’s tenure; and $194,174.25 during Dr. Franco’s). (Id. at ¶¶ 74, 76.)
In addition, State Farm paid a total of $1,022,072.06 to Medical
Wellness. (Id. at ¶¶ 74, 77.) Plaintiff State Farm Fire paid $156,317.64 of this
amount (all paid during Dr. Carrasco’s tenure). (Id. at ¶¶ 74, 77.) And Plaintiff
State Farm Mutual paid the remaining $865,754.42 ($647,730.35 during Dr.
Carrasco’s tenure; and $221,302.66 during Dr. Coll’s). (Id. at ¶¶ 74, 77.)
Lastly, State Farm paid a total of $320,566.94 to Pain Relief. (Id. at ¶¶
74, 78.) Plaintiff State Farm Fire paid $226,084.25 of this amount
($145,326.15 during Dr. Lorites’s tenure; and $80,758,10 during Dr. Gomez-
Cortes’s). (Id. at ¶¶ 74, 78.) And Plaintiff State Farm Mutual paid the remaining
$94,482.69 (all paid during Dr. Lorites’s tenure). (Id. at ¶¶ 74, 78.)
C. State Farm is entitled to summary judgment on its FDUTPA and
unjust enrichment claims.
Even viewing the record evidence in the light most favorable to the
Defendants, the Court concludes there is no genuine issue of material fact ripe
for determination at trial regarding State Farm’s FDUPTPA and unjust
enrichment claims. As set forth below, the services the Clinics billed State
Farm for were unlawfully rendered and non-compensable. As more fully
explained, also below, these findings alone are sufficient to entitle State Farm
to relief on these claims.
(1) Unlawfully Rendered and Non-compensable Services
(a) Therapy Treatments Unlawfully Performed by Licensed Massage
Therapists
The only healthcare practitioners all three Clinics employed to provide
the prescribed physical-therapy treatments were licensed massage therapists.
(Pls.’ Stmt. of Facts at ¶¶ 36–37.) But a licensed massage therapist’s scope of
practice does not permit him or her to perform anything but “massage,” which
is defined as “the manipulation of the soft tissues of the human body with the
hand, foot, arm, or elbow, whether or not such manipulation is aided by
hydrotherapy . . . or thermal therapy; any electrical or mechanical device; or
the application to the human body of a chemical or herbal preparation.” Fla.
Stat. § 480.033; see also Gov’t Employees Ins. Co. v. Quality Diagnostic Health
Care, Inc., 369 F. Supp. 3d 1292, 1299 (S.D. Fla. 2019) (Martinez, J.) (“[T]he
practice of physical therapy generally requires licensure under the
Physical Therapy Act.”) Excluded from the scope of permissible services under
this definition, then, according to State Farm, are treatments performed by the
massage therapists at the Clinics: mechanical traction; gait training;
neuromuscular reeducation; and therapeutic exercises. (Pls.’ Stmt. of Facts at
¶¶ 36–37.)
Pain Relief, along with Medical Wellness and the Muse Family, disagree
with State Farm’s assessment, however, arguing the cited definition does not
prevent a licensed massage therapist from rendering the physical therapy
provided at the Clinics. In support, Pain Relief11 looks to a statutory exemption

11 Medical Wellness and the Muse Family provide no real argument and simply conclude,
without any support, that “[n]one of the modalities performed by the [licensed massage
therapists] . . . fell outside of the parameters of the [massage therapy] statute.” (Medical
Wellness et al.’s Resp. at 8 (emphasis in original).) To the extent this opposition warrants
that allows a Florida licensed massage therapist, among others, to “us[e] any
physical agent as a part of, or incidental to, the lawful practice of her or his
profession.” Fla. Stat. § 486.161. Correspondingly, Pain Relief relies on several
cases that indicate, generally, that a massage therapist can use certain
“physical agents” to assist the massage therapist in performing massage. The
Court finds this statutory exemption and the cases Pain Relief relies on
inapplicable here.
To begin with, Pain Relief provides no support, nor is the Court aware of
any, for Pain Relief’s apparent contention that the therapies at issue in this
case are akin to the “physical agent” identified in the statute. Further, there is
no indication here that the Clinics’ massage therapists were using any such
“physical agents” as part of or “as incidental to their practice of massage.” Gov't
Employees Ins. Co. v. DG Esthetic & Therapy Ctr., Inc., 18-20921-CIV, 2019 WL
1992930, at *6 (S.D. Fla. Apr. 19, 2019) (Altonaga, J.) Instead, the facts here,
as set forth above, show that the massage therapists at the Clinics were
purportedly providing mechanical traction, gait training, neuromuscular
reeducation, and therapeutic exercises to the Clinic patients. There is no record
evidence that these therapies were in any way associated with, or even
incidental to, any massage they were providing.
In two of the cases Pain Relief relies on, the courts address only the use
of hot packs, electrical muscle stimulators, ultrasound therapy devices, and
mechanical massage. State Farm Mut. Auto. Ins. Co. v. Physicians Injury Care
Ctr., Inc., 6:06-CV-1757-ORL-GJK, 2008 WL 11337326, at *6 (M.D. Fla. Dec.
18, 2008); State Farm Mut. Auto. Ins. Co. v. Universal Med. Ctr. of S. Florida,
Inc., 881 So. 2d 557, 560 (Fla. 3d DCA 2004). As noted by those courts, such
“simple modalities,” were permissible because they were either used
incidentally to the practice of massage therapy or were used to directly assist a
physician with treatment. The treatments being billed for in this case go well
beyond the mere use of “hot packs, electrical muscle stimulators, ultrasound
therapy devices, and mechanical massage” and, again, are not incidental to any
associated massage. To find otherwise would allow the limited exemption—for
“physical agents” used “incidental to” massage—to permit massage therapists
the unfettered right to practice physical therapy without a physical therapy
license. Quality Diagnostic Health Care, 369 F. Supp. 3d at 1301 (noting that
the exemption is “not an unfettered right for these enumerated professionals to
practice physical therapy outside of their professional license,” but, rather, “it
is an exemption to allow these professionals the full use of their professional
license, despite the fact certain services they may perform under their

addressing, the Court’s consideration of it is subsumed within its analysis of Pain Relief’s
argument.
professional license are also regulated as the ‘practice of physical therapy’”).
Moreover, even if any of the identified services the massage therapists
performed were technically legal, “the PIP statute . . . precludes reimbursement
[for] massage therapists” who are performing physical therapy services. Geico
Gen. Ins. Co. v. Beacon Healthcare Ctr. Inc., 3D18-2030, 2020 WL 912938, at *3
(Fla. 3d DCA Feb. 26, 2020).
In sum, then, the Court finds the record evidence shows the Clinics, in
concert with the individual Defendants, submitted bills to State Farm seeking
reimbursement for non-compensable physical therapy services that were being
performed by massage workers unlicensed to do so.
(b) Noncompliant Record Keeping
There are many recordkeeping requirements in Florida that apply to
healthcare clinics and to the practice of medicine generally. For example, a
licensed physician must maintain medical records “in English, in a legible
manner and with sufficient detail to clearly demonstrate why the course of
treatment was undertaken.” Fla. Admin. Code r. 64B8-9.003(2). Moreover, a
patient’s “medical record shall contain sufficient information to identify the
patient, support the diagnosis, justify the treatment and document the course
and results of treatment accurately.” Fla. Admin. Code r. 64B8-9.003(3). In
order to sufficiently comply with this provision, the record must “include[e], at
a minimum, patient histories; examination results; test results; records of
drugs prescribed, dispensed, or administered; reports of consultations and
hospitalizations; and copies of records or reports or other documentation
obtained from other healthcare practitioners.” Id. A patient’s medical records
must be maintained for five years from the last patient contact. Fla. Admin
Code R. 64B8-10.002(3).
The Clinics themselves are subject to various record-keeping standards
as well. For example, each Clinic must appoint a medical director or clinic
director as a “records owner” who must “develop and implement policies,
standards, and procedures to protect the confidentiality and security of the
medical record.” Fla. Stat. §§ 400.9935(1)(e), 456.057(10). Any employee of
these records owners must, in turn, “be trained in these policies, standards,
and procedures.” Id. Further, the patient records must be properly maintained
to safeguard the patients’ protected health information. See Fla. Stat. §
456.057(7)(a). To this end, “records owners are responsible for maintaining a
record of all disclosures of information contained in the medical record to a
third party, including the purpose of the disclosure request.” Fla. Stat. §
456.057(11). As set forth above, the undisputed facts show the medical
directors and the Clinics failed to comply with many of these requirements.
For example, Lazaro was permitted to review patient medical records at
all the Clinics despite any evidence or indication from the record that he was in
any way authorized to do so: he is not a healthcare practitioner or involved in
the patients’ care or treatment; there is no evidence any patient authorized
Lazaro’s inspection of the records; and there is no evidence Lazaro satisfied any
of the statutory exceptions that would allow him access to the records. (See
Pls.’ Stmt. of Facts at ¶¶ 43, 48, 54.) Additionally, none of the Clinics’ records
documented the results of patient x-rays or, accordingly, whether the results of
the x-rays were ever used in prescribing or developing the patient’s treatments.
(Id. at ¶¶ 45, 49, 57.) Moreover, the treatment plans for the patients at Medical
Wellness and Pain Relief were deficient: they did not indicate the amount of
time or units any particular treatment should be performed. (Id. at ¶¶ 46, 50.)
Lastly, Medical Wellness did not maintain its patients’ records for five years as
required. (Id. at ¶ 42.)
Drs. Goldstraj and Lorites both served as medical directors, at Health &
Wellness and Pain Relief, respectively, when these record-keeping requirements
were not met. Indeed, Dr. Goldstraj testified he was unaware of any record-
keeping policies and procedures Health & Wellness had in place and admitted
he was unfamiliar with any of Florida’s record-keeping laws. (Id. at ¶¶ 55–56.)
And neither doctor, during their tenures, properly safeguarded the records as
they were required to do as medical directors.
(c) Invalid and Unlawful Prescriptions for Treatment
At each Clinic, patients received unlawful prescriptions for treatment.
Under Florida law, a prescription must justify the court of treatment to be valid
and lawful. Fla. Admin. Code r. 64B8-9.003(2)–(3). Indeed, a physician may
face disciplinary action or the denial of licensure for a failure to “keep legible . .
. medical records . . . that justify the course of treatment of the patient,
including, but not limited to, patient histories; examination results; test
results; records of drugs prescribed, dispensed, or administered; and reports of
consultations and hospitalizations.” Fla. Stat. § 458.331(1)(m). Each Clinic
issued prescriptions for treatment which were not followed. (Pls.’ Stmt. of Facts
at ¶ 38.) Such a deviation from Florida law renders the Clinics’ prescriptions
unlawful.
(d) Copayments and Deductibles
In order to prevent violations of Florida’s Insurance Fraud Statute,
medical directors must also ensure copayments and deductibles are collected
by their clinics. B&A Diagnostic, Inc., 145 F. Supp. 3d at 1164 n. 7. When
copayments and deductibles are not collected, healthcare providers have less
incentive not to administer excessive and unnecessary care. Correspondingly,
“if insureds are required to pay a deductible every time they visit a medical
clinic, they will be less likely to make unnecessary visits to the medical clinic.”
United Auto. Ins. Co. v. Florida Wellness & Rehab. Ctr., 08-20348-CIV, 2009 WL
10667729, at *2 (S.D. Fla. Feb. 11, 2009) (Lenard, J.). The Court finds that on
the record before it, it is undisputed that the Clinics here, under the direction
of the medical director defendants, including Drs. Goldstraj and Lorites, failed
to make any real effort to collect co-payments and deductibles. (Pls.’ Stmt. of
Facts at ¶¶ 58–63, 65–68, 70.) This failure is readily apparent with respect to
Health & Wellness and Pain Relief.
In some contrast, Medical Wellness’s failure is a closer call. Santos
testified that he personally asked every Medical Wellness patient, verbally, to
pay twenty percent of their final bill. (Santos Dep. Vol. 2, 48:9–13.) He also
maintained Medical Wellness’s front-desk staff, on the one hand, “inform[ed]
patients about the twenty percent” (id. at 47:7–11), but on the other only gave
them a copy of their bill if they specifically asked for it (id. at 46:6–12). At the
same time, Santos said that it was the “front desk person[’s]” job to collect
twenty-percent from patients (id. at 46:13–15), but also maintained it was not
the front-desk staff’s responsibility to actually do so. (Id. at 47:12–14.) Santos
says he pointedly told patients not to pay until after the insurance company
had paid eighty percent of the bill (id. at 48:13–15) and acknowledged that
patients paid only in cash and only “little by little according to their possibility
[sic].” (Id. at 47:16–18.) Notably, Santos acknowledged there is no
documentation reflecting either his efforts to collect or any cash payments
Medical Wellness purportedly received. (Pls.’ Stmt. of Facts at ¶ 64.)
In viewing this evidence and all factual inferences reasonably drawn from
it in the light most favorable to Medical Wellness and Santos, the Court finds
Santos’s testimony still does not raise a reasonable doubt as to Medical
Wellness’s noncompliance with the statute requiring it to establish a general
business practice of collecting deductibles and copayments. State Farm Mut.
Auto. Ins. Co. v. Med. Serv. Ctr. of Fla., Inc., 103 F. Supp. 3d 1343, 1351 (S.D.
Fla. 2015) (Moore, C.J.) (noting that “only reasonable doubts are to be resolved
in favor of the non-moving party”) (emphasis in original). Under Florida Statute
section 817.234(7)(a), service providers must not “engage in a general business
practice” of failing to collect deductibles and copayments. In determining
whether a healthcare provider has engaged in such a practice, courts must
consider evidence showing whether the provider “made a good faith attempt to
collect such deductible or copayment.” Fla. Stat. § 817.234(7)(a). Even upon
reading the evidence in the light most favorable to Medical Wellness and
Santos, the Court does not discern a genuine issue for trial on this matter:
Santos’s testimony, even assuming it is fully believed, at most reveals a half-
hearted attempt to inform patients about the deductibles generally and even
less of an attempt to actually collect them. Indeed, by Santos’s own admission,
these efforts resulted in, at most, some patients paying some portion of their
deductibles. This does not demonstrate a general business practice at Medical
Wellness of making a good-faith effort to collect deductibles and copayments.
This is especially so in the face of the unrebutted evidence showing Medical
Wellness (1) did not have any formal policies instructing staff on collecting
deductibles and copayments, (2) never sent out a single bill to any patient, and
(3) did not have any documentation showing it ever collected a deductible, and
Santos’s acknowledgment that he did not know the difference between a
deductible and a copayment. Ultimately, the Court finds this “[f]ailure to make
a good-faith effort to collect co-payments is ‘insurance fraud’ that renders the
charges submitted to State Farm . . . unlawful and noncompensable.” B&A
Diagnostic, Inc., 145 F. Supp. 3d at 1164 n. 7 (citing Fla. Stat. §§
627.736(5)(b)(1)(b), 817.234(7)(a)).
(2) FDUTPA
State Farm maintains the Defendants, collectively, violated FDUTPA by
submitting invoices to State Farm that were unlawful, unenforceable, and non-
compensable. According to State Farm, the medical directors—the six
defendant doctors—all failed to comply with their statutory obligations which
rendered their bills unlawful and non-compensable. Further, says State Farm,
Beatriz, Lazaro, and Santos were all directly in control of the operations at one
or more of the Clinics, either as owners, billers, or consultants.
In opposition, the Muse Defendants (joined by Health & Wellness and Dr.
Goldstraj) maintain (1) various factual disputes preclude the entry of summary
judgment and (2) FDUTPA is not implicated here because FDUTPA only covers
the consumer relationships between State Farm and its insureds—that is, the
patients. (Medical Wellness et al.’s Resp. at 9–10.) Pain Relief, through its
opposition (joined by Dr. Lorites), in turn, maintains there is a question of fact
as to whether State Farm knew or should have known about the deficiencies in
the claims Pain Relief submitted. (Pain Relief’s Resp. at 5.) According to Pain
Relief, there remains a question of fact regarding whether State Farm acted
reasonably, under the circumstances, in paying the claims. (Id. at 4–5.) After
careful review, and in light of the overwhelming and unrebutted evidence
presented, the Court agrees with State Farm that there are no genuine issues
of material fact with respect to its FDUTPA claims.
“To establish a claim under the FDUTPA, State Farm must show (1) a
deceptive act or unfair practice, (2) causation, and (3) actual damages.” Med.
Serv. Ctr. of Fla., 103 F. Supp. 3d at 1354. “A deceptive act or practice is one
that is likely to mislead consumers and an unfair practice is one that offends
established public policy and one that is immoral, unethical, oppressive,
unscrupulous or substantially injurious to consumers.” Id. (quotations
omitted). “[D]eception may be accomplished by innuendo rather than outright
false statements.” Millennium Commun. & Fulfillment, Inc. v. Off. of Atty. Gen.,
Dept. of Leg. Affairs, State of Fla., 761 So. 2d 1256, 1264 (Fla. 3d DCA 2000).
To determine whether an act is deceptive or unfair, Florida law applies
an objective test: “whether the alleged practice was likely to deceive a consumer
acting reasonably in the same circumstances, rather than actual reliance on
the representation or omission at issue.” Vazquez v. Gen. Motors, LLC, 17-
22209-CIV, 2018 WL 447644, at *6 (S.D. Fla. Jan. 16, 2018) (Gayles, J.)
(quotations omitted). FDUTPA does not impose liability solely on corporate
entities; rather, a FDUTPA claim against individuals may proceed so long as
the “aggrieved party . . . alleges that the individual was a direct participant in
the improper dealings.” Nationwide Mut. Co. v. Ft. Myers Total Rehab Ctr., Inc.,
657 F. Supp. 2d 1279, 1288 (M.D. Fla. 2009); KC Leisure, Inc. v. Haber, 972
So. 2d 1069, 1074 (Fla. 5th Dist. App. 2008) (“In order to proceed against an
individual for a violation of FDUTPA, a plaintiff must allege that the individual
was a direct participant in the dealings.”)
The undisputed facts presented here overwhelmingly show that the
billing forms submitted to State Farm regarding medical services allegedly
provided to their insureds were deceptive. The Defendants, in submitting the
forms, duped State Farm into paying for services that were actually unlawfully
rendered and non-compensable. See, e.g., DG Esthetic & Therapy, 2019 WL
1992930, at *5 (concluding that insurers, like State Farm, are not required to
pay a claim for medical services performed by a person who was not actually
validly licensed to perform those services). As set forth above, the Clinics, with
the direct participation of the medical director Defendants and the Muse
Family, operated in violation of numerous Florida laws, rules, and regulations
promulgated specifically to protect the general welfare of their patients. These
deficiencies include the most basic and fundamental aspects of rendering
healthcare services: using appropriately licensed practitioners; maintaining
adequate medical records; employing competent and legally compliant medical
directors; and collecting patient payments.
Medical Wellness and the Muse Family’s arguments in opposition are
unavailing. To begin with, they maintain State Farm cannot lodge a FDUTPA
claim because State Farm is not a “consumer” as defined by the statute. They
also argue that even if State Farm qualified as a “consumer,” it could only seek
redress against the Clinics and not against any of the individual Defendants.
Both contentions are without merit.
As previously addressed in the Court’s order denying some of the
Defendants’ motions to dismiss (ECF No. 113), State Farm is not required to be
a “consumer” to allege a FDUTPA claim. Orange Lake Country Club, Inc. v.
Castle Law Group, P.C., 617CV1044ORL31DCI, 2018 WL 1535719, at *5 (M.D.
Fla. Mar. 29, 2018) (“FDUTPA claims are not limited to consumers.”). In fact,
amendments to the Act in 2001, “indicate[] that the [Florida] legislature no
longer intended FDUTPA to apply to only consumers, but to other entities able
to prove the remaining elements of the claim as well.” Caribbean Cruise Line,
Inc. v. Better Bus. Bureau of Palm Beach County, Inc., 169 So. 3d 164, 169 (Fla.
4th DCA 2015). Thus, State Farm’s lack of “consumer” status in no way bars
its FDUTPA claims.
Likewise, FDUTPA claims are not limited to suits against corporate
entities alone. Nor, as the Muse Family argues, must an individual defendant
be in privity with a plaintiff to be implicated in a FDUTPA claim. Indeed, “it has
long been the law in Florida that in order to proceed against an individual,” as
opposed to a corporate entity, for a FDUTPA violation, “an aggrieved party must
allege that the individual was a direct participant in the improper [corporate]
dealings.” KC Leisure, Inc. v. Haber, 972 So. 2d 1069, 1074 (Fla. 5th DCA
2008). It is unnecessary to pierce the corporate veil where an individual
defendant was a direct participant in the complained of dealings. Id. (citing
Rollins, Inc. v. Heller, 454 So. 2d 580, 582 (Fla. 3d DCA 1984)). Based on the
record here, there is abundant evidence that the individual Muse Family
Defendants were direct participants in the deceptive billing at issue here and,
therefore, they are proper defendants in this case.
Pain Relief’s arguments in opposition are also unavailing. First, Pain
Relief submits State Farm either knew or should have known of the deficiencies
in the claims Pain Relief submitted and therefore State Farm was not really
misled or deceived. (Pain Relief’s Resp. at 5.) In support of its argument, Pain
Relief relies on an affidavit it procured from Daniel Collazo, an owner of the
Pain Relief clinic. But as set forth above, in section 3.A., the Court finds the
entirety of this declaration conclusory and wholly lacking in probative value. As
such, the Court concludes Pain Relief’s argument is without any factual
support. Thus, even if Pain Relief’s argument had legal merit—which is
questionable, at best—its contention would still fail based on its failure to
supply admissible evidence to maintain its position.
Pain Relief also complains that State Farm’s summary-judgment motion
presents arguments based on unpleaded theories, namely that Pain Relief was
operating in violation of various Florida statutory provisions and that it did not
collect copayments or deductibles. (Pain Relief’s Resp. at 7.) But State Farm’s
complaint clearly alleges Pain Relied failed to properly submit its claims and
abide by Florida law in running its clinic. The facts State Farm submits in
support of its motion merely substantiate the complaint’s allegations. These are
not, as Pain Relief urges, new theories.
In sum, then, State Farm has shown that it is entitled to judgment as a
matter of law and there is no genuine issue of material fact with respect to its
FDUTPA claims against all the non-defaulting Defendants. The claims
submitted by the Clinics were universally non-compensable based on the
Clinics’ recordkeeping improprieties and failures to make a good faith effort to
collect copayments and deductibles. Additionally, vast subsets of these claims
sought reimbursement for unlawfully rendered services where massage
therapists purportedly administered physical therapies that they were
unlicensed to perform and where prescriptions for treatment were issued but
not followed. The repeated submissions, through the concerted transactions
and dealings of the Defendants, of what are, at bottom, non-compensable
invoices to State Farm, were deceptive practices that the Court finds violate
FDUTPA.
(3) Unjust Enrichment
State Farm also maintains it is entitled to summary judgment on its
unjust enrichment claims based on the Defendants’ rendering of unlawful and
non-compensable services, as set forth above. To prevail on its claim for unjust
enrichment, State Farm must show (1) it has conferred a benefit on the
Defendants, who have knowledge thereof; (2) the Defendants voluntarily
accepted and retained the benefit conferred; and (3) the circumstances are
such that it would be inequitable for the Defendants to retain the benefit
without paying the value thereof to State Farm. Med. Serv. Ctr. of Fla., 103 F.
Supp. 3d at 1355. In opposition, Pain Relief submits State Farm’s unjust
enrichment claims fail because “State Farm voluntarily paid the claims with
notice of the alleged illegalities that it now complains of.” (Pain Relief’s Resp. at
6.) Medical Wellness and the Muse Family, on the other hand, maintain State
Farm’s unjust enrichment claim fails because (1) State Farm has an adequate
remedy at law and therefore is not entitled to equitable relief and (2) State
Farm’s unjust enrichment claim can only apply to the Clinics themselves and
not the individual Defendants. (Muse Family Resp. at 10.)
Pain Relief’s position is unavailing. To begin with, Pain Relief’s voluntary-
payment argument relies on affidavits that the Court has declined to consider,
as set forth in section 3.A. Without these affidavits, Pain Relief lacks any
factual support for its position. Furthermore, and as Pain Relief acknowledges,
the voluntary-payment doctrine is an affirmative defense. (Pain Relief’s Resp. at
6 n. 9.) As State Farm points out, however, Pain Relief never pleaded this
affirmative defense in its answer. Ordinarily, the failure to plead an affirmative
defense results in the waiver of the defense. Latimer v. Roaring Toyz, Inc., 601
F.3d 1224, 1239 (11th Cir. 2010) (“Failure to plead an affirmative defense
generally results in a waiver of that defense.”) Nonetheless, a court may still
consider an unpleaded affirmative defense if it is shown the plaintiff has
suffered no prejudice. Miranda de Villalba v. Coutts & Co. (USA) Intern., 250
F.3d 1351, 1353 (11th Cir. 2001). Here, Pain Relief maintains State Farm has
suffered no prejudice because “State Farm’s entire case is entirely based on the
submissions it used to adjust the claims.” (Pain Relief’s Resp. at 6 n. 9.) Pain
Relief fails to explain, though, why State Farm’s reliance on these
“submissions” translates into a lack of prejudice. Furthermore, Pain Relief has
not offered any justification for its failure to plead its voluntary-payment
affirmative defense. In sum, even if Pain Relief’s voluntary-payment defense
had any substantive merit, it would nonetheless fail (1) for want of factual
support and (2) based on waiver.
Medical Wellness and the Muse Family’s opposition is also unavailing. To
begin with, they fail to supply a single legal authority to support their position
that State Farm is not entitled to equitable relief or that such relief can only
apply to the clinics. See Brown v. NCL (Bahamas) Ltd., 15-21732-CIV, 2016 WL
8716482, at *5 (S.D. Fla. Oct. 13, 2016) (“Motions devoid of any legal authority
or a supporting memorandum of law are due to be denied or stricken.”) More
importantly, their arguments lack merit. Notably, the general unavailability of
equitable remedies when adequate legal remedies exist “does not apply to
unjust enrichment claims.” State Farm Mut. Auto. Ins. Co. v. Physicians Injury
Care Ctr., Inc., 427 Fed. App’x 714, 722 (11th Cir. 2011), rev’d in part on other
grounds sub nom. State Farm Mut. Auto. Ins. Co. v. Williams, 824 F.3d 1311
(11th Cir. 2014). Rather, an unjust enrichment claim is foreclosed only where
the parties are bound by an express contract. Id. Here, there is no such
contract and “[t]hus, the availability of Plaintiffs’ FDUTPA claim does not
require dismissal of its unjust enrichment claim.” Harris v. Nordyne, LLC, 14-
CIV-21884, 2014 WL 12516076, at *7 (S.D. Fla. Nov. 14, 2014) (Bloom, J.).
Additionally, the Court is not persuaded that liability under State Farm’s
unjust enrichment claims should apply only to the Clinics and not to the
individual Defendants themselves. Notably, “there is significant case law
holding that a defendant is not required to individually receive payments in
order for a cause of action for unjust enrichment to exist.” State Farm Mut.
Auto. Ins. Co. v. B & A Diagnostic, Inc., 104 F. Supp. 3d 1366, 1375–76 (S.D.
Fla. 2015) (Moore, C.J.). The unjust benefit need not flow directly to a
defendant to establish liability. Id.
In sum, the undisputed facts establish that State Farm conferred a
benefit on the Defendants. The facts show that State Farm directly rendered
payments to the Clinics and then the Clinics, in turn, provided salaries and
other payments to the Muse Family members and the medical directors. (Pls.’
Stmt. of Facts at ¶¶ 76–8.) There is no dispute that the Defendants were all
aware of, accepted, and retained the benefits State Farm conferred. Finally, the
undisputed facts show the services billed for were not lawfully rendered and
therefore were non-compensable. It would therefore be inequitable for the
Defendants to retain benefits “that [they were] not legally entitled to receive in
the first place.” State Farm Fire & Cas. Co. v. Silver Star Health & Rehab, 739
F.3d 579, 584 (11th Cir. 2013). State Farm has established its entitlement to
summary judgment in its favor on its unjust enrichment claims while the
Defendants have failed, in response, to show there is any genuine issue for
trial.
D. Statute of Limitations
Pain Relief and Dr. Lorites, separately, maintain the statute of limitations
bars State Farm’s claims against them. Pain Relief raises this argument both in
the context of warding off State Farm’s motion for summary judgment as well
attempting to move for partial summary judgment within its response. (Pain
Relief’s Resp., ECF No. 202.) Dr. Lorites, on the other hand, raises his statute
of limitations defense only in his motion for summary judgment. (Dr. Lorites’s
Mot., ECF No. 205.) Both Defendants’ arguments fail.
To begin with, Pain Relief and Dr. Lorites’s contention that State Farm
cannot prevail on its motion for summary judgment because it failed to
proactively address their affirmative defenses is meritless. Simply reciting an
affirmative defense in an answer is inadequate. “On a plaintiff’s motion for
summary judgment, the defendant bears the initial burden of showing that the
affirmative defense is applicable.” Office of Thrift Supervision v. Paul, 985 F.
Supp. 1465, 1470 (S.D. Fla. 1997) (Ungaro, J.); see also Singleton v. Dep’t of
Corr., 277 Fed. App’x 921, 923 (11th Cir. 2008) (“[T]he burden of establishing
an affirmative defense lies on the defendant, not on the plaintiff . . . .”)
(emphasis in original). A defendant must therefore establish an initial
entitlement to the affirmative defense before a plaintiff must rebut that
showing.
Next, to the extent Pain Relief and Dr. Lorites seek to establish a genuine
issue of material fact with respect to their statute of limitations defenses, their
attempts fail. Pain Relief and Dr. Lorites maintain that, with respect to invoices
submitted to State Farm between June 2010 and April 2013, State Farm’s
FDUTPA and unjust enrichment claims are time barred. And, indeed, neither
party disputes that claims on these invoices are subject to a four-year statute-
of-limitations period. State Farm, rather, maintains its claims did not accrue
until July 2018, when it finally discovered the Defendants’ scheme. (Pls.’ Resp.
to Dr. Lorites’s Mot. at 238.) In support of its contention, State Farm points to
the doctrine of fraudulent concealment. In opposition, without citing to any
actual supporting evidence, Dr. Lorites simply insists “State Farm [was] on
notice of the alleged illegalities from the onset,” having full possession of all the
medical records and claims forms, and therefore “knew or should have known
of any allegations of fraud or misconduct well prior to the expiration of any
statute of limitations.” (Dr. Lorites’s Mot. at 5.) This is insufficient.
To invoke fraudulent concealment, a plaintiff must show that a
defendant “engage[d] in the willful concealment of the cause of action using
fraudulent means to achieve that concealment.” Raie v. Cheminova, Inc., 336
F.3d 1278, 1282 n.1 (11th Cir. 2003) (citing Berisford v. Jack Eckerd Corp., 667
So.2d 809, 811 (Fla. Dist. Ct. App. 1995)). Here, State Farm has presented
facts establishing that Pain Relief and Dr. Lorites made affirmative
misrepresentations—that the services rendered were lawful and compensable—
in the invoices submitted to State Farm. (Pls.’ Resp. to Dr. Lorites’s Mot. at 7.)
State Farm has also established that these misrepresentations were intended
to conceal the actual facts from State Farm—otherwise State Farm would not
have paid the claims. (Id.) This suffices to establish fraudulent concealment.
See Berisford, 667 So. 2d at 812 (finding fraudulent concealment where a
defendant pharmacy’s affirmative misrepresentation in medical records was
intended to conceal facts from the plaintiff). In the face of these undisputed
facts, neither Pain Relief nor Dr. Lorites has come forward with any record
evidence which shows that State Farm should have been on notice of the
Defendants’ schemes prior to July 2018.
As Pain Relief and Dr. Lorites have failed to establish any genuine issue
of material fact with respect to their statute-of-limitations defenses, they have
not even come close to prevailing on their own motions for summary judgment.
Thus, to the extent either of them seeks summary judgment in their favor as to
the specified invoices based on the statute of limitations, the Court denies their
motions.
E. Declaratory Relief
Finally, State Farm maintains it is entitled to a declaration that it is not
required to pay the Clinics’ outstanding invoices. In opposing State Farm’s
request for declaratory relief, Medical Wellness cites to Florida Statutes section
86.011 and then complains State Farm has failed to allege uncertainty as to
any of its rights. (Muse Defs.’ Resp. at 10.) Medical Wellness also suggests
declaratory relief here is unnecessary because the Clinics have not
counterclaimed for invoices that remain unpaid. (Id. at 10–11.) At least in the
context of this case, Medical Wellness’s arguments are virtually unintelligible.
The law in this circuit is well settled that insurers like State Farm are not
obligated to pay bills submitted by a clinic that is operating unlawfully. See,
e.g., Silver Star Health & Rehab, 739 F.3d at 584 (“Under Florida law State
Farm was entitled to seek a judicial remedy to recover the amounts it paid
Silver Star and to obtain a declaratory judgment that it is not required to pay
Silver Star the amount of the outstanding bills.”) (emphasis added); Med. Serv.
Ctr. of Fla., 103 F. Supp. 3d at 1356 (granting declaratory relief on insurer’s
motion for summary judgment where insurer established the defendant clinics
submitted bills for services that were not lawfully provided). As recounted by
the facts above, the Court finds there is no genuine dispute that the Clinics
were operating unlawfully. Indeed, with respect to State Farm’s request for
declaratory relief, Medical Wellness does not in any way rebut State Farm’s
contention in this regard. The Court thus finds State Farm is entitled to a
declaration that it is not obligated to pay any of the Clinics’ outstanding
invoices for pending claims.
F. Damages
State Farm has set forth, through its motion for summary judgment and
statement of facts, that the Defendants were not legally entitled to receive the
payments identified in exhibits 42 through 46 to the amended complaint. (ECF
Nos. 6-42 through 6-46; Pls.’ Stmt. of Facts at ¶¶ 76–78.) State Farm Fire’s
payments are summarized as follows:

Clinic Associated Medical Director Amount
Health & Wellness Dr. Goldstraj $306,958.93
Health & Wellness Dr. Franco $8,943.61
Medical Wellness Dr. Carrasco $156,317.64
Pain Relief Dr. Lorites $145,326.15
(Pls.’ Mot. at 21.) State Farm Mutual’s payments are also summarized:

Clinic Associated Medical Director Amount
Health & Wellness Dr. Goldstraj $1,070,337.35
Health & Wellness Dr. Franco $194,174.25
Medical Wellness Dr. Carrasco $647,730.35
Medical Wellness NA $221,302.66
Pain Relief Dr. Lorites $94,482.69
Pain Relief Dr. Gomez-Cortes $80,758.10
(Id.) As State Farm has shown, Lazaro, Beatriz, and Santos’s involvement with
the schemes perpetrated by the Clinics was such that (1) Lazaro is jointly and
severally liable for all of the amounts listed above; (2) Beatriz is jointly and
severally liable for all the payments made to both Health & Wellness and
Medical Wellness; and (3) Santos is jointly and severally liable for all the
amounts paid to Medical Wellness. As for the medical directors who have not
been defaulted or dropped from this case, State Farm has similarly shown that,
as indicated above, (1) Dr. Goldstraj is jointly and severally liable for State
Farm’s payments to Health & Wellness during his tenure; and (2) Dr. Lorites is
jointly and severally liable for State Farm’s payments to Pain Relief during his
tenure. Notably, none of the Defendants has disputed the amounts listed
above.
4. The Court denies Medical Wellness and the Muse Family’s motion
for summary judgment.
Medical Wellness and the Muse Family (the “Muse Defendants”) seek
summary judgment on several bases. (Muse Defs.’ Mot., ECF No. 172.) First,
they attack State Farm’s fraud claims, as set forth in counts one through three,
complaining State Farm (1) failed to comply with the heightened pleading
standards set forth in Federal Rule of Civil Procedure 9(b) and (2) failed to come
forward with any evidence supporting their claims of fraud. Next, the Muse
Defendants argue State Farm’s FDUTPA claims, as set forth in counts four
through six, fail because there is no consumer relationship between State Farm
and the Muse Defendants. Third, the Muse Defendants complain State Farm
has not demonstrated its entitlement to a declaratory judgment. Lastly, the
Muse Defendants set forth a series of eleven “points” they maintain justify
dismissal or summary judgment as to various Defendants and “issues.” After
review, the Court finds the Muse Defendants’ motion meritless.
To begin with, much of the Muse Defendants’ argument centers on what
they describe as pleading deficiencies in State Farm’s complaint. In other
words, they attempt to argue State Farm failed to state claims upon which
relief can be granted through a motion for summary judgment. This is
procedurally improper and impermissible: a motion asserting a “failure to state
a claim upon which relief can be granted . . . must be made before pleading.”
Fed. R. Civ. P. 12(b)(6) (emphasis added). The Muse Defendants have all
answered the complaint and therefore their opportunity to test the sufficiency
of the complaint’s allegations has passed. As an initial matter, then, the Court
denies the Muse Defendants’ motion to the extent their position rests on State
Farm’s purported failures to state claims upon which relief may be granted.
A. The Muse Defendants fail to carry their burden of establishing their
entitlement to summary judgment on State Farm’s fraud claims.
The Muse Defendants maintain State Farm’s fraud claims fail because
State Farm has not presented any evidence of (1) what false statements each
Muse Defendant knowingly made to State Farm; (2) the materiality of any of
those statements; and (3) State Farm’s reliance on those statements. (Muse
Defs.’ Mot. at 5.) With respect to the Muse Defendants’ first point, they appear
to misapprehend the law. A plaintiff pursuing a fraud claim need not show that
each defendant personally made the misrepresentations at issue in the case.
Instead, “all knowing participants in a fraudulent scheme are legally liable for
the actions of an individual who acts to carry out the scheme.” United States v.
Gonzalez, 404 Fed. App’x 403, 405 (11th Cir. 2010); see also State Farm Mut.
Auto. Ins. Co. v. Brown, 16-80793-CIV, 2017 WL 1291995, at *6 (S.D. Fla. Mar.
30, 2017) (Marra, J.) (finding a fraud claim viable against a supplier of durable
medical units who never made any statements directly to State Farm but who
was nonetheless alleged to be part of the fraud scheme); State Farm Mut. Auto.
Ins. Co. v. Altamonte Springs Diagnostic Imaging, Inc., 611-CV-1373-ORL-31GJ,
2011 WL 6450769, at *4 (M.D. Fla. Dec. 21, 2011) (agreeing that “everyone who
knowingly participates in a fraud scheme will be liable for the conduct of their
co-schemers even if some participants do not make the fraudulent
statements”).
Here, the Muse Defendants do not dispute that State Farm has presented
abundant evidence showing Medical Wellness submitted thousands of claims
forms which represented the services billed for were medically necessary and
lawfully rendered. (Pls.’ Resp. at 5.) State Farm has also presented substantial
record evidence indicating “the services rendered at Medical Wellness were
performed in violation of a litany of Florida law and regulations.” (Pls.’ Resp. at
5 (citing to Pls.’ Stmt. of Facts and Mot. for Partial Summ. J).) In response to
that evidence, the Muse Defendants counter merely that (1) Medical Wellness
was properly incorporated in Florida; (2) Medical Wellness hired licensed
physicians to act as its medical directors; (3) Medical Wellness obtained AHCA
licenses for its operations; (4) Santos testified that Medical Wellness “patients
were diagnosed, then treated and the billings were accurate.” (Muse Defs.’ Mot.
at 12.) The Muse Defendants’ first three points here are not responsive to State
Farm’s evidence and have no bearing on whether Medical Wellness billed for
illegally rendered services. Further, the Muse Defendants grossly
mischaracterize Santos’s cited deposition testimony. Regardless, the evidence
the Muse Defendants present does not even come close to showing an absence
of any genuine issue of material fact regarding their contention that Medical
Wellness “was in full compliance with Florida law.” (Id.)
Next, State Farm has presented ample evidence that the individual Muse
Family members were direct participants in Medical Wellness’s scheme. For
example, State Farm’s record evidence shows Lazaro served as the “business
consultant,” consulting on “all aspects of the business” at Medical Wellness;
Beatriz performed Medical Wellness’s billing, through one of her other
companies; and Santos was the owner of Medical Wellness. The Muse
Defendants have not even come close to establishing a lack of any genuine
issue of material fact regarding the Muse Family’s knowing participation in the
scheme State Farm alleges.
The Muse Defendants also miss the mark with respect to their second
point, as to the materiality of the misrepresentations in Medical Wellness’s
claims forms. State Farm was prompted to issue payment to Medical Wellness
based on the forms Medical Wellness submitted. There is record evidence
showing that these forms sought payment for medical services that were
unlawfully rendered. Importantly, as shown by State Farm’s evidence, the
forms submitted require the medical provider to attest to the medical necessity
and lawfulness of the claim submission. This evidence, at a minimum,
establishes the materiality of the alleged misrepresentations.
Lastly, State Farm has submitted what appears to be uncontroverted
evidence that State Farm relied on the claims forms Medical Wellness
submitted in rendering payment. See Physicians Injury Care Ctr., 427 Fed.
App’x at 720 (finding reliance where the insurer’s legal analyst testified that the
insurer “only pays a claim for PIP benefits if a bill is submitted and that a claim
adjuster relies on the accuracy of the bill in processing the claim”). Indeed, the
Muse Defendants’ only response to State Farm’s showing regarding reliance is
to once again fall back on their position that none of the individual Muse
Family members themselves made any misrepresentative statements to State
Farm. As set forth above, such direct contact is not necessary so long as the
defendants knowingly participated in the fraudulent scheme. See Gonzalez,
404 Fed. App’x at 405 (“all knowing participants in a fraudulent scheme are
legally liable for the actions of an individual who acts to carry out the scheme.”)
B. The Muse Defendants fail to carry their burden of establishing their
entitlement to summary judgment on State Farm’s FDUTPA.
The Muse Defendants argue they are entitled to summary judgment on
State Farm’s FDUTPA claims because State Farm has not adduced evidence of
the necessary “consumer relationship” between State Farm and the Muse
Defendants. This argument is unavailing. Again, “it has long been the law in
Florida that in order to proceed against an individual using a FDUTPA violation
theory an aggrieved party must allege that the individual was a direct
participant in the improper dealings.” Ft. Myers Total Rehab Ctr., 657 F. Supp.
2d at 1288 (quotations omitted). State Farm has adduced abundant evidence
indicating that all four Muse Defendants were direct participants in the
“improper dealings.”
The Muse Defendants, like they did in response to State Farm’s motion
for summary judgment, again argue State Farm’s FDUTPA claims fail because
State Farm is not a “consumer.” For the same reasons as were set out above, in
section 3.C.(2), the Muse Defendants miss the mark. State Farm need not be a
“consumer,” as that term is defined by the statute, in order to prevail on a
FDUTPA claim.
Similarly, the Muse Defendants’ contention that State Farm’s claim fails
because they did not participate in “trade or commerce” with State Farm is
without merit. FDUTPA’s definition of “trade or commerce” encompasses the
provision of healthcare services. On its face, the definition of “trade or
commerce” includes the “providing . . . of any good or service . . . whether
tangible or intangible.” Fla. Stat. § 501.203(8). The definition of “trade or
commerce” is considered to be “quite broad.” Alvi Armani Med., Inc. v.
Hennessey, 629 F. Supp. 2d 1302, 1305 (S.D. Fla. 2008) (Lenard, J.). Further,
the Act itself requires its provisions to be “construed liberally to . . . protect the
consuming public and legitimate business enterprises from those who engage
in unfair methods of competition, or unconscionable, deceptive, or unfair acts
or practices in the conduct of any trade or commerce.” Fla. Stat. § 501.202(2).
And, to be sure, courts have not hesitated to allow insurers to pursue FDUTPA
claims under similar circumstances. See, e.g., Physicians Injury Care Ctr., 427
Fed. App’x at 723 (affirming jury verdict in favor of insurer on its FDUTPA
claims against a clinic, its medical director, and office manager); State Farm
Mut. Auto. Ins. Co. v. First Care Sol., Inc., 232 F. Supp. 3d 1257, 1268 (S.D. Fla.
2017) (Gayles, J.) (granting summary judgment in insurer’s favor against clinic
owner where the court found “[f]raudulent conduct in the context of billing for
PIP benefits qualifies as a deceptive act for purposes of FDUTPA”). In short, the
Muse Defendants’ attempt to show that they are entitled to summary judgment
on this basis falls flat.
C. The Muse Defendants fail to carry their burden of establishing their
entitlement to summary judgment on State Farm’s request for
declaratory relief.
The Muse Defendants contend State Farm has failed to show that they
are “owed nothing for services even accepting all of the allegations in the
amended complaint as true.” (Muse Defs.’ Mot. at 8.) To the extent the Muse
Defendants mean to argue that there is no genuine issue of material fact with
respect to State Farm’s request for declaratory relief, their position is
unfounded. As set forth above, the record evidence clearly reveals that the
Clinics billed State Farm for services unlawfully rendered. Florida law is clear
that, where bills are submitted to an insurer for services unlawfully rendered,
and therefore non-compensable, the insurer is entitled to a declaration that it
is not obligated to pay the outstanding invoices. Med. Serv. Ctr. of Fla., 103 F.
Supp. 3d at 1356 (granting declaratory relief on insurer’s motion for summary
judgment where insurer established the defendant clinics submitted bills for
services that were not lawfully provided) (Moore, C.J.). The Muse Defendants
are not entitled to summary judgment on State Farm’s request for declaratory
relief.
D. The Muse Defendants are not entitled to summary judgment “as to
certain undisputed matters.”
The Muse Defendants also list eleven “points” on which they seek
summary judgment. Many of the issues they raise have no bearing on whether
any of the Defendants are entitled to summary judgment on State Farm’s
claims. More importantly, the Muse Defendants do not supply even a hint of
legal authority for their position that summary judgment should be granted in
their favor on each of these “issues.” This alone is fatal to the Muse Defendants’
claims. See Brown, 2016 WL 8716482, at *5 (“Motions devoid of any legal
authority or a supporting memorandum of law are due to be denied or
stricken.”); c.f. N.L.R.B. v. McClain of Georgia, Inc., 138 F.3d 1418, 1422 (11th
Cir. 1998) (“Issues raised in a perfunctory manner, without supporting
arguments and citation to authorities, are generally deemed to be waived.”) If
the Defendants, represented by counsel, cannot be bothered to cite to legal
authority to support their own position, the Court will not endeavor to piece
together their argument for them.
5. The Court denies Dr. Lorites’s motion for summary judgment.
As set forth above, in section 3.D., the Court denies Dr. Lorites’s motion
to the extent it is based on the expiration of the applicable statute of limitations
period. Dr. Lorites also seeks summary judgment in his favor based on his
contention that State Farm “failed to establish that [he] acted contrary to [the]
requirements of ACHA or the Administrative Code in the administration of his
duties and responsibilities.” (Dr. Lorites’s Mot. at 6.) He does not elaborate on
this in any way except to recite a list of medical director responsibilities as set
forth by Florida Statutes. Dr. Lorites’s cursory submission in no way entitles
him to summary judgment.
6. State Farm’s motion to strike the exhibits Pain Relief has submitted
in opposition to State Farm’s motion for summary judgment is
moot.
The Court has granted State Farm’s motion for summary judgment
against Pain Relief. In doing so, in section 3.A., above, the Court disregarded
the three affidavits and discovery responses at issue in State Farm’s motion to
strike. (Pls.’ Mot. to Strike, ECF No. 239.) This renders State Farm’s motion to
strike, at least as it relates to the Court’s evaluation of State Farm’s motion for
summary judgment, moot. To the extent Pain Relief intends to rely on any of
these same documents during the trial of the remaining counts in this case,
State Farm’s motion to strike is denied without prejudice to State Farm’s
raising the issue anew should that be necessary.
7. Conclusion
As set forth above, the Court orders as follows:
A. State Farm’s motion for partial summary judgment (ECF No. 184) is
granted in part and denied in part;
B. The Muse Defendants’ motion for summary judgment is denied (ECF No.
172);
C. Dr. Lorites’s motion for summary judgment is denied (ECF No. 205);
and
D. State Farm’s motion is denied in part as moot and denied in part without
prejudice (ECF No. 239).
The remaining claims of common-law fraud against the Clinics, the Muse
Family, and Drs. Lorites and Goldstraj will proceed to trial as scheduled. Once
those claims have been resolved, State Farm can move for default judgments
against the defaulted medical directors.
The Clerk is directed to mail a copy of this order to the pro se
Defendants identified below.
Done and ordered, in Miami, Florida, on March 4, 2020.

(Robert N. Scola, Jr.
United States District Judge

Copy via U.S. mail to:
Dr. Hugo Goldstraj
3029 NE 188th Street, Apt. 305
Aventura, Florida 33180
Dr. Manuel Franco
13400 SW 83rd Avenue
Miami, FL 33156
Dr. Angel Carrasco
29224 SW 142 Place
Homestead, FL 33033
Dr. Jose Gomez-Cortes
3400 SW 130th Avenue
Miami, FL 33175

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10643481. Public record. Not legal advice.