UNITED STATES EX REL CLJ LLC v. << (2024)

ORDER GRANTING THIRD-PARTY DEFENDANT ACCOUNTABLE CARE OPTIONS, LLC'S MOTION TO DISMISS AMENDED THIRD-PARTY COMPLAINT [DE 109]

THIS CAUSE is before the Court upon Third-Party Defendant Accountable Care Options, LLC's (“Accountable Care” or “ACO”) Motion to Dismiss Amended Third-Party Complaint and Memorandum of Law (“Motion”) [DE 109]. Third-Party Plaintiff Doreen B. Halickman, as Personal Representative of the Estate of Jack F. Halickman, M.D. has filed a Response [DE 111],¹ and Accountable Care has filed a Reply [DE 112]. On January 22, 2024, the Court held an in-person hearing on the Motion. See DE 121. Thus, the matter is now ripe for review.

I. BACKGROUND

On August 28, 2023, Ms. Halickman filed a Third-Party Complaint Pursuant to 28 U.S.C. §§ 133 and 1367 [DE 103]. Subsequently, on September 21, 2023, Accountable Care filed a Motion to Dismiss Third-Party Complaint and Memorandum of Law [DE 105]. In response, Ms. Halickman filed an Amended Third-Party Complaint Pursuant to 28 U.S.C. §§ 133 and 1367 (“Amended Third-Party Complaint”) [DE 106]. Within the Amended Third-Party Complaint, Ms. Halickman alleges two causes of action—breach of contract (“Count 1”) and negligence (“Count 2”) against Accountable Care. [DE 106].

Accordingly, because Ms. Halickman's Amended Third-Party Complaint was filed within 21 days of the Motion to Dismiss pursuant to Federal Rule of Civil Procedure 15(a)(1)(B), and because Ms. Halickman was permitted to amend the Complaint once as a matter of course under Rule 15(a)(1), the Court denied Accountable Care Options’ initial Motion to Dismiss as moot. [DE 108]. Accountable Care then filed the instant Motion in response to the Amended Third-Party Complaint.

II. MOTION, RESPONSE, REPLY, AND HEARING

a. Accountable Care's Motion [DE 109]

As summarized by Accountable Care, Ms. Halickman “attempts to blame ACO for decedent Dr. Jack Halickman's fraudulent billing practices. She asserts two claims, lacks standing to assert either, and both are time-barred.” [DE 109 at 1]. Further, Ms. Halickman's “amended claims fare no better on their purported merits. Her amended claims are still premised on fabricated rights in contract and tort. Neither the federal regulations nor the agreements cited in the Amended Third-Party Complaint create any rights on which Halickman can sue.” Id. at 2. Thus, Accountable Care argues Ms. Halickman's claims should be dismissed with prejudice after two failed attempts at stating claims. Id.

More specifically, first, with respect to standing, Accountable Care argues that Dr. Halickman was “not a third-party beneficiary of the ACO Participating Provider Agreement” and that Ms. Halickman therefore lacks standing. Id. at 3. Citing the elements of a cause of action for the breach of a third-party beneficiary contract, Accountable Care asserts that Ms. Halickman cannot establish a clear or manifest intent that the Participating Provider Agreement primarily and directly benefits a third party. Id. at 4. Indeed, “[t]he contractual language on which [Ms.] Halickman relies does not evidence” clear or manifest intent. Id. According to Accountable Care, this is because the Participating Provider Agreement states that it “shall be interpreted in conjunction with the Master Agreement,” and because the Master Agreement was “for the sole benefit of the parties hereto (and their respective heirs, executors, administrators, successors, and assigns).” Id.

That being said, second, Accountable Care acknowledges that Ms. Halickman's “new standing theory” (after filing the Amended Third-Party Complaint) is that Dr. Halickman was the “sole administrator of FPIM”² and thus an “intended beneficiary of the Agreement.” Id. On this matter, Accountable Care notes that Ms. Halickman offers no definition of the word “administrator,” and Accountable Care argues that the word must be interpreted as a synonym for personal representative pursuant to section 731.201(28), Florida Statutes, because “administrator” is listed alongside “heirs,” “executors,” “successors,” and “assigns” under section 14.08 of the Master Agreement. Id. at 5.

Further, Accountable Care notes that “[Ms.] Halickman also doubles down on her theory that, because Dr. Halickman was the sole owner of FPIM for a time, she can disregard the fact that FPIM, and not Dr. Halickman, was the party to the Participating Provider Agreement.” Id. To this end, while Ms. Halickman “alleges that because Dr. Halickman was FPIM's sole member at the time of the relevant events” and “stands in the shoes of the entity,” Accountable Care argues that “the law of limited liability companies ․ grants no standing to an LLC member and reaffirms that any entitlement to funds ran in favor of FPIM, not Dr. Halickman.” Id.

And third, with respect to standing, Accountable Care argues that Ms. Halickman's “remaining third-party-beneficiary theory allegation”—“that [Dr.] ‘Halickman and ACO were the sole beneficiaries under the [Participating Provider] Agreement’ because the Agreement ‘was predicated on [Dr.] Halickman (and other providers) providing medical services on a per capita basis’ ”—is undermined by the Participating Provider Agreement itself. Id. at 6 (quoting DE 106 at ¶ 17).

Accountable Care next argues that Ms. Halickman's claims are “time-barred because [the] claims accrued no later than 2017.” Id. According to Accountable Care, “[t]he statute of limitations for [Ms.] Halickman's claims has run insofar as those claims are based on conduct alleged to have occurred, and causes of action that accrued, in 2014–2017,” as Ms. Halickman “first filed her breach of contract and negligence claims over five years later, in August 2023.” Id. at 7. Thus, because “Florida's statute of limitations applies to [Ms.] Halickman's state common law claims for breach of contract and negligence,” and because “the conduct giving rise to [Ms.] Halickman's claims allegedly occurred more than five years, and certainly more than four years, before the date of the original Third-Party Complaint was filed (August 28, 2023),” Accountable Care argues that both claims are time-barred. Id. at 7.

Moreover, to the extent that Ms. Halickman attempts to cure the time-bar through paragraphs 82 and 83 of the Amended Third-Party Complaint, Accountable Care argues that Ms. Halickman “must ․ choose between having standing and timely claims.” Id. at 7–8. In any event, Accountable Care notes that for a breach of contract claim, the statute of limitations runs from the time of the breach and that, the allegation that “ACO's alleged failure to stop Dr. Halickman's scheme caused him no damages until this lawsuit was filed does not bear on when the breach claim accrued.” Id. at 8–9. And as to negligence, Accountable Care argues that, “[w]hile [Ms.] Halickman makes a conclusory allegation or two to distinguish between the alleged breaches of contract and negligence, the conduct on which both claims are based is effectively the same, and thus occurred 2014–2017” and is time-barred. Id. at 9.

Next, as to the merits, Accountable Care argues that “[n]either the regulations nor [either] Agreement creates a cause of action.” Id. at 9. To this end, Accountable Care first argues that 42 CFR Part 425 does not create a private right of action. Id. Indeed, “[e]ven taking the allegations of the Third-Party Complaint as true, 42 CFR Part 425’s regulatory requirements are simply not [Ms.] Halickman's to enforce, so her claims must fail.” Id. at 10. Thus, Accountable Care maintains that “[b]ecause no right of action appears in 42 CF Part 425, and [because] none can exist as a matter of law, ․ the claims relying on a ‘breach’ of duties under 42 CFR Part 425 fail, and should be dismissed with prejudice.” Id. at 11.

Additionally, turning to Count 1, Accountable Care argues that Ms. Halickman's breach of contract claim fails, “regardless of whether [Ms.] Halickman relies on an alleged breach of non-existent duties under the regulations incorporated into the contract or purported requirements of ACO's Compliance Plan and Code of Conduct.” Id. As to her argument concerning breach of non-existent duties, Accountable Care notes that Ms. Halickman's reference to the specific subparts of the regulation are regulatory requirements “to become an accountable care organization, not duties an accountable care organization owes its members.” Id. And, as to the Compliance Plan and Code of Conduct, Accountable Care argues that it is “just that—a series of internal guidelines, and not binding obligations between particular parties. It is not a contract, and neither FPIM nor Dr. Halickman is a party to it.” Id. at 12.

Turning to Count 2, Accountable Care argues:

First, [Ms.] Halickman confusingly attempts to sue for negligence based on contractual duties. This is fundamentally improper. Second, she attempts to sue for a “duty to warn” arising from some unknown, unpled source. This is deficient. Third, she alleges negligence under 42 CFR 425.302(a)(2). This regulation creates no duty to support a negligence claim.

Id. With respect to the first argument, Accountable Care notes that a breach of contractual duty does not give rise to a negligence claim and that a negligence claim “should be dismissed when premised on a breach of a contractual duty.” Id. at 13. As to an alleged violation of a “non-specific independent duty to warn,” Accountable Care argues that the allegation that “ACO owed [Dr.] Halickman a duty to warn him as soon as they knew or should have known of his allegedly non-compliant billing practices” is insufficient and ill-defined, as Ms. Halickman identifies no source for such a claim. Id. And finally, under 42 CFR § 425.302(a)(2), Accountable Care argues that it is “a regulatory requirement” and “not a duty an accountable care organization owes to its participants.” Id. at 14.

b. Ms. Halickman's Response [DE 111]

Ms. Halickman first argues that Dr. Halickman is a third-party beneficiary, as “[t]he Master Agreement does not state that there are no third party beneficiaries; it states there are none except for specific enumerated exceptions, including the administrators of the parties.” [DE 111 at 2]. In this regard, Ms. Halickman argues:

In the present case, Third Party Plaintiff [Ms.] Halickman alleges that Dr. Halickman was a third-party beneficiary of the Master Agreement, pursuant to the plain language of the agreement, which states that administrators of the parties thereto are third party beneficiaries. ACO, instead of applying the plain meaning of the word administrator, instead argues that it is defined by statute; extrinsic evidence that the parties intended a different effect than the plain meaning of the written term. This is not allowed under the parol evidence rule, which was invoked by ACO in a merger clause (Art XIV Section 14.06 of the Master Agreement). Even if such evidence were allowed, when weighed against the evidentiary value of the plain language of the contract itself, in addition to many other, far more relevant statutes, the intent would be a factual question requiring submission to a jury.

Id. at 3.

Indeed, according to Ms. Halickman, “[u]nder Florida case law, the plain language meaning of the term, not ACO's offered references to a completely unrelated statute, is controlling of its interpretation.” Id. at 4. More specifically, Ms. Halickman argues that:

the plain meaning of the “administrator” of a clinic is the one who administrates it. That is, he takes charge of the day-to-day operations of the facility. Therefore, in this case, where ACO has placed a merger clause in their Agreement, this plain meaning of [sic] controls. Jack Halickman, as the person in charge of the day-to-day operations of FPIM was unquestionable [sic] that person, and is thus a third party beneficiary by the Master Agreement's terms.

Id. at 4–5. But even assuming “the applicability of extrinsic evidence of a contrary intent” were permissible, Ms. Halickman argues that “evidence of such contrary intent is extremely unpersuasive.” Id. at 5. In this regard, to the extent Accountable Care provided a definition of “administrator” from the Florida Probate Code (while this case does not involve probate), Ms. Halickman maintains that the definition of administrator from Chapter 408 (dealing with Health Care Administration) is more appropriate. Id. at 6. In fact, “[a] reasonable reader ․ of the Master Agreement would interpret the plain meaning of the word administrator in light of the context; but specifically the context of the contract itself and the negotiated agreement with ACO, not that of an extremely irrelevant statutory subsection in the Probate Code.” Id. at 8.

Next, Ms. Halickman addresses Accountable Care's argument that the breach of contract and negligence claims are time barred. Id. at 11. With respect to Ms. Halickman's breach of contract claim, she argues that, “[w]hile it is true that ․ breach of contract claims have a five (5) year statute of limitations, it remains the case that ACO's fraudulent concealment of their breach prevented Dr. Halickman from discovering such breaches until CLJ's Qui Tam action was filed and unsealed.” Id. And, Ms. Halickman argues that this fraudulent concealment tolls the running of the statute of limitations. Id.

As to negligence, Ms. Halickman contends the claim is not barred because “the claim[ ] w[as] not discovered until the filing and unsealing of CLJ's Qui Tam action.” Id. at 13. According to Ms. Halickman, “being a negligence claim, it accrued when Dr. Halickman was sued by CLJ and made aware of the allegations against him (and the negligence of ACO).” Id. Moreover, Ms. Halickman argues that ACO's “fraudulent concealment of any errors in Dr. Halickman's billing would toll the statute of limitations on this claim as well.” Id.

Turning to the merits, Ms. Halickman first argues that “ACO is and was obligated to honor its contractual obligations, and where the failure to do so created damages, it is liable.” Id. Indeed, “contracting parties can (and frequently do) bind themselves to obligations to obey the law, and these do render them liable to other contracting parties.” Id. at 14. Second, Ms. Halickman argues that the provisions of 42 CFR Part 425—which are incorporated into the contract—“are duties owed to Plaintiff, because a contract is an exchange of promises, even if ACO wishes to renege on these now.” Id. at 14–15. Further, Ms. Halickman argues that the Compliance Plan and Code of Conduct are contractual terms, as they, too, were incorporated into the contract. Id. at 15.

And finally, Ms. Halickman argues that negligence is adequately pled, as Florida law recognizes negligent failure to warn claims, which “can arise from a failure to warn of a breach of regulations.” Id. According to Ms. Halickman, “Florida Courts have long held that the violation of a statute may be utilized as evidence of negligence.” Id. Moreover, to the extent Accountable Care argues that no source of the duty to warn is identified, Ms. Halickman argues that “Dr. Halickman relied on ACO's assurances in forming his assumption that his billing was being done correctly, including ․ Richard Lucibella's certifying his billing statements for years.” Id. at 16.

c. Accountable Care's Reply [DE 112]

Accountable Care begins by arguing that it is Ms. Halickman's definition of “administrator” that is unreasonable and without any legal basis. [DE 112 at 2]. To the extent Ms. Halickman argues that administrator—as used in the Master Agreement—means one who administrates a clinic, “[i]t defies logic that the parties to the Master Agreement intended to bury the conferral of rights on the person who ‘administrate[d]’ FPIM in a provision titled ‘No Third-party Beneficiaries.’ ” Id. at 3. Indeed, “[w]hile [Ms.] Halickman apparently combed the Florida Statutes for a use of ‘administrator’ that supports her argument, ACO applied a basic canon of construction.” Id.

Next, with respect to the statute of limitations, Accountable Care argues Ms. Halickman's contention that “her untimely filing of the breach of contract and negligence claims should be excused because Dr. Halickman did not know that the federal government would or could assert claims based on his illegal billing practices ․ fails as a matter of law.” Id. at 5. To this end, Accountable Care notes that section 95.11(2)(b), Florida Statutes, does not contain a delayed discovery exception. Id. Moreover,

As to the negligence claim, [Ms.] Halickman contends that the claim “accrued when Dr. Halickman was sued by CLJ[.]” [DE 111 at 13]. This argument is at odds with the rest of the Response, where [Ms.] Halickman alleges a failure to warn or report that accrued, at the latest, in 2017, while Dr. Halickman was a purported “administrator” of FPIM. As noted in the Motion to Dismiss [DE 109 at 8], Dr. Halickman is only alleged to have “stood in the shoes of” FPIM through September 1, 2017 [DE 106 at ¶ 5]. Any claim of his which his estate could now prosecute must have accrued during that time for him to have standing, and that entire time period falls outside the four years preceding the filing of [Ms.] Halickman's claims. Per [Ms.] Halickman's own allegations, damages did not accrue at a time when Dr. Halickman “stood in the shoes of” FPIM, but instead several years later.

Id. at 5–6. And, Accountable Care argues that Ms. Halickman asserts no facts amounting to fraudulent concealment as to breach of contract, and that the Amended Third-Party Complaint contains “no allegations of fraudulent concealment.” Id.

Finally, as to the merits of the Third-Party Amended Complaint, Accountable Care argues that Ms. Halickman “attempts to transform singular references to the regulatory scheme of 42 CFR Part 425 into a full-fledged ‘exchange of promises’ where the contracts evidence no such intent.” Id. at 6. In this regard, “42 CFR Part 425’s regulatory requirements are not [Ms.] Halickman's to enforce [DE 109 at 10], as they do not create a duty running between ACO and Dr. Halickman.” Id. at 7.

Additionally, Accountable Care contends that Ms. Halickman “fails to identify an allegation of any duty independent of ACO's alleged contractual duties sufficient to maintain a negligence claim.” Id. This is because “a breach of a duty alleged to arise under contract does not give rise to a negligence claim, and a negligence claim premised on a contractual duty must be dismissed.” Id. at 8. Further, to the extent Ms. Halickman frames her negligence claim as a negligent failure to warn or report claim, Accountable Care argues that such claim also fails under Florida law, as the claim “requires some specified state-law duty.” Id. And, according to Accountable Care, Ms. Halickman “cites no authority permitting her to rely on alleged breaches of 42 CFR Part 425 as the basis of a state-law negligence claim.” Id.

d. January 22, 2024 Hearing

During the January 22, 2024 Hearing on Accountable Care's Motion to Dismiss, the parties largely repeated arguments presented in their papers. However, Ms. Halickman presented two theories of standing (one never before raised) and attempted to clarify her negligence claim.

Specifically, with respect to standing, as stated by Ms. Halickman's counsel:

Standing is granted in two different ways. One is as to the definition of “administrator.” My belief, that's a factual issue that should be decided by a jury, or at the very least decided at a motion for summary. I think our pleadings, four corners of the pleadings, properly plead that. But it goes to that particular definition.

And our argument is that this is a healthcare clinic. The context should be more in a healthcare clinic, which defines who the administrator is in a healthcare clinic.

The second argument, Your Honor, is the direct harm argument, which Silver Crown directly relay -- or directly identifies. The direct harm here was directly to Dr. Halickman. Hence, he's the one that's being sued saying that he filed false claims, even though those claims went to the benefit of FPIM and ultimately went to the benefit of I guess Lucibella by buying FPIM, but he suffered the direct harm, and his harm was unique. The harm was unique only to him. In other words, if he suffered direct harm, but that harm was not unique to him –

[DE 122 at 24–25]. In other words, Ms. Halickman again argued that she has standing because Dr. Halickman was the “administrator” of FPIM and was therefore a third-party beneficiary. Ms. Halickman also argued (for the first time at oral argument) that she has standing because Dr. Halickman suffered a “direct harm.”

Additionally, with respect to her negligence claim, Ms. Halickman stated that her negligence claim was a “negligent failure to warn” claim and a “failure to train [claim] ․ which goes hand in hand with the failure to warn.” Id. at 49–50.

III. ANALYSIS

Rule 8(a)(2) of the Federal Rules of Civil Procedure requires “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). The Supreme Court has held that “[w]hile a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the ‘grounds’ of his ‘entitlement to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citations omitted).

“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quotations and citations omitted). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. Thus, “only a complaint that states a plausible claim for relief survives a motion to dismiss.” Id. at 679. Pleadings, “because they are no more than conclusions, are not entitled to the assumption of truth.” Id. The Court must review the “well-pleaded factual allegations” and, assuming their veracity, “determine whether they plausibly give rise to an entitlement to relief.” Id. A plaintiff must, under Twombly’s construction of Rule 8, cross the line “ ‘from conceivable to plausible.’ ” Id. at 680 (citation omitted). When considering a motion to dismiss, the Court must accept all of the plaintiff's allegations as true in determining whether a plaintiff has stated a claim for which relief could be granted. See id. at 678.

In the instant case, Accountable Care's Motion is focused on standing, the statute of limitations, and the merits. The Court will address each aspect below.

a. Standing

“For a party to have standing to bring a lawsuit, it must have ‘(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.’ ” Muransky v. Godiva Chocolatier, Inc., 979 F.3d 917, 924 (11th Cir. 2020) (quoting Spokeo, Inc. v. Robins, 578 U.S. 330, 338 (2016)). The plaintiff bears the burden of establishing standing as the party invoking federal jurisdiction. Spokeo, Inc., 578 U.S. at 338. “While standing may be available to third-party beneficiaries of a contract, this designation is usually limited or precluded by the contract at issue, subject to applicable law.” Harnarrine v. Praetorian Ins. Co., No. 18-62848, 2019 WL 8508084, at *2 (S.D. Fla. Jan. 10, 2019). To this end, “[t]he question of whether, for standing purposes, a non-party to a contract has a legally enforceable right is a matter of state law.” AT&T Mobility, LLC v. Nat'l Ass'n for Stock Car Auto Racing, Inc., 494 F.3d 1356, 1366 (11th Cir. 2007). And, under Florida law, “[a] party seeking to enforce a contract as a third-party beneficiary must allege four elements: ‘(1) existence of a contract; (2) the clear or manifest intent of the contracting parties that the contract primarily and directly benefit the third party; (3) breach of the contract by a contracting party; and (4) damages to the third party resulting from the breach.’ ” Reconco v. Integon Nat'l Ins. Co., 312 So. 3d 914, 917 (Fla. 4th DCA 2021) (quoting Mendez v. Hampton Ct. Nursing Ctr., LLC, 203 So. 3d 146, 148 (Fla. 2016)).

As to the second element—the clear or manifest intent of the contracting parties that the contract primarily and directly benefit the third party—“[c]ontract interpretation is ‘a question of law’ to be decided by the court ‘by reading the words of a contract in the context of the entire contract and construing the contract to effectuate the parties’ intent.” Entourage Custom Jets, LLC v. Air One MRO, LLC, No. 18-22061, 2020 WL 2308320, at *2 (S.D. Fla. May 8, 2020) (quoting Feaz v. Wells Fargo Bank, N.A., 745 F.3d 1098, 1104 (11th Cir. 2014)). “Under Florida law, if the terms of a contract are clear and unambiguous, a court must interpret the contract in accordance with its plain meaning.” Id. (quoting Key v. Allstate Ins. Co., 90 F.3d 15466, 1549 (11th Cir. 1996) (alteration omitted)). In this regard, “[i]n determining the plainness or ambiguity of legal text, whether such text is found in statutes or contracts, Florida courts have recognized the ‘supremacy-of-text principle,’ which means that ‘[t]he words of a governing text are of paramount concern, and what they convey, in their context, is what the text means.” Florida Farm Bureau Gen. Ins. Co. v. Worrell, 359 So. 3d 890, 892 (Fla. 5th DCA 2023) (quoting Ham v. Portfolio Recovery Assocs., LLC, 308 So. 3d 942, 946–47 (Fla. 2020) (second alteration in original)).

Here, the Amended Third-Party Complaint contains the following allegations with respect to standing:

13. The Master Agreement states in Section 14.08, this Agreement is for the sole benefit of the parties hereto (AND their respective hers’ executors, administrators, successors, and assigns).

14. FPIM 3 was a party to the ACO Agreement.4

15. [Dr,] Halickman was the sole owner and administrator of FPIM.

16. Additionally, on information and belief, [Dr.] Halickman assigned his right to receive payment from Medicare programs to FPIM, “assignment of benefits”.

17. [Dr.] Halickman and ACO were the sole beneficiaries of the Agreement. The ACO Agreement was predicated on [Dr.] Halickman (and other providers) providing medical services on a per capita basis. If the services were less than an amount determined by the Center for Medicare Services a portion of the difference would be paid to [Dr.] Halickman and ACO.

18. As the single member at the time of ACO's misconduct, [Dr.] Halickman stands in the shoes of the entity for the purpose of standing to bring these claims.

19. [Dr.] Halickman was injured by ACO's breach of a variety of duties contained within the attached Agreements and explained more fully herein.

20. ACO's breach of the contractual agreements caused the alleged overbilling of Medicare by FPIM and [Dr.] Halickman.

21. [The] Halickman[s have] incurred tens of thousands of dollars in legal fees and will continue to incur legal fees as well as potential damages if Relator exceeds Seventy-Five Thousand ($75,000.00) Dollars.

[DE 106 at 2–3 ¶¶ 13–21] (footnote added). Further, Ms. Halickman alleges that on September 3, 2014, FPIM—through Dr. Halickman—joined ACO, LLC pursuant to an “ACO Participating Provider Agreement.” [DE 106 at 4 ¶ 25].

The ACO Participating Provider Agreement was to “be interpreted in conjunction with the Master Agreement and the Company's written Policies and Procedures, as they may be adopted or amended from time to time.” [DE 106 at 23]. The Master Agreement, in turn, contained the following section:

Section 14.08 No Third-party Beneficiaries. Except as provided in Article XIII, which shall be for the benefit of and enforceable by Covered Persons as described therein, this Agreement is for the sole benefit of the parties hereto (and their respective heirs, executors, administrators, successors and assigns) and nothing herein, express or implied, is intended to or shall confer upon any other Person, including any creditor of the Company, any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

[DE 106 at 51].

Now, Ms. Halickman argues that she clearly has standing because Section 14.08 of the Master Agreement provides third-party beneficiary standing to the parties (including FPIM) and their “respective heirs, executors, administrators, successors and assigns.” According to Ms. Halickman, Dr. Halickman was an “administrator” of FPIM. Therefore, the ACO Participating Provider Agreement (and the Master Agreement) expressed a clear or manifest intent to primarily and directly benefit Dr. Halickman. Accountable Care, on the other hand, argues that Ms. Halickman lacks standing because “heirs, executors, administrators, successors and assigns” are all terms involving a successor-type relationship. And, Accountable Care maintains that “administrator” must be read in its proper context. That is, Accountable Care argues the definition of administrator—when examined in its proper context involving terms with successor-type relationships—is more akin to a “personal representative.”

The Court finds it somewhat ironic, and perhaps telling, that Ms. Halickman relies on a section of the Master Agreement explicitly entitled “No Third Party Beneficiaries” to support her argument that Dr. Halickman is, in fact, a third party beneficiary—despite not being specifically named as such in the contract. To make her argument, Ms. Halickman takes the word “administrator” from that section of the contract and asserts that word necessarily includes Dr. Halickman. During the January 22, 2024 hearing on the Motion to Dismiss, Accountable Care's counsel pointed the Court to Morales v. Rotino, 27 A.D.3d 433 (N.Y. App. Div. 2006), as a persuasive case concerning the meaning of “administrator” when used in a similar context. In that case, a plaintiff was struck by an automobile driven by defendant Theresa Rotino, who had leased the automobile from Ford Motor Credit Company. Id. at 434. The plaintiff “executed and tendered to Rotino and her insurance carrier a general release which did not expressly name Ford as one of the released parties.” Id. The executed release “covered Rotino as well as her ‘heirs, executors, administrators, successors and assigns.” Id.

Due to the execution of the general release, Ford Motor Credit Company “moved to dismiss the complaint insofar as asserted against it ․ on the basis that the action could no longer be maintained because it was covered under the release as an administrator and assignee of the driver in accordance with the lease.” Id. However, after “converting that branch of its motion ․ to dismiss the complaint insofar as asserted against it on the ground that the action cannot be maintained because of release and settlement ․ into one for summary judgment, [the New York Supreme Court] denied that branch of the motion.” Id. Thereafter, on appeal, the New York appellate court noted that “[t]he Supreme Court correctly observed that the words ‘administrators’ and ‘assigns’ when used in the context of ‘heirs, executors, administrators, successors and assigns’ in the release plainly referred to an administrator of an estate and someone who may have stepped into Rotino's shoes in another capacity with respect to the plaintiff's action against her.” Id. at 435. As stated by the court, “[t]here is simply no merit to Ford's contention that the words ‘administrators’ and ‘assigns’ as used in the release must be read in conjunction with the automobile lease between Rotino and Ford to which the plaintiff was not even a party.” Id.

In the instant case, the Court finds Morales persuasive. Here, like in Morales, there is no merit to Ms. Halickman's contention that the word “administrator” means the administrator of a healthcare clinic when surrounded by “heirs,” “executors,” “successors,” and “assigns,” which all involve successor-type relationships. Thus, based on the plain language of Section 14.08 and upon examining the text in its context, the Court finds that the term “administrator” is unambiguous and refers to a successor-type relationship—not a healthcare clinic administrator. The Court therefore also finds that Ms. Halickman lacks standing as a third-party beneficiary under the ACO Participating Provider Agreement and Master Agreement, as there is no clear or manifest intent that the contracts primarily and directly benefit Dr. Halickman.

The Court notes that during the January 22, 2024 hearing, Ms. Halickman initially argued that the definition of “administrator” is a factual issue that should be decided by a jury or “at the very least decided [o]n a motion for summary [judgment].” [DE 122 at 24]. However, on this point, the Court specifically asked Ms. Halickman's counsel during the hearing if there was “any discovery that ․ has been taken or you would take that would in any way address the determination of what the word ‘administrator’ means in Section 1408 of the master agreement.” Id. at 40. Ms. Halickman's counsel responded “I don't believe so” and that “I don't believe there's anything that addressed that in this case.” Id. at 40–41. Thus, even assuming the term “administrator” were ambiguous (which it is not), and even assuming the Court were to later decide this matter at the summary judgment stage, Ms. Halickman has essentially represented that nothing would change between the motion to dismiss and the motion for summary judgment stages with respect to the meaning of “administrator” under Section 14.08. In any event, the Court rejects Ms. Halickman's definition of “administrator” based on the clear contract language and the four corners of the Amended Third-Party Complaint.

Additionally, as another basis for standing, Ms. Halickman argued—for the very first time—during the January 22, 2024 hearing, that she has standing because Dr. Halickman suffered a “direct harm.” [DE 122 at 24–25]. According to Ms. Halickman's counsel:

The direct harm here was directly to Dr. Halickman. Hence, he's the one that's being sued saying that he filed false claims, even though those claims went to the benefit of FPIM and ultimately went to the benefit of I guess Lucibella by buying FPIM, but he suffered the direct harm, and his harm was unique. The harm was unique only to him.

Id. at 25. As further stated by Ms. Halickman, “[t]he direct harm here was that he billed under his [N]PI. He's being sued now that he billed incorrectly. He's the one that will suffer a judgment.” Id.

In support of this belated, unbriefed, and unpled theory of standing, which Ms. Halickman's counsel stated was pled “very indirectly” in the Amended Third-Party Complaint, Ms. Halickman relies upon cases provided to the Court as part of a “Notice of Supplemental Authority” [DE 120]. More specifically, Ms. Halickman relies primarily upon Silver Crown Investments, LLC v. Team Real Estate Management, LLC, 349 F. Supp. 3d 1316 (S.D. Fla. 2018), for her “direct harm” standing theory. However, in Silver Crown, the court cited to Dinuro Investments, LLC v. Camacho, 141 So. 3d 731 (Fla. 3d DCA 2014), as “the controlling test for whether claims should be brought directly or derivatively.” Silver Crown, 349 F. Supp. 3d at 1326. In this regard, the Dinuro Investments court noted that a direct claim could be brought “only if (1) there is a direct harm to the shareholder or member such that the alleged injury does not flow subsequently from an initial harm to the company and (2) there is a special injury to the shareholder or member that is separate and distinct from those sustained by the other shareholders or members.” Id. (quoting Dinuro, 141 So. 3d at 739–40). The Court does not find these cases persuasive or controlling.

Simply stated, the Court questions how the cases cited pertaining to standing in Ms. Halickman's Notice of Supplemental Authority—which all involved whether an action could be brought directly or derivatively—are at all relevant to the issue of Ms. Halickman's alleged standing as a supposed third-party beneficiary. As aptly stated by Accountable Care's counsel during the hearing:

Now, this argument about direct harm. As Your Honor noted, it's not pled, but I think we're confusing concepts here. The direct harm cases relate to the difference between a derivative claim and a direct claim, but generally in the context of an LLC member suing the LLC.

In a derivative claim, a claim can be a member suing on behalf of the LLC, but usually the LLC appears on both sides of the caption because that's who's also getting sued. This is not that. They don't even claim this is that. That's what those cases relate to.

If Dr. Halickman has a claim, a direct claim, then I suppose he can assert it. That's effectively what he did here, though, and the problem is that his direct claim, besides this issue of the derivative versus direct argument not applying, took on the form of breach of contract and negligence. And we'll get into that. I don't want to get ahead of the arguments. But it's clearly not breach of contract when he's not a party to the contract, and that's what we're talking about right now.

So there's the negligence claim, as well, that we'll get to. But he cannot sue for direct harm under a contract to which he's a party unless he is a third-party beneficiary, and the only way he gets there is if the Court accepts a definition of “administrator” that somehow fits him in. And the only definition they've come up with, which they didn't plead, is this one from the healthcare administration statute in Florida, which, as previously discussed, wouldn't make sense here.

[DE 122 at 30–31].

The Court finds that Ms. Halickman's argument about “direct harm” does not support her assertion that she has standing to pursue her third-party claims in this case. Whether an action may be brought directly or derivatively has no bearing on whether Dr. Halickman was an intended third-party beneficiary to the contract at issue here and therefore allegedly has standing. As acknowledged by Ms. Halickman's counsel, “the direct harm analogy gives [Dr. Halickman] actual status. Not a derivative claim, but gives him the ability to sue based on a breach of that contract.” Id. at 27. Thus, Dr. Halickman still must have been a party to the contract or an intended third-party beneficiary. He is neither. Accordingly, even accepting Ms. Halickman's unpled argument that Dr. Halickman suffered a “direct harm” and therefore has standing, the Court finds and concludes that Ms. Halickman lacks standing under the ACO Participating Provider Agreement and the Master Agreement in this case. The Court therefore rejects this argument on the merits.

Additionally, the Court notes that Ms. Halickman never properly pled, raised, or briefed this argument, and only belatedly mentioned it at the oral argument hearing. Arguments presented for the first time at oral argument are deemed waived. See, e.g., In re Eigidi, 571 F.3d 1156, 1163 (11th Cir. 2009) (“Arguments not properly presented in a party's initial brief or raised for the first time in the reply brief are deemed waived.”); see also McFarlin v. Conseco Servs., LLC, 381 F.3d 1251, 1263 (11th Cir. 2004) (“A party is not allowed to raise at oral argument a new issue for review.”); Sunflower Condo. Ass'n v. Everest Nat'l Ins. Co., No. 19-CV-80743, 2020 WL 4501805, at *6 (S.D. Fla. Apr. 28, 2020), report and recommendation adopted, 2020 WL 5757085 (S.D. Fla. Sept. 28, 2020) (stating that a party “may not rely on an argument not raised in its initial summary judgment briefing”). Therefore, the Court also finds that Ms. Halickman failed to properly assert, and thereby waived, this direct harm standing argument. Thus, in addition to rejecting this “direct harm” argument on the merits, Ms. Halickman's waiver of this issue is an additional basis for this Court's granting of Accountable Care's Motion on lack of standing grounds.

b. Statute of Limitations & Merits

While the Court would ordinarily address the statute of limitations arguments and the merits, Ms. Halickman's lack of standing in this case is dispositive. Ms. Halickman cannot pursue her claims as she lacks standing. Therefore, the Court finds no need to reach the parties’ arguments concerning the statute of limitations and the merits in this case.

IV. CONCLUSION

In light of the foregoing, it is hereby ORDERED AND ADJUDGED that Third-Party Defendant Accountable Care Options LLC's Motion to Dismiss Amended Third-Party Complaint [DE 109] is GRANTED based on a lack of standing. Accordingly, Ms. Halickman's Amended Third-Party Complaint [DE 106] is DISMISSED WITHOUT PREJUDICE. See Stalley ex rel. U.S. v. Orlando Reg'l Healthcare Sys., Inc., 524 F.3d 1229, 1232 (11th Cir. 2008) (stating that standing is jurisdictional, and that a lack of standing has the same effect as dismissal for lack of subject matter jurisdiction).

ORDERED and ADJUDGED in Chambers at West Palm Beach, Palm Beach County, Florida, this 29th day of February 2024.

FOOTNOTES

1.   Ms. Halickman also filed a Notice of Supplemental Authority at DE 120. For purposes of clarity, the Court will refer to the Defendant/Third Party Plaintiff Doreen B. Halickman as “Ms. Halickman” and will refer to her deceased husband Jack F. Halickman, M.D. as “Dr. Halickman”.

2.   FPIM stands for Family Practice & Internal Medicine of the Palm Beaches, LLC. [DE 106 at 2 ¶ 4].

3.   The Court notes that FPIM stands for Family Practice & Internal Medicine of the Palm Beaches, for which Dr. Halickman was the “single member and One Hundred (100%) owner.” [DE 106 at 2 ¶¶ 4–5].

4.   The ACO Agreement is undefined in the Amended Third-Party Complaint. However, it appears to be a reference to the ACO Participating Provider Agreement.

WILLIAM MATTHEWMAN, United States Magistrate Judge