United States District Court, D. Maryland
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY et al. Plaintiff,
SLADE HEALTHCARE, INC., et al. Defendants.
L. Hollander United States District Judge
State Farm Mutual Automobile Insurance Company (“State
Farm Mutual”) and State Farm Fire and Casualty Company
(“State Farm Fire”) (collectively, “State
Farm”) filed suit against twenty-three defendants,
alleging fraud and unjust enrichment in connection with
medical treatment provided to individuals injured in motor
vehicle accidents. These individuals were eligible for so
called “no-fault benefits” from State Farm under
Maryland's personal injury protection law. ECF 1
(“Complaint”). State Farm seeks compensatory damages
as well as a declaratory judgment that it need not pay
outstanding medical claims during the pendency of this suit.
The 315-paragraph Complaint is supported by 40 exhibits.
See ECF 1-2 to ECF 1-41. Jurisdiction is founded on
diversity of citizenship. See 28 U.S.C. § 1332;
ECF 1, ¶ 13.
defendants consist of four related groups, who allegedly
acted in concert. The first group is composed of six medical
clinics: (1) Mondawmin Medical Center, Inc.
(“Mondawmin”); (2) Alameda Medical Center, Inc.;
(3) Mount Clare Medical Center, Inc.; (4) Erdman Medical
Center, Inc.; (5) Liberty Medical & Injury Center, Inc.;
and (6) Eastside Medical Center, Inc.
(“Eastside”) (collectively, the
“Clinics”). ECF 1, ¶¶ 17-36. The second
group consists of twelve physicians and chiropractors who
provided treatment and services for the patients of the
Clinics: Ronald Mukamal, M.D.; Michael Mozes Enoch, M.D.;
Patricia Bey, M.D.; Nava Bazzazieh, D.C.; Randy Hallman,
D.C.; Timothy Owen, D.C.; Wayne Sodano, D.C.; Lance Miller,
D.C.; Tiffany Butler, D.C.; Ekele Enyinnaya, D.C.; Scot
Kampmann, D.C.; and Stephen Doyle, D.C. (collectively, the
“Providers”). Id. ¶¶ 37-53.
third group comprises four of the officers and directors of
the Clinics: Yevgeniy Barg; Mikhail Podinovsky (also known as
Michael Podin); Alexander Morin; and Elina Morin
(collectively, the “Owners”). Id.
¶¶ 54-58. They allegedly designed and directed the
fraudulent scheme. Id. ¶ 8. The remaining
defendant is Slade Healthcare, Inc. (“Slade”),
whose website advertises the Clinics' services and the
Providers' medical background. Id. ¶¶
49-53; see, e.g., id. ¶¶ 37-39.
Slade allegedly recruited and directed patients to the
Clinics. Id. ¶ 8.
section of the suit titled “Causes of Action, ”
plaintiff sets forth eighteen claims for relief. See
ECF 1 at 68-85. They include, multiple claims for common law
fraud, unjust enrichment, and declaratory judgment.
Clinics, Owners, and Slade (ECF 43) and the Providers (ECF
52) answered in part and countersued, which they subsequently
amended. ECF 65 (the Clinics, Owners, and Slade's Amended
Counterclaim); ECF 66 (the Providers' Amended
Counterclaim) (collectively, the “Amended
Counterclaim”). The Amended Counterclaims allege
defamation (ECF 65, ¶¶ 25-32; ECF 66, ¶¶
25-32); tortious interference with prospective business
advantage (ECF 65, ¶¶ 33-41; ECF 66, ¶¶
33-41); and civil conspiracy. ECF 65, ¶¶ 42-46; ECF
66, ¶¶ 42-46.
addition, the Clinics, Owners, and Slade jointly moved to
dismiss under Fed.R.Civ.P. 12(b)(6) (ECF 44), supported by a
memorandum of law (ECF 44-1) (collectively, the “Clinic
Motion”) and exhibits. See ECF 44-2 to ECF
44-3. They seek dismissal of State Farm's declaratory
judgment claims and claims of fraud and unjust enrichment as
to claim payments made by State Farm prior to December 14,
2014. ECF 44-1. However, as to the counts of fraud and unjust
enrichment, these defendnts do not assert that the Complaint
fails to state a claim.
to Rule 12(b)(6), the Providers have also moved to dismiss
(ECF 55), supported by a memorandum of law. ECF 55-1
(collectively, the “Provider Motion”). Like the
Clinics, Owners, and Slade, the Providers seek dismissal of
State Farm's declaratory judgment claims and claims of
fraud and unjust enrichment as to payments made prior to
December 14, 2014. ECF 55-1. In addition, the Providers seek
dismissal of all unjust enrichment claims, but they do not
seek dismissal of all the fraud claims. Id.
Farm opposes the Clinic Motion. ECF 68. The Clinics, Owners,
and Slade replied (ECF 71) and submitted additional exhibits.
ECF 71-1 to ECF 71-10. State Farm also opposes the Provider
Motion. ECF 68. The Providers replied. ECF 72. In addition,
the Clinics, Owners, and Slade filed a letter (ECF 88)
notifying the Court of a recent decision issued by Judge
Catherine Blake in State Farm Mut. Auto. Ins. Co. v.
Carefree Land Chiropractic, LLC, CCB-18-1279, 2018 WL
6514797 (D. Md. Dec. 11, 2018). State Farm responded. ECF 89.
part, State Farm has filed a motion to dismiss the Amended
Counterclaim (ECF 69), pursuant to Rule 12(b)(6), supported
by a memorandum of law (ECF 69-1) (collectively, the
“State Farm Motion”) and exhibits. ECF 69-2 to
ECF 69-4. The defendants jointly oppose the State Farm Motion
(ECF 77) and State Farm has replied. ECF 81.
hearing is necessary to resolve the motions. See
Local Rule 105.6. For the reasons set forth below, I shall
deny the Clinic Motion and the Provider Motion and grant the
State Farm Motion.
dispute concerns alleged fraud with regard to thousands of
medical claims submitted to State Farm in connection with
treatment rendered by defendants to patients who had motor
vehicle insurance through State Farm. The Providers and
Clinics provide chiropractic and rehabilitative medical
services at the Clinics. Slade maintains a website that
“advertises the services provided by the Clinics and
provides prospective patients with phone numbers they can
call to make appointments at any of Slade's
locations.” ECF 1, ¶ 51 Pursuant to Maryland's
personal injury protection law (the “PIP” law),
Md. Code (2017 Repl. Vol., 2018 Supp.), §
19-505(a)(1)-(3) of the Insurance Article
(“Ins.”), a motor vehicle liability insurer must
provide coverage for the medical expenses of persons involved
in motor vehicle accidents. Ins. § 19-505(a)(1)-(3)
provides, in part: “[E]ach insurer that issues, sells,
or delivers a motor vehicle liability insurance policy in the
State shall provide coverage for  medical, hospital, and
disability benefits” to the named insured, any family
member residing in the insured's household, any
individual injured while using the insured motor vehicle with
the permission of the named insurer, any individual injured
while in the insured motor vehicle, or any individual injured
in an accident involving the insured motor vehicle while a
pedestrian or operating an animal-operated vehicle or a
bicycle. See ECF 1, ¶ 59.
benefits cover at least $2, 500 of “all reasonable and
necessary [medical] expenses that arise from a motor vehicle
accident and that are incurred within 3 years after the
accident[.]” Ins. § 19-505(b)(2)(i); ECF 1, ¶
60. Notably, these benefits are “payable without regard
to . . . the fault or nonfault of the named insured or the
recipient of benefits in causing or contributing to the motor
vehicle accident[.]” Id. § 19-507(a)(1);
ECF 1, ¶ 61. Such benefits are often referred to as
“no fault” benefits.
such as State Farm, must “make all payments of [these]
benefits [to covered individuals, such as accident victims] .
. . periodically as claims for the benefits arise and within
30 days after the insurer receives satisfactory proof of
claim.” Ins. § 19-508(a); ECF 1, ¶ 62. If an
insurer fails to make timely payment, it must pay the
claimant “simple interest” on the overdue
payments “at the rate of 1.5% per month.” Ins.
§ 19-508(c); Code of Maryland Regulations 31.15.07.06.
Farm alleges that the defendants are engaged in a fraudulent
medical billing scheme.
to plaintiff, from at least April 2010 through the suit's
commencement on December 14, 2017, the Clinics and Providers
have provided treatment and submitted medical bills that
“exploit patients' insurance benefits rather than
address the patients' true unique needs.”
Id. ¶¶ 7, 17. In particular, State Farm
asserts that the medical bills and supporting documentation
are “the product of a fraudulent, predetermined
treatment protocol (the “Protocol”) provided by
the Clinics and Providers to accident victims. Id.
¶ 3. According to State Farm, the Protocol is intended
(a) enable the Defendants to fully exploit and collect the
patients' No-Fault Benefits, which were typically $2,
500; (b) not refer the patients to any other health care
provider for any other reason, including diagnostic testing
(e.g., x-rays, MRIs), physical therapy, or consultations by
physicians such as orthopedists or neurologists, to avoid
potentially having to share the patients' No-Fault
Benefits; and (c) keep the total medical expenses to less
than $6, 000 to “fly under the radar” of, and
encourage settlements by, the insurance companies to which
claims for payment are made and thereby incentivize the
patients' lawyers (“PI Attorneys”) to refer
more clients to the Defendants.
State Farm alleges that the Protocol involves several steps:
(1) an initial examination that is intended not to diagnose
patients properly and design a treatment plant, but to report
“substantially similar findings to justify a
predetermined course of treatment;” (2) a treatment
plan consisting of “substantially the same three or
more modalities, plus chiropractic manipulations, provided to
almost every patient on almost every visit, regardless of the
unique circumstances and needs of each patient, to support at
least four separate charges for each visit;” (3)
patient discharge from treatment when the defendants'
charges total $6, 000 or less, regardless of the
patient's condition; and (4) submission of documentation
to State Farm representing that the examinations and
treatments were medically necessary. Id. ¶ 4.
Protocol also “involves the absence of patient
referrals for consultations with any other medical
professionals . . . who have expertise in diagnosing and
treating injuries that the patients might actually have, or
to any other providers for diagnostic testing . . ., which
might be necessary to diagnose and arrive at an appropriate
treatment plan for injuries that patients might actually
have.” Id. ¶ 5. In State Farm's view,
such referrals would be in the best interest of some
patients, but against the financial interest of defendants,
“because any such referrals would likely deplete or
exhaust the No-Fault Benefits available to the Defendants if
those benefits are also owed to other providers.”
to the Complaint, each of the participants (the Owners, the
Clinics, Slade, and the Providers) “had a critical role
in the scheme, with each needing the others to successfully
carry out and profit from the scheme.” Id.
¶ 8. State Farm claims that the Owners “through
their overlapping ownership interests and control of Slade
and the Clinics, were able to design, direct, and oversee the
implementation of the Predetermined Treatment Protocol at the
Clinics.” Id. Slade “recruited and
funneled to the respective Clinics patients who were the
lifeblood of and essential to the economic success of the
scheme by advertising the Clinics' services, obtaining
information from prospective patients online and through a
toll-free number, and arranging appointments for the
prospective patients at the respective Clinics.”
Id. And, the Providers “were necessary to the
success of the scheme because the laypersons who owned Slade
and the Clinics could not prescribe and provide any of the
goods and professional services.” Id. In other
words, the Providers rendered the treatment that was the
subject of the fraudulent bills submitted to State Farm.
Farm also asserts that the Clinics and Providers treated
patients who were in staged accidents and therefore not
actually injured. Id. ¶ 191. The Complaint
alleges staged accidents occurring on five separate dates
between November 13, 2011 and March 24, 2016. Id.
¶¶ 191-227. After each staged accident, at least
some of the purported accident victims sought care from the
Clinics and Providers. Id. ¶¶ 196-99,
211-214, 221, 224-27. State Farm alleges that even though
these individuals “could not have been injured because
they were not in actual accidents, ” they
“received the same Predetermined Treatment Protocol as
the other patients at the Clinics.” Id. ¶
noted, defendants have lodged counterclaims against State
Farm for defamation (ECF 65, ¶¶ 25-32); tortious
interference with prospective business advantage and economic
and business relationships (id. ¶¶ 33-41);
and civil conspiracy. Id. ¶¶ 42-46. They
allege, inter alia, that State Farm has falsely
“notified third parties expressly and by innuendo of
its dishonesty and fraud claims about the Medical Clinics,
their owners, and the Treatment Providers who provide medical
services to injured accident victims at the Medical
Clinics.” Id. ¶ 12.
they maintain that State Farm has sued them as part of
“a nationwide scheme targeting medical providers
treating lower income, minority and immigrant accident victim
patients who live in urban areas[.]” ECF 65, ¶ 1.
State Farm, they claim, creates these “manufactured and
knowingly false accusations of fraud” to eliminate
medical providers, like the Clinics and Providers, “as
sources of available treatment for urban lower income,
minority, and immigrant accident victims, and to dramatically
drive down medical and bodily injury payments in auto
accident claims submitted to State Farm across the
county.” Id. ¶¶ 1-2, 7.
to the Amended Counterclaim, State Farm has “proclaimed
that it will not pay any future claims for medical
treatment” provided by the Clinics. Id. ¶
16. And, it has allegedly told accident victims and third
parties that it is denying the medical treatment claims
because (1) “State Farm has filed a lawsuit
against” the Clinics and Providers, id. ¶
15, and (2) the Clinics, Providers, and Owners “have
[engaged] and are engaging in fraud and dishonesty.”
Id. ¶ 17. The counterclaimants allege that the
insurer is “publishing” these claims “for
the purpose of deterring injured accident victims from
obtaining medical treatment at the Medical Clinics.”
Id. Moreover, State Farm has allegedly told accident
victims and their attorneys that it is rejecting
“medical treatment expense claims if the medical
expenses relate to medical treatment provided” by the
Providers or Clinics. Id. ¶ 23. Further,
defendants assert that State Farm has acted with
“malice and intent to injure” them. Id.
counterclaimants do not clearly state in their Amended
Counterclaim whether these statements were made orally or in
writing. But, they refer to “oral statements” in
their opposition to the State Farm Motion. See,
e.g., ECF 77 at 15, 17. Therefore, I shall assume that
the statements referenced above were made orally.
addition, the counter-plaintiffs assert that State Farm has
sent claim denial letters to various persons alerting them to
the ongoing litigation, “so that current and future
patients and their and other lawyers will know the details of
State Farm's defamatory . . . statements . . . and will
not obtain treatment at and/or refer patients to the Medical
Clinics in the future.” ECF 65, ¶ 23. They also
submitted as an exhibit a copy of a claim letter denial. ECF
69-3 at 2-3. In relevant part, the letter states,
id. at 2: “At this time, State Farm . . . is
denying payment of these bill(s) because the matters giving
rise to the charges are at issue in a pending civil lawsuit
between East Side Medical Center and State Farm.”
Additional facts are included in the Discussion.
Standard of Review
defendant may test the legal sufficiency of a complaint by
way of a motion to dismiss under Rule 12(b)(6). In re
Birmingham, 846 F.3d 88, 92 (4th Cir. 2017); Goines
v. Valley Cmty. Servs. Bd., 822 F.3d 159, 165-66 (4th
Cir. 2016); McBurney v. Cuccinelli, 616 F.3d 393,
408 (4th Cir. 2010), aff'd sub nom.,
McBurney v. Young, 569 U.S. 221 (2013); Edwards
v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999).
A Rule 12(b)(6) motion constitutes an assertion by a
defendant that, even if the facts alleged by a plaintiff are
true, the complaint fails as a matter of law “to state
a claim upon which relief can be granted.” Whether a
complaint states a claim for relief is assessed by reference
to the pleading requirements of Fed.R.Civ.P. 8(a)(2). That
rule provides that a complaint must contain a “short
and plain statement of the claim showing that the pleader is
entitled to relief.” The purpose of the rule is to
provide the defendants with “fair notice” of the
claims and the “grounds” for entitlement to
relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544,
survive a motion under Fed.R.Civ.P. 12(b)(6), a complaint
must contain facts sufficient to “state a claim to
relief that is plausible on its face.”
Twombly, 550 U.S. at 570; see Ashcroft
v. Iqbal, 556 U.S. 662, 684 (2009) (citation omitted)
(“Our decision in Twombly expounded the
pleading standard for ‘all civil actions' . . .
.”); see also Willner v. Dimon, 849 F.3d 93,
112 (4th Cir. 2017). But, a plaintiff need not include
“detailed factual allegations” in order to
satisfy Rule 8(a)(2). Twombly, 550 U.S. at 555.
Moreover, federal pleading rules “do not countenance
dismissal of a complaint for imperfect statement of the legal
theory supporting the claim asserted.” Johnson v.
City of Shelby, Miss., 574 U.S., 135 S.Ct. 346, 346
(2014) (per curiam).
the rule demands more than bald accusations or mere
speculation. Twombly, 550 U.S. at 555; see
Painter's Mill Grille, LLC v. Brown, 716 F.3d 342,
350 (4th Cir. 2013). If a complaint provides no more than
“labels and conclusions” or “a formulaic
recitation of the elements of a cause of action, ” it
is insufficient. Twombly, 550 U.S. at 555. Rather,
to satisfy the minimal requirements of Rule 8(a)(2), the
complaint must set forth “enough factual matter (taken
as true) to suggest” a cognizable cause of action,
“even if . . . [the] actual proof of those facts is
improbable and . . . recovery is very remote and
unlikely.” Twombly, 550 U.S. at 556 (internal
quotation marks omitted).
reviewing a Rule 12(b)(6) motion, a court “must accept
as true all of the factual allegations contained in the
complaint” and must “draw all reasonable
inferences [from those facts] in favor of the
plaintiff.” E.I. du Pont de Nemours & Co. v.
Kolon Indus., Inc., 637 F.3d 435, 440 (4th Cir. 2011)
(citations omitted); see Semenova v. MTA, 845 F.3d
564, 567 (4th Cir. 2017); Houck v. Substitute Tr. Servs.,
Inc., 791 F.3d 473, 484 (4th Cir. 2015); Kendall v.
Balcerzak, 650 F.3d 515, 522 (4th Cir. 2011), cert.
denied, 565 U.S. 943 (2011). But, a court is not
required to accept legal conclusions drawn from the facts.
See Papasan v. Allain, 478 U.S. 265, 286 (1986).
“A court decides whether [the pleading] standard is met
by separating the legal conclusions from the factual
allegations, assuming the truth of only the factual
allegations, and then determining whether those allegations
allow the court to reasonably infer” that the plaintiff
is entitled to the legal remedy sought. A Society Without
a Name v. Virginia, 655 F.3d 342, 346 (4th. Cir. 2011),
cert. denied, 566 U.S. 937 (2012).
ordinarily do not “‘resolve contests surrounding
the facts, the merits of a claim, or the applicability of
defenses'” through a Rule 12(b)(6) motion.
Edwards, 178 F.3d at 243 (quoting Republican
Party v. Martin, 980 F.2d 943, 952 (4th Cir. 1992)).
However, “in the relatively rare circumstances where
facts sufficient to rule on an affirmative defense are
alleged in the complaint, the defense may be reached by a
motion to dismiss filed under Rule 12(b)(6).”
Goodman v. Praxair, Inc., 494 F.3d 458, 464 (4th
Cir. 2007) (en banc); accord Pressley v. Tupperware Long
Term Disability Plan, 553 F.3d 334, 336 (4th Cir. 2009).
Because Rule 12(b)(6) “is intended [only] to test the
legal adequacy of the complaint, ” Richmond,
Fredericksburg & Potomac R.R. Co. v. Forst, 4 F.3d
244, 250 (4th Cir. 1993), “[t]his principle only
applies . . . if all facts necessary to the affirmative
defense ‘clearly appear[ ] on the face of the
complaint.'” Goodman, 494 F.3d at 464
(quoting Forst, 4 F.3d at 250) (emphasis added in
when a defendant moves to dismiss a complaint under Rule
12(b)(6), courts are limited to considering the sufficiency
of allegations set forth in the complaint and the
‘documents attached or incorporated into the
complaint.'” Zak v. Chelsea Therapeutics
Int'l, Ltd., 780 F.3d 597, 606 (4th Cir. 2015)
(quoting E.I. du Pont de Nemours & Co., 637 F.3d
at 448). The court “may not consider any documents that
are outside of the complaint, or not expressly incorporated
therein . . . .” Clatterbuck v. City of
Charlottesville, 708 F.3d 549, 557 (4th Cir. 2013).
under limited circumstances, when resolving a Rule 12(b)(6)
motion, a court may consider documents beyond the complaint
without converting the motion to dismiss to one for summary
judgment. Goldfarb v. Mayor & City Council of
Baltimore, 791 F.3d 500, 508 (4th Cir. 2015). In
particular, a court may properly consider documents that are
“explicitly incorporated into the complaint by
reference and those attached to the complaint as
exhibits.” Goines, 822 F.3d at 166 (citation
omitted); see also Six v. Generations Fed. Credit
Union, 891 F.3d 508, 512 (4th Cir. 2018); U.S. ex
rel. Oberg v. Pa. Higher Educ. Assistance Agency, 745
F.3d 131, 136 (4th Cir. 2014); Anand v. Ocwen Loan
Servicing, LLC, 754 F.3d 195, 198 (4th Cir. 2014);
Am. Chiropractic Ass'n v. Trigon Healthcare,
Inc., 367 F.3d 212, 234 (4th Cir. 2004), cert.
denied, 543 U.S. 979 (2004); Phillips v. LCI
Int'l Inc., 190 F.3d 609, 618 (4th Cir. 1999).
“before treating the contents of an attached or
incorporated document as true, the district court should
consider the nature of the document and why the plaintiff
attached it.” Goines, 822 F.3d at 167 (citing
N. Ind. Gun & Outdoor Shows, Inc. v. City of S.
Bend, 163 F.3d 449, 455 (7th Cir. 1998)). Of import
here, “[w]hen the plaintiff attaches or incorporates a
document upon which his claim is based, or when the complaint
otherwise shows that the plaintiff has adopted the contents
of the document, crediting the document over conflicting
allegations in the complaint is proper.”
Goines, 822 F.3d at 167. Conversely, “where
the plaintiff attaches or incorporates a document for
purposes other than the truthfulness of the document, it is
inappropriate to treat the contents of that document as
may also “consider a document submitted by the movant
that [is] not attached to or expressly incorporated in a
complaint, so long as the document was integral to the
complaint and there is no dispute about the document's
authenticity.” Goines, 822 F.3d at 166
(citations omitted); see also Woods v. City of
Greensboro, 855 F.3d 639, 642 (4th Cir. 2017), cert.
denied, U.S., 138 S.Ct. 558 (2017); Oberg, 745
F.3d at 136; Kensington Volunteer Fire Dep't. v.
Montgomery Cty., 684 F.3d 462, 467 (4th Cir. 2012). To
be “integral, ” a document must be one
“that by its ‘very existence, and not the
mere information it contains, gives rise to the legal
rights asserted.'” Chesapeake Bay Found., Inc.
v. Severstal Sparrows Point, LLC, 794 F.Supp.2d 602, 611
(D. Md. 2011) (citation omitted) (emphasis in original).
See also Fed. R. Civ. P. 10(c) (“A copy of a
written instrument that is an exhibit to a pleading is a part
of the pleading for all purposes.”).
addition, “a court may properly take judicial notice of
‘matters of public record' and other information
that, under Federal Rule of Evidence 201, constitute
‘adjudicative facts.'” Goldfarb, 791
F.3d at 508; see also Tellabs, Inc. v. Makor Issues &
Rights, Ltd., 551 U.S. 308, 322 (2007); Katyle v.
Penn Nat'l Gaming, Inc., 637 F.3d 462, 466 (4th Cir.
2011), cert. denied, 565 U.S. 825 (2011);
Philips v. Pitt Cty. Mem. Hosp., 572 F.3d 176, 180
(4th Cir. 2009). However, under Fed.R.Evid. 201, a court may
take judicial notice of adjudicative facts only if they are
“not subject to reasonable dispute, ” in that
they are “(1) generally known within the territorial
jurisdiction of the trial court or (2) capable of accurate
and ready determination by resort to sources whose accuracy
cannot reasonably be questioned.” State Farm submitted
40 exhibits with its Complaint. These include lists of
medical claims for services provided by the Clinics and
Providers (ECF 1-2 to ECF 1-20); for each Clinic, exemplar
reports of initial chiropractic and medical doctor
examinations (ECF 1-21 to 1-32); deposition transcripts (ECF
1-33 to ECF 1-38); an investigator report (ECF 1-39); and the
complaint (ECF 1-40) and docket in a different suit (ECF
1-41). Because these exhibits were submitted with the
Complaint, and are incorporated in it, I may consider them
without converting the State Farm Motion to one for summary
Clinics, Owners, and Slade attach two exhibits to their
Motion: a transcript of a deposition (ECF 44-2) and a
Maryland Insurance Administration bulletin (ECF 44-3).
Because the transcript is part of the same deposition (ECF
1-33) that plaintiff “explicitly incorporated into the
complaint by reference and . . . attached to the complaint,
” the document is integral and the Court may consider
it as to defendants' motions to dismiss. Zak,
780 F.3d at 606 (internal quotation omitted). Although the
bulletin is not integral to the Complaint, the Court may take
judicial notice of it. See Philips v. Pitt Cty. Mem'l
Hosp., 572 F.3d 176, 180 (4th Cir.2009) (“In
reviewing a Rule 12(b)(6) dismissal, we may properly take
judicial notice of matters of public record.”).
their reply, the Clinics, Owners, and Slade also submitted an
order (ECF 71-1) in a different suit brought by State Farm,
excerpts from complaints in several suits filed by State Farm
(ECF 71-3 to 71-10), and a table summarizing those
complaints. ECF 71-2. I may take judicial notice of the order
and complaints as they are matters of public record. The
table is neither integral to the Complaint nor a matter of
public record. Accordingly, I shall not consider it in the
context of this Memorandum Opinion.
Farm, as counter-defendant, attached to its motion to dismiss
two exhibits and a sworn declaration in support of their
authenticity. ECF 69-2. The first is a claim denial letter
(ECF 69-3 at 2-3), and the second is an explanation of
benefits (ECF 69-3). The counter-plaintiffs also submitted a
claim denial letter (ECF 77-1 at 2) and an explanation of
benefits (ECF 77-1 at 3-6). The claim denial letters are
virtually the same. Compare ECF 69-3 at 2-3
with ECF 77-1 at 2.
the claim denial letters and explanations of benefits were
referenced in the Amended Counterclaim as a basis for the
defamation and tortious interference claims, they are
integral to the suit. See Goldfarb, 791 F.3d at 508.
Therefore, I may consider them as to the State Farm Motion.
Farm also attached a court order (ECF 81-1) in an unrelated
suit against parties not named that it brought. Although it
is not integral to the Amended Counterclaim, the Court may
take judicial notice of it. See Philips, 572 F.3d at
180. However, “these facts [must be] construed in the
light most favorable” to the non-movant.
Clatterbuck, 708 F.3d at 557.
Choice of Law
parties assume, without discussion, that Maryland law applies
to this diversity case. A federal court sitting in diversity
must apply the law of the state in which the court is
located, including the forum state's choice of law rules.
Colgan Air, Inc. v. Raytheon Aircraft Co., 507 F.3d
270, 275 (4th Cir. 2007); see Ground Zero Museum Workshop
v. Wilson, 813 F.Supp.2d 678, 696 (D. Md. 2011)
(“When choosing the applicable state substantive law
while exercising diversity or supplemental jurisdiction, a
federal district court applies the choice of law rules of the
forum state.”) (citing ITCO Corp. v. Michelin Tire
Corp., Commercial Div., 722 F.2d 42, 49 n. 11 (4th Cir.
tort claims, Maryland applies the law of the state where the
alleged harm occurred (“lex loci delicti ”).
See, e.g., Proctor v. Washington Metropolitan
Area Transit Auth., 412 Md. 691, 726, 990 A.2d 1048,
1068 (2010); Erie Ins. Exch. v. Heffernan, 399 Md.
598, 625, 925 A.2d 636, 651 (2007); Phillip Morris, Inc.
v. Angeletti, 358 Md. 689, 744, 752 A.2d 200, 230
(2000). Because the alleged events took place in Maryland,
the substantive tort law of Maryland governs the parties'
tort claims. See Hauch v. Connor, 295 Md. 120,
123-24, 453 A.2d 1207, 1209 (1983).
contract claim, including one for unjust enrichment, Maryland
courts follow the rule of lex loci contractus,
applying the substantive law of the state where the contract
was formed, unless there is a choice-of-law provision in the
contract. Todd v. Xoom Energy Maryland, LLC,
GJH-15-154, 2016 WL 727108, at *6 (D. Md. Feb. 22, 2016)
(citations omitted); Griffith Energy Services, Inc. v.
National Union Fire Ins. Co. of Pittsburgh, Va., 224 Md.
252, 274, 120 A.3d 800, 821 (2015); see also Am.
Motorists Ins. Co. v. ARTRA Group, Inc., 338 Md. 560,
573, 659 A.2d 1295, 1301 (1995); U.S. Life Ins. Co. v.
Wilson, 198 Md.App. 452, 462-63, 18 A.3d 110, 116
(2011);); Konover Prop. Tr., Inc. v. WHE Assocs.,
Inc., 142 Md.App. 476, 489, 790 A.2d 720, 728 (2002).
Here, the parties appear to agree that Maryland law covers
the contract-related counts of unjust enrichment.
See ECF 44-1; ECF 55; ECF 68. Accordingly, I will
apply Maryland law in addressing these counts.