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Luttrell v. Brannon

United States District Court, D. Kansas

December 17, 2018

JAMES K. BRANNON, et al., Defendants.



         This case arises out of Defendants' medical treatment of Plaintiff Charles R. Luttrell for roughly two and a half years. Plaintiff alleges Defendants not only provided him with inadequate medical care, but also engaged in a complicated scheme to defraud both Plaintiff and Missouri Medicaid. Plaintiff's Second Amended Complaint-the operative complaint-asserts ten causes of action[1] against various Defendants, including: a claim under the federal Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961, et seq; a civil conspiracy claim; a claim under the Kansas Consumer Protection Act (“KCPA”), K.S.A. § 50-623, et seq; a vicarious liability claim; an alter ego liability claim; and a punitive damages claim.[2] Defendants seek dismissal of these claims, alleging various pleading defects. Because the Court concludes the RICO, civil conspiracy, KCPA, and alter ego liability claims contain fatal pleading deficiencies, it dismisses these claims. The Court also dismisses in part Plaintiff's vicarious liability and punitive damages claims, as more fully discussed below.

         I. BACKGROUND

         The following facts are from the well-pleaded allegations of the Second Amended Complaint and, consistent with the well-established standards for evaluating motions to dismiss under Federal Rule of Civil Procedure 12(b)(6), the Court assumes the truth of these facts for purposes of analyzing Defendants' motions to dismiss.

         A. The Parties

         Defendant James Brannon, M.D. (“Dr. Brannon”) and Defendant Mauricio Garcia, M.D. (“Dr. Garcia”) are physicians who provided Plaintiff medical treatment between 2012 and March of 2015. Doc. 151 at 5. Dr. Brannon is also a surgeon and the designer of a surgical device known as the Titanium Hip Tool Locking Plate Bone Graft Stabilization System (“Hip Tool”). Id. at 3.

         Defendant Orthopedic Sciences, Inc. (“OSI”) manufactures the Hip Tool for sale. Id. at 19. Dr. Brannon is the president and 90% owner of OSI. Id. He is also a sales representative of OSI and markets OSI's products. Id.

         Defendant Joint Preservation Institute of Kansas, L.L.C. (“JPI”) is Dr. Brannon's practice entity. Dr. Brannon is the designated manager and 100% owner of JPI. Id. at 19.

         Defendant Headache & Pain Center, P.A. (“HPC”) provides facilities for patient treatment. Id. at 19. Dr. Brannon and Dr. Garcia are the sole two members of the Board of Directors for HPC. Id. at 18. HPC contracts with JPI to allow Dr. Brannon to perform joint preservation surgeries at HPC, during which surgeries Dr. Brannon implants the Hip Tool. Id. HPC pays JPI significantly more for each joint preservation surgery than any other procedure performed at HPC. Id.

         Defendant Doctors Hospital, L.L.C. (“Doctors Hospital”) is an ambulatory surgical center that also contracts with JPI to provide facilities where Dr. Brannon conducts joint preservation surgeries. Id. at 18-19. Doctors Hospital pays JPI significantly more for each joint preservation surgery than any other procedure performed at Doctors Hospital. Id. at 19.

         Defendant PatientFirst Healthcare Alliance, P.A. (“PatientFirst”) is the owner of HPC and Doctors Hospital. Id. at 18. Dr. Brannon and Dr. Garcia are the sole owners of PatientFirst and sit on its Board of Directors. Id.

         B. The Dispute

         Plaintiff has suffered right hip pain for years. Id. at 6. He established a physician-patient relationship with Dr. Brannon when he sought evaluation for that hip pain. Id. For roughly two and a half years between 2012 and the early spring of 2015, Dr. Brannon, Dr. Garcia, and HPC routinely provided Plaintiff prescriptions for narcotic pain medications to address the hip pain. Id. at 5. Dr. Brannon and Dr. Garcia were the primary physicians prescribing these medications. Id.

         Dr. Brannon ultimately diagnosed Plaintiff with avascular necrosis (death of bone tissue) of the right hip. Id. Dr. Brannon advised Plaintiff that the traditional treatment for this condition was total hip replacement, but that, in Plaintiff's case, this was unnecessary. Id. Instead, Dr. Brannon recommended a joint preservation surgery he “invented” himself. Id. During the joint preservation surgery, Dr. Brannon would implant a Hip Tool in Plaintiff. Id. Dr. Brannon convinced Plaintiff to undergo the joint preservation surgery and implantation of the Hip Tool in lieu of total hip replacement. Id. Plaintiff underwent the joint preservation surgery at Doctors Hospital and the Hip Tool was implanted on March 4, 2015. Id.

         Before his surgery, on February 18, 2015, Plaintiff underwent an x-ray of his right hip at Doctors Hospital. Id. The x-ray revealed that his right hip was normal in appearance and there were no findings of avascular necrosis. Id. at 6-7. Dr. Brannon knew the results of the x-ray before he performed joint preservation surgery on Plaintiff. Id. at 7. Despite knowing the results of the x-ray, Dr. Brannon continued with the joint preservation surgery and implantation of the Hip Tool. Id. Bone samples were taken during the surgery and subsequent pathology reports “argued against avascular necrosis.” Id. at 7-8.

         Following the joint preservation surgery, Plaintiff experienced severe pain and discomfort in his right hip. Id. at 10. He sought treatment from a different doctor, Dr. David Anderson (“Dr. Anderson”), who diagnosed Plaintiff with a fracture caused by implantation of the Hip Tool. Id. Dr. Anderson concluded the joint preservation surgery, including the Hip Tool, failed. Id. He also diagnosed Plaintiff with severe osteoarthritis of the right hip, “a clear contraindication” for the joint preservation surgery that Dr. Brannon recommended and performed. Id. Ultimately, Dr. Anderson performed a total hip replacement surgery on Plaintiff's right hip and removed the Hip Tool. Id. at 10-11. During surgery, Dr. Anderson took bone samples. Id. at 11. Subsequent pathology reports confirmed there was no evidence of avascular necrosis. Id.

         Plaintiff ultimately alleges that Defendants perpetrated a complex scheme to supply him with powerful narcotic pain medications to make him suggestable to Dr. Brannon's recommendations to undergo an overly expensive and unnecessary medical procedure (the joint preservation surgery) to implant an overly expensive and unnecessary surgical device (the Hip Tool). Id. at 11-14. Defendants specifically targeted Plaintiff because they could profit from Plaintiff's Missouri Medicaid benefits. Id. at 9. Plaintiff further alleges that Defendants' interrelationships advanced the very purpose of Defendants' scheme, allowing Defendants to conceal numerous conflicts of interest (Defendants' financial gain versus Plaintiff's medical care), none of which were disclosed to Plaintiff. Id. at 11-14.


         Plaintiff filed suit on March 3, 2017. Doc. 1. The original Complaint included eight causes of action and a claim for punitive damages. Id. Plaintiff originally identified only Dr. Brannon, OSI, JPI, and Doctors Hospital as defendants. Id. On December 21, 2017, Plaintiff filed a First Amended Complaint adding Dr. Garcia, HPC, and PatientFirst as additional defendants. Doc. 84. The First Amended Complaint also added three additional causes of action. Id. Dr. Brannon, JPI, Garcia, HPC, and PatientFirst subsequently filed various motions to dismiss, and Doctors Hospital filed a motion for judgment on the pleadings or motion for summary judgment. Docs. 85, 87, 106, 108, 131. Defendants' various motions included requests for dismissal of Plaintiff's RICO, KCPA, and civil conspiracy claims. Docs. 85, 87, 106, 108, 131.

         The Court ruled on Defendant's motions on June 19, 2018, granting dismissal in part, denying dismissal in part, and granting Plaintiff leave to amend certain claims. Doc. 149 at 1-2. Relevant to the Second Amended Complaint and Defendants' instant motions are the following rulings:

RICO Claims: The Court dismissed all claims except those predicated on damages representing Plaintiff's out-of-pocket expenses for unnecessary medical treatment.
KCPA Claims: The Court dismissed all claims but granted Plaintiff leave to amend to allege claims based on acts of billing or pricing to the extent Plaintiff suffered financial injury or loss from such acts.
Civil Conspiracy: The Court dismissed all claims but granted Plaintiff leave to amend to allege claims based on Plaintiff's surviving RICO and KCPA claims.

Id. at 2, 8, 31, 33.

         III. STANDARD

         Under Rule 12(b)(6), 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) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The plaintiff's claim is facially plausible if he pleads sufficient factual content to allow the Court “to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. The plausibility standard requires “more than a sheer possibility that a defendant has acted unlawfully” but “is not akin to a ‘probability requirement.'” Id. “Where a complaint pleads facts that are ‘merely consistent with' a defendant's liability, it ‘stops short of the line between possibility and plausibility of entitlement to relief.'” Id. (quoting Twombly, 550 U.S. at 557).

         This standard results in two principles that underlie a court's analysis. Id. First, “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.” Id. Stated differently, though the court must accept well-pleaded factual allegations as true, it is “not bound to accept as true a legal conclusion couched as a factual allegation.” Twombly, 550 U.S. at 555 (internal citations and quotations omitted). “Second, only a complaint that states a plausible claim for relief survives a motion to dismiss.” Iqbal, 556 U.S. at 679. “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not ‘shown'-‘that the pleader is entitled to relief.'” Id. (quoting Fed.R.Civ.P. 8(a)(2) (original brackets omitted)). “In keeping with these [two] principles, a court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth.” Id. “When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.” Id.

         IV. ANALYSIS

         As noted above, Plaintiff asserts RICO (Count III), civil conspiracy (Count IV), KCPA (Count VI), vicarious liability (Count IX), alter ego liability (Count X), and punitive damages (Count XI) claims. Because the Court concludes the RICO, civil conspiracy, KCPA, and alter ego liability claims contain a fatal pleading deficiency, it dismisses these claims. Plaintiff's vicarious liability claim against PatientFirst is also dismissed in its entirety and is dismissed in part as to OSI and JPI. Finally, because these dismissals leave the punitive damages claim as Plaintiff's sole remaining claim against Dr. Garcia, HPC, Doctors Hospital, and ...

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