Charles Dickerson v. TLC The Laser Eye Center

• Court: Court of Appeals for the Fourth Circuit
• Decided: August 15, 2012
• Docket: 12-1117
• Status: Unpublished

Opinion

UNPUBLISHED

UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

No. 12-1117

CHARLES BENJAMIN DICKERSON, a/k/a Ben, on behalf of himself and all others similarly situated,

Plaintiff - Appellant,

and

JOHN HOLLMAN, on behalf of himself and all others similarly situated,

Plaintiff,

v.

TLC THE LASER EYE CENTER INSTITUTE, INC.; TLC THE LASER CENTER CAROLINA, INC.; TLC THE LASER CENTER MADISON, INC.; TLC LASER EYE CENTERS OKLAHOMA CITY; TLC THE LASER CENTER TRI-CITIES, INC.; TLC THE LASER CENTER MASSACHUSETTS, INC.; TLC THE LASER CENTER BREA, INC.; TLC LASER EYE CENTERS CLEVELAND; TLC LASER EYE CENTERS COLUMBUS; TLC THE LASER CENTER BOCA RATON, INC.; TLC LASER EYE CENTERS PITTSBURGH; TLC LASER EYE CENTERS FARGO; VALLEY LASER EYE CENTER, LLC; TLC LASER EYE CENTERS TULSA; TLC LASER EYE CENTERS EDINA; TLC THE LASER CENTER INDIANA, LLC; TLC THE LASER CENTER INSTITUTE FT. LAUDERDALE, d/b/a TLC Ft. Lauderdale, a/k/a TLC The Laser Center Institute; TLC THE LASER CENTER INSTITUTE, INC.-DENVER, d/b/a TLC Denver, a/k/a TLC The Laser Center Institute, Inc.; TLC THE LASER CENTER INSTITUTE INC.-ATLANTA, d/b/a TLC Atlanta, a/k/a TLC The Laser Center Institute, Inc.; TLC THE LASER CENTER INSTITUTE, INC.- MANHATTAN, d/b/a TLC Manhattan, a/k/a TLC The Laser Center Institute, Inc.; TLC THE LASER CENTER INSTITUTE, INC.-GARDEN CITY, d/b/a TLC Garden City, a/k/a TLC The Laser Center Institute, Inc.; TLC THE LASER CENTER INSTITUTE, INC.- TORRANCE, d/b/a TLC Torrance, a/k/a TLC The Laser Center Institute, Inc.; TLC THE LASER CENTER NORTHEAST, INC.-NORTH JERSEY, d/b/a TLC North Jersey, a/k/a TLC The Laser Center Northeast, Inc.; TLC LASER CENTER NORTHEAST, INC.-ROCKVILLE, d/b/a TLC Rockville, a/k/a TLC Laser Center Northeast, Inc.; TLC THE LASER CENTER INSTITUTE, INC.-WHITE PLAINS, d/b/a TLC White Plains, a/k/a TLC The Laser Center Institute, Inc.; TLC MIDWEST EYE LASER CENTER, INC.-CHICAGOLAND, d/b/a TLC Chicagoland, a/k/a TLC Midwest Eye Laser Center, Inc.; TLC THE LASER CENTER NORTHEAST, INC.-BIG SKY, d/b/a TLC Big Sky, a/k/a TLC The Laser Center Northeast, Inc.; TLC THE LASER CENTER INSTITUTE, INC.-CHARLESTON, d/b/a TLC Charleston, a/k/a TLC The Laser Center Institute, Inc.; TLC THE LASER CENTER INSTITUTE, INC.-SAN ANTONIO, d/b/a TLC San Antonio, a/k/a TLC The Laser Center Institute, Inc.; TLC THE LASER INSTITUTE-TAMPA, d/b/a TLC Tampa, a/k/a TLC The Laser Institute; DAVID KOHLER, OD, Individually and in their capacity as Clinical Director for TLC The Laser Center Institute, Inc.; MELISSA MELOTT, OD, Individually and in their capacity as Clinical Director for TLC The Laser Center Institute, Inc. ; DEREK VAN VEEN, OD, Individually and in their capacity as Clinical Director for TLC The Laser Center Institute, Inc.; CYNTHIA YEAGER, OD, Individually and in their capacity as Clinical Director for TLC the Laser Center Institute, Inc.; JODI ABRAMSON, MD; ALBERTO ARAN, MD; ROBERT ARFFA, MD; DAVID K. AYMOND, MD; DAVID BOES, MD; STAN BRAVERMAN, MD; ERIC DONNENFELD, MD; MARTIN FOX, MD; DAVID HUNTER, MD; JEFFREY MACHAT, MD; JOHN OSTER, MD; GEORGE PARDOS, MD; EDWARD PERRAUT, MD; LOUIS PROBST, MD; RANDALL RABON, MD; JEFF ROBIN, MD; ROY RUBINFELD, MD; STEPHEN SLADE, MD; MARK SPEAKER; NANCY TANCHEL, MD; GREGORY TEMAS, MD; STEWART TERRY, MD; MARK E. WHITTEN, MD; LARRY WOMACK, MD; WENDELL WONG, MD; JONATHAN WOOLFSON, MD; BRIAN ANDREW, Esq.; STACEY ANNE LERUM; BOB MAY, Esq.; JOHN POTTER, MD,

Defendants - Appellees.

Appeal from the United States District Court for the District of South Carolina, at Greenville. J. Michelle Childs, District Judge. (6:10-cv-00685-JMC)

Submitted: June 20, 2012 Decided: August 15, 2012

Before GREGORY, WYNN, and THACKER, Circuit Judges.

Affirmed by unpublished per curiam opinion.

2 Paul S. Landis, FAYSSOUX LAW FIRM, PA, Greenville, South Carolina; Douglas F. Patrick, Sr., Stephen R. H. Lewis, COVINGTON, PATRICK, HAGINS, STERN & LEWIS, PA, Greenville, South Carolina, for Appellant. W. Howard Boyd, Jr., Ronald G. Tate, Jr., Luanne Lambert Runge, GALLIVAN, WHITE & BOYD, PA, Greenville, South Carolina; H. Donald Sellers, Christopher B. Major, HAYNSWORTH, SINKLER & BOYD, PA, Greenville, South Carolina; Robert H. Hood, James B. Hood, Deborah H. Sheffield, HOOD LAW FIRM, Charleston, South Carolina; David H. Batten, Charles H. Foppiano, BATTEN LEE, PLLC, Cary, North Carolina; James F. Rogers, Cory E. Manning, NELSON MULLINS RILEY & SCARBOROUGH, LLP, Columbia, South Carolina; Lee C. Weatherly, CARLOCK, COPELAND, SEMLER & STAIR, LLP, Charleston, South Carolina; Jack G. Gresh, HALL, BOOTH, SMITH & SLOVER, PC, Sullivan's Island, South Carolina, for Appellees.

Unpublished opinions are not binding precedent in this circuit.

3 PER CURIAM:

Charles Benjamin Dickerson appeals the district

court’s grant of motions to dismiss the first amended complaint

(“FAC”) filed by Appellees TLC Lasik Centers, TLC Clinical

Directors, TLC LASIK Surgeons, and TLC Management (collectively,

“the Providers”). Dickerson is the class representative in an

action alleging violations of the Racketeer Influenced and

Corrupt Organization Act (“RICO”) and requesting declaratory and

injunctive relief regarding his and the putative class members’

medical records that were allegedly concealed and converted by

the Providers. Dickerson alleged that the Providers

participated in an elaborate fraudulent scheme to conceal their

medical malpractice. For the following reasons, we affirm the

district court’s grant of the motions to dismiss.

I.

Dickerson challenges the district court’s

determination that his RICO claim is barred by the statute of

limitations. Generally, “a motion to dismiss filed under

Federal Rule of Civil Procedure 12(b)(6), which tests the

sufficiency of the complaint, . . . cannot reach the merits of

an affirmative defense, such as the defense that the plaintiff’s

claim is time-barred.” Goodman v. PraxAir, Inc., 494 F.3d 458,

464 (4th Cir. 2007). However, in rare cases, courts may

4 determine the merits of an affirmative defense at this stage in

the litigation if “all facts necessary to the affirmative

defense clearly appear[] on the face of the complaint.” Id.

(quoting Richmond, Fredericksburg & Potomac R.R. v. Forst, 4

F.3d 244, 250 (4th Cir. 1993)) (emphasis in the original).

The RICO statute does not provide a limitations period

for civil actions, however, the Supreme Court has determined

that a four-year statute of limitations applies. Agency Holding

Corp. v. Malley-Duff & Associates, Inc., 483 U.S. 143, 156

(1987). Further, the Supreme Court has established that the

discovery-of-injury accrual rule applies to civil RICO actions.

Rotella v. Wood, 528 U.S. 549, 556 (2000). Under this rule, the

statute of limitations will begin to run from the date when the

plaintiff knew or should have known of the existence of a RICO

injury. Id.

Dickerson alleged several RICO injuries, which include

conversion of his medical records and payments for unnecessary

surgeries and treatment. With respect to the injury arising

from payments for unnecessary surgeries and treatment, the FAC

is silent regarding when Dickerson’s first Lasik surgery

occurred and when he sought additional treatment from the

Providers. However, the FAC does allege several dates in which

the Providers converted his medical records by faxing and

mailing his records between themselves as part of the

5 racketeering scheme beginning in February 1999 and continuing

through May 2005. J.A. 112-13. The FAC also alleges that the

mail fraud was committed without Dickerson’s knowledge or

consent and that the Providers continue to conceal and convert

the medical records to date. The district court concluded that

based upon these dates alleged in the FAC, Dickerson’s RICO

claim “certainly accrued by May 2005,” since the action was

initiated in March 2010, and Dickerson’s claims were not raised

until May 2010. J.A. 311.

That the conversion of the medical records occurred on

those dates does not clearly indicate that Dickerson had or

should have had notice that the conversions were taking place.

On the face of the FAC, there is no indication from the

allegations that Dickerson should have known that his medical

records were being converted over this period of time. Indeed,

the FAC is explicit that the conversion of the records was kept

secret to conceal his true diagnosis. See e.g., J.A. 116.

Given that there is no allegation that demonstrates Dickerson

should have known that the Providers were converting his medical

records at a date that would lead to the conclusion that the

limitations period has expired, the statute of limitations

defense was not clearly present on the face of the FAC, and the

district court erred in rendering that conclusion. As a result,

the Court need not consider Dickerson’s alternative argument

6 that the limitations period should be equitably tolled due to

the Providers’ fraudulent conduct.

II.

Next Dickerson challenges the district court’s

dismissal of his civil RICO claim. To establish a RICO claim,

Dickerson must sufficiently allege facts that if accepted as

true demonstrate that the Providers engaged in “(1) conduct (2)

of an enterprise (3) through a pattern (4) of racketeering

activity.” Sedima v. Imrex Co., 473 U.S. 479, 496 (1985).

Dickerson can only recover if he shows that his injury caused by

the RICO violation damaged his business or property. Id. See

also, 18 U.S.C. § 1964(c). Thus, any allegation of personal

injuries and losses from those injuries will not be considered

injuries to business or property under the act. Bast v. Cohen,

Dunn & Sinclair, P.C., 59 F.3d 492, 495 (4th Cir. 1995). The

district court concluded that the FAC sufficiently alleged a

pattern of racketeering activity and the existence of an

enterprise. See J.A. 296-300. It dismissed the RICO claim,

however, because it found that the FAC did not allege a

cognizable injury caused by the RICO activity to Dickerson’s

business or property. J.A. 306.

In the FAC, Dickerson pled several injuries to his and

the class members’ properties caused by the Providers’ alleged

7 RICO activity. With respect to the first injury, the district

court correctly concluded that costs and attorney fees are

automatically granted in a successful RICO case, and thus these

damages are separate from the damages arising from the injury to

a plaintiff’s business or property. See 18 U.S.C. § 1964(c).

Similarly, the district court correctly concluded that, with

respect to the second injury, the money spent on subsequent

surgeries and treatment were damages stemming from personal

injuries derived from the Providers’ medical malpractice and not

–- as Dickerson alleged –- damages arising from an injury to his

property. 1

1 Relatedly, Dickerson argues that the district court ignored allegations in the FAC regarding fees he and the class members had to pay to enter into the LTCs. In the FAC, Dickerson alleged that the LTCs were used to induce prospective patients to the Providers by guaranteeing lifetime vision care for patients that would cover “any additional LASIK surgery needed and any treatment for vision related problems associated with or caused by the LASIK surgery performed under the LTC.” J.A. 95-96. Dickerson contends that the LTCs were ultimately used by the Providers to further their fraudulent scheme and that these contracts were no longer honored once the Providers believed that Dickerson and class members’ claims for medical malpractice had expired. While these allegations were part of the “Factual Background” section of the FAC, Dickerson did not allege that these fees should be considered property for the RICO claim nor did he list the fees as compensatory damages stemming from the RICO violation. Thus, even when reading the FAC in a light favorable to Dickerson, the FAC simply does not contain pleadings that suggest that these fees should be considered an injury to property as required for the RICO claim.

8 Finally, with respect to the third injury, the

district court concluded that under South Carolina law,

Dickerson had an “intangible property interest” in his medical

information, yet conversion of this interest was not a legally

cognizable action. J.A. 303. As a result, it held that

Dickerson could not demonstrate any “concrete” or “quantifiable”

injury to his business or property. 2 J.A 303.

Under South Carolina law, the crime of conversion “is

the unauthorized assumption and exercise of the right of

ownership over goods or person or personal chattels belonging to

another, to the alteration of the condition or the exclusion of

the owner’s rights. To establish the tort of conversion, it is

essential that the plaintiff establish either title to or right

to the possession of the personal property.” Regions Bank v.

Schmauch, 582 S.E.2d 432, 442 (S.C. Ct. App. 2003). South

Carolina law does not ordinarily permit a conversion claim

founded on an intangible property interest unless the interest

is “merged in, or identified with, some document.” Gignilliat

v. Gignilliat, Savitz & Bettis, L.L.P., 684 S.E.2d 756, 763

(S.C. 2009) (dismissing plaintiff’s conversion claim that

2 We assume without deciding, that the district court correctly determined that Dickerson possesses an intangible property interest in his medical records under South Carolina law.

9 alleged the defendants used plaintiff’s name without her consent

because there was no documentation evidencing plaintiff’s

exclusive right to the use of her name). Under South Carolina

law patients do possess rights in obtaining truthful diagnoses,

see J.A. 302 (citing Hook v. Rothstein, 316 S.E.2d 690, 694-95

(S.C. Ct. App. 1984) overruled in part on other grounds by Linog

v. Yampolsky, 656 S.E.2d 355, 358 (S.C. 2008)), and in accessing

information contained in medical files, although the physician

maintains an ownership right in the actual file, id. (citing

S.C. Code Ann. §§ 44-115-20; 44-115-30 (2009)).

Although Dickerson contends that his interest in his

medical information was merged in or identified with the medical

records themselves, South Carolina has designated physicians as

the lawful owners of any medical record within their possession.

See S.C. Code. Ann. § 44-115-20. And as the district court

pointed out in its opinion denying Dickerson’s motion to alter

or amend its previous judgment, those courts that have addressed

this issue have questioned whether a patient’s possessory or

privacy interest in their information contained in medical

records can form the basis of a conversion claim. J.A. 336.

Because the medical records belong to the physicians who possess

them and the law merely affords patient’s access to copies of

their records, the district court was correct to conclude that a

10 claim of conversion with respect to the medical records could

not be maintained.

III.

Finally, Dickerson appeals the district court’s

dismissal of his claim for declaratory and injunctive relief.

Dickerson contends that the district court misapprehended the

bases for these claims and that his requests for declaratory and

injunctive relief are based on the RICO violation and not the

Health Insurance Portability and Accountability Act, (“HIPAA”),

Pub. L. No. 104-191, 110 Stat. 1936 (1996), or any other

provision of law.

For the following reasons, we affirm the district

court’s dismissal of Dickerson’s requests for declaratory and

injunctive relief. With respect to the request for declaratory

relief, Dickerson’s argument on appeal is not responsive to the

district court’s determination that the proper avenue for

requesting medical records given the disposition of this case is

through a discovery motion. It is within the discretion of the

district court to grant declaratory relief and such relief is

appropriate “when the judgment will serve a useful purpose in

clarifying and settling the legal relations in issue, and . . .

when it will terminate and afford relief from the uncertainty,

insecurity, and controversy giving rise to the proceeding.”

11 Centennial Life Ins. Co. v. Poston, 88 F.3d 255, 256 (4th Cir.

1996) (internal quotation marks omitted). Here, the district

court gave a well-reasoned answer for why a declaration was “ill

suited” to determine whether Dickerson and the putative class

members were entitled to the disclosure of the medical records.

Alternatively, dismissal of the claim for declarative relief is

warranted because of the dismissal of Dickerson’s RICO claim.

With respect to the request for injunctive relief,

Dickerson now claims that his request for injunctive relief was

only predicated on the RICO violation despite the fact that the

FAC’s pleadings explicitly assert HIPAA violations. As

determined above, Dickerson has not sufficiently pled a RICO

claim, and consequently he cannot be entitled to injunctive

relief on this basis.

IV.

For the foregoing reasons, we affirm the district

court’s grant of the Providers’ motions to dismiss. We dispense

with oral argument because the facts and legal contentions are

adequately presented in the materials before the Court and

argument would not aid the decisional process.

AFFIRMED