Marcia Lee Stresemann, d/b/a Affiliated Counseling Center, LLC v. Lucinda Jesson, Commissioner of the Minnesota Department of Human Services, in her individual and official capacity

CourtCourt of Appeals of Minnesota
DecidedAugust 4, 2014
DocketA13-1967
StatusUnpublished

This text of Marcia Lee Stresemann, d/b/a Affiliated Counseling Center, LLC v. Lucinda Jesson, Commissioner of the Minnesota Department of Human Services, in her individual and official capacity (Marcia Lee Stresemann, d/b/a Affiliated Counseling Center, LLC v. Lucinda Jesson, Commissioner of the Minnesota Department of Human Services, in her individual and official capacity) is published on Counsel Stack Legal Research, covering Court of Appeals of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Marcia Lee Stresemann, d/b/a Affiliated Counseling Center, LLC v. Lucinda Jesson, Commissioner of the Minnesota Department of Human Services, in her individual and official capacity, (Mich. Ct. App. 2014).

Opinion

This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2012).

STATE OF MINNESOTA IN COURT OF APPEALS A13-1967

Marcia Lee Stresemann, d/b/a Affiliated Counseling Center, LLC, Respondent,

vs.

Lucinda Jesson, Commissioner of the Minnesota Department of Human Services, in her individual and official capacity; et al., Appellants.

Filed August 4, 2014 Reversed Johnson, Judge

Anoka County District Court File No. 02-CV-13-1154

John M. Degnan, Scott M. Flaherty, Daniel M. White, Briggs and Morgan, P.A., Minneapolis, Minnesota (for respondent)

Lori Swanson, Attorney General, Scott H. Ikeda, Uzodima Franklin Aba-Onu, Assistant Attorneys General, St. Paul, Minnesota (for appellants)

Considered and decided by Rodenberg, Presiding Judge; Johnson, Judge; and

Chutich, Judge. UNPUBLISHED OPINION

JOHNSON, Judge

The Medicaid Fraud Control Unit of the Office of the Attorney General

investigated allegations of fraudulent billing practices by a clinic that provides mental-

health counseling services. The investigation included the execution of a warrant for the

search of business records possessed by the clinic and a subsequent review of those

records. In this civil lawsuit, the owner of the clinic claims that an employee of the

Office of the Attorney General and two others violated her Fourth Amendment rights and

committed common-law torts. The defendants moved to dismiss the amended complaint.

The district court granted the motion in part and denied it in part. In this interlocutory

appeal, the defendants seek reversal of the district court’s partial denial of their motion to

dismiss. We conclude that the district court erred by not granting the motion to dismiss

in its entirety. Therefore, we reverse.

FACTS

The Affiliated Counseling Center, LLC (ACC), provides mental-health counseling

services. Marcia Lee Stresemann, a licensed professional clinical counselor, is the sole

owner of ACC.

Medica Insurance Company contracts with the Minnesota Department of Human

Services (DHS) to facilitate health-care services to Medicaid and Medicare recipients in

Minnesota. Medica also contracts with health-care providers, such as ACC, which

provide health-care services to Medicaid and Medicare recipients, and the health-care

providers submit claims for reimbursement to Medica.

2 A person anonymously contacted Medica to report possible fraudulent billing by

ACC. A Medica investigator contacted ACC, requested certain records, and conducted a

preliminary investigation. In August 2011, the Medica investigator referred the matter to

the Medicaid Fraud Control Unit (MFCU) of the Office of the Attorney General (OAG).

Catharine Morton-Peters is employed by the OAG as the chief investigator of the

MFCU. After receiving the referral from Medica, Morton-Peters conducted a review of

the information and documents provided by Medica. She reviewed reimbursement

claims that ACC submitted to DHS between January 1, 2009, and October 10, 2012. She

also interviewed a former ACC psychiatrist, a former ACC nurse practitioner, two former

ACC employees who had responsibility for billing, and a clinical psychologist who

knows Stresemann but had not been employed by ACC. Morton-Peters suspected that

ACC had been significantly overpaid on Medicaid and Medicare claims and further

suspected that ACC had fraudulently submitted claims in violation of state law. See

Minn. Stat §§ 609.466, .52, .527 (2010).

In October 2012, Morton-Peters prepared an application for a warrant to conduct a

search of ACC’s premises for evidence relevant to the suspected violations of law. To

establish probable cause, the 22-page warrant application described the investigative

steps performed thus far and summarized the tentative conclusions of the investigation.

The application requested a warrant for a search of documents possessed by ACC,

including employee records, patient files, and billing and reimbursement records. The

application also requested permission to remove patient files from ACC’s premises,

3 which would allow OAG investigators to review records at an off-site location, retain

relevant records, and return irrelevant records.

In October 2012, an Anoka County District Court judge approved the application

and issued the search warrant in the form requested by Morton-Peters. The Fridley

Police Department executed the search warrant and seized records from ACC’s office. In

January 2013, Stresemann sent a letter to three persons demanding the return of the

seized records: Morton-Peters; Ron Nail, the manager of the Surveillance and Integrity

Review Section of the Office of the Inspector General of DHS; and a person employed by

the United States Department of Health and Human Services. The OAG promptly

responded that it had returned, and would continue to return, records that were irrelevant

to the investigation but that it would retain records that were relevant to the investigation

and allow ACC to photocopy such records.

In February 2013, Stresemann commenced this action on behalf of ACC. Her

amended complaint names three persons as defendants: Morton-Peters; Nail; and Lucinda

Jesson, the commissioner of DHS. The amended complaint alleges five causes of action:

(1) a violation of Minn. Stat. § 144.298, subd. 2 (2012), which protects the privacy of

patient health-care records; (2) a claim arising under 42 U.S.C. § 1983 (2012) based on

unspecified violations of her Fourth Amendment rights; (3) a violation of article I, section

10, of the Minnesota Constitution; (4) conversion; and (5) trespass to chattels.

In May 2013, the three defendants moved to dismiss the amended complaint for

failure to state a claim on which relief can be granted. See Minn. R. Civ. P. 12.02(e). In

September 2013, the district court granted the motion in part by dismissing counts 1 and

4 3 but denied the motion in part with respect to counts 2, 4, and 5. Morton-Peters, Nail,

and Jesson appeal, seeking interlocutory review of the district court’s partial denial of

their motion to dismiss. See McGovern v. City of Minneapolis, 475 N.W.2d 71, 72

(Minn. 1991).1

DECISION

I. Count 2

Appellants argue that the district court erred by denying their motion to dismiss

with respect to count 2 of the amended complaint, which alleges a claim or claims arising

under section 1983 of title 42 of the United States Code, which authorizes a private cause

of action for “the deprivation of any rights, privileges, or immunities secured by the

Constitution and laws.” See Connick v. Thompson, 131 S. Ct. 1350, 1359 (2011); see

also L.K. v. Gregg, 425 N.W.2d 813, 817 (Minn. 1988).

We begin by attempting to identify with particularity the allegations against each

of the three appellants. In the portion of her amended complaint that relates specifically

to count 2, Stresemann alleges only that appellants “subjected or caused to be subjected

[Stresemann] to the deprivation of [her] rights and privileges secured by the Fourth

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Marcia Lee Stresemann, d/b/a Affiliated Counseling Center, LLC v. Lucinda Jesson, Commissioner of the Minnesota Department of Human Services, in her individual and official capacity, Counsel Stack Legal Research, https://law.counselstack.com/opinion/marcia-lee-stresemann-dba-affiliated-counseling-center-llc-v-lucinda-minnctapp-2014.