Court grants insurers' dismissal of RICO claims by Florida doctor over disability benefits

By Marian Johns | May 16, 2019

FORT MYERS — A Florida federal judge has granted a group of insurance companies' motion to dismiss several counts of Racketeer Influenced and Corrupt Organizations Act (RICO Act) claims made by a Florida doctor who did not receive benefits under his five disability insurance policies. 

According to a March 26 U.S. District Court for the Middle District of Florida opinion and order, the defendants, First Unum Life Insurance Company, Provident Life  and Casualty Insurance Company and Unum Group filed a motion to dismiss three RICO Act allegations made by the defendant, Dr. Marcus Allen, in a second amended complaint. The court ruled that Allen did not "plausibly allege distinctiveness of a RICO enterprise."

According to the court filing, Allen says his benefits were terminated by the defendants' "scheme" to end claims of "high benefit disabled medical professionals" such as himself who are insured under "own occupation."  Allen's second amended complaint accuses the defendants of breach of contract, fiduciary duty and RICO Act violations.  The court previously dismissed Allen's RICO claims against the defendants in December 2018, but left him the right to amend should there be "a good faith basis for further allegations to address the issue of distinctiveness." 

In their motion to dismiss the RICO allegations, the defendants argue Allen failed "to state a claim" and "lack causation" and "fail the distinctiveness requirement, are not pled with particularity" and should be reversed based on the McCarran-Ferguson Act. 

The court cited the Federal Rule of Civil Procedure, stating a complaint must "contain a 'short and plain statement' of the claim showing the pleader is entitled to relief." The court ruled the "lack of distinction necessarily causes plaintiff's three RICO claims to fail" as cited in Ray v. Spirit Airlines Inc.

Also at question was the defendant's corporate structure and entities and its use of "external, non-employee medical consultants" which Allen alleges were part of the "scheme."

U.S. District Judge John Steele stated: "The allegations are wholly conclusory and alleged 'upon information and belief” and fail to allege with any particularity what role the medical consultants played, the specific conduct attributable to the medical consultants that caused injury, or that they were even aware of the scheme."

The judge dismissed the RICO claims within the plaintiff's second amended complaint Three of the claims were dismissed without leave to amend.

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