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Erlebach v. Raj Enterprises of Central Florida, LLC

United States District Court, D. Idaho

January 3, 2019

TYRELL CURTIS ERLEBACH, Plaintiff,
v.
RAJ ENTERPRISES OF CENTRAL FLORIDA, LLC d/b/a PINNACLE LABORATORIES d/b/a PINNACLE LABORATORY SERVICES d/b/a PINNACLE LABS, MILLENIUM HEALTH, LLC, MILLS BRINSON III BSMT, CLD, K & K TREATMENT, ROSTAD GPS & MONITORING SERVICES, LLC, KIM ROSTAD d/b/a K & K TREATMENT, K & K BAIL BONDS LLC d/b/a K & K TREATMENT, DENNIS STOKES in his individual and official capacities, PAYETTE COUNTY, PAYETTE COUNTY SHERIFF'S OFFICE, PAYETTE COUNTY SHERIFF CHAD HUFF in his individual and official capacities, PAYETTE COUNTY BOARD OF COMISSIONERS, PAYETTE COUNTY COMMISSIONER MARK SHIGETA in his individual and official capacities, PAYETTE COUNTY COMMISSIONER LARRY CHURCH in his official and individual capacities, PAYETTE COUNTY COMMISSIONER CAROL BRUCE in her official and individual capacities, PAYETTE COUNTY COMMISSIONER GEORGIA HANIGAN in her individual and official capacities, ANNE MARIE KELSO, SCOTT LANEY, JOSEPH JOHNSON, and JOHN DOES 1 through XXX. Defendants.

          MEMORANDUM DECISION AND ORDER

          B. LYNN WINMILL, U.S. DISTRICT COURT JUDGE.

         INTRODUCTION

         The Court has before it Defendant Millennium Health LLC's Motion to Dismiss (Dkt. 36); Defendant Dennis Stokes' Motion to Strike (Dkt. 61); Defendant Scott Laney's Motion for Summary Judgment (Dkt. 77); and Plaintiff Tyrell Curtis Erlebach's Motion to Amend/Correct Complaint (107). For the reasons explained below, the Court will grant Defendant Millennium Health LLC's Motion to Dismiss, grant Defendant Dennis Stokes' Motion to Strike, deny Defendant's Scott Laney's Motion for Summary Judgment as premature, and grant in part and deny in part Plaintiff's Motion to Amend/Correct Complaint.

         BACKGROUND[1]

         Plaintiff Tyrell Curtis Erlebach (“Plaintiff”) is a former licensed physician's assistant specializing in providing physician assistant services in cardiac surgery.[2] FAC, ¶ 33, Dkt. 107-1. In January of 2016, Plaintiff was charged in connection with a domestic disturbance in State v. Erlebach, Payette County Case Number CR 2016-0154. Id., ¶ 34. Plaintiff posted a bond in the amount of $200, 000 for his pretrial release. Id., ¶ 38. As a condition of his release, Plaintiff was required to report to the Payette County Misdemeanor Probation Office and follow release conditions which included not consuming or possessing alcoholic beverages and submitting to testing for alcohol and/or drugs as required by his probation officer. Id.

         At the time of Plaintiff's release from jail, Defendant Payette County had a contract with Indianhead Resources, LLC pursuant to which Indianhead promised to “perform all supervision duties for persons with pretrial release conditions as ordered by a judge in Payette County.” Id., ¶ 39.2. Such supervision duties included, but were not limited to, signing people up for drug and/or alcohol testing, referring such individuals to an appropriate facility, monitoring the reports of drug and/or alcohol testing, and reporting any failed drug or alcohol tests to the Court. Id. Defendant Dennis Stokes, through his corporation Indianhead Resources, served as the Misdemeanor Probation Officer for Payette County. Id., ¶ 41. Plaintiff alleges Stokes in turn contracted with Defendant K & K Treatment to provide random drug and alcohol testing of the individuals Stokes referred. Id., ¶ 64.

         It is not clear from the FAC precisely what services K & K Treatment agreed to provide to either Indianhead Resources or to Payette County. However, upon his release from detention in early 2016, Stokes referred Plaintiff to K & K Treatment to provide urine samples for drug and alcohol analysis. Id., ¶ 138. Plaintiff went to a K & K Treatment facility to provide urine samples on January 25, February 4, February 8, February 26, March 3, and April 14, 2016. Id., Ex. 2, p. 2.[3] K & K Treatment sent Plaintiff's urine samples from each of these dates to Defendant Pinnacle Laboratory Services for evaluation and analysis.[4] Id. Although each of his previous reports had been negative, Pinnacle Laboratory Services reported Plaintiff's urine sample from April 14, 2016 tested positive for alcohol. Id. Specifically, Pinnacle Laboratory Services reported positive findings for ethyl glucuronide and ethyl sulfate. Id. Ethyl glucuronide and ethyl sulfate are minor metabolites of alcohol found in both blood and urine up to 36 hours after alcohol consumption. Id., p. 3.

         The results of Plaintiff's April 14, 2016 urinalysis were reported to Defendant Stokes, who then conveyed the results to the Payette County Prosecuting Attorney's office. FAC, ¶ 62. The Payette County Sheriff's Office and Payette County District Court were also notified of Plaintiff's “positive” alcohol test, and Plaintiff was ultimately arrested and incarcerated for failure to comply with his conditions of pretrial release. Id., ¶ 159. Plaintiff alleges he was forced to post a second bond and suffered injury to his reputation caused by one or more stories reported in the local newspaper regarding his alleged failure to comply with the conditions of his supervised release. Id., ¶ 161. Plaintiff also alleges he was ultimately barred from practicing his profession as a physician's associate as “a direct and proximate result” of the “acts and omissions of the Defendants.” Id., ¶ 214.

         Confident that Pinnacle Laboratory Services' report was a “false positive, ” Plaintiff immediately hired Willamette Valley Forensics to review Pinnacle Laboratory Services' results. Willamette Valley Forensics' report suggests the analysis conducted by Pinnacle Laboratory Services was not scientifically reliable because: (1) the cutoff level utilized by Pinnacle Laboratory Services was inappropriate to use as a tool to evaluate alcohol consumption and could lead to misinterpretation; (2) Pinnacle Laboratory Services did not report an error rate as commonly provided by accredited laboratories; (3) Plaintiff's “positive” values of ethyl glucuronide and ethyl sulfate represented trace levels of alcohol; (4) such “positive” values also represented levels below the laboratory's instrument capabilities to produce credible results; (5) use of chemical products such as vanilla extract, hygiene products, mouthwash, or cough syrup will also produce trace levels of ethyl glucuronide and ethyl sulfate; (6) the levels reported for Plaintiff's specimen were consistent with his use of common household products such as hand sanitizer, aftershave and vitamins, which can be absorbed through dermal tissues or inhalation and can be misinterpreted as alcohol ingestion resulting in a false positive; and (7) laboratory reports must be interpreted by a qualified medical individual or toxicologist. Id., Ex. 2, p. 7.

         Although Plaintiff criticizes Pinnacle Laboratory Services and its report for each of these errors, the last is key to the inclusion of Millennium Health as a defendant in this action. To ensure scientific reliability, the Willamette Valley Forensics report indicates that lab reports like those issued by Pinnacle Laboratory Services must be reviewed by a qualified medical individual or toxicologist. Id. Like Pinnacle Laboratory Services, Millennium Health provides analysis of, and reporting on, urine samples provided for forensic drug and alcohol testing. FAC, ¶ 65. On April 2, 2015, K & K Treatment registered as a new client with Millennium Health. Id., Ex. 1, p. 1. Prior to this registration, Plaintiff alleges Defendant Scott Laney, an employee of Millennium Health, advised K & K Treatment that he knew Alisha Phillips, a family nurse practitioner working in Payette, and suggested that Phillips could serve as K & K Treatment's medical director. FAC, ¶ 68. Laney agreed to contact Phillips to see if she would be interested in this role, but purportedly failed to do so. Id. Nevertheless, Laney represented to K & K Treatment that Phillips had agreed to act as K & K Treatment's authorized medical provider. Id. The April 2, 2015 New Client Registration form between Millennium Health and K & K Treatment designated Phillips as K & K Treatment's “Authorized Healthcare Provider.” Id., Ex. 1. Phillips' signature also appeared on the New Client Registration Form. Id. Plaintiff alleges Millennium Health or “its agents Defendant Laney and/or Defendant [Joseph] Johnson” forged Phillips' signature on the New Client Registration Form. FAC, ¶ 99. Defendant Joseph Johnson was also an employee of Millennium Health. Phillips' signature continued to appear on drug and alcohol analysis reports ordered by K & K Treatment after it registered as a new client of Millennium Health. Id., ¶ 101.

         At some time prior to Plaintiff's April 14, 2016 urinalysis test, Laney ended his employment with Millennium Health. Id., ¶ 82. Plaintiff alleges, “[w]hen Defendant Laney was no longer employed by [Millennium Health] he and/or [Johnson] diverted the analysis of drug/alcohol testing ordered by [K & K Treatment] from [Millennium Health] to [Pinnacle Laboratory Services].” Id. Plaintiff suggests Laney and Johnson misrepresented to Pinnacle Laboratory Services that Phillips would continue to serve as K & K Treatment's authorized medical provider. Id., ¶ 84-85. K & K Treatment is identified as the client, and Phillips is identified as the “Doctor, ” on Pinnacle Laboratory Services' urinalysis of Plaintiff's April 14, 2016 urine sample. Id., Ex. 1. Phillips is also identified as the “Doctor, ” or ordering medical provider, on each of Plaintiff's five negative urinalysis tests analyzed by Pinnacle Laboratory Services at the request of K & K Treatment prior to April 14, 2016. FAC, ¶ 104. However, Phillips is not a doctor qualified to review drug and alcohol tests, did not order or review tests of Plaintiff's urine samples, and did not agree to monitor or review any drug or alcohol tests for Millennium Health, K & K Treatment, or Pinnacle Laboratory Services. Id., ¶¶ 104-5.

         In late April 2016, Phillips first learned she was improperly identified as the “Doctor” on lab reports associated with random drug and alcohol tests arranged by K & K Treatment when Plaintiff's criminal defense attorney contacted Phillips and asked her to review Pinnacle Laboratory Services' positive report of Plaintiff's April 14, 2016 urine sample. Id., ¶ 108. Phillips had never heard of K & K Treatment and did not understand how she had been identified as the “Doctor” on the Pinnacle Laboratory Services report. Id., ¶ 109. Phillips contacted Defendant Kim Rostad, owner of K & K Treatment, and was told her name was listed as “Doctor” on hundreds of lab reports issued by both Millennium Health and Pinnacle Laboratory Services associated with random drug tests arranged by K & K Treatment. Id., ¶ 110. Rostad also told Phillips that Laney and Johnson had “assisted K & K Treatment with the necessary arrangements to have [Millennium Health] perform the testing associated with K & K Treatment's random drug and alcohol testing business.” Id. In addition, Laney and Johnson purportedly “identified Alisha Phillips as K & K Treatment's authorized medical provider or ‘Doctor' associated with K & K Treatment's random drug and alcohol testing business” without Phillips' authorization or knowledge. Id., ¶ 119.

         Millennium Health filed a Motion to Dismiss Plaintiff's original complaint on August 15, 2018. Motion to Dismiss, Dkt. 36. The original complaint did not reference any of the allegations regarding Laney and Johnson's misrepresentations to K & K Treatment and Pinnacle Laboratory concerning Phillips. In its Motion to Dismiss, Millennium Health contends Plaintiff cannot establish the duty element of his negligence claim because Pinnacle Laboratory, a competitor of Millennium Health, analyzed Plaintiff's specimen and sent the “false positive” report to K & K Treatment. Memorandum in Support of Motion to Dismiss, Dkt. 36-1, p. 5. Further, Millennium Health contends it was not involved with the collection, receipt, testing, analysis, or reporting of Plaintiff's specimen. Id., p. 6. Although the Court grants in part Plaintiff's Motion to Amend, Plaintiff still fails to state a claim for negligence against Millennium even with the allegations regarding Laney and Johnson. For the reasons explained below, the FAC does not adequately allege a duty owed by Millennium to Plaintiff. The Motion to Amend is accordingly denied with respect to Plaintiff's allegations against Millennium Health, and Millennium is dismissed as a defendant in this action.

         ANALYSIS

         1. MILLENNIUM HEALTH'S MOTION TO DISMISS (Dkt. 36)

         A. Legal Standard

         Federal Rule of Civil Procedure 8(a)(2) requires only “a short and plain statement of the claim showing that the pleader is entitled to relief, ” in order to “give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.” Bell Atlantic v. Twombly, 550 U.S. 544, 555 (2007). While a complaint “does not need detailed factual allegations, ” it must set forth “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. 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.” Id. at 570. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id. at 556. The plausibility standard is not akin to a “probability requirement, ” but it asks for more than a sheer possibility that a defendant has acted unlawfully. 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. at 557.

         The Supreme Court identified two “working principles” that underlie Twombly in Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). First, the court need not accept as true legal conclusions that are couched as factual allegations. Id. Rule 8 does not “unlock the doors of discovery for a plaintiff armed with nothing more than conclusions.” Id. at 678-79. Second, to survive a motion to dismiss, a complaint must state a plausible claim for relief. Id. at 679. “Determining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id.

         A dismissal without leave to amend is improper unless it is beyond doubt that the complaint “could not be saved by any amendment.” Harris v. Amgen, Inc., 573 F.3d 728, 737 (9th Cir. 2009). The Ninth Circuit has held that “in dismissals for failure to state a claim, a district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts.” Cook, Perkiss and Liehe, Inc. v. Northern California Collection Service, Inc., 911 F.2d 242, 247 (9th Cir. 1990). The issue is not whether plaintiff will prevail but whether he ...


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