Engelhart v. Huong T. Le Nguyen (In re 1960 Family Practice, P.A.)

1

IN RE: 1960 FAMILY PRACTICE, P.A., Debtor.

EVA S. ENGELHART, CHAPTER 7 TRUSTEE,Plaintiff, v. HUONG T. LE NGUYEN, ALLERGY OF TEXAS, PLLC, EXPRESS SPECIALITY PHARMACY, LLC, PHYSICIAN'S ALLIANCE OF RED OAK, LP, HUONG LE AND ALLERGY OF TEXASPLLC, MINH NGUYEN, WOODLANDS IMAGING LP, VIVENTI MED LLC and TEXAS RADIOLOGY ASSOCIATES, Defendants.

No. 20-35493

Adversary No. 21-3906

United States Bankruptcy Court, S.D. Texas, Houston Division

March 7, 2023

CHAPTER 7

MEMORANDUM OPINION

Eduardo V. Rodriguez, Chief United States Bankruptcy Judge

Eva S Engelhart, chapter 7 Trustee requests that this Court reconsider dismissal of her complaint against Texas Radiology Associates, P.A., Viventi Med, LLC, and Woodlands Imaging LP pursuant to Federal Rule of Civil Procedure 54(b) or in the alternative pursuant to Federal Rule of Civil Procedure 60(b). Texas Radiology Associates, P.A., Viventi Med, LLC and Woodlands Imaging, LP oppose the relief requested.

On February 24, 2023, the Court held a hearing and after considering the pleadings on file, evidence in the record, arguments of counsel, and applicable law, the Court grants "Plaintiff's Motion To Reconsider Dismissal (Rule 7054(a)/54(b))) Or In The Alternative Motion for Relief From Order (Rule 9054(b)/60(b))."^[1] However, pursuant to Rule 12(e), Eva Engelhart, chapter 7 Trustee, must rectify the shotgun pleading errors violating Federal Rules of Civil Procedure 8(a)(2) and 9(b) by filing a more definite statement in the form of an amended complaint by no later than March 28, 2023.

I. Background

1. On November 9, 2020, 1960 Family Practice, P.A. filed for bankruptcy protection under chapter 7 of the Bankruptcy Code^[2] initiating the bankruptcy case.^[3]

2. On September 7, 2021, Eva S. Engelhart, Chapter 7 Trustee, ("Trustee or Plaintiff") filed the instant complaint ("Adversary Proceeding") against Huong Le, Express Specialty Pharmacy, LLC, Allergy Of Texas PLLC, and Physicians Alliance Of Red Oak, LP.^[4]

3. On August 12, 2022, Plaintiff filed her "Chapter 7 Trustee's Motion For Leave To File First Amended Complaint Pursuant To Federal Rule Of Civil Procedure 15(a)(2)."^[5]

4. On September 2, 2022, Huong Lee and Allergy of Texas, PPC filed "Defendants Huong Le and Allergy Of Texas PLLC's Objection To Trustee's Motion For Leave To Amend And Motion To Strike."^[6]

5. On September 8, 2022, Trustee filed her "Chapter 7 Trustee's Response To Defendants' Motion To Strike."^[7] 6. On October 17, 2022, the Court held a hearing and Trustee, inter alia, was granted until October 18, 2022 to amend her complaint.^[8]

7. On October 18, 2022, Trustee filed her "First Amended Complaint"^[9] ("Complaint") against Huong Le ("Le", Minh Nguyen ("Nguyen"), Express Specialty Pharmacy, LLC ("ESP"), Allergy Of Texas PLLC ("AOT"), Physicians Alliance Of Red Oak, LP ("PARO"), Woodlands Imaging, LP ("Woodlands"), Viventi Med LLC ("Viventi"), and Texas Radiology Associates, P.A. ("TRA") (collectively "Defendants") which is currently the live pleading before the Court.

8. On November 10, 2022, the following pleadings were filed: "Dr. Minh Nguyen's Motion To Dismiss For Failure To State A Claim Pursuant To B.R. 7012(b)(6); Failure To Plead Fraud With Particularity; and Alternatively For More Definite Statement Pursuant To B.R. 70121(e)"^[10] (Nguyen's Motion To Dismiss"); "Texas Radiology Associates, PA's Motion To Dismiss For Failure To State A Claim Pursuant To B.R. 7012(b)(6); and Failure To Plead Fraud With Particularity"^[11] ("TRA's Motion To Dismiss"); "Woodlands Imaging, LP's Motion To Dismiss For Failure To State A Claim Pursuant To B.R. 7012(b)(6); and Failure To Plead Fraud With Particularity"^[12] ("Woodland's Motion To Dismiss"); and "Viventi Med LLC's Motion To Dismiss For Failure To State A Claim Pursuant To B.R. 7012(b)(6); and Failure To Plead Fraud With Particularity"^[13] ("Viventi's Motion To Dismiss").

9. On November 17, 2022, the following pleadings were filed: "Defendant Huong Le's Rule 12(b)(6) Motion To Dismiss For Failure To State A Claim and, Alternatively, Rule 12(b)(1) Motion To Dismiss For Lack Of Subject Matter Jurisdiction"^[14] ("Le's Motion To Dismiss"); and "Defendant Allergy Of Texas, PLLC's ("AOT") Rule 12(b)(6) Motion To Dismiss For Failure To State A Claim"^[15] ("AOT's Motion To Dismiss").

10.On November 19, 2022, Trustee filed "Trustee's Response To Dr. Minh Nguyen's Motion To Dismiss For Failure To State A Claim Pursuant To 7012(b)(6); Failure To Plead Fraud With Particularity And Alternatively For More Definite Statement Pursuant To 7012(e)"^[16]("Trustee's Response to Nguyen's Motion to Dismiss").

11.Trustee failed to timely respond to TRA's Motion To Dismiss, Woodland's Motion to Dismiss, and Viventi's Motion to Dismiss, and thus were treated as unopposed.

12.On December 5, 2022, the Court entered an order granting: (i) TRA's Motion to Dismiss and dismissed Causes of Action 15, 16, 17, 18, & 19 of the Complaint as they relate to TRA; (ii) Woodland's Motion To Dismiss and dismissed Causes of Action 24, 25, 26, 27, & 28 of the as they related to Woodlands; and (iii) Viventi's Motion to Dismiss and dismissed Causes of Action 20, 21, 22, & 23 of the Complaint as they relate to Viventi ("Order of Dismissal").^[17]

13.On December 7, 2022, Trustee filed "Plaintiff's Motion To Reconsider Dismissal (Rule 7054(a)/54(b)) Or In The Alternative Motion For Relief From Order (Rule 9054(b)/60(b)" ("Motion To Reconsider").^[18]

14.Additionally and also on December 7, 2022, Trustee filed (i) Trustee's Response To Woodlands Imaging, LP's Motion To Dismiss For Failure To State A Claim Pursuant To 7012(b)(6) And Failure To Plead Fraud With Particularity And Chapter 7 Trustee's Motion To Amend Pursuant To Rule 15" ("Trustee's Response to Woodland's Motion to Dismiss")^[19]; (ii) "Trustee's Response To Texas Radiology Associates, Pa's Motion To Dismiss For Failure To State A Claim Pursuant To 7012(b)(6) And Failure To Plead Fraud With Particularity And Chapter 7 Trustee's Motion To Amend Pursuant To Rule 15"^[20] ("Trustee's Response to TRA's Motion to Dismiss"); (iii) "Trustee's Response To Viventi Med, LLC's Motion To Dismiss For Failure To State A Claim Pursuant To 7012(b)(6) And Failure To Plead Fraud With Particularity And Chapter 7 Trustee's Motion To Amend Pursuant To Rule 15"^[21] ("Trustee's Response to Viventi's Motion To Dismiss").

15.On December 8, 2022, Trustee timely filed "Trustee's Response To Allergy Of Texas, PLLC's Motion To Dismiss For Failure To State A Claim Per Rule 12 (b)(6)"^[22] ("Trustee's Response to AOT's Motion To Dismiss"); and "Trustee's Response To Huong Le's Motion To Dismiss For Failure To State A Claim Per Rule 12 (b)(6)"^[23] ("Trustee's Response to Le's Motion To Dismiss").

16.On December 27, 2022, Texas Radiology Associates, P.A., Viventi Med, LLC, and Woodlands Imaging, LP (collectively "Defendants") filed "Defendants' Response to Trustee's Motion to Reconsider"^[24] ("Defendants' Response").

17.On February 24, 2023, the Court held a hearing on the Motion to Reconsider and now issues its instant memorandum and order.^[25]

II. Jurisdiction, Venue, and Constitutional Authority

This Court holds jurisdiction pursuant to 28 U.S.C. § 1334(b) and exercises its jurisdiction in accordance with Southern District of Texas General Order 2012-6.^[26] Section 157 allows a district court to "refer" all bankruptcy and related cases to the bankruptcy court, wherein the latter court will appropriately preside over the matter.^[27] This Court determines that pursuant to 28 U.S.C. § 157(b)(2)(A), (F), (H) and (O) this proceeding contains core matters, as it primarily involves proceedings concerning the administration of this estate and recovery of alleged fraudulent and preferential transfers.^[28] This proceeding is also core under the general "catch-all" language with respect to the preference claims, because such suits are the type of proceeding that can only arise in the context of a bankruptcy case.^[29]

This Court may only hear a case in which venue is proper.^[30] 28 U.S.C. § 1409(a) provides that "a proceeding arising under title 11 or arising in or related to a case under title 11 may be commenced in the district court in which such case is pending."^[31] All Defendants reside and/or have their principal place of business in either The Woodlands, Texas, Spring, Texas, or Houston, Texas,^[32] and therefore, venue of this proceeding is proper.

This Court must evaluate whether it has constitutional authority to enter an order in this case. In Stern v. Marshall, which involved a core proceeding brought by the debtor under 28 U.S.C. § 157(b)(2)(C), the Supreme Court held that a bankruptcy court "lacked the constitutional authority to enter a final judgment on a state law counterclaim that is not resolved in the process of ruling on a creditor's proof of claim."^[33] However, Stern is inapplicable to the Motion to Reconsider. Stern concerned final orders entered by the bankruptcy court and here, the Court need only enter an interlocutory order because motions to reconsider pursuant to Federal Rule of Civil Procedure 54(b) and Federal Rule of Civil Procedure 60(b) are interlocutory.^[34] Entering an interlocutory order does not implicate "the constitutional limitations on the Court's authority to enter final judgments."^[35] Therefore, this Court need not determine whether it has constitutional authority to enter a final order because an interlocutory order is all that is required by the instant Motion to Reconsider.

III. Analysis

A. Standard of review for a motion to reconsider under the Federal Rules of Civil Procedure

Trustee seeks reconsideration of this Court's Order of Dismissal pursuant to Federal Rule of Civil Procedure ("Rule") 54(b), made applicable to this...