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Hernandez v. Gemini Hospice LLC

United States District Court, D. Arizona

April 10, 2017

Jessie N. Hernandez, Plaintiff,
v.
Gemini Hospice LLC, et al., Defendants. Gemini Hospice LLC, Counter-Claimant,
v.
Jessie N. Hernandez, Counter-Defendant.

          ORDER

          Honorable G. Murray Snow United States District Judge

         Pending before the Court is Plaintiff Jessie Hernandez's (“Hernandez”) Motion to Dismiss Gemini Hospice, LLC's (“Gemini”) Amended Counterclaim for Fraud, (Doc. 50). For the following reasons, the motion is granted in part and denied in part.

         BACKGROUND

         This counterclaim for fraud arises from Hernandez's lawsuit alleging that Gemini violated the Fair Labor Standards Act and engaged in unlawful defamation against her. (Doc. 48.) Hernandez was employed by Gemini as a certified nursing assistant for approximately five months between December 2014 and May 2015. (Id. at 10.) Part of Hernandez's duties involved traveling to visit and treat certain patients. (Id.) Gemini alleges that Hernandez knew that she was not permitted to obtain compensation for hourly time spent driving to her first work location of the day or driving home from her last work location of the day, regardless of whether that work location was the Gemini office or the home of a patient. (Id. at 11.) Gemini alleges that despite this, Hernandez continuously submitted claims for which she was paid for the time and mileage involved in this travel and that such claims were false and inflated. (Id. at 11-12.) Gemini also asserts that Hernandez inflated the actual amount of miles driven between patient visits in the middle of the day, ensuring compensation for miles that she never actually drove. (Id. at 12.) Gemini goes on to allege that Hernandez was compensated for approximately 1, 250 miles and over 100 hours that she was not entitled to as a result of this fraudulent scheme. (Id. at 13.)

         Hernandez successfully pursued payment for the time she spent traveling to her first patient of the day for the period of March 16 through March 31, 2015, by filing a claim for payment with the Industrial Commission of Arizona (“ICA”). (Doc. 50, Ex. 1.) Hernandez asserted before the ICA that she had in fact been instructed by the company to submit hours and mileage involved in making the first patient visit of the day, and asserted that “the employer did not raise this as an issue until this pay period.” (Id.) While Gemini did not contest that Hernandez actually spent the time involved in traveling to the first visit, it asserted that that company policy did not pay hours or mileage to their first client visit of the day. (Id.) The ICA rejected Gemini's defense both by awarding Hernandez all the amount of the additional pay she sought, and by noting that “there is no written policy in the company handbook coving (sic) this issue of documenting mileage and hourly start time.”[1] (Id.)

         In this present motion to dismiss, Hernandez seeks the dismissal of Gemini's fraud claim on two grounds: First, because it is precluded by the ICA's administrative determination. (Doc. 50 at 5-7.) Second, because it is not pled with sufficient particularity under Rule 9(b) of the Federal Rules of Civil Procedure. (Doc. 50 at 7.)

         DISCUSSION

         I. Legal Standard

         Claims sounding in fraud must satisfy the heightened pleading requirements of Rule 9(b) of the Federal Rules of Civil Procedure. Therefore, to survive a motion to dismiss, a claim that alleges fraud must “state with particularity the circumstances constituting fraud or mistake.” Fed.R.Civ.P. 9(b). Rule 9(b) requires the claimant to establish “the who, what, when, where, and how of the misconduct charged, as well as what is false or misleading about [the purportedly fraudulent] statement, and why it is false.” Cafasso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1055 (9th Cir. 2011).

         “[A]s a general rule, a district court may not consider materials not originally included in the pleadings in deciding a Rule 12 motion, ” however, “it ‘may take judicial notice of matters of public record' and consider them without converting a Rule 12 motion into one for summary judgment.” United States v. 14.02 Acres of Land More or Less in Fresno Cty., 547 F.3d 943, 955 (9th Cir. 2008) (quoting Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001) (internal quotation marks and citation omitted)). This exception includes reports by administrative bodies, and thus “[j]udicial notice is appropriate for records and reports of administrative bodies.” Id. (internal citations and quotations omitted). Therefore, this Court will take judicial notice of the administrative records of the ICA and include them in its analysis of the current motion to dismiss.

         II. Discussion A. Sufficiency of the Pleadings

         Gemini sufficiently alleges its counterclaim for fraud. In Arizona, a claim for fraud requires:

proof of nine elements by clear and convincing evidence: (1) a representation; (2) its falsity; (3) its materiality; (4) the speaker's knowledge of its falsity or ignorance of its truth; (5) the speaker's intent that it be acted upon by the recipient in the manner reasonably contemplated; (6) the hearer's ignorance of its falsity; (7) the hearer's reliance on its truth; (8) ...

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