United States District Court, E.D. Michigan, Southern Division
State Farm Mutual Ins. Co., Plaintiff,
Elite Health Centers, Inc., et. al. Defendants.
OPINION AND ORDER DENYING DEFENDANTS' MOTION TO
F. Cox United States District Judge.
State Farm Mutual Automobile Insurance Company (“State
Farm”) brings this action against 18 defendants.
Specifically, State Farm claims that Defendants have
submitted fraudulent claims to the insurer under
Michigan's No-Fault Automobile Act. State Farm's
complaint alleges several claims of common law fraud, civil
conspiracy and unjust enrichment, and a count for declaratory
before the Court is Defendants Elite Health Centers, Inc.,
Elite Chiropractic, P.C., Elite Rehabilitation, Inc., Midwest
Medical Associates, Inc., Pure Rehabilitation, Inc., Derek L.
Bittner D.C., Mark A. Radom, Derek Lawrence Bittner, D.C.,
Ryan Matthew Lukowski, D.C., Michael P. Draplin, D.C., Mark
J. Juska, M.D., and Superior Diagnostic, Inc.'s Motion to
Dismiss. Defendants Dearborn Center for Physical Therapy,
LLC, Michigan Center for Physical Therapy, Inc., Jayson
Rosett, Noah H. Upfall and Michael J. Paley, M.D. have filed
concurrences to the Motion to Dismiss. Defendant Chintan
Desai, M.D. has not concurred in the motion and has instead
filed a separate motion to dismiss, which the Court will
address at a later date in a separate Opinion & Order.
advance the following arguments in their motion: (1) the
complaint fails to plead any facts to support individual
liability; (2) State Farm lacks standing to allege claims
arising from the incorporation of the entity defendants as
non-profit corporations; (3) the fraud claims fail because
they do not meet the heightened pleading requirements of Rule
9(b); (4) the civil conspiracy claims fail because the
complaint fails to plead an underlying tort and because the
complaint fails to plead conspiracy with requisite
specificity; (5) the unjust enrichment claims fail because
the complaint fails to identify which Defendants received
which benefits and because an express contract exists
covering the subject matter at issue; and (6) the Court
should abstain from exercising jurisdiction over the
declaratory judgment action.
motion has been fully briefed. The Court finds that oral
argument would not significantly aid in the decisional
process and therefore orders that the instant motion will be
decided upon the briefs. See E.D. Mich. LR 7.1(f).
For the reasons that follow, the Court shall
DENY Defendants' motion.
State Farm is a corporation that engages in the business of
insurance in Michigan. State Farm brings this action against
18 defendants, all of which are alleged to have played a role
in a scheme to defraud the insurer: (1) Elite Health Centers,
Inc.; (2) Elite Chiropractic, P.C.; (3) Elite Rehabilitation,
Inc.; (4) Midwest Medical Associates, Inc.; (5) Pure
Rehabilitation, Inc.; (6) Derek L. Bittner D.C., P.C.; (7)
Mark A. Radom; (8) Derek Lawrence Bittner D.C.; (9) Ryan
Matthew Lukowski D.C.; (10) Michael P. Draplin D.C.; (11)
Noel H. Upfall D.O.; (12) Mark J. Juska; (13) Superior
Diagnostic, Inc.; (14) Chintan Desai, M.D.; (15) Michael J.
Paley; (16) Dearborn Center for Physical Therapy, LLC; (17)
Michigan Center for Physical Therapy, Inc.; and (18) Jason
center of the alleged scheme are Defendants Derek Lawrence
Bittner, D.C., a chiropractor, and Mark A. Radom, a
Farm alleges that Bittner and Radom created, own and control
several entities that: (1) submit bills and supporting
documentation to State Farm Mutual for chiropractic, physical
therapy and medical services purportedly rendered to patients
that were not actually performed or were not medically
necessary; (2) that prescribe and refer patients to two
locations owned by Defendant Jayson Rosett for physical
therapy services that are either not performed or not
medically necessary; and (3) that refer State Farm Mutual
insureds to receive medically unnecessary MRIs from Horizon
Imaging, LLC and from Defendant Superior Diagnostics, Inc.
(Compl. at ¶ 1).
The Elite Entities
Derek L. Bittner D.C., P.C. (“Bittner P.C.”) is a
Michigan professional corporation, formed in 2000. (Compl. at
¶ 203). Bittner is the resident agent and president.
(Id.). Defendant Elite Chiropractic P.C.
(“Elite Chiro”) is a Michigan professional
corporation formed in 2011. Derek Bittner is the resident
agent and sole officer.
P.C. and Elite Chiro submitted bills to State Farm Mutual for
chiropractic services purportedly rendered at four locations:
Sterling Heights, Detroit, Westland, and Riverview. (Compl.
at ¶ 205).
Elite Rehabilitation, Inc. (“Elite Rehab”) is a
Michigan domestic non-profit formed by Bittner in 2011.
(Compl. at ¶ 206). Defendant Pure Rehabilitation, Inc.,
(“Pure Rehab”) is a Michigan domestic non-profit
corporation formed in March 2014 to replace Elite Rehab.
(Compl. at ¶ 207).
Elite Health Centers, Inc., (“Elite Health”) is a
Michigan domestic non-profit formed in 2011 by Bittner.
(Compl. at ¶ 208). From 2013 through June 2014, Elite
Health submitted documentation for: (1) physical therapy
under the assumed names Rehabilitation of Sterling Heights
and Rehabilitation of Detroit; (2) for medical exams under
the name Pain Specialists of Michigan; for surgery
consultations under the name Prime Neurosurgery Group; and
(3) for neurological consultations under the name Pioneer
Neurology Group. Defendant Midwest Medical Associates, Inc.
(“Midwest Medical”) is a Michigan domestic
non-profit corporation formed in March 2014 to replace Elite
Ryan Matthew Lukowski, D.C. (“Lukowski”) is a
licensed chiropractor. (Compl. at ¶ 211). From
Approximately 2012 through approximately February 2013,
Lukowski worked for the Elite Entities full-time at the
Detroit location and once a week at the Sterling Heights
Michael Patrick Draplin, D.C., (“Draplin”) is a
licensed chiropractor. (Compl. at ¶ 212). Draplin worked
for the Elite Entities at the Detroit location, where he
became the primary Elite chiropractor after Lukowski left.
this time, Lukowski and Draplin are alleged to have falsely
purported to provide legitimate chiropractic evaluations and
treatment for a significant number of patients who treated at
Elite pursuant to the Predetermined Protocol, referred
patients to Elite doctors for medical exams pursuant to which
medically unnecessary physical therapy could be prescribed
and ordered medically unnecessary MRIs.
The Elite Doctors
Noah Upfall, D.O. (“Upfall”) is a licensed doctor
of osteopathy. (Compl. at ¶ 213). Upfall worked for
Elite Health and its successor, Midwest Medical, from 2011
through February 2014.
Mark J. Juska, M.D. (“Juska”) is a licensed
medical doctor. (Compl. at ¶ 214). Juska worked at Elite
Health and its successor, Midwest Medical, from late 2013
through early 2015. Juska testified that: he was an employee
of Michigan Sports and Spine Center, P.C. (“Michigan
Sports”); his boss was Jeff S. Pierce, D.O., who is the
president of Michigan Sports; Pierce arranged for him to work
at Elite Health; there was a relationship or agreement
between Elite Health and Michigan Sports; and that he was
paid by Michigan sports, not Elite Health.
and Juska are alleged to have falsely purported to examine,
diagnose and prescribe medically unnecessary physical therapy
for patients who treated at the Elite Entities and made
referrals to other Elite doctors and ordered medically
Superior Diagnostic, Inc. (“Superior”) is a
Michigan non-profit corporation formed in 2014. (Compl. at
¶ 215). Superior is owned by Bittner and Radom, either
directly or indirectly through Midwest Medical, which in turn
is owned by Bittner and Radom.
and Radom are alleged to have directed chiropractors, doctors
and staff at the Elite Entities to steer patients to Superior
for medically unnecessary MRIs to serve Radom's and
Bittner's financial interests.
Chintan Desai, M.D. (“Desai”) is a licensed
doctor and works as an independent contractor with a
teleradiology company where he remotely reviews MRIs for
Horizon, a mobile MRI truck located in a parking lot (which
Radom allegedly has a financial interest). (Compl.
¶¶ 22, 216).
Michael J. Paley, M.D. (“Paley”) is a licensed
doctor and remotely reviews MRIs from Horizon and Superior.
(Compl. at ¶ 217).
and Paley have allegedly provided fraudulent MRI reports for
patients who treated at Elite, which report abnormalities
that do not exist and which over-read and exaggerate
abnormalities that may exist.
The Rosett Defendants
times relevant to this action, Defendant Jayson Rosett
(“Rosett”) owned Defendant Dearborn Center for
Physical Therapy, LLC (“Dearborn Center”) and
Defendant Michigan Center for Physical Therapy, Inc.
(“Michigan Center”) (collectively, “the
Rosett PT Entities”). (Compl. at ¶ 219).
is alleged to have directed the activities of those who were
employed by and associated with the Rosett PT Entities. From
2011 to present, the Rosett PT Entities allegedly submitted
medical records and supporting documents, which are
fraudulent in that they represented that physical therapy