United States District Court, E.D. Michigan, Southern Division
State Farm Mutual Ins. Co., Plaintiff,
Elite Health Centers, Inc., et. al., Defendants.
OPINION & ORDER DENYING DEFENDANT'S 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 Defendant Chintan Desai's
“Motion to Dismiss the Complaint for Failure to Join a
Necessary Party and Failure to State a Claim.” (Doc. #
58, Def.'s Mo.”). Defendant brings his motion
pursuant to Rules 9(b), 12(b)(6), 12(b)(7) and 19 of the
Federal Rules of Civil Procedure. In his motion, Defendant
advances two main arguments. First, Defendant argues that
Plaintiff's complaint should be dismissed because State
Farm failed to join Horizon Imaging, LLC. Defendant claims
that Horizon is a necessary and indispensable party pursuant
to Federal Rule of Civil Procedure 19. Defendant
alternatively argues that the complaint's common law
fraud, civil conspiracy, and unjust enrichment claims fail to
state a claim upon which relief could be granted.
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
State Farm is a corporation that engages in the business of
insurance in Michigan. Plaintiff brings this action against
18 defendants, all of which played a role in an alleged
scheme to defraud the insurer.
center of the alleged scheme are Defendants Derek Lawrence
Bittner, D.C., a chiropractor, and Mark A. Radom, a
layperson. State 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.
Bittner's wife, Ryan Bittner, D.C., is the secretary.
(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). Defendant Elite Health Centers, Inc.,
(“Elite Health”) is a Michigan domestic
non-profit formed in 2011 by Bittner. (Compl. at ¶ 208).
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; (3) for surgery consultations under
the name Prime Neurosurgery Group; and (4) 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 Health.
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.
Farm alleges that Lukowski and Draplin: (1) falsely purported
to provide legitimate chiropractic evaluations and treatment
for a significant number of patients who were treated at
Elite pursuant to the Predetermined Protocol; (2) referred
patients to Elite doctors for medical exams pursuant to which
medically unnecessary physical therapy could be prescribed;
and (3) 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 Sportsj 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 examined, diagnosed and
prescribed medically unnecessary physical therapy for
patients who treated at the Elite Entities and made referrals
to other Elite doctors and ordered medically unnecessary
MRI Defendants (Defendant Desai)
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. is a licensed doctor and works as an
independent contractor with a teleradiology company where he
remotely reviews MRIs for non-party Horizon Imaging, LLC, a
mobile MRI truck located in a parking lot (in which Radom
allegedly has a financial interest). (Compl. ¶¶ 22,
216). Defendant Michael J. Paley, M.D. (“Paley”)
is a licensed doctor and remotely reviews MRIs from non-party
Horizon and Defendant Superior. (Compl. at ¶ 217).
and Paley 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 were
fraudulent in that they represented that physical therapy
services were actually rendered and were medically necessary
when, in fact, they were not.
Allegations Regarding ...