United States District Court, E.D. Michigan, Southern Division
ALLSTATE INSURANCE COMPANY, ALLSTATE FIRE AND CASUALTY INSURANCE COMPANY, ALLSTATE PROPERTY AND CASUALTY INSURANCE COMPANY, ESURANCE INSURANCE COMPANY, and ESURANCE PROPERTY AND CASUALTY INSURANCE COMPANY, Plaintiffs,
v.
TOX TESTING, INC., PARAGON LABS, LLC, MICHIGAN TECHNOLOGY PARTNERS, LLC, CURE IMAGING, LLC, U.S. HEALTH PHARMACEUTICALS, LLC d/b/a MEDS DIRECT, BLOCK BILLING SOLUTIONS, LLC, MICHAEL ANGELO, and CHITRA SINHA, M.D., Defendants.
David
R. Grand United States Magistrate Judge
OPINION
AND ORDER (1) GRANTING PLAINTIFFS' MOTION FOR ENTRY OF
JUDGMENT AGAINST MERCYLAND HEALTH SERVICES, PLLC AND MOHAMMED
ALI ABRAHAM, M.D., a/k/a MOHAMMED ALI IBRAHIM (ECF NO. 96) AS
UNOPPOSED, (2) ENTERING THE AGREED JUDGMENT, (3) PERMITTING
PLAINTIFFS TO SUBMIT A BILL OF COSTS DETAILING THEIR
ATTORNEY'S FEES AND COSTS INCURRED AS A RESULT OF THE
BREACH OF THE SETTLEMENT AGREEMENT, AND (4) CANCELING THE
HEARING SCHEDULED FOR OCTOBER 23, 2019 AT 10:00 A.M.
PAUL
D. BORMAN UNITED STATES DISTRICT JUDGE.
In this
action, the Allstate plaintiffs allege that the defendants,
comprised of “a medical clinic, urine drug testing
companies, magnetic resonance imaging (“MRI”)
facilities, pharmacies, physical therapy clinics, and the
physicians, owners, managers, agents and representatives of
the same, ” engaged in a fraudulent scheme to seek
reimbursement under Michigan's No-Fault Act for treatment
and services that were not actually rendered, were medically
unnecessary, were fraudulently billed, and were not lawfully
rendered. Allstate entered into a confidential settlement
agreement with two of the defendants, but now claims that
those defendants materially breached the settlement agreement
and accordingly seeks entry of the “Agreed
Judgment” as provided by the parties as a term of the
settlement.
Presently
before the Court is Plaintiffs' Motion for Entry of
Judgment Against Mercyland Health Services, PLLC
(“Mercyland”) and Mohammed Ali Abraham, M.D.,
a/k/a Mohammed Ali Ibrahim (“Abraham”). (ECF No.
96.) Defendants Mercyland and Abraham have not responded to
Allstate's motion. The Court has determined, pursuant to
E.D. Mich. L.R. 7.1(f), that a hearing is not necessary and
decides the matter on the written submission.
I.
BACKGROUND
A.
Allstate's Complaint
On
October 25, 2018, Plaintiffs Allstate Insurance Company,
Allstate Fire and Casualty Insurance Company, Allstate
Property and Casualty Insurance Company, Esurance Insurance
Company, and Esurance Property and Casualty Insurance Company
(collective “Allstate” and/or
“Plaintiffs”) filed their Complaint against 18
defendants, including Mercyland Health Services, PLLC
(“Mercyland”) and Mohammed Ali Abraham, M.D.,
a/k/a Mohammed Ali Ibrahim (“Abraham”). (ECF No.
1, Complaint.) Allstate alleges the existence of a
well-organized and complex fraudulent scheme whereby the
defendant medical providers submitted false and fraudulent
medical records, bills, and invoices to Allstate seeking
reimbursement under the Michigan No-Fault Act, Mich. Comp.
Laws § 500.3101, et seq., for medical treatment
and services that were not actually provided, were medically
unnecessary, were not lawfully rendered, and were charged at
unreasonable rates. (Id.) Allstate asserts claims
for violation of the Racketeer Influenced and Corrupt
Organizations (“RICO”) Act, 18 U.S.C. §
1962(c) and (d), common law fraud, civil conspiracy, payment
under mistake of fact, unjust enrichment, and declaratory
relief. (Id.)
B.
April 1, 2019 Settlement Agreement Between Allstate,
Mercyland and Abraham
On
April 1, 2019, Plaintiffs Allstate and Defendants Mercyland
and Abraham entered into a Confidential Settlement Agreement
to resolve Allstate's allegations in the Complaint
against Mercyland and Abraham only. (ECF No. 96-4,
Confidential Settlement Agreement.) The Settlement Agreement
required Mercyland and Abraham, jointly and severally, to pay
the amount set forth in the Agreement to Allstate within 75
days of the Settlement Agreement's execution date, April
1, 2019. (Id. ¶ 2.) Thus, payment was due to
Allstate on or before June 15, 2019. To “assure that
Mercyland and Abraham will comply with their obligations
under this [Settlement] Agreement, ” Mercyland and
Abraham were required to (and purportedly did) sign an
agreed-upon form of judgment (the “Agreed
Judgment”) as a term of the Settlement Agreement, in
the amount of $250, 000.00, less any payments made by
Mercyland and Abraham pursuant to paragraph 2 of the
Agreement. (Id. ¶ 3 and Exhibit A; ECF No.
96-3, Agreed Judgment.) The Settlement Agreement provides
that, “in the event that Allstate does not receive
timely payment pursuant to paragraph two, ” Allstate is
entitled to enter the Agreed Judgment after providing
Mercyland and Abraham with ten (10) days written notice of
the breach. (ECF No. 96-4, Settlement Agreement ¶ 3.)
In the
May 22, 2019 Stipulation and Order dismissing Allstate's
claims against Mercyland and Abraham, without prejudice, the
Court expressly “retain[ed] jurisdiction over this
matter only to enforce the terms of settlement reached
between the parties.” (ECF No. 67, May 22, 2019
Stipulation & Order of Dismissal 5, PgID 2626.)
C.
Mercyland and Abraham Breached the Parties' Settlement
Agreement
Pursuant
to the terms of the parties' Settlement Agreement,
Mercyland and Abraham were required to make payment of the
settlement amount to Allstate, in full, by June 15, 2019.
(See Settlement Agreement ¶ 2.) However,
Allstate did not receive payment, and, on June 18, 2019,
Allstate provided written notice to Mercyland and Abraham of
their “material breach of the Settlement
Agreement” because of their failure to make payment
“within the time specified by the Settlement Agreement,
” or thereafter. (ECF No. 96-5, June 18, 2019 Written
Notice from Allstate, PgID 3350.) Allstate advised in that
notice that if the material breach was not cured within ten
days (by June 28, 2019), it would “enter the Agreed
Judgment and seek all damages available to it.”
(Id.) Mercyland and Abraham failed to cure the
breach and have not made any payment to Allstate due pursuant
to the parties' Settlement Agreement. (ECF No. 96-6,
Catia Monforton-Farris Aff., ¶ 6, PgID 3352.)
D.
Allstate's Motion for Entry of Judgment Against ...