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Metropolitan Property and Casualty Insurance Co. v. Savin Hill Family Chiropractic, Inc.

United States District Court, D. Massachusetts

December 28, 2016

METROPOLITAN PROPERTY AND CASUALTY INSURANCE COMPANY and THE COMMERCE INSURANCE COMPANY, Plaintiffs,
v.
SAVIN HILL FAMILY CHIROPRACTIC, INC., et al., Defendants.

          REPORT AND RECOMMENDATION ON THE GLASSMAN PARTIES' MOTION TO DISMISS UNDER THE MASSACHUSETTS ANTI-SLAPP STATUTE

          Judith Gail Dein United States Magistrate Judge.

         I. INTRODUCTION

         The plaintiffs, Metropolitan Property and Casualty Insurance Company and The Commerce Insurance Company (collectively, “Plaintiffs” or “Carriers”), have brought this action against two chiropractic entities, their present and former principals, certain of their employees and various related entities and individuals, claiming that the Defendants engaged in a fraudulent scheme to obtain insurance benefits from the Carriers by billing for chiropractic treatment that was “unreasonable and unnecessary, that [has] been wrongfully and grossly exaggerated, not rendered in some cases, rendered by unlicensed personnel, rendered to non-injured body areas, as well as for magnified and fabricated symptoms and injuries, ” and by “filing, pursuing and prosecuting insurance claims based on such treatment and bills.” Among the named Defendants are the Law Offices of Jeffrey S. Glassman, LLC (“GLO”), its owner, Jeffrey S. Glassman, Esq. (“Glassman”), and two individuals who were employed as paralegals at GLO, Brandy Soto (“Soto”) and Heger Asenjo (“Asenjo”) (collectively, “the Law Firm Defendants”). The Plaintiffs claim that the Law Firm Defendants participated in the alleged scheme by, inter alia, unlawfully recruiting and soliciting patients insured by the Carriers; referring patients to the chiropractic entities for treatment; and knowingly submitting and prosecuting false and inflated claims for insurance benefits using false chiropractic records. In their Second Amended Complaint, the Plaintiffs have asserted claims against the Law Firm Defendants for violations of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1962(c)-(d) (Counts I-IV), common law fraud/deceit (Count V), true conspiracy (Count VI), civil conspiracy (Count VII), intentional interference with contractual relations (Count IX) and intentional interference with advantageous business relationships (Count X). In addition, the Plaintiffs have asserted claims against GLO and Glassman pursuant to Mass. Gen. Laws ch. 93A (Counts XI-XIII).

         The matter is presently before the court on the “Motion by Jeffrey Glassman and Law Offices of Jeffrey S. Glassman LLC, Under the Massachusetts Anti-SLAPP Statute, to Dismiss All State Law Claims Against Them and for an Award of Attorneys' Fees and Expenses” (Docket No. 344). By their motion, Glassman and GLO (collectively, the “Glassman Parties”) contend that all of the Carriers' state law claims against them must be dismissed because those claims are based on the Glassman Parties' “petitioning activities, ” and are therefore not actionable under the Massachusetts anti-SLAPP statute, Mass. Gen. Laws ch. 231, § 59H.[1] The Glassman Parties further contend that under the anti-SLAPP statute, they are entitled to recover the costs and reasonable attorney's fees incurred in connection with their motion. As set forth in detail below, this court finds that the Glassman Parties have ignored substantial portions of the Complaint in an attempt to characterize the case against them as a challenge solely to their representation of clients in connection with litigation.[2] Considering the Second Amended Complaint in its entirety, this court finds that the Glassman Parties have failed to satisfy their burden of showing that the state law claims against them are based on petitioning activities alone, and that there is no substantial basis for those claims aside from the petitioning activities. Accordingly, and for all the reasons described herein, this court recommends to the District Judge to whom this case is assigned that the pending motion to dismiss be DENIED.

         II. STATEMENT OF FACTS[3]

         The Plaintiffs are insurance companies which underwrite motor vehicle insurance in Massachusetts. (2d Am. Compl. ¶ 126). Massachusetts law requires that motor vehicle insurers, including the Plaintiffs, provide personal injury protection (“PIP”) benefits in every policy they issue. (Id. ¶ 127). See also Golchin v. Liberty Mut. Ins. Co., 460 Mass. 222, 225-26, 950 N.E.2d 853, 857 (2011) (describing PIP benefits as part of the Massachusetts standard automobile insurance policy, and “the ‘central feature' of the Massachusetts ‘no-fault' automobile insurance system” (citation omitted)). Such benefits “are payable for medical expenses, lost wages, and replacement services and may be claimed by, among others, any person who is injured while occupying an insured vehicle.” Golchin, 460 Mass. at 226, 950 N.E.2d at 857-58. Moreover, the insurer is required to pay the benefits “upon receipt of reasonable proof of the fact and amount of expenses and loss incurred” by the claimant, and may be subject to liability if PIP benefits that are due and payable remain unpaid for 30 days, or if it is shown that the insurer knowingly or willfully failed to carry out the prompt, fair and equitable settlement of a claim for which liability is reasonably clear. (2d Am. Compl. ¶¶ 129-30, 140).

         The Plaintiffs contend that in order to meet their obligations to process PIP claims promptly and fairly, they must rely on the representations of the claimants' treatment providers, including their representations that the treatment given and the expenses incurred were reasonable, necessary and causally related to an event covered under the applicable insurance policy. (Id. ¶ 132). Allegedly, under Massachusetts law, chiropractic treatment, as well as any bills associated with such treatment, are presumed to be necessary and reasonable when sworn to by the licensed chiropractor who provided the claimant's treatment. (Id. ¶ 133). The Plaintiffs assert that in this case, “[t]he Defendants have developed and implemented a scheme to exploit this statutory framework by utilizing the ‘necessary and reasonable treatment' presumption to wrongfully induce Metropolitan and Commerce to pay or settle false and inflated claims[.]” (Id. ¶ 142).

         There is no need to describe the alleged scheme in detail, or to explain the role of each Defendant. Rather, the following overview of the scheme and the Law Firm Defendants' alleged participation in that scheme will suffice to put the Glassman Parties' motion to dismiss in context.

         Overview of the Alleged Scheme to Defraud the Carriers

         The Carriers claim that since January 2008, the Defendants have carried out a fraudulent scheme by soliciting and recruiting patients who had reportedly sustained injuries in automobile accidents and were eligible for PIP benefits under their automobile insurance policies, arranging for the patients to receive unnecessary and/or unreasonable chiropractic evaluations and treatment at Logan Chiropractic, Inc. (“Logan”) or Savin Hill Family Chiropractic, Inc. (“Savin Hill”), and seeking coverage for the costs of that treatment by submitting or facilitating the submission of bills to the Carriers. (See id. ¶¶ 1-5, 163). According to the Plaintiffs, the bills reflected chiropractic treatment that was “wrongfully and grossly exaggerated, not rendered in some cases, rendered by unlicensed personnel, rendered to non-injured body areas, as well as for magnified and fabricated symptoms and injuries.” (Id. ¶ 3). Moreover, the Plaintiffs contend that the Defendants acted knowingly and intentionally in connection with their efforts to obtain improper insurance payments. (Id. ¶ 4).

         The Defendants' conduct allegedly resulted in the submission of thousands of improper insurance claims, including claims for PIP benefits, bodily injury coverage and uninsured motorist benefits. (Id. ¶¶ 2, 9). However, the Carriers contend that because the false nature of the chiropractic records was not apparent on a claim-by-claim basis, they were unable to detect the fraud or avoid paying benefits. (Id. ¶¶ 9-10). They further contend that they have incurred millions of dollars in damages as a result of the Defendants' conduct. (See id. ¶¶ 12(g)-12(h)). By their claims in this action, the Carriers are seeking both compensatory damages and injunctive relief against each of the Defendants.

         The Law Firm Defendants' Alleged Role in the Fraudulent Scheme

         Defendant GLO is a Massachusetts limited liability company, which was organized for the purpose of providing legal services. (Id. ¶ 40). Defendant Glassman is a licensed attorney and the sole owner of GLO. (Id. ¶ 42). The Plaintiffs claim that Glassman and his firm have “a longstanding illicit and illegal referral relationship with the [remaining] Defendants, ” which “was established to carry out the Defendants' fraudulent scheme to wrongfully obtain insurance benefits from [the Carriers].” (Id. ¶ 45). In particular, the Plaintiffs assert that Glassman, GLO, and two paralegals who have been employed by GLO throughout the relevant time period, Defendants Soto and Asenjo, participated in the alleged fraud by:

(1) improperly and unlawfully soliciting, meeting and/or recruiting Metropolitan and Commerce patients and/or claimants to seek unwarranted, unlicensed, predetermined and/or unnecessary and unreasonable chiropractic treatment from [Logan, Savin Hill and a number of licensed chiropractors working for those entities (collectively, the “Medical Provider Defendants”)]; (2) knowingly and willfully participating in the preparation and/or completion of patient in-take forms as well as other medical records and forms from the Medical Provider Defendants on behalf [of] Metropolitan and Commerce claimants and/or patients; and (3) improperly and unlawfully soliciting, meeting and/or recruiting Metropolitan and Commerce patients and/or claimants to submit PIP, Medical Payment (“MedPay”), Bodily Injury (“BI”), Optional Bodily Injury (“OBI”), and Uninsured and/or Underinsured Motorist (“UM”) claims through the legal representation of the Defendant, Law Offices of Jeffrey S. Glassman, LLC, based on the fraudulent chiropractic records and bills of the Medical Provider Defendants.

(Id. ¶ 5).

         As alleged in the Second Amended Complaint, the unlawful solicitation, recruiting and referral activities were largely carried out by Soto and Asenjo in their capacities as employees of GLO. (See id. ¶¶ 48-57). The plaintiffs claim that Soto and Asenjo met with individuals who had been injured in automobile accidents, and were eligible for benefits under insurance policies with the Carriers, in order to solicit business for GLO and establish an attorney-client relationship between GLO and the patients. (Id. ¶¶ 49, 51-52, 54-55). According to the Plaintiffs, the paralegals identified those patients by obtaining police reports of automobile accidents that had occurred in the Boston area, and contacting the individuals identified in the police reports. (Id. ¶¶ 51, 198). They also received the names and contact information of motor vehicle accident victims from sources employed at Boston Medical Center, Enterprise Rent-A-Car and Eagle Hill Auto Body. (Id. ¶¶ 241-46, 253-56, 260, 267, 273, 276). Soto and Asenjo allegedly used that information to solicit and recruit new personal injury patients not only for GLO, but also for Logan and Savin Hill. (Id. ΒΆΒΆ 244, 255, 267, 274). The Plaintiffs claim that solicitations by a representative or agent of an attorney are prohibited under Massachusetts statutory law, and that Soto's and ...


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