Government Employees Insurance Co. et al v. Jacques, M.D. et al

Filing 141

ORDER ADOPTING REPORT AND RECOMMENDATIONS. For the reasons stated in the attached Memorandum and Order, plaintiffs' motion for entry of default judgment against defendants Eastwestern Neurology, P.C., Samir Haddad, M.D., Modern Neurology, P.C., New Age Neurology, P.C., and Ultimate Healing Acupuncture, P.C., is GRANTED in the amount of $722,769.82. The Clerk of Court is respectfully directed to enter judgment for plaintiff and against defendants Eastwestern Neurology, P.C., Samir Hadd ad, M.D., Modern Neurology, P.C., New Age Neurology, P.C., and Ultimate Healing Acupuncture, P.C. and close this case. Plaintiffs' counsel shall serve a copy of this Memorandum and Order and the Judgment on defendants, and note service on the docket. Ordered by Judge Kiyo A. Matsumoto on 3/31/2017. (Fletcher, Camille)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
-------------------------------------GOVERNMENT EMPLOYEES INSURANCE CO.,
GEICO INDEMNITY CO., GEICO
GENERAL INSURANCE COMPANY, and
GEICO CASUALTY CO.,
Plaintiffs,
-againstROGER JACQUES, M.D., BAYVIEW
MEDICAL CARE, P.C., JEAN CLAUDE
COMPAS, M.D., NORTH EAST EMPIRE
MEDICAL, P.C., ROCKAWAY FAMILY
MEDICAL CARE, P.C., MODESTO
FONTANEZ, M.D., EASTWESTERN
NEUROLOGY, P.C., SAMIR HADDAD, M.D.,
MODERN NEUROLOGY, P.C., NEW AGE
NEUROLOGY, P.C., NICOLAS EL-KHOURY,
M.D., ST. DOMINICK MEDICAL SERVICES,
P.C., ANTHONY DESANO, D.C.,
CHIROPRACTIC EXAM WORKS, P.C., GLENN
WHITNEY, D.C., MSK WELLNESS, D.C.,
P.C., WOO YUP KANG, D.C., PACIFIC
CHIROPRACTIC, P.C., JOSEPH GAMBINO,
D.C., ABSOLUTE CHIROPRACTIC &
WELLNESS, P.C., JJ & R CHIROPRACTIC,
P.C., HAN NA KIM, P.T., PAWEL
GIERUCKI, L.AC., SILVER NEEDLE
ACUPUNCTURE, P.C., YOUNG PARK, L.AC.,
P.T., Y.S.P. PHYSICAL THERAPY, P.C.,
XIAO XU, L.AC., ULTIMATE HEALING
ACUPUNCTURE, P.C., and JOHN DOE
DEFENDANTS 1-10,
Defendants.
-------------------------------------MATSUMOTO, United States District Judge:

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ORDER ADOPTING REPORT
AND RECOMMENDATION
14-CV-5299(KAM)(VMS)

On September 10, 2014, plaintiffs Government Employees
Insurance

Co.,

GEICO

Indemnity

1

Co.,

GEICO

General

Insurance

Company,

and

GEICO

“plaintiffs”)
Jacques,

Casualty

commenced

M.D.

(“Dr.

this

Co.

(collectively,

action

Jacques”);

against

Bayview

“GEICO”

defendants

Medical

Care,

or

Roger
P.C.

(“Bayview Medical”); Jean Clause Compas, M.D. (“Dr. Compas”);
North East Empire Medical, P.C. (“North East Empire”); Rockaway
Family Medical Care, P.C. (“Rockaway”); Modesto Fontanez, M.D.
(“Dr. Fontanez”); Eastwestern Neurology, P.C. (“Eastwestern”);
Samir Haddad (“Dr. Haddad”); Modern Neurology, P.C. (“Modern”);
New Age Neurology, P.C. (“New Age”); Nicolas El-Khoury, M.D. (“Dr.
El-Khoury”); St. Dominick Medical Services, P.C. (“St. Dominick”);
Anthony

Desano,

D.C.

(“Desano”);

Chiropractic

Exam

Works

(“Chiropractic”); Glenn Whitney, D.C. (“Whitney”); MSK Wellness,
D.C.,

P.C.

(“MSK”);

Woo

Kup

Kang,

D.C.

(“Kang”);

Pacific

Chiropractic, P.C. (“Pacific Chiropractic”), Joseph Gambino, D.C.
(“Gambino”); Absolute Chiropractic & Wellness, P.C. (“Absolute
Chiropractic”); JJ & R Chiropractic, P.C. (“JJ & R Chiropractic”);
Han Na Kim, P.T. (“Kim”); Pawel Gierucki, L.AC. (“Gierucki”);
Silver Needle Acupuncture, P.C. (“Silver Needle”); Young Park,
L.AC., P.T. (“Park”); Y.S.P. Physical Therapy (“YSP”); Xiao Xu
(“Xu”);

and

Ultimate

Healing

Acupuncture,

P.C.

(“Ultimate

Healing”) (collectively, “Defendants”) alleging that defendants
engaged in a scheme to submit fraudulent claims for reimbursement

2

pursuant to New York’s “no fault” insurance law in violation of
the federal Racketeer Influenced and Corrupt Organizations Act
(“RICO”), 18 U.S.C. §§ 1961 et seq., as well as New York State
common law fraud and unjust enrichment.
(“Compl.), ECF No. 1.)

(See generally Complaint

The summons and complaint were served upon

defendants Eastwestern, Haddad, Modern, New Age, and Ultimate
Healing (collectively, “Defaulting Defendants”) on September 25,
2014. (Executed Summons, ECF Nos. 9, 16, 17, 18, 33.)

The

Defaulting Defendants never appeared in this action, and on October
31, 2014, the Clerk of Court issued a Certificate of Default for
each of the Defaulting Defendants.

(Certificates of Default, ECF

Nos. 51, 54, 55, 56, 60.)
Plaintiffs filed a renewed motion for entry of default
judgment against the Defaulting Defendants on June 30, 2016. 1
Nos. 121-23.).

(ECF

Plaintiffs served the renewed motion for entry of

default judgment on the Defaulting Defendants.
Service, ECF No. 124.)

(See Affidavit of

On October 7, 2016, the court referred

the motion for entry of default judgment to Magistrate Judge Vera
M. Scanlon for a Report and Recommendation. (See Docket Entry dated
October 7, 2016.)

1

All other defendants have been dismissed from this action.
73, 84-85, 87-89, 111-112, 114, 125, 130-137.)

3

(See ECF Nos. 3,

On February 13, 2017, Magistrate Judge Scanlon issued a
Report and Recommendation (Report and Recommendation (“R&R”), ECF
No. 139), in which she recommended that the court grant plaintiffs’
motion for default judgment and find the Defaulting Defendants
liable

for

fraud

and

unjust

enrichment;

enter

a

declaratory

judgment that plaintiffs are not obligated to pay the outstanding
fraudulent

claims

submitted

by

the

corporate

Defaulting

Defendants, Modern, New Age, Eastwestern and Ultimate Healing;
find Dr. Haddad liable for a substantive violation of RICO as well
as for conspiracy to violate the civil RICO statute; and order
judgment

for

plaintiffs

in

the

amount

of

$722,769.82,

plus

interest, to be allocated as follows: (1) Dr. Haddad and Modern to
be jointly and severally liable for $139,953.16; (2) Dr. Haddad
and New Age to be jointly and severally liable for $25,833.64; (3)
Dr. Haddad to be liable individually for $102,500.23; (4) Ultimate
Healing to be liable for $379,086.53; and (5) Eastwestern to be
liable for $75,396.26. on plaintiffs' state common law fraud
claims. (R&R, ECF No. at 35-36.)
A district court reviewing a Report & Recommendation
from a magistrate judge “may accept, reject, or modify, in whole
or in part, the findings or recommendations made by the magistrate
judge.”

28

U.S.C.

§

636(b)(1)(C).

4

“Failure

to

object

to

a

magistrate judge’s report and recommendation within the prescribed
time limit ‘may operate as a waiver of any further judicial review
of the decision, as long as the parties receive clear notice of
the consequences of their failure to object.’” Sepe v. New York
State Ins. Fund, 466 F. App’x 49, 50 (2d Cir. 2012) (quoting United
States v. Male Juvenile, 121 F.3d 34, 38 (2d Cir.1997)); see also
Almonte v. Suffolk Cnty., 531 F. App’x 107, 109 (2d Cir. 2013)
(“As a rule, a party’s failure to object to any purported error or
omission in a magistrate judge’s report waives further judicial
review of the point.” (quoting Cephas v. Nash, 328 F.3d 98, 107
(2d Cir. 2003))); Wagner & Wagner, LLP v. Atkinson, Haskins,
Nellis, Brittingham, Gladd & Carwile, P.C., 596 F.3d 84, 92 (2d
Cir. 2010) (“[A] party waives appellate review of a decision in a
magistrate judge’s Report and Recommendation if the party fails to
file timely objections designating the particular issue.”).
Upon

careful

review

of

the

unopposed

Report

and

Recommendation, which was served on the Defaulting Defendants, and
the

plaintiffs’

motion

for

default

judgment,

including

their

supporting affidavits and exhibits, the court finds no clear error
in

Judge

Scanlon’s

well-reasoned,

calculated Report and Recommendation.

thorough

and

carefully

Accordingly, the court

adopts the Report and Recommendation in its entirety pursuant to

5

28 U.S.C. § 636(b)(1).
Accordingly, plaintiffs’ motion for entry of default
judgment against defendants Eastwestern Neurology, P.C., Samir
Haddad, M.D., Modern Neurology, P.C., New Age Neurology, P.C., and
Ultimate Healing Acupuncture, P.C., is GRANTED in the amount of
$722,769.82. The court ORDERS that:
1.

Default judgment on liability be entered against all

Defaulting Defendants as to plaintiffs’ common law fraud and unjust
enrichment claims;
2.
the

It is declared that plaintiffs are not obligated to pay

outstanding

Defaulting

fraudulent

Defendants

claims

Eastwestern

submitted

by

Neurology,

the

corporate

P.C.,

Modern

Neurology, P.C., New Age Neurology, P.C., and Ultimate Healing
Acupuncture, P.C.;
3.

Default judgment be entered against Dr. Samir Haddad as

to plaintiffs’ RICO claims; and
4.

Dr. Samir Haddad be held jointly and severally liable

with each of Modern Neurology, P.C. and New Age Neurology, P.C.
The judgment in the amount of $722,769.82 is allocated as follows:
5.

Dr. Samir Haddad and Modern Neurology, P.C. be jointly

and severally liable for $139,953.16, which includes $74,101.40 in
compensatory damages and $65,851.76 in prejudgment interest, plus

6

$16.24 per diem from February 14, 2017 until the date of entry of
judgment; and
6.

Dr. Samir Haddad and New Age Neurology, P.C. be jointly

and severally liable for $25,833.64, which includes $15,327.61 in
compensatory damages and $10,506.03 in prejudgment interest, plus
$2.59 per diem from February 14, 2017 until the date of entry of
judgment; and
7.

Dr. Samir Haddad be liable for RICO damages in the amount

of $102,500.23, which represents trebled damages of $222,304.20
for the fraudulent claims submitted through Modern Neurology, P.C.
and $45,982.83 for the fraudulent claims submitted through New Age
Neurology, P.C. less the compensatory damages and prejudgment
interest awarded against those entities;
8.

Ultimate

Healing

Acupuncture,

P.C.

be

liable

for

$379,086.53, which includes $230,777.88 in compensatory damages
and $148,308.65 in prejudgment interest, plus $36.57 per diem from
February 14, 2017 until the date of entry of judgment; and
9.

Eastwestern Neurology, P.C., be liable for $75,396.26,

which includes $53,092.18 in compensatory damages and $22,304.08
in prejudgment interest, plus $5.50 per diem from February 14,
2017 until the date of entry of judgment.
The Clerk of Court is respectfully directed to enter

7

judgment

for

plaintiff

and

against

defendants

Eastwestern

Neurology, P.C., Samir Haddad, M.D., Modern Neurology, P.C., New
Age Neurology, P.C., and Ultimate Healing Acupuncture, P.C. and
close this case.

Plaintiffs’ counsel shall serve a copy of this

Memorandum and Order and the Judgment on defendants, and note
service on the docket.

SO ORDERED.
Dated:

March 31, 2017
Brooklyn, New York
___________/s/_______________
Hon. Kiyo A. Matsumoto
United States District Judge

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