STATE FARM AUTOMOBILE INSURANCE COMPANY et al v. RIOS et al

Filing 44

MEMORANDUM. ( SIGNED BY HONORABLE EDMUND V. LUDWIG ON 1/22/10. ) 1/25/10 ENTERED AND COPIES MAILED, E-MAILED.(gn, )

IN THE UNITED STATES DISTRICT COURT F O R THE EASTERN DISTRICT OF PENNSYLVANIA S T A T E FARM MUTUAL AUTOMOBILE IN S U R A N C E COMPANY, et al. v. S T E P H E N M. RIOS, D.C., et al. : : : : : : C IV IL ACTION

N o . 06-2048

MEMORANDUM L u d w ig , J. January 22, 2010

T h is is an insurance fraud case. Jurisdiction is diversity. 28 U.S.C. § 1331. Plaintiffs move fo r partial summary judgment. Defendants have not responded to the motion. The motion will be g r a n te d . In 2006, plaintiffs State Farm Mutual Automobile Insurance Company and State Farm Fire & Casualty Insurance Company commenced this action against defendants Stephen M. Rios, M.D. a n d Rios Chiropractic Center. The complaint alleged that, beginning in 1997, defendants

s u b m itte d bills to plaintiffs for treatment rendered to more than 250 individuals who were either in su red by State Farm or involved in accidents with State Farm insureds. Further, however, d e fe n d a n ts billed for examinations that were not performed and treatments not rendered. Also, the d ia g n o se s given by defendants were untrue or were exaggerated for the purpose of justifying d efe n d an ts' billings. The complaint makes claim for common law fraud (Count I), statutory in su ra n c e fraud (Counts II and III, and unjust enrichment (Count IV). It requests damages in e x c e s s of $1.7 million - representing payments plaintiffs made in reliance on reports, notes and b i lls generated by defendants. T h e evidence submitted consists of the expert reports of Joseph R. Verna, D.C., a

c h iro p rac tic auditing professional, who reviewed more than 250 claim files involving State Farm in s u re d s and third-party claimants examined and treated by defendants between 1997 and 2009. M o tio n , ¶ 7, and Exhibits B and C. The record also includes the deposition testimony and tre a tm e n t files of eight former patients of defendants, Exhibits F through S, and investigative r e p o r ts based on surveillance videos of four additional former patients, plus their treatment files, E x h ib i ts T through Z. Billing statements for the foregoing 12 patients also substantiate plaintiffs' c la im s . T h e evidence of record is undisputed. There is no genuine issue of material fact, and p l a in t if fs are entitled to judgment as a matter of law on all claims. A n assessment of damages hearing will be scheduled by separate order.

B Y THE COURT:

/s/ Edmund V. Ludwig Edmund V. Ludwig, J.

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