United States District Court, W.D. Washington, Seattle
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, et al., Plaintiffs,
PETER J. HANSON, et al., Defendants.
ORDER DENYING MOTION FOR SUMMARY JUDGMENT
S. Lasnik United States District Judge
matter comes before the Court on “Defendants'
Motion for Summary Judgment.” Dkt. # 68. Plaintiffs,
insurers who provide Personal Injury Protection
(“PIP”) insurance to Washington residents, seek
to recover over $300, 000 in payments made to defendants for
chiropractic services that plaintiffs allege were not
reasonable and/or necessary. Plaintiffs assert claims of
fraud and unjust enrichment against Dr. Hanson and his
practice. They also seek a declaration that they need not pay
any outstanding charges related to services provided by
Hanson Chiropractic. Although defendants moved for an order
dismissing all of plaintiffs' claims with prejudice, the
motion mentions the unjust enrichment claim only in general
terms and ignores the overcharging aspects of plaintiffs'
fraud claim. Arguments raised for the first time in reply
have not been considered.
judgment is appropriate when, viewing the facts in the light
most favorable to the nonmoving party, there is no genuine
issue of material fact that would preclude the entry of
judgment as a matter of law. The party seeking summary
dismissal of the case “bears the initial responsibility
of informing the district court of the basis for its
motion” (Celotex Corp. v. Catrett, 477 U.S.
317, 323 (1986)) and “citing to particular parts of
materials in the record” that show the absence of a
genuine issue of material fact (Fed. R. Civ. P. 56(c)). Once
the moving party has satisfied its burden, it is entitled to
summary judgment if the non-moving party fails to designate
“specific facts showing that there is a genuine issue
for trial.” Celotex Corp., 477 U.S. at 324.
The Court will “view the evidence in the light most
favorable to the nonmoving party . . . and draw all
reasonable inferences in that party's favor.”
Krechman v. County of Riverside, 723 F.3d 1104, 1109
(9th Cir. 2013). Summary judgment should be granted where the
nonmoving party fails to offer evidence from which a
reasonable jury could return a verdict in its favor.
FreecycleSunnyvale v. Freecycle Network, 626 F.3d
509, 514 (9th Cir. 2010).
reviewed the memoranda, declarations, and exhibits submitted
by the parties,  the Court finds as follows:
argue that (1) their statements that the treatments provided
to State Farm's insureds were reasonable and necessary
are not actionable representations of fact for purposes of a
fraud claim, (2) State Farm is unable to prove that the
statements of reasonableness and necessity were false and/or
that defendants knew them to be false, (3) State Farm did not
rely on the statements, and (4) State Farm's damages are
speculative. None of the arguments justify summary
dispositive relief in defendants' favor. State Farm
claims that defendants developed and implemented a scheme to
maximize charges to patients who had PIP coverage by
diagnosing significant injuries, providing a full array of
services over an extended period of time regardless of each
patient's particularized needs, and billing for testing
and reporting on a fixed schedule with no resulting changes
to the treatment regimens. The primary evidence of this
scheme is the remarkable consistency in the diagnoses and
treatment plans for this cohort of patients regardless of the
nature of the automobile accident in which they were injured,
the patient's physical condition and prior treatment
history, and/or progress made during treatment. State Farm
also has evidence that defendants used pre-printed cards
setting forth an extended treatment program, with visit
numbers and services already filled in. Finally, there is
some evidence in the record to support the conclusion that
patients who had PIP coverage were more likely to receive
serious diagnoses and extensive treatment, whereas an
entirely different treatment regimen applied after PIP funds
were exhausted or when there was no coverage in the first
place. Plaintiffs' expert identifies a number of
instances in which defendants' treatment plan did not
comport with the standard of care and opines that the pattern
of findings, diagnoses, and treatment across the State Farm
cohort at issue here is incredible and not what one would
expect to see in a legitimate clinical setting.
on the evidence provided, a reasonable jury could find that
defendants made knowingly false statements regarding
reasonableness and necessity in order to maximize charges and
insurance reimbursements, that plaintiffs were unable to
contemporaneously conclude that any particular treatment was
unreasonable or unnecessary given the diagnosis put forth by
defendants in a particular case file, that plaintiffs paid
the charges in reliance on defendants' certification,
that plaintiffs subsequently discovered that the diagnoses
were fabricated or overstated in order to justify treatment
plans that maximized insurable events (rather than to provide
reasonable and necessary treatment), and that State Farm was
damaged as a result of defendants' scheme. If the jury
resolves all of the factual issues in plaintiffs's favor,
uncertainty in the measure of those damages will not preclude
recovery under Washington law. See Sigman v.
Stevens-Norton, Inc., 70 Wn.2d 915, 921-22 (1967).
of the foregoing reasons, defendants' motion for summary
judgment (Dkt. # 68) is DENIED. The Clerk of Court is
directed to seal Dkt. # 68. Defendants shall, within seven
days of the date of this Order, file an appropriately
redacted version of the motion for public viewing Dated this
27th day of February, 2018.
 Despite appropriately using initials
throughout much of their memorandum, defendants identify at
least three patients by name on pages 10, 11, and 20. The
motion will be sealed, and defendants shall file a redacted
motion for public viewing within seven days of the date of
 The evidentiary defects related to
defendants' initial submission of unsworn expert reports
have been corrected. Plaintiffs' objections to those
reports are overruled.
Plaintiffs' objections to the independent medical
examination and utilization review reports are overruled.
Defendants have not offered the reports for the truth of the
matter asserted, but to show what plaintiffs did when they
received a claim related to defendants' patients and what
plaintiffs relied upon when making payment
Defendants' Daubert challenge to Dr.
Stout's opinion testimony was raised for the first time
in reply and has not been considered.
Defendants properly submitted evidence with their
reply memorandum to rebut plaintiffs' statistics-based