allstate sues chiropractor daniel dahan for fraud...transact business in, and/or maintain their...
TRANSCRIPT
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• Thomas E. Fraysse- SBN 104436 R. Patrick Snook- SBN 129912 KNOX RICKSEN LLP 1300 Clay Street, Suite 500 Oakland, CA 94612-1427 Telephone: (510) 285-2500 Facsimile: (510) 285-2505
• Los ANf:L{ ~ft D
ERIOR COURT
SEP. 0 8 2008 K JOHNA C
KE, CLERK BYSHAUN
SLEY, 0Ep Attorneys for Plaintiffs Ury PEOPLE OF THE STATE OF CALIFORNIA, ex rei., ALLSTATE INSURANCE COMPANY, ALLSTATEINSURANCECOMPANY
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF LOS ANGELES
PEOPLE OF THE STATE OF CALIFORNIA, ex rei. ALLSTATE INSURANCE COMPANY, ALLSTATE INSURANCE COMPANY
Plaintiffs,
vs.
DANIEL H. DAHAN, an individual; PROGRESSIVE DIAGNOSTIC IMAGING, INC., a California Corporation; and DOES ONE through FIVE HUNDRED, inclusive,
Defendants.
Case No. 8C397695 COMPLAINT FOR VIOLATION OF CALIFORNIA INSURANCE FRAUDS PREVENTION ACT, VIOLATION OF THE CALIFORNIA UNFAIR COMPETITION ACT, FRAUD AND DECEIT, CONSTRUCTIVE TRUST, AND EQUITABLE LIEN; DEMAND FOR JURY TRIAL
FILED IN CAMERA AND UNDER SEAL
Plaintiffs Allstate Insurance Company (hereinafter "Allstate") and People of the State of
California, ex rel. Allstate Insurance Company (hereinafter collectively "plaintiffs"), allege as
follows:
1.
I. INTRODUCTION ;g~g~~ n-<-to-t !'T'I:::a::I'T'II"T'I .......
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This is an action by Allstate Insurance Company to reco~~ -ge~ <1!\cf. cjjtil ••c;:l••:=-t: Co.l ('")
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penalties on its own behalf and on behalf of the People of the State of Calif~rnia ex l'd.~~si'ate C) :5fXR --a
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Insurance Company, arising from an insurance fraud scheme planned and ca$ed ou'f §'@le g ~~;;,
defendants involving the production of false and misleading medical reports and bills tci!suPiort c.:-'1 ..
0 a-personal injury claims against insurance companies. As a direct result of the defendan!if'?fonduct,
. I .
COMPLAINT FOR VIOLATION OF CALIFORNIA INSURANCE FRAUDS PREVENTION ACT, VIOLATION OF THE CALIFORNIA
UNFAIR COMPETITION ACT, FRAUD AND DECEIT, CONSTRUCTIVE TRUST, AND EQUITABLE LIEN; DEMAND FOR JURY TRIAL
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• • false and fraudulent claims have been made against insurance policies issued by Allstate and other
insurance companies. As a further direct result of the defendants' conduct, Allstate has incurred
substantial financial losses. Allstate, therefore, brings this action on its own behalf as well as on
behalf of the People of the State of California to recover monetary damages and to enjoin, deter,
and/or prevent the defendants, and each of them, from engaging in such conduct in the future.
2. The defendants have knowingly engaged in these illegal and fraudulent practices
since 2001. Defendants' conduct was and is in direct violation of California law including, but not
limited to, California Penal Code Section 550; the Moscone-Knox Professional Corporations Act,
codified as California Corporations Code Section 13400 et seq.; the California Insurance Frauds
Prevention Act, codified as California Insurance Code Section I 871.7; the California Unfair
Competition Act, codified as California Business and Professions Code Section 17200 et seq.;
California Business and Professions Code Section 2052; as well as common law causes of action
for fraud and deceit.
3. At all times herein relevant the defendants engaged in the conduct herein alleged
with the intent to present or to cause to be presented false or fraudulent claims for the payment of a
loss or injury under a contract of insurance. The defendants prepared, made, subscribed to writings,
or allowed such writings to be presented to Allstate and other insurance companies in support of
false or fraudulent claims. In doing so, the defendants aided, abetted, solicited, or conspired with
one another to engage in such conduct, all for financial gain.
4. The California Insurance Frauds Prevention Act, Article 1, Section 1871, et seq.,
was originally enacted in 1989. In 1993, the Act was amended to add Section 1871.7. This section
allows the Attorney General, a County District Attorney, the Insurance Commissioner, or any other
interested party to enhance the government's ability to prosecute violations of, and recover losses
from, certain specified fraudulent insurance practices. In enacting Section 1871.7, the California
Legislature envisioned that insurance companies, working with law enforcement agencies, could
contribute to efforts to combat the prevalent and serious problem of insurance fraud. As such,
Insurance Code section 1871.7 provides for a qui tam civil action permitting individuals to
prosecute proscribed conduct in a civil action without fear of reprisal or government inaction.
-2-
COMPLAINT FOR VIOLATION OF CALIFORNIA INSURANCE FRAUDS PREVENTION ACT, VIOLATION OF THE CALIFORNIA
UNFAIR COMPETITION ACT, FRAUD AND DECEIT, CONSTRUCTIVE TRUST, AND EQUITABLE LIEN; DEMAND FOR JURY TRIAL
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• • 5. Insurance Code section 1871.7 provides that anyone who violates Penal Code
section 550 is liable for a civil penalty of up to $10,000 for each claim plus an assessment up to
three times the amount of the damages sustained by the victim in addition to any other penalties that
might be prescribed by law.
6. Section 1871.7 allows any interested person, including an insurer, to bring a civil
action for violation of the section for that person and the State of California. The complaint is to be
filed in camera and under seal for 60 days to allow the government to conduct its own investigation
without the knowledge of defendants, and to determine whether to join in the suit. Further, a copy
of the complaint and written disclosure of substantially all material evidence shall be served on the
District Attorney and Insurance Commissioner.
7. Allstate has complied with the requirements of Insurance code section 1871.7.
Simultaneously with the filing of this action, Allstate provided all material information regarding
the allegations contained in this complaint to the Los Angeles County District Attorney's Office
and to the Insurance Commissioner of the State of California. Allstate has also offered complete
cooperation in any potential investigation instituted by the above-referenced government entities.
8. This complaint for damages arises from an investigation that Allstate initiated in
2007. As a result of the investigation, Allstate uncovered an insurance fraud scheme that was
originated, planned and developed by defendant Daniel H. Dahan and carried out by him and other
defendants through his wholly-owned general corporation and alter ego, defendant Progressive
Diagnostic Imaging, Inc. In substance, the scheme involves the preparation of medical
documentation by the defendants that contains misleading, false and fraudulent information,
knowing that such documentation would be submitted to insurance companies in support of claims
made under policies of insurance. The conduct of the defendants, and each of them, was
undertaken with the intent to deceive insurance carriers for financial gain and with a conscious
disregard of the rights of Allstate and other insurance carriers, to accommodate the needs of
plaintiff personal injury attorneys and law firms in the business of representing individuals with
personal injury claims against insurance companies and their insureds, and to purportedly enhance
the ability of chiropractors to increase personal injury work.
- 3-COMPLAINT FOR VIOLATION OF CALIFORNIA INSURANCE FRAUDS PREVENTION ACT, VIOLATION OF THE CALIFORNIA
UNFAIR COMPETITION ACT, FRAUD AND DECEIT, CONSTRUCTIVE TRUST, AND EQUITABLE LIEN; DEMAND FOR JURY TRIAL
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• • 9. Allstate, Allstate policyholders, other insurance companies and their insureds, the
motoring public, and the State of California were and are the direct victims of the illegal and
fraudulent scheme conducted by defendants, and each of them.
I 0. Allstate is the original source for all of the information contained in this complaint.
II. JURISDICTION AND VENUE
II. This is a civil action arising under the laws of the State of California to redress
violations of California law including but not limited to, California Penal Code Section 550; the
Moscone-Knox Professional Corporations Act, codified as California Corporations Code Section
13400 et seq.; the California Insurance Frauds Prevention Act, codified as California Insurance
Code Section 1871 et seq.; the California Unfair Competition Act, codified as California Business
and Professions Code Section 17200 et seq.; as well as common law causes of action for fraud and
deceit. This Court has jurisdiction over the subject matter of this civil claim pursuant to the
California Constitution Article VI, Section 10; Insurance Code Section 1871.7; as well as California
Business and Professions Code Section 17200 et seq.
12. Jurisdiction over the person and venue are proper in this district pursuant to Los
Angeles Superior Court Local Rule 2.0(c) and because defendants reside in, can be found in,
transact business in, and/or maintain their principal office in Los Angeles County; and while in the
County of Los Angeles, the defendants engaged in illegal and fraudulent conduct prohibited by
Penal Code Section 550, Insurance Code Section 1871.7, Business and Professions Code Section
17200 et seq., as well as common law fraud and deceit.
III. PARTIES
13. Allstate is a corporation organized and existing under the laws of the State of Illinois
with its principal place of business in the State of Illinois. Allstate is an insurance company which,
inter alia, issues automobile insurance policies and is licensed to conduct business in the State of
California. It brings this action for its own benefit and for the benefit of the People of the State of
California under the provisions of California Insurance Code Section 1871.7(e)(l).
14. Defendant Daniel H. Dahan, ("Dahan") is a resident of the City of Long Beach,
County of Los Angeles, State of California.
-4-
COMPLAINT FOR VIOLATION OF CALIFORNIA INSURANCE FRAUDS PREVENTION ACT, VIOLATION OF THE CALIFORNIA
UNFAIR COMPETITION ACT, FRAUD AND DECEIT, CONSTRUCTIVE TRUST, AND EQUITABLE LIEN; DEMAND FOR JURY TRIAL
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• • 15. Defendant Progressive Diagnostic Imaging, Inc. ("PDI") is and at all times herein
relevant, was a corporation organized and existing under the laws of the State of California with its
principal place of business in the City of Long Beach, County of Los Angeles, State of California
that is and was owned, operated, and controlled or directed by Dahan at all times herein relevant.
16. The true names or capacities, whether individual, corporate, associate, or otherwise,
of defendants sued herein as DOES ONE through FNE HUNDRED, inclusive, are unknown to
Allstate, who therefore sues such defendants by such fictitious names. Plaintiff is informed and
believes and upon such information and belief alleges that each of the defendants designated herein
as a DOE is legally responsible in some manner for the conduct herein alleged.
17. DOES ONE HUNDRED AND ONE through TWO HUNDRED were or are
individuals or entities acting as agents or employees of Dahan and/or PDI, acting within the scope
of agency or employment and engaging in the conduct hereinafter alleged. Each individual acted
with full knowledge ofthe illegality of the activities and conduct undertaken in connection with the
aforementioned entities, and conspired in, acquiesced, ratified, or approved of the conduct herein
alleged undertaken by the other defendants.
18. DOES TWO HUNDRED AND ONE through THREE HUNDRED were or are
individuals or entities that owned or operated PDI.
19. DOES THREE HUNDRED AND ONE through FIVE HUNDRED were or are
individuals or entities who aided, abetted, assisted, otherwise participated in, or were or are
involved in the fraudulent conducted hereinafter described; and aided, abetted, or assisted the other
defendants with full knowledge of the illegality of the activities and conduct.
20. Defendants knowingly, willfully, and intentionally conspired with each other
defendant and agreed to a course of action to defraud Allstate and other similarly situated insurance
companies through illegal schemes as well as fraudulent and/or unlawful claims made against
insurance policies, including, but not limited to, automobile liability policies, as hereinafter alleged.
21. Allstate is further informed and believes, and thereon alleges that, at all times herein
relevant, there was a unity of interest and ownership between PDI and Dahan such that any
individuality and separateness between this entity and individual has ceased.
- 5-COMPLAINT FOR VIOLATION OF CALIFORNIA INSURANCE FRAUDS PREVENTION ACT, VIOLATION OF THE CALIFORNIA
UNFAIR COMPETITION ACT, FRAUD AND DECEIT, CONSTRUCTIVE TRUST, AND EQUITABLE LIEN; DEMAND FOR JURY TRIAL
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• • 22. PDI is, therefore, the alter ego of Dahan, and is and was a mere shell,
instrumentality, and conduit through which Dahan carries on his business.
23. Adherence to the fiction of the separate existence of PDI, as distinct from Dahan,
would permit an abuse of the corporate privilege, and would promote injustice by protecting Dahan
from liability for the wrongful acts committed by him under the name of PDI. Any references or
allegations regarding or relating to PDI apply equally to Dahan.
24. Allstate is further informed and believes, and thereon alleges, that PDI and Dahan
have common supervision, control, management, officers, and a unity of interest in ownership,
which is reflected in the pooling of their earnings, expenses, and losses, such that for all intents and
purposes they are one and the same and but the alter ego of one another.
25. The "alternative" alter ego relationship between Dahan and PDI should be
recognized to prevent an injustice. If the alter ego relationship between such defendants should not
be recognized, an inequity would result because an entity responsible for wrongdoing would be
shielded from liability. When considering an award of punitive damages, the entire net worth of a
defendant is considered. If the corporate structure of the alter ego defendants, and each of them, is
disregarded, punitive damages will be based solely on the assets of the "fronting" entity; assets
which are much smaller than the other entities' assets. Because punitive damages are meant to
punish and make an example of the wrongdoer, it would be inequitable to allow entities responsible
for the wrongdoing complained of to shield their assets and escape punitive damages liability.
IV. FACTUAL ALLEGATIONS
A. History of Defendants' Conduct
26. At all times herein relevant and since at least 200 I, PDI was and is engaged in the
business of preparing and generating false and fraudulent medical documentation to support
personal injury claims submitted to insurance companies and to purportedly enhance the ability of
chiropractors to increase personal injury work. This insurance fraud scheme was originated by
Dahan, a chiropractor licensed by the State of California, and carried out by him through PDI, a
general corporation organized under the laws of the State of California, which, at all times herein
relevant, was wholly-owned by Dahan. The false and fraudulent medical reports created by Dahan
- 6-COMPLAINT FOR VIOLATION OF CALIFORNIA INSURANCE FRAUDS PREVENTION ACT, VIOLATION OF THE CALIFORNIA
UNFAIR COMPETITION ACT, FRAUD AND DECEIT, CONSTRUCTIVE TRUST, AND EQUITABLE LIEN; DEMAND FOR JURY TRIAL
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• • and unlicensed "technicians" purport to interpret and analyze x-rays through the use of alleged
"patented technology." Though the purported medical reports usually bear the name and signature
of a licensed physician, they are uniformly prepared without the input, review, approval or
knowledge of the licensed physician whose name appears on the report. Instead the purported
medical reports are generated by a computer software application utilized by an unlicensed
employee of defendants. To create the appearance of legitimacy, however, defendants intentionally
and willfully place the name of a practicing physician or other health care provider on the purported
medical report and billing statement, without the knowledge or authorization of the physician, and
forge that physician's signature. The purported medical documentation is then furnished to the
referring chiropractor, knowing that such documentation will be submitted to insurance companies
in support of a claim against a policy of insurance.
27. The bogus medical reports prepared by defendants contain medical diagnoses,
medical findings, and medical opinions, including opinions concerning permanent impairment of
individuals, purportedly based on the American Medical Association Guide to the Evaluation of
Permanent Impairment. The purported medical reports, as well as the diagnoses, findings, and
opinions contained therein, are not generated by a licensed physician as is consistently represented
by the defendants through the placement of the name and/or signature of a licensed physician or
other health care provider on the reports, but by a software program, the involvement of Dahan, and
by untrained, unlicensed technicians, at least one of which has nothing more than a high school
degree. The bogus medical reports contain multiple material misrepresentations of fact, which were
and are known to be false by the defendants, yet were and are submitted to Allstate and other
insurance carriers with them intent to deceive them into believing such reports to be true. At all
times herein relevant, Allstate reasonably relied on such reports submitted in support of claims
made under policies of insurance issued by Allstate and as a consequence, paid POI's bills, and
considered the findings, opinions and diagnoses in evaluating personal injury claims, including, but
not limited to bodily injury claims, uninsured motorist claims and underinsured motorist claims.
The purported medical reports prepared by defendants had the effect of fraudulently increasing the
settlement value of claims, causing Allstate to pay substantially more than would have been paid,
- 7-COMPLAINT FOR VIOLATION OF CALIFORNIA INSURANCE FRAUDS PREVENTION ACT, VIOLATION OF THE CALIFORNIA
UNFAIR COMPETITION ACT, FRAUD AND DECEIT, CONSTRUCTIVE TRUST, AND EQUITABLE LIEN; DEMAND FOR JURY TRIAL
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• • had Allstate known that the purported medical reports were false and fraudulent.
28. At all times herein relevant, defendants and each of them, were aware that they were
producing false and fraudulent medical reports, and knew that the reports were being submitted to
insurance companies in support of claims made on policies of insurance.
29. In addition to producing bogus medical documentation, defendants submitted and
continue to submit fraudulent billing statements to give the appearance that a licensed physician
actually performed professional services when, in fact, no licensed physician or other health care
provider performed such professional services. Defendants have consistently engaged in fraudulent
billing practices in connection with PDI, including, but not limited to, billing for services which
were not provided, up-coding, double and triple billing for services rendered, and billing for the
interpretation of more films than exist for a particular patient. Like the bogus medical reports,
defendants used the names of licensed physicians without authorization on billing statements to
give the appearance that the licensed physician had actually performed the professional services.
30. At all times herein relevant, defendants, and each of them, were aware that they were
producing false and fraudulent medical billings, and knew that such billings were being submitted
to insurance companies in support of claims made on policies of insurance.
31. Defendants, and each of them, have engaged in this insurance fraud scheme with the
intent to bilk money out of Allstate and other similarly situated insurance companies, to create the
appearance of a serious injury or impairment where it does not otherwise exist, and to falsely and
fraudulently inflate the value of claims submitted to insurance companies. The fraudulent conduct
of defendants has caused substantial financial losses to Allstate, other insurance companies, the
motoring public, and the State of California.
B. The Manufacture of Bogus Medical Reports
32. The defendants solicit business from chiropractors across the United States by
offering services including the reading and interpreting of x-ray films by board certified radiologists
and tout POI's "patented" report-generating software applications as being helpful to the treating
chiropractor in obtaining business from personal injury attorneys and payment by insurance
companies. They advertise the advantage of utilizing PDI's services as including increased
- 8-COMPLAINT FOR VIOLATION OF CALIFORNIA INSURANCE FRAUDS PREVENTION ACT, VIOLATION OF THE CALIFORNIA
UNFAIR COMPETITION ACT, FRAUD AND DECEIT, CONSTRUCTIVE TRUST, AND EQUITABLE LIEN; DEMAND FOR JURY TRIAL
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• • personal injury referrals and the ability to provide attorneys with professional documentation. At
all times herein relevant, PDI has held itself out as "the nation's technological leader in x-ray
interpretation and analysis reporting and documentation." Defendants do business in this fashion
with extensive advertising to chiropractors across the country and also as part of other businesses
owned and operated by Dahan, including, but not limited to a chiropractic consulting business
entitled "Practice Perfect."
33. At all times herein relevant, the defendants' advertising for PDI was false,
fraudulent, and misleading, designed to lure and entice chiropractors into using PDI for x-ray
analysis and interpretation. When defendants represent that a "doctor" uses PDI's "patented
technology" to produce reports, the representation was and is false. When defendants represent
that, "Our radiologist reads the films for pathologies and produces a biomechanical report," the
representation was and is false. From its inception in or about 2001, to the present, defendants have
consistently utilized false, fraudulent and misleading advertising for PDI, calculated to induce and
entice chiropractors and other health care providers to refer x-rays for interpretation and analysis.
34. To manufacture the fraudulent medical reports, unlicensed PDI employee(s) scan
and "digitize" x-rays sent via FedEx from locations throughout the United States. Once digitized,
PDI, as directed and controlled by Dahan, undertakes two separate and distinct report-generating
processes that are subsequently made to appear as having all been part of the same process. One
step is to send, via e-mail, the digitalized image of an x-ray made from scanning the actual x-ray
film, to a "reading" radiologist, usually a board-certified radiologist working as an independent
contractor, who is paid a flat rate to interpret or read the scanned digital image. The "reading"
radiologist reviews the digitalized image and dictates a standard x-ray report that contains findings
for each film or series of films for different regions of the patient's body. A flat rate paid by PDI to
the radiologist is often as little as $8 to $10 per x-ray or "pathology" report.
35. The other process undertaken by PDI after the x-rays are scanned and digitized does
not involve a licensed physician or the "reading" radiologist. PDI independently prepares its own
purported radiology reports using PDI's computer software application which is operated by an
unlicensed technician. This alleged radiology report is created without the knowledge, authority or
- 9-COMPLAINT FOR VIOLATION OF CALIFORNIA INSURANCE FRAUDS PREVENTION ACT, VIOLATION OF THE CALIFORNIA
UNFAIR COMPETITION ACT, FRAUD AND DECEIT. CONSTRUCTIVE TRUST, AND EQUITABLE LIEN; DEMAND FOR JURY TRIAL
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• • ratification of the "reading" radiologist and more often than not, the computer-generated radiology
reports are created at PDI before the "reading" radiologist has reviewed the digitized x-ray received
from PDI for review. Without any involvement or input by the "reading" radiologist, the purported
radiology reports prepared by PDI contain medical findings, medical opinions, and medical
diagnoses relating to various medical conditions and often include permanent impairment ratings
purportedly based upon utilization of the American Medical Association Guide to the Evaluation of
Permanent Impairment. Despite the fact that the "reading" radiologist has no knowledge of and has
never seen the PDI computer-generated reports for review or approval, the defendants intentionally
affix the "reading" radiologist's name and/or signature to the radiology reports to give the
appearance that the reports were authored by a licensed physician or board-certified radiologist.
Defendants have knowingly created thousands of bogus medical reports bearing the name of a
licensed physician or other health care provider knowing that the use of the licensed physician's
name and signature was not authorized, permitted or approved by the physician. As a result of the
practices of defendants, Allstate has received in excess of 450 claims supported by purported
medical documentation generated by defendants through PDI.
36. PDI's bogus radiology reports frequently feature an opinion regarding permanent
impairment, often as high as a 25% "whole person" impairment, represented by defendants as
being based on the American Medical Association Guide to the Evaluation of Permanent
Impairment. In setting forth a purported medical impairment rating, including representing that the
rating is based on the AMA guidelines, and affixing the name and/or signature of a licensed
physician who never authorized, saw or performed an impairment evaluation of the patient,
defendants falsely and fraudulently represent to insurers and anyone reviewing the reports that the
medical report reflects the professional medical judgment, opinions and conclusion of the
healthcare professional whose name appears on the report, when in fact the report was prepared by
an unlicensed employee of the defendants. The representations were and are material, and were and
are made intentionally and with the intent to deceive anyone reviewing the reports, including
insurance companies, their representatives and medical utilization reviewers. At all times herein
relevant, Allstate and other insurers reasonably relied on the false representations to their detriment.
- 10-
COMPLAINT FOR VIOLATION OF CALIFORNIA INSURANCE FRAUDS PREVENTION ACT, VIOLATION OF THE CALIFORNIA
UNFAIR COMPETITION ACT, FRAUD AND DECEIT, CONSTRUCTIVE TRUST, AND EQUITABLE LIEN; DEMAND FOR JURY TRIAL
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• • As a direct consequence of the material misrepresentation of fact as herein alleged, Allstate has
suffered substantial financial loss.
C. Illegal Practice of Medicine
37. Defendants, through PDI, engage in the practice of medicine despite being
prohibited from doing so by California law. The bogus medical reports created by PDI contain
medical findings, medical opinions, and medical diagnoses of medical conditions. These findings,
opinions, and diagnoses are literally manufactured by a computer software application and an
untrained, unlicensed technician in the employ of defendants, acting at the direction and control of
Dahan and other defendants. The conduct of defendants in rendering medical findings, medical
opinions and medical diagnoses constituted and continue to constitute the illegal practice of
medicine in violation of California Business and Professions Code Section 2052.
D. Illegal Ownership of a Medical Practice
38. By virtue of the fact that defendant, through PDI, provide professional medical
services, form medical diagnoses and offer opinions on permanent impairment, defendants were
and are engaged in the practice of medicine. Under the laws of the State of California, PDI was and
is required to be organized as a professional corporation, not a general corporation, subject to strict
ownership requirements designed to protect the public from lay-ownership of medical practices.
Defendants organized PDI as a general corporation in violation of California law. Under California
law, Dahan could hold an ownership interest in a professional medical corporation, but only up to
49%, as a chiropractor licensed by the State of California. A chiropractor may not, under California
law, have a I 00% interest in a professional medical corporation. At all times herein relevant, and to
the present, no licensed physician in the State of California has held an interest in PDI. As such,
PDI is an illegally-owned medical corporation under the laws of the State of California and any
billing statements generated by POI were and are void.
E. Fraudulent Billing Practices
39. The defendants, through PDI, have, at all times herein relevant, routinely engaged in
fraudulent billing practices including improper use of CPT Codes on billing statements for medical
services purportedly rendered by PDI. Such improper use of CPT Codes includes, but is not limited
- II -
COMPLArNT FOR VIOLATION OF CALIFORNIA rNSURANCE FRAUDS PREVENTION ACT, VIOLATION OF THE CALIFORNIA
UNFAIR COMPETITION ACT, FRAUD AND DECEIT, CONSTRUCTIVE TRUST, AND EQUITABLE LIEN; DEMAND FOR JURY TRIAL
• • to, double and triple billing for services rendered, billing for services which PDI does not perform,
and billing for the interpretation of more films than exist for a particular patient. In addition, the
billing statements submitted to Allstate for payment or as support for a personal injury claim were
and are false and fraudulent as the billing statement represents that the service was rendered by a
licensed professional, which was false.
40. "Reading" radiologists whose names appear on purported radiology reports prepared
by defendants deny that they performed services listed on the billing statements and report that they
did not prepare the billing statements submitted by PDI and did not authorize the use of their names
on the billing statements.
41. At all times herein relevant, defendants have prepared billing statements that include
charges for professional medical services involving face-to-face consultations, using CPT Codes
that include a face-to-face evaluation as a component to the service rendered. Neither the "reading"
radiologists' review of digitized x-rays, nor PDI's creation of computer-generated radiology reports
involves face-to-face time with a patient. PDI has never been engaged in any face-to-face
evaluation, meeting, or even telephone conversation with a patient. Indeed, a "reading"
radiologist's review of digitized x-rays could never, under any circumstance, be described to
include a face-to-face evaluation with the patient. Yet, defendants routinely billed for services
which involve a face-to-face evaluation, knowing that such services were never rendered by a
licensed physician. Defendants were, at all times, knowledgeable concerning billing and use of
CPT codes and knowingly included such charges on billing statements to falsely give the
appearance that such services were, in fact, rendered by a licensed physician. Defendants,
nonetheless, produced such billing statements with intent to defraud and deceive insurance
companies, including Allstate. Allstate, at all times herein relevant, reasonably relied on the
representations contained in the PDI billing statements and as a consequence, suffered significant
financial losses.
42. At all times herein relevant, defendants have included charges in PDI billing
statements under a CPT Code for the delivery, fitting, and adjustment of a device, including
orthotics. At no time, however, did PDI perform any service that involved the delivery, fitting and
- 12-
COMPLAINT FOR VIOLATION OF CALIFORNIA INSURANCE FRAUDS PREVENTION ACT, VIOLATION OF THE CALIFORNIA
UNFAIR COMPETITION ACT, FRAUD AND DECEIT, CONSTRUCTIVE TRUST, AND EQUITABLE LIEN; DEMAND FOR JURY TRIAL
1
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• • adjustment of a device, including orthotics, in connection with the work done by the "reading"
radiologists and the generation of false and fraudulent medical reports. The charges, as such were
material misrepresentation of fact intended to deceive insurance companies.
43. At all times herein relevant, defendants have routinely included charges in PDI
billing statements for the interpretation of more x-rays than actually exist for a given patient. For
example in instances in which the treating chiropractors had exposed the patient to only four or five
views, a PDI billing statement will be generated in which PDI bills for review of a full seven view
Davis Series_ In creating billing statements through PDI, defendants routinely billed and continue
to bill for services which were not rendered, including, but not limited to billing for the review of
more x-rays than were supplied to PDI by the treating chiropractor for review. The billing for
services not rendered was not the result of mistake, neglect or inadvertence, but was part of a
scheme to charge insurance companies for work that had not been performed. The PDI billing
statements, were, at all times herein relevant, carefully crafted by defendants to falsely give the
appearance that work was actually performed and that such services were rendered by a licensed
professional, knowing at all times that such representations were not true. They, nonetheless,
generated false and fraudulent medical documentation and billing statements knowing that the
medical documentation and billing statements were false and fraudulent and that they would be
submitted to an insurance company in support of a claim. The billing statements were produced by
defendants as part of the scheme or plan to create false and fraudulent documentation to assist
persons making personal injury claims and to purportedly help chiropractors increase their personal
injury referrals from attorneys.
FIRST CAUSE OF ACTION (California Insurance Frauds Prevention Act)
(California Insurance Code § 1871. 7) (Alleged Against All Defendants by Plaintiffs)
44. Plaintiffs re-allege and incorporate paragraphs 1 through 43 above as though fully
set forth herein.
45. This is a claim for damages and penalties nnder the Insurance Frauds Prevention
Act, California Insurance Code § 1871.7.
- 13-COMPLAINT FOR VIOLATION OF CALIFORNIA INSURANCE FRAUDS PREVENTION ACT, VIOLATION OF THE CALIFORNIA
UNFAIR COMPETITION ACT, FRAUD AND DECEIT, CONSTRUCTIVE TRUST, AND EQUITABLE LIEN; DEMAND FOR JURY TRIAL
1
2
3
4
5
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• • 46. By virtue of the conduct alleged herein, defendants, and each of them, intentionally
and repeatedly violated California Insurance Code Section 1871.7(b) in that defendants, and each of
them, knowingly violated California Penal Code Sections 5 50. As of the time of filing this
complaint, Allstate has identified in excess of 650 claims in which defendants have engaged in
some or all of the following conduct:
A. Knowingly presented or cause to be presented false or fraudulent claims for
the payment of a loss of injury under a contract of insurance; and/or
B. Knowingly prepared, made or subscribed writings, with the intent to present
or use them, or allow them to be presented, in support of a false or fraudulent claim; and/or
C. Presented or caused to be presented written or oral statements as part of, or in
support of claims for payment or other benefit pursuant to an insurance policy, knowing that the
statement contains false or misleading information concerning material facts; and/or
D. Prepared or made any written or oral statements that were intended to be
presented to an insurer in connection with, or in support of, claims or benefit pursuant to an
insurance policy, knowing that the statements contain false or misleading information concerning
material facts; and/or
E. Aiding, abetting, soliciting, assisting or conspiring with any person to engage
in A through D above.
47. As a result of such conduct on the part of the defendants, plaintiffs have been
damaged in substantial amounts, and are entitled to damages and penalties in accordance with
California Insurance Code Section 1871.7, to be determined at trial.
SECOND CAUSE OF ACTION (California Unfair Competition Act)
(California Business and Professions Code § 17200 et seq.) (Alleged Against All Defendants by Plaintiff Allstate only)
48. Allstate re-alleges and incorporates paragraphs 1 through 4 7 above as though fully
set forth herein.
49. California Business and Professions Code Section 17200 et seq. was enacted by the
California State Legislature in 1933 to protect businesses from the unfair business practices of
- 14-COMPLAINT FOR VIOLATION OF CALIFORNIA INSURANCE FRAUDS PREVENTION ACT. VIOLATION OF THE CALIFORNIA
UNFAIR COMPETITION ACT, FRAUD AND DECEIT, CONSTRUCTIVE TRUST, AND EQUITABLE LIEN; DEMAND FOR JURY TRIAL
1
2
3
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5
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• • competitors. By the late 1970's the statute was expanded to protect consumers from any "unlawful,
unfair or fraudulent business act or practice" and any "unfair, deceptive, untrue or misleading
advertising."
50. Under California Business and Professions Code Section 17203, "[a]ny person who
engages, has engaged, or proposes to engage in unfair competition may be enjoined in any court of
competent jurisdiction. The court may make such orders or judgments, including the appointment
of a receiver, as may be necessary to prevent the use or employment by any person of any practice
which constitutes unfair competition, as defined in this chapter, or as may be necessary to restore to
any person in interest any money or property, real or personal, which may have been acquired by
means of such unfair competition."
51. Under California Business and Professions Code Section 17201, Allstate is a
"person" as defined by the statute.
52. The conduct of defendants, and each of them, as alleged herein, constitutes "unfair
competition" under California Business and Professions Code Section 17200, which includes, "any
unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading
advertising .... "
53. As a result of the conduct of defendants, and each of them, as alleged herein,
Allstate has suffered the loss of substantial amounts of money. Under California Business and
Professions Code Section 17204, Allstate is a "person who has suffered injury in fact and has lost
money or property as a result of such unfair competition." Accordingly, Allstate asks this court to
issue orders and enter judgment in favor of Allstate and against defendants as hereinafter set forth.
THIRD CAUSE OF ACTION (Fraud and Deceit)
(Alleged Against All Defendants by Plaintiff Allstate only)
54. Allstate re-alleges and incorporates paragraphs 1 through 53 above as though fully
set forth herein.
55. Defendants, and each of them, engaged in the conduct alleged herein with the intent
to defraud and deceive insurance companies, including Allstate, and the general public as to the true
nature of the business conducted by defendants, and each of them. The multiple misrepresentations
. 15 . COMPLAINT FOR VIOLATION OF CALIFORNIA INSURANCE FRAUDS PREVENTION ACT, VIOLATION OF THE CALIFORNIA
UNFAIR COMPETITION ACT, FRAUD AND DECEIT, CONSTRUCTIVE TRUST, AND EQUITABLE LIEN; DEMAND FOR JURY TRIAL
1
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• • of fact concerning the practices of the defendants, and each of them, including specific
representations made in records, narrative reports, billings statements, and other documents
generated by defendants, and each of them, at all times herein relevant, were intentional and made
with the intent to have insurance companies, including Allstate, rely on such representations. At all
times herein relevant, the representations made by defendants, and each of them, as to the practices
of the defendants, and each of them, were false and misleading and the falsity of the representations
was known to the defendants, and each of them, at the time such representations were made.
56. Defendants, and each of them, repeatedly made misrepresentations of fact
concerning the nature of the services rendered and/or the billings for such services; and/or
concealed from Allstate material facts concerning the nature of the services rendered and/or the
billings in records and bills provided to Allstate; all in connection with claims for the payment of
benefits under contracts of insurance, as herein alleged. Affirmative representations were
repeatedly made in connection with services and billing which were untrue, and known to be untrue
by defendants, and each of them, at the time such affirmative representations were made, as herein
alleged.
57. At all times herein relevant, Allstate reasonably relied on the representations made
by defendants. Had Allstate known the true facts concerning the services and billing, it would have
materially affected its analysis and payment of claims made under contracts of insurance.
58. As a result of the conduct of the defendants, and each of them, Allstate has suffered
substantial financial injury through the payment of claims that would not have otherwise been paid.
59. In engaging in such fraudulent conduct, as herein alleged, defendants acted with
malice, oppression, or fraud sufficient warrant the imposition of punitive damages.
FOURTH CAUSE OF ACTION (Constructive Trust)
(Alleged Against All Defendants by Plaintiffs)
60. Plaintiffs re-allege and incorporate paragraphs 1 through 59 above as though fully
set forth herein.
61. On information and belief, with monies and proceeds from the conduct alleged
above, defendants, and each of them, have acquired title to real property, personal property, and
- 16-COMPLAINT FOR VIOLATION OF CALIFORNIA INSURANCE FRAUDS PREVENTION ACT, VIOLATION OF THE CALIFORNIA
UNFAIR COMPETITION ACT, FRAUD AND DECEIT, CONSTRUCTIVE TRUST, AND EQUITABLE LIEN; DEMAND FOR JURY TRIAL
1
2
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• • have deposited funds into various accounts including, but not limited to, checking accounts, savings
accounts, mutual fund accounts, and other accounts. Thus, defendants, and each of them, are
involuntary trustees holding said property and profits in constructive trust for Plaintiffs with the
duty to convey the same to plaintiff forthwith.
62. On information and belief, defendants, and each of them, have used monies and
proceeds from the wrongful conduct herein alleged to acquire title to real property, including but
not limited to real property located at 4255 Cedar Avenue, Long Beach, California, 90807; 1050
East Wardlow Road, Long Beach, California, 90807; 115 West 37th Street, Long Beach,
California; and I 021 Pacific Avenue, Long Beach, California.
63. On information and belief, defendants, and each of them, have used monies and
proceeds from the wrongful conduct alleged herein to deposit monies into accounts at various
banks, including but not limited to accounts under the name Daniel H. Dahan, Progressive
Diagnostic Imaging, Inc., and Practice Perfect, Inc.
64. Plaintiffs are entitled to, and request, equitable relief in the form of a constructive
trust, upon all real property, personal property, and accounts, including but not limited to those
alleged herein, that were acquired with proceeds or monies from the wrongful conduct alleged
herein.
65. Plaintiffs are presently unaware of the location of any further monies and proceeds
wrongfully taken from Allstate and other insurers by the defendants. As further investigation and
discovery is conducted on this matter, plaintiffs will amend this complaint to allege the location and
nature of the monies and proceeds wrongfully taken by the defendants.
66. On information and belief, and due to the nature of the defendants' conduct alleged
herein, plaintiffs have not been able to identify all real property, personal property, or accounts
acquired by defendants, and each of them, with monies or proceeds from the wrongful conduct
alleged herein; and plaintiffs are entitled to, and requests, equitable relief in the form of a
constructive trust, upon all real property, personal property, and accounts which are identified at the
time of trial.
/Ill - 17 -
COMPLAINT FOR VIOLATION OF CALIFORNIA INSURANCE FRAUDS PREVENTION ACT. VIOLA T!ON OF THE CALIFORNIA
UNFAIR COMPETITION ACT. FRAUD AND DECEIT, CONSTRUCTIVE TRUST, AND EQUITABLE LIEN; DEMAND FOR JURY TRIAL
• • 1 FIFTH CAUSE OF ACTION
(Equitable Lien) 2 (Alleged Against All Defendants by Plaintiffs)
3 67. Plaintiffs re-allege and incorporate paragraphs 1 through 66 above as though fully
4 set forth herein.
5 68. On information and belief, Allstate's monies and funds acquired by defendants, and
6 each of them, as alleged herein, can be traced to the purchase, improvement, betterment, or deposit
7 into real property, personal property, or accounts at banks, savings and loans, mutual fund
8 companies, corporations, partnerships, or other accounts or business entities.
9 69. The retention by defendants, and each of them, of the real property, personal
::: 1 o property, or accounts purchased, improved, bettered, or added to with monies or funds that
b >< <
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11 defendants have wrongfully acquired from Allstate would result in unjust enrichment.
12 70. Plaintiffs are entitled to, and request, equitable relief in the form of an equitable lien,
13 upon all real property, personal property, and accounts identified above which were acquired with
14 proceeds or monies from the wrongful conduct alleged above.
15 71. On information and belief, and due to the nature of the defendants' conduct alleged
16 herein, plaintiffs have not been able to identify all real property, personal property, or accounts
17 acquired by defendants with monies or proceeds from the wrongful conduct alleged above; and
18 plaintiffs are entitled to, and requests, equitable relief in the form of an equitable lien, upon all real
19 property, personal property, and accounts which are identified at the time oftrial.
20 PRAYER
21 WHEREFORE, Plaintiffs pray for the following relief:
22 Under the First Cause of Action for Violation of California Insurance Code Section 1871.7
23
24 I. For all damages, penalties and assessments allowable under California Insurance
25 Code Section 1871.7(b) as to each defendant found to have violated California Penal Code Sections
26 549, 550 or 551 for each fraudulent claim presented to Allstate;
27 2. A temporary injunction to prevent the transfer, concealment, or dissipation of illegal
28 proceeds by Dahan and PDI;
- 18 -COMPLAINT FOR VIOLATION OF CALIFORNIA INSURANCE FRAUDS PREVENTION ACT, VIOLATION OF THE CALIFORNIA
UNFAIR COMPETITION ACT, FRAUD AND DECEIT, CONSTRUCTIVE TRUST, AND EQUITABLE LIEN; DEMAND FOR JURY TRIAL
1
2
3
4
5
6
7
8
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• • 3. A temporary injunction to protect the public prohibiting Dahan and PDI from
engaging in the practice of medicine; prohibiting Dahan from having an ownership interest in any
medical practice or corporation, including, but not limited to PDI; and prohibiting Dahan and PDI
from further violating California Penal Code Section 550;
4. Attorney's fees;
5. Costs of suit; and
6. Such further and other relief as may be deemed appropriate by the court;
Under the Second Cause of Action for Violation of California Business and Professions Code Section 17200 et seq.
I. For a permanent injunction prohibiting Dahan from working in, or otherwise being
involved with any health-related field, including, but not limited to, medicine, chiropractic, physical
therapy and radiology;
2. For a permanent injunction prohibiting Dahan from having any ownership interest in
any business in a health-related field, including, but not limited to, medicine, chiropractic, physical
therapy and radiology;
3. For a permanent injunction prohibiting Dahan from practicing medicine;
4. For a permanent injunction prohibiting Dahan from violating California Penal Code
Section 550;
5. For a permanent injunction prohibiting Dahan from working in, or otherwise being
involved with any insurance-related business, including, but not limited to, working for an
insurance company, working for a law firm engaged in a personal injury practice, advising claimant
or their representative concerning claims, advising chiropractors concerning claims, capping,
running, and advising any person or entity concerning the use of CPT or other billing codes;
6. For a permanent injunction prohibiting PDI from engaging in the corporate practice
of medicine absent proof to the court that PDI is owned in accordance with the Moscone Knox
Professional Corporations Act and all other applicable California state law;
7. For a permanent injunction prohibiting Dahan, PDI and any other person or entity
from using the claimed "patented technology" to generate medical reports absent proof to the
- 19-COMPLAINT FOR VIOLATION OF CALIFORNIA INSURANCE FRAUDS PREVENTION ACT, VIOLATION OF THE CALIFORNIA
UNFAIR COMPETITION ACT, FRAUD AND DECEIT, CONSTRUCTIVE TRUST, AND EQUITABLE LIEN; DEMAND FOR JURY TRIAL
1
2
3
4
5
6
7
8
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• • satisfaction of this court that the report has been reviewed, approved and authorized by a board
certified radiologist licensed by the State of California as a physician and surgeon;
8. For a permanent injunction prohibiting Dahan from having an ownership interest in
PDI;
9. For a permanent injunction prohibiting Dahan from starting any other business
related to radiology in any respect;
I 0. For a judicial declaration and judgment that any and all bills, billing statements
and/or billing invoices generated by PDI were and are void as a matter of law;
11. For restitution, including, but not limited to, all monies paid by Allstate to Dahan,
PDI, any claimant, any claimant's attorney or any other person in connection with any and all
claims made against policies of insurance in which any document generated or produced by PDI
was presented to Allstate in connection with a claim, including, but not limited to, all amounts paid
under medical payments provisions, all settlements paid on uninsured motorist claims, all
settlements paid on underinsured motorist claims, and all bodily injury settlements.
12. For Attorney's fees;
13. For costs of suit; and
14. For such further and other relief as may be deemed appropriate by the court;
Under the Third Cause of Action for Fraud and Deceit
1. For all actual damages, according to proof;
2. For punitive damages
3. For costs of suit; and
4. For such other and further relief as the court may deem appropriate.
Under the Fourth Cause of Action for Constructive Trust
1. That the court impose a constructive trust on Dahan and PDI, as constructive trustee
for the benefit of plaintiffs with respect to any real or personal property, to prevent the transfer,
concealment and/or dissipation of property that was acquired with the illegal proceeds gained
through the acts of Dahan.
-20-
COMPLAINT FOR VIOLATION OF CALIFORNIA INSURANCE FRAUDS PREVENTION ACT, VIOLATION OF THE CALIFORNIA UNFAIR COMPETITION ACT, FRAUD AND DECEIT, CONSTRUCTIVE TRUST, AND EQUITABLE LIEN; DEMAND FOR JURY TRIAL
/
>< ~
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1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
• • Under the Fifth Cause of Action for Equitable Lien
I. That the court imposes an equitable lien on Dahan and PDI to prevent such
defendants from retaining and enjoying the benefits of property acquired as a result of defendants
wrongful and fraudulent conduct, as herein alleged. It is respectfully requested that the court find
an equitable lien in favor of plaintiffs and against Dahan and PDI in the amount of the judgment for
the plaintiff in this action.
Under All Causes of Action
I. For costs of suit;
2. For attorney's fees;
3. For such other and further relief as the court may deem appropriate.
Dated: August 28, 2008 KNOX RICKSEN LLP
By: ______________________ _
Thomas E. Fraysse R. Patrick Snook Attorneys for Plaintiff ALLSTATE INSURANCE COMPANY
- 21 -COMPLAINT FOR VIOLATION OF CALIFORNIA INSURANCE FRAUDS PREVENTION ACT, VIOLATION OF THE CALIFORNIA
UNFAIR COMPETITION ACT, FRAUD AND DECEIT, CONSTRUCTIVE TRUST, AND EQUITABLE LIEN; DEMAND FOR JURY TRIAL
PARTY WITHOUT ATTORNEY (Name,
uu1ua> E. Fraysse SBN 104436 KNOX RICKSEN LLP
SBN 129912
1300 Clay Street Suite 500, Oakland, CA 94612-1427 J 0) 285-2500 FAX NO. (5J 0) 285-2505
ISU'PERIO'RCOURT OF CALIFORNIA, COUNTY OF
sTREET ADDREss, Ill N. Hill Street MA,uNGADDREss, Ill N. Hill Street
ciTYANDZIPCoD•,Los CA 90012
CIVIL CASE COVER SHEET 00 Unlimited D Limited
(Amount (Amount demanded demanded is
Auto Tort
0 Auto (22) D Uninsured motorist (46)
Other PI/PD/WD (Personal Injury/Property Damage/Wrongful Death) Tort
0 Asbestos (04) D Product liability (24)
D Medical malpractice (45)
0 Other PI/PD/WD (23) Non-PIIPD/WD (Other) Tort
D Business tort/unfair business practice (07)
0 Civil rights (08)
0 Defamation (13) W Fraud (16)
0 Intellectual property (19) D Professional negligence (25)
D Other non-PIIPD/WD tort (35)
Complex Case Designation
D Counter D Joinder
Contract 0 Breach of contract/warranty (06)
0 Rule 3.740 collections (09)
D Other collections (09)
D Insurance coverage (18)
0 Other contract (37)
Real Property D Eminent domain/Inverse
condemnation (14)
D Wrongful eviction (33)
0 Other real property (26)
Unlawful Detainer
D Commercial (31)
D Residential (32)
0 Drugs(38)
Judicial Review
0 Asset forfeiture (05)
D Petition re: arbitration award (11)
D Writ of mandate (02) . I
FOR COURT USE ONLY
CASE NUMBER:
JUDGE
DEPT
Provisionally Complex Civil Litigation (Cal. Rules of Court, rules 3.400-3.403)
D AntitrustfTrade regulation {03)
D Construction defect (1 0)
0 Mass tort (40)
D Securities litigation (28)
D Environmentai!Toxic tort (30)
D Insurance coverage claims arising from the above listed provisionally complex case types (41)
Enforcement of Judgment
D Enforcement of judgment (20)
Miscellaneous Civil Complaint
D RIC0(27)
D Other complaint (not specified above) (42)
Miscellaneous Civil Petition
D Partnership and corporate governance (21)
D Other petition (not specified above) (43)
2. This case is is not complex under rule 3.400 of the California Rules of Court. If the case is complex, mark the factors requiring exceptional judicial management:
a. D Large number of separately represented parties
b. D Extensive motion practice raising difficult or novel issues that will be time-consuming to resolve
c. D Substantial amount of documentary evidence
d. D Large number of witnesses
e. D Coordination with related actions pending in one or more courts in other counties, states, or countries, or in a federal court
f. D Substantial postjudgment judicial supervision
3. Remedies sought (check all that apply): a.[X] monetary b. [X] nonmonetary; declaratory or injunctive relief c. [X] punitive
4. Number of causes of action (specify): FIVE (5) 5. This case D is [X] is not a class action suit. 6. If there are any known related cases, file and serve a notice of related case. (You may
Date: August 26, 2008 .. R. Patrick Snook
(TYPE OR PRINT NAME)
NOTICE • P~intiff must file this cover sheet with the first paper filed in the action or proceeding (except small claims cases or cases filed
u~j:ler the Probate Code, Family Code, or Welfare and Institutions Code). (Cal. Rules of Court, rule 3.220.) Failure to file may result in--sanctions.
• Fif~ this cover sheet in addition to any cover sheet required by local court rule. • If !l)is case is complex under rule 3.400 et seq. of the California Rules of Court, you must serve a copy of this cover sheet on aU
ottier parties to the action or proceeding. • Uiiless this is a collections case under rule 3.740 or a complex case, this cover sheet will be used for statistical purposes onlv.
~ f5age1of2
Form Adopted for Mandatory Use CIVIL CASE COVER SHEET Cal Rules of Court, rulf:!S 2.30, 3.220, 3.400-3.403. 3.740: Judicial Council of California Cal. Standards of Judicial Administration, std. 3.10 CM-010 [Rev. Julv 1. 20071 www.courtinfo.ca.aov
INSTRU-NS ON HOW TO COMPLETE THE CO~ SHEET CM-010
' To Plaintiffs and Others Filing First Papers. If you are filing a first paper (for example, a complaint) in a civil case, you must complete and file, along with your first paper, the Civil Case Cover Sheet contained on page 1. This information will be used to compile statistics about the types and numbers of cases filed. You must complete items 1 through 6 on the sheet. In item 1, you must check one box for the case type that best describes the case. If the case fits both a general and a more specific type of case listed in item 1, check the more specific one. If the case has multiple causes of action, check the box that best indicates the primary cause of action. To assist you in completing the sheet, examples of the cases that belong under each case type in item 1 are provided below. A cover sheet must be filed only with your initial paper. Failure to file a cover sheet with the first paper filed in a civil case may subject a party, its counsel, or both to sanctions under rules 2.30 and 3.220 of the California Rules of Court.
To Parties in Rule 3.740 Collections Cases. A "collections case" under rule 3.740 is defined as an action for recovery of money owed in a sum stated to be certain that is not more than $25,000, exclusive of interest and attorney's fees, arising from a transaction in which property, services, or money was acquired on credit. A collections case does not include an action seeking the following: (1) tort damages, (2) punitive damages, (3) recovery of real property, (4) recovery of personal property, or (5) a prejudgment writ of attachment. The identification of a case as a rule 3. 7 40 collections case on this form means that it will be exempt from the general time-for-service requirements and case management rules, unless a defendant files a responsive pleading. A rule 3.740 collections case will be subject to the requirements for service and obtaining a judgment in rule 3.740.
To Parties in Complex Cases. In complex cases only, parties must also use the Civil Case Cover Sheet to designate whether the case is complex. If a plaintiff believes the case is complex under rule 3.400 of the California Rules of Court, this must be indicated by completing the appropriate boxes in items 1 and 2. If a plaintiff designates a case as complex, the cover sheet must be served with the complaint on all parties to the action. A defendant may file and serve no later than the time of its first appearance a joinder in the plaintiffs designation, a counter-designation that the case is not complex, or, if the plaintiff has made no designation, a designation that the case is complex.
Auto Tort Auto (22)-Personallnjury/Property
Damage/Wrongful Death Uninsured Motorist (46) (if the
case involves an uninsured motorist claim subject to arbitration, check this item instead of Auto)
Other PI/PDIWD (Personal Injury/ Property Damage/Wrongful Death) Tort
Asbestos (04) Asbestos Property Damage Asbestos Personal Injury/
Wrongful Death Product Liability (not asbestos or
toxic/environmental) (24) Medical Malpractice (45)
Medical MalpracticePhysicians & Surgeons
Other Professional Health Care Malpractice
Other Pt/PD/WD (23) Premises Liability (e.g., slip
and fall) Intentional Bodily lnjury/PDIWD
(e.g., assault, vandalism) Intentional Infliction of
Emotional Distress Negligent Infliction of
Emotional Distress Other PI/PD/WD
Non-PI/PD/WD (Other) Tort Business Tort/Unfair Business
Practice (07) Civil Rights (e.g., discrimination,
false arrest) (not civil harassment) (08)
Defamation (e.g., slander, libel) (13)
~taud (16) 'Intellectual Property (1 9) Professional Negligence (25) / Legal Malpractice ;~,, Other Professional Malpractice :~ (not medical or legal) ,Other Non-PI/PD/WD Tort (35)
Emp~oyment :\wrongful Termination (36) jj)ther Employment (15)
CM-010 [Rev. July 1, 20071
CASE TYPES AND EXAMPLES Contract
Breach of ContracVWarranty (06) Breach of Rental/Lease
Contract (not unlawful detainer or wrongful eviction)
Contract/Warranty Breach-Seller Plaintiff (not fraud or negligence)
Negligent Breach of Contract/ Warranty
Other Breach of Contract/Warranty Collections (e.g., money owed, open
book accounts) (09) Collection Case-Seller Plaintiff Other Promissory Note/Collections
Case Insurance Coverage (not provisionally
complex) (18) Auto Subrogation Other Coverage
Other Contract (37) Contractual Fraud Other Contract Dispute
Real Property Eminent Domain/Inverse
Condemnation (14) Wrongful Eviction (33) Other Real Property (e.g., quiet title) (26)
Writ of Possession of Real Property Mortgage Foreclosure Quiet Title Other Real Property (not eminent domain, landlord/tenant, or foreclosure)
Unlawful Detainer Commercial (31) Residential (32) Drugs (38) (if the case involves illegal
drugs, check this item; otherwise, report as Commercial or Resident.iaQ
Judicial Review Asset Forfeiture (05) Petition Re: Arbitration Award (11) Writ of Mandate (02)
Writ-Administrative Mandamus Writ-Mandamus on Limited Court
Case Matter Writ-Other Limited Court Case
Review Other Judicial Review (39)
Review of Health Officer Order Notice of Appeal-Labor
Commissioner A eals
CIVIL CASE COVER SHEET
Provisionally Complex Civil Litigation (Cal. Rules of Court Rules 3.400-3.403)
AntitrustfTrade Regulation (03) Construction Defect (10) Claims Involving Mass Tort (40) Securities Litigation (28) Environmentalffoxic Tort (30) Insurance Coverage Claims
(arising from provisionally complex case type listed above) (41)
Enforcement of Judgment Enforcement of Judgment (20)
Abstract of Judgment (Out of County)
Confession of Judgment (nondomestic relations)
Sister State Judgment Administrative Agency Award
(not unpaid taxes) Petition/Certification of Entry of
Judgment on Unpaid Taxes Other Enforcement of Judgment
Case Miscellaneous Civil Complaint
RICO (27) Other Complaint (not specified
above) (42) Declaratory Relief Only Injunctive Relief Only (non-
harassment) Mechanics Lien Other Commercial Complaint
Case (non-tort/non-complex) Other Civil Complaint
(non-tort/non-complex) Miscellaneous Civil Petition
Partnership and Corporate Governance (21)
Other Petition (not specified above) (43) Civil Harassment Workplace Violence Elder/Dependent Adult
Abuse Election Contest Petition for Name Change Petition for Relief From Late
Claim Other Civil Petition
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