Allstate Insurance Company v. Spine Specialists of Michigan, P.C.

CourtDistrict Court, E.D. Michigan
DecidedAugust 4, 2025
Docket2:24-cv-11881
StatusUnknown

This text of Allstate Insurance Company v. Spine Specialists of Michigan, P.C. (Allstate Insurance Company v. Spine Specialists of Michigan, P.C.) is published on Counsel Stack Legal Research, covering District Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Allstate Insurance Company v. Spine Specialists of Michigan, P.C., (E.D. Mich. 2025).

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

ALLSTATE INSURANCE COMPANY, et al.,

Plaintiffs, Case Number: 24-cv-11881 Hon. Linda V. Parker v.

SPINE SPECIALISTS OF MICHIGAN, P.C., et al.,

Defendants. /

OPINION AND ORDER GRANTING PLAINTIFFS’ MOTION TO FILE AMENDED COMPLAINT (ECF No. 49) This matter is before the Court on Allstate Insurance Company, Allstate Fire and Casualty Insurance Company, Allstate Property and Casualty Insurance Company, and ASMI Auto Insurance Company’s (collectively, “Allstate”) motion for leave to file an amended complaint. (ECF No. 49.) The motion is fully briefed. (ECF Nos. 56-57, 61-62.) For the reasons set forth below, the motion is GRANTED. I. BACKGROUND Allstate seeks to file an amended complaint to add two additional defendants: Central Home Health Care Services, Inc. (“CHHCS”) and Sheel Walvekar (“Walvekar”). Walvekar allegedly controlled CHHCS for the purpose of billing for services allegedly rendered to patients who claimed to be involved in

auto accidents by existing defendant Central Home Health Care, Inc. (“CHHC”). (ECF No. 49, PageID.1774.) Allstate alleges that discovery in this case has established that while health care services were ordered from CHHC and rendered

by CHHC employees and contractors, it was CHHCS that billed Allstate for many of those services as if they were actually ordered from and provided by CHHCS. (ECF No. 49, PageID.1776-77.) For example, on June 9, 2023, Defendant Dr. Louis Radden, D.O. allegedly

prescribed healthcare services from CHHC for patient D.D. (ECF No. 49-2, PageID.1806-07.) However, CHHCS, not CHHC, billed for the alleged services to D.D., charging Allstate more than $13,700 for two purported dates of service. (Id.)

Allstate notes that in addition to this specific example, the First Amended Complaint will include exhibits that identify by date, service, and amount billed every fraudulent claim submitted. (ECF No. 61, PageID.2092.) Allstate detailed numerous ways that CHHC allegedly obscured the role of

CHHCS and its relationship to CHHC, including multiple instances where Walvekar testified in cases filed under the name “Central Home Health Care Services” that the plaintiff in those cases was formed in the 1980s and had multiple

owners, both of which describe CHHC and not CHHCS. (ECF No. 61, PageID.2088.) In fact, CHHCS was incorporated in Michigan in 2012 with Walvekar as the sole owner. (ECF No. 49-9; ECF No. 56, PageID.2005.)

Further, Allstate alleges that CHHC and CHHCS routinely conflate their operations, and the two entities frequently bill interchangeably and without regard to what entity actually provides services. (ECF No. 49-2, PageID.1807.) Allstate

provides two examples to support this allegation. First, despite the fact that services were ordered from CHHC, two invoices were submitted to Allstate using CHHCS’ name, but just one of those invoices used the Taxpayer Identification Number (“TIN”) of CHHCS while the other invoice used a TIN belonging to

CHHC. (ECF No. 49-2, PageID.1808; ECF No. 49-6.) Similarly, in the second example, the defendants submitted an invoice to Allstate that included the TIN for CHHC but provided other documentation with the name and TIN of CHHCS.

(ECF No. 49-2, PageID.1808.) Beyond connecting CHHCS and Walvekar to the alleged scheme, the First Amended Complaint outlines the ways in which they allegedly contributed to it. These contributions include billing for health care services not performed (ECF

No. 49-2, ¶¶ 165-79), creating false diagnoses and reports of physical limitations (Id. at ¶¶ 251-61), providing medically unnecessary health care treatment (Id. at ¶¶ 352-91), submitting fraudulent double billing (Id. at ¶¶ 475-76), and charging

unreasonable and uncustomary rates for services. (Id. at ¶¶ 493-95, 504-508). In all of these allegations, Allstate provides, where applicable, the patient’s initials, claim number, dates of treatment, amount billed, and services allegedly

rendered. As a result of the defendants’ allegedly fraudulent acts, Allstate has paid millions of dollars to them related to the patients at issue in the First Amended Complaint. (ECF No. 49-2, PageID.1796.) As further evidence of these payments,

specifically those made to CHHCS, Allstate provides copies of cancelled checks produced during discovery, which alone total to over $125,000. (ECF No. 61-4.) Defendants Spine Specialists of Michigan, P.C. (“Spine Specialists”), Michigan Ambulatory Surgical Center, LLC (“MASC”), Anesthesia Services

Affiliates, PLLC (“ASA”), North American Laboratories, LLC (“NAL”), and Dr. Louis Radden, D.O. (“Dr. Radden”) (together the “Spine Defendants”), oppose the motion on the grounds that they will be forced to incur additional attorney’s fees if

the relief sought by Allstate is granted. However, Spine Defendants acknowledge that there are no new claims asserted and the new factual assertions are limited. (ECF No. 57, PageID.2070-2071.) CHHC filed a separate response objecting to the motion. (ECF No. 56.)

CHHC argues that the amendment would be futile as the amended complaint would not survive a motion to dismiss as it does not satisfy the particularity requirements of Fed. R. Civ. P. 9(b). (Id. at PageID.2010-12.) Furthermore, CHHC argues that the lack of new information in the amended complaint demonstrates undue delay or bad faith. (Id. at PageID.2013.)

Originally filed on July 19, 2024, this case has been pending for approximately one year. (ECF No. 1.) Discovery is currently scheduled to close on September 30, 2025, and a dispositive motion deadline is set for December 16,

2025. This case was recently reassigned to this Court and was originally before Judge Goldsmith. No defendant has filed a motion to dismiss as of the date of this Opinion and Order. II. STANDARD

Pursuant to Federal Rule of Civil Procedure 15(a), leave to amend is “freely” granted “when justice so requires.” See Fed. R. Civ. P. 15(a). The United States Supreme Court has advised that a plaintiff should be allowed the opportunity to

test a claim on the merits if the facts and circumstances underlying the claim suggest that it may be a proper subject of relief. Foman v. Davis, 371 U.S. 178, 182 (1962). However, a motion for leave to amend a complaint should be denied if the amendment is brought in bad faith or for dilatory purposes, results in undue

delay or prejudice to the opposing party, or would be futile. Id. An amendment is futile when the proposed amendment fails to state a claim upon which relief can be granted and would be subject to dismissal pursuant to

Federal Rule of Civil Procedure 12(b)(6). Rose v. Hartford Underwriters Ins. Co., 203 F.3d 417, 420 (6th Cir. 2000); see also Midkiff v. Adams Cnty. Reg’l Water Dist., 409 F.3d 758, 767 (6th Cir. 2005) (explaining that a proposed amendment is

futile if the amendment could not withstand a motion to dismiss). III. ANALYSIS A. Good Cause Under Federal Rule of Civil Procedure 16(b)(4)

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