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UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF MICHIGAN 

SOUTHERN DIVISION 

REHAB SOLUTIONS, INC., 

Plaintiff, 

v. 

ST. JAMES NURSING & PHYSICAL 

REHABILITATION CENTER, INC., 

Defendant. 

 / 

Case No. 14-cv-13651 

UNITED STATES DISTRICT COURT JUDGE

GERSHWIN A. DRAIN

UNITED STATES MAGISTRATE JUDGE

MONA K. MAJZOUB

ORDER GIVING DEFENDANT OPPORTUNITY TO PROVIDE DEPOSITION OF 

ROGER MALI PRIOR TO SUMMARY JUDGMENT RULING [33] 

I. INTRODUCTION

On September 19, 2014, Rehab Solutions, Inc. (“Rehab Solutions” or “Plaintiff”), 

commenced this breach of contract action against St. James Nursing & Physical Rehabilitation 

Center, Inc. (“St. James” or “Defendant”), alleging that St. James failed to pay certain invoices 

for services rendered by Rehab Solutions. See Dkt. No. 1. Presently before the Court is Rehab 

Solutions’ Motion for Summary Judgment [33]. This matter is fully briefed and a hearing was 

held on August 18, 2015. The Court will give St. James an opportunity to provide the deposition 

of Mr. Mali prior to ruling on Rehab Solutions’ Motion for Summary Judgment [33].

II. BACKGROUND

St. James is a Michigan corporation with its principal place of business in Michigan. See 

Dkt. No. 1 at ¶ 1. It is a nursing facility that provides nursing care and services, including 

physical therapy to the sick and elderly. See id. at ¶ 6. Rehab Solutions is a North Carolina 

corporation with its principal place of business in North Carolina. See id. at ¶ 2. It provides 

physical, occupational and speech therapy services in nursing facilities. See id. at ¶ 5. 

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A. The Agreement 

On October 24, 2013, Rehab Solutions and St. James entered into a one-year outsourcing 

Therapy Services Agreement (“the Agreement”). See Dkt. No. 1-2 at ¶ 1. The Agreement 

automatically renewed for successive one-year terms unless either party delivered written notice 

to the other of intent not to renew at least thirty days prior to the end of each term. See id. 

 Per the terms of the Agreement, Rehab Solutions was to provide St. James with 

“specialized therapy services,” including physical therapy, occupational therapy, and speech and 

language pathology. See Dkt. No. 1-2 at ¶ 2. The Agreement indicates that the scope of the 

services provided by Rehab Solutions included, amongst other things, “accurate CPT coding and 

ICD-9 identification on service logs submitted to the billing office” and a requirement that Rehab 

Solutions “[p]rovide all required therapy billing information to the business office per the terms 

of the contract[.]” Dkt. No. 1-2 at 10. 

 The Agreement further indicates that Rehab Solutions was to be compensated by St. 

James “for services rendered during each calendar month according to invoices submitted to [St. 

James] by Rehab Solutions.” Id. at ¶ 3. The Agreement required that Rehab Solutions “be paid in 

full within 30 days after each invoice is submitted by Rehab Solutions to [St. James].” Id. The 

invoices were required to “reflect the Schedule of Rates agreed to by Rehab Solutions and [St. 

James]” Id. (referencing Dkt. No. 1-2 at 8-9 “Exhibit A-Fee Schedule”). 

 The Agreement also contained the following provision outlining an appeals procedure in 

the event that Rehab Solutions claimed and received payment from St. James for service that was 

later disallowed, denied or recaptured by a third-party: 

In the event Rehab Solutions claims and receives payment from [St. James] for 

service, reimbursement for which is later disallowed or recaptured in part or in 

full by the federal, state or local government, or other third party payor, including 

without limitation the Medicare or Medicaid programs, and where such 

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disallowance or recapture is directly attributable to the acts or omissions of Rehab 

Solutions, its employees or contractors, . . . Rehab solutions shall promptly refund 

the disallowed or recaptured amount, previously received by Rehab Solutions to 

[St. James] upon final resolution (by the fiscal intermediary, carrier, or, if 

appealed, by final administrative or judicial determination)[.] 

Dkt. No. 1-2 at ¶ 4.1.1

 However, the Agreement indicates that Rehab Solutions would only 

refund the disallowed or recaptured amount if the denial was based on a finding that “[t]he 

services were not medically necessary; . . . [t]he services were otherwise not covered services 

under polices and the rules of any applicable payment program; or, . . . [t]he services were not 

supported by timely and complete invoices and other necessary documentation of a claim.” Id. at 

¶¶ 4.1.1–4.1.3. After Rehab Solutions provided a refund for a claim, the Agreement contained a 

procedure for Rehab Solutions to appeal the disallowed claim. Id. at ¶¶ 4.2–4.2.2. 

 St. James was required by the Agreement to provide notice to Rehab Solutions with 

respect to denied claims. See Dkt. No. 1-2 at ¶ 4.3. Specifically, the Agreement indicates that 

“[i]n order to timely appeal denied claims, Rehab Solutions requires notification and receipt of 

the detailed remittance advice and UB04 for residents within 14 calendar days of the ‘paid date’

on the remittance advice.” Id. at ¶ 4.3.1. If St. James did not notify Rehab Solutions “of such a 

claim denial . . . disallowance or recapture as required [in the Agreement], Rehab Solutions 

[was] entitled to receive and retain full payment of such claim from [St. James] and [had] no 

obligation to refund or reimburse any portion of such claim to [St. James.]”  Id. at ¶ 4.3.2. 

Per the terms of the agreement, either party could terminate the Agreement if either 

materially failed “to comply with any of the obligations, liabilities or undertaking assumed by 

such party under this Agreement” following a stated period of written notice. See Dkt. No. 1-2 at 

 1

 The Agreement specifically notes that “without limitation, Rehab Solutions shall have no obligation to refund or 

reimburse in any instance where Rehab Solutions has committed no act or omission giving rise to disallowance or 

recapture but an act or omission of [St. James] or a third party results in disallowance or recapture[.]” Dkt. No. 1-2 

at ¶ 4.1. 

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¶ 1. However, Rehab Solutions could terminate the Agreement “immediately” upon the 

occurrence of, amongst other things, the “failure of [St. James] to pay compensation as 

provided[.]” Id. The Agreement also contained a choice of law provision indicating it was to “be 

governed and construed in accordance with the laws of the State of North Carolina.” Id. at ¶ 16. 

B. The Dispute 

Rehab Solutions began providing services at St. James’ facility in October of 2013, and 

provided invoices for services rendered through September 2014. See Dkt. No. 1-5 at 7-17. 

Rehab Solutions asserts that it provided St. James with “the necessary information to seek 

reimbursement from third-party payors for the services rendered by Rehab Solutions[,]”

including, “inter alia, therapy and service logs, ICD-9 codes for medical treatment diagnoses, G 

codes, change of therapy and information regarding the onset, star and end dates of care.” Dkt. 

No. 33 at 13 (citing Dkt. No. 33-5 at ¶¶ 4, 9-10 “Affidavit of Brandy Shumaker”). 

Nevertheless, Rehab Solutions asserts that St. James did not pay Rehab Solutions for 

services rendered from October 2013 through April 2014. See Dkt. No. 33 at 14 (citing Dkt. No. 

33-4 at ¶ 10 “Affidavit of Donald R. Tesner”). Rehab Solutions claims that it made numerous 

attempts to collect past-due amounts until it sent a demand letter to St. James on May 14, 2014, 

requesting that St. James immediately pay all past-due invoices. Id. (citing Letter from Emily A. 

Shupe, Counsel for Rehab Solutions, to Administrator of St. James (May 14. 2014) (Dkt. No. 1-

3)). Rehab Solutions further asserts that “St. James did not pay those invoices, but it represented 

that it would work towards a payment plan for the outstanding invoices if Rehab Solutions would 

continue to provide services at its facility.” Id. (citing Dkt. No. 33-4 at ¶ 10). 

Accordingly, Rehab Solutions states that it kept providing services while the parties 

“attempted to negotiate a payment plan.” Dkt. No. 14 (citing Dkt. No. 33-4 at ¶ 11). Rehab 

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Solutions argues that “St. James never raised any issues with the services rendered, the amounts 

of the invoices, or the third-party payor reimbursement information.” Id. To the contrary, Rehab 

Solutions claims that “H. Roger Mali, a principal of St. James, inquired if Rehab Solutions 

would replace the current therapy service provider in another one Mali’s skilled nursing 

facilities.” Id. (citing Dkt. No. 33-4 at 13-14, ¶ 15). 

Rehab Solutions acknowledges that “St. James did make some payments towards the 

past-due invoices during the parties’ negotiations in the summer of 2014.” Dkt. No. 33 at 13 

(citing Dkt. No. 33-4 at 11, ¶ 11). However, Rehab Solutions is adamant that “at no time did 

Rehab Solutions ever inform St. James that these payments constituted a full payment of its debt 

to Rehab Solutions.” Id. (citing Dkt. No. 33-4 at ¶ 11). Thus, Rehab Solutions claims that 

“[d]espite the initial progress towards repayment, St. James again became delinquent in its 

payments[.]” Id. at 14-15 (citing Dkt. No. 33-4 at ¶ 12). 

On August 29, 2014, Rehab Solutions sent St. James a letter in which it informed St. 

James that, unless certain conditions were met, including payment of the then-outstanding 

balance of $265,763.93, Rehab Solutions would terminate the Agreement effective September 

12, 2014. See Dkt. No. 33 at 15 (citing Letter from Emily A. Shupe, Counsel for Rehab 

Solutions, to Administrator of St. James (August 29, 2014) (Dkt. No. 1-4)). Still, Rehab Solution 

contends that St. James did not pay any portion of the outstanding balance. Id. (citing Dkt. No. 

33-4 at ¶¶ 13-14). Accordingly, Rehab Solutions states that it terminated the Agreement pursuant 

to Section 1(d) on September 12, 2014. See id. (referencing Dkt. No. 1-2 at ¶ 1). 

St. James gives a different account of the relationship between the parties. St. James 

emphasizes that Rehab Solutions “was required to record in a ‘Therapy Log Book’ the nature of 

the services rendered and the resident for whom said services were provided.” Dkt. No. 44 at 6. 

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(emphasis in original). According to St. James, Rehab Solutions “[i]mmediately . . . began 

defaulting on its obligation to accurately record and document the services that they had 

provided to St. James’ residents in the Therapy Logs.” Id. Specifically, St. James argues that 

Rehab Solutions “refused to remit payment previously made back to St. James, or alternatively, 

apply such payments to other amounts due and owing[.]” Dkt. No. 44 at 7. 

As a result, St. James asserts that “an alleged discrepancy developed between the 

amounts that [Rehab Solutions] invoiced St. James for, and the amounts that [St. James was] 

demanding from the insurance carriers.” Id. St. James claims that it “immediately communicated 

the issue to [Rehab Solutions] and reiterated the necessity of proper record keeping to ensure that 

[Rehab Solutions was] promptly and accurately compensated for [its] services and that St. James 

was remunerated for payments it had made to [Rehab Solutions].” Id. (emphasis in original). 

However, as the balance of the claims continued to grow, St. James argues that Rehab Solutions 

“refused to correct the deficiencies and inaccuracies in the Therapy logs and in some cases, 

refused to provide any documentation whatsoever!” Dkt. No. 44 at 7 (emphasis in original). 

Thus, despite the fact that St. James asserts it would reiterate “that in order for payments to be 

made to [Rehab Solutions], St. James needed the Therapy Logs to be capable of billing the 

insurance carriers.” Id. (emphasis in original). 

 Rehab Solutions began to demand payment in May of 2014, but St. James indicates that 

Rehab Solutions did so “despite repeated requests from St. James that [Rehab Solutions] 

correct, and in many instances provide at all, the Therapy Logs which St. James required 

in order to bill the insurance carriers.” Dkt. No. 44 at 7 (emphasis in original). When St. 

James refused to pay without proper Therapy Logs, St. James asserts that Rehab Solutions 

“began to falsify the Therapy Logs that it did provide to St. James, in many cases sending 

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Invoices to St. James which grossly exaggerated the services rendered; and in others, invoicing 

St. James for services that were never actually performed.” Id. 

St. James concludes arguing that it “has no conflict with paying [Rehab Solutions] for the 

services it has rendered on behalf of St. James’ patients.” Dkt. No. 44 at 8. However, St. James 

argues it is incapable of making “payments on an alleged balance which, [Rehab Solutions] has 

repeatedly inflated through exaggerated costs and services; and for services that St. James is 

incapable of invoicing to the appropriate insurance carriers as a result of [Rehab Solutions’] 

failure and/or refusal to provide accurate therapy records.” Id. 

III. DISCUSSION

In the briefing, St. James was adamant that Rehab Solutions “was required to record in a 

‘Therapy Log Book’ the nature of the services rendered and the resident for whom said services 

were provided.” Dkt. No. 44 at 6. Rehab Solutions takes the position that “the Agreement does 

not require Rehab Solutions to provide St. James with ‘Therapy Logs.’” Dkt. No. 45 at 5. After 

reviewing the record, the Court agrees with St. James on this point 

The Agreement indicates that, amongst other things, Rehab Solutions was required to 

provide “accurate CPT coding and ICD-9 identification on service logs submitted to the billing 

office” and “all required therapy billing information to the business office per the terms of the 

contract[.]” Dkt. No. 1-2 at 10. Critically, the affidavit of Rehab Solutions’ own witness, Mr. 

Brandy Shumaker, similarly indicates that “[t]he information necessary for reimbursement”

includes “[t]herapy service records and logs, including minutes of therapy provided[.]” Dkt. No. 

33-5 at ¶ 4(a).2

 Accordingly, it appears that Rehab Solutions is incorrect in its assertion that “the 

 2

 Mr. Shumaker further indicates that, consistent with the Agreement the following were necessary in order to be 

provided to St. James: (1) “Internal Classification of Disease (ICD-9) Codes, which show which diseases are 

applicable to each individual resident. This needs to be included on the billing to know why the resident is being 

treated by nursing and or therapy;” Dkt. No. 33-5 at ¶ 4(b); and (2) “Current Procedural Terminology (“CPT”) 

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Agreement does not require Rehab Solutions to provide St. James with ‘Therapy Logs.’” Dkt. 

No. 45 at 5. 

Importantly, however, Rehab Solutions argued in its briefs that “[e]ven if there were such 

a requirement, Brandy Shumaker’s affidavit that St. James was given access to all information 

for St. James to seek reimbursement from insurance carriers through Rehab Solutions’ software 

applications is undisputed.” Dkt. No. 45 at 5. At the hearing, Rehab Solutions re-emphasized this 

argument and correctly noted that St. James makes many assertions without citing case law or 

the record to support its argument. 

The Court stressed this fact at the hearing. In response, Defense Counsel informed the 

Court that he had mistakenly forgot to attach an affidavit from his client in Response to the 

Plaintiff’s Motion for Summary Judgment. Astonishingly, Defense Counsel did not have the 

affidavit with him. Inexplicably, he has since failed to provide the Court with a copy of this 

affidavit despite the fact that the hearing took place two weeks ago. Moreover, when repeatedly 

pressed to direct the Court to any evidence in the record to support his case, Defense Counsel 

continued to provide conclusory assertions and was unable to specifically point to anything in the 

record because he claimed his clients did not keep a paper trail. 

Put simply, St. James’ conclusory assertions in its briefs and at the hearing are 

insufficient pursuant Rule 56 of the Federal Rules of Civil Procedure. See FED. R. CIV. P. 

56(c)(1) (“A party asserting that a fact cannot be or is genuinely disputed must support the 

assertion by citing to particular parts of materials in the record[.]”) (emphasis added); see also 

Bennett v. Louisville Metro Gov't, No. 14-6307, 2015 WL 3893259, at *3 (6th Cir. June 25, 

2015) (“Counsel’s reliance on items that are not part of the record does not suffice to generate a 

 

Codes are used to show what types of services were rendered during each therapy session;” id. at ¶ 4(f). Cf. Dkt. No. 

1-2 at 10 (noting Rehab Solutions was required to provide “accurate CPT coding and ICD-9 identification on service 

logs submitted to the billing office[.]”). 

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genuine issue of material fact. When responding to a motion for summary judgment, ‘[a] party 

asserting that a fact cannot be or is genuinely disputed must support the assertion by . . . citing to 

particular parts of materials in the record.’ ‘[T]he non-moving party must present evidence upon 

which a reasonable jury could find in her favor.’ ‘A plaintiff cannot simply sit back and highlight 

deficiencies in the defendant’s argument without providing some affirmative support for its own 

position.’ The party opposing summary judgment must instead ‘show that she can make good on 

the promise of the pleadings by laying out enough evidence that will be admissible at trial to 

demonstrate that a genuine issue on a material fact exists, and that a trial is necessary.’ Bald 

assertions do not a jury question make; a jury could not find in favor of Bennett on the strength 

of her counsel's representations alone.”) (internal citations omitted) (emphasis in original). 

Rule 56(e) of the Federal Rules of Civil Procedure provides two different options for this 

Court to take in this situation. The first option is rather forgiving. Rule 56(e) empowers a court to 

give a party who has failed to address a summary judgment movant’s assertions of fact “an 

opportunity to properly support or address” the fact. FED. R. CIV. P. 56(e)(1); see also FED. R.

CIV. P. 56(e)(4) (allowing the Court to “issue any other appropriate order.”). On the other hand, 

Rule 56(e) sets forth a less forgiving approach allowing a court to “consider [a] fact undisputed” 

if it has not been properly supported or addressed as required by Rule 56(c). See FED. R. CIV. P. 

56(e)(2); see also FED. R. CIV. P. 56(e)(3) (allowing the Court to “grant summary judgment if the 

motion and supporting materials . . . show that the movant is entitled to it[.]”).

After the hearing, the Court was very close to granting Plaintiff’s Motion for Summary 

Judgment in light of the briefing and argument put forth by Defendant. Nevertheless, Defendant 

did note that there had been no depositions in this case and that a deposition was scheduled for 

the first week of September. The Court considered this information with the guidance of the 

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2010 Advisory Committee Note to rule 56(e) which states that, under Subdivision (e)(1), 

“afford[ing] an opportunity to properly support or address [a] fact” is “in many circumstances . . 

. the court’s preferred first step.” FED. R. CIV. P. 56(e) 2010 advisory committee’s note; see also 

id. (noting that with respect to Subdivision (e)(4) “[t]he choice among possible orders should be 

designed to encourage proper presentation of the record.”). 

Here, the only testimonial evidence the Court can consider are two self-serving affidavits 

from individuals from Rehab Solutions. St. James has directed the Court to nothing, although 

there is scant evidence in the record that possibly supports St. James position.

3

 Overall, the record is 

inadequate for this Court to make an informed decision regarding Plaintiff’s Motion for 

Summary Judgment. See Grimes v. D.C., No. 13-7038, 2015 WL 4430157, at *7 (D.C. Cir. July 

21, 2015) (“Indeed, for the evidentiary burden that Rule 56(c) places on nonmovant plaintiffs to 

function, a court must be able to evaluate an inadequately supported assertion of material fact 

and deem it not materially disputed, such that summary judgment is warranted in whole or in 

part.”); 11 James WM. Moore et al., Moore's Federal Practice § 56.99[2][a] (Matthew Bender 

3d ed. 2015) (“[Giving a party another opportunity to support or address a fact] will often be the 

best option, minimizing the chance of an unjust result based on an inadequate record.”). 

 3

 After reviewing every piece of record evidence in this matter, the Court found one piece of evidence that possibly 

supports St. James position that there were complaints about billing. There is one email from Mr. Mali, the principal 

of St. James, from the negotiations with Rehab Solutions regarding the payments. In the email, from July of 2014, 

Mr. Mali impliedly supports the position of St. James in this litigation—that the invoices were incorrectly billed and 

that St. James raised invoice issues with Rehab Solutions: 

I think the only main item is that we need some sort of mechanism to reconcile the bills (even the 

past due bills). . . . [T]he idea is that we have to have a right to work with Rehab Masters to 

reconcile the past due invoices. I think some of the issues that got us to where we are was the 

misunderstanding with some of the bills. To that end - I think as long as we agree that the parties 

will work in good faith and mutual acceptable adjustments, that works for everyone. 

Dkt. No. 44-3 at 75; see also id. at 81 (amending a proposed forbearance agreement sent by Rehab Solutions to 

clarify that certain issues were raised with regard to the amounts and services rendered under the services agreement 

at another facility, and seeking “reconciliation” with Rehab Solutions to reach something mutually agreeable. This is 

not dispositive, however, because it did not deal with St. James). 

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IV. CONCLUSION

In light of the record before the Court, the Court HEREBY ORDERS Defendant to 

provide an expedited copy of Mr. Mali’s deposition no later than September 8, 2015. Cf. 

Jimmerson v. Meyers, No. 3:14-CV-342, 2015 WL 470456, at *1 (N.D. Ind. Feb. 3, 2015) 

(giving an opportunity to provide additional detail); Parks v. Blanchette, No. 3:09-CV-604 VAB, 

2015 WL 1970526, at *1 (D. Conn. May 1, 2015) (directing Defendants to resubmit affidavits of 

witnesses). 

IT IS SO ORDERED. 

Dated: August 28, 2015 

 /s/Gershwin A Drain 

 HON. GERSHWIN A. DRAIN 

 United States District Court Judge

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