UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

STATE FARM MUTUAL AUTOMOBILE

INSURANCE COMPANY,

Plaintiff,

v.

LOUIS N. RADDEN, D.O., and SPINE

SPECIALISTS OF MICHIGAN, P.C.,

Defendants.

 /

Case No. 14-13299

Honorable John Corbett O’Meara

OPINION AND ORDER DENYING DEFENDANTS'

FEBRUARY 15, 2017 MOTION FOR SUMMARY JUDGMENT

This matter came before the court on defendants Spine Specialists of Michigan

("SSOM") and Dr. Louis D. Radden's February 15, 2017 motion for summary

judgment. Plaintiff State Farm Mutual Automobile Insurance Company ("State

Farm") filed a response March 24, 2017; and Defendants filed a reply brief March 31,

2017. Oral argument was heard April 6, 2017. For the reasons that follow, the court

will deny the motion for summary judgment.

BACKGROUND FACTS

The complaint alleges that from January 2011 to the date of its filing on August

25, 2014, Dr. Louis Radden and his company SSOM engaged in a scheme to defraud
State Farm in order to obtain No-Fault benefits to which Defendants knew they were

not entitled by submitting bills for allegedly fraudulent examinations and medically

unnecessary spinal injection. The complaint alleges claims for RICO violations,

common law fraud, and unjust enrichment, as well as a claim for declaratory judgment

that SSOM is not entitled to payment for unpaid fraudulent charges.

In their motion for summary judgment Defendants make the following

arguments: 1) State Farm lacks any evidence that Defendants engaged in fraud or any

racketeering activity; 2) Defendants’ treatment of patients was not the proximate cause

of State Farm’s alleged injury; 3) the state court actions involving State Farm and its

insureds are res judicata with respect to State Farm’s allegations of fraud; 4) State

Farm has failed to identify an “enterprise” distinct from the alleged “racketeering

activity”; 5) State Farm has no witness to testify regarding the allegations in the

complaint; and 6) State Farm’s named expert is not capable of testifying about fraud,

causation or damages, as his testimony is inadmissible under Rule 701 and 702 of the

Rules of Evidence. Defendants also seek sanctions against State Farm for not

dismissing this lawsuit.

LAW AND ANALYSIS

To succeed on a common law fraud claim, a plaintiff must prove the following

elements: “(1) the defendant made a material representation; (2) the representation

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was false; (3) when the defendant made the representation, the defendant knew it was

false, or made it recklessly, without knowledge of its truth as a positive assertion; (4)

the defendant made the representation with the intention that the plaintiff would act

upon it; (5) the plaintiff acted in reliance upon it; and (6) the plaintiff suffered

damages.” M & D, Inc. v. W.B. McConkey, 231 Mich. App. 22, 27 (1998).

Defendants argue that State Farm is unable to show “how or which services”

were fraudulent. However, State Farm’s evidence consists of the testimony of Dr.

Smuck; summary charts reflecting patterns in defendant Radden’s reports, practices

and billing; fluoroscopy films from the injections; MRI films and interpretive reports;

nurse and anesthesiology notes from the injections; and billing patterns. Therefore,

State Farm has presented sufficient evidence to create genuine issues of material fact

regarding Defendants’ alleged scheme to defraud under common law fraud.

To prove a RICO claim under 18 U.S.C. § 1962(c), a plaintiff must establish the

following elements: “(1) conduct (2) of an enterprise (3) through a pattern (4) of

racketeering activity.” In re ClassicStar Mare Lease Litig., 727 F.3d 473, 483 (6th Cir.

2013).

State Farm alleges that Dr. Radden’s pattern of racketeering activity consisted

of repeated violations of the federal mail fraud statute, 18 U.S.C. § 1341, based upon

the use of the U.S. mails to submit fraudulent bills and records for examinations and

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injections which were either not performed, not performed properly, or were not

medically necessary. State Farm relies on the same evidence as those in its common

law fraud claim to rebut Defendants’ motion for summary judgment.

Defendants argue that a RICO violation requires that a plaintiff prove the

existence of a person and an enterprise that is not simply the same person referred to

by a different name, citing Cederic Kushner Promotions, Ltd. v. King, 533 U.S. 158,

161 (2001). Since Dr. Radden is the sole shareholder of co-defendant SSOM,

Defendants assert that State Farm cannot prove a RICO violation. However, in King

the United States Supreme Court held that “[t]he corporate owner/employee, a natural

person, is distinct from the corporation itself, a legally different entity with different

rights and responsibilities due to its different legal status. And we can find nothing

in the [RICO] statute that requires more ‘separateness’ than that.” Id. at 163. 

Therefore, Defendants are not entitled to summary judgment on State Farm’s RICO

claim.

Defendants also argue that certain, unidentified claims of the 267 at issue in the

complaint have been adjudicated in state court and that the judgments in those cases

are res judicata in the present action. However, Defendants have failed to identify

even one case they contend has res judicata effect here.

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As for the admissibility of Dr. Smuck’s testimony, Rule 703 provides that an

expert may base an opinion on facts or data that “the expert has been made aware of

or personally observed” and the facts and data “need not be admissible for the opinion

to be admitted” if an “expert in the particular field would reasonably rely on those

kinds of facts or data in forming an opinion on the subject.” In addition, Rule 1006

provides for the use of summaries to prove content. Moreover, at the summary

judgment stage, it is of no import whether the evidence is ultimately deemed

admissible at trial.

For all these reasons, genuine issues of material fact remain to preclude

Defendants’ motion for summary judgment.

ORDER

It is hereby ORDERED that Defendants’ February 15, 2017 motion for

summary judgment is DENIED.

s/John Corbett O'Meara 

United States District Judge

Date: April 10, 2017

I hereby certify that a copy of the foregoing document was served upon counsel of record on this date, April 10,

2017, using the ECF system.

s/William Barkholz 

Case Manager

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