UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

State Farm Mutual Automobile 

Insurance Company, 

Plaintiff, Case No: 15-10993

Hon. Victoria A. Roberts

v.

Universal Rehab Services, Inc.,

PhysioFlex, PLLC,

Ahmad T. Abulabon, P.T.,

Summit Medical Group, PLLC, and

David Jankowski, D.O.,

Defendants.

 /

ORDER DENYING STATE FARM’S MOTION TO DISMISS 

SUMMIT MEDICAL GROUP PLLC’S COUNTERCLAIM

I. Introduction

State Farm Mutual Automobile Insurance Company (“State Farm”) sued

Defendants. It alleges they engaged in a scheme to submit fraudulent claims for

no-fault benefits. Defendant/Counter-Plaintiff Summit Medical Group, PLLC (“Summit”)

filed a three count Counterclaim: (1) Fraud/Fraudulent Misrepresentation; (2) Civil

Conspiracy; and (3) Declaratory Relief. State Farm moves to dismiss the counterclaim

(Doc. #55). The Motion is fully briefed and the Court dispenses with oral argument. 

The Court finds that Summit’s Counterclaim sufficiently states cognizable claims;

State Farm’s Motion is DENIED. 

II. Legal Standard

A motion to dismiss under Fed. R. Civ. P. 12(b)(6) tests the legal sufficiency of

1

2:15-cv-10993-VAR-APP Doc # 65 Filed 02/23/16 Pg 1 of 6 Pg ID 1852
the complaint. RMI Titanium Co. v. Westinghouse Elec. Corp., 78 F.3d 1125, 1134 (6th

Cir. 1996). "To survive a motion to dismiss, a complaint must contain sufficient factual

matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'" Ashcroft

v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S.

544, 570 (2007)). A claim is plausible on its face "when the plaintiff pleads factual

content that allows the court to draw the reasonable inference that the defendant is

liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556). 

A complaint "must contain something more ... than ... a statement of facts that

merely creates a suspicion [of] a legally cognizable right of action." Twombly, 550 U.S.

at 555 (citations omitted). Indeed, "a plaintiff's obligation to provide the ‘grounds' of his

‘entitle[ment] to relief' requires more than labels and conclusions, and a formulaic

recitation of the elements of a cause of action will not do." Id.; see also Iqbal, 556 U.S.

at 678 ("Threadbare recitals of the elements of a cause of action, supported by mere

conclusory statements, do not suffice."). Moreover, the Court is "not bound to accept as

true a legal conclusion couched as a factual allegation." Iqbal, 556 U.S. at 678 (citation

omitted). 

III. Discussion

A. Count I: Fraud/Fraudulent Misrepresentation

 State Farm says Count I is really a contract claim disguised as fraud and should

be dismissed. State Farm also says Summit fails to plead facts sufficient to support the

reliance and damage elements of fraud. Moreover, State Farm says Summit fails to

satisfy the heightened pleading requirements for fraud. 

2

2:15-cv-10993-VAR-APP Doc # 65 Filed 02/23/16 Pg 2 of 6 Pg ID 1853
To state a claim for fraud, plaintiff must allege: “(1) the defendant made a

material representation; (2) the representation was false; (3) at the time the

representation was made, it was either known to be false, or made recklessly without

any knowledge of its truth; (4) the representation was made with the intention that it

should be acted on by plaintiff; (5) plaintiff, in fact, acted in reliance on it; and (6) plaintiff

suffered damages as a result.” Little Caesar Enterprises, Inc. v. OPPCO, LLC, 219

F.3d 547, 551 (6th Cir. 2000). See also, Hi–Way Motor Co. v. Int'l Harvester Co., 398

Mich. 330, 247 N.W.2d 813, 816 (1976). Additionally, Fed. R. Civ. P. 9(b) requires the

plaintiff to “. . . state with particularity the circumstances constituting fraud.” Farnsworth,

569 F. App’x at 427. 

Summit’s allegations of fraud are sufficiently pled. Summit says State Farm

represented that it was investigating certain claims and that it had not yet made a

determination whether to pay those claims. Summit attached examples of these letters

to the counterclaim. Summit says these representations were false when made because

State Farm was aware of its internal investigation procedures and it knew that it was not

actually investigating these claims. Summit says these representations were made with

an intention that they would be acted on by Summit, that Summit relied on them and

suffered injury. 

State Farm’s Motion to Dismiss Count I is DENIED. 

B. Count II: Civil Conspiracy

State Farm says the Civil Conspiracy claim should be dismissed because it fails

to plead: (1) an underlying tort; or (2) the actual conspiracy with requisite specificity. 

3

2:15-cv-10993-VAR-APP Doc # 65 Filed 02/23/16 Pg 3 of 6 Pg ID 1854
A conspiracy is a combination of two or more persons, by some concerted action,

to accomplish a criminal or unlawful purpose, or to accomplish a lawful purpose by

using criminal or unlawful means. Fenestra Inc. v. Gulf Am. Land Corp., 377 Mich. 565,

593 (Mich.1966); Marks One Car Rental, Inc. v. Auto Club Grp. Ins. Co., 55 F. Supp. 3d

977, 988 (E.D. Mich. 2014).

Summit says it pled an underlying tort: common law fraud/fraudulent

misrepresentation based on State Farm's fraudulent letters and other communications.

Additionally, Summit says State Farm did not perpetrate this fraud on its own but had

the assistance of doctors who worked with State Farm to justify denial decisions.

Summit says State Farm routinely hires specific doctors who are willing to sign reports

supporting the decision to deny claims. Summit says State Farm pays these doctors

“exorbitant amounts” as an incentive to knowingly participate in the scheme. 

The Counterclaim provides the names of the doctors allegedly hired by State

Farm to conduct examinations even though these doctors were allegedly already aware

the claim had been denied. The Court agrees that this is sufficient factual detail to state

a claim. Discovery may prove otherwise. 

State Farm’s Motion to Dismiss Count II is DENIED. 

C. Count III: Declaratory Relief

State Farm says Count III should be dismissed because: (1) it seeks relief under

the Michigan Unfair Trade Practices Act (“MUTPA”) which does not provide a private

cause of action; (2) it contains an insufficient conclusory assertion that State Farm

made untimely payment which does not entitle Summit to recover penalty interest under

4

2:15-cv-10993-VAR-APP Doc # 65 Filed 02/23/16 Pg 4 of 6 Pg ID 1855
the statute; and (3) Summit seeks relief from persons who are not parties to the

litigation. 

The Counterclaim lists several statutory provisions, including MCL §§500.2006

and 500.2014(b), among others. 

Courts have previously confirmed that the MUTPA does not generally provide for

a private right of action. State Farm Mut. Auto. Ins. Co. v. Physiomatrix, Inc., No.

12-11500, 2013 WL 509284, at *9 (E.D. Mich. Feb. 12, 2013) on reconsideration, No.

12-11500, 2013 WL 3777108 (E.D. Mich. May 22, 2013). However, like the defendants

in Phsyiomatrix, Summit references § 500.2006 which allows an insurance company to

be penalized at a rate of 12% per annum for untimely payment of benefits. “Section

500.2006 is an exception to the general rule that a private cause of action does not exist

under the [M]UTPA.” Id. citing, Geer v. Amex Assurance Co., 2010 WL 2681160 at

*2–3 (E.D.Mich. Jul.6, 2010). 

State Farm does not address the other statutory provisions referenced in Count

III. The Court finds Summit properly pled a claim under MUTPA. 

State Farm’s Motion to Dismiss Count III is DENIED. 

IV. Conclusion

State Farm’s Motion to Dismiss Summit Medical Group PLLC’s Counterclaim

(Doc. #55) is DENIED.

IT IS ORDERED. 

S/Victoria A. Roberts 

Victoria A. Roberts

United States District Judge

Dated: February 23, 2016

5

2:15-cv-10993-VAR-APP Doc # 65 Filed 02/23/16 Pg 5 of 6 Pg ID 1856
The undersigned certifies that a copy of this

document was served on the attorneys of record

by electronic means or U.S. Mail on February 23,

2016.

s/Linda Vertriest 

Deputy Clerk

6

2:15-cv-10993-VAR-APP Doc # 65 Filed 02/23/16 Pg 6 of 6 Pg ID 1857