SLAPPed down

INSURANCE-RELATED COURT CASES

Digested from case reports published online

Allstate Insurance Company et al. filed a complaint on behalf of itself and the people of California against Dr. Sonny Rubin and related medical providers. Allstate generally alleged that Rubin prepared fraudulent patient medical records and billing statements in support of insurance claims.

Rubin filed an anti-SLAPP (Strategic Lawsuits Against Public Participation) motion, arguing that the preparation and submission of its medical reports and bills were protected litigation activities.

The trial court denied Rubin’s motion, saying: “Litigation is not ‘under [serious] consideration—and thereby protected activity under the anti-SLAPP statute—if the litigation is merely a ‘possibility.’”

Sonny Rubin is a physician who controls two medical companies: Sonny Rubin M.D., Inc., and Coastal Spine and Orthopedic Specialists, Inc. A portion of Rubin’s practice involves “lien patients” involved in automobile accidents who are referred by attorneys. Lien patients have signed a “medical lien” that authorizes their attorney “to pay directly to Rubin such sums as may be due and owing … and to withhold such sums from any settlement, judgment, or verdict as may be necessary to pay for” the patient’s treatment (this case involves only lien patients). After providing medical treatment for lien patients, Rubin prepares “medical narrative reports, operative reports, and billing statements to be used in support of claims for insurance benefits under policies of insurance issued by Allstate.”

In September 2019, Allstate filed a complaint on behalf of itself and the people of the state of California. The complaint pleaded two causes of action: insurance fraud and unfair competition. Allstate generally alleged that Rubin violated the law by “presenting or causing to be presented false or fraudulent claims for the payment of a loss or injury under a contract of insurance.” According to Allstate, Rubin “engaged in a conspiracy, scheme, or plan to prepare and present false, fraudulent, and/or misleading narrative reports, operative reports, and billing statements … in support of, or in connection with,” claims against Allstate and other insurers.

In March 2020, Rubin filed an anti-SLAPP motion. Rubin averred in a declaration that his “lien patients” are “currently seeking a personal injury claim and are therefore represented by an attorney for the purposes of litigation.” Rubin understood that he is “authorized to send the patient’s medical reports and statements of diagnosis, treatment, etc., to the patient’s attorney to be used in the patient’s personal injury case.” Rubin argued in its motion to strike that “preparing and providing the patient’s attorney the necessary documents supporting the medical services provided on a lien falls within the definition of prelitigation activities” under the anti-SLAPP statute.

In June 2020, Allstate filed an opposition. It argued that “the submission of insurance claims, even where litigation ultimately arises, does not constitute protected conduct under the anti-SLAPP statute.”

In October 2020, the trial court ruled that “Rubin has failed to establish that Allstate’s claims arise from protected activity. Accordingly, the court need not reach step two of the anti-SLAPP analysis, and the special motion to strike is denied.” Rubin appealed.

On appeal, Rubin declared that the medical lien form authorized him to “send the patient’s medical reports and statements of diagnosis, treatment, etc., to the patient’s attorney to be used in the patient’s personal injury case.”

As stated by the trial court: “There are several problems with this argument. First, the language of the medical lien form contemplates payment from any settlement, judgment, or verdict. The settlement reference acknowledges the possibility that Rubin’s patients will resolve their claims without resort to court. That the patients have retained attorneys is of no moment.

“Second, Rubin’s argument hinges on his subjective understanding of the purpose of his reports and bills. Rubin offers no testimony from patients stating that they intended the bills to be evidence of damages in litigation … .

“Third, while Rubin argues that his reports and bills are prepared to be used in litigation, doctors regularly prepare notes or reports and bill for their treatment. Nothing about them is unique to the litigation context.”

The court concluded that Rubin’s documents were prepared in the regular course of business and therefore were not protected activity.

The People ex rel. Allstate Insurance Company v. Sonny Rubin, et al.—Court of Appeal of the State of California, Fourth Appellate District, Division Three—July 12, 2021—No. 30-2019-01101013.