Allstate Insurance Company v. Nguyen

Background

Allstate Insurance Company, Allstate Property and Casualty Company, and Allstate Indemnity Company sued Huy Ngoc Nguyen, D.C., Healthcare Chiropractic Clinic, Inc., Accident Recovery Chiropractic, P.A., Northwest MRI Center, Inc., and related entities. The court had previously dismissed the claims against Mimi Doan and Midwest MRI Center, leaving claims against Nguyen, the clinic entities, and Northwest MRI Center.

Allstate alleged that the defendants operated a scheme involving automobile-accident victims and their no-fault insurance benefits. According to the evidence described by the court, treatments were sometimes rushed or incomplete; patients were sometimes directed to sign for treatments they did not receive; insurance companies were billed using provider information that did not always match the person who performed a procedure; patients were coached before examinations; and employees, referral sources, and others were paid to bring new patients to the clinics. The court also described evidence that Nguyen told an employee to target certain racial and ethnic groups when soliciting accident victims and to conceal the clinic’s involvement in those calls.

Nguyen, Doan, and a business associate pleaded guilty to wire fraud in 2018. Nguyen agreed to pay restitution but had not done so. Allstate’s seven-count civil complaint asserted claims involving civil racketeering and conspiracy, common-law fraud, no-fault fraud, unjust enrichment, disgorgement, and declaratory relief. Allstate sought $832,950 for payments made to the defendant entities since January 1, 2010, for treatment of Allstate-insured patients.

Motions and analysis

Allstate moved for summary judgment on all counts. Summary judgment is a decision without a trial when the evidence shows no genuine dispute over an important fact and the moving party is entitled to judgment under the law. The defendants moved for judgment on the pleadings, which asks the court to decide a case based on the pleadings rather than factual evidence developed through discovery.

The defendants relied on a transcript of Nguyen’s post-conviction deposition and argued that his testimony conflicted with other evidence, creating a factual dispute. The court rejected that argument because the defendants did not identify a specific disputed fact. It also noted that Nguyen had repeatedly admitted the conduct described in the complaint during his guilty plea, a proceeding concerning his chiropractic license, and his sentencing hearing.

The court further held that Nguyen’s self-serving post-conviction testimony did not prevent summary judgment. It applied judicial estoppel, a doctrine that prevents a party from taking a position in one legal proceeding that is inconsistent with a position taken in an earlier proceeding.

Ruling

Judge Paul A. Magnuson granted Plaintiffs’ amended motion for summary judgment. The court ordered that Plaintiffs be awarded $832,950 in damages. It denied Defendants’ motion for judgment on the pleadings, which the opinion had described as moot after granting summary judgment.