Judge boots lawyers in hardball insurance case

The seemingly far-removed clients may been have roped into the same lawsuit from Allstate because they served the same injured driver, Falzon said.

“The thread between them is extremely thin, but because of the way the law is written, (the out-of-state insurers) get to take advantage of that,” Falzon told Crain’s. “I suspect if you looked at (Smith & Brink’s) war room, they would have some kind of chart as to who’s got the biggest accounts receivable and then they try to draw the string between RO Repair Service in Gurgaon.”

Falzon and Blumberg’s clients settled over the summer, records show.

But Zawaideh, the Royal Oak pharmacist, was the only defendant among a dozen medical providers who didn’t settle and ended up in a deposition room in August that led to Smith & Brink getting booted from the lawsuit.

Stafford ruled Nov. 12 that McEttrick engaged in improper “substantive discussions” with Zawaideh during a break at an Aug. 5 deposition without Zawaideh’s attorneys present — a violation of ethics rules for plaintiffs attorneys.

McEttrick’s comments to Zawaideh included a suggestion that the pharmacist could “stay off Allstate’s radar” if he billed the auto insurance company “less than competing providers” using a Medicare fee schedule under Michigan’s new auto insurance reform law, according to the judge’s up pest control meerut uttar pradesh.

“Zawaideh testified that he challenged McEttrick’s advice that he simply bill Allstate according to the Medicare fee schedule to be assured payment,” the judge wrote.

During the deposition break, Zawaideh testified that the Allstate attorney also brought up a $200,000 pharmacy bill for one injured driver and told him jurors would be shocked by that figure if the lawsuit went to trial because “they could purchase a house with that kind of money.”

“McEttrick violated (Michigan Rules of Professional Conduct) by engaging in substantive discussions that went to the nub of the case — ZMC’s billing practices and Allstate’s allegations of fraud,” Stafford wrote in her ruling.

Zawaideh testified that McEttrick also talked to him about Allstate’s lineup of expert witnesses should the lawsuit go to trial and told the defendant he “would not be happy with the report, or with her, after he read it,” according to the judge’s ruling.

When McEttrick suggested Zawaideh could avoid legal action from Allstate if he lowered his bills, the pharmacist testified that he replied, “the case could be Health Blog.”

“Zawaideh testified that McEttrick laughed and said that ‘this case is not getting dismissed,'” the judge wrote.

Stafford said Zawaideh’s testimony was corroborated by a court reporter.

“Most egregiously, McEttrick lied in her affidavit and under oath during the evidentiary hearing,” Stafford wrote in her ruling. “Those lies may qualify as perjury …”

Stafford also disqualified Smith & Brink shareholder attorney Nathan Tilden because he was in the deposition room with McEttrick and the court reporter and “he did nothing to stop the discussion” McEttrick was having with Zawaideh, the judge said. Tilden did not return email messages seeking comment.

McEttrick and Allstate Corp. (NYSE: ALL), the Northbrook, Ill.-based parent company of Allstate Insurance Co., did not return messages from Crain’s seeking comment about the judge’s ruling. Richard King Jr., president/managing director and shareholder of King, Tilden, McEttrick & Brink, P.C. did not return a message seeking comment.

ZMC’s attorneys pursued a judicial review of the Allstate legal team’s conduct after Fink Bressack managing partner David Fink confronted McEttrick and Tilden about the matter on an Aug. 10 videoconference, court records show.

“These conversations did not occur,” McEttrick told Fink, according to a transcript of the call in court records.

In her affidavit, McEttrick told the judge she “had very little conversation with defendant Zawaideh on August 5, and never any conversations alone with him.”

However, when under oath in an evidentiary hearing, McEttrick acknowledged making a comment about how a jury might view $200,000 in charges for prescription drugs for one patient.

Zawaideh testified that McEttrick boasted “about the strength of Allstate’s case,” the judge wrote, “but he also said McEttrick asked him about his past and future billing practices, which invited him to disclose privileged information.”

McEttrick later claimed that one of ZMC Pharmacy’s lawyers — Morgan Schut, an associate at Fink Bressack — tried to entrap her by leaving her alone in the deposition room with Zawaideh.

“But they neither cite evidence to support this alleged plot nor explain how defense counsel successfully solicited Pavlovich to falsely corroborate Zawaideh’s allegations,” the judge wrote.

The judge ruled that Zawaideh’s claim about McEttrick’s comments was supported by a text message Schut sent Zawaideh shortly after the deposition ended, outlining that McEttrick had advised the pharmacist to “just bill so you won’t be on our client’s radar.”

Stafford also blasted Allstate’s legal team for lobbing “baseless accusations that Fink committed misconduct” in his interactions with the court reporter when Fink sought her testimony.

Allstate’s lawyers at Smith & Brink also engaged in “deny-and-attack gamesmanship” and “scorched-earth tactics to discourage” Fink from informing the judge of McEttrick’s comments to the pharmacist, Stafford said.

“Using another disreputable tactic, Smith & Brink painted Zawaideh as a criminal whose allegations were unworthy of consideration, even though he has been neither found liable in this lawsuit nor guilty of any crimes,” Stafford wrote.

Fink declined to comment.

The judge’s ruling came to a shock to defense attorneys in Southeast Michigan that have spent years defending medical providers in lawsuits against Allstate and other out-of-state insurers.

“It raises some serious questions in the matter in which they practice in this district,” Blumberg said. “I’ve never seen anything like the order that came down from that magistrate judge.”

Falzon, the Southfield attorney who represented other medical providers in the lawsuit, said he hopes federal judges in Detroit will apply more scrutiny to RICO lawsuits that Allstate and other auto insurers such as State Farm Insurance and Liberty Mutual Group bring against medical providers.

Falzon called Stafford’s disqualification of McEttrick and Allstate’s lead team at Smith & Brink “highly unusual.”

“But I didn’t doubt a word of it,” Falzon said. “(McEttrick’s) running that whole RICO task force for Allstate. You get pretty cocky when you’re always winning.”

Contact: [email protected];

(313) 446-1654; @ChadLivengood