Aggressive solicitation comes after auto accidents in Detroit – Detroit Free Press
Detroit drivers face the highest average insurance rates for cars and other vehicles in the country,
Detroit Free Press
A Free Press investigation finds that runaway medical bills, disability benefits payouts and lawsuits under Michigan’s one-of-a-kind, no-fault insurance system play a key role in driving up costs for drivers.
Find out what’s behind the high cost of auto insurance in Detroit — and what steps could be taken to help fix the problem.
No one wants to be in an auto accident. But people who’ve just been in accidents are a target audience for those in the business of representing or treating no-fault insurance patients.
There has been an explosion in recent years in and around Detroit of billboard, TV and radio ads for personal-injury lawyers and some accident-victim referral services that urge people to call up a lawyer after nearly any accident to snag no-fault benefits and money.
Referral services work by directing people who have been in crashes to specific medical providers or law firms. In exchange for that referral, the services can get a 40% or even 50% cut of the plaintiff lawyer’s contingency fee, according to court documents and contracts reviewed by the Free Press.
Some of the more provocative ads in recent years have been for a referral service called Motor City Accident Attorneys that uses the 800-411-PAIN hotline. One of their 2015 radio ads featured Detroit rapper Trick-Trick. “Somebody might owe you some money; this is the number you call to get it, even the money that you got to pay your babysitter,” Trick-Trick rhymed in the ad.
“Now I can count. And I can count real high. But I can’t count to unlimited,” a different announcer said in another ad, this one airing on WJLB-FM (97.9), a hip-hop and R&B station. “Unlimited money for house cleaning, unlimited money for child care, unlimited money for somebody to do your dishes. … But first, you need to call the Motor City Accident Attorneys at 1-800-411-PAIN.”
Motor City Accident Attorneys also paid more than $40,000 a month in 2015 to have its logo and the pink 411 PAIN logo wrapped around Detroit city buses, a city spokesman said.
Yet despite its local-sounding name, Motor City Accident Attorneys’ corporate members were listed in state records as three personal-injury lawyers with offices in Florida. Repeated messages left for the lawyers weren’t returned.
A Free Press investigation has found that among the major culprits for Detroit’s highest-in-the-nation auto insurance rates are runaway medical bills, disability benefits and a surge in lawsuits under Michigan’s no-fault insurance system, the only one of its kind that allows for unlimited benefits. Detroiters, on average, pay more than $3,000 a year in premiums.
First-party lawsuits, in which a person who was in an accident sues his or her auto insurance company for no-fault benefits, have quadrupled in Wayne County since 2004, even as the number of accidents has fallen. Lawyers can ultimately get a one-third cut of the client’s medical billings and insurance benefits payouts in these lawsuits.
Critics contend that such ads can be particularly effective with lower-income individuals, who, by their circumstances, are more likely to be lured by the hope of a payout. This would apply in Detroit, where more than a third of residents live in poverty.
“The best people for plaintiff attorneys to take are people that will sue and put their name on a dotted line for anything that will result in them possibly making money,” said Eric Poe, chief operating officer of CURE Auto Insurance, a New Jersey-based nonprofit auto insurance company. Poe was an unpaid adviser for a proposal to reduce car insurance premiums in Detroit, known as D-Insurance.
“So typically, the not-so-high income individuals are more likely to sue because the pot at the end of the rainbow is greater,” he said.
Rather than advertise and wait for clients or patients to call, some solicitors will reach out to people who have been in an auto accident to steer them to lawyers, doctors or rehab clinics.
Known as “ambulance chasing,” this illicit practice of approaching or cold calling those who were just in a crash is common in Detroit.
Many personal-injury attorneys recall hearing stories from clients who encountered a deluge of phone calls from unknown callers in the days or hours after their accident. Some clients say they were even slipped information about lawyers or treatment centers while still in the hospital for their injuries.
“Some of my clients, when they call me, their phone is ringing with other attorneys who are calling, and attorneys are knocking on their doors, chasing them,” said Southfield-based personal-injury attorney Carl Collins III.
Those who solicit an accident victim in Michigan for commercial purposes within 30 days of a car crash face a misdemeanor charge and, for a repeat offense, possible jail time and $60,000 fine. It has been illegal since January 2014 to access or buy police reports of crashes for solicitation purposes during that first month. And medical bills or attorney fees that are linked to accident-victim solicitation can be tossed out.
But authorities have yet to charge anyone in Wayne County since new state laws against ambulance chasing went into effect three years ago. A spokesman for the Wayne County prosecutor said he was unaware of any solicitation cases reaching their office.
Detroit resident Shira Kresch, 24, said she received a flurry of phone calls and text messages on the morning after her car crash from mystery callers, at least two of whom attempted to solicit her.
Kresch was involved in an accident about 9 p.m. March 22, near New Center in Detroit, at the Lodge and West Grand Boulevard. Kresch said her vehicle hit another vehicle whose driver didn’t see the traffic light and failed to stop. No one was injured, and the damage to both vehicles appeared relatively modest, she said. Police officers arrived and wrote up an incident report.
Her cell phone received the first call at 7:30 a.m. the next day, followed minutes later by a second call from a different number with the 313 area code. Kresch said she didn’t answer those initial calls because she ordinarily doesn’t take calls from unknown numbers. However, she did answer the third mystery call that morning, at 7:50 a.m. from an unknown number with a 248 area code to figure out what was happening.
The male caller identified himself as an “accident consultant” and knew her name and that she had just been in an accident. Kresch told the man she was heading to work and too busy to talk. “He said, ‘Well, I just have one quick question for you: Are you hurt, or would you like to speak to an attorney?’ So I told him I wasn’t hurt, and that was it.”
Around this time, Kresch received a text message from a number with a 313 area code from a “Miss Johnson” who introduced herself as Kresch’s “benefit coordinator” and dangled a cash offer. The text said: “You have been pre-approved for a monthly check of $600 plus medical benefits at no cost to you. Contact Miss Johnson ASAP to activate your $600 monthly benefit plus medical benefits. To prevent fraud from your account and speaking to an illegal telemarketer only discuss this accident with this office.”
Kresch said she didn’t reply to the text or pursue any medical treatment or legal services for her accident. A Free Press reporter later called the 248 number and the number on the text, and after identifying himself as a reporter investigating no-fault solicitation, he was told he had the wrong numbers.
It’s unclear how solicitors obtained details of Kresch’s accident and her contact information. Although police reports of crashes are available to the public through Freedom of Information requests, it’s unlikely the callers could have obtained the documents overnight.
Detroit Police Sgt. Michael Woody said the department has received several reports of similar solicitations in recent months.
“We’re going to continue to work the investigations until we figure out where this information is being captured from and who it is being sent to,” Woody said. “They should not have to face these kinds of issues once they get into an accident.”
Coming ‘out of nowhere’
Davon Hicks was in a rented pickup that lost control and hit a utility pole in Detroit in late January 2014.
In deposition testimony for his first-party lawsuit against Avis Budget Car Rental, Hicks recalled how after the accident, a man he thought was named “Chad” from a place called “Legal Genius” showed up at his sister’s house and told him that he could get benefits. “He just came out of nowhere. It was like three of them that called me. They was like, ‘Can I meet up with you?’ I’m like, ‘Yeah, I guess so.’
“I didn’t understand what was going on, to be honest with you,” Hicks said in the deposition. “So he was running it down, my sister was sitting there. She was like, ‘Well, I know about some stuff and it sound pretty much right. He going to find you a lawyer — this and this and that. They’ll make a percentage off that. … All I have to do is sign some papers.”
Hicks said that Chad then “connected” him with the Southfield-based Wigod & Falzon law firm. Wigod & Falzon allegedly referred him to a doctor who, in turn, referred him to a Southfield-based MRI center, Affiliated Diagnostics of Oakland, which billed $20,100 for taking four MRIs that were charged between $4,950 and $5,250 per image, according to court documents and a transcript of Hicks’ deposition testimony.
Wigod & Falzon ultimately withdrew from representing Hicks because, according to Hicks, the law firm was also representing the other person in the rental car, whom Hicks had considered suing.
On his own, Hicks found a new attorney, Terry Cochran of Cochran, Kroll & Associates in Livonia, and ultimately won a $30,000 insurance settlement for no-fault benefits in his first-party lawsuit.
But when it came time to apportion the proceeds of the settlement between Hicks’ medical providers, Cochran asked the Wayne County Circuit judge to toss out the $20,100 bill from Affiliated Diagnostics of Oakland.
Cochran said the bill was void because it was linked to what was said to be the solicitation of Hicks, who had his MRIs done there following a chain of referrals that began after Hicks was contacted by Chad from Legal Genius and had signed up with the Wigod & Falzon law firm.
“Plaintiff and defendant strongly believe that their actions in this matter constitute solicitation,” Cochran wrote in a legal brief.
In a phone interview, attorney Lawrence Falzon told the Free Press that Wigod & Falzon had no connection to the alleged solicitation and received Hicks’ case as a referral from another law firm. He declined to identify the firm.
“It wasn’t my law firm that had anything to do with signing him initially,” Falzon said, adding that his firm has no referral relationships with MRI facilities.
LegalGenius is a Southfield-based personal-injury law firm. A lawyer representing the firm said LegalGenius had no involvement in Hicks’ case, and that people who do solicit accident victims have falsely presented themselves as being with the firm.
“There were other law firms that solicit people using the name of ‘LegalGenius’ when, in fact, they had no association with LegalGenius,” said attorney Ben Gonek.
Representatives of Affiliated Diagnostics did not return repeated messages seeking comment for this report that were left by phone and in person with their front-desk staff.
Cochran said his client, ultimately, did not have to share any of his insurance settlement with the MRI center.
They ‘handle everything’
Two patients have described being solicited at their home following a car accident and later referred to a now-closed medical clinic in Dearborn that was linked to an out-of-state celebrity plastic surgeon.
The clinic, Executive Plaza Medical, was inside an office complex at 17000 Executive Plaza Drive.
State records show it was incorporated in February 2014 by Dr. Joseph K. Bivens, a plastic surgeon who ordinarily practices in California and Florida and has appeared on “The Real Housewives of Orange County” TV show. The records also show Bivens’ name as the clinic’s president.
It’s unclear what attracted the famed surgeon to Michigan for a clinic that treated car crash patients. The website for Bivens’ plastic surgery practice lists his specialties as including facelifts, brow lifts, liposuction and breast and butt augmentations.
Dr. Richard Ochs, once a head doctor at Executive Plaza, told the Free Press that Bivens’ signature was on his paychecks and, as far as he knows, Bivens was the clinic’s owner, although the plastic surgeon did not personally practice at the clinic.
Ochs, who is now semi-retired, said Bivens was rarely on-site at the Dearborn clinic, and day-to-day operations were handled by a local management group. “He was like an absentee owner — he was rarely there,” Ochs said.
One Detroit woman’s eventual journey to Executive Plaza began the day after her July 21, 2014, auto accident when, out of the blue, a caller who identified herself as “Monica” phoned her, according to the woman’s deposition testimony in her first-party lawsuit against Progressive.
Monica explained how, “We’re going to take care of you. You have nothing to worry about. We’re going to send someone to your house. They’re going to have you sign some papers so we can basically handle everything for you,” the woman, Raquel Miller, recalled in the deposition.
Two hours later, a young man showed up at the house where she was staying and handed her paperwork to sign and a card that said “Legal Genius,” Miller testified. She subsequently signed up with the Reifman Law Firm in Southfield, which she thought was linked to the man who showed up at the house.
When contacted for comment, a Reifman Law representative told the Free Press that his firm does not solicit clients or accept clients who have been solicited by others. The representative, who only identified himself as “Peter,” said Miller may have briefly signed up with his law firm, but it didn’t take the case. “We turned it back shortly after,” said the Reifman Law representative, who refused to give his full name.
Detroit accident victims “get called all the time by everybody,” the representative said. “I don’t know anything about it, and I can’t comment on it.”
Gonek, the attorney for LegalGenius, said LegalGenius did not have any involvement in the case or the house visit.
Days after receiving the strange call and visit, Miller said she was sent to her first of several visits with Ochs. She testified how Monica set up the appointments and arranged for a medical transportation company to take her there and to physical therapy appointments at Advanced Care Rehab in Detroit.
The company typically charged no-fault insurance $35 for each pickup, $35 for drop-offs, plus $2.99 for each mile, records show.
A month after the auto accident, Miller said she was able to return to work yet continued physical therapy and seeing Ochs at Executive Plaza. She said she signed up with a different law firm after hearing through Ochs’ office that Reifman Law “had released me,” according to her deposition testimony.
By then, Miller was driving herself to work every day and felt she was capable of driving herself to medical appointments, as well. However, various people who were working her case “insisted” that she use a transportation company’s minivans to get to those therapy appointments and Ochs’ office, she said in the deposition. Progressive insurance was billed nearly $3,000 for all the rides, according to testimony and court documents.
Messages seeking comment from Advanced Care Rehab and its lawyer for this report were not returned.
Another Detroiter was allegedly sent to see Ochs at Executive Plaza following a June 2014 car accident. Sherman Mobley said that people began calling him shortly after his accident, and that he signed up with the Reifman law firm, according to deposition testimony.
He then met with a person whom he thought to be an attorney and was referred by a woman in that office to begin treatment with Ochs, the man said in the deposition.
Ochs then saw the patient for his accident-related neck, back and knee pain, and sent him for MRIs at Affiliated Diagnostics of Oakland and for therapy at Advanced Care Rehab. Mobley said he continued treatment with Ochs for about nine months, until he was told the doctor had stopped seeing patients, and the clinic closed soon after.
Mobley had signed up with a different law firm by the time he filed a first-party lawsuit against Farmers Insurance. The insurance company settled the case last year for $43,500, including $10,000 for medical bills at Advanced Care Rehab and $4,500 for Affiliated Diagnostics.
Reifman Law’s representative told the Free Press that Mobley was also a “turn-back” and that the firm did not solicit him or take his case.
Reached by phone, Ochs, who now lives in California, said that he didn’t know how the patients he saw at Executive Plaza found their way to him. Ochs said he also didn’t know about any alleged links to solicitation involving Executive Plaza Medical, and had he known of such claims, he would have stopped working there. Executive Plaza closed its doors in late April 2015, he said.
“That is the last thing in the world I’d want to be involved in,” Ochs said. “In terms of how they (patients) got to me, I don’t know. This is the first time someone has brought it to my attention that someone came to their door unsolicited.”
In a phone interview, a woman who described herself as a publicist for Dr. Bivens emphasized that Bivens never practiced at the Dearborn clinic and said he had nothing to do with the alleged solicitation. The publicist, Marina Kufa, said the doctor was not available to answer questions.
“Dr. Bivens is a celebrity plastic surgeon. He doesn’t talk to anyone,” Kufa said.
Staff at Bivens’ California office referred all comment about the Michigan clinic to David Poces, a Florida-based chiropractor whose name was once listed in Michigan incorporation records as Executive Plaza’s resident agent. Reached by phone, he told the Free Press he didn’t know anything about Bivens’ involvement in the clinic and quickly hung up.
Solicited in the ER?
Some metro Detroit accident victims have described solicitation schemes that are supposedly occurring on the streets and even inside hospitals.
A Detroit woman said that while visiting Henry Ford Hospital’s emergency room following her April 2014 car accident, someone slipped her a card or note to begin treatment at a medical clinic called Vital Community Care in Southfield that is unaffiliated with the hospital system.
“While I was there, one of the doctors told me to — he gave me a card or write it down to go to Vital,” the woman, Binnie Boatner, said in a deposition for her first-party lawsuit against State Farm. Asked whether she was certain that it was a doctor who handed the card, she replied, “It’s hard for me to know because so many people came around. I figured they (were) all doctors.”
The woman proceeded to seek treatment at Vital Community Care. From there, she said she was referred to a physical therapy business, a nearby pharmacy and a transportation service that shuttled her to appointments.
The transportation service, GetWell Medical Transport, a commonly utilized medical transportation firm in metro Detroit, ultimately sought $7,950 from the woman’s State Farm auto insurance for her rides to medical appointments over a period of months, including charges between $90 and $100 for regular appointments and $250 for trips to get X-rays, MRIs or a CAT scan, according to State Farm’s claims in court documents.
It’s unclear from court records how much of the transportation bills State Farm ultimately paid. Still, the woman testified that she would not have taken the rides if she — and not the auto insurance company — had to pay those charges. “No, I wouldn’t. I’d catch a cab first,” she said.
There was no allegation that GetWell had knowledge of or involvement in the alleged solicitation.
An attorney for GetWell said the company’s charges are reasonable and actually below those of other medical transport firms. The attorney, Gary Blumberg, emphasized that medical transportation is an unpredictable business where insurance companies routinely delay payment or pay less than is owed.
“They wait sometimes years to get paid,” he said. “Sometimes they don’t get paid at all.”
A manager at Vital Community Care, who would only give her name as “Mia,” said in a brief phone interview that no one solicits patients for the clinic or works outside the clinic in any hospitals.
A Henry Ford Health System spokeswoman said the hospital system has no affiliations with Vital Community Care and forbids employees or third parties from soliciting patients.
Accosted on streets?
A Russian immigrant in Hamtramck said that following his June 2014 auto accident, he was approached on a Hamtramck street by a man who handed him a business card for a clinic in Warren called EZ Rest Re-Hab Center, purportedly telling him, “You should treat with us.”
Prior to this encounter, the Hamtramck man had been diagnosed after the crash by a doctor with chronic back pain, and MRIs reportedly showed only degenerative changes to his back, according to court documents. Yet saying he felt lower back pain from the crash, the man went to visit the Warren clinic.
After just five months, he had generated a no-fault insurance bill of more than $20,000 at EZ Rest, including charges for the clinic’s door-to-door transportation service, court records say. Asked why he used the ride service rather than driving himself to appointments, he said in a deposition, “Why should I when they will come and pick me up?”
The man later underwent an independent medical examination for the insurance company by a Beaumont Hospital-affiliated doctor who found no basis for the man’s pain symptoms. The examiner “also felt that all of this physical therapy for over a year was excessive for the objective injuries that were demonstrated early on,” according to case summary documents in the man’s first-party lawsuit.
EZ Rest joined the man’s lawsuit against the Main Street America Protection Insurance, demanding payment of its outstanding bills. The lawsuit was settled last summer for an undisclosed amount.
An EZ Rest representative who would only give her name as “Michelle C.” told the Free Press that the man’s claim of being approached on the street and directed to the clinic is untrue. The clinic also no longer treats auto accident patients, she said.
According to court documents, EZ Rest’s medical records reportedly say the Hamtramck man was referred to them by a Sterling Heights doctor.
Lawyer’s legal fight
Some prominent personal-injury law firms have in the past contacted potential clients at home through targeted letters sent to their address. This marketing practice is allowed under Michigan law and rules of professional lawyer conduct, as the letters contain information intended for individuals who are facing a legal issue and may benefit from representation.
Attorney Mike Morse, owner of the Southfield-based Mike Morse Law Firm, was among the metro Detroit law firms that once purchased police reports of car crashes and then sent informational letters to people in accidents. This occurred before a state law against accessing or purchasing police reports of recent car crash victims took effect in January 2014.
One such flyer — since discontinued by Morse’s firm — declared “WE HAVE YOUR POLICE REPORT!” in bold letters and informed recipients that they could call 855-MIKE-WINS for a free consultation.
The flyer came with a two-page form letter signed by Morse that said that even if the accident was the person’s fault, he or she was still entitled to Michigan no-fault benefits. “This could be hundreds of thousands of dollars a year worth of benefits in your pocket!” the letter stated in bold, underlined italics.
In a 2015 interview with the Free Press, Morse noted how such flyers were permitted and once common and said his firm stopped sending the letters before the new law that mandates a 30-day waiting period for using police reports to contact people who were in auto accidents.
“When it was permissible, we would buy police reports and send out a letter with those police reports, and that was done by a dozen law firms in the city,” Morse said. “What I do hear, which is illegal and unfortunate, is there are still law firms or people posing as law firms calling (accident victims), which is reprehensible and despicable and should not be happening.”
Few attorneys in metro Detroit have been formally accused of soliciting clients or reprimanded. However, Morse has been fighting allegations that he was involved in the solicitation of a car crash victim at Sinai-Grace Hospital in Detroit in November 2010.
The Michigan Attorney Grievance Commission, which investigates allegations of attorney misconduct, filed a complaint last June claiming that Morse, as owner of the Mike Morse Law Firm, was personally liable for the alleged solicitation of the woman, who became a client of his firm after signing a retainer agreement handed to her by a stranger in her hospital room.
Last month, the Grievance Commission agreed to dismiss its solicitation allegations against Morse, a stipulation that is still subject to approval by a three-person panel of the Attorney Discipline Board that is scheduled to meet on Thursday.
The grievance complaint also claimed that Morse’s firm took an improperly large cut of the woman’s no-fault insurance benefits during the six-month period when an auto insurer was voluntarily paying her benefits, but no lawsuit had been filed. During that time, the case was in Morse’s “pre-suit department.”
The State Bar of Michigan says it is generally OK for lawyers to charge pre-lawsuit fees. However, the size of Morse’s 33% fee on attendant care and 20% on wage-loss benefits before any lawsuit was actually filed was “disproportionate to the nature and extent of the legal services provided,” the grievance complaint said.
Morse has denied all of the allegations in the grievance complaint concerning solicitation and disproportionate fees.
“Michael Morse expects the complaint to be dismissed because he did nothing wrong,” Kenneth Mogill, an attorney representing Morse in the grievance case, said earlier this year. “The Grievance Administrator admits that he (Morse) had no personal involvement in the 2010 events that are at issue, and his law firm fully complied with all its ethical obligations.”
Grievance Administrator Alan Gershel declined through an assistant last week to comment about the potential dismissal of the solicitation allegations. Morse’s attorney offered no additional comment.
The original complaint said that a nonlawyer private investigator who had a business relationship with Morse appeared in the doorway of the crash victim’s room at Sinai-Grace Hospital in Detroit and carried an unsigned Mike Morse Law retainer agreement. The investigator told the woman he was there to offer information about the no-fault law at the request of one of the woman’s coworkers, the complaint says, but the injured woman said she never told any coworkers she wanted such information.
Contact JC Reindl: 313-222-6631 or firstname.lastname@example.org. Follow him on Twitter @JCReindl.