Coats Rose Attorneys Jerry Young and Tim Rothberg Win Lawsuit for Client Against Allstate Insurance

HOUSTON, Dec. 10, 2014 /PRNewswire/ -- Coats Rose Partner Jerry Young and Associate Tim Rothberg secured a significant victory on appeal for its client, Rehab Alliance against Allstate Insurance.

In this David vs. Goliath-like lawsuit, Allstate claimed Rehab Alliance committed fraud in connection with medical treatment provided to over 100 personal injury claimants whose claims were ultimately settled by Allstate. Allstate alleged Rehab Alliance misrepresented certain treatment as being medically necessary, improperly coded or billed for treatment, engaged in the unauthorized and corporate practice of medicine by entering into payment or fee-splitting arrangements, and concealed patient notes, letters of protection, and other agreements that supposedly released a patient from financial liability for any treatment provided. Allstate claimed that had it known of Rehab Alliance's alleged conduct, Allstate would not have settled the underlying personal injury claims for the amounts agreed to on behalf of its insureds.

On behalf of Rehab Alliance, Mr. Young and Mr. Rothberg sought summary judgment and argued that in light of Allstate's sophisticated claim-review and settlement process—which included the use of multiple claims adjusters, attorneys, Colossus (a proprietary claim valuation software program), Mitchell Expert Claim Summary (a proprietary medical auditing software program), and medical expert reviews—Allstate could not have justifiably relied on any alleged fraud. 

Mr. Young and Mr. Rothberg also argued Allstate's alleged damages were too speculative to support Allstate's claims because Allstate could not point to a single personal injury claimant that would have settled his or her claim for a reduced amount had Allstate not considered the treatment or charges from Rehab Alliance.

The trial court agreed with arguments presented by Mr. Young and Mr. Rothberg and granted summary judgment in favor of Rehab Alliance. Allstate subsequently appealed the decision to the Fourteenth Court of Appeals. The appellate court agreed with the trial court and affirmed the dismissal of Allstate's claims.

"This is a significant decision as it limits insurance companies in the manner they can seek to unwind settlements of personal injury claims and complain about the representations of the health care providers who contribute to them," says Jerry Young. "Insurers like Allstate cannot seek to void a settlement because of some perceived change in outcome, but must show that the outcome would have resulted in a reduced overall monetary payment by the insurer."

Allstate has filed at least four similar lawsuits against health care providers in Texas in the last 6 years. Of those lawsuits, only this one resulted in an adverse judgment against Allstate.

Coats Rose is a business transaction and litigation law firm based in Houston, Texas. For more than 30 years, Coats Rose attorneys have worked with clients in construction/surety law, real estate law, commercial litigation of all types, municipal law, public finance, affordable housing, insurance law, labor and employment law, and governmental relations. Coats Rose is comprised of over 90 attorneys, with offices in Houston, Dallas, Austin, San Antonio, and New Orleans.

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SOURCE Coats Rose Law Firm

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