Summit County Court certifies class-action lawsuit against KNR law firm and Wadsworth doctor re: alleged price-gouging and fraudulent fees
This afternoon, Judge James A. Brogan, presiding in the Summit County Court of Common Pleas, issued a 56-page order certifying two classes of claims brought by four former clients of the law firm Kisling Nestico & Redick (“KNR”). The Court ruled that tens of thousands of the firm’s clients are entitled to proceed in a single lawsuit regarding an allegedly fraudulent fee charged for so-called “investigations” that were never performed, as well as an alleged price-gouging scheme by which the firm conspired with Wadsworth doctor Sam Ghoubrial, M.D. to overcharge the firm’s clients for medical services.
The Court’s order was based on a detailed summary of evidence presented by the Plaintiffs—including sworn testimony from current and former KNR attorneys and numerous internal firm communications and client files—showing that the KNR firm uses a high-volume, high-advertising business model to systematically take advantage of its clients by,
- directing them to treat with Dr. Ghoubrial, who has collected nearly $8 million from KNR client settlements since approximately 2011 by requiring the clients to unwittingly waive their own health-insurance benefits and then charging them exorbitant rates for basic care—including medically contraindicated “trigger-point injections”—allowing the firm to inflate its attorneys’ fees with a minimum of effort; and
- charging the clients a bogus “investigation” fee on every case, to pay so-called “investigators” whose primary job was to chase new clients down to sign them up before they could sign with a competing firm.
In its order, the Court held that Plaintiffs submitted evidence showing that Dr. Ghoubrial “substantially overcharged his patients” for injections and medical supplies, and that “it is clear” that the manner in which Ghoubrial received payment from the KNR clients “insured the charges he made would escape scrutiny by the insurance carriers and other government agencies.” The Court further stated that “it is at least a jury question whether [KNR owner and managing attorney Rob Nestico] knew that Dr. Ghoubrial was overcharging his patients.” The Court noted that KNR “made heavy use of Dr. Ghoubrial, who Nestico referred to as ‘Gubs,’” and, “having worked in the field of low impact automobile accidents [Nestico] could not have been unfamiliar with the usual charges for these treatments and devices.” Thus, if Plaintiffs’ claims are proven at trial, “Ghoubrial would be required to disgorge to the class members the amount of the overcharge,” and “KNR would be required to disgorge the amount of the contingent fee attributable to the overcharges.”
Regarding the alleged “investigation fee” fraud, the Court stated that “common proof will show that all class members suffered damages by having to pay the ‘investigation fee,’” and that “class members do not receive any ‘service’ in exchange for the ‘investigation fee’ – they are instead paying for a service KNR provides to itself – the service of soliciting new clients and securing their business.” The Court further observed that the so-called “investigation fee” “is essentially an ‘ambulance chasing’ fee to ensure KNR receives the client’s business rather than any competitor law firm.”
“We expect that Judge Brogan’s well-reasoned ruling will be upheld on appeal, and that the affected KNR clients will recover the wrongfully charged fees at issue,” said Peter Pattakos, lead attorney for the Plaintiffs.
The case is captioned Member Williams et al., v. Kisling, Nestico & Redick, LLC, et al. (Summit C.P. No. 2016-CV-09-3928). In addition to Mr. Pattakos, the Plaintiffs are represented by Rachel Hazelet of the Pattakos Law Firm in Fairlawn, Ohio, and Joshua Cohen and Ellen Kramer of Cohen Rosenthal & Kramer in Cleveland, who, as the Court ruled, “are qualified to represent the members of the classes certified by the Court in this action” and “have demonstrated they will prosecute the action vigorously.”