November 1992

Oregon D.C.'s suit OK'd by court

by Daniel J. Gatti, Esq.

The Oregon Court of Appeals has ruled that an Oregon chiropractor may sue the State Accident Insurance Fund (SAIF) and Executive Director, Stan Long, for the wrongful interference with the physician/patient relationship in a decision handed down on September 16, 1992. The Oregon Court of Appeals has ruled that the chiropractor's case may proceed to trial.

On March 8, 1990, Larry Glubka, D.C. of Eugene, Oregon, was one of nine chiropractic physicians in Oregon to be sued by SAIF for "racketeering and fraud."

The racketeering and fraud charges filed by SAIF alleged that Dr. Glubka charged SAIF higher fees than what he charged to the general public. Glubka countered that he could "give away" services to indigents and others without providing give away to SAIF. Therefore, Glubka counter sued SAIF alleging that SAIF's lawsuit was a wrongful lawsuit and was an intentional interference with the contractual rights between him and his patients.

Undercover investigation

Glubka alleged that in 1989, SAIF initiated "Operation Clean Sweep," an investigation that involved the use of undercover agents who posed as injured workers. The undercover agents were set up with false identities and mock employers with assumed business names of "D & S Demolition" and "AMF Janitorial."

The undercover agents presented themselves to various chiropractic physicians, including Glubka, and complained of injuries from which they were not suffering.

Glubka further alleged that the SAIF employees falsified medical and insurance records concerning the extent and cause of the feigned or pretended injuries. On the basis of the fraudulent statements made by the SAIF undercover agents and the records presented by those agents. Glubka provided care and treatment.

In Glubka's counter suit for intentional interference with contractual relations, Glubka alleged that SAIF was aware of the economic and contractual relationships between himself and his patients. Despite this, SAIF and its Executive Director Stan Long intended to interfere with those relationships by engaging in "improper conduct" with "improper motives." The Oregon Court of Appeals held the lawsuit alleged all of the essential elements necessary to justify relief for Glubka.

Actions called improper

Specifically, the Oregon Court of Appeals acknowledged that, if proven, SAIF's improper conduct could include implementing "Operation Clean Sweep," filing a lawsuit for racketeering and fraud, knowing that such labels were wrongful and intending to prejudice Glubka with irreparable harm; and coordination a "media event" in which SAIF and its executive director defamed Glubka by announcing SAIF's unfounded lawsuit against Glubka so that Glubka and other chiropractic physicians would be held up to public contempt and ridicule.

The Oregon Court of Appeals further acknowledged that, if proven, the improper motives allegedly were to discredit chiropractors; enhance the reputation and image of the attorney general; convince a special session of the Oregon legislature to pass workers' compensation reform legislation; and protect SAIF from being liquidated by the legislature in any upcoming session.

Since the original suits were filed, Glubka's counter case against SAIF was dismissed by the lower court and Glubka appealed that dismissal to the Oregon Court of Appeals. In the meantime, SAIF's case against Glubka for "racketeering and fraud" went to trial in Marion County Circuit Court in July of 1992.

In that case, SAIF was suing Glubka for damages and penalties in excess of $750,000 for the alleged racketeering and fraud and claimed more than $20,000 for reimbursement of alleged overpayments made by SAIF to Glubka from 1989 to 1992. After the evidence was presented, Marion County Circuit Court Judge Robert McConville dismissed the racketeering and fraud charges against Glubka and the Marion County jury awarded $134.80 for alleged overpayments made by SAIF to Glubka.

No evidence of fraud

The judge ruled that SAIF had failed to present any evidence from which a reasonable jury could conclude that Glubka had engaged in any business practice which could reasonable be construed as racketeering and fraud. SAIF has not appealed that judgment order.

As a result of the Oregon Court of Appeals' decision, Glubka can now proceed with his counter suit against SAIF. Obtaining and reviewing all of SAIF's documents regarding Operation Clean Sweep could take approximately one year. After that task is completed, it is expected that the Glubka v. SAIF, et al., case will proceed to trial.