This matter originated out of a scheme by a towing company in Clio, Michigan that involved hundreds of fraudulent requests for towing services. After a pre-suit investigation by the insurance carrier, it was determined that several long distance tows never occurred based on the duration of service, the vehicle never making it to the alleged destination, and other factors. For example, it was claimed that a vehicle was towed from Flint to Port Huron, but the service only took 30 minutes and the shop in Port Huron had no record of servicing the vehicle. Several individuals made phone calls either in their name or under an alias, using real and fabricated accounts with the carrier.
The lawsuit, filed in federal court on behalf of the insurance carrier, asserted contract claims against the towing company. The lawsuit also asserted a RICO count against the towing company and its co-conspirators in order to bring in the individuals who made the phone calls as parties to the case. This resulted in several defendants cooperating with the insurance carrier in prosecution of the matter. The filing of the lawsuit also gained favorable media attention in the Flint/Clio area.
After filing two unsuccessful dispositive motions, the defendants eventually paid when faced with mounting evidence and pointed discovery requests. The towing company paid the lion’s share, but the individual defendants each paid a portion as well. Through these settlements, CEF attorneys were able to recover all damages that resulted from the scheme. The lawsuit also sent a message that this insurance carrier will not tolerate this conduct from its vendors. The key to success was the team approach between the thorough and indisputable evidence developed during the pre-suit investigation, and the strategic use of the materials to plead claims and develop a discovery plan that had maximum impact on the parties involved.