3734 Pro-Solutions Settles With Texas DC
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Dynamic Chiropractic – June 3, 2010, Vol. 28, Issue 12

Pro-Solutions Settles With Texas DC

Suits still in progress in several other states.

By Editorial Staff

Following the first "cross-action" filed against Pro-Solutions in May 2009 in Texas,1 there are now reported actions in Iowa,2 Washington and Florida involving the company and its president and CEO, Dr. Maurice "Moe" Pisciottano.

The initial Texas litigation, which centered around "marketing and consulting services" that were sold as part of the ProAdjuster CEO Program, specifically the recruiting and training of an associate for the doctor's office, has now been settled.

Commenting on the settlement, Larry J. Laurent, attorney for the Texas doctor, explained: "The lawsuit was filed against ProAdjuster and Dr. Pisciottano in conjunction with a suit initially brought by Leaf Funding against my client, a chiropractor practicing in Houston. She had purchased a second ProAdjuster machine through the ProAdjuster CEO program and had financed through ProAdjuster Finance Corp. Leaf Funding had purchased her debt from ProAdjuster and sued my client when she defaulted on her note. My client could not afford to make the payments because ProAdjuster failed to deliver the services they contracted to provide as a condition of her agreeing to buy the second machine. Without the services provided by ProAdjuster, my client could not afford the lease payments. My client reached a settlement with Leaf under which she agreed to pay Leaf about $100,000. We then proceeded to really press the suit against ProAdjuster based on her allegations of fraud and breach of contract. ProAdjuster agreed to settle my client's suit last February, just prior to our taking Dr. Pisciottano's scheduled oral deposition."

"My client is ecstatic. My client got to walk away without owing any more money. I do, however, regret not having the opportunity to take Dr. Pisciottano's deposition. I would have liked to ask him about the 20 or 30 other doctors who are all in a similar position to my client - who are in default on hundreds of thousands of dollars in equipment leasing debts because ProAdjuster failed to deliver on the promises they made the doctors as an inducement to buy those other adjusting machines through ProAdjuster's CEO program."

Thus far, these lawsuits have a number of things in common. Each began as part of an action by the leasing company against a DC who was no longer able to make their payments. Each involved an accusation of fraud and violation of the Uniform Commercial Code against Pro-Solutions. Some of these actions suggest that Pro-Solutions never made good on its offer of a "Replacement Plan," which states that if the doctor "is not satisfied with the purchase of the entire system after complying with the terms below, Pro-Solutions will find a replacement customer to purchase the remainder of the lease used to fund the purchase of the ProAdjuster System."

When asked about these allegations, Ken Butters, an attorney representing doctors in Iowa, remarked:

"I am currently representing eight (8) chiropractors who have been sued by leasing companies related to numerous misrepresentations made by Dr. Maurice Pisciottano and his companies to induce my clients to enter into the leases in the first place. In addition, I have talked to probably ten (10) other chiropractors who are not involved in litigation yet who are making the same misrepresentation and fraud claims against Dr. Pisciottano and his companies."

"[We] are alleging that Article 13 of the Uniform Commercial Code, which deals with leases, has been violated by the leasing companies in that Article 13 covers a defined term 'goods' and while the ProAdjuster unit itself is a "good," there are numerous other items that are not "goods" and therefore you have a bundling under Article 13 which is in violation of Article 13, such as software, promised training of chiropractors, etc."

"One of my doctors states that he was given a 'Replacement Plan' and a couple of others over the phone have mentioned that to me also. It appears that whenever pressed on an issue, Dr. Pisciottano would say whatever was needed to pacify the complaining doctor."

What makes this situation challenging for doctors is that the money they owe on the "system" is owed to the leasing company. Pro-Solutions has already gotten its money. If the system is not what the doctor believes they were promised or if they are not able to return it, then it is hard to go back to Pro-Solutions for recourse. In the face of this situation, Laurent offered the following observations and suggestions:

"Unfortunately, as individual doctors it is going to be very costly to defend against a lawsuit by the leasing company and to proceed in an action against ProAdjuster. I believe that the individual doctors are likely to be picked off one-by-one by the leasing companies who hold their notes if they default - like my client.

"From what I've heard from other lawyers trying to defend the suits brought against the doctors, other courts have not been as willing to permit then to pursue an action against ProAdjuster, as we were able to do in our Houston lawsuit. If that is the case, the only recourse the doctors would have would be to file their own lawsuit(s) against ProAdjuster/Pro-Solutions in Pennsylvania. If they lose their lease suits and judgments taken against them the dollar amount of the judgments would be a significant measure of the financial damage they have sustained as a result of ProAdjuster's actions.

"They would be wise to join forces and proceed together as a group sharing the costs of litigation, but I'm not sure a formal class action would be available to them under PA. law. They also need to be aware of the time restrictions the Pennsylvania statute of limitations might impose on their ability to bring an action against ProAdjuster/Pro-Solutions."

When asked about these ongoing issues, Dr. Pisciottano submitted a four-page letter outlining Pro-Solutions' position on the leases. While the letter, excerpted as follows, does not address the Texas settlement or other issues raised above, it does provide insight into how Pro-Solutions views the lawsuits between the leasing companies, Pro-Solutions and its customers. (After receiving the letter, we followed up with Dr. Pisciottano, asking specifically about the Texas settlement, but received no further response as of press time.)

"When a product is purchased with a financial agreement or lease, the doctors simply cannot stop paying for those monthly obligations without ramifications. This is similar to a home mortgage or a car payment. When the consumer runs into financial difficulty and attempts to simply 'walk away' from their home or drop off their car, the lenders take legal action and impose penalties."

"We at [Pro-Solutions], like other companies in the healthcare [marketplace], have experienced a small percentage of customers that are having difficulty paying their obligations. Those obligations may include the equipment packages that they have purchased from us and others. In an attempt to reduce their monetary obligations, customers have come up with creative ways to stop paying. Interestingly enough, we have found a pattern among this small percentage of doctors. The pattern is that they are experiencing financial problems.

"We have also found that there is an overwhelming number of doctors who have purchased the exact same packages at the same prices with the same finance agreements with the same leasing companies and have absolutely no challenges at all; in other words, these doctors are doing GREAT! So, for the small percentage of doctors having challenges, we have found via our investigations that they in most cases have not implemented the material, systems, equipment or services whether through us or other vendors. Because they have not implemented these systems and did not get the intended results, they now want to blame others and not take responsibility for their purchase and their decisions. Again, this number or percentage of doctors is extremely low, less than 1%. This statistical commonality helps guide [Pro-Solutions] to the real reasons behind the issues, lack of implementation.

"We agree with the financial institutions and banks in the healthcare [marketplace]when they require doctors to pay for the obligations. In the cases where doctors think they can just walk away, we have seen leasing companies file suit against these doctors for payment. We agree that the finance company should be paid. In all such cases we have supported the finance companies with information when necessary to help them recover monies owed."

References

  1. "Pro-Solutions Sued for Breach of Contract." Dynamic Chiropractic, Nov. 18, 2009.
  2. "Second DC Files Lawsuit Against Pro-Solutions." Dynamic Chiropractic, April 22, 2010.

Reference/background materials, including Sigma's initial complaint against Pro-Solutions, the actions filed by the Iowa and Texas chiropractors, interviews with attorneys Larry Laurent and Ken Butters, a copy of the "Replacement Plan," and Dr. Pisciottano's four-page letter are available in their entirety online at www.dynamicchiropractic.com/proadjusterlawsuits.


Dynamic Chiropractic editorial staff members research, investigate and write articles for the publication on an ongoing basis. To contact the Editorial Department or submit an article of your own for consideration, email .


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