Suit Targets Chiropractic Practice-Builders
Heidi Brown and her 17-year-old son Trevor Rhiner of Urbandale, Iowa, are seeking class-action status for a lawsuit against a chiropractic practice-building company, its leaders, and chiropractors who follow its teachings. The class-action petition arose in connection with a suit against Paul Kerkhoff, D.C., who allegedly told Brown that Trevor had a serious case of scoliosis and that without intense and immediate treatment, the boy would develop arthritis in his early twenties and would be unable to continue to play sports. After a year of treatment, the mother consulted an orthopedist who said that Trevor did not have scoliosis and did not need the recommended treatment. After filing suit for malpractice and negligent misrepresentation, Brown's attorney discovered that Kerkhoff was a client of The Masters Circle, a practice-building firm that teaches how to use scare tactics to create long-term patients. The petition asks the court to set up a class consisting of all patients who have had at least 12 sessions of treatment by a Masters Circle member. The Masters Circle was founded by Larry Markson, D.C., and two other chiropractors. Markson previously did business as Markson Management Associates, which he formed in 1980. The Masters Circle Web site states that Markson has coached more than 10,000 chiropractors. The document below is the first amended complaint minus the names of 14 "coaches" who were subsequently dismissed from the suit.
IN THE IOWA DISTRICT COURT FOR DALLAS COUNTY
HEIDI BROWN and HEIDI BROWN as parent
DR. PAUL KERKHOFF and KERKHOFF CHIROPRACTIC,
FIRST AMENDED PETITION AND NATIONAL CLASS ACTION
COME NOW Plaintiffs, Heidi Brown and Trevor Rhiner, and through their attorneys, Wandro, Baer & Casper, P.C., and hereby file this Petition and National Class Action. In support of said Petition, Plaintiffs state as follows:
NATURE OF CLASS ACTION
1 . This is a national class action brought on behalf of all patients nationwide who have been treated by a chiropractor who is or was a member of the Masters Circle. The Masters Circle is a worldwide organization which trains chiropractors on methods of "targeting, leveraging and closing" the sale of chiropractic services to new patients. The Masters Circle teaches "scripts," various leveraging and high pressure sales tactics to its chiropractors to be used to convince patients to agree to pay for chiropractic care.
2. The Masters Circle boasts that it is a worldwide practice management group that teaches chiropractors how to "turn their practice into an all cash business" and not to let "right or wrong" keep them from "having the practice of their dreams." In return for this ongoing training and support, chiropractors who join the enterprise pay the Masters Circle approximately $650 per month to use the scripts and tactics developed by the Masters Circle to enable the chiropractors to build their practice and obtain personal wealth.
3. This national class action Petition seeks redress on behalf of all past, current and future patients who have been treated by chiropractors who are members of the Masters Circle. These class members wrongly assumed that based upon the doctor/patient relationship, their chiropractor would strive to put the patient's best interest ahead of the doctor's personal interest. The class members were unknowingly subjected to a nationwide conspiracy by which chiropractors used unethical and misleading practices to induce patients into agreeing to pay for chiropractic care. Because of the Defendants' conspiracy, unlawful enterprise and breach of fiduciary duty, the class members were deprived of their right to make informed medical decisions based upon unbiased medical advice.
4. The named Plaintiffs, Heidi Brown and her son Trevor Rhiner, fell prey to the unethical practices of Defendants. The named Plaintiffs sought treatment from a chiropractor, Dr. Paul Kerkhoff, who was a member of the Masters Circle. Dr. Kerkhoff followed the Masters Circle pre-set scripts and practices of requiring that patients follow their chiropractor's goal of long term care with a minimum of 12 chiropractic sessions before the patient underwent a re-check. After paying for numerous chiropractic sessions, Plaintiffs learned that the chiropractic sessions were not necessary but rather were based upon the chiropractor's goal of selling them a long term care plan.
5. This national class action seeks damages, a declaratory judgment and injunctive relief based upon the fraudulent, misleading and unethical tactics used by the Masters Circle and its chiropractic members. Specifically, this national class action Petition seeks redress on behalf of the Class based upon claims of conspiracy, ongoing criminal conduct (Iowa RICO statute), breach of fiduciary duty and unjust enrichment.
6. Plaintiff Heidi Brown is a resident of Urbandale, Iowa. She is also the mother and next friend of Plaintiff Trevor Rhiner.
7. Plaintiff Trevor Rhiner is a minor and resident of Urbandale, Iowa.
8. Defendant Dr. Paul Kerkhoff is a practicing chiropractor in Waukee, Iowa. Defendant Kerkhoff was at all times relevant hereto and continues to be an active member of the Members Circle.
9. Defendant Kerkhoff Chiropractic is an Iowa corporation with its principal place of business in Waukee, Iowa.
10. Defendant The Masters Circle is a New York corporation with its principal place of business in Jericho, New York.
11. Defendant Dr. Larry Markson is an officer, owner and/or employee of the Members Circle. Defendant works with and through the Masters Circle to teach chiropractor members how to use the "scripts" and various other methods set forth in the Masters Circle Procedure Manual to attract and keep patients.
12. Defendant Dr. Bob Hoffman is an officer, owner and/or employee of the Members Circle. Defendant works with and through the Masters Circle to teach chiropractor members how to use the "scripts" and various methods set forth in the Masters Circle Procedure Manual to attract and keep patients.
13. Defendant Dr. Dennis Perman is an officer, owner and/or employee of the Members Circle. Defendant works with and through the Masters Circle to teach chiropractor members how to use the "scripts" and various methods set forth in the Masters Circle Procedure Manual to attract and keep patients.
[Paragraphs 14 to 27 concerned the 14 original defendants who were subsequently dismissed from the case. It described each one as "a coach employed by the Masters Circle to teach chiropractor members the Masters Circle's principles of patient acquisition, patient compliance and various scripts to be used to leverage patients into agreeing to pay for chiropractic services."]
28. Defendants "John Doe(s)" are the unnamed and yet unknown chiropractors across the United States who are or have been members of the Masters Circle. Once these names are obtained the Petition will be amended to name each chiropractor individually as a Defendant.
29. Venue is proper in Iowa in that this is an action that occurred or resulted in damage to the named Plaintiffs in Waukee, Iowa, and some of the acts taken by Defendants in carrying out the conspiracy and/or criminal enterprise alleged herein took place in Iowa. The acts of each Defendant in carrying out the conspiracy and/or criminal enterprise are attributable to each of the other Defendants, and each conspirator acted as the agent of the other conspirators in furthering the conspiracy and/or the criminal enterprise. As such, Defendants are jointly and severally liable for the unlawful activity alleged herein.
30. By reason of the facts alleged herein, this Court may exercise personal jurisdiction over each Defendant.
31 . The amount in controversy is in excess of the jurisdictional amount necessary for the maintenance of this action in the Iowa District Court for Dallas County.
GENERAL ALLEGATIONS ON BEHALF OF THE NATIONAL CLASS
32. Plaintiffs bring this action as a class action pursuant to the Iowa Rule of Civil Procedure 1.26 1.
33. This action is brought on behalf of a Class, consisting of all past, current and future patients (1) who have been treated by chiropractors who were at the time of the treatment members of the Masters Circle, and (2) who underwent at least 12 chiropractic sessions, the minimum number of visits required by the Masters' Circle before a re-check of the patient's condition. These class members were the targets of a nationwide conspiracy, a criminal enterprise and were mislead by the Masters Circle and its member chiropractors through a scheme to induce patients to pay for long-term chiropractic services.
34. The members of the Class are so numerous that joinder of all members is inpracticable.
35. While the exact number of class members is unknown to the named Plaintiffs at this time and can only be ascertained through appropriate discovery, Plaintiffs believe that there are hundreds of members in the proposed Class.
36. There are common questions of law and fact in this matter that relate to and affect the rights of each member of the class and the relief sought is common to the entire class. Each member of the class has unresolved complaints against Defendants regarding the conspiracy and the criminal enterprise between the Masters Circle and the chiropractors. This nationwide conspiracy was perpetrated by the Defendants for the purpose of "targeting, leveraging and closing" the sale of long-term chiropractic services which robbed each class member of their ability to make independent and informed decisions regarding their health care.
37. There arc questions of law and fact which are common to the claims of the named Plaintiffs and the Class. Sonic of these common questions include, but are not limited to:
a. Whether defendants had a fiduciary duty or duty of loyalty and confidence to their patients to examine and treat each patient in accordance with the conditions represented by that individual patient,
b. Whether the defendants breach their fiduciary duty or duty of loyalty and confidence to a patient by conspiring to prescribe a course of treatment for each patient prior to seeing and examining the patient.
c. Whether the defendants' agreement among themselves to prescribe and give 12 or more chiropractic treatments to any presenting patient before analyzing the legitimate need for chiropractic treatment is a standing prior breach of fiduciary duty to each and every patient.
d. Whether the defendant Masters Circle edict that chiropractors refrain from answering a patient's questions about his or her care until after the 12th visit (also known as the re-check) was or is a breach of the chiropractor's fiduciary duty or duty of loyalty and confidence to the patient, since the undisclosed purpose of the practice was or is to prolong the treatment regimen.
e. Whether the defendant Masters Circle edict to its members that they take full back x-rays of all patients was a breach of the chiropractor's fiduciary duty or duty of loyalty and confidence to the patient, since the undisclosed purpose of the practice is or was to boost the income of the chiropractor and, in turn, the defendant Masters Circle.
f. Whether the defendant Masters Circle edict to its chiropractor members that they "require" that all new patients attend a "Special Consultation" and require that each patient bring a friend or family member to the "Special Consultation" as part of the patient's care plan was or is a breach of the chiropractor's fiduciary duty or duty of loyalty and confidence to the patient, since the undisclosed purpose of the practice is to recruit new patients and boost the income of the chiropractor and, in turn, the defendant Masters Circle.
g. Whether the rule established by defendant Masters Circle that chiropractors refuse to treat a patient on the first visit until the patient has agreed to the terms of the chiropractor's treatment and/or payment plan was or is a breach of the chiropractor's fiduciary duty or duty of loyalty and confidence to the patient.
h. Whether defendants agreed, combined and conspired to breach their fiduciary duty or duty of loyalty and confidence to their patients in order to sell their services and obtain money from chiropractic patients.
i. Whether the failure of chiropractors who belong or belonged to defendant Masters Circle to disclose this affiliation to their patients constituted a hidden fact concerning the chiropractor's fiduciary duty or ditty of loyalty and confidence to the patient.
j. Whether defendants combined, agreed, and conspired to use unethical practices, misinformation, scare tactics, manipulation and high-pressure sales tactics to expand their patient bases and derive income for the defendants individually and for the defendant Masters Circle.
k. Whether defendants combined, agreed, and conspired to use unethical practices, misinformation, scare tactics, manipulation and high-pressure sales tactics to retain current patients in order to maintain the patient based and continue the stream of income for the individual defendant chiropractors and for the defendant Masters Circle.
I. Whether or not the acts or omissions alleged herein constitute an unlawful conspiracy under the laws of Iowa.
m. Whether the acts and or omissions alleged herein constitute an unlawful enterprise under the laws of Iowa.
n. Whether any or all of the above actions caused injury or damage to the named plaintiffs and to the plaintiff class.
o. Whether defendants were unjustly enriched through their practices aimed at the plaintiff class.
p. Whether the agreement to prescribe, prior to seeing the patient, a regimen of 12 or more chiropractic treatments, irrespective of the condition of the patient, constitutes a common injury to the patients and a common measure of damages to the patient members of the plaintiff class.
q. Whether the named plaintiff's and the plaintiff class are entitled to declaratory and/or injunctive relief.
38. The questions of law and fact which are common to the claims of the named Plaintiffs and the Class predominate over questions, if any, that may affect only individual members of the Class because, among other reasons, Defendants have acted on grounds generally applicable to the entire class. This is especially true here because most of Defendants' actions material to this suit occurred before a patient ever meets with a chiropractor.
39. Class action treatment is the superior, if not the only, method for the fair and efficient adjudication of this controversy because, among other reasons, such treatment will permit a large number of similarly situated persons to prosecute their common claims in a single forum, simultaneously, efficiently, and without the unnecessary duplication of evidence, effort, and expense that numerous individual actions would engender. The benefits of proceeding through the class mechanism, including providing injured persons with a method of obtaining redress from the Defendants.
40. The named Plaintiffs claims are typical of the members of the Class. Heidi Brown and her son Trevor Rhiner were damaged by the same wrongful conduct by Defendants alleged in this Petition. Trevor Rhiner was treated by Dr. Kerkhoff, a chiropractor who was and continues to be a chiropractor who is a member of the Masters Circle. The named Plaintiffs were subjected to the scare tactics and unethical techniques taught by the Masters Circle. The named Plaintiffs were also subjected to high pressure sales tactics regarding the chiropractor's request for an up-front payment for a yeas of intense chiropractic care, Thus, a joint and common interest exists among the named Plaintiffs and the Class.
41. The named Plaintiffs will fairly and adequately protect and represent the interests of the Class. The named Plaintiffs' interests are coincident with, and not antagonistic to those of the Class.
42. The claims of the Plaintiffs who are representatives of the class, are typical of the claims of all members of the class, in that the claims of the class, including Plaintiffs, depend on a showing of the conduct, commissions and/or omissions by Defendants giving rise to the right of the Plaintiffs to the relief sought and arise from the same operative facts.
43. The named Plaintiffs are representative parties for the class and are able to and will fairly and adequately protect the interests of the class. Each of the Plaintiffs is committed to being a class representative and understands the attendant responsibilities, and has or can acquire the financial resources to assure the interests of the class will not be harmed.
44. The attorneys for Plaintiffs are experienced and capable in the field of class action litigation and complex commercial litigation and have successfully represented claimants in other litigation of this nature. The law firm of Wandro, Baer & Casper, as designated counsel for Plaintiffs will actively conduct and be responsible for Plaintiffs' case and the firm has the financial resources to assure the class will be represented adequately,
BACKGROUND FACTS RELEVANT TO THE CLAIMS
45. Chiropractors are licensed physicians. They are required to obtain a degree from an accredited chiropractic college, take and pass the national board exams and they must meet the licensing requirements of the state in which they practice in order to become a licensed chiropractor.
46, Chiropractors are regulated in each state and it is uniformly required across the country that a chiropractor owes a patient a fiduciary duty of care and loyalty.
47. In addition, chiropractors are unfortunately required to maintain the fiduciary and/or confidential relationship to a patient. Chiropractors also must avoid conflicts of interest with their patients and can not associate with anyone or any group that advocates unethical or misleading practices.
48, Thus, there is an inherent fiduciary relationship in the doctor/patient relationship that is well established across the country by statute and the common law.
THE CONSPIRACY OR ENTERPRISE
49. The Masters Circle’s leaders are Dr. Larry Markson, Dr. Dennis Perman and Dr. Bob Hoffman.
50. The Masters Circle touts itself as ''highly specialized and unique leadership training and practice building organization. “ The Masters Circle uses "Identity Based" approach to transform chiropractors into the types of people who will "do whatever it takes" to ''build the practice of their dreams and the lifestyle they can imagine.''
51. Membership to the Masters Circle is offered only to chiropractors. An initial membership term is for either eighteen or twenty-four months. The monthly cost for a chiropractor to join the Masters Circle is approximately $650 per month.
52. In return for membership dues, each chiropractor receives an Enrollment Package which includes a 340 page “Masters Guide for the 21st Century Chiropractor” (hereinafter “the Manual”) which covers several topics including patient education, patient compliance, developing leverage over patients and new patient acquisition. The Manual also includes written "scripts" to be memorized by each chiropractor to use with patients in order to induce patients to start or continue with chiropractic care.
53. The Masters Circle also provides its members with one-on-one coaching from the chiropractic consultants, monthly computerized statistical analyses of the chiropractor's practice, a toll free hot-line, PODs (small interactive “masterminding sessions"), newsletters, e-mails, products and seminars to emphasize the practices, scripts and high pressure sales tactics methods set forth in the Manual.
54. When a chiropractor joins the Masters Circle the chiropractor must agree to study and follow the Manual, be compliant with the Masters Circle's practices and policies and follow the recommendations and advice of the Masters Circle's coaches.
55. The Masters Circle, through the use of its Manual, coaches, e-mails, newsletters, seminars and other training sessions, has conspired with chiropractors nationwide to use high pressure sales tactics, admittedly "heavy handed" scripts and unethical practices and policies to induce patients across the country to agree to pay for long-term chiropractic services.
56. The use of these tactics and the true purposes behind these set practices and policies are not disclosed to the patient.
57. The Defendants often exchange information relating to this conspiracy through their seminars, telephone calls, PODs, e-mails and mailed newsletters. The stated purpose of the conspiracy or enterprise is to dramatically increase the sale of chiropractic services nationwide to unsuspecting patients.
58. Each of the Defendants have prospered from this conspiracy or enterprise. The chiropractors use these techniques to induce more patients to pay for chiropractic services and in turn the Masters Circle then receives money back from the member chiropractors through the monthly membership fee, seminar costs and sales of the Master Circle's products. The more prosperous the conspiracy or enterprise becomes, the more each of the Defendants prosper. In addition, the Masters Circle uses its success rate to attract new chiropractors to the conspiracy or enterprise.
59. In furtherance of the conspiracy or enterprise, the Masters Circle, its executives, officers, employees, and the member chiropractors:
a. participate in meetings and conversations throughout the United States to discuss these unethical practices, scare tactics, scripts and other unlawful and unethical methods in order to work together to dramatically increase the number of patients seeking chiropractic care in the United States, including, but not limited to, Iowa; and
b. agree during such meetings and conversations to use, carry-out and perpetrate these unethical marketing and practice methods to "target, leverage and close" the sale to new potential chiropractic patients throughout the United States, including, but not limited to, Iowa.
60. Defendants intentionally aimed their conduct at potential patients throughout the United States, including those located in Iowa. Defendants knew that the injury inflicted by their unlawful conduct would be felt by those, such as Plaintiffs and members of the Class, by making sales of chiropractic services on the basis of pre-set, misleading and unethical practices.
61. A few examples of the types of values, practices or unethical sales techniques endorsed and taught by the Masters Circle include:
- Patients are Prescribed a Minimum of 12 visits before a Re-Check is performed
At the initial Report of Findings chiropractors are to tell patients "in order to be sure that your schedule of appointments fits your needs, you will be re-examined every 12 visits as part of your program of care. At that time, I'll reevaluate your progress, let you know where you are in your program of care, and make some recommendations. Also, if you have questions, re-exam time is a good time to ask them because we will have a few extra minutes to address any concerns you might have."
- Patient's Questions About Their Progress Should Be Delayed Until the Re-Check Appointment
"When a patient asks you a question, it's perfectly legitimate to say 'I'd like to answer that question for you now, but I don't have all the information I need to give you a complete answer. I see that you have a re-exam and mini-report coming up in four visits .... I'm going to write down your question so we both remember it and give you an answer after I look at your re-exam findings." This adds "drama" to the re-check.
- The Frequency of Visits Should Not Be Reduced at The First Re-Check Evaluation
"First, it's better not to reduce the patient's frequency at the first re-exam because it teaches the patient erroneously that re-exam means schedule reduction, which may not always be the case. Second, by setting a goal for the patient based on your re-exam, it keeps the patient actively involved in the experience without overly focusing on symptoms."
- Do Not Adjust A New Patient On The First Visit—Wait Until The Report Of Findings
"Never, ever, adjust the patient on the first visit, regardless of your rationalized and preprogrammed conditioning. There's a voice screaming inside you saying, 'the patient is in severe pain, and I'm a chiropractor, whose job it is to get them out of pain as soon as possible!' That sounds great, but is it the real reason, the intellectual truth? Or, is it based upon your need for acceptance or the fear that if you don't adjust them, the patient will go somewhere else. Those internal urges to be a 'good guy or gal' will be there for sure, after all they are habits and we all want to be loved. "Finally, if your concept is to create a 'lifetime' chiropractic patient, and not a 'spectator' patient, who passively participates, receives a few adjustments and disappears, then you must first conclude the following: The patient must first 'accept ' you as a person, and chiropractic as a viable health service, before you automatically accept them as a patient."
- Chiropractors Need To Control Patients To Maintain Capacity
"Patient compliance is defined by your standards, what you expect of your patients. If you let them do whatever they want, then your practice won't run as efficiently, and your capacity will diminish. If, on the other hand, you train your patients to be great patients, then your practice will run more smoothly, and your capacity will go up." ' Here again, as in the examination, when the patient attempts to talk you into not taking x-rays, your decision as to 'what to do' is not based on right or wrong. The decision comes from 'who you are,' from your belief system, from your securities and insecurities. Your reasons still don't count! They are the same reasons that have been limiting you in other areas of your life, too. "Either you determine exactly what it is you want and exactly what price you are willing to pay to get it, or you'll spend your life allowing other people, places, things and events to have dominion over you. The procedures you have selected up to this point allow everyone to see 'who you are.'"
- Use "Leverage" To Convince Your Patient To Agree To Long Term Care Goals
"This brings up the concept of leverage, which means 'incentive, reason, or getting someone to do something.' When we begin to use '^patient's values to gain leverage, it dramatically increases the patient's willingness to comply with your program of care."
'For example, you could say, 'Mrs. Patient, you seem like the kind of person who really takes her responsibility as a mother seriously. If you follow my recommendations and follow through on your program of care, you'll have the best chance of being there when your baby needs you. Let's make sure to do whatever it takes to get you well as soon and as completely as possible.' By relating your service to the patient's values hierarchy, you enhance compliance, build trust and respect, and demonstrate that you are 'tuned-in' to your patient's needs."
"Make sure to keep rapport through this kind of process, especially if you're going to use something painful or unpleasant to gain leverage. For example, there may be a right time for you to say to a patient, 'Mr. Patient, don't you realize that if you keep missing your visits, you run the risk of your condition becoming much worse? What's going to happen to your wife and children if you become disabled and can 't work? ' This may seem heavy-handed, and it is ... except if someone tends to he motivated better by consequences than by benefits. As you become more skillful at working with people's values, you'll develop an awareness of how and when to motivate toward benefits or away from consequences."
- Chiropractors Should Use "Target, Leverage And Closing" To Obtain New Patients
"The third step is closing. The closing is the most important part of the referral process, because this is where the patient actually makes an appointment to come in. No matter how artful your approach, it doesn't count unless you close successfully." ' By the way, if you want an easy way to remember the three steps in this referral process, just think Target, Leverage, Close - TLC, which is the way you should take care of all the patients that are lucky enough to choose you as their chiropractor." "Obviously, if you lack self-confidence, you won't be quite as strong, sensing that you 'can't get away with it.'"
- A Sample "Script" For Chiropractors To Use To Obtain New Patients
"I remember a time when I was sitting in a restaurant and as I read my menu the waitress came over and said, 'What'll it be?' I said, 'Well, I'd like to start with a bowl of vegetable soup' and she wrote it down. And then 1 said, 'And I think I'd also like a grilled cheese sandwich' and as I looked up from the menu, 1 stared briefly at her shoulders and said, 'Has anyone ever told you that your left shoulder is higher than your right'?' and she said, 'What'?' I said, 'Gee, I didn't mean to offend you, it's just that I am Dr. Perman and my specialty is helping people to get their structures healthy, and I noticed some distortion in your spine. Tell me, do you stand of your feet all day?'
"Now, I know she does, because all waitresses do, and true to form she said, 'Yes I do.' I said, 'Do you usually carry your tray on one side rather than the other?' knowing full well she does, because all waitresses do. So she said, 'Well, yes' and I said, 'Which side do you usually carry your tray on?' and she said, 'the left' and I said, 'Are you right handed or left handed?' and she said, 'right handed' and I said, 'Hmm, I thought so - can I have that grilled cheese on whole wheat bread?' She said, 'Forget about your lunch, pal - what about my shoulders?' At this point, I have her full attention. I said, 'Look, at the end of a day, do you feel tired and stiff i your upper back and neck?' and she said, 'You're darned right I do' and I said, 'We should really get that checked out, because if you don't it's probably going to get slowly worse until it interferes with your work, not to mention the rest of your life. Tell me, what neighborhood do you live in?' Bam! New patient!
Did you pick up on how many questions I asked? By asking questions, I control the communication. Also, I phrased my questions so that they could be answered with a 'yes' response. When I get the person saying yes to small commitments, I have a better shot of getting a yes on a big commitment."
62. The Defendants' acts charged in this Petition were authorized, ordered, or done by their officers, directors, agents, employees, or representatives, while actively engaged in the management of Defendants' businesses.
EFFECTS OF THE COMBINATION AND CONSPIRACY
63. Across the country, including in Iowa, the combination and conspiracy alleged herein had the substantial and material effects of providing potential patients with misleading, deceptive and false information which was delivered by a health care provider. Patients were never informed that the information they were being provided was part of a set practice or policy, had been scripted or was a well practiced technique to "target, leverage and close" the sale of chiropractic care to the patient.
64. Patients were misled by the failure of the chiropractors to disclose their affiliation with the Masters Circle that the chiropractors had already agreed to follow certain practices and adhere to certain policies with regard to the patient's care plan. The appearance of the doctor patient relationship was nothing but a facade in order to sell services.
65. Patients unknowingly relied upon information provided to them by these chiropractors in making decisions about their health care.
66. In this particular case, the named Plaintiffs were mislead by Dr. Paul Kerkhoff who was and continues to be a member of Masters Circle. At no time during the initial meeting or the treatments did Dr. Kerkhoff ever disclose to the named Plaintiffs that he was a member of the Masters Circle and that his policies, practices, scripts and scare tactics were being used to "leverage" them into paying for chiropractic services. Dr. Kerkhoff never disclosed that he had previously agreed to follow the Masters Circle's practices to increase his patient base and build personal wealth.
67. Instead, the named Patients believed that when Dr. Kerkhoff evaluated Trevor Rhiner's condition and provided Trevor and his family with Trevor's prognosis that the doctor had Trevor's best interest at heart and that Dr. Kerkhoff would not prescribe unnecessary or excessive treatment.
68. Dr. Kerkhoff informed the named Plaintiffs that Trevor had a serious case of Scoliosis and that based upon his x-rays Trevor would develop arthritis in his early twenties, would not be able to continue to play sports, and was at risk of a serious debilitating injury in the future without intense and immediate chiropractic treatment.
69. Dr. Kerkhoff also tried to pre-sell named Plaintiffs a year of treatments with a discount for a cash payment and a discount since they were referred by a relative. The named Plaintiffs were told repeatedly that a year of treatment was necessary because Trevor was such a 'serious case,"
70. During this time the named Plaintiffs were devastated about the seriousness of Trevor's problems with his spine and they suffered emotional turmoil at the possibility that Trevor would have to give up his sporting activities or that he would develop arthritis or a permanent disability.
71. During the course of treatment, the named Plaintiffs became concerned that Dr. Kerkhoff had started treating Trevor with painful traction treatments. The named Plaintiffs also were concerned about the continued frequency of the chiropractic treatments given the fact that Trevor Rhiner was symptom free. Based upon these concerns, the named Plaintiffs took Trevor's x-rays to an orthopaedic surgeon.
72. The orthopaedic surgeon informed the named Plaintiffs that intense and long term chiropractic treatment was unnecessary and that Trevor did not have a serious case of scoliosis. The orthopaedic surgeon also informed named Plaintiffs that there was no truth to the Dr. Kerkhoff s statements that Trevor could not play sports or that he would develop arthritis in his early twenties.
73. Further, the named Plaintiffs were told that the use of the traction for a growing boy was unnecessary and could be harmful.
74. After the initiation of a lawsuit against Dr. Kerkhoff, the named Plaintiffs learned through discovery that Dr. Kerkhoff was a member of the Masters Circle and that he follows the practices and procedures set forth by the Masters Circle, including the unethical and fraudulent practices set forth in the Masters Circle's Manual.
75. Dr. Kerkhoff used the techniques he learned from the Masters Circle to "target, leverage and close" the sale of the chiropractic services to the named Plaintiffs.
76. Dr. Kerkhoff "leveraged" his position as a doctor by using negative consequences to ensure the patient's compliance with the doctor's recommendations for long term care.
77. In accordance with the Masters Circle practices, Dr. Kerkhoff required the named Plaintiffs to attend a "Special Consultation" and Trevor's mother was required to bring another family member or friend. This was a required part of Trevor's treatment plan.
78. It was never disclosed to the named Plaintiffs that the true purpose of this "Special Consultation" advocated by the Masters Circle Manual was to ensure that new patients brought new potential customers to a presentation about the benefits of chiropractic service.
79. Dr. Kerkhoff also followed the Masters Circle edict that re-checks of a patient's progress should only be held every 12 visits. According to the Manual the patient's questions about his or her care are to be delayed until the re-check in order to ensure the patient continues with treatment and to add "drama" to the re-check appointment.
80. In accordance wit the Masters Circle Manual, Dr. Kerkhoff did not reduce Trevor's frequency of visits when his symptoms subsided nor were they reduced at the re-check. This practice ensures that the patient will not associate the required frequency of visits with the patient's symptoms or the re-check appointment. Thus, the Masters Circle teaches chiropractors that the patient's symptoms or alleviation of symptoms are not to be used by a chiropractor as a measure for determining when care should be reduced or stopped.
81. Dr. Kerkhoff also followed the Masters Circle Manual that requires that all patients are to receive full back x-rays even if they are only complaining of one area of pain. The cost of the full back x-rays are another area of profit for chiropractors.
82. The named Plaintiffs, like the other members of the Class, fell prey to the Defendants' conspiracy and enterprise because they had no idea that their chiropractor's practices and recommendations were part of a national enterprise to increase sales of chiropractic services to patients whether or not such services were needed.
83. Based on Dr. Kerkhoff s representations and the use of leveraging "scare tactics" on Trevor and his family, the named Plaintiffs agreed to an intensive chiropractic treatment plan with Dr. Kerkhoff.
84. As a direct and proximate result of Defendants' illegal combination and conspiracy, Plaintiffs and the Class have been damaged in that Plaintiffs and the Class made health care decisions without being informed that the doctor-patient relationship had been compromised from the outset and that their doctor's advice as to their need for chiropractic services was being manipulated in order to "close" the sale to the patient as a "target." As a result the named Plaintiffs and the Class were unable to make informed decisions regarding their health care needs and they paid more for chiropractic evaluations, x-rays and care based upon the Masters Circle's undisclosed pre-set policy.
85. Plaintiffs reallege paragraphs 1 through 84 as if fully set forth herein
86. Defendants engaged in a civil conspiracy to establish misleading and unethical practices and policies that were not patient driven in order to sell chiropractic services to potential chiropractic patients.
87. The conspiracy was aimed at raising funds through the sale of chiropractor services by each member of the Masters Circle. The increased sales resulted in increased profits for every member, increased and prolonged membership in the Masters Circle and the use of the funds to perpetuate the conspiracy through meetings, coaches and other support systems.
88. The conspiracy resulted in patients being misled into believing that their chiropractic physician was making recommendations to them regarding their health care based upon the patient's best interest. The heart of the conspiracy was aimed at interfering with and breaching the fiduciary, confidential and ethical duties owed by a chiropractor to a patient.
89. As part of the conspiracy the chiropractors provided patients with misinformation regarding their need for chiropractic services and patients ultimately agreed to pay for services based upon a mistaken belief as to what type of care was necessary due to the conspirator's actions.
90. The member chiropractors conspired with the Masters Circle and its agents to pre-set care plans for patients before the patients were initially seen for treatment.
91. The conspiracy resulted in the member chiropractors expanding their patient base exponentially and as a result the Masters Circle also enjoyed great wealth and expansion in members.
92. The Defendants took numerous steps to carry out their conspiracy through meetings, e-mails, telephone calls, one-on-one coaching, advertising and the distribution and use of the Masters Circle's Manual.
93. The conspiracy led to the injuries and damages suffered by named Plaintiffs and the Class as set forth herein.
94. All Defendants who participated in the conspiracy arc jointly and severally liable for all of these damages.
95. Defendants, through their concert in action intentionally, willfully, and wantonly conspired to disregard the rights, property and health care needs of Plaintiffs as patients and are thus jointly and severally liable for punitive damages to punish and deter Defendants from future similar wrongful conduct.
WHEREFORE Plaintiffs pray for judgment against the Defendants in such amount as will fairly and reasonably compensate Plaintiffs for the injuries and damages sustained, with an award of exemplary damages in such amount as will deter and punish Defendants for the conduct herein, all with pre and post judgment interest at the rate allowed by law, the costs of this action and any other relief the Court deems appropriate.
ONGOING CRIMINAL CONDUCT
(Iowa Code § 706A)
96. Plaintiffs replead paragraphs 1 through paragraph 95 as if fully set forth herein.
97. Defendants worked together to knowingly combine and collaborate to conduct the affairs of the Masters Circle.
98. All of the Defendants were aware of the financial goals and objectives of the enterprise.
99. The Defendants knowingly conducted the affairs and mission of the enterprise, directly and indirectly, through actions which included preparatory or completed offenses, committed for financial gain on a continuing basis.
100. In furtherance of the enterprise, Defendants violated $706A.2(1), (2) and (4) and committed other acts for a financial gain on a continuing basis which are indictable offenses under the following statutes:
(a) Theft by deception, Iowa Code §714.1;
(b) Insurance fraud, Iowa Code §507E.3;
(c) Conspiracy, Iowa Code §706.1 ;
(d) Money Laundering, Iowa Code §706B.2;
(e) Insurance fraud, New York Penal Code §§ 176.10; 176.1 5; 176.20;
(f) Scheme to Defraud, New York Penal Code §190.60; and
101. Portions of the funds from this unlawful activity and criminal conduct were used or invested, directly or indirectly, by the Defendants back into the enterprise and into the Masters Circle and the Masters Circle's assets which, on information and belief, includes real property.
102. All of the Defendants knowingly acquired or maintained, directly or indirectly, an interest in or control of the enterprise.
103. All of the Defendants facilitated the criminal network by obtaining benefits for other members of the network by means of false or fraudulent pretenses, representation, promises or material omissions.
104. The named Plaintiffs and the Class Members were damaged and injured by Defendants' wrongful actions.
105. Defendants' actions were done with a reckless and willful disregard for Plaintiffs' rights and property.
WHEREFORE Plaintiffs pray for a declaration that Defendants have violated this statute and judgment against Defendants in such amount as will fairly and reasonably compensate Plaintiffs for the injuries and damages sustained, with an award of the types of damages recoverable under Iowa Code 706A including, but not limited to, attorney fees, treble damages, punitive damages, costs and any other award the Court deems just.
BREACH OF FIDUCIARY DUTY PER SE
106. Plaintiffs replead paragraphs 1 through paragraph 105 as if fully set both herein.
107. Defendants are chiropractors who either work for the Masters Circle or work in private practice.
108. As licensed physicians, Defendants owe a fiduciary duty and duty of loyalty and confidence to patients.
109. The Defendant doctors were in a position of dominance over Plaintiffs based upon the doctor/patient confidential relationship.
110. This relationship presumes that the chiropractors have a duty to act in the patient's best interest and provide the patient with unbiased information so the patient can make informed decisions about their health care.
111. This relationship presumes that the chiropractors have a duty to treat patients based upon their symptoms and medical needs not abased on a pre-set practice which requires that all patients be prescribed a set number of adjustments or long-term care.
112. This duty also presumes that the chiropractor will disclose to patients any conflicts of interest.
113. Defendants breached these duties when Defendants set practices, policies and procedures to be followed for a patient's care plan without first reviewing the patient's needs.
114. Defendants breached these duties when they failed to disclose that their pre-set goal for each patient was long-term care with a minimum of 12 visits between each re-check.
115. Defendants breached these duties when they failed to disclose their membership or affiliation with the Masters Circle and prior agreement to follow the Masters Circle's policies and practices to use scripts and high pressure sales tactics to sell every patient long term care plans .
116. Defendants breached these duties for each and every reason stated in paragraph 37 of this First Amended Petition.
117. Defendants' breaches of these duties resulted in damage to Plaintiffs.
118. The breach of these duties was reckless, wanton and willful and with disregard to Plaintiffs rights.
WHEREFORE Plaintiffs pray for judgment against the Defendants in such amount as will fairly and reasonably compensate Plaintiffs for the injuries and damages sustained, with an award of exemplary damages in such amount as will deter and punish Defendants for the conduct herein, all with pre and post judgment interest at the rate allowed by law, the costs of this action and any other relief the Court deems appropriate.
119. Plaintiffs replead paragraphs 1 through paragraph 118 as if fully set both herein.
120. Defendants have unjustly and inequitably benefited from their unethical and misleading actions.
121. The Plaintiffs were unjustly deprived of their property when they made payments for services that were unethical and pre-determined.
WHEREFORE, Plaintiffs request restitution of the amounts paid to Defendants as part of their unethical and misleading practices and any other relief the Court deems appropriate.
Plaintiffs through their undersigned counsel hereby demands a jury on all issues presented herein. Respectfully submitted,
Kimberly K. Baer PK0014675
Steven Wandro PK0008439
WANDRO, BAER & CASPER, P.C.
2501 Grand Avenue, Suite B
Des Moines. Iowa 50312
ATTORNEYS FOR PLAINTIFFS
The undersigned, the named Plaintiff in the aforesaid Amended Petition attests that I have read the Amended Petition and that 1 verily believe that the facts alleged are true to the best of my knowledge.
This page was revised on February 24, 2011.