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Dynamic Chiropractic – January 29, 2007, Vol. 25, Issue 03

More Legal Troubles for "Uncle Paul"

Summary Judgment Filed, Awaits Court Ruling

By Kathryn Feather, Senior Associate Editor

Adam L. Hoogestraat, DC, has filed a motion for summary judgment against Dr. Paul "Uncle Paul" Hollern in the U.S. District Court of the Western District of Kentucky, Louisville Division.

The motion is in response to a collection action originally filed by Hollern against Hoogestraat for Hoogestraat's participation in a chiropractic business training program, known as the Hollern System, and run by the UnclePaul Chiropractic Business Training Corporation.

According to the summary judgment request, the original action filed by Hollern "seeks to recover from Hoogestraat the sum of $451,696 under a certain Purchase and Management Agreement ('the Agreement'). Such sum represents a claim for $395,000 due as compensation under the Agreement relating to Hoogestraat's participation in Hollern System courses, plus $56,696 in alleged advancements."

Hoogestraat alleges that the "Agreement" is not enforceable for several reasons, including "fraudulent inducement, illegality, failure of consideration and failure to comply with the requirements of both KRS Chapters 165A and 367." Hoogestraat also claims that "UnclePaul and Hollern have failed to respond to Hoogestraat's discovery requests tendered in Sept. 2005 in this action and in May 2006, in the prior bankruptcy adversary proceeding between the parties."

According to the background provided in the motion filing, "From February 2003 to November 2003, Hoogestraat received training in the Hollern System from Hollern and UnclePaul at either Uncle Paul's business premises in Louisville, or at a chiropractic office in which Hollern had a financial interest. Approximately midway through the course of instruction, Hollern represented to Hoogestraat and the other students in his class, that they had only been presented half the information necessary to successfully operate a chiropractic office under the Hollern System. Hollern further represented that the remaining half of the training in the Hollern System would be withheld until they signed a contract with respect to the purchase of the aforementioned business opportunity. As a result of this representation, Hoogestraat signed the 'Agreement' in favor of Hollern on or about June 23, 2003."

Hoogestraat alleges that each time he saw a presentation by Hollern or the UnclePaul Chiropractic Business Training Corporation, it did not include or display any of the underlying data supporting his hypothetical earnings example required by KRS 367.811. "Thus Hoogestraat verily believes that Hollern's hypothetical earnings example was significantly in excess of the earnings actually experienced by those chiropractors who had previously purchased Hollern's and UnclePaul's business opportunity."

The motion also states that, "Although Hollern had represented that further training as to the remaining half of the Hollern System would only be provided after Hoogestraat and his fellow students signed their respective Agreements, neither Hollern or UnclePaul thereafter provided any additional training different than what had been previously presented. In or about January 2004, Hollern approved Hoogestraat's choice of a location for a chiropractic office in Waterloo, Iowa. In or about February 2004, Hoogestraat signed a lease for a chiropractic office in Waterloo and commenced the necessary build-out process to convert the leased premises into a chiropractic office in the manner dictated by Hollern and the Hollern System. However, contrary to what Hollern represented, he did not negotiate Hoogestraat's lease for this premises, did not fund all of the build-out costs and did not sell Hoogestraat the equipment utilized in this office. On or about Oct. 7, 2004, UnclePaul initiated civil actions against Hoogestraat in the Jefferson Circuit Court for the purpose of recovering damages resulting from his alleged breach of the Agreement.

"On Sept. 14, 2006, Hoogestraat filed his Amended Answer to UnclePaul's and Hollern's Complaint and a Counterclaim against them. Hoogestraat's Counterclaim alleges, inter alia, that UnclePaul's and Hollern's claims are barred based upon fraud and their failure to comply with the requirements of both KRS Chapters 165A and 367. Neither UnclePaul nor Hollern filed a responsive pleading to Hoogestraat's Counterclaim within the 20 day time period permitted by Fed.R.Civ.P.12(a)(2)."

A History of Legal Issues

Paul Hollern and the UnclePaul Chiropractic Business Training Corporation have been in the legal spotlight on several occasions in the past few years. In 2004, Hollern became the subject of a federal investigation after Jeffrey Miller, DC, filed an 18-page complaint with the Kentucky Board of Chiropractic Examiners against the UnclePaul Chiropractic Business Training Corporation. Dr. Miller served as the chief operations officer for UnclePaul from Oct. 1, 2003 to Jan. 8, 2004, before filing the complaint, which cited numerous alleged violations of state statutes.

On Oct. 14, 2005, Hollern filed for bankruptcy in Jefferson County, Ky., just days before a series of new U.S. bankruptcy laws went into effect. The Chapter 7 liquidation filing listed 93 creditors and reportedly included several investors and client doctors. Hollern's estimated assets were listed at $100,001 to $500,000 and his estimated debts as $1,000,001 to $10,000,000. Numerous lawsuits have been filed between Hollern and approximately 35 of his former clients regarding violation of agreements similar to the one Hoogestraat signed. Most of the lawsuits were filed by Hollern in an attempt to force his clients to pay him based upon the signed agreements. However, some clients filed suit first in an attempt to establish legal ground in the client's home state.

More recently, in June 2006, Hollern was arrested and spent several nights in the Grayson County jail before being arraigned in federal court on June 9, 2006, on one count of obstruction of justice. According to the grand jury indictment, "From on or about April 13, 2006, until on or about May 2, 2006, in the Western District of Kentucky, Jefferson County, Kentucky, and elsewhere, the defendant, Paul Hollern, knowingly, with the intent to retaliate against a witness for providing to a law enforcement officer truthful information relating to the commission and possible commission of a Federal offense, took action harmful to the witness by attempting to interfere with the witness's lawful employment and livelihood; to wit, the defendant falsely proclaimed to the witness's neighbors and employers that the witness was involved in, and under investigation for, child pornography."

Until his obstruction-of-justice indictment, Hollern maintained a single chiropractic practice in Hillview, Ky. Shortly thereafter, a sign appeared on the office door reading, "Closed due to a family emergency." The corporate Web site of the Uncle Paul Chiropractic Business Training Corporation (www.unclepaul.biz) has not been accessible since Sept. 2004, shortly after Dr. Miller filed his complaint against Hollern.

Resources

  1. Uncle Paul Chiropractic Business Training, LLC v Dr. Adam L. Hoogestraat, DC. Case No. 3:04CV-615-H. Motion for Summary Judgment; filed in the United States District Court of Western Kentucky, Louisville Division, Nov. 3, 2006.
  2. "Uncle Paul Indicted on Obstruction-of-Justice Charges." Dynamic Chiropractic, July 4, 2006. www.chiroweb.com/archives/24/14/15.html.
  3. Indictment from the United States District Court of Western Kentucky, United States of America v. Paul Hollern. Case No. 3:06CR-82-S, June 9, 2006.
  4. "Uncle Paul Files Chapter 7 Bankruptcy." Dynamic Chiropractic, Dec. 2, 2005. www.chiroweb.com/archives/23/25/19.html.
  5. "Uncle Paul Seeks Release From Investor Obligations." Dynamic Chiropractic, Oct. 24, 2005. www.chiroweb.com/archives/23/22/17.html.
  6. "Uncle Paul Accused." Dynamic Chiropractic, Sept. 27, 2004. www.chiroweb.com/archives/22/20/14.html.

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