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CLARK v. GROUP PLAN FOR EMPLOYEES OF NORTH TONAWAN

March 10, 1994

JAMES CLARK, By and Through His Legal Guardian, WILLIAM M. CLARK 18922 Forrest Hills Drive Woodhaven, Michigan 48183, Plaintiff,
v.
GROUP PLAN FOR EMPLOYEES OF NORTH TONAWANDA PUBLIC SCHOOLS 175 Humphrey Street North Tonawanda, New York 14120, Defendant.


FOSCHIO


The opinion of the court was delivered by: LESLIE G. FOSCHIO

JURISDICTION

 A consent to proceed before the undersigned on was filed on May 27, 1993.

 BACKGROUND and FACTS

 Plaintiff's Legal Guardian, William M. Clark, is a Michigan resident, bringing this action on behalf of his brother, James Clark, also a Michigan resident, who was incapacitated as a result of an automobile accident which took place on June 4, 1988. Defendant, Group Plan for Employees of North Tonawanda Public Schools ("Group Plan") is a health benefit plan organized by the North Tonawanda Public Schools for the benefit of its employees. The Group Plan was formed as a self-insured health benefit plan on December 1, 1988, and is administered by a third party administrator on behalf of the North Tonawanda Public Schools.

 James Clark sustained severe brain injuries as a result of his automobile accident, incurring high medical costs. From May 15, 1990 until September 11, 1990, Clark was cared for at the New Medico Healthcare Center in Michigan. The cost of his stay at the New Medico facility during that period was $ 98,889.00. Clark's representative at that time, his former wife Mary Jane Clark, who was and remains an employee of the North Tonawanda School District, filed claims with FCS Health Administrators, Inc. ("FCS"), the Group Plan's third party administrator during that time period, beginning on July 13, 1990, relating to the New Medico confinement.

 On August 25, 1990, John Tylec, the Personnel Director for the North Tonawanda Public Schools authorized FCS to initiate "large case management" for James Clark. See Exhibit A, James Clark/New Medico Scenario of Events, Plaintiff's Memorandum in Opposition. Tylec contacted the North Tonawanda Public Schools' attorney on January 25, 1991 to apprise him of the Clark situation. On March 20, 1991, Tylec notified FCS that the New Medico claim should be denied; Mary Jane Clark was notified of this decision by FCS on April 8, 1991. Thereafter, Nova Healthcare Administrators ("Nova") replaced FCS as the third party administrators of the Group Plan. The claim was appealed to Nova pursuant to the Group Plan procedures. On January 30, 1992, Nova informed Mrs. Clark that the claim was denied on the basis that the treatment was not medically necessary.

 On December 8, 1992, Plaintiff filed this lawsuit, raising two causes of action - a claim under the Employee Retirement Income Security Act of 1974 ("ERISA"), and a pendent breach of contract claim.

 On February 17, 1994, Defendant filed a motion for summary judgment. Oral argument on the matter was held on March 9, 1994.

 For the reasons as set forth below, Defendant's motion is GRANTED in part and DENIED in part.

 DISCUSSION

 Defendant is seeking summary judgment on the ground that (1) there is no subject matter jurisdiction as the Group Plan at issue in this case is exempt from ERISA, and no other independent jurisdictional basis for the breach of contract claim has been raised, and (2) this action is time barred as no Notice of Claim was filed with the North Tonawanda Public Schools, and the action was filed more than one year following the date the cause of action accrued, the statutory time limit contained in N.Y. Education Law ┬ž 3813.

 1. ERISA claim

 Defendant claims that Plaintiff's cause of action under ERISA must fail as the Group Plan which is the subject of this action is a governmental plan and, ...


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