The Toys Plan subsequently forwarded Mr. Geisler's medical bills to Liberty Life and requested that payment be processed under the Swezey Plan. The bills covered treatment rendered on or about April to June 1992, and equalled approximately $ 153,000. Additional medical expenses have since been incurred by Mr. Geisler.
In May 1993, Liberty Life paid Mr. Geisler's medical bills on a primary basis preserving its right under the Swezey Plan to recover any amounts paid in excess of its liability as the secondary insurer for Mr. Geisler. On or about September 9, 1993, the Geislers entered into a subrogation/ assignment agreement with Liberty Life, under which Mr. Geisler's claims under ERISA were assigned to Liberty Life.
Liberty Life now seeks, inter alia, an order from this Court pursuant to § 502(a)(3) of ERISA declaring that it is only secondarily liable for the medical expenses of Mr. Geisler incurred for the 29 months following the date of his retirement. Liberty Life claims that Mr. Geisler's former employer, Toys, should have provided continuation benefits to Mr. Geisler after his termination of employment with Toys pursuant to the COBRA. Accordingly, Liberty Life seeks reimbursement by Toys and/or the Toys Plan pursuant to § 502(a)(1)(B) for benefits paid on behalf of Mr. Geisler during the period March 28, 1991 to January 31, 1993.
Liberty Life also seeks to enforce the coordination of benefits provisions of the Swezey Plan pursuant to § 502(a)(3) of ERISA, 29 U.S.C. § 1132(a)(3). Finally, Liberty Life asserts a promissory estoppel claim, a violation of COBRA notice rights claim and an equitable subrogation claim against Toys and/or the Toys Plan.
The Complaint in this action was filed on July 8, 1993. The Toys Defendants' motion to dismiss the Complaint was filed on September 9, 1993. On October 15, 1993, Liberty Life filed its Response to the motion to dismiss, as well as a motion to amend the Complaint. On the same date, the Geislers filed a crossmotion to withdraw their crossclaims and join as Co-Plaintiffs in this action in the filing of an amended complaint. The Toys Defendants then filed a Reply in further support of their motion to dismiss the Complaint on November 3, 1993. This Reply also supported their motion to dismiss the crossclaims of the Geislers. Plaintiff's Surreply and numerous correspondences were filed with this Court thereafter.
In order to avoid further delay in the resolution of this action, and because the Complaint and the proposed Amended Complaint are substantially identical for purposes of the COBRA allegations, this Court treats the motion to dismiss the Complaint as a motion to dismiss the Amended Complaint.
This facilitates resolution of this action without affecting the substantive outcome of the issues.
I. Plaintiff's Motion to Amend its Complaint
Courts are generally liberal in granting leave to amend. See Foman v. Davis, 371 U.S. 178, 182, 9 L. Ed. 2d 222, 83 S. Ct. 227 (1962). Courts, however, do have discretion to deny such leave "where the motion is made after an inordinate delay, no satisfactory explanation is offered for the delay, and the amendment would prejudice the defendant." Cresswell v. Sullivan & Cromwell, 922 F.2d 60, 72 (2d Cir. 1990); see, e.g., Tokio Marine & Fire Insurance Co. v. Employers Insurance of Wausau, 786 F.2d 101, 103 (2d Cir. 1986). The plaintiff bears the burden of demonstrating why such leave should be granted in the face of an overly long delay. See Cresswell, 992 F.2d at 72; Sanders v. Thrall Car Mfg. Co., 582 F. Supp. 945, 952 (S.D.N.Y. 1983).
Liberty Life seeks to realign the Rule 19 Defendants (the Geislers) as Co-Plaintiffs in this action.
Liberty Life also seeks to "add several factual allegations relating to events that occurred since the filing of the Complaint, in particular, that Charles and Pamela Geisler have executed an assignment and subrogation agreement with Liberty Life." Pl.'s Mem. Supp. Mot. Amend at 1. Finally, Liberty Life seeks leave to incorporate the crossclaims of the Geislers as additional claims.
Because this Court finds that no party will be prejudiced by granting leave to amend the Complaint in this action, and because the interests of justice so require, this Court grants Plaintiff's motion to amend its Complaint. To prevent further delay in the adjudication of this matter, this Court accepts for filing the proposed Amended Complaint.
II. The Geislers' Crossmotion to Join in Plaintiff's Motion to Amend the Complaint
The Geislers seek an Order to withdraw their Answer and Crossclaims and join with Liberty Life as Co-Plaintiffs in the filing of an Amended Complaint. In the alternative, the Geislers seek an enlargement of time in which to respond to the Toys Defendants' motions to dismiss the Complaint, to dismiss the Answer and Crossclaims of the Geislers, and to impose Rule 11 sanctions.
The Geislers seek to join as Co-Plaintiffs in this action in order to, inter alia, preserve Mr. Geisler's claim for primary benefits from the Toys Plan. Because this Court has granted Plaintiff's motion to amend the Complaint, and because the joining of the Geislers as Co-Plaintiffs in this action is in the interests of justice, this Court hereby grants this crossmotion.
III. Defendants Toys and the Toys Plan's Motion to Dismiss
A motion to dismiss for failure to state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure should be granted only when "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Green v. Maraio, 722 F.2d 1013, 1015-16 (2d Cir. 1983) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957)). The court must accept as true all material facts well-pleaded in the Complaint and must make all reasonable inferences in the light most favorable to the plaintiff. In re Energy Sys. Equip. Leasing Sec. Litig., 642 F. Supp. 718, 723 (E.D.N.Y. 1986).
Liberty Life asserts that this Court has federal question jurisdiction over this action under both § 502(a) of ERISA and the federal question statute, 28 U.S.C. § 1331. The Toys Defendants argue that Liberty Life lacks standing to pursue its claims against them because Liberty Life is not a "participant, beneficiary or fiduciary" of the Toys Plan, a prerequisite to filing an action brought under § 502(a) of ERISA. Specifically, the Toys Defendants assert that neither Liberty Life's status as a claims administrator of the Swezey Plan nor its status as subrogee or assignee of Mr. Geisler's rights under the Toys Plan confer standing on Liberty Life for purposes of § 502(a) of ERISA. The Toys Defendants also argue that 28 U.S.C. § 1331 does not provide a basis for standing to bring this action. This Court finds that federal jurisdiction in this action can be predicated on § 502(a) of ERISA and does not address whether 28 U.S.C. § 1331 properly supports jurisdiction in this action.
1. Liberty Life as Claims Administrator of the Swezey Plan
Section 502(a)(3) of ERISA permits "a participant, beneficiary, or fiduciary" to bring an action:
(A) to enjoin any act or practice which violates any provision of this title or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this title or the terms of the plan.