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November 4, 2002


The opinion of the court was delivered by: Honorable Lawrence E. Kahn, United States District Judge


Plaintiff brings this action invoking the jurisdiction of the Court pursuant to 28 U.S.C. § 1337, alleging that Defendant failed to fulfill its obligations to her in violation of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001-1461, in particular the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"), 29 U.S.C. § 1161-1168, and further alleging supplemental New York State law claims for breach of contract and negligence arising from the same set of facts and circumstances. Plaintiff alleges that Defendant failed to notify her of her rights regarding the continuation of her group health care plan or of her right to elect to extend coverage under COBRA. Plaintiff seeks compensation for all out-of-pocket medical bills incurred as a result of her termination of coverage, as-yet undetermined damages, further penalties should Defendant be found liable for wilful neglect, reasonable attorney fees and costs, and such further relief as the Court deems reasonable and just.

I. Background

Plaintiff Melody Edwardsen Phillips married Mr. Frank Studenroth (hereinafter referred to as "Plaintiff's Husband" or "Mr. Studenroth") in 1985, and they lived together in Saratoga Springs, New York, until 1993. In July of that year, while they were on vacation in Maine, Plaintiff's Husband left the Plaintiff and moved out of their home. Their relationship continued to deteriorate until they were no longer speaking with each other.

On October 5, 1994, Plaintiff's Husband obtained an ex parte divorce in the Dominican Republic. The Dominican Republic court issued a divorce decree on the ground that Plaintiff, who (apparently knowing nothing of the proceeding) did not appear, was in default. Plaintiff's Husband quickly returned to the United States, and "married" his secretary, Ms. Patricia Leadley, on October 7, 1994. This ex parte foreign divorce was later held invalid and therefore did not effect the martial status of Plaintiff and her husband. Phillips v. Studenroth, Index No. 97-2427, slip op. at 4-6 (N.Y.Sup.Ct. filed Mar. 12 1996).

With the exception of a brief interim over ten years ago, Plaintiff's Husband has worked for Defendant Saratoga Harness Racing, Inc., since 1979. While working for Defendant, Plaintiff's Husband participated in a group health insurance plan administered by Defendant. Plaintiff also received health care coverage under this plan as his spouse. On or about October 10, 1994, following his "marriage" to Ms. Leadley, Plaintiff's Husband informed Ms. Helen Casson, Defendant's Personnel Director, that he had divorced and remarried, and that he wished to drop Plaintiff from his medical coverage, and extend coverage to Ms. Leadley as his new wife. Ms. Casson completed and signed a form indicating that Plaintiff was no longer eligible for medical coverage under the plan. Ms. Casson then gave Plaintiff's Husband papers notifying Plaintiff of her rights under COBRA. Plaintiff's Husband assured Ms. Casson that he would deliver them to Plaintiff. From October 12 to October 26-the 14 days following Ms. Casson's notification of Mr. Studenroth's divorce-Ms. Casson was on vacation.

There is some dispute as to what happened next.*fn1 Plaintiff's Husband states that he handed the COBRA forms to Plaintiff within days of receiving them from Ms. Casson and that Plaintiff threw them on the ground. Plaintiff's Husband also states that he put the forms in his children's luggage before they returned to Plaintiff after visiting him. (Defendant alleges that Plaintiff's Husband and Plaintiff communicated by passing notes in this fashion.) Ms. Casson states that in late October Plaintiff's Husband told her that he had delivered the COBRA forms to Plaintiff. Ms. Casson also claims that in late October or early November Plaintiff called her and explained that she had no need for COBRA coverage because she was still married to her husband, Mr. Studenroth. Plaintiff maintains that she learned that her insurance had lapsed in January 1995.

In November 1994, Plaintiff underwent medically necessary treatment for thyroid eye disease, including radiation therapy, under the assumption that her health insurance through Defendant was still in effect. She subsequently learned that her health coverage had been terminated in October 1994 and that her medical treatments had not been covered by Defendant's insurance.

In a decision and order entered March 12, 1996, by the Honorable William H. Keniry, Justice of the State of New York Supreme Court, 4th Judicial District, Saratoga County, the Dominican Republic divorce was declared null and void, on the ground that Plaintiff had not "been given adequate notice of the foreign divorce proceeding and an opportunity to be heard." Phillips v. Studenroth, Index No. 97-2427, slip op. at 4-6 (N.Y.Sup.Ct. filed Mar. 12 1996).

In an earlier decision, this Court found that the nullified foreign divorce did not constitute a "qualifying event" that triggered Defendant's notice obligations under COBRA and gave rise to Plaintiff's cause of action. Accordingly, the action was dismissed for lack of subject matter jurisdiction. Phillips v. Saratoga Harness Racing, Inc., 103 F. Supp.2d 127, 130 (N.D.N.Y. 2000). On appeal, the Second Circuit reversed this decision, holding that Defendant's notice obligations under COBRA were triggered when Plaintiff's Husband notified the plan administrator that a "qualifying event" had occurred. See Phillips v. Saratoga Harness Racing, 240 F.3d 174, 179 (2d. Cir. 2001). The Court of Appeals remanded the case for consideration of the merits of Defendant's and Plaintiff's motions for summary judgment pursuant to Fed.R.Civ.P. 56. Id. at 180. It is to those motions which the Court now turns. Defendant moves for dismissal of the complaint and for costs, including reasonable attorneys' fees. Plaintiff moves for a finding of Defendant's liability as a matter of law and for the medical expenses incurred by her during the period of time her insurance lapsed, as well as the maximum statutory fine available.*fn2

II Discussion

A. Summary Judgment Standard

Federal Rule of Civil Procedure 56 provides that summary judgment is proper when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). In applying this standard, courts must "`resolve all ambiguities, and credit all factual inferences that could rationally be drawn, in favor of the party opposing summary judgment.'" Brown v. Henderson, 257 F.3d 246, 251 (2d Cir. 2001) (quoting Cifra v. General Electric Co., 252 F.3d 205, 216 (2d Cir. 2001)).

Once the moving party meets its initial burden by demonstrating that no material fact exists for trial, the nonmovant "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) (citations omitted). The nonmovant "must come forth with evidence sufficient to allow a reasonable jury to find in her favor." Brown, 257 F.3d at 251 (citation omitted). Bald assertions or conjecture unsupported by evidence are insufficient to overcome a motion for ...

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