The opinion of the court was delivered by: Gerard E. Lynch, District Judge.
In this action arising out of defendant National Life of Vermont's denial of benefits under a disability insurance policy to plaintiff Charles E. Binder, plaintiff seeks to amend his complaint to add UnumProvident Corporation as a defendant, and to assert an additional claim against both National Life and UnumProvident. National Life opposes the motion, on the grounds that the amendments would be futile. For the reasons discussed below, the motion is granted in part and denied in part.
Plaintiff is a well-known lawyer and the managing partner of a national law firm, Binder & Binder, that specializes in disability and Social Security litigation. (Compl. ¶¶ 12-13.) He holds a Disability Income Insurance Policy with National Life, which provides for benefits for lost income in the event that he becomes totally or residually disabled and is unable to work. (Id. ¶¶ 3-4.) In May 1999, plaintiff underwent surgery for appendicitis, which resulted in extensive deep vein thrombosis. (Id. ¶ 16.) He has been unable to work full-time since then, and in September 1999, he applied for disability benefits from National Life. (Id. ¶ 20.) National Life deferred making a determination on Binder's claim until November 2000, when it denied the claim on the grounds that there was no objective evidence that he was totally or residually disabled within the meaning of his policy. (Id. ¶ 29.)
In his original Complaint, plaintiff asserted five claims against National Life based on its denial of his disability claim, on theories of breach of contract, bad faith conduct, and a violation of N.Y. Gen. Bus. L. § 349, which prohibits the use of consumer-oriented deceptive practices. Specifically, plaintiff alleged that National Life failed to make the benefits determination in accordance with the terms of the policy (Id. ¶ 33), and that the denial of his claim was part of a practice of delaying and denying claims on the basis of its pecuniary interests, without regard to the merits of the claims (id. ¶¶ 49, 54). Binder seeks payment of monthly benefits under the policy and a refund of the premiums he has paid since he became disabled, as well as punitive damages (based on the bad faith conduct and § 349 claims), and attorney's fees. (Id. ¶¶ (a)-(i).)
Binder now moves to amend his Complaint to include UnumProvident as a defendant, and to assert an additional claim, based on bad faith conduct, against both National Life and UnumProvident. In his proposed Amended Complaint ("Am. Compl."), plaintiff alleges that UnumProvident is the "parent or controlling entity" of National Life (Am. Compl. ¶ 4), and that it played an important role in the denial of his claim. Specifically, plaintiff states that after National Life denied his application for benefits in November 2000, it informed him that UnumProvident would handle any appeal from the denial. (Id. ¶ 44.) Binder submitted an appeal, and in February 2002, UnumProvident upheld National Life's denial of benefits, stating that there was no medical evidence suggesting that Binder was unable to work. (Id. ¶ 49.) Plaintiff also alleges that the denial of his claim was part of a general practice, followed by both National Life and UnumProvident, of denying claims without regard to their merit, and of precluding their medical staff from making independent determinations on the merits of the claims. (Id. ¶¶ 62; 70-73.)
Based on these allegations, plaintiff's Amended Complaint asserts new claims against both parties. First, in the Amended Complaint's Second Cause of Action, plaintiff asserts a breach of contract claim against UnumProvident based on its appellate review of his benefits application. (Id. ¶ 51.) Second, plaintiff amends the Fourth Cause of Action to add UnumProvident as a defendant to the claim against National Life for bad faith conduct, based on the insurers' alleged policy of denying claims to protect their financial interests. (Id. ¶ 62.) Third, in the Fifth Cause of Action, plaintiff asserts a new claim against both National Life and UnumProvident for bad faith conduct, based on various alleged practices that were not in accordance with the provisions of the policy, including instructing medical staff to deny claims rather than making independent judgments (Id. ¶ 69), rewarding employees for denying claims (Id. ¶ 78), and failing to independently review appeals of claim denials (id. ¶ 76). Finally, in the Amended Complaint's Sixth Cause of Action, plaintiff adds UnumProvident as a defendant to the claim alleging that the insurers' practices were deceptive and misleading, in violation of N.Y. Gen. Bus. L. § 349. (Id. ¶¶ 87-88.)
Fed.R.Civ.P. 15(a) provides that leave to amend a complaint after a responsive pleading has been filed "shall be freely given when justice so requires." While the decision as to whether to allow a plaintiff to amend her complaint is committed to the discretion of the district court, there must be "good reason" to deny the motion. ACITO v. Imcera Group, Ltd., 47 F.3d 47, 55 (2d Cir. 1995). Thus, a district court may deny leave to amend when plaintiff has unduly delayed, when defendants may be prejudiced by the amendment, and when it appears that amendment would be futile. Bomani v. Artuz, No. 96 Civ. 4465 (JGK), 1998 WL 82694, at *1 (S.D.N.Y. Feb. 26, 1998).
Defendant argues that all of plaintiff's proposed amendments to the Complaint are futile because they do not state claims on which relief can be granted. (Def. Mem. at 1.) When considering whether an amendment to a pleading would be futile, courts use the same standard that is used to judge the adequacy of a filed pleading. "[T]he court should not dismiss the complaint for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief, and it should not deny leave to file a proposed amended complaint unless that same rigorous standard is met." Ricciuti v. N.Y.C. Transit Auth., 941 F.2d 119, 123 (2d Cir. 1991) (internal quotation marks and citations omitted). In determining whether the proposed amendments are futile, therefore, the court should accept "as true the facts alleged in the complaint," Jackson Nat'l Life Ins. Co. v. Merrill Lynch & Co., 32 F.3d 697, 699-700 (2d Cir. 1994), and deny leave to amend only if it is evident from the face of the proposed amended complaint itself that plaintiff has not stated claims on which relief can be granted. S.S. Silverblatt, Inc. v. East Harlem Pilot Block-Bldg. 1 Housing Devel. Fund Co., Inc., 608 F.2d 28, 42-43 (2d Cir. 1979).
I. Breach of Contract Claim Against UnumProvident
Plaintiff alleges in the Amended Complaint's Second Cause of Action that UnumProvident breached the terms of his insurance policy when it upheld on appeal National Life's denial of his disability claim, because it failed to review his appeal in accordance with the terms of the policy, and its denial of benefits lacked a rational basis. (Am. Compl. ¶¶ 46-51.) National Life contends that no action for breach of contract may be asserted against UnumProvident because it was not a party to the contract between Binder and National Life. (Def. Mem. at 2.) While conceding that UnumProvident was not a party to the contract, plaintiff alleges that UnumProvident was the parent, or controller, of National Life (Am. Compl. ¶ 4), and asserts in his brief that UnumProvident "interjected itself into . . . the determinations made in denying plaintiff's claims." (Pl. Mem. at 1.) Plaintiff argues in his briefs that UnumProvident may be held liable as a party to the contract on one of two theories: (1) that UnumProvident is National Life's alter ego and thus the corporate veil may be pierced to reach it (Pl. Mem. at 1-2); and (2) that UnumProvident acted in concert with National Life (Pl. R. Mem. at 3).*fn1
Plaintiff has not sufficiently pleaded the elements of either theory. With respect to the alter ego theory, under New York law, a corporation may be held liable for the acts of its subsidiary when (1) "the owner exercised complete domination over the corporation with respect to the transaction at issue; and [(2)] . . . such domination was used to commit a fraud or wrong that injured the party seeking to pierce the veil." Accordia Northeast, Inc. v. Thesseus Int'l Asset Fund, N.V., 205 F. Supp.2d 176, 181 (S.D.N.Y. 2002). Plaintiff has not pleaded that UnumProvident completely dominated National Life; indeed, the only allegation that directly deals with the relationship between the two corporations is the conclusory (and perhaps inaccurate) statement that UnumProvident is the "parent or controlling entity" of National Life.*fn2 (Am. Compl. ¶ 4.) The only other allegations with respect to UnumProvident's role in the claim denial state that UnumProvident and its employees handled plaintiff's appeal. (Id. ¶ 49.) While this allegation allows the inference that UnumProvident and National Life had a contractual relationship, or perhaps even shared employees (Pl. Mem. at 2), it alone does not allow an inference that UnumProvident completely dominated National Life, or disregarded corporate formalities in its dealings with it. See Harrison v. NBD Inc., 990 F. Supp. 179, 183-84 (E.D.N.Y. 1998) (allegations that corporations shared employees and had some "administrative overlap" insufficient to allege complete domination). Aside from these allegations, the Amended Complaint is completely devoid of any description of the relationship between the two corporations, or of UnumProvident's power to control National Life. Plaintiff has therefore failed to plead the elements necessary to pierce the corporate veil.
Alternatively, plaintiff argues in his reply brief that even if UnumProvident was not National Life's alter ego, UnumProvident may be liable for breach of the policy because it acted in concert with National Life. (Pl. R. Mem. at 3.) New York law permits a party to be held liable for another's tortious conduct if it has agreed to "participate in a common plan" to commit a tortious act, and a tortious act is committed pursuant to that agreement. Rastelli v. Goodyear Tire & Rubber Co., 79 N.Y.2d 289, 295 (1992). This theory of joint liability does not apply to breaches of contract, however. Wanamaker v. Columbian Rope Co., 740 F. Supp. 127, 137 (N.D.N.Y. 1990). As the Amended Complaint's Second Cause of Action alleges only that UnumProvident's review of the claim was not ...