United States District Court, S.D. New York
March 9, 2004.
MONICA KNOLL, Plaintiff, -against- EQUINOX FITNESS CLUBS n/k/a EQUINOX HOLDINGS, INC., EQUINOX WELLNESS CENTER INC., HARVEY J. SPEVAK, and THE EQUINOX HEALTH AND WELFARE PLAN, Defendants
The opinion of the court was delivered by: SHIRA SCHEINDLIN, District Judge
MEMORANDUM OPINION AND ORDER
Plaintiff seeks reconsideration of this Court's December 22, 2003
Opinion and Order dismissing her case in its entirety. See Knoll v.
Equinox Fitness Clubs, No. 02 Civ. 9120, 2003 WL 23018807, at *9
(S.D.N.Y. Dec. 22, 2003). Plaintiff argues that her fraudulent inducement
claim was erroneously dismissed as a matter of law and that this Court
overlooked facts favoring plaintiff and construed disputed facts in
defendants' favor with regard to her repudiation claim. Plaintiff also
argues that the Court erred in dismissing her Fourth and Fifth Claims.
For the following reasons, plaintiff's motion is granted in part and
denied in part.
I. STANDARD OF REVIEW
Motions for reconsideration are governed by Local Civil Rule 6.3 and
are committed to the sound discretion of the
district court. See AT&T Corp. v. Microsoft, No. 01 Civ.
4872, 2004 WL 309150, at *1 (S.D.N.Y. Feb. 19, 2004). Reconsideration is
an "extraordinary remedy to be employed sparingly in the interests of
finality and conservation of scarce judicial resources." In re Health
Mgmt. Sys., Inc. Sec. Litig., 113 F. Supp.2d 613, 614 (S.D.N.Y.
2000) (internal quotation marks and citation omitted). See also Range
Road Music, Inc. v. Music Sales Corp., 90 F. Supp.2d 390, 392
(S.D.N.Y. 2000) ("The . . . limitation on motions for reconsideration is
to ensure finality and to prevent the practice of a losing party
examining a decision and then plugging the gaps of the lost motion with
additional matters.") (internal quotation marks and citation omitted).
Under Local Civil Rule 6.3, "the moving party must demonstrate
controlling law or factual matters put before the court on the underlying
motion that the movant believes the court overlooked and that might
reasonably be expected to alter the court's decision." Montanile v.
National Broad. Co., 216 F. Supp.2d 341, 342 (S.D.N.Y. 2002),
aff'd, 2003 WL 328825 (2d Cir. Feb. 13, 2003) (unpublished). The
standard for granting a motion for reconsideration is strict so as to
prevent repetitive arguments on issues that have been thoroughly
considered by the court. See In re Houbigant, Inc., 914 F. Supp. 997,
1001 (S.D.N.Y. 1996).
A motion for reconsideration is not a substitute for appeal. See
RMED Int'l, Inc. v. Sloan's Supermarkets, Inc., 207 F. Supp.2d 292,
296 (S.D.N.Y. 2002). Nor is it a vehicle "to reargue those issues already
considered when a party does not like the way the original motion was
resolved." In re Houbigant, Inc., 914 F. Supp. at 1001.
Accordingly, the moving party may not "advance new facts, issues or
arguments not previously presented to the Court." Morse/Diesel, Inc.
v. Fidelity and Deposit Co. of Maryland, 768 F. Supp. 115, 116
A. Plaintiff's Fraudulent Inducement Claim
Plaintiff argues that the Court overlooked facts and law concerning the
validity and enforceability of the Release. Specifically, plaintiff
claims that defendants failed to provide her with timely notice under the
Consolidated Omnibus Budget Reconciliation Act ("COBRA") and
affirmatively misled her concerning her COBRA rights. See
Plaintiff's Memorandum of Law in Support of Motion for Reconsideration
("Pl. Rec. Mem.") at 8 ("The uncontroverted evidence in this case
indicates that the Benefits Administrator, a `fiduciay' under ERISA,
misled Plaintiff to believe she would have no health insurance at all if
she did not sign the release. Specifically, `the Benefits Administrator
told [her] that she only had 30 days to get COBRA.'").
In particular, plaintiff claims that this Court overlooked controlling
law holding that when the employer and the plan administrator are the
same person, the required notice must be made within fourteen days of
termination. Plaintiff also claims that this Court overlooked facts
contained in plaintiff's declaration where she claims she was
affirmatively misled by defendants as to her COBRA rights.
1. Affirmative Misrepresentation
While it may be true that defendants failed to timely provide plaintiff
with the required COBRA notice, the claim that plaintiff was misled by
the Benefits Administrator is supported only by plaintiff's declaration
which was submitted after she was deposed. See 8/22/03
Declaration of Monica Knoll Pursuant to 28 U.S.C. § 1746 ("Knoll
Decl.") ¶ 11 ("After I was terminated, the Benefits Administrator at
Equinox told me that I only had 30 days to get COBRA. I asked for
information about COBRA, but I never received anything in response.").
The following deposition testimony, cited by plaintiff as further
evidence of an affirmative misrepresentation by Equinox, indicates only a
mistaken belief on plaintiff's part:
Q: Do you know how long you waited between
executing the release and the time that you
first received it?
A: I know there was an e-mail that Kathy
I had sent to Kathy dated October that I think
I sent her in mid October saying that, at that
time, I still hadn't
received anything on COBRA. So it had to
have been after the 12th, and I just, you know,
I just know there was some back and forth on
the corrections, but we got closer and closer
to the date of November 1, and in my
understanding, I just thought that there was 30
days to COBRA. . . . I thought that there
was no time to even have the conversation, and
it was November 1. I had
Q: Was your concern that you wouldn't be eligible
for COBRA or that you wouldn't have the money
to pay for it?
A: I was concerned that I wouldn't have insurance
after on November 1 without signing
A: That I missed the 30-day mark or something.
I felt that if I didn't sign this, then I
wouldn't have insurance, . . .
3/13/03 Deposition of Monica Knoll ("Knoll Dep.") at 152-54
Q: Did you have any concern that you wouldn't be
able to avail yourself of COBRA if you didn't
Q: Because you wouldn't be able to pay for it or
because you wouldn't be
Q: When you say both, what do you mean? I think
you are reading my mind here.
A: I thought that if I was if I
didn't sign this by November 1 that I wouldn't
A: So if I didn't have coverage by November 1 and
I had no insurance with cancer, I thought
that meant that I would not be eligible for
insurance based on my precondition.
Id. at 155-56 (emphasis added).
A plaintiff, however, cannot defeat a motion for summary judgment by
recanting earlier deposition testimony in a subsequent declaration
contradicting that testimony. See Margo v. Weiss, 213 F.3d 55,
60-61 (2d Cir. 2000) ("[P]laintiffs cannot defeat a motion for summary
judgment by responding with affidavits recanting . . . earlier
[deposition] testimony.") (citing Perma Research & Dev. Co. v.
Singer Co., 410 F.2d 572, 578 (2d Cir. 1969)). Therefore,
plaintiff's claim that Equinox's Benefits Administrator told her that she
only had thirty days in which to obtain COBRA coverage is rejected as it
is belied by plaintiff's earlier deposition testimony indicating that the
thirty-day deadline was plaintiff's own mistaken belief.
Not only does the statement in plaintiff's declaration contradict her
earlier deposition testimony, it also contradicts statements made in
Plaintiff's Rule 56.1 Counterstatement dated August 22, 2003. Plaintiff
states that "Defendants did not provide Knoll with notice of her COBRA
rights before she signed the Release." Plaintiff's Submission of Disputed
Facts ¶ 9. Then, in denying one of defendants' undisputed facts,
Plaintiff believed that she could only avail
herself of COBRA without signing the release
within 30 days of the date of her termination.
Despite repeated requests for the necessary
information, Defendants never provided it within
30 days. At the time Plaintiff received the
release agreement, she believed she would not have
any health insurance if she did not sign the
Plaintiff's Response to Defendants' Assertion of Undisputed Facts
dated August 22, 2003 ¶ 41 (responding to defendants' statement that
"Plaintiff was aware that she could avail herself of COBRA benefits
without signing the release.").*fn1
Finally, plaintiff's recent argument that the Benefits
Administrator at Equinox affirmatively misrepresented to plaintiff that
she only had thirty days to avail herself of COBRA also
contradicts the argument she made in opposing defendants' motion for
summary judgment. In her opposition papers, plaintiff argued:
In this case, Defendants' duty to disclose
information relating to continued health coverage
arose not from the Release, but from COBRA.
Section 606 of ERISA, 29 U.S.C. § 1166.
Defendants failed to disclose the
required COBRA information to Plaintiff, and
as a result Plaintiff executed the Release based
on the false impression that she had to
do so to obtain continued coverage. Defendants'
failure to disclose the COBRA information
constitutes a knowing misrepresentation of
Plaintiff's Memorandum of Law in Opposition to Defendants' Motion
for Summary Judgment ("Pl. Opp.") at 9 (emphasis added). Failing to
disclose COBRA information is not the same as affirmatively
misrepresenting a COBRA deadline. Therefore, the affirmative
misrepresentation argument raised in plaintiff's motion for
reconsideration is a new argument and, as such, cannot be considered on
reconsideration. See Morse/Diesel, 768 F. Supp. at 116.
2. Required Notice of COBRA Rights
Plaintiff also seeks to reargue this Court's finding that Equinox had
no legal duty to notify her of her COBRA rights until November 14, 2001,
forty-four days after her termination. See Knoll, 2003 WL
23018807, at *7. Plaintiff asserts that defendants are both employer and
Plan Administrator and, as such, had only fourteen days after plaintiff's
date of termination to notify her of her COBRA rights, not the forty-four
day period applicable where the employer and plan administrator are
distinct entities. See PI. Rec. Mem. at 7. In support of this argument,
plaintiff claims that this Court overlooked that portion of defendants'
Answer responding to the following allegation: "Defendant Equinox is an
active New York corporation doing
business in the City, County and State of New York from its offices
located at 895 Broadway, New York, New York 10003. Equinox is the `plan
sponsor' and "plan administrator' under Sections 3(16)(A) and (B) of
ERISA. . . ." Complaint ¶ 11. However, in their Answer, defendants
respond as follows: "Admit that Equinox employs more than 15 people and
that its Human Resources department is located at 895 Broadway, New York,
New York, but except as so admitted, Defendants aver that paragraph 11 of
the Complaint sets forth a conclusion of law to which no response is
required." Answer and Counterclaim ¶ 11. Furthermore, in their motion
for summary judgment, defendants noted that Equinox's Plan Administrator
is not "named as a defendant in this suit." Memorandum of Law in Support
of Defendants' Motion for Summary Judgment at 25. Plaintiff never
rebutted this statement. Thus, there is no evidence that defendants are
both employer and Plan Administrator.*fn2
More importantly, plaintiff conceded in her opposition to the motion
for summary judgment that "an employer who is also the plan administrator
must notify a qualified beneficiary of her rights to continue coverage
under the group health plan within 44 days of the date of the qualifying
event.'" Pl. Opp. at 22. Plaintiff seeks to recant this concession in her
motion for reconsideration, noting that plaintiff's opposition papers
incorrectly stated the period as forty-four days, not fourteen days.
See Pl. Rec. Mem. at 7 n.4. However, "a motion for
reconsideration may not be used to plug gaps in an original argument or
to argue in the alternative once a decision has been made." Horsehead
Res. Dev. Co., Inv. v. B.U.S. Envtl. Servs., Inc., 928 F. Supp.,
287, 289 (S.D.N.Y. 1996) (internal quotation marks and citations
In sum, for the reasons stated above, plaintiff has failed to show that
this Court overlooked controlling law or factual matters that would
impact the Court's earlier ruling regarding plaintiff's fraudulent
inducement claim. Plaintiff's motion for reconsideration seeking to
reinstate her Sixth Claim is therefore denied.
B. Plaintiff's Repudiation Claim
Plaintiff argues that the Court overlooked facts in her favor and
construed disputed facts in defendants' favor in finding that the parties
did not repudiate the Release. In
particular, plaintiff claims that she signed the Election of
Continued Coverage form ("Extension Form") on March 1, 2002, for the sole
purpose of obtaining COBRA coverage, at her own expense, for the
remainder of the eighteen-month period.*fn3 See Pl. Rec. Mem. at 10. In
support of this claim, plaintiff cites the following deposition
Q: Was it your understanding that once you
executed this, that your health insurance would
be paid by Equinox per the terms of your
A: It was understood that if I signed this,
my insurance would be reinstated.
A: But not whether Equinox paid for it or not. I
signed this to make sure that I had my
Knoll Dep. at 174-75 (emphasis added). Plaintiff's claim
that she signed the Extension Form on March 1, 2002 to get benefits on a
prospective basis only is belied by her statement that she
understood that by signing the form, her insurance would be
reinstated. The word "reinstate" has been defined to mean
"to restore to a previous effective state." Webster's Ninth New
Collegiate Dictionary 993 (9th Ed. 1987) (emphasis added). Even if
plaintiff signed the Extension Form to secure coverage on a prospective
basis only, it is undisputed that she also obtained the retroactive
reinstatement of her insurance coverage at no cost to her. Accepting the
benefits conveyed under the November l, 2001 Release, four months after
its execution, is clearly an act of ratification regardless of
plaintiff's intent in signing the Extension Form.
Furthermore, plaintiff did not timely repudiate the Release when she
had an opportunity to do so. See VKK Corp. v. National Football
League, 244 F.3d 114, 125 (2d Cir. 2001) (stating that a party
challenging a release is "required to challenge its validity promptly
after [its] execution, or not at all."). Plaintiff's claim that she
repudiated the Release by filing a Charge of Discrimination with the
Equal Employment Opportunity Commission on March 13, 2002, over four
months after the Release was executed, has already been rejected by this
Court. There is no reason to disturb this finding. See Knoll,
2003 WL 23018807, at *8.
Lastly, plaintiff's argument concerning the credit Equinox allegedly
took from its insurance carrier, The Guardian, does nothing to suggest
that Equinox repudiated the Release.
Whatever the circumstances surrounding that credit, it is
undisputed that Knoll remained covered for the period November 1, 2001
through April 30, 2002, except for one prescription she filled in
February of 2002 at her own expense. One way or another, Equinox provided
plaintiff with health insurance coverage at no cost to her in accordance
with the spirit, if not the technical terms, of the Release. Whether
Equinox actually paid the premiums associated with that coverage is of no
moment. In any event, the credit allegedly taken by Equinox does not
evidence an intent to repudiate the Release. If Equinox truly wanted to
repudiate the Release, it would have instructed its insurance carrier to
cancel plaintiff's coverage. Accordingly, plaintiff's motion to reinstate
her First, Second and Third Claims is denied.
C. Plaintiff's Fourth Claim
In her Fourth Claim, plaintiff alleges that defendants failed to
provide her with the required notice of her rights under COBRA.
See Complaint ¶ 76. This claim, which was dismissed on
summary judgment without discussion, must be reinstated.
In her opposition papers, plaintiff argued that an employer is not
relieved of giving an employee notice of her COBRA rights even if the
employee is given notice of such rights at the commencement of her
coverage under COBRA. See Pl. Opp. at
22 (citing Holford v. Exhibit Design Consultants,
218 F. Supp.2d 901, 906 (W.D. Mich. 2002) ("The compulsory character of
COBRA's notification requirement has been repeatedly upheld by federal
courts, even where the qualified beneficiary had received the initial COBRA
notice at the commencement of his/her coverage, or where the employee had
personal knowledge of his/her COBRA rights.") (citing Mlsna v. Unitel
Communications, Inc., 41 F.3d 1124, 1129 (7th Cir. 1994)).
Defendants did not respond to this argument in their reply papers.
Defendants now argue that because Equinox was not legally obligated to
notify plaintiff of her COBRA rights until November 14, 2001, there was
no need for such notice because plaintiff was already enrolled in COBRA
as of November 1, 2001. Defendants further argue that the Release itself
may be construed as a COBRA notice. Finally, defendants argue that
plaintiff received an appropriate COBRA notice in March of 2002 when she
was sent an Election of Continued Coverage form. These arguments are
without merit and must be rejected.
First, even though plaintiff signed the Release on November 1,
2001, triggering her employer-paid coverage under COBRA, she did not
receive any COBRA notice at this time. Furthermore, whether plaintiff
adequately understood all of her COBRA rights as of November 1, 2001, is
not clear. Therefore, the signing of the Release did not vitiate
Equinox's duty to send
plaintiff formal notice of her COBRA rights by November 14, 2001.
In addition, plaintiff's receipt of COBRA coverage does not relieve the
employer of its duty to provide notice. That duty was triggered when
plaintiff was terminated from her job, resulting in the termination of
group health care benefits. See Gaskell v. Harvard Coop. Soc'y,
3 F.3d 495, 499 (1st Cir. 1993) ("Under COBRA, `the term "qualifying
event" means, with respect to any covered employee, any . . .
[termination or reduction in hours] which, but for the continuation
coverage required under this part, would result in the loss of coverage
of a qualified beneficiary.. . .'") (quoting 29 U.S.C. § 1163)
(alterations and emphasis in original). The trigger date is not extended
to the end of the employer-paid period of COBRA coverage as that coverage
is not part of the employer's group health insurance plan.
Second, the Release itself did not contain the type of
information required in a COBRA notice, e.g., the cost of
premiums, the date premiums are due, and the maximum term of coverage.
Therefore, the Release cannot be considered adequate COBRA notice. Third,
assuming that the Election of Continued Coverage form constitutes
adequate COBRA notice, it was clearly untimely as it was sent more than
five months after plaintiff's termination. Because there are material
issues of fact regarding if and when plaintiff was given adequate notice
of her COBRA
rights, plaintiff's Fourth Claim cannot be dismissed on summary
judgment and is hereby reinstated.
D. Plaintiff's Fifth Claim
Plaintiff's Fifth Claim alleges that defendants violated the Employee
Retirement Income and Security Act ("ERISA") by failing to provide her
with, inter alia, the employee benefit plan documents ("Plan
Documents") she requested. Defendants sought dismissal of this claim in
their original moving papers on the following grounds: (1) that
plaintiff's request for Plan Documents, contained in the September 18,
2002 letter sent to Harvey S. Spevak, was not directed to Equinox's Plan
Administrator; (2) that Harvey S. Spevak was not Equinox's Plan
Administrator; and (3) that the Plan Administrator was not named as a
defendant in this suit. Defendants renew these arguments in their
opposition to plaintiff's motion for reconsideration.
Defendants' arguments regarding the identity of Equinox's Plan
Administrator must be rejected as its logic is circular. Plaintiff could
not reasonably be expected to know who the Plan Administrator was without
the Plan Documents, which were the subject of her request in September
2002. Without these documents, plaintiff sent her request to Equinox's
Chief Executive Officer, Harvey S. Spevak. In addition, plaintiff asked
Spevak to forward her request to the Plan Administrator,
"[i]f applicable." September 18, 2002 Letter from Nina H. Kazazian
to Harvey S. Spevak, Ex. 2 to the Affidavit of Harvey S. Spevak (part of
defendants' moving papers). Accordingly, there is a material question of
fact as to whether plaintiff's September 18, 2002 letter adequately put
Equinox on notice of her demand for Plan Documents thereby obligating
Equinox to produce such documents or face civil penalties. Plaintiff's
Fifth Claim is therefore reinstated.
For the reasons stated above, plaintiff's motion for reconsideration is
denied with respect to her First, Second, Third, and Sixth Claims.
Plaintiff's motion is granted as to her Fourth and Fifth Claims which are
hereby reinstated. The Clerk of the Court is directed to void the
Judgment previously filed and re-open this case as to the Fourth and
Fifth Claims only. An in-person status conference is scheduled for March
23, 2004 at 3:30 p.m. The Clerk of the Court is directed to close this
motion (document # 35).