United States District Court, S.D. New York
April 9, 2004.
JOHN S. ARTANDI and ADVANCED PAIN CARE OF NEW YORK, INC., Plaintiffs, -against- ARNALDO BUZACK, SCOTT DENETT, TIMOTHY BROWN, MARITZA JACOBO, FIRST HEALTH GROUP CORP. and SAM ASH MUSIC CORPORATION, Defendants
The opinion of the court was delivered by: JAMES FRANCIS, Magistrate Judge
MEMORANDUM OPINION AND ORDER
This is an action brought by a physician and the professional
corporation through which he operates to recover payment for services
rendered. The plaintiffs originally brought suit in New York State
Supreme Court, New York County, against four former patients; their
employer, Sam Ash Music Corporation ("Sam Ash"); and the entity that
administered the Sam Ash group health plan, First Health Group Corp.
("First Health"). The defendants removed the case to this Court pursuant
to 28 U.S.C. § 1441 on the basis of federal question jurisdiction,
since it involves claims arising under the Employee Retirement Income
Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et sea.
The parties then agreed that I would exercise jurisdiction over the
action for all purposes pursuant to 28 U.S.C. § 636(c). The
defendants have now moved for summary judgment, while the plaintiffs have
cross-moved to disqualify defendants' counsel from continuing its joint
representation of all defendants. For the reasons set forth below, the defendants' motion for summary judgment is granted in part and
denied in part, and decision on the plaintiffs' motion for
disqualification is deferred pending a hearing.
Plaintiff John S. Artandi is a physician licensed to practice in the
State of New York. (Affidavit of John S. Artandi dated Feb. 25, 2004
("Artandi Aff."), attached to Notice of Cross-Motion, at 4 & Exh. A).
He practices as a physiatrist specializing in the field of physical
medicine and rehabilitation, which is a medical discipline incorporating
physical therapy. (Artandi Aff. at 4). Apparently, Dr. Artandi performs
his services under the auspices of Advanced Pain Care of New York, Inc.
("Advanced Pain"). (Complaint ("compl."), ¶ 12).
From December 1995 to November 1996, Dr. Artandi treated the four
individual defendants in this action: Arnaldo Buzack, Scott Denett,
Timothy Brown, and Maritza Jacobo. (Artandi Aff. at 5). At the time he
provided the services, he obtained from each patient an assignment of
insurance payments. (Affirmation of Douglas E. Rowe dated Feb. 5, 2004
("Rowe Aff."), attached to Notice of Motion, ¶ 5 & Exh. C).
Although some of the claims submitted to First Health on behalf of these
patients were paid, the vast majority were not. According to Dr. Artandi,
he is still owed $37, 717.00 for treatment provided to Mr. Buzack, $33,
866.00 for Mr. Denett,*fn1 $9, 502.00 for Mr. Brown, and $18, 534.00 for
Ms. Jacobo. (Compl., ¶¶ 15-34).
The group health insurance plan at issue here (the "Plan") was
established by Sam Ash for its employees in 1992. (Affidavit of David
Charles Ash dated Feb. 4, 2004 ("Ash Aff."), attached to Notice of
Motion, ¶ 4). Because it is a self-insured plan, the funds to pay
most claims come directly from Sam Ash itself. (Ash Aff., ¶ 4). In
addition, Sam Ash maintains a stop-loss policy with Standard Security
Life Insurance Company of New York, which pays the amount by which any
covered claim exceeds $50,000.00 in one year. (Ash Aff., ¶ 4).
At the time the Plan was created, Sam Ash hired Comprehensive Benefit
Services Co., Inc. ("Comprehensive") as a third-party administrator to
process and adjudicate claims. (Ash Aff., ¶ 5). Thereafter,
Comprehensive changed its name to EBP HealthPlans and was subsequently
purchased by First Health. (Ash Aff., ¶ 6). First Health's role is
defined by an Administration Agreement originally entered into between
Sam Ash and Comprehensive. (Ash Aff., ¶¶ 6, 7).
When the various insurance claims at issue here were denied, Dr.
Artandi and Advanced Pain brought this action against Sam Ash, First
Health, and the four individual patients who, under the terms of their
assignments, remain liable for payment for any services not covered by
insurance. Discovery has been completed, and Sam Ash and First Health now
move for summary judgment on a variety of grounds. First Health argues
principally that as a third-party administrator, it is not a fiduciary of
the Plan and therefore cannot be held liable for unpaid benefits. Sam Ash contends that
it, too, is not liable because it was never in privity with the
plaintiffs, and the parties who did have a direct relationship with Sam
Ash the patients only assigned to the plaintiffs their
rights with respect to First Health. Further, Sam Ash maintains that the
denial of the claims was proper because: (1) the Plan allowed for the
provision of physical therapy services only by a physical therapist, not
by a physician, (2) the services rendered were unnecessary and not in
accordance with generally accepted medical standards, and (3) the charges
exceeded those that are reasonable and customary.
The plaintiffs have opposed the defendants' motion and have cross-moved
to disqualify the law firm of Certilman Balin Adler & Hyman, LLP (the
"Certilman Firm") from representing all of the defendants jointly.
According to the plaintiffs, the interests of the individual patients are
so inconsistent with those of Sam Ash and First Health that ethical
principles bar a law firm from representing both groups.
I will address each issue in turn and will discuss additional facts as
appropriate to the analysis.
A. Summary Judgment
1. Legal Framework
Pursuant to Rule 56 of the Federal Rules of Civil Procedure, summary
judgment is appropriate where "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 judgment as a
matter of law." Fed.R.Civ.P. 56(c); accord Marvel Characters.
Inc. v. Simon, 310 F.3d 280, 285-86 (2d Cir. 2002); Andy Warhol
Foundation for the Visual Arts, Inc. v. Federal Insurance Co.,
189 F.3d 208, 214 (2d Cir. 1999). The moving party bears the initial burden
of demonstrating "the absence of a genuine issue of material fact."
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Where the
moving party meets that burden, the opposing party must come forward with
"specific facts showing that there is a genuine issue for trial,"
Fed.R.Civ.P. 56(e), by "a showing sufficient to establish the existence of
[every] element essential to that party's case, and on which that party
will bear the burden of proof at trial." Celotex, 477 U.S. at
In assessing the record to determine whether there is a genuine issue
of material fact, the court must resolve all ambiguities and draw all
factual inferences in favor of the nonmoving party. Anderson v.
Liberty Lobby. Inc., 477 U.S. 242, 255 (1986); Vann v. City of
New York, 72 F.3d 1040, 1048-49 (2d Cir. 1995). But the court must
inquire whether "there is sufficient evidence favoring the nonmoving
party for a jury to return a verdict for that party," Anderson,
477 U.S. at 249 (citation omitted), and grant summary judgment where the
nonmovant's evidence is conclusory, speculative, or not significantly
probative. Id. at 249-50. "The litigant opposing summary
judgment may not rest upon mere conclusory allegations or denials, but must bring forward some affirmative indication that
his version of relevant events is not fanciful." Podell v. Citicorp
Diners Club, Inc., 112 F.3d 98, 101 (2d Cir. 1997) (internal
quotations and citations omitted); accord Matsushita Electric
Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) (a
nonmoving party "must do more than simply show that there is some
metaphysical doubt as to the material facts"); Goenaga v. March of
Dimes Birth Defects Foundation, 51 F.3d 14, 18 (2d Cir. 1995)
(nonmovant "may not rely simply on conclusory statements or on
contentions that the affidavits supporting the motion are not credible").
In sum, if the court determines that "the record taken as a whole could
not lead a rational trier of fact to find for the non-moving party, there
is no `genuine issue for trial.'" Matsushita, 475 U.S. at 587
(quoting First National Bank of Arizona v. Cities Service Co.,
391 U.S. 253, 288 (1968)).
2. First Health
any plan, fund or program . . . established or
maintained by an employer . . . to the extent
that such plan, fund or program was established or
is maintained for the purpose of providing for its
participants or their beneficiaries, through the
purchase of insurance or otherwise, . . .
benefits in the event of sickness, accident,
disability, death or unemployment[.]
29 U.S.C. § 1002. This broad definition encompasses the Sam Ash
group health insurance plan at issue here. Once ERISA comes into play, it
preempts "any and all State laws insofar as they may now or hereafter
relate to any employee benefit plan." 29 U.S.C. § 1144 (a); see
Pilot Life Insurance Co. v. Dedeaux, 481 U.S. 41
, 46 (1987) (ERISA's preemptive provisions are "deliberately expansive,
and designed to establish pension plan regulation as exclusively a
federal concern"); Snyder v. Elliott W. Dann Co., 854 F. Supp. 264,
273 (S.D.N.Y. 1994). Therefore, the plaintiffs' claims must be
analyzed exclusively in the context of ERISA.
ERISA provides that a "participant or beneficiary" may bring an action
"to recover benefits due . . . under the terms of [a] plan."
29 U.S.C. § 1132 (a)(1)(B). In such a suit, monetary relief may be enforced
only against the plan as an entity, unless individual liability is shown.
29 U.S.C. § 1132(d)(2); see Chapman v. ChoiceCare Long Island
Term Disability Plan, 288 F.3d 506, 509-10 (2d Cir. 2002);
Leonelli v. Pennwalt Corp., 887 F.2d 1195, 1199 (2d Cir. 1989)
(administrators and trustees in their capacity as such may be liable).
By contrast, an entity that is not a fiduciary for a plan is generally
not liable under ERISA. See Reich v. Rowe, 20 F.3d 25, 29 (1st
Cir. 1994); Kodes v. Warren Corp., 24 F. Supp.2d 93, 100 (D.
ERISA defines a fiduciary as one who:
(i) . . . exercises any discretionary authority
or discretionary control respecting management of
such plan or exercises any authority or control
respecting management or disposition of its
assets, (ii) . . . renders investment advice
for a fee or other compensation, direct or
indirect, with respect to any moneys or other
property of such plan, or has any authority or
responsibility to do so, or (iii) . . . has any
discretionary authority or discretionary
responsibility in the administration of such plan.
29 U.S.C. § 1002 (21) (A). An entity that lacks such discretion is
not a fiduciary and is not liable under ERISA. See Leonelli,
887 F.2d at 1199. Thus, "ERISA cannot be used to impose liability upon third-party claim administrators who are not acting as fiduciaries
within the meaning of ERISA." Buckley Dement. Inc. v. Travelers Plan
Administrators of Illinois. Inc., No. 92 C 5946, 1993 WL 453466, at
*3 (N.D. Ill. Nov. 4, 1993) (citing cases), aff'd, 39 F.3d 784
(7th Cir. 1994); see Terry v. Bayer Corp., 145 F.3d 28
(1st Cir. 1998) ("[W]hen the plan administrator retains discretion to
decide disputes, a third party service provider . . . is not a
fiduciary of the plan, and thus not amenable to suit under [ERISA].");
Nicholson v. Prudential Insurance Co., 235 F. Supp.2d 22, 26
(D. Me. 2003); Kodes, 24 F. Supp.2d at 100-01. These
principles are reflected in a Department of Labor advisory opinion, which
holds that a third-party administrator lacking final authority to rule on
claims is not a fiduciary and not subject to liability under ERISA.
See 29 C.F.R. § 2509.75-8, D-2.
In this case, the Administration Agreement defines First Health's
responsibilities as follows:
The Contract Administrator [First Health] agrees
to perform the following administrative services
for the Plan Sponsor [Sam Ash]:
(a) assist in the preparation and printing of a
Master Plan Document, plan booklet,
identification cards and other material
necessary to the operation of the Plan;
(b) process and adjudicate all claims presented
for payment under the Plan, including but not
limited to, reasonable investigatory work in
determining claims eligibility within the
framework of Plan policies, interpretations,
rules and procedures made and approved by the
(c) process, issue and distribute claim checks,
drafts and explanation of benefits to Plan
members, providers of service, Plan Sponsor or
others as applicable and document such
disbursements; (d) answer inquiries from the Plan Sponsor, Plan
members and service providers concerning
requirements, procedures or benefits of the
(e) review all applications for coverage under
the Plan based upon underwriting guidelines
established by the Contract Administrator, to
determine eligibility for status as a Plan
(f) maintain all claim data for the Plan;
(g) prepare and provide to the Plan Sponsor
monthly reports of funds received from the
Plan Sponsor and all disbursements made from
the Plan in accordance with the standard
reporting procedures and schedules;
(h) provide to the Plan Sponsor all information
in its possession that is necessary for the
Plan Sponsor to prepare reports required by
any local, state or federal government reports
pertaining to the operation of the Plan to
include the information necessary to complete
the Schedule A for Form 5500.
(Ash. Aff., Exh. B, § 2.01). By contrast, Sam Ash, as the "Plan
Sponsor," retains final authority with respect to all major decisions,
including the determination of eligibility on any claim:
The Plan Sponsor shall have final authority in
determining benefit provisions and Plan language
describing such benefit provisions as outlined in
the Plan's Master Plan Document and Plan Booklet.
The Plan Sponsor shall have final authority in
determining the eligibility of claims to be paid
by the Plan with the express understanding that
any claim payment authorized by the Plan Sponsor
as an exception to the eligibility or other terms
and conditions of the Plan's Master Plan Document
may not be eligible for reimbursement pursuant to
the applicable stop loss policy.
The Plan Sponsor shall have final authority in
directing the Contract Administrator as to the use
of Plan assets. . . .
(Ash Aff., Exh. B, §§ 1.01, 1.02, 1.03). Because First Health lacks the discretion necessary to deem it a fiduciary, it cannot be
liable for unpaid benefits under ERISA, and it is entitled to summary
3. Sam Ash
Sam Ash, having the authority that First Health lacks, could be liable.
Indeed, the Plan explicitly identifies Sam Ash as the fiduciary. (Ash
Aff., Exh. A at 27). However, Sam Ash argues that, as a threshold matter,
it had no relation of privity with the plaintiffs and therefore cannot be
sued by them.
While it is true that the plaintiffs' right of recovery runs directly
against the individual defendants rather than against their insurer, the
patients have assigned to Dr. Artandi their right to reimbursement. "The
right to reimbursement under a health plan may be assigned by a patient
covered by the health plan to a health care provider so long as the plan
instrument does not specifically prohibit such assignments."
Richstone v. Chubb Colonial Life Insurance, No. 97 Civ. 3481,
1999 WL 287332, at *5 (S.D.N.Y. May 7, 1999) (citation omitted); see
Fisher v. Building Service 32B-J Health Fund, No. 96 Civ. 5526, 1997
WL 531315, at *4 (S.D.N.Y. Aug. 27, 1997); Renfrew Center v. Blue
Cross and Blue Shield of Central New York, Inc., No. 94-CV-1527,
1997 WL 204309, at *3 (N.D.N.Y. April 10, 1997); Protocare of
Metropolitan N.Y., Inc. v. Mutual Association Administrators, Inc.,
866 F. Supp. 757, 761 (S.D.N.Y. 1994). Such an assignment provides
standing to the health care provider to pursue an ERISA claim against the
insurer for unpaid benefits. See Richstone, 1999 WL 287332, at
*5; Fisher, 1997 WL 531315, at *5; Protocare,
866 F. Supp. at 761. And here, not only does the Plan not prohibit assignment,
it explicitly permits it. (Ash Aff., Exh. A at 67).
Nevertheless, Sam Ash contends that the assignments executed by the
patients in this case cannot give the plaintiffs standing because those
documents only assigned the right to receive payments made by First
Health. (Rowe Aff., Exh. C). This argument is disingenuous. As the
defendants themselves have maintained, First Health is only a conduit for
payments made from Sam Ash funds pursuant to the final authority of Sam
Ash. Thus, the assignments are fairly construed as providing the
plaintiffs with standing to seek relief from the party with final
authority and financial responsibility under the plan Sam Ash.
b. Covered Services
In the alternative, Sam Ash argues that the treatment provided by Dr.
Artandi was not covered by the Plan. To the extent that the terms of the
policy are clear and unambiguous, they must be enforced. See Village
of Sylvan Beach v. Travelers Indemnity Co., 55 F.3d 114, 115 (2d
Cir. 1995). However, if the policy language is ambiguous, it must be
interpreted in favor of the insured. See Goldberger v. Paul Revere
Life Insurance Co., 165 F.3d 180, 182 (2d Cir. 1999); Masella
v. Blue Cross & Blue Shield of Connecticut, Inc., 936 F.2d 98,
107 (2d Cir. 1991).
According to the defendants, "[t]he plan excludes expenses for physical
therapy services performed by a doctor." (Memorandum of Law of Defendant First Health Group Corp. and Sam Ash Music
Corporation in Support of Their Motion for Summary Judgment Dismissing
the Complaint at 10). This, however, is not an accurate characterization
of the Plan's language. What it actually provides is that covered
services include "[p]hysical therapy rendered by a qualified physical
therapist." (Ash Aff., Exh. A at 41). The distinction is important. The
defendants have not suggested that Dr. Artandi, a physiatrist, is not
"qualified" to provide physical therapy. And, contrary to the defendants'
suggestion, the Plan does not specifically exclude from coverage physical
therapy services provided by a physician. Rather, the import of the Plan
language seems to be that physical therapy is not covered if it is
provided by someone who is not qualified the fitness instructor
at the local gym, for example. At the very least, then, the Plan language
is ambiguous and precludes summary judgment on this basis.
c. Necessity and Cost of Services
More persuasive is Sam Ash's argument that Dr. Artandi provided
treatment that was, in large measure, not medically necessary, and that
he charged fees well beyond those that are customary and reasonable for
the services rendered. For example, Dr. Artandi treated Mr. Buzack on 57
occasions, of which Sam Ash found 11 to be medically necessary. (Ash
Aff., ¶ 16). Charging $400 to $800 per session, Dr. Artandi billed
Mr. Buzack $48,000 over the course of a year, first for treatment of a
sprained ankle and then for lower back syndrome. (Ash Aff., ¶ 13).
These facts certainly suggest that Sam Ash's determinations to decline coverage may have been justified. They do not, however,
warrant summary judgment. The information provided by the defendants with
respect to each patient is largely anecdotal and is not accompanied by
any expert analysis of the medical records or billing practices. Indeed,
the defendants' Statement of Undisputed Material Facts does not include
any assertions relating to the necessity for or value of Dr. Artandi's
services. At a minimum, then, the factual disputes underlying this issue
preclude summary judgment, and defendants' motion with respect to San Ash
must be denied.
Motions to disqualify counsel are generally disfavored. See,
e.g., Felix v. Balkin, 49 F. Supp.2d 260, 267 (S.D.N.Y.
1999). Courts are reluctant to grant such motions because they are often
tactically motivated, cause undue delay, add expense, and have "an
immediate adverse effect on the client by separating him from counsel of
his choice. . . ." Board of Education v. Nyquist,
590 F.2d 1241, 1246 (2d Cir. 1979); accord Evans v. Artek Systems
Corp., 715 F.2d 788, 791-92 (2d Cir. 1983); Feinberq
v. Katz, No. 01 Civ. 2739, 2003 WL 260571, at *3 (S.D.N.Y. Feb. 5,
2003); Felix, 49 F. Supp.2d at 267. While doubts should be
resolved in favor of disqualification, the moving party must satisfy a
"high standard of proof." Evans, 715 F.2d at 791 (citation
omitted); accord Felix, 49 F. Supp.2d at 267 (parties moving
for disqualification of counsel must carry a "heavy burden"); Aqee
v. Paramount Communications, Inc., 853 F. Supp. 778, 783 (S.D.N.Y.
1994) (subjecting motion to disqualify counsel to `"heightened scrutiny"),
rev'd in part on other grounds, 59 F.3d 317 (2d Cir. 1995).
In this case, the plaintiffs contend that the Certilman Firm cannot
continue to represent all of the defendants because to do so would deny
the individual defendants the opportunity to assert cross-claims against
Sam Ash and First Health. The defendants respond that they have
determined to present a unified defense; that merely hypothetical
cross-claims are insufficient indicia of conflict; and that the
individual defendants have, at any rate, made an informed decision to
waive any potential conflict.
New York's Code of Professional Responsibility (the "Code") establishes
appropriate guidelines for the professional conduct of attorneys in the
United States District Courts in this state. See NCK Organization
Ltd, v. Bregman, 542 F.2d 128, 129 n.2 (2d Cir. 1976); de
Transport du Cocher, Inc., 290 F. Supp.2d 344, 348 (E.D.N.Y. 2003);
Sumitomo Corp. v. J.P. Morgan & Co., No. 99 Civ. 8780, No.
99 Civ. 4004, 2000 WL 145747, at *2 (S.D.N.Y. Feb. 8, 2000); Local Civil
Rule 1.5(b)(5). In particular, Disciplinary Rule 5-105 ("DR 5-105") of
the Code addresses attorney representation of clients with interests that
may conflict.*fn2 DR 5-105 indicates that joint representation is permitted even if the lawyer's
professional judgment "will be or is likely to be adversely affected,
"provided that: (1) "a disinterested lawyer would believe that the
lawyer can competently represent the interest of each [client]," and
(2) each client consents to the joint representation after full
explanation of "the advantages and risks involved." DR 5-105(A)-(C),
22 N.Y.C.R.R. § 1200.24. However, some conflicts are so severe
that even an informed waiver is insufficient to avoid disqualification.
See Bonner v. Guccione, No. 94 Civ. 7735, 1997 WL 91070, at
*2 (S.D.N.Y. March 3, 1997); United States v. Rahman,
861 F. Supp. 266, 274 (S.D.N.Y. 1994). This is because courts have an
obligation both to supervise members of the bar and to assure a fair
trial to all litigants. See Dutton v. County of Suffolk,
729 F.2d 903, 909 (2d Cir. 1984).
Here, the conflict between Sam Ash as the insurer and the individual
defendants as the insureds is significant. On the one hand, it is in the
interest of Sam Ash to show that the services provided to the individual
defendants by Dr. Artandi are not covered by its group health plan. This is precisely what it
attempted to do when it argued that the policy does not cover physical
therapy treatment provided by a doctor. On the other hand, it is in the
interest of the individual defendants to establish that the services are
indeed covered so that Sam Ash would be responsible for paying Dr.
Artandi's bills and they would be relieved of any liability. While the
patients might agree with Sam Ash that Dr. Artandi overcharged them, it
will do them little good to show that his charges are not customary and
reasonable. Although such proof would relieve Sam Ash of liability under
the Plan, the individual defendants specifically agreed that they would
remain liable to Dr. Artandi for charges not covered by insurance. To be
sure, proof that Dr. Artandi provided wholly unnecessary treatment might
foreclose him from recovery against all of the defendants, but the
chances are slim that this could be established for every office visit
for each individual defendant.
There is no adequate proof that the individual defendants have
knowingly waived this evident conflict. Although the Certilman Firm
contends that the defendants agreed to present a "unified" defense, that
defense has not been articulated, and the motion for summary judgment
could only have benefitted Sam Ash and First Health. The only evidence of
waiver is a conclusory statement by counsel that "[t]he defendants have
been informed that this firm represents all of the defendants and have
nevertheless waived any conflict and have authorized this firm to
represent them in this action." (Affirmation of Douglas E. Rowe dated
March 19, 2004, ¶ 3). There is no indication that the individual defendants executed
a written waiver. There is no indication that they obtained independent
legal advice before waiving any conflict. And, there is no indication
that they understood the implications of separate representation,
including the opportunity to file cross-claims against Sam Ash.
[I]t is not clear from the record the extent to
which counsel to the defendants has disclosed
fully the implications of his continued
simultaneous representation of all the defendants
or that the defendants understand fully the risks
involved in having a single attorney represent
their respective, and potentially different
interests. . . .
World Food Systems. Inc. v. BID Holdings. Ltd., No. 98
Civ. 8515, 2001 WL 246372, at *5 (S.D.N.Y. March 12, 2001). Under these
circumstances, it is appropriate to conduct a hearing to determine
whether the Certilman Firm should continue to represent all of the
defendants. See Kara Holding Corp. v. Getty Petroleum Marketing.
Inc., No. 99 Civ. 0275, 2002 WL 1684365, at *5 (S.D.N.Y. July 24,
2002) (hearing necessary where record does not establish whether joint
representation is appropriate). Prior to the hearing, the Certilman Firm
shall provide the individual defendants with a copy of this Memorandum
Opinion and Order. Those defendants may, if they wish, seek the advice of
independent counsel with respect to whether they should be separately
represented. At the hearing, the defendants should be prepared to explain
how their interests can be reconciled and what unified defense they will
present. The individual defendants shall attend the hearing so that it
can be verified that any waiver on their part is knowing and voluntary.
The question of whether the conflict here is so severe that it cannot be
waived is reserved for determination after the hearing. The hearing shall
be conducted on May 3, 2004 beginning at 9:30 a.m. unless the defendants
advise me before that date that they have decided to retain separate
For the reasons set forth above, the defendants' motion for summary
judgment is granted with respect to the claims against First Health and
denied with respect to the claims against Sam Ash. Determination of the
plaintiffs' motion to disqualify defendants' counsel from continued joint
representation of the defendants is deferred pending the hearing
described in this opinion.