United States District Court, S.D. New York
August 3, 2005.
CLINTON SEWELL, M.D. and CARICARE MEDICAL SERVICES, P.C., Plaintiffs,
THE 1199 NATIONAL BENEFIT FUND FOR HEALTH AND HUMAN SERVICES, Defendant.
The opinion of the court was delivered by: JED RAKOFF, District Judge
Both sides move for reconsideration of the Court's Memorandum
Order of June 22, 2005 that denied both parties' respective
motions for summary judgment and dismissed defendant's unjust
enrichment counterclaim. The motions are granted in part and
denied in part.
First, the parties complain that the Court erred in referring
to plaintiffs' claim as one for "breach of contract," rather than
as one brought under ERISA § 502, 29 U.S.C. § 1132 to recover
benefits that are allegedly due plaintiffs as assignees of
participants and beneficiaries of defendant's Plan. Although the
Court's June 22, 2005 Memorandum Order does initially state that
plaintiffs' allege that defendant "breached a contract between
the parties," see Memorandum Order dated June 22, 2005 at 1, it
is clear from a full reading of the Memorandum Order that what is
meant is a breach of defendant's obligations under the Plan.
Nevertheless, for the sake of clarity, the Court hereby amends
the first sentence of the June 22, 2005 Memorandum Order to read
as follows: "Plaintiffs Clinton Sewell, M.D. and Caricare Medical
Services, P.C. bring this lawsuit against defendant, The 1199 National Benefit Fund for Health and
Human Services (the "Fund"), to recover benefits they allege are
due them as assignees of participants and beneficiaries of
defendant's ERISA Plan. See ERISA § 502(a) (1) (B),
29 U.S.C. § 1132(a) (1) (B)."
Second, the Court agrees with defendant that plaintiffs, as
assignees of participants and beneficiaries ("Members") of the
Plan, stand in the shoes of these Members. Accordingly, the Court
hereby strikes from page 3 of its June 22, 2005 Memorandum Order
the two sentences that read "Further, the document upon which
defendant relies as mandating an internal review, namely, the
`Summary Plan Description,' clearly applies to the relationship
between the Plan and the Plan's Members, and not to the
relationship between Plaintiffs and defendant." See Summary
Plan Description, attached as Exhibit B to Plaintiffs' Motion for
Third, this means the Court must reach the question (which it
previously did not reach) of whether the defendant is entitled to
summary judgment on the ground that plaintiffs failed to exhaust
the internal administrative remedies that were available to
Members. See Kinstler v. First Reliance Standard Life Ins. Co.,
181 F.3d 243, 249-51 (2d Cir. 1999); Kennedy v. Empire Blue
Cross and Blue Shield, 989 F.2d 588, 592-93 (2d Cir. 1993).
Specifically, defendant contends that plaintiffs failed to take
an internal appeal from defendant's denial of their claims.
However, the letter that defendant argues constituted the denials
of claims (and thereby triggered a 60-day period in which
plaintiffs had to seek administrative appeal in order to preserve their standing to bring this suit) it simply notifies
plaintiffs that defendant is "withholding" payments "pending
resolution" of a "continued review of [plaintiffs'] billing
patterns and practices." Letter of Ruth Antoniades, March 11,
2004, attached as Ex. D to Plaintiffs' Motion for Summary
Judgment. This does not remotely meet the requirements of an
ERISA denial of benefits, let alone an adequate notice of appeal.
See 29 C.F.R. §§ 2560.503-1(g) (1) (i), (iv);*fn1 see
also Burke v. Kodak Retirement Income Plan, 336 F.3d 103, 107
(2d Cir. 2003) ("A written notice of denial [under ERISA] must be
comprehensible and provide the claimant with the information
necessary to perfect her claim, including the time limits
applicable to administrative review. A notice that fails to
substantially comply with these requirements does not trigger a
time bar contained within the plan.").*fn2 Put another way,
defendant, having simply stalled its resolution of plaintiffs'
claims, has no basis to complain that plaintiffs have filed the
The Court has considered the parties' other arguments for
reconsideration and finds them without merit. Accordingly, the
Court hereby reconfirms its denials of both parties' motions for