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G.R.J.H., Inc. v. Oxford Health Plans

May 14, 2009


The opinion of the court was delivered by: Norman A. Mordue, Chief U.S. District Judge



On December 5, 2006, plaintiff commenced the present action against defendant Oxford Health Plans, Inc. ("OHP")*fn1 in New York State Supreme Court, County of Saratoga. The complaint asserts causes of action for breach of contract and violations of New York General Business Law ("GBL") § 349 against defendant. On January 18, 2007, defendant removed the action to this court on the basis that the action includes a demand for payment of certain insurance benefits pursuant to an employee welfare benefit plan that is subject to the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq.

Presently before the Court is defendant's motion (Dkt. No. 21) for dismissal of the complaint on the basis that ERISA preempts plaintiff's state law claims*fn2 , or in the alternative, for summary judgment pursuant to Fed. R. Civ. P. 56 based upon two theories: (1) OHP is not a proper party to the lawsuit; and (2) plaintiff cannot prove the required elements to sustain a cause of action for breach of contract or a violation of GBL § 349.


In June 2006, plaintiff entered into a Group Enrollment Agreement ("Agreement") with Oxford Health Insurance, Inc. ("OHI"). According to the Agreement, plaintiff was designated as "Group" and OHI was designated as "Us" or "We". OHP was not named in the Agreement and was not a signatory to the Agreement. On the motion, Juanita B. Luis, Associate General Counsel of United HealthCare Services, Inc. (an affiliate of OHP), provided an affidavit. Ms. Luis stated that OHI is a wholly owned subsidiary of Oxford Health Plans (NY) and an indirect subsidiary of OHP.

Under the terms of the Agreement, OHI would arrange or pay for medical and hospital services for the benefit of plaintiff's employees and their covered dependents. The relevant portions of the Agreement provided, inter alia, in pertinent part as follows:


The first day of the month is the "Premium Due Date". The Group agrees to remit to Us on or before the Premium Due Date the applicable Total Monthly Premium . . . If a Premium payment is not made in full by Group on or prior to the Premium Due Date, a 30-day Grace Period will be granted to the Group for payment without interest charge. If payment is not received by the expiration of the Grace Period,

then the Agreement may be terminated by Us pursuant to Section XIII of this document. Notwithstanding any language to the contrary in the Agreement, We will have no obligation to provide benefits or pay claims for any Member during any period for which the required Premium payment has not bee made, including during any Grace Period.


A. The Agreement may be terminated by Us:

(I) Upon written notice, if any Premium payment or contribution required to be made by the Group is not received by the Premium Due Date, subject to a 30-day Grace Period.

On the motion, Daniel Fresa, a Team Leader of Small Group Collections for OHP during the relevant time period, provided an affidavit.*fn4 Mr. Fresa stated that he was fully familiar with OHI's Enrollment Agreement with plaintiff. According to Fresa, OHI sent two separate Invoice Summaries ("invoices") to plaintiff for premiums due on September 1, 2006.*fn5

The invoices were entitled "Oxford Health Plans Invoice Summary". The first invoice was for the September 2006 premium, $1,031.60, for four of plaintiff's employees, referenced as Billing Group 2. The second invoice was in the amount of $3,310.36 which represented the September 2006 premium and retroactive premiums from June 1, 2006 for a newly added employee, referenced as Billing Group 3. The invoices directed plaintiff to remit payment to Oxford Health Plans in Newark, New Jersey with a slip entitled "Oxford Health Plans Remittance Advice".*fn6

On September 7, 2006, after the Premium Due Date but within the Grace Period, OHI received two payments (dated September 1, 2006) from plaintiff totaling $1,859.39. The checks were made payable to "Oxford Health Plans".

On September 14, 2006, two separate but identical letters were sent to plaintiff to the attention of plaintiff's employees, Alicia Metz and Lauren Simons. The letters were sent by "Financial Operations - Collections Department Oxford Health Plans".*fn7 The letters advised that plaintiff had an unpaid account balance of $2,196.63. The letters indicated that, "if we do not receive your payment by the last day of this month, your Oxford coverage will be subject to termination effective the ...

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