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Benefitvision Inc v. Gentiva Health Services

March 14, 2011

BENEFITVISION INC., PLAINTIFF,
v.
GENTIVA HEALTH SERVICES, INC. DOING BUSINESS AS GENTIVA HEALTH SERVICES (USA) INC.,
GENTIVA SERVICES OF NEW YORK, INC., GENTIVA HEALTH SERVICES, IPA INC.,
GENTIVA HEALTH SERVICES INC., A REGISTERED FOREIGN DELAWARE CORPORATION, DOING BUSINESS IN NEW YORK AS GENTIVA HEALTH SERVICES INC. DEFENDANTS.



The opinion of the court was delivered by: Hurley, Senior District Judge:

MEMORANDUM & ORDER

Plaintiff Benefitvision, Inc. ("BVI" or "Plaintiff") commenced this action against defendants Gentiva Health Services, Inc., doing business as Gentiva Health Services (USA) Inc., Gentiva Services of New York, Inc., Gentiva Health Services, IPA Inc., and Gentiva Health Services Inc. (collectively, "Gentiva" or the "Defendants") to recover damages based upon Defendants' alleged breach of contract. Presently before the court is Defendants' motion for summary judgment pursuant to Federal Rule of Civil Procedure 56. For the reasons set forth below, Defendants' motion is denied.

BACKGROUND

The following facts are taken from the pleadings, the parties' Local Civil Rule 56.1 Statements and the papers submitted by the parties in connection with the motion.*fn2

The Parties

BVI is a benefits communication and enrollment company incorporated under Illinois law that provides services to human resource departments of large and mid-sized companies. BVI's "services include providing benefit counselors that give benefit orientations[ ] to employees of client organizations helping them make informed decisions about their employee benefits," and then "recording those decisions" and "processing that data." (Am. Compl. ¶ 5.) Gentiva is a "provider of comprehensive home healthcare and related services" (Defs.' Mem. at 2) and is a Delaware corporation with its principal place of business in New York.

Letter of Intent

On or about June 2006, BVI and Gentiva began to negotiate the terms of a contract whereby BVI would provide benefit orientation and enrollment services to Gentiva employees. The parties documented their pre-contract negotiations in a Letter of Intent ("LOI") dated July 13, 2006. According to the LOI, the parties agreed to "negotiate in good faith" toward completing a contractual agreement that would allow "BVI [to] become the benefit orientation/benefit enrollment source of all full-time benefit-eligible employees." (Decl. of Philip J. Walsh, dated Feb. 5, 2010 ("Walsh Decl."), Ex. 3 at 1.) BVI assured Gentiva that "[a]ll enrollers will have insurance licenses, as needed." (Id. at 2.)

Broker of Record Letters

Subsequently, Gentiva sent three letters addressed to Ron Kleiman, President of BVI ("Kleiman"). The first letter is dated September 14, 2006; the remaining two letters are undated. (See Walsh Decl., Ex. 4.) The first letter states:

Dear Ron, We are pleased to inform Benefit Vision, Inc. that you are our Broker of Record for the Universal Life Plan, effective September 1, 2006, on all enrollments effective January 1, 2007 going forward until further notice.

(Id.) The following two letters are identical, except that they substitute "Accident Insurance Plan" and "Critical Illness Plan" in the place of "Universal Life Plan." (Id.)

Master Service Agreement

On November 6, 2006, the two parties executed a Master Service Agreement (the "Agreement") whereby "BVI agree[d] to provide GENTIVA with employees of BVI who [would] provide services on request by GENTIVA." (Walsh Decl., Ex. 5 at 1.) Pursuant to the Agreement, each specific work assignment for BVI would be memorialized in a separate Statement of Work ("SOW") setting forth details of the specific services BVI would provide to Gentiva. (Id. at 1.) Defendants have submitted an SOW, signed by the parties on November 28 and 30, 2006, which defines the scope of BVI's work for a two-year term as including the following tasks: "sending enrollment packages to new hires," "develop[ing] a computer presentation that will record/verify the employee's data, explain the employee's total benefit program, explain and record enrollment decisions for each benefit area, provide a summary review of all decisions," "send[ing] employee enrollment information to all elected carriers for processing," "send[ing] Gentiva a payroll deduction once a week," and processing employees' qualified life status changes. (Id. at 6.)

The Agreement provided that "[n]o fees of any type or nature other than the rate or fixed project rate set forth on each applicable SOW shall be due to BVI except as otherwise specifically stated herein." (Id. at 1.)*fn3 The Agreement further states that BVI will be compensated for its provision of its services as follows:

BVI will be permitted to include a new optional benefit (or benefits) as part of the Gentiva Health Services benefit package that has been approved prior by Gentiva. To the extent employees enroll for the new coverage or coverages, BVI will receive the applicable commission from the applicable Insurance companies. Any new products to be added will be mutually agreed upon by BVI and Gentiva Health Services. Gentiva Health Services will help facilitate this process by making the benefit(s) available on a payroll deduction basis. Recognizing that BVI's compensation comes from the payment of premiums over time, Gentiva Health Services agrees to continue payroll deduction services for the optional benefit or benefits enrolled for at least three (3) years from the end of this contract, as long as at least 200 employees are having premium deducted. (Id. at 1-2.) The "new option benefit (or benefits)" referred to in this provision of the Agreement included life and accident insurance policies issued by TransAmerica Life Insurance Company ("TransAmerica") and critical illness insurance policies issued by AIG.*fn4 (See Defs.' 56.1 ¶ 8.)

The Agreement provided that it would be effective "from the Effective Date [November 6, 2006] until December 31, 2008, unless cancelled by either party within 90 days notice after the initial termination date of this agreement." (Id. at 1.) The term "initial termination date" is not defined elsewhere in the Agreement. The Agreement further states:

On ninety (90) days' notice to the other Party, either GENTIVA or BVI may terminate this Agreement and any SOWs hereto for convenience, provided, however, that either Party may terminate any one or more SOWs without terminating this Agreement. Notwithstanding termination of one or more SOWs, payment for services rendered by BVI to and including said date of termination shall be due and payable by GENTIVA to BVI. (Id. at 3.)

Finally, the Agreement provides that it "shall be governed by the law of the state of New York as to all matters, including, but not limited to, matters of validity, construction, effect and performance, except that no doctrine or choice of law rules shall ...


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