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Patrick Kriwox and Laurie Kriwox, Individually, and As Mother and Father of v. Ebs-Rmsco

May 26, 2011


The opinion of the court was delivered by: David N. Hurd United States District Judge



Plaintiffs Patrick Kriwox*fn1 and Laurie Kriwox (collectively "plaintiffs") bring this action individually, and on behalf of their minor child O.K., against defendants Empire State Carpenters Welfare Fund ("Empire State") and EBS-RMSCO, Inc. ("EBS") (collectively "defendants") alleging breach of contract. Specifically, plaintiffs challenge defendants' decision to deny payment of medical expenses under plaintiffs' health insurance policy.

Empire State moves to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) ("Rule __"). EBS moves for judgment on the pleadings in accordance with Rule 12(c). Defendants argue the complaint is preempted by the Employment Retirement Income Security Act ("ERISA"). 29 U.S.C. §§ 1001--1461 (2006). Plaintiff opposes both motions and cross-moves to amend the complaint. Defendants have not opposed plaintiffs' cross-motion. The motions were considered on their submissions without oral argument.


Kriwox is a member of the Carpenters Local 747 union. As part of his membership in the union, he obtained health insurance for he and his family through a benefit plan established by defendant Empire State. The plan was administered by defendant EBS.

On August 22, 2009, plaintiffs' daughter, O.K., was involved in an accident while a passenger on an all terrain vehicle. As a result of the accident, O.K. sustained serious injuries requiring medical attention. Her medical expenses from the accident totaled over $171,000. Plaintiffs timely submitted the medical bills to the plan administrator, EBS, for payment. EBS approved payment of approximately $3,352.89 but denied the remainder of the claim.

On December 28, 2009, Kriwox appealed EBS's denial of benefits. On January 8, 2010, EBS denied the appeal on the ground that the benefit plan excluded medical coverage for injuries or illness resulting from engaging in any hazardous activity, including drag racing or competitive racing, sky diving and bungee jumping, motorcycles, snowmobiles, boats or watercrafts. On February 2, 2010, his attorney appealed the denial. On February 18, 2010, EBS upheld its original decision denying payment of the medical claims.

Plaintiffs brought suit against EBS and Empire State Regional Council of Carpenters on July 16, 2010, in New York State Supreme Court, Lewis County, asserting a breach of contract claim. On September 3, 2010, defendant EBS removed the action to federal court. Plaintiffs amended the complaint to remove Empire State Regional Council of Carpenters and add defendant Empire State. The amended complaint was filed on or about October 15, 2010.


A. Plaintiffs' Cross-Motion to Amend

In response to defendants' preemption arguments, plaintiffs concede their state law breach of contract claim is governed by 29 U.S.C. § 1132 ("section 502"), the civil enforcement provision of ERISA. However they contend the claim, as pleaded, should be recharacterized as one under ERISA. In the alternative, they move to amend the complaint to cure the deficiency and to add a second cause of action against EBS.

The amended complaint's sole cause of action is a state law breach of contract claim based on defendants' failure to pay benefits under the health insurance policy. The parties do not dispute the claim is preempted by ERISA. Federal courts disagree regarding whether a complaint's common law breach of contract claim should be recharacterized as a claim pursuant to § 502(a)(1)(B) or dismissed without prejudice pursuant to the preemption doctrine.Harrison v. Metro. Life Ins. Co., 417 F. Supp. 2d 424, 431 (S.D.N.Y. 2006) (citing Fanney v. Trigon Ins. Co., 11 F. Supp. 2d 829, 832 (E.D. Va. 1998) (noting disagreement among courts regarding whether state law claims preempted by ERISA should be recharacterized as claims pursuant to § 502(a)(1)(B)). In Arthurs v. Metro. Life Ins. Co., the Southern District of New York examined a complaint that alleged a common law breach of contract claim, but set forth the elements of a claim under § 502(a)(1)(B). Arthurs, 760 F. Supp. 1095, 1098 (S.D.N.Y. 1991). The court held the proper remedy was not dismissal based on preemption, but instead recharacterization of the claim as one under ERISA. Id."'[This] approach is consistent with the Second Circuit's holding that a pleading is sufficient where it sets forth the factual allegations supporting the elements of a claim, even if it fails to identify the specific law under which it brings a claim.'" G.R.J.H., Inc. v. Oxford Health Plans, Inc.,No. 07-CV-00068,2009 WL 1362985, at *4 (N.D.N.Y. May 14, 2009) (Mordue, J.) (quoting Harrison, 417 F. Supp. 2d at 431). Recharacterization promotes the interests of justice and sound judicial administration. Id. at *5.

Here, the amended complaint identifies the parties, alleges there was a benefit plan, that the plaintiffs were beneficiaries of that plan, and that they submitted claims under the plan that were wrongfully denied. It sets forth factual allegations supporting the elements of an ERISA claim. However, it need not be decided whether it is proper to recharacterize the claim as one under ยง 502(a)(1)(B) because the purposes behind recharacterization would not be accomplished here. The proposed ...

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