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Scott R. Cirigliano, Sr. and Kelli L. Cirigliano, Individually and On Behalf of v. the Village of Afton

July 9, 2012

SCOTT R. CIRIGLIANO, SR. AND KELLI L. CIRIGLIANO, INDIVIDUALLY AND ON BEHALF OF A.L.C., S.R.C., JR., AND A.J.C., INFANTS, PLAINTIFFS,
v.
THE VILLAGE OF AFTON, NEW YORK, DEFENDANT.



MEMORANDUM-DECISION and ORDER

I. INTRODUCTION

On March 9, 2009, Plaintiffs brought this action against the Village of Afton ("Defendant" or "Village") alleging that Defendant failed to comply with notice requirements applying to the termination of coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"). Dkt. No. 1 ("Complaint"). On September 16, 2009, Plaintiffs were granted an entry of default against Defendant. Dkt. No. 9. On July 9, 2010 the Court issued a default judgment on the issue of Defendant's liability. Dkt. No. 10. On September 10, 2010, Plaintiffs filed a Motion for award of monetary damages. Dkt. No. 13. In response, on September 29, 2010, Defendant filed a Cross-Motion to vacate the entry of default and default judgment against Defendant as well as to oppose Plaintiffs' Motion for damages. Dkt. Nos. 16, 17. On September 29, 2011, the Court granted Defendant's Cross-Motion and granted Plaintiffs leave to file a Motion to amend their Complaint within thirty days. Dkt. No. 23 ("September Order") at 5-6.

Presently before the Court are Plaintiffs' Amended Complaint and Defendant's Motion to dismiss. Dkt. Nos. 24 ("Amended Complaint"), 25 ("Motion"). Plaintiffs filed a Response in opposition to Defendant's Motion, and Defendant filed a Reply. Dkt. Nos. 27 ("Response"), 30 ("Reply"). For the reasons that follow, the Court denies Defendant's Motion to dismiss with respect to Plaintiffs' federal claim as well as the state law claims of Plaintiffs K. Cirigliano and infant Plaintiffs A.L.C., S.R.C., Jr., and A.J.C ("Infant Plaintiffs"). The Court grants Defendant's Motion to dismiss with respect to the state law claim of Plaintiff S. Cirigliano.

II. BACKGROUND

In or around April 1997, Plaintiff S. Cirigliano was employed by Defendant as a police officer. Am. Compl. ¶ 6. From 2002 until September 2004, Plaintiff S. Cirigliano was the Village's Chief of Police. Id. ¶¶ 6, 9. Plaintiffs were enrolled in Defendant's group benefit plan. See id. ¶ 1. Plaintiff S. Cirigliano was suspended by Defendant in September 2004. Id. ¶ 9. Plaintiff S. Cirigliano believes his suspension was the result of an investigation he undertook into what he believed was an unlawful relationship between the Village's then-Mayor and an underage female. Id. ¶¶7-9.

Plaintiff S. Cirigliano claims that he only learned his health insurance coverage had been terminated in February 2005 when, during a scheduled surgery to treat Plaintiff A.L.C.'s muscular dystrophy, Plaintiff S. Cirigliano was informed by the hospital of insurance problems. Id. ¶ 15. He further alleges that Defendant never informed him of the termination of his health insurance or of his "right to elect continuation coverage." Id. ¶¶ 11-12. As a result, Plaintiffs contend that they owe thousands of dollars from the lack of insurance to cover A.L.C.'s surgery; and, consequently, that they have endured the garnishment of wages, repossession of family vehicles, loss of their home, and the sale of items of personal property. Id. ¶ 15. Plaintiffs further allege that the incumbent stress has: exacerbated S. Cirigliano's cluster headaches forcing him to seek the treatment of a mental health professional; caused K. Cirigliano to suffer panic attacks that led her to terminate her employment; and forced the family into separate residences. Id. ¶¶ 16-17.

Plaintiffs' Amended Complaint alleges two causes of action that are based on Plaintiff S. Cirigliano's suspension being considered a "qualifying event" for the purposes of state and federal laws regulating group healthcare policies. Id. ¶ 10. First, Plaintiffs allege that, in spite of the "qualifying event," Defendant has never provided Plaintiffswith notice of their right to elect continuation of healthcare coverage under COBRA (the "federal claim").Id. ¶¶ 11-13. Second, Plaintiffs contend that Defendant's failure to provide notice also violates New York State Insurance and Labor laws (the "state claims"). Id. ¶ 2. Plaintiffs believe that Defendant was aware of its failure to provide Plaintiffs with notice of the termination of Plaintiffs' healthcare insurance, and that Defendant discussed such failure during Village Board meetings. Resp. ¶¶ 10-12. Accordingly, Plaintiffs seek monetary damages in the amount of "$100.00 per day from September 1, 2004."

Am. Compl. ¶ 18.

III. STANDARD OF REVIEW

In reviewing a motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, the Court must "accept all [factual] allegations in the complaint as true and draw all inferences in the light most favorable to" the non-moving party. In re NYSE Specialists Sec. Litig., 503 F.3d 89, 95 (2d Cir. 2007). "Documents that are attached to the complaint or incorporated in it by reference are deemed part of the pleading and may be considered." Roth v. Jennings, 489 F.3d 499, 509 (2d Cir. 2007) (citations omitted). To survive a motion to dismiss, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). This plausibility standard "is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. (quoting Twombly, 550 U.S. at 570). Facial plausibility exists "when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. Additionally, the "tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions." Id.

A claim may also be dismissed under Rule 12(b)(1) for lack of subject matter jurisdiction if the "court lacks the statutory or constitutional power to adjudicate it." Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000). A plaintiff has the burden of proving by a preponderance of the evidence that subject matter jurisdiction exists. Id. But, the Court may consider evidentiary matter beyond the pleadings and courts have frequently required that "the party asserting jurisdiction be permitted discovery of facts demonstrating jurisdiction, at least where the facts are peculiarly within the knowledge of the opposing party." See Kamen v. Am. Tel. & Tel. Co., 791 F.2d 1006, 1011 (2d Cir. 1986).

IV. DISCUSSION

A. Amended Complaint

As a threshold matter, the Court considers whether to allow Plaintiffs' Amended Complaint. In its September Order, the Court granted Plaintiffs leave to file a Motion to amend their Complaint. Sept. Order at 6. However, Plaintiffs have not filed such a motion. See generally Dkt. Rather, on October 28, 2011, Plaintiffs filed an Amended Complaint and served a copy on Defendant. See generally Am. Compl. The Amended Complaint supplements Plaintiffs' initial claim that Defendant failed to provide notice of Plaintiffs' right to continuing coverage under COBRA with similar failure to notify claims under New York State law: New York State Insurance Law § 3221(m), New York Labor Law § 217, and New York Labor Law § 195(6). Id. ¶ 2.

Defendant contends that Plaintiffs' Amended Complaint should be disregarded because Plaintiffs failed to move for leave to amend from the Court and the time granted for Plaintiffs to move to amend has expired. Defendant's Memorandum of law in support of Motion to dismiss (Dkt. No. 26) ("Defendant's Memorandum") at 3. Under Rule 15(a)(2), Plaintiffs may only amend their pleading "with the opposing party's written consent or the court's leave." FED. R. CIV. P. 15(a)(2). Nevertheless, the "court should freely give leave when justice so requires." Id. Generally: if the underlying facts or circumstances relied upon by a plaintiff may be a proper subject of relief, he ought to be afforded an opportunity to test his claim on the merits. In the absence of any apparent or declared reason -- such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc. -- the leave sought should, as the rules require, be 'freely given.'

Foman v. Davis, 371 U.S. 178, 230 (1962). Prejudice to the non-movant must be considered in determining whether to grant leave to amend. See, e.g., Zenith Radio Corp. v. ...


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