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Star Multi Care Services, Inc. v. Empire Blue Cross Blue Shield

United States District Court, E.D. New York

March 19, 2014


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For Plaintiff: John Fazzini and Mona R. Conway, Law Office of John Fazzini, Huntington Station, NY.

For Empire, Defendant: Alvin C. Lin and Howard S. Wolfson, Morrison Cohen LLP, New York, NY.


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JOSEPH F. BIANCO, United States District Judge.

Plaintiff Star Multi Care Services, Inc. (" plaintiff" or " Star" ) initiated this action in the Supreme Court of the State of New York, County of Suffolk, on February 12, 2013. The state-court complaint alleges tat defendant Empire Blue Cross Blue Shield (" defendant" or " Empire" ) breached a contract to pay for home health care services provided by Star to defendant Demetria Sarris (" Ms. Sarris" ). Empire was served with the complaint on February 12, 2013, and removed this action to federal court on March 4, 2013. It appears that the parties dispute whether Ms. Sarris and her agent, Van Sarris (" the Sarrises" or " the Sarris defendants" ) had been served on that date, but in any event, they did not affirmatively consent to Empire's removal. Plaintiff has filed a motion to remand, and in response, Empire has opposed remand and filed a motion to dismiss, pursuant to Federal Rule of Civil Procedure 12(b)(6), asserting several bases for dismissal.

For the reasons set forth below, plaintiff's motion to remand is denied, and Empire's motion to dismiss is granted. As a threshold matter, in connection with the motion to remand, plaintiff argues that Empire's notice of removal is defective because the other defendants did not consent to removal and, thus, the rule of unanimity has been violated. The Court disagrees. It is well settled that one of the exceptions to the unanimity rule is where the non-joining defendants had not been served at the time the action was removed and, here, it is conceded that service on the Sarris defendants had not been completed at the time Empire had filed its notice of removal on March 4, 2013. To the extent plaintiff argues that, after removal and after the Sarris defendants were served, defendants still had an affirmative obligation to obtain their consent to removal, there is no support in the removal statute or case authority for that position. Instead, the statute places the burden on the later-served defendants to make a motion to remand within 30 days of service if they do not consent. See 28 U.S.C. § § 1447(c), 1448. Here, because the later-served defendants chose not to make such a remand motion, plaintiff's motion for remand on this ground is without merit.

In addition, plaintiff argues that remand is warranted because its claim does not arise under ERISA and, thus, the Court lacks subject matter jurisdiction. However, as discussed in detail below, the Court

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concludes that Star's claim is pre-empted by ERISA and that the motion to remand for lack of subject matter jurisdiction is denied. In particular, it is conceded that: (1) Ms. Sarris is a participant in the ERISA Plan at issue; (2) Star submitted claims for benefits under the Plan in its capacity as Ms. Sarris's assignee; (3) the claims were denied on grounds of medical necessity; and (4) Star is not in Empire's network of providers, nor does it have any other formal contract with Empire for the provision of services to Ms. Sarris. Thus, it is clear that the claim asserted by Star raises a colorable claim for benefits under an ERISA plan and does not give rise to an independent duty between Star and Empire. Although Star argues that Empire did have an independent duty, Star was required to seek authorization from Empire before providing services by the terms of the Plan. In fact, plaintiff's own complaint uses the term " authorization" to describe what it received from Empire (Compl. ¶ 13), and thus it is clear that the alleged authorization was pursuant to the Plan and not an independent duty. At oral argument, plaintiff's counsel asserted that a claim, which is based upon an alleged oral confirmation by Empire that the services for Ms. Sarris would be covered by the Plan, gives rise to an independent duty that does not implicate the ERISA plan. However, that exact argument was expressly rejected by the Second Circuit in Montefiore Med. Ctr. v. Teamsters Local 272, 642 F.3d 321 (2d Cir. 2011), where the Second Circuit held that ERISA preempted a state law claim for payment based upon a verbal verification that the anticipated services on a patient were covered. Thus, plaintiff's claim is clearly preempted by ERISA and subject matter jurisdiction exists in federal court. Accordingly, plaintiff's motion to remand on this ground is denied.

Finally, given the application of ERISA, it is clear that an ERISA claim cannot proceed against Empire, as an insurer, because an ERISA claim under Section 502(a)(1)(B) can only be asserted against the plan itself, the plan administrator, and the plan trustees. In fact, plaintiff concedes this point. See Pl. Opp. Mem. At 18 (" Star agrees with Empire's opening statement to its final argument for dismissal that 'Plaintiff's ERISA benefit claim cannot proceed forward against Blue Cross.'" ). Moreover, plaintiff does not dispute Empire's alternative argument that plaintiff has failed to exhaust the administrative remedies under ERISA. Accordingly, the motion to dismiss is granted as to Empire, and the case is remanded to state court with respect to the remaining state law claims against the Sarris defendants.

I. Background

A. Factual Background

According to the complaint, plaintiff provided home healthcare services to Ms. Sarris from March 14, 2012, to November 1, 2012, the value of which exceeds $70,000.00. (Compl. ¶ ¶ 8, 11.) Plaintiff contends that Empire is liable for the value of these services because, as Ms. Sarris's health insurer, it " provided authorization" to plaintiff before plaintiff performed the services. ( Id. ¶ 13.) Although the complaint does not state the basis for Empire's authority, other than to allege that Empire was Ms. Sarris's health insurer, it appears that, during the relevant time period, Empire was the insurer for the " Verizon Medical Expense Plan for New York and New England" (" the Plan" ). (Oluwasanmi Decl. ¶ 4.) The Plan is a health and welfare benefit plan under ERISA, and Ms. Sarris was a Plan participant. Id.

B. Procedural History

Plaintiff filed its breach-of-contract complaint in the Supreme Court of the State of New York, ...

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