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Talarico v. Excellus Health Plan, Inc.

United States District Court, N.D. New York

May 6, 2015

DR. JOSEPH C. TALARICO; and VICTOR SURGICAL CARE, PLLC, Plaintiffs,
v.
EXCELLUS HEALTH PLAN, INC., Defendant.

WHATLEY KASSAS, LLP ILZE C. THIELMANN, ESQ., New York, NY, Counsel for Plaintiffs.

LOEB & LOEB LLP DANIEL A. PLATT, ESQ., Los Angeles, CA, Counsel for Defendant.

DECISION and ORDER

GLENN T. SUDDABY, District Judge.

Currently before the Court, in this Employee Retirement Income Security Act ("ERISA") action filed by Dr. Joseph C. Talarico and Victor Surgical Care, PLLC ("Plaintiffs") against Excellus Health Plan, Inc. ("Defendant"), are Plaintiffs' motion for a preliminary injunction pursuant to Fed.R.Civ.P. 65, and Defendant's motion to strike the affidavit of Melissa Talarico. (Dkt. Nos. 25, 31.) The motions are fully briefed, and a hearing on the motion for a preliminary injunction was held on March 10, 2010. (Dkt. Nos. 27, 28, 29, 31, 32, 35; Hrg. Tr.) For the reasons set forth below, both motions are denied.

I. RELEVANT BACKGROUND

A. Plaintiffs' Claims

Generally, liberally construed, Plaintiffs' Amended Complaint asserts the following eleven claims against Defendant arising from its reduction and then cessation of payment for services rendered by Plaintiffs between approximately September of 2013 and December of 2014: (1) breach of plan provisions for benefits in violation of ERISA § 502(a)(1)(B); (2) violation of ERISA through improper "adjustments"; (3) violation of ERISA by failing to promptly and properly respond to claims; (4) breach of fiduciary duties of loyalty and due care in violation of ERISA § 404; (5) failure to provide a full and fair review in violation of ERISA; (6) breach of contract; (7) breach of the covenant of good faith and fair dealing; (8) quasi-contract/unjust enrichment; (9) violation of N.Y. General Business Law § 349; (10) violation of N.Y. Insurance Law § 3224-A; and (11) tortious interference with prospective economic advantage. ( See generally Dkt. No. 18 [Plfs.' Am. Compl.].) Familiarity with the factual allegations supporting these claims in Plaintiffs' Amended Complaint is assumed in this Decision and Order, which is intended primarily for the review of the parties. (Id. )

B. Parties' Arguments on Plaintiffs' Motion

Generally, Plaintiffs' motion requests an Order that (1) enjoins Defendant from improperly recouping payments that Defendant has made on past claims submitted by Plaintiffs, by failing to make payments on claims submitted for current charges for covered, medically necessary medical services provided to enrollees in Defendant's health care plans, (2) enjoins Defendant from telling enrollees in its health care plans that Plaintiffs have been paid for claims on which Defendant has recouped payment, and (3) compels Defendant to provide Plaintiffs with a detailed accounting of all claims at issue in this action, including providing check numbers and dates on claims submitted by Plaintiffs on which Defendants purports to have made payment directly to its enrollees instead of to Plaintiffs. (Dkt. No. 25, Attach. 1, at 5 [attaching page "1" of Plfs.' Memo. of Law].)

Generally, in their motion papers and during oral argument, Plaintiffs have asserted the following two arguments: (1) they will suffer irreparable harm in the absence of a preliminary injunction because they will have to close the doors of their practice forever (given that Defendant's enrollees represent 60% of their patient base, they are unable to make payroll and pay overhead, and they have reached the limit of their line of credit and credit cards); and (2) there exist sufficiently serious questions as to the merits of the case to make them a fair ground for litigation and a balance of hardships tipping decidedly in their favor, because Plaintiffs do not lack standing to assert claims on behalf of their patients (given that Defendant's Anti-Assignment Provision, which prohibits patients from transferring their "right to collect money from [Defendant]" for the services provided under the policy, is too narrow to encompass Plaintiffs' right to sue for the patients' receipt of funds and, in any event, Defendant waived the right to invoke the provision because it paid Plaintiffs in the past and stopped payment without citing the provision). ( See generally Dkt. No. 25, Attach. 1 [Plfs.' Memo. of Law]; Dkt. No. 28 [Plfs.' Reply Memo. of Law]; Hrg. Tr.)

Generally, in its motions papers and during oral argument, Defendant has asserted the following two arguments: (1) Plaintiffs will not suffer irreparable harm in the absence of a preliminary injunction because (a) their claim that Defendant has stopped paying their patients is (in addition to being supported by inadmissible hearsay) contradicted by the evidence adduced by Defendant, and (b) in any event, Plaintiffs' claim that their business will fail is speculative and supported by only inadmissible evidence (and their reliance on Roso-Lino Beverage Distrib., Inc. v. Coca-Cola Bottling Co., 749 F.2d 124, 125 [2d Cir. 1984], is misplaced because that case is distinguishable from the current case); and (2) there do not exist sufficiently serious questions as to the merits of the case to make them a fair ground for litigation and a balance of hardships tipping decidedly in Plaintiffs' favor because (a) they lack standing to assert their ERISA claims (given that the plans and policies at issue in this action contain prohibitions on assignment), (b) even if the plans did not prohibit such an assignment, Plaintiffs admit that, of the 444 claims at issue, they do not any have assignments for 176 of those claims, and they have been assigned the right to receive direct payments for only 199 of those claims (leaving only 69 claims for which they have allegedly been assigned the right to file suit), and (c) to the extent Plaintiffs had inadvertently been paid directly in the past, such payment does not impose on Defendant an ongoing obligation to continue direct payment. ( See generally Dkt. No. 27, Attach. 2 [Def.'s Opp'n Memo. of Law]; Dkt. No. 31 [Def.'s Motion to Strike]; Dkt. No. 32 [Def.'s Evid. Obj.]; Hrg. Tr.)

C. Parties' Arguments on Defendant's Motion

Generally, in its motion to strike the affidavit of Melissa Talarico, Defendant asserts the following two arguments: (1) the Court should exercise its discretion to strike the affidavit of Melissa Talarico in its entirety because it is well settled that a party may not attempt to cure deficiencies in its moving papers by including new evidence in its reply to opposition papers (thus depriving the opposing party of the opportunity to respond to that new evidence); and (2) at the very least, the Court should strike Paragraphs 5-14, 16-18, and 20-22 of the affidavit because they contain evidence that is inadmissible in that it (a) lacks foundation under Fed.R.Evid. 602, (b) contains improper conclusions under Fed.R.Evid. 704, (c) is not the best evidence under Fed.R.Evid. 1002, and/or (d) is irrelevant under Fed.R.Evid. 402. (Dkt. Nos. 31, 32.)

Generally, in response, Plaintiffs assert the following two arguments: (1) the Court should exercise its discretion to not strike the affidavit of Melissa Talarico because Defendant was not deprived of the opportunity to respond to that affidavit in that Defendant had the opportunity both submit contrary evidence and cross-examine her at the hearing (which it declined ...


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