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Summary of this case from Mandavia v. Columbia Univ.Opinion
02 Civ. 9120 (SAS)
March 9, 2004
Nina H. Kazazian, Esq., Denver, Colorado, for Plaintiff
Christina L. Feege, Esq., Littler Mendelson, P.C., New York, New York, for Defendants
MEMORANDUM OPINION AND ORDER
Plaintiff seeks reconsideration of this Court's December 22, 2003 Opinion and Order dismissing her case in its entirety. See Knoll v. Equinox Fitness Clubs, No. 02 Civ. 9120, 2003 WL 23018807, at *9 (S.D.N.Y. Dec. 22, 2003). Plaintiff argues that her fraudulent inducement claim was erroneously dismissed as a matter of law and that this Court overlooked facts favoring plaintiff and construed disputed facts in defendants' favor with regard to her repudiation claim. Plaintiff also argues that the Court erred in dismissing her Fourth and Fifth Claims. For the following reasons, plaintiff's motion is granted in part and denied in part. I. STANDARD OF REVIEW
Motions for reconsideration are governed by Local Civil Rule 6.3 and are committed to the sound discretion of the district court. See ATT Corp. v. Microsoft, No. 01 Civ. 4872, 2004 WL 309150, at *1 (S.D.N.Y. Feb. 19, 2004). Reconsideration is an "extraordinary remedy to be employed sparingly in the interests of finality and conservation of scarce judicial resources." In re Health Mgmt. Sys., Inc. Sec. Litig., 113 F. Supp.2d 613, 614 (S.D.N.Y. 2000) (internal quotation marks and citation omitted). See also Range Road Music, Inc. v. Music Sales Corp., 90 F. Supp.2d 390, 392 (S.D.N.Y. 2000) ("The . . . limitation on motions for reconsideration is to ensure finality and to prevent the practice of a losing party examining a decision and then plugging the gaps of the lost motion with additional matters.") (internal quotation marks and citation omitted).
Under Local Civil Rule 6.3, "the moving party must demonstrate controlling law or factual matters put before the court on the underlying motion that the movant believes the court overlooked and that might reasonably be expected to alter the court's decision." Montanile v. National Broad. Co., 216 F. Supp.2d 341, 342 (S.D.N.Y. 2002), aff'd, 2003 WL 328825 (2d Cir. Feb. 13, 2003) (unpublished). The standard for granting a motion for reconsideration is strict so as to prevent repetitive arguments on issues that have been thoroughly considered by the court. See In re Houbigant, Inc., 914 F. Supp. 997, 1001 (S.D.N.Y. 1996).
A motion for reconsideration is not a substitute for appeal. See RMED Int'l, Inc. v. Sloan's Supermarkets, Inc., 207 F. Supp.2d 292, 296 (S.D.N.Y. 2002). Nor is it a vehicle "to reargue those issues already considered when a party does not like the way the original motion was resolved." In re Houbigant, Inc., 914 F. Supp. at 1001. Accordingly, the moving party may not "advance new facts, issues or arguments not previously presented to the Court." Morse/Diesel, Inc. v. Fidelity and Deposit Co. of Maryland, 768 F. Supp. 115, 116 (S.D.N.Y. 1991).
II. DISCUSSION
A. Plaintiff's Fraudulent Inducement Claim
Plaintiff argues that the Court overlooked facts and law concerning the validity and enforceability of the Release. Specifically, plaintiff claims that defendants failed to provide her with timely notice under the Consolidated Omnibus Budget Reconciliation Act ("COBRA") and affirmatively misled her concerning her COBRA rights. See Plaintiff's Memorandum of Law in Support of Motion for Reconsideration ("Pl. Rec. Mem.") at 8 ("The uncontroverted evidence in this case indicates that the Benefits Administrator, a `fiduciay' under ERISA, misled Plaintiff to believe she would have no health insurance at all if she did not sign the release. Specifically, `the Benefits Administrator told [her] that she only had 30 days to get COBRA.'").
In particular, plaintiff claims that this Court overlooked controlling law holding that when the employer and the plan administrator are the same person, the required notice must be made within fourteen days of termination. Plaintiff also claims that this Court overlooked facts contained in plaintiff's declaration where she claims she was affirmatively misled by defendants as to her COBRA rights.
1. Affirmative Misrepresentation
While it may be true that defendants failed to timely provide plaintiff with the required COBRA notice, the claim that plaintiff was misled by the Benefits Administrator is supported only by plaintiff's declaration which was submitted after she was deposed. See 8/22/03 Declaration of Monica Knoll Pursuant to 28 U.S.C. § 1746 ("Knoll Decl.") ¶ 11 ("After I was terminated, the Benefits Administrator at Equinox told me that I only had 30 days to get COBRA. I asked for information about COBRA, but I never received anything in response.").
The following deposition testimony, cited by plaintiff as further evidence of an affirmative misrepresentation by Equinox, indicates only a mistaken belief on plaintiff's part:
Q: Do you know how long you waited between executing the release and the time that you first received it?
A: I know there was an e-mail that Kathy — I had sent to Kathy dated October that I think I sent her in mid October saying that, at that time, I still hadn't received anything on COBRA. So it had to have been after the 12th, and I just, you know, I just know there was some back and forth on the corrections, but we got closer and closer to the date of November 1, and in my understanding, I just thought that there was 30 days to COBRA. . . . I thought that there was no time to even have the conversation, and it was November 1. I had —
Q: Was your concern that you wouldn't be eligible for COBRA or that you wouldn't have the money to pay for it?
A: I was concerned that I wouldn't have insurance after — on November 1 without signing this.
Q: Because —
A: That I missed the 30-day mark or something. I felt that if I didn't sign this, then I wouldn't have insurance, . . .
3/13/03 Deposition of Monica Knoll ("Knoll Dep.") at 152-54 (emphasis added).
Q: Did you have any concern that you wouldn't be able to avail yourself of COBRA if you didn't sign this?
A: Yes.
Q: Because you wouldn't be able to pay for it or because you wouldn't be —
A: Both.
Q: When you say both, what do you mean? I think you are reading my mind here.
A: I thought that if I was — if I didn't sign this by November 1 that I wouldn't have coverage.
Q: Okay.
A: So if I didn't have coverage by November 1 and I had no insurance with cancer, I thought that meant that I would not be eligible for insurance based on my precondition.Id. at 155-56 (emphasis added).
A plaintiff, however, cannot defeat a motion for summary judgment by recanting earlier deposition testimony in a subsequent declaration contradicting that testimony. See Margo v. Weiss, 213 F.3d 55, 60-61 (2d Cir. 2000) ("[P]laintiffs cannot defeat a motion for summary judgment by responding with affidavits recanting . . . earlier [deposition] testimony.") (citing Perma Research Dev. Co. v. Singer Co., 410 F.2d 572, 578 (2d Cir. 1969)). Therefore, plaintiff's claim that Equinox's Benefits Administrator told her that she only had thirty days in which to obtain COBRA coverage is rejected as it is belied by plaintiff's earlier deposition testimony indicating that the thirty-day deadline was plaintiff's own mistaken belief.
Not only does the statement in plaintiff's declaration contradict her earlier deposition testimony, it also contradicts statements made in Plaintiff's Rule 56.1 Counterstatement dated August 22, 2003. Plaintiff states that "Defendants did not provide Knoll with notice of her COBRA rights before she signed the Release." Plaintiff's Submission of Disputed Facts ¶ 9. Then, in denying one of defendants' undisputed facts, plaintiff states:
Plaintiff believed that she could only avail herself of COBRA without signing the release within 30 days of the date of her termination. Despite repeated requests for the necessary information, Defendants never provided it within 30 days. At the time Plaintiff received the release agreement, she believed she would not have any health insurance if she did not sign the release.
Plaintiff's Response to Defendants' Assertion of Undisputed Facts dated August 22, 2003 ¶ 41 (responding to defendants' statement that "Plaintiff was aware that she could avail herself of COBRA benefits without signing the release.").
Both of these statements contradict plaintiff's statement that she "believed on November 1, 2002 that she would not be able to get any medical insurance if she did not sign the Release, because she had missed what Defendants told her was a 30-day deadline to get COBRA." Plaintiff's Submission of Disputed Facts dated August 22, 2003 ¶ 8. Again, the deposition testimony cited in support of that statement, even when corrected by plaintiff's July 11, 2003 Errata Sheet, does not mention that anyone at Equinox told her there was a thirty-day deadline to apply for COBRA.
Finally, plaintiff's recent argument — that the Benefits Administrator at Equinox affirmatively misrepresented to plaintiff that she only had thirty days to avail herself of COBRA — also contradicts the argument she made in opposing defendants' motion for summary judgment. In her opposition papers, plaintiff argued:
In this case, Defendants' duty to disclose information relating to continued health coverage arose not from the Release, but from COBRA. Section 606 of ERISA, 29 U.S.C. § 1166. Defendants failed to disclose the required COBRA information to Plaintiff, and as a result Plaintiff executed the Release based on the false impression that she had to do so to obtain continued coverage. Defendants' failure to disclose the COBRA information constitutes a knowing misrepresentation of material fact.
Plaintiff's Memorandum of Law in Opposition to Defendants' Motion for Summary Judgment ("Pl. Opp.") at 9 (emphasis added). Failing to disclose COBRA information is not the same as affirmatively misrepresenting a COBRA deadline. Therefore, the affirmative misrepresentation argument raised in plaintiff's motion for reconsideration is a new argument and, as such, cannot be considered on reconsideration. See Morse/Diesel, 768 F. Supp. at 116.
2. Required Notice of COBRA Rights
Plaintiff also seeks to reargue this Court's finding that Equinox had no legal duty to notify her of her COBRA rights until November 14, 2001, forty-four days after her termination. See Knoll, 2003 WL 23018807, at *7. Plaintiff asserts that defendants are both employer and Plan Administrator and, as such, had only fourteen days after plaintiff's date of termination to notify her of her COBRA rights, not the forty-four day period applicable where the employer and plan administrator are distinct entities. See PI. Rec. Mem. at 7. In support of this argument, plaintiff claims that this Court overlooked that portion of defendants' Answer responding to the following allegation: "Defendant Equinox is an active New York corporation doing business in the City, County and State of New York from its offices located at 895 Broadway, New York, New York 10003. Equinox is the `plan sponsor' and "plan administrator' under Sections 3(16)(A) and (B) of ERISA. . . ." Complaint ¶ 11. However, in their Answer, defendants respond as follows: "Admit that Equinox employs more than 15 people and that its Human Resources department is located at 895 Broadway, New York, New York, but except as so admitted, Defendants aver that paragraph 11 of the Complaint sets forth a conclusion of law to which no response is required." Answer and Counterclaim ¶ 11. Furthermore, in their motion for summary judgment, defendants noted that Equinox's Plan Administrator is not "named as a defendant in this suit." Memorandum of Law in Support of Defendants' Motion for Summary Judgment at 25. Plaintiff never rebutted this statement. Thus, there is no evidence that defendants are both employer and Plan Administrator.
Nonetheless, plaintiff claims that this Court overlooked a number of cases holding that when a defendant is both the employer and the plan administrator, the defendant does not have forty-four days in which to notify a terminated employee, of her COBRA rights. However, these cases are not controlling law as they are decisions from the Northern District of New York. See Herman Miller, Inc. v. Worth Capital, Inc., No. 97 Civ. 7878, 1998 WL 226202, at *1 (S.D.N.Y. May 4, 1998) ("[T]he decision of a fellow district court is not a `controlling' one for the purposes of Local Rule 6.3."), aff'd, 173 F.3d 844 (2d Cir. 1999) (unpublished). Moreover, as noted, plaintiff has offered no proof that defendants are both employer and plan administrator.
More importantly, plaintiff conceded in her opposition to the motion for summary judgment that "an employer who is also the plan administrator must notify a qualified beneficiary of her rights to continue coverage under the group health plan within 44 days of the date of the qualifying event.'" Pl. Opp. at 22. Plaintiff seeks to recant this concession in her motion for reconsideration, noting that plaintiff's opposition papers incorrectly stated the period as forty-four days, not fourteen days. See Pl. Rec. Mem. at 7 n. 4. However, "a motion for reconsideration may not be used to plug gaps in an original argument or to argue in the alternative once a decision has been made." Horsehead Res. Dev. Co., Inv. v. B.U.S. Envtl. Servs., Inc., 928 F. Supp., 287, 289 (S.D.N.Y. 1996) (internal quotation marks and citations omitted).
In sum, for the reasons stated above, plaintiff has failed to show that this Court overlooked controlling law or factual matters that would impact the Court's earlier ruling regarding plaintiff's fraudulent inducement claim. Plaintiff's motion for reconsideration seeking to reinstate her Sixth Claim is therefore denied.
B. Plaintiff's Repudiation Claim
Plaintiff argues that the Court overlooked facts in her favor and construed disputed facts in defendants' favor in finding that the parties did not repudiate the Release. In particular, plaintiff claims that she signed the Election of Continued Coverage form ("Extension Form") on March 1, 2002, for the sole purpose of obtaining COBRA coverage, at her own expense, for the remainder of the eighteen-month period. See Pl. Rec. Mem. at 10. In support of this claim, plaintiff cites the following deposition testimony:
In her reply memorandum in further support of reconsideration, plaintiff states that "her intent in signing the enrollment form on March 1, 2002, . . . was simply to obtain coverage for the remaining twelve months." Plaintiff's Memorandum of Law in Further Support of Motion for Reconsideration at 11 (emphasis added). Presumably, the remaining twelve months began to run at the expiration of the first six months of coverage provided by Equinox (November 1, 2001 through April 30, 2002). If plaintiff did not intend to ratify the Release when she signed the Extension Form, it is unclear how she planned to obtain insurance for March and April of 2002.
Q: Was it your understanding that once you executed this, that your health insurance would be paid by Equinox per the terms of your agreement?
A: It was understood that if I signed this, my insurance would be reinstated.
Q: Right.
A: But not whether Equinox paid for it or not. I signed this to make sure that I had my insurance.
Knoll Dep. at 174-75 (emphasis added). Plaintiff's claim — that she signed the Extension Form on March 1, 2002 to get benefits on a prospective basis only — is belied by her statement that she understood that by signing the form, her insurance would be reinstated. The word "reinstate" has been defined to mean "to restore to a previous effective state." Webster's Ninth New Collegiate Dictionary 993 (9th Ed. 1987) (emphasis added). Even if plaintiff signed the Extension Form to secure coverage on a prospective basis only, it is undisputed that she also obtained the retroactive reinstatement of her insurance coverage at no cost to her. Accepting the benefits conveyed under the November l, 2001 Release, four months after its execution, is clearly an act of ratification regardless of plaintiff's intent in signing the Extension Form.
Furthermore, plaintiff did not timely repudiate the Release when she had an opportunity to do so. See VKK Corp. v. National Football League, 244 F.3d 114, 125 (2d Cir. 2001) (stating that a party challenging a release is "required to challenge its validity promptly after [its] execution, or not at all."). Plaintiff's claim that she repudiated the Release by filing a Charge of Discrimination with the Equal Employment Opportunity Commission on March 13, 2002, over four months after the Release was executed, has already been rejected by this Court. There is no reason to disturb this finding. See Knoll, 2003 WL 23018807, at *8.
Lastly, plaintiff's argument concerning the credit Equinox allegedly took from its insurance carrier, The Guardian, does nothing to suggest that Equinox repudiated the Release. Whatever the circumstances surrounding that credit, it is undisputed that Knoll remained covered for the period November 1, 2001 through April 30, 2002, except for one prescription she filled in February of 2002 at her own expense. One way or another, Equinox provided plaintiff with health insurance coverage at no cost to her in accordance with the spirit, if not the technical terms, of the Release. Whether Equinox actually paid the premiums associated with that coverage is of no moment. In any event, the credit allegedly taken by Equinox does not evidence an intent to repudiate the Release. If Equinox truly wanted to repudiate the Release, it would have instructed its insurance carrier to cancel plaintiff's coverage. Accordingly, plaintiff's motion to reinstate her First, Second and Third Claims is denied.
C. Plaintiff's Fourth Claim
In her Fourth Claim, plaintiff alleges that defendants failed to provide her with the required notice of her rights under COBRA. See Complaint ¶ 76. This claim, which was dismissed on summary judgment without discussion, must be reinstated.
In her opposition papers, plaintiff argued that an employer is not relieved of giving an employee notice of her COBRA rights even if the employee is given notice of such rights at the commencement of her coverage under COBRA. See Pl. Opp. at 22 (citing Holford v. Exhibit Design Consultants, 218 F. Supp.2d 901, 906 (W.D. Mich. 2002) ("The compulsory character of COBRA's notification requirement has been repeatedly upheld by federal courts, even where the qualified beneficiary had received the initial COBRA notice at the commencement of his/her coverage, or where the employee had personal knowledge of his/her COBRA rights.") (citing Mlsna v. Unitel Communications, Inc., 41 F.3d 1124, 1129 (7th Cir. 1994)). Defendants did not respond to this argument in their reply papers.
Defendants now argue that because Equinox was not legally obligated to notify plaintiff of her COBRA rights until November 14, 2001, there was no need for such notice because plaintiff was already enrolled in COBRA as of November 1, 2001. Defendants further argue that the Release itself may be construed as a COBRA notice. Finally, defendants argue that plaintiff received an appropriate COBRA notice in March of 2002 when she was sent an Election of Continued Coverage form. These arguments are without merit and must be rejected.
First, even though plaintiff signed the Release on November 1, 2001, triggering her employer-paid coverage under COBRA, she did not receive any COBRA notice at this time. Furthermore, whether plaintiff adequately understood all of her COBRA rights as of November 1, 2001, is not clear. Therefore, the signing of the Release did not vitiate Equinox's duty to send plaintiff formal notice of her COBRA rights by November 14, 2001. In addition, plaintiff's receipt of COBRA coverage does not relieve the employer of its duty to provide notice. That duty was triggered when plaintiff was terminated from her job, resulting in the termination of group health care benefits. See Gaskell v. Harvard Coop. Soc'y, 3 F.3d 495, 499 (1st Cir. 1993) ("Under COBRA, `the term "qualifying event" means, with respect to any covered employee, any . . . [termination or reduction in hours] which, but for the continuation coverage required under this part, would result in the loss of coverage of a qualified beneficiary.. . .'") (quoting 29 U.S.C. § 1163) (alterations and emphasis in original). The trigger date is not extended to the end of the employer-paid period of COBRA coverage as that coverage is not part of the employer's group health insurance plan.
Second, the Release itself did not contain the type of information required in a COBRA notice, e.g., the cost of premiums, the date premiums are due, and the maximum term of coverage. Therefore, the Release cannot be considered adequate COBRA notice. Third, assuming that the Election of Continued Coverage form constitutes adequate COBRA notice, it was clearly untimely as it was sent more than five months after plaintiff's termination. Because there are material issues of fact regarding if and when plaintiff was given adequate notice of her COBRA rights, plaintiff's Fourth Claim cannot be dismissed on summary judgment and is hereby reinstated.
D. Plaintiff's Fifth Claim
Plaintiff's Fifth Claim alleges that defendants violated the Employee Retirement Income and Security Act ("ERISA") by failing to provide her with, inter alia, the employee benefit plan documents ("Plan Documents") she requested. Defendants sought dismissal of this claim in their original moving papers on the following grounds: (1) that plaintiff's request for Plan Documents, contained in the September 18, 2002 letter sent to Harvey S. Spevak, was not directed to Equinox's Plan Administrator; (2) that Harvey S. Spevak was not Equinox's Plan Administrator; and (3) that the Plan Administrator was not named as a defendant in this suit. Defendants renew these arguments in their opposition to plaintiff's motion for reconsideration.
Defendants' arguments regarding the identity of Equinox's Plan Administrator must be rejected as its logic is circular. Plaintiff could not reasonably be expected to know who the Plan Administrator was without the Plan Documents, which were the subject of her request in September 2002. Without these documents, plaintiff sent her request to Equinox's Chief Executive Officer, Harvey S. Spevak. In addition, plaintiff asked Spevak to forward her request to the Plan Administrator, "[i]f applicable." September 18, 2002 Letter from Nina H. Kazazian to Harvey S. Spevak, Ex. 2 to the Affidavit of Harvey S. Spevak (part of defendants' moving papers). Accordingly, there is a material question of fact as to whether plaintiff's September 18, 2002 letter adequately put Equinox on notice of her demand for Plan Documents thereby obligating Equinox to produce such documents or face civil penalties. Plaintiff's Fifth Claim is therefore reinstated.
III. CONCLUSION
For the reasons stated above, plaintiff's motion for reconsideration is denied with respect to her First, Second, Third, and Sixth Claims. Plaintiff's motion is granted as to her Fourth and Fifth Claims which are hereby reinstated. The Clerk of the Court is directed to void the Judgment previously filed and re-open this case as to the Fourth and Fifth Claims only. An in-person status conference is scheduled for March 23, 2004 at 3:30 p.m. The Clerk of the Court is directed to close this motion (document # 35).