Opinion
No. 04 Civ. 4474 (JSR).
August 3, 2005
MEMORANDUM ORDER
Both sides move for reconsideration of the Court's Memorandum Order of June 22, 2005 that denied both parties' respective motions for summary judgment and dismissed defendant's unjust enrichment counterclaim. The motions are granted in part and denied in part.
First, the parties complain that the Court erred in referring to plaintiffs' claim as one for "breach of contract," rather than as one brought under ERISA § 502, 29 U.S.C. § 1132 to recover benefits that are allegedly due plaintiffs as assignees of participants and beneficiaries of defendant's Plan. Although the Court's June 22, 2005 Memorandum Order does initially state that plaintiffs' allege that defendant "breached a contract between the parties," see Memorandum Order dated June 22, 2005 at 1, it is clear from a full reading of the Memorandum Order that what is meant is a breach of defendant's obligations under the Plan. Nevertheless, for the sake of clarity, the Court hereby amends the first sentence of the June 22, 2005 Memorandum Order to read as follows: "Plaintiffs Clinton Sewell, M.D. and Caricare Medical Services, P.C. bring this lawsuit against defendant, The 1199 National Benefit Fund for Health and Human Services (the "Fund"), to recover benefits they allege are due them as assignees of participants and beneficiaries of defendant's ERISA Plan. See ERISA § 502(a) (1) (B), 29 U.S.C. § 1132(a) (1) (B)."
Second, the Court agrees with defendant that plaintiffs, as assignees of participants and beneficiaries ("Members") of the Plan, stand in the shoes of these Members. Accordingly, the Court hereby strikes from page 3 of its June 22, 2005 Memorandum Order the two sentences that read "Further, the document upon which defendant relies as mandating an internal review, namely, the `Summary Plan Description,' clearly applies to the relationship between the Plan and the Plan's Members, and not to the relationship between Plaintiffs and defendant." See Summary Plan Description, attached as Exhibit B to Plaintiffs' Motion for Summary Judgment.
Third, this means the Court must reach the question (which it previously did not reach) of whether the defendant is entitled to summary judgment on the ground that plaintiffs failed to exhaust the internal administrative remedies that were available to Members. See Kinstler v. First Reliance Standard Life Ins. Co., 181 F.3d 243, 249-51 (2d Cir. 1999); Kennedy v. Empire Blue Cross and Blue Shield, 989 F.2d 588, 592-93 (2d Cir. 1993). Specifically, defendant contends that plaintiffs failed to take an internal appeal from defendant's denial of their claims. However, the letter that defendant argues constituted the denials of claims (and thereby triggered a 60-day period in which plaintiffs had to seek administrative appeal in order to preserve their standing to bring this suit) it simply notifies plaintiffs that defendant is "withholding" payments "pending resolution" of a "continued review of [plaintiffs'] billing patterns and practices." Letter of Ruth Antoniades, March 11, 2004, attached as Ex. D to Plaintiffs' Motion for Summary Judgment. This does not remotely meet the requirements of an ERISA denial of benefits, let alone an adequate notice of appeal.See 29 C.F.R. §§ 2560.503-1(g) (1) (i), — (iv); see also Burke v. Kodak Retirement Income Plan, 336 F.3d 103, 107 (2d Cir. 2003) ("A written notice of denial [under ERISA] must be comprehensible and provide the claimant with the information necessary to perfect her claim, including the time limits applicable to administrative review. A notice that fails to substantially comply with these requirements does not trigger a time bar contained within the plan."). Put another way, defendant, having simply stalled its resolution of plaintiffs' claims, has no basis to complain that plaintiffs have filed the instant suit.
29 C.F.R. § 2560.503-1(g) (1) states in pertinent part:
The notification [of benefit determination] shall set forth, in a manner calculated to be understood by the claimant —
(i) The specific reason or reasons for the adverse determination;
(ii) Reference to the specific plan provisions on which the determination is based;
(iii) A description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary;
(iv) A description of the plan's review procedures and the time limits applicable to such procedures, including a statement of the claimant's right to bring a civil action under section 502(a) of the Act following an adverse benefit determination on review; . .
While the Plan treats a failure of the defendant to issue a notice of denial or notice of extension within 90 days of the filing of a claim as a de facto denial, such a provision cannot override the statutory requirements for a proper notice as set forth in 29 C.F.R. § 2560.503-1(g)(1).
The Court has considered the parties' other arguments for reconsideration and finds them without merit. Accordingly, the Court hereby reconfirms its denials of both parties' motions for summary judgment.
SO ORDERED.