Opinion
3807-03.
Decided on March 31, 2004.
John N. Romano, Esq. Attorney for Defendant-Third Party Plaintiff. 2168 Central Park Avenue, Yonkers, New York 10710 Office of the General Counsel 1199 National Benefit Fund, Attorney for Third Party Defendant 330 W. 42nd Street, 31st Floor, New York, New York 10036 Att: Lisa Smith, Esq. Arpino Arpino, Esqs. Attorneys for Plaintiff. 155 East Main Street, Smithtown, New York 11787.
In this action by plaintiff seeking to recover payment for medical/surgical services provided, the third-party defendant moves to dismiss the third-party complaint against it on the ground that: 1) the defendant third-party plaintiff's state law claims are barred against it under the Employees Retirement Security Act of 1974, 29 USC § 1001 et seq. ("ERISA"), 2) that the defendant third-party plaintiff was not a participant in the 1199 Fund during the relevant time period, and 3) that the defendant third-party plaintiff has failed to exhaust administrative remedies. The defendant third-party plaintiff opposes the motion.
The defendant third-party plaintiff asserts that she was an employee of the Mount Vernon Hospital as a licensed practical nurse until December 31, 2001, and that she was a member of the 1199 National Benefit Fund (the "1199 Fund") as part of that employment. She further asserts that she began employment with Park Gardens Rehabilitation and Nursing Center as of December 17, 2001, where she remains a member of the 1199 Fund to date. Ms. Lukose was admitted to the Mount Vernon Hospital for surgery from March 7 to March 11, 2002. She was later billed $7,962.00 by the hospital when the 1199 Fund denied coverage of her medical expenses, claiming that her coverage was not in effect during the time period she had been admitted to the hospital. Ms. Lukose claims that a representative of the 1199 Fund indicated to her that she would still be covered for health insurance after her employment terminated at Mount Vernon Hospital since she was employed by another 1199 participating employer.
In her third-party action, Ms. Lukose alleges fraud, negligence and breach of contract for the failure of the 1199 Fund to pay her medical bills. As stated in the affidavit of Lisa Smith, Esq., Local 1199's attorney, the 1199 Fund is a self-funded employee welfare plan governed by ERISA that provides eligible participants with medical benefits. However, Smith alleges that Ms. Lukose's medical benefits terminated as of the date of her resignation from Mount Vernon Hospital, December 30, 2001. Further, she claims that Park Gardens Rehabilitation and Nursing Center is not a contributing member of the 1199 Fund. Instead, Park Gardens participates in another 1199-sponsored plan, the 1199 SEIU Greater New York Benefit Fund, which is an entirely different health plan from the 1199 Fund.
Smith asserts that Ms. Lukose's third party action consists of state common law claims that are pre-empted by ERISA, and that the third party action against the 1199 Fund must therefore be dismissed. For the reasons that follow, this Court agrees that the third party action against the 1199 Fund must be dismissed.
"ERISA provides an extensive and complex pre-emption scheme to facilitate the maintenance of a uniform national law governing employee benefit plan administration" ( Harvey v. Members Employees Trust for Retail Outlets, 96 NY2d 99, 106 (2001)). ERISA's general pre-emption statute directs that ERISA "shall supersede any and all State laws insofar as they may . . . relate to any employee benefit plan" ( Id.; 29 USC § 1144(a)). This pre-emption applies to State common-law claims as well as to statutory laws ( Dalton v. Peninsula Hospital Center, 164 Misc2d 912 (Sup. Ct, NY Co. 1995) citing Pilot Life Ins. Co. v. Dedeaux, 481 US 41, 44 (1987)). The effect of ERISA pre-emption is wholly to eliminate state law claims by benefit plan participants and beneficiaries, leaving them only the causes of action specifically provided in the ERISA statute's civil enforcement provisions ( Smith v. Dunham-Bush, Inc., 959 F2d 6, 15 (2d Cir. 1992)).
In her third-party action, Ms. Lukose alleges fraud, negligence and breach of contract for the failure of the 1199 Fund to pay her medical bills, all of which are state common-law causes of action. She does not contest the third party defendant's assertion that the 1199 Fund is a plan governed by ERISA, but argues that the 1199 Fund should be estopped from applying ERISA since its members deceived her. The Court finds the estoppel argument without merit since there is a governing federal statute.
Ms. Lukose is, however, not without a remedy. ERISA authorizes a participant, such as Ms. Lukose, to bring a civil action under that statute to recover accrued benefits due under the plan and to seek a declaratory judgment on the entitlement to benefits provided by the plan. This Court finds that the claims contained in the defendant third party plaintiff's complaint are pre-empted by ERISA and must therefore be dismissed ( see Nalzenec v. Blue Cross of Western New York, Inc., 191 AD2d 982 (4th Dept 1993); Logan v. Empire Blue Cross and Blue Shield, 275 AD2d 187 (2nd Dept 2000)).
The third party complaint is hereby dismissed.
The above constitutes the Decision and Order of the Court.