Saini v. CIGNA Life Insurance Company of New York
Filing
32
MEMORANDUM AND OPINION re: 26 MOTION to Dismiss . filed by CIGNA Life Insurance Company of New York. Given the foregoing, CIGNA's motion is GRANTED, and Plaintiff's claims under the New York Insurance Law § 2601 and the New York General Business Law § 349 are DISMISSED WITH PREJUDICE. The parties are directed to submit a proposed case management plan by May 31, 2018. The Clerk of Court is directed to terminate the motion at docket entry 26. (Signed by Judge Katherine Polk Failla on 4/24/2018) (js)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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:
JYOTI SAINI,
:
:
:
Plaintiff,
:
v.
:
:
CIGNA LIFE INSURANCE COMPANY OF
:
:
NEW YORK,
:
Defendant. :
:
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USDC SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC #: _________________
April 24, 2018
DATE FILED: ______________
17 Civ. 1922 (KPF)
OPINION AND ORDER
KATHERINE POLK FAILLA, District Judge:
After her husband tragically and unexpectedly passed away, Plaintiff
Jyoti Saini sought benefits under a group accident insurance policy issued to
her husband by his former employer. The insurance provider, CIGNA Life
Insurance Company of New York (“CIGNA”), denied Plaintiff’s claim, and after
exhausting her administrative remedies, she sued CIGNA. Plaintiff’s complaint
includes claims under the Employee Retirement Income Security Act of 1974
(“ERISA”), Pub. L. 93-406, 88 Stat. 829; as well as Section 2601 of the New
York Insurance Law and Section 349 of the New York General Business Law
(“GBL”). Pending before the Court is CIGNA’s motion to dismiss Plaintiff’s
state-law claims. For the following reasons, the Court grants the motion.
BACKGROUND 1
A.
Factual Background
CIGNA’s motion to dismiss turns largely on questions of law rather than
allegations of fact. The Court therefore recounts the underlying facts only as
necessary for context.
1.
Mr. Saini’s Passing and the Subsequent Investigation
This case arises out of Plaintiff’s claim for benefits under the group
accident insurance policy of her late husband, Rakesh Saini (“Mr. Saini”), after
his death in April 2015. (See Am. Compl. ¶¶ 1, 6, 12). On April 19, 2015,
Mr. Saini was swimming with one of the Sainis’ two children in a pool at the
1
This Opinion draws facts from the Amended Complaint (“Am. Compl.” (Dkt. #11)), as
well as the administrative record (“Administrative Record” or “Admin. R.”) associated
with CIGNA’s processing of Plaintiff’s claim, which CIGNA provided as an attachment to
the Declaration of Kevin G. Horbatiuk in conjunction with the motion to dismiss (Dkt.
#27-2, -3, -4). The Court will refer to the Administrative Record by the Bates numbers
that CIGNA affixed to its pages. In addition, the Court will refer to CIGNA’s
Memorandum of Law in Support of the Motion to Dismiss as “Def. Br.” (Dkt. #28).
Plaintiff does not contest the Court’s review of the Administrative Record in ruling on
CIGNA’s motion, and her Amended Complaint makes clear that she relied on the
documentation included in the Administrative Record in drafting her claims. (See, e.g.,
Am. Compl. ¶ 20 (referring to CIGNA’s expert statements in support of its final denial of
Plaintiff’s claim for benefits)). The Court may therefore consider the Administrative
Record because the Amended Complaint either incorporates its contents by reference,
or relies on its terms and effects, thus rendering the documentation associated with
CIGNA’s denial of Plaintiff’s claim integral to the Amended Complaint. See DiFolco v.
MSNBC Cable L.L.C., 622 F.3d 104, 111 (2d Cir. 2010) (“In considering a motion to
dismiss for failure to state a claim pursuant to Rule 12(b)(6), a district court may
consider the facts alleged in the complaint, documents attached to the complaint as
exhibits, and documents incorporated by reference in the complaint.”); Chambers v.
Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002) (“Even where a document is not
incorporated by reference, the court may nevertheless consider it where the complaint
‘relies heavily upon its terms and effect,’ which renders the document ‘integral’ to the
complaint.” (citation omitted)); see, e.g., Tagged, Inc. v. Scottsdale Ins. Co., No. 11 Civ.
127 (JFM), 2011 WL 2748682, at *1 n.1 (S.D.N.Y. May 27, 2011) (An “insurance policy
falls within the classic category of documents that may be considered although not
attached to the complaint” where “it is a contract that gives rise to legal obligations on
which [plaintiff’s] claims are based.”); PB Americas Inc. v. Cont’l Cas. Co., 690 F. Supp.
2d 242, 253-54 (S.D.N.Y. 2010) (holding that insurance policy was integral to complaint
where plaintiff alleged defendants breached the policy).
2
apartment complex in which the family lived; at that time, Plaintiff was in the
apartment with their younger child. (Id. at ¶ 6). As Plaintiff was feeding the
younger child, the older child returned to the apartment and told Plaintiff that
Mr. Saini was nonresponsive. (Id. at ¶ 7). Upon arriving at the scene, Plaintiff
found her husband dead, face down in the pool. (See id. at ¶ 9). A death
certificate filed on April 21, 2015, cited the cause of death as “freshwater
drowning” and the manner of death as an “accident.” (Admin. R. 206).
An autopsy report by the Hennepin County Medical Examiner’s Office
also identified the cause of death as an accidental drowning. (Admin R. 54).
The autopsy report diagnosed “[p]ulmonary congestion and edema … with
foamy fluid in airways,” and it noted further that a cardiovascular pathology
report discovered “[a]ctive lymphocytic myocarditis of the cardiac conduction
system[.]” (Id. at 55). The cardiovascular pathology report also diagnosed
“[a]ctive lymphocytic myocarditis within atrioventricular node and penetrating
His bundle.” (Id. at 61). A toxicology report for Mr. Saini tested negative for
any substances. (Id. at 55).
2.
CIGNA’s Review and Denial of Plaintiff’s Claim for Benefits
On May 5, 2015, Plaintiff submitted a claim to CIGNA for benefits under
Mr. Saini’s group accident policy, which CIGNA had issued to his employer,
Tata Consulting Services Limited. (See Admin R. 1, 13, 35). In the process of
investigating the claim, CIGNA solicited the opinion of Dr. R. Norton Hall as to
whether “Mr. Saini suffered a medical event prior to his drowning[.]” (Id. at
103). After reviewing the available medical evidence, Dr. Hall explained that
3
the autopsy report revealed “acute myocarditis, an inflammatory condition of
the heart with lymphocytic invasion of the conduction system of the heart at
the atrioventricular node and Bundle of His[.]” (Id. at 104). This condition
“interrupt[s] the nerve impulses that trigger the ventricles to contract and the
heart to beat, thus causing a sudden electrical cardiac death.” (Id.). Dr. Hall
thus concluded that “Mr. Saini suffered an acute medical event that resulted in
a sudden cardiac death prior to being found face down in the water.” (Id.). 2
On August 6, 2015, CIGNA issued its determination on Plaintiff’s claim
for benefits, in which it explained that she was not entitled to benefits under
Mr. Saini’s insurance policy. (See Admin. R. 35). The decision relied on an
exclusion from coverage in the policy providing as follows:
[B]enefits will not be paid for any Covered Injury or
Covered Loss which, directly or indirectly, in whole or
in part, is caused by or results from any of the following
unless coverage is specifically provided for by name in
the Description of Benefits Section:
… Sickness, disease, bodily or mental infirmity,
bacterial or viral infection or medical or surgical
treatment thereof, except for any bacterial infection
resulting from an accidental external cut or wound or
accidental ingestion of contaminated food.
(Id.). In addition, the policy defined a “Covered Accident as ‘a sudden,
unforeseeable, external event that … is not contributed to by disease, Sickness,
mental or bodily infirmity.” (Id. at 37 (ellipsis in original)). Thus, relying on the
2
Dr. Hall also explained that the medical examiner who signed Mr. Saini’s death
certificate did so before Mr. Saini’s heart had been examined, and therefore the medical
examiner “did not have the benefit of the investigation and findings” of the
cardiovascular pathology report. (Admin. R. 104).
4
discovery of Mr. Saini’s heart condition, CIGNA determined that his “drowning
and death were precipitated by an internal, medical event” that “does not meet
the definition of a Covered Accident as defined by [the] policy,” and “because
his drowning was caused by a sudden cardiac event, his death is specifically
excluded by the terms of [the] policy[.]” (Id.).
On October 26, 2015, Plaintiff appealed CIGNA’s initial determination.
(Admin. R. 31). In processing the appeal, CIGNA solicited a review of the case
by Dr. J. Scott Denton, a forensic pathologist. (See id. at 21; Def. Br. 7). Dr.
Denton opined “that the most likely cause of death for Mr. Saini is best
certified as drowning due to lymphocytic myocarditis of the cardiac conduction
system.” (Admin. R. 21). Based on this opinion, on February 2, 2016, CIGNA
issued its final decision denying Plaintiff benefits. (Id. at 13).
B.
Procedural Background
Plaintiff filed the initial complaint in this action on March 16, 2017
(Dkt. #2), and she amended her complaint on April 13, 2017 (Dkt. #11). The
Amended Complaint includes the following causes of action:
i.
Declaratory relief “pursuant to [Section] 501(a)(1)(B) of
the ERISA[,] 29 U.S.C.[] § 1132(a)(1)(B),” in the form of
an order “declaring that the action of [CIGNA] in denying
[P]laintiff’s … claim is illegal and contrary to law and
that [P]laintiff is entitled to recover her lawful benefits
under the Plan, along with attorney fees, costs and
expenses and pre[-] and post-judgment interest.”
ii.
“Recovery of benefits under the Plan” pursuant to
[Section] 501(a)(1)(B) of the ERISA[,] 29 U.S.C.[]
§ 1132(a)(1)(B),” in the form of an order “directing
[CIGNA] to pay the benefits that are due to [P]laintiff
under the Plan, that are available to [P]laintiff[.]”
5
iii.
“‘Other equitable relief,’ pursuant to [Section] 501(a)(3)
of ERISA[,] 29 U.S.C.[] § 1132(a)(3) for all her other
damages, including compensatory damages[.]” 3
iv.
Damages under New York law for “‘bad faith and unfair
claims settlement practice and procedures and unfair
trade practices’ in violation of [Section] 2601 of the New
York State Insurance Law and for ‘deceptive business
practices,’ in violation of [Section] 349 of the [GBL.]”
(Am. Compl. ¶¶ 23-34 (capitalization removed)).
On October 26, 2017, CIGNA moved to dismiss the Plaintiff’s state-law
claims. (Dkt. #26-28). On November 27, 2017, Plaintiff opposed the motion
(Dkt. #30), and on December 11, 2017, CIGNA replied to Plaintiff’s opposition
(Dkt. #31).
DISCUSSION
A.
Motions to Dismiss
When considering a motion to dismiss under Rule 12(b)(6), a court
should “draw all reasonable inferences in [the plaintiff’s] favor, assume all
well-pleaded factual allegations to be true, and determine whether they
plausibly give rise to an entitlement to relief.” Faber v. Metro. Life Ins. Co., 648
F.3d 98, 104 (2d Cir. 2011) (internal quotation marks omitted) (quoting Selevan
v. N.Y. Thruway Auth., 584 F.3d 82, 88 (2d Cir. 2009)). Thus, “[t]o survive a
3
The first, second, and third causes of action refer to Section 501(a)(3) of ERISA and 29
U.S.C. § 1132, the latter of which is not a codification of Section 501. Although these
claims are not at issue here, the Court notes that if Plaintiff sources these claims in
Section 501 of ERISA, that citation is likely erroneous. Section 501 of ERISA, codified
at 29 U.S.C. § 1131, specifies “criminal penalties” for willful ERISA violations, and it
does not include subsections. Instead, the Court intuits that Plaintiff intended to refer
to Section 502 of ERISA, codified at 29 U.S.C. § 1132, which constitutes the statute’s
civil enforcement scheme.
6
motion to dismiss, a complaint must contain sufficient factual matter, accepted
as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007)).
“While Twombly does not require heightened fact pleading of specifics, it
does require enough facts to ‘nudge [a plaintiff’s] claims across the line from
conceivable to plausible.’” In re Elevator Antitrust Litig., 502 F.3d 47, 50 (2d
Cir. 2007) (per curiam) (quoting Twombly, 550 U.S. at 570). “Where a
complaint pleads facts that are ‘merely consistent with’ a defendant’s liability,
it ‘stops short of the line between possibility and plausibility of entitlement to
relief.’” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 557). Moreover,
“the tenet that a court must accept as true all of the allegations contained in a
complaint is inapplicable to legal conclusions. Threadbare recitals of the
elements of a cause of action, supported by mere conclusory statements, do
not suffice.” Id.
B.
The Court Dismisses Plaintiff’s State-Law Claims
1.
New York Insurance Law § 2601 Does Not Create a Private Right
of Action
Section 2601 of the New York Insurance Law prohibits all insurers
engaged in business in New York from “engag[ing] in unfair claim settlement
practices.” N.Y. Ins. Law § 2601(a). This Section is enforceable through § 109,
which authorizes the New York Superintendent of Financial Services to bring a
civil action to recover a money judgment as a penalty for any violation of the
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New York Insurance Law. Id. § 109(d); see also id. § 107(41) (defining
“Superintendent” as the Superintendent of Financial Services of New York).
The Court will not belabor why Plaintiff’s claim under § 2601 fails —
despite Plaintiff’s contestations to the contrary, New York courts have made
clear that § 2601 does not create a private right of action. See N.Y. Univ. v.
Cont’l Ins. Co., 87 N.Y.2d 308, 317-18 (1995) (“We recognized … in Rocanova …
that Insurance Law § 2601 does not give rise to a private cause of action.”
(citing Rocanova v. Equitable Life Assur. Soc’y of U.S., 83 N.Y.2d 603, 614-15
(1994) (“[T]he law of this State does not currently recognize a private cause of
action under Insurance Law § 2601.” (collecting cases))); accord Lobello v. N.Y.
Cent. Mut. Fire Ins. Co., 58 N.Y.S.3d 842, 844 (4th Dep’t 2017), appeal
withdrawn, 30 N.Y.3d 1103 (2018); Litvinov v. Hodson, 826 N.Y.S.2d 536,
536-37 (4th Dep’t 2006); Zawahir v. Berkshire Life Ins. Co., 804 N.Y.S.2d 405,
407 (2d Dep’t 2005). Plaintiff’s claim under New York Insurance law § 2601 is
therefore dismissed.
2.
ERISA Preempts Plaintiff’s GBL § 349 Claim
“By its terms, ERISA governs employee benefit plans established or
maintained by an employer or an employee organization.” Wiener v.
Unumprovident Corp., 202 F. Supp. 2d 116, 119 (S.D.N.Y. 2002) (citing 29
U.S.C. § 1002(1)-(6)). And by design, ERISA “expressly include[s] a broadly
worded preemption clause within a comprehensive statutory scheme” to
“establish pension plan regulation as exclusively a federal concern.” Smith v.
Dunham-Bush, Inc., 959 F.2d 6, 8 (2d Cir. 1992) (internal citations omitted).
8
Specifically, the statutory scheme provides that it “shall supersede any and all
State laws insofar as they … relate to any employee benefit plan” that is “not
exempt” from preemption. 29 U.S.C. § 1144(a); see Franklin H. Williams Ins. Tr.
v. Travelers Ins. Co., 50 F.3d 144, 147-48 (2d Cir. 1995). ERISA “exempts from
preemption generally applicable criminal laws and laws regulating insurance,
banking[,] or securities.” Smith, 959 F.2d at 9 n.2 (citing 29 U.S.C.
§§ 1144(b)(2)(A), (b)(4)).
This civil enforcement scheme under ERISA thus “completely preempts
any state-law cause of action that ‘duplicates, supplements, or supplants’ an
ERISA remedy.” Montefiore Med. Ctr. v. Teamsters Local 272, 642 F.3d 321,
327 (2d Cir. 2011) (quoting Aetna Health Inc. v. Davila, 542 U.S. 200, 209
(2004)). Indeed, a state-law claim that “merely amounts to an alternative
theory of recovery for conduct actionable under ERISA is preempted.”
Venturino v. First Unum Life Ins. Co., 724 F. Supp. 2d 429, 432 (S.D.N.Y. 2010)
(quoting Diduck v. Kaszycki & Sons Contractors Inc., 974 F.2d 270, 288 (2d Cir.
1992)). Whether a state-law claim is preempted thus turns on whether it is
“within the scope of [ERISA] § 502(a)(1)(B),” 29 U.S.C. § 1132(a)(1)(B), which
allows “a plan participant or beneficiary” to “bring an action ‘to recover benefits
due to him [or her] under the terms of [the] plan, to enforce his [or her] rights
under the terms of the plan, or to clarify his [or her] rights to future benefits
under the terms of the plan[.]” Montefiore Med. Ctr., 642 F.3d at 328 (last
alteration in original).
9
To determine whether a claim falls within the scope of § 502(a)(1)(B),
courts within the Second Circuit apply a two-pronged inquiry: Such a claim is
preempted if it is “brought (i) by ‘an individual [who] at some point in time,
could have brought his [or her] claim under ERISA § 502(a)(1)(B),’ and
(ii) under circumstances in which ‘there is no other independent legal duty that
is implicated by a defendant’s actions.’” Montefiore Med. Ctr., 642 F.3d at 328
(first alteration in original) (footnote call number omitted) (quoting Davila, 542
U.S. at 210). The first prong entails a two-part inquiry, under which a court
considers (i) “whether the plaintiff is the type of party that can bring a claim
pursuant to § 502(a)(1)(B),” and (ii) “whether the actual claim that the plaintiff
asserts can be construed as a colorable claim for benefits pursuant to
§ 502(a)(1)(B).” Id.
Within this framework, ERISA preempts Plaintiff’s § 349 claim. GBL
§ 349 prohibits “[d]eceptive acts or practices in the conduct of any business,
trade or commerce or in the furnishing of any service in” the state of New York.
§ 349(a). To state a claim under § 349, “a plaintiff must show: [i] the defendant
directed deceptive acts at consumers; [ii] the defendant’s acts mislead in a
material way; and [iii] an injury, as a result of the defendant’s acts.” Rodriguez
v. It’s Just Lunch, Int’l, No. 07 Civ. 9227 (SHS) (KNF), 2010 WL 685009, at *7
(S.D.N.Y. Feb. 23, 2010). Plaintiff’s § 349 claim offers no explanation as to why
CIGNA’s denial of her claim for benefits was deceptive or misleading, and
instead alleges in conclusory fashion that she is entitled to damages because of
CIGNA’s “deceptive business practices.” For this reason, Plaintiff fails to state
10
a prima facie § 349 claim. See also Abraham v. Penn Mut. Life Ins. Co., No. 98
Civ. 6439 (DC), 2000 WL 1051848, at *3 (S.D.N.Y. July 31, 2000) (finding that
a “‘private’ contract dispute as to policy coverage” does not constitute a
deceptive act or practice that is “consumer-oriented” under section 349”
(alteration in original) (quoting N.Y. Univ., 87 N.Y.2d at 321)). But even if she
stated a valid claim, it would be preempted.
First, as a beneficiary to the Plan, Plaintiff is the type of person who
could have brought her claim pursuant to § 502(a)(1)(B). See, e.g., Dillon v.
Metro. Life Ins. Co., 832 F. Supp. 2d 355, 362 (S.D.N.Y. 2011) (“Although
[plaintiff] brings his claim as a garden variety breach of contract claim, he
could have brought it as a claim for benefits under ERISA because it is
grounded in the denial of benefits pursuant to the terms of his Plan.”). Indeed,
Plaintiff’s complaint seemingly intends to state such a claim. See supra note 3.
Second, the Court may construe Plaintiff’s claim as a “colorable claim” for
benefits. Though the pleadings are not a model of clarity, and though the
claim under § 349 is framed as one based on “deceptive business practices”
(see Am. Compl. ¶¶ 32-33), the Amended Complaint seeks review of CIGNA’s
denial of Plaintiff’s claim for benefits, and Plaintiff would only be entitled to
damages if the Court found that CIGNA had improperly denied her claim. See
Neuroaxis Neurosurgical Assocs., PC v. Cigna Healthcare of N.Y., Inc., No. 11
Civ. 8517 (BSJ) (AJP), 2012 WL 4840807, at *3-4 (S.D.N.Y. Oct. 4, 2012)
(differentiating between claims for the “right to payment” and “amount of
payment,” only the former of which “are considered actual claims for benefits
11
and can be preempted” (citing Montefiore, 642 F.3d at 330-32)); accord
McCulloch Orthopedic Surgical Servs., PLLC v. United Healthcare Ins. Co. of N.Y.,
No. 14 Civ. 6989 (JPO), 2015 WL 3604249, at *5 (S.D.N.Y. June 8, 2015).
Third and finally, Plaintiff does not indicate that CIGNA was subject to
any legal duty independent of those embodied in the insurance policy at issue,
either in her pleadings or her opposition to the motion to dismiss. See, e.g.,
Iannone v. Metro. Life Ins. Co., No. 14 Civ. 0341 (AKH), 2014 WL 1918238, at *5
(S.D.N.Y. May 12, 2014) (holding that ERISA preempted fraudulent
misrepresentation claim where plaintiff did “not identif[y] any independent legal
duty which require[d] [insurer] to continue to provide her with … benefits”).
Plaintiff’s ultimate success in this lawsuit depends on whether CIGNA properly
denied her claim for benefits; although she cites to non-ERISA, New York
statutes, her pleadings do not suggest any alternative theory of recovery, such
as fraud or misrepresentations on CIGNA’s part. See, e.g., Dillon, 832 F. Supp.
2d at 362 (finding no independent legal duty where contract claim “derive[d]
entirely from [insurer’s] obligations pursuant to” insurance plan, and “[a]ny
evaluation of the claim is ‘inextricably intertwined with the interpretation of
Plan coverage and benefits” (quoting Montefiore, 642 F.3d at 332)).
Thus, ERISA preempts Plaintiff’s claim under GBL § 349, and it is
therefore dismissed. 4
4
Although the Court need not reach whether Plaintiff’s claim under the New York
Insurance Law is preempted, the Court notes that “[n]umerous courts [that] have
reviewed causes of action … brought pursuant to state insurance law to collect unpaid
benefits … ha[ve] concluded — notwithstanding [ERISA’s] insurance saving clause —
12
CONCLUSION
Given the foregoing, CIGNA’s motion is GRANTED, and Plaintiff’s claims
under the New York Insurance Law § 2601 and the New York General Business
Law § 349 are DISMISSED WITH PREJUDICE. The parties are directed to
submit a proposed case management plan by May 31, 2018. The Clerk of
Court is directed to terminate the motion at docket entry 26.
SO ORDERED.
Dated:
April 24, 2018
New York, New York
__________________________________
KATHERINE POLK FAILLA
United States District Judge
that the causes of action are preempted by ERISA.” Shackelton v. Conn. Gen. Life Ins.
Co., 817 F. Supp. 277, 283 (N.D.N.Y. 1993) (collecting cases).
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