RAMOS, District Judge.
Before the Court is the Report and Recommendation ("R & R") dated March 6, 2014 of Magistrate Judge Lisa Margaret Smith, to whom this matter was referred for an inquest as to damages following default judgments against the Defendants. This action involves numerous plaintiffs, numerous defendants, and assorted causes of action under federal and state law. Accordingly, in the R & R, Judge Smith recommends damages of varying amounts for and against the different parties. For the reasons stated herein, the ,Court ADOPTS the R & R and directs the entry of judgment as recommended.
Plaintiffs Jeffrey C. Seifts, Ellen Manfredo, Charles Hargreaves, Selma Denmark, Peter Audet, Carolyn DeMichelle, Susan E. Hoyt, Maryann Pulvirenti, Joseph French, Linford Snyder, Diane Berman, John Bastone, and John Gerson, individually and on behalf of the participants of the Fleetcare CU 1000P Medical Program, John and Jane Does 1-300, Jeffrey C. Seifts & Co., Inc., and Consumer Advocates Group, Ltd. ("CAG") (collectively, "Plaintiffs"), commenced this action on November 3, 2005 against Consumer Health Solutions LLC d/b/a Palmetto Administrators ("CHS"), Fleetcare Group, LLC, Fleet Care Corporation, Bart Posey, TIG Premier Insurance Company, William M. Worthy, II, Angela Posey, Obed Kirkpatrick, Jollene Priester, Jack Henson Hawkins, and New Source Benefits, LLC, individually and jointly and severally (collectively,
Initially assigned to the Honorable Stephen C. Robinson, the case was transferred to the Honorable Richard J. Holwell on November 12, 2010, Doc. 62, to the Honorable J. Paul Oetken on October 20, 2011, Doc. 83, and to the undersigned on July 22, 2013. Doc. 148. The case was referred to the Honorable Lisa Margaret Smith, United States Magistrate Judge, on November 14, 2011. Doc. 84.
On May 6, 2011, Judge Holwell entered a default judgment in favor of Plaintiffs Ellen Manfredo, Charles Hargreaves, Selma Denmark, Peter Audet, Carolyn DeMichelle, Susan E. Hoyt, Maryann Pulvirenti, Joseph French, Linford Snyder, Diane Berman, John Bastone, and John Gerson (the "Individual Plaintiffs") and against Defendants CHS, Fleetcare Group, LLC, Fleet Care Corporation, Bart Posey, William M. Worthy, II, Angela Posey, Obed Kirkpatrick, Jollene Priester, Jack Henson Hawkins, and New Source Benefits, LLC. Doc. 80. On March 15, 2012, Judge Oetken entered a default judgment in favor of Plaintiffs Jeffrey C. Seifts, Jeffrey C. Seifts & Co., Inc., and CAG (the "Seifts Plaintiffs") and against Defendants CHS, Fleetcare Group, LLC, Fleet Care Corporation, Bart Posey, William M. Worthy, II, Angela Posey, Obed Kirkpatrick, Jack Henson Hawkins, and New Source Benefits, LLC, jointly and severally. Doc. 102. Both Judge Holwell and Judge Oetken referred the issue of the amount of damages to which the Individual Plaintiffs and Seifts Plaintiffs may be entitled to Judge Smith for an inquest or hearing on damages. Doc. 80; Doc. 84; Doc. 102.
On March 6, 2013, Judge Smith issued her R & R, concluding that a judgment for damages should be entered as follows:
R & R 334-35. Judge Smith declined to recommend an award of attorneys' fees to the Seifts Plaintiffs but invited them to argue their claim to such fees in any objections to the R & R. The Seifts Plaintiffs filed no objections. Id. at 335. Conversely, Judge Smith concluded that the Individual Plaintiffs would be entitled to an attorneys' fees awarded as provided for in § 349 of the New York General Business Law and noted that this Court might refer the case back to her for a determination of any application by those Plaintiffs for attorneys' fees. Id. No such application has been filed as of yet. Id.
The R & R noted that objections, if any, would be due by March 24, 2014 and that failure to timely object would preclude later
A district court reviewing a magistrate judge's report and recommendation "may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge." 28 U.S.C. § 636(b)(1)(C). Parties may raise "specific," "written" objections to the report and recommendation "[w]ithin fourteen days after being served with a copy." Id.; see also Fed.R.Civ.P. 72(b)(2). A district court reviews de novo those portions of the report and recommendation to which timely and specific objections are made. 28 U.S.C. § 636(b)(1)(C); see also United States v. Male Juvenile (95-CR-1074), 121 F.3d 34, 38 (2d Cir.1997). The district court may adopt those parts of the report and recommendation to which no party has timely objected, provided no clear error is apparent from the face of the record. Lewis v. Zon, 573 F.Supp.2d 804, 811 (S.D.N.Y.2008). The district court will also review the report and recommendation for clear error where a party's objections are "merely perfunctory responses" argued in an attempt to "engage the district court in a rehashing of the same arguments set forth in the original petition." Ortiz v. Barkley, 558 F.Supp.2d 444, 451 (S.D.N.Y.2008) (citations and internal quotation marks omitted).
No party has objected to the R & R. The Court has reviewed Judge Smith's thorough R & R and finds no error, clear or otherwise. Judge Smith reached her determination on damages after a careful review of the parties' submissions. R & R 311-12. The Court therefore ADOPTS Judge Smith's recommended judgment regarding damages for the reasons stated in the R & R and REFERS back to Judge Smith future applications, if any are filed, for attorneys' fees with regard to the Individual Plaintiffs.
The parties' failure to file written objections precludes appellate review of this decision. PSG Poker, LLC v. DeRosa-Grund, No. 06 CIV. 1104(DLC), 2008 WL 3852051, at *3 (S.D.N.Y. Aug. 15, 2008) (citing United States v. Male Juvenile, 121 F.3d 34, 38 (2d Cir.1997)).
It is SO ORDERED.
LISA MARGARET SMITH, United States Magistrate Judge.
Plaintiffs Jeffrey C. Seifts, Ellen Manfredo, Charles Hargreaves, Selma Denmark, Peter Audet, Carolyn DeMichelle, Susan E. Hoyt, Maryann Pulvirenti, Joseph French, Linford Snyder, Diane Berman, John Bastone, John Gerson, individually and on behalf of the participants of the Fleetcare CU 1000P Medical Program, John and Jane Does 1-300, and Jeffrey C. Seifts and Co., Inc. and Consumer Advocates Group, Ltd. commenced this action against Defendants Consumer Health Solutions LLC d/b/a Palmetto Administrators, Fleetcare Group, LLC, Fleet Care Corporation, Bart Posey, TIG Premier Insurance Company
On May 6, 2011, the Honorable Richard J. Holwell entered a default judgment in favor of Plaintiffs Ellen Manfredo, Charles Hargreaves, Selma Denmark, Peter Audet, Carolyn DeMichelle, Susan E. Hoyt, Maryann Pulvirenti, Joseph French, Linford Snyder, Diane Berman, John Bastone, and John Gerson (the "Individual Plaintiffs") and against Defendants Consumer Health Solutions, LLC d/b/a Palmetto Administrators, Fleetcare Group, LLC, Fleet Care Corporation, Bart Posey, William M. Worthy, II, Angela Posey, Obed Kirkpatrick, Jollene Priester, Jack Henson Hawkins and New Source Benefits, LLC. Docket # 80. The issue of the amount of damages to which the Individual Plaintiffs may be entitled was referred to the undersigned for an inquest/hearing on damages. Id.; see also Docket # 84. On March 15, 2012, the Honorable J. Paul Oetken entered a default judgment in favor of Plaintiffs Jeffrey C. Seifts, Jeffrey C. Seifts & Co., Inc., and Consumers Advocates Group, Ltd. (the "Seifts Plaintiffs"), and against Defendants Consumer Health Solutions, LLC d/b/a Palmetto Administrators, Fleetcare Group, LLC, Fleet Care Corporation, Bart Posey, William M. Worthy, II, Angela Posey, Obed Kirkpatrick, Jack Henson Hawkins and New Source Benefits, LLC, jointly and severally. Docket # 102.
On March 26, 2012, the Seifts Plaintiffs and the Individual Plaintiffs filed their affidavits in support of their requested damages. Docket ## 107-115.
Upon review, the Court found that the submissions from the Seifts Plaintiffs and the Individual Plaintiffs in support of their
Docket # 147 at 5 (footnote omitted). The Individual Plaintiffs filed their supplemental submissions on September 20, 2013, Docket ## 156-62. The Seifts Plaintiffs have filed nothing in response to the Court's July 24 Order.
For the reasons that follow, 1 conclude, and respectfully recommend that Your Honor should conclude, that a judgment should be entered awarding damages as set forth below.
Individual plaintiff Jeffrey C. Seifts ("J. Seifts") is the owner of corporate plaintiffs J.C. Seifts and Co., Inc. and Consumer Advocates Group, Ltd. ("CAG"). All of the other individual plaintiffs — Ellen Manfredo, Charles Hargreaves, Selma Denmark, Peter Audet, Carolyn DeMichelle, Susan E. Hoyt, Maryann Pulvirenti, Joseph French, Linford Snyder, Diane Berman, John Bastone, and John Gerson (the "Individual Plaintiffs") — were members of CAG. Both J. Seifts and the Individual Plaintiffs enrolled in a medical insurance plan, FleetCare CU 1000P Medical Program ("FleetCare Plan"), and paid premiums, in exchange for which they expected to receive health care benefits. However, Plaintiffs were unlawfully denied benefits by the Defendants.
The history of these claims is as follows:
In the late summer or early fall of 2004, J. Seifts, on behalf of CAG, contacted Defendant FleetCare Group LLC ("Fleet-Care Group" or "FleetCare LLC") regarding the purchase of health insurance coverage for an association. J. Seifts wanted to find coverage for CAG members that would provide medical indemnity coverage and hospitalization coverage, i.e., coverage for office visits, laboratory testing services, doctors' services, hospital professional services, and related ancillary medical services, at a reasonable premium. J. Seifts had several telephone conversations as well as in-person meetings with individual defendants Bart Posey and Obed Kirkpatrick, who were acting as agents of FleetCare Group, and came to an agreement with respect to an insurance plan for CAG members. Final agreement on all material terms of the FleetCare Plan was reached on October 15, 2004. The Individual Plaintiffs, who decided to participate in the FleetCare Plan, filled out application forms and tendered premium payments. The effective start date of
During November and December, 2004, eligible claims for health care benefits were not paid or were paid in error. When the Individual Plaintiffs' medical claims were not paid, the Individual Plaintiffs received collection notices from their health care providers and were unable to obtain the medical care that they needed. Plaintiffs contacted Defendants to try to correct the situation, but claims payment problems persisted. When prompted by J. Seifts to pay outstanding medical claims, Defendant Consumer Health Solutions LLC d/b/a Palmetto Administrators, the third-party administrator for the Fleet-Care Plan, issued several checks to health care providers, but they were all returned for insufficient funds. In late spring or early summer of 2005, some Defendants began telling CAG members and health care providers seeking payment that the FleetCare Plan was self-funded, knowing that such statements were incorrect and misleading, in order to divert attention from their failure to pay claims and their conversion of premiums and to destroy the business relationships between and among J. Seifts, J.C. Seifts and Co., CAG, and the Individual Plaintiffs.
After a period of months, Plaintiffs realized that any further attempts to have Defendants pay their medical claims would be useless. Defendants were refusing to pay the claims, were ignoring the claims, and were using the premium payments for purposes other than the provision of medical benefits to FleetCare Plan participants.
On November 3, 2005, Plaintiffs commenced this action. Docket # 1. On March 10, 2006, Plaintiffs filed a First Amended Complaint. Docket # 17. The First Amended Complaint contains 14 claims asserted against all Defendants, unless otherwise noted: violation of ERISA, 29 U.S.C. §§ 406
As noted above, on May 6, 2011, a default judgment was entered in favor of the Individual Plaintiffs, Docket # 80, and on March 15, 2012, a default judgment was entered in favor of the Seifts Plaintiffs. Docket # 102.
Upon the default of a party, a court must accept as true all factual allegations in the complaint, except those relating to damages, and a plaintiff is entitled to all reasonable inferences from the evidence offered, but the court nonetheless has discretion to decide whether the facts set forth in the complaint state a valid claim. See, e.g., Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir.1981); see also, e.g., Gov't Emps. Ins. Co. v. AMD Chiropractic, P.C., No. 12-cv-4295, 2013
In determining the amount of damages to be awarded, "under FRCP 55(b)(2), `it [is] not necessary for the District Court to hold a hearing, as long as it [has] ensured that there [is] a basis for the damages specified in the default judgment.'" Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir.1997) (quoting Fustok v. ContiCommodity Servs., Inc., 873 F.2d 38, 40 (2d Cir.1989)). "On an inquest for damages following a default, plaintiff bears the burden of proof and must introduce sufficient evidence to establish the amount of damages with reasonable certainty." RGI Brands LLC v. Cognac Brisset-Aurige, S.a.r.l., No. 12 Civ. 1369, 2013 WL 1668206, at *6 (S.D.N.Y. Apr. 18, 2013) (collecting cases), adopted by, 2013 WL 4505255 (S.D.N.Y. Aug. 23, 2013).
The difficulty in this case is that there are two sets of Plaintiffs with different, and arguably conflicting, interests, as well as different interactions and/or relationships with the Defendants.
Likewise, the relationship between the Seifts Plaintiffs and the Individual Plaintiffs is unclear. Although the First Amended Complaint alleges that "Seifts was seeking an insurance solution that he could offer to CAG members," id. ¶ 50, and all of the Individual Plaintiffs were CAG members, id. ¶¶ 4-14, there are no allegations concerning the duties owed by CAG to its members. Thus, to the extent that premium binder payments and/or premium payments from the Individual Plaintiffs to
Finally, the Court's ability to parse out the well-pleaded allegations in the First Amended Complaint has been complicated by the fact that many allegations refer simply to "plaintiffs" or "defendants," leaving the Court to determine which allegations are specific to which Plaintiffs and which of the Defendants is involved in which of the specific acts of misconduct alleged.
Despite the lack of clarity, which prompted the Court to issue its July 24 Order, the Court will proceed to address the merits of the Seifts Plaintiffs' and Individual Plaintiffs' damages applications.
The Seifts Plaintiffs have not responded to the Court's July 24 Order, which directed all Plaintiffs to submit a statement as to the claims in the First Amended Complaint upon which they seek relief, including the provision of legal authority stating the elements of each such claim and an explanation of how the facts deemed admitted in the First Amended Complaint satisfy those elements. Furthermore, the July 24 Order directed all Plaintiffs to provide legal support for the amount and type of damages being sought, as well as the manner of calculating damages, including citations to case law. Because the Seifts Plaintiffs have submitted nothing, the Court is left to base its decision on their earlier submission, which consists of an affidavit from J. Seifts ("Seifts Aff."), Docket # 115.
The Seifts affidavit lists the various causes of action asserted in the First Amended Complaint (conversion, breach of fiduciary duty, negligent and fraudulent misrepresentation, breach of contract, tortious interference with business relations, unjust enrichment, and violations of ERISA and § 349 of the New York General Business Law), without explaining how the factual allegations in that pleading satisfy the elements of each of those claims or correlating the factual allegations in that pleading to the amount of damages sought to be recovered. However, in the section of his affidavit entitled, "Damages," J. Seifts asserts that "defendants converted sums that CAG forwarded to them in connection with the establishment and administration of the CAG health plan." Seifts Aff. ¶ 13. Accordingly, the Court assumes that the Seifts Plaintiffs are seeking relief as a result of unspecified defendants' conversion of the money sent to FleetCare Group, as alleged in the First Amended Complaint.
As J. Seifts explained in his affidavit, and as alleged in the First Amended Complaint, after filling out application forms and tendering binder checks and premium payments, throughout November and December, 2004, Plan participants' claims were not paid or were paid in error. First Am. Compl. ¶ 76; Seifts Aff. ¶ 5. According to J. Seifts, "defendants were either refusing to pay the claims or simply ignoring them, and moneys forwarded to them were being converted to use for purposes other than to provide medical benefits to the CAG participants." Seifts Aff. ¶ 9.
"Plaintiffs who bring conversion claims against multiple defendants are not required to specify in their complaint which defendant received, has possession of the funds, or which of them has or had the power to return the funds. They are required, however, to indicate clearly the defendants against whom relief is sought and the basis upon which the relief is sought against the particular defendants. In other words, they must show that each individual defendant played some role in the conversion." Segal v. Bitar, No. 11 Civ. 4521, 2012 WL 273609, at *9 (S.D.N.Y. Jan. 30, 2012) (internal quotation marks, alteration, and citations omitted). In this case, the allegations in the First Amended Complaint do not establish that each of the defendants played some role in the conversion of the funds sent to FleetCare Group by CAG. Thus, all Plaintiffs allege that (1) the CAG checks were made payable to FleetCare Group and were deposited into a FleetCare Group bank account, First Am. Compl. ¶ 67; (2) the premiums paid by CAG, deposited into the general operating accounts of Fleet-Care LLC
There are therefore sufficient allegations to show that corporate defendants FleetCare Group LLC, FleetCare Corporation, and Consumer Health Solutions
"It has long been established that a corporate officer who commits or participates'in a tort, even if it is in the course of his [or her] duties on behalf of the corporation, may be held individually liable." Lo-Presti, 126 F.3d at 42 (internal quotation marks and alterations omitted). With respect to Worthy, the First Amended Complaint alleges that he "is an officer and shareholder, or otherwise has an ownership interest in FleetCare Corp." First Am. Compl. ¶ 19. It is further alleged that "the assets of FleetCare LLC, including the premiums paid by Plaintiffs, were transferred or otherwise converted to FleetCare Corp. before or about late April 2005, under the direction of Worthy and Defendant Bart Posey." Id. ¶ 20. With respect to Posey, the First Amended Complaint alleges that he "owned a one-half interest in FleetCare LLP[
In sum, the Seifts Plaintiffs have succeeded in stating a claim for conversion upon which they may recover damages against Defendants FleetCare Group LLC, FleetCare Corporation, CHS, Worthy, Bart Posey, Angela Posey, and Kirkpatrick.
"A plaintiff who prevails on a conversion claim may recover the value of the property at the time and place of conversion, plus interest." Wells Fargo Bank, N.A. v. Nat'l Gasoline, Inc., No. 10-CV-1762, 2013 WL 1822288, at 1.0 (E.D.N.Y. Apr. 30, 2013) (internal quotation marks and citations omitted). The Seifts Plaintiffs have provided sufficient proof of the amounts which CAG sent to FleetCare Group in connection with the creation and
Moreover, to the extent that the Seifts Plaintiffs seek "interest at the legal rate from November 3, 2005," the date on which this action was commenced, Seifts Aff. at 6, they are not entitled to recover prejudgment interest on their conversion claim because it was not requested in either the body of the First Amended Complaint or in the ad damnum clause. Pursuant to Fed. R. Civ. P. 54(c), "[a] default judgment must not differ in kind from, or exceed in amount, what is demanded in the pleadings." Accordingly, I conclude and respectfully recommend that Your Honor should conclude, that the Seifts Plaintiffs' application for prejudgment interest should be denied.
The Seifts affidavit also states that as a result of Defendants' wrongdoing, J. Seifts and CAG "were forced to provide sums to directly pay medical claims that were being submitted from CAG plan participants" estimated to total $120,000. Seifts Aff. ¶ 14. The Seifts Plaintiffs do not explain under which legal claim they seek to recover these damages. In any event, they have been unable to provide the Court with any bank records evidencing the exact amount of these payments. "A plaintiffs statement as to the amount of damages alone does not provide the requisite reasonable certainty." RGI Brands LLC, 2013 WL 1668206, at *6 (collecting cases). Accordingly, even if the Seifts Plaintiffs (more particularly, J. Seifts and/or CAG) were entitled to recover this money pursuant to one of the claims asserted in the First Amended Complaint, the Court does not have sufficient `evidence to include such amount in its award of damages.
Accordingly, based on the evidence presented to the Court, I conclude, and respectfully recommend that Your Honor should conclude, that CAG — the only Seifts Plaintiff for which sufficient evidence of damages has been submitted-should
In addition, the Seifts affidavit states, "I am ... advised by our attorneys that ERISA and the New York General Business Law provide prevailing parties asserting claims under those statutes with the right to receive their reasonable attorneys' fees and disbursements." Seifts Aff. ¶ 12, However, as noted above, the Seifts Plaintiffs failed to submit anything to the Court in response to the July 24 Order explaining how the factual allegations in the First Amended Complaint satisfy the elements of a claim under either ERISA or the New York General Business Law or providing legal support for the recovery of damages under either statute. Thus, the Court is left to conclude that the Seifts Plaintiffs have abandoned recovery of damages based on these legal claims. To the extent that the Seifts Plaintiffs seek to recover attorneys' fees based on claims asserted under either ERISA or the New York General Business Law, they may include in any objections to this Report and Recommendation that they might file an explanation of how the factual allegations in the First Amended Complaint satisfy the elements of a claim under either ERISA or the New York General Business Law. If Your Honor determines that the Seifts Plaintiffs have satisfied their burden of establishing the liability of any of the defendants under either statute to them (as opposed to the Individual Plaintiffs), then you may refer the case back to the undersigned to decide the issue of attorneys' fees.
In their Supplemental Memorandum of Law, submitted in response to the Court's July 24 Order, the Individual Plaintiffs set forth the claims upon which they base their request for damages. Docket # 162. The Individual Plaintiffs premise their recovery of damages on their New York state law claims for conversion (second cause of action), quantum meruit/unjust enrichment (fourth and eighth causes of action), fraud (fifth cause of action), breach of contract (sixth cause of action), breach of implied contract (ninth cause of action), breach of the covenant of good faith and fair dealing (tenth cause of action), intentional infliction of emotional distress (twelfth cause of action), violation of New York Insurance Law § 3224-a ("The Prompt Pay Law") (thirteenth cause of action), and deceptive trade practices under New York General Business Law § 349 (fourteenth cause of action). See id.
"Under New York law, a breach of contract action requires proof of: (1) a contract; (2) performance of the contract by one party; (3) breach by the other party; and (4) damages." Nwagboli, 2009 WL 4797777, at *3 (internal quotation marks, citation, and footnote omitted). In the First Amended Complaint, the "plaintiffs," i.e., both the Seifts Plaintiffs and the Individual Plaintiffs, allege that "[o]n or about October 15, 2004, the defendants and plaintiffs reached agreement on all material terms and entered into a binding contractual relationship to provide to the plaintiffs health insurance services and benefits," First Am. Compl. ¶ 121, and the "plaintiffs accepted those services and tendered premium payments to the defendants." Id. ¶ 122.
More specifically, elsewhere in the First Amended Complaint, they allege that there was an "agreement of all material terms between FleetCare[
Although the factual allegations, accepted as true, state a claim by the Individual Plaintiffs for breach of contract, the allegations concerning the existence of a contract do not establish a contractual relationship
Accordingly, to the extent that damages may be assessed against Defendants in light of their default, the damages for breach of contract may only be assessed against Defendant FleetCare Group LLC.
"Under New York law, quasicontractual... relief is unavailable where [as here] an express contract covers the subject matter." Karmilowicz v. Hartford Fin. Servs. Grp., 494 Fed.Appx. 153, 157 (2d Cir.2012) (internal quotation marks and citations omitted). Likewise, under New York law, a plaintiff cannot assert claims for breach of the covenant of good faith and fair dealing and conversion predicated upon the same facts as a breach of contract. Id. at 158. Therefore, because the factual allegations underlying all of these claims are the same as those underlying the Individual Plaintiffs' claim for breach of contract, i.e., the "defendants" accepted the Individual Plaintiffs' health insurance premiums but failed to provide health insurance in return, they may not recover damages on these causes of action.
Despite the heading in their Supplemental Memorandum of Law that "Common Law Authorizes this Court to Award Plaintiffs Damages on the Fraud Fifth Cause of Action and the Breach of Contract/Implied Contract Sixth and Ninth Causes of Action," Supp. Mem. of Law at 5, the Individual Plaintiffs proceed to discuss only how they have alleged a claim for breach of contract. Id. ("Plaintiffs allege that there was an offer of health insurance coverage, acceptance of the offer via premium payment, and damages resulting from the breach in the failure to provide the insurance after the premiums were paid."). "To assert a fraud cause of action, under New York law, a plaintiff must allege: (1) the defendant made a material false representation, (2) the defendant intended to defraud the plaintiff thereby, (3) the plaintiff reasonably relied upon the representation, and (4) the plaintiff suffered damage as a result of such reliance." Nwagboli, 2009 WL 4797777, at *5 (internal quotation marks and citation omitted). In the First Amended Complaint, the Plaintiffs allege that "the defendants or their agents made misrepresentations that they knew or should have known were false to induce the plaintiffs to enter into the contract. The defendants falsely and fraudulently represented that they would provide medical coverage and claim benefits according to the Plan." First Am, Compl. ¶ 114; see also id. ¶¶ 115-18. However, "a cause of action for fraud cannot exist when the fraud claim arises out of the same facts as a breach of contract claim with the sole additional allegation that the defendant
In any event, even if the Individual Plaintiffs' fraud claim was not deemed duplicative of their breach of contract claim, the claim still fails because they do not plead fraud with the requisite particularity. "The Second Circuit has explained that, for a fraud claim `to comply with Rule 9(b), the complaint must: (1) specify the statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3) state where and when the statements were made, and (4) explain why the statements were fraudulent.'" Golden Archer Invs., LLC v. Skynet Fin. Sys., 2012 WL 123989, at *7 (S.D.N.Y. Jan. 3, 2012) (quoting Lerner v. Fleet Bank, N.A., 459 F.3d 273, 290 (2d Cir.2006) (citation and internal quotation marks omitted)). The Individual Plaintiffs nowhere plead which specific fraudulent statements were made to them, by whom, or where and when they were made.
Consequently, the Individual Plaintiffs cannot assert a claim for fraud and cannot recover damages on this claim.
To state a claim for the intentional infliction of emotional distress, a plaintiff must allege "(i) extreme and out-rageous conduct; (ii) intent to cause, or disregard of a substantial probability of causing, severe emotional distress; (iii) a causal connection between the conduct and injury; and (iv) severe emotional distress." Howell v. N.Y. Post Co., Inc., 81 N.Y.2d 115, 121, 596 N.Y.S.2d 350, 612 N.E.2d 699 (1993). The conduct must be so outrageous and extreme "as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community." Id. at 122, 596 N.Y.S.2d 350, 612 N.E.2d 699 (internal quotation marks and citations omitted). "Whether the conduct alleged may reasonably be regarded as so extreme and outrageous as to permit recovery is a matter for the court to determine in the first instance." Stuto v. Fleishman, 164 F.3d 820, 827 (2d Cir.1999) (citations omitted).
The Individual Plaintiffs contend that "the misrepresentation of the availability of health insurance in return for the payment of premiums rises to that level of outrageous conduct that is actionable under this cause of action." Supp. Mem. of Law at 7-8. Accepting the allegations in the First Amended Complaint as true, the Court does not agree that the alleged conduct is sufficiently "extreme and outrageous" to state a claim for intentional infliction of emotional distress. As explained above, at base, the Individual Plaintiffs' case is about the breach of a contract for health insurance, and an intentional breach of contract is not "extreme and outrageous" conduct. See Nwagboli, 2009 WL 4797777, at *5 ("The facts present a routine contract dispute, where one contracting party breached the agreement intentionally. Without more, this conduct cannot be deemed `truly egregious.'"). Accordingly, the Individual Plaintiffs cannot recover damages on this cause of action.
There is a private right of action under New York Insurance Law § 3224-a,
The First Amended Complaint alleges that
First Am. Compl. ¶ 86.
Although the factual allegations, accepted as true, state a claim for violation of New York's Prompt Pay' Law, the law only applies to "health care claims submitted under contracts or agreements." N.Y. Ins. Law § 3224-a. Because, as explained above, the Individual Plaintiffs are only alleged to have had a contract with Fleet-Care Group LLC, the Individual Plaintiffs can only assert a claim under the Prompt Pay Law against that Defendant. See Docket # 81 (9/30/11 Opinion & Order) at 12, 2011 WL 4542905 ("Because the Court has found that TIG did not enter into an agreement with plaintiffs, was not the underwriting insurer of the Plan, and otherwise had no contact with the plaintiffs, plaintiffs' claims that TIG violated New York Insurance Law § 3224-a and New York General Business Law § 349 must be dismissed. See N.Y. Ins. Law § 3224-a (applicable to `health care claims submitted under contracts or agreements' (emphasis added)); N.Y. Gen. Bus. Law § 349 (applicable to Id]eceptive acts or practices in the conduct of any business').").
New York General Business Law § 349 makes unlawful "[d]eceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this state," and provides for a private right of action to be brought by "any person who has been injured by reason of any violation of this section." N.Y. Gen. Bus. Law §§ 349(a), (h). To state a claim under N.Y. GBL § 349, "a plaintiff must demonstrate that (1) the defendant's deceptive acts were directed at consumers, (2) the acts are misleading in a material way, and (3) the plaintiff has been injured as a result." Maurizio v. Goldsmith, 230 F.3d 518, 521
Accordingly, the Individual Plaintiffs may recover damages on their N.Y. GBL § 349 claim. However, the allegations do not support the recovery of damages on this claim from all Defendants. Rather, the claim as alleged by the Individual Plaintiffs only supports the recovery of damages from Defendant FleetCare Group LLC since, as alleged in the First Amended Complaint, the "written documents" received by the Individual Plaintiffs, which contained the deceptive representations, "verified and substantiated" the agreement between FleetCare Group LLC and the Individual Plaintiffs. First Am. Compl. 1162.
Having determined that the Individual Plaintiffs may proceed to recover damages from Defendant FleetCare Group LLC on their claims for breach of contract and violations of New York Insurance Law § 3224-a and New York General Business Law § 349, the Court proceeds to an assessment of the adequacy of the Individual Plaintiffs' submissions in support of their claims for damages and a determination of those damages. Not all of the Individual Plaintiffs have provided a submission in support of an award of damages. Rather, counsel for the Individual Plaintiffs stated that they were "unable to contact and/or locate individual Plaintiff[s] Charles Hart greaves, Selma Denmark, Carolyn Michelle [sic], Diane Berman and John Gerson." Rivera Decl. (Docket # 107) ¶ 3. In the absence of any evidence regarding the amount of damages sought by these Individual Plaintiffs, I conclude, and respectfully recommend that Your Honor should conclude, that Plaintiffs Hargreaves, Denmark, DeMichelle, Berman, and Gerson are not entitled to any award of damages. In addition, although counsel for the Individual Plaintiffs did not include Linford Snyder in the list of plaintiffs whom they were unable to contact and/or locate, he likewise has not provided any submission to the Court regarding damages. Accordingly, I conclude, and respectfully recommend that Your Honor should conclude, that Plaintiff Linford Snyder is not entitled to any award of damages.
"Where a plaintiff seeks recovery for the same damages under different legal theories, only a single recovery is allowed." Conway v. Icahn & Co., Inc., 16 F.3d 504, 511 (2d Cir.1994) (citations omitted). Despite the different legal claims asserted, the affidavits submitted by the
Each Individual Plaintiffs affidavit in support of his or her application for damages shall be discussed in turn.
Manfredo, who at all relevant times was self-employed as a massage therapist, procured medical insurance through " CAG's insurance plan for self-employed individuals, FleetCare CU 1000P Medical Program ("FleetCare Plan"). Manfredo Aff., 8/27/13 (Docket # 158) ¶¶ 2-3.
Manfredo also seeks to recover amounts that she had to pay to her medical providers when the FleetCare Plan failed to pay her medical bills. Manfredo Aff. ¶ 6. Manfredo lists the medical providers, dates of service, and billing amounts and avers that "copies of the bills and respective proof of payment" are attached to her affidavit as Exhibit B. Id. She further declares that
The billing amounts for Westchester Pathology Associates and Quest Diagnostics, $217 and $160.75, respectively, are evidenced by collection notices seeking payment. Id. ¶ 6 & Ex. B. However, it appears that Manfredo has double-counted the Quest Diagnostics bill for $160.75 as having been incurred on both January 18, 2005, and November 28, 2005. See id. Ex. B, p. 2 (collection notice dated November 28, 2005, is for $160.75 bill charged by Quest Diagnostics on January 18, 2005). With respect to the amounts attributed to bills from Mount Kisco Medical Group ("MKMG") for the dates December 20, 2004 ($389), January 18, 2005 ($35 and $1,296), and February 15, 2005 ($330), the bills provided evidence only the 5389 charge incurred on December 20, 2004; a charge of $1,252 incurred on January 18, 2005; and the charge of $330 incurred on February 15, 2005. See id. Ex. B (1/15/08 statement from MKMG). There is nothing in the MKMG bills evidencing a separate $35 charge incurred on January 18, 2005, or the $44 differential between the $1,296 claimed by Manfredo and $1,252 on the billing statement. Thus, the MKMG bills evidence charges incurred by Manfredo totaling $1,971.
Accordingly, based on the evidence presented to the Court, I conclude, and respectfully recommend that Your Honor should conclude, that Manfredo should be awarded damages in the amount of $2,348.75, plus an additional $1,000, see footnote 19, supra, or a total of $3,348.75, from Defendant FleetCare Group LLC.
Audet, who at all relevant times was self-employed in sales and marketing, procured medical insurance through the FleetCare Plan offered by CAG. Audet Aff., 8/14/13 (Docket # 157) ¶¶ 2-3.
Audet also seeks to recover amounts that he had to pay to his medical providers when the FleetCare Plan failed to pay his medical bills. Id. ¶ 7. Audet lists the medical providers, dates of service, and billing amounts and states that "copies of the bills
Accordingly, based on the evidence presented to the Court, I conclude, and respectfully recommend that Your Honor should conclude, that Audet should be awarded damages in the amount of $2,794.28, plus an additional $1,000, see footnote 19, supra, or a total of $3,794.28, from Defendant FleetCare Group LLC.
Hoyt, who at all relevant times was self-employed as a real estate broker, procured medical insurance through the FleetCare Plan offered by CAG. Hoyt Aff. (8/13/13, Docket # 161) ¶¶ 2-3.
Hoyt also seeks to recover amounts that she had to pay to her medical providers when the FleetCare Plan failed to provide her with healthcare coverage. Id. ¶¶ 5-6. Hoyt lists checks, including the dates of the checks and the check numbers, that she paid to medical providers for office visits, as well as to CAG for premiums, and provides a copy of bank statements "showing proof of payment," although the "statements provided do not reflect an actual copy of the check or to whom the check is made payable to [sic]." Id. ¶ 5 & Ex. A. She avers that these amounts "were actually submitted to the Defendants under the terms of the Fleetcare health insurance plan paid through CAG to Fleetcare," and they "demonstrate the medical expenses actually incurred during the time I was an insured of the Fleetcare plan provided by the Defendants and the medical expenses above were in fact paid by me on or about the above dates." Id. ¶ 7. The bank statements, for the most part, reflect the month and day (but not the year) and the numbers of the checks, as well as their dollar amounts, as listed in Hoyt's affidavit. Id.
However, to the extent that the checks were for payment of premiums to CAG, there is no basis for Hoyt to recover these monies from Defendant FleetCare Group LLC given the absence of proof that CAG forwarded Hoyt's premium payments to FleetCare Group. Furthermore, to the extent that Hoyt seeks to recover for medical bills paid on September 26, 2004 ($170 paid to Fishkill OBGYN) and October 18 (or October 15), 2004 ($116 paid to Mid Hudson Medical Group), there is no basis for the Court to conclude that Hoyt was covered by the FleetCare Plan as early as September, 2004. Although Hoyt states that she joined the Plan in September, 2004, the First Amended Complaint alleges that "Minal agreement was reached on all material terms of the Plan no later than October 15, 2004," First Am. Compl. ¶ 61, and then subsequently refers to "the binding nature of the agreement reached on October 15, 2004," id. ¶ 64, but then alleges that "Rifle effective start date for the Plan was November 1, 2004." Id. ¶ 67. Thus, there is no basis for the recovery of medical expenses incurred prior to November 1, 2004.
Accordingly, based on the evidence presented to the Court, I conclude, and respectfully recommend that Your Honor should conclude, that Hoyt should be awarded damages in the amount of $295, plus an additional $885, see footnote 19, supra, or a total of $1,180, from Defendant FleetCare Group LLC.
Pulvirenti, who at all relevant times was self-employed as a real estate broker, procured medical insurance through the FleetCare Plan offered by CAG. Pulvirenti Aff. (8/20/13, Docket # 159) ¶¶ 2-3.
Pulvirenti also seeks to recover amounts that she had to pay to her medical providers when the FleetCare Plan failed to pay her medical bills. Id. ¶ 9. Pulvirenti lists the medical providers, dates of service, and billing amounts and states that "copies of the bills and respective proofs of payment" are attached to her affidavit as Exhibit C. Id. She further declares that these amounts "were actually submitted to the Defendants under the terms of the Fleetcare health insurance plan paid through CAG to Fleetcare," and they "demonstrate the medical expenses actually incurred during the time I was an insured of the Fleetcare plan provided by the Defendants and the medical expenses above were in fact paid by me." Id. ¶ 11. However, the first item listed in Pulvirenti's affidavit is a $500 medical bill from Vassar Brothers Medical Group covering services provided on August 10, 2004. Id. Because, as explained above, the First Amended Complaint alleges that the effective start date for the FleetCare Plan was November 1, 2004, First Am. Compl. ¶ 67, there is no basis for the Court to award damages for medical expenses incurred prior to that date. The other expenses incurred in connection with treatment by Vassar Brothers Medical Group, as evidenced by billing statements in the amounts of $1,240, $600, and $1,302.74, do fall within the period in which Pulvirenti was covered by the Fleet-Care Plan and may be included in the award of damages recommended herein.
The billing amounts for Dr. Kristina Otero, Dr. Robert Dianni, and Dr. Ruben Delgado are evidenced by Health Insurance Claims Forms which appear to have been submitted to CAG. Id. ¶ 9 & Ex. C.
Pulvirenti also provides copies of checks to evidence payment of $30 and $250 to Orange Pathology, and $125 to American Partners in Anesthesia. Id.
Accordingly, based on the evidence presented to the Court, I conclude, and respectfully recommend that Your Honor should conclude, that Pulvirenti should be awarded damages in the amount of $4,886.09, plus an additional $1,000, see footnote 19, supra, or a total of $5,886,09, from Defendant FleetCare Group LLC.
French, who at all relevant times was self-employed as the owner of an entertainment business, procured medical insurance through the FleetCare Plan offered by CAG. French Aff. (3/22/12, Docket # 110) ¶¶ 2-3. French joined the FleetCare Plan in late 2004, and states that to the best of his recollection, he paid $250 per month in premiums for himself and his late wife. Id. ¶ 4. French claims that he paid the premiums directly to CAG for the months of November, 2004, through December, 2005, for a total of $3,500 in payments. Id. However, French states that he is "unable to locate proof of these payments." Id. n. 1. In any event, to the extent that the premiums were paid, in the first instance, to CAG, there is no basis to recover these monies from Defendant FleetCare Group LLC given the absence of proof that CAG forwarded French's premium payments to FleetCare Group.
French also seeks to recover amounts that he had to pay to his medical providers when the FleetCare Plan failed to pay his medical bills. French Aff. ¶ 6. French lists the "providers and their billing amounts which were incurred and paid during the time my family was `insured' by Fleetcare," and he states that attached to his affidavit are "copies of the bills which indicate when they were paid." Id. ¶ 6 & Ex. A.
Accordingly, based on the evidence presented to the Court, I conclude, and respectfully recommend that Your Honor should conclude, that French should be awarded damages in the amount of $5,975, plus an additional $1,000, see footnote 19, supra, or a total of $6,975, from Defendant FleetCare Group LLC.
Bastone, who at all relevant times was self-employed as a salesperson, procured medical insurance through the FleetCare Plan offered by CAG. Bastone Aff. (3/21/12, Docket # 109) ¶¶ 2-3. Bastone signed up for a family plan in late 2004, and states that he initially paid $916 to join the FleetCare Plan and paid $719 per month in premiums. Id. ¶ 4. Bastone paid the premiums directly to CAG for the months of December, 2004, through September, 2005, for a total of $7,387 in payments. Id. Bastone attaches copies of checks that evidence his payment of premiums to CAG. Id. Ex. A. Review of these checks shows that the initial payment in December, 2004, was for $961, that the subsequent monthly payments (except for the months of May, June, and July, 2005)
Bastone also seeks to recover amounts that he had to pay to his medical providers when the FleetCare Plan failed to pay his medical bills. Id. ¶ 5. Bastone lists the medical providers, dates of service, and billing amounts and states that he has provided "copies of the bills and respective proofs of payment" for the itemized amounts set forth in his affidavit, id. ¶ 5 & Ex. B, but notes that he only "provided copies of all the bills/proof of payment in [his] possession." Id. ¶ 5 n. 1.
Some of the items listed in Bastone's affidavit — medical bills from Bone & Joint Associates for $804.96, $763.20, and $5,150.80, and from Quest Diagnostics for $80 — are bills covering services provided in November, 2004. Id. ¶ 5 & Ex. B.
A bill from Quest Diagnostics for $70 is for medical services provided on November 15, 2005. Id. Ex. B. Because Bastone does not provide any evidence that he was covered by the FleetCare Plan after September or October, 2005 (assuming that the above-noted check from October, 2005, for payment of $768 to CAG extended insurance coverage through the end of that month), the Court will not consider this dollar amount as part of any recommended award of damages.
Finally, Bastone provides copies of checks reflecting payments that he made to his medical providers. A number of these checks date from the period during which Bastone was covered by the FleetCare Plan — a March 7, 2005,
Accordingly, based on the evidence presented to the Court, 1 conclude, and respectfully recommend that Your Honor should conclude, that Bastone should be awarded damages in the amount of $9,583.34, plus an additional $1,000, see footnote 19, supra, or a total of $10,583.34, from Defendant FleetCare Group LLC.
It is regrettable that despite the lengthy pendency of this litigation, the Court is unable to recommend a more significant award of damages, particularly to the Individual Plaintiffs. However, the Court is constrained by the evidence that has been submitted for its consideration.
Based on the foregoing, I conclude, and respectfully recommend that Your Honor should conclude, that a judgment should be entered in this action as follows:
Based on the failure of the Seifts Plaintiffs to comply with the Court's July 24 Order, the Court declines to recommend an award of attorneys' fees to the Seifts Plaintiffs at the present time. However, the Seifts Plaintiffs may include in any objections to this Report and Recommendation that they might file an explanation of how the factual allegations in the First Amended Complaint satisfy the elements of a claim under either ERISA or the New York General Business Law, such that they might seek an award of attorneys' fees. If Your Honor determines that the Seifts Plaintiffs have satisfied their burden of establishing the liability of any of the Defendants to them under either statute, then you may, refer the case back to the undersigned to decide the issue of attorneys' fees.
However, given that the Individual Plaintiffs have sufficiently pled a claim under New York General Business Law § 349 against Defendant FleetCare Group LLC, I conclude, and respectfully recommend that Your Honor should conclude, that the Individual Plaintiffs are entitled to an award of attorneys' fees as provided for in that statute. See N.Y. GBL § 349(h). Counsel for the Individual Plaintiffs has not yet submitted an application for attorneys' fees. Accordingly, if Your Honor agrees with this recommendation, then you may refer the case back to the undersigned to decide that application.
Pursuant to 28 U.S.C. § 636(b)(1), as amended, and Fed.R.Civ.P. 72(b), the parties shall have fourteen (14) days, plus an additional three (3) days, pursuant to Fed. R.Civ.P. 6(d), or a total of seventeen (17) days, see Fed.R.Civ.P. 6(a), from the date hereof, to file written objections to this Report and Recommendation. Such objections, if any, shall be filed with the Clerk of the Court with extra copies delivered to the chambers of The Honorable Edgardo Ramos, United States District Judge, at the United States Courthouse, 40 Foley Square, New York, New York 10007, and to the chambers of the undersigned at the United States Courthouse, 300 Quarropas Street, White Plains, New York 10601.
Failure to file timely objections to this Report and Recommendation will preclude later appellate review of any order of judgment that will be entered.
Requests for extensions of time to file objections must be made to Judge Ramos and should not be made to the undersigned.
Filed March 6, 2014.
First Am. Compl. ¶ 67.
