866 F. Supp. 2d 137
N.D.N.Y.2012Background
- Haag (ERISA participant) and Dr. Koumanis sue MVP for seven claims arising from alleged underpayment of Haag’s breast reconstruction benefits.
- Case was removed to federal court and MVP moved to dismiss; plaintiffs sought to amend the complaint under Rule 15.
- Haag assigned her right to recover benefits to Koumanis, who seeks to pursue benefits as the proper plaintiff.
- SPD designates The College of Saint Rose as plan administrator; MVP acts as claims and appeals administrator.
- Hearing held; court considers whether MVP is proper defendant, exhaustion of remedies, and merits under ERISA and WHCRA.
- Court grants cross-motion to amend, denies some claims, dismisses Haag's claims, and identifies two surviving ERISA claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Haag lacks standing due to assignment to Koumanis | Koumanis stands in Haag’s shoes as assignee. | Haag remains proper plaintiff; assignment not valid reasoning. | Koumanis replaces Haag; Haag dismissed. |
| Whether MVP is a proper defendant under ERISA | MVP controls claims process; should be liable as plan administrator. | Employer may not be liable if not the actioning administrator. | MVP deemed appropriate defendant at this stage. |
| Whether plaintiffs exhausted administrative remedies | MVP failed to follow SPD notice procedures; exhaustion should be excused. | Exhaustion required regardless; procedures followed or not. | Plaintiffs deemed to have exhausted due to MVP’s failure to follow procedures. |
| Whether plaintiffs state a claim under ERISA § 503 (notice) and § 502(a)(1)(B) (benefits) | Defendant failed proper notice and underpaid benefits despite preauthorization. | Paid benefits; questions of sufficiency should await discovery. | Two claims plausibly stated and survive dismissal. |
| WHCRA claim viability | WHCRA notice requirement not satisfied by MVP. | WHCRA not providing private action, or not properly implicated here. | WHCRA claim dismissed as lacks viability at this stage. |
Key Cases Cited
- Krauss v. Oxford Health Plans, Inc., 517 F.3d 614 (2d Cir. 2008) (remand and full review under ERISA not always required)
- Crocco v. Xerox Corp., 137 F.3d 105 (2d Cir. 1998) (plan administrator determination governs ERISA liability)
- I.V. Servs. of Am., Inc. v. Trs. of Am. Consulting Eng’rs Council Ins. Trust Fund, 136 F.3d 114 (2d Cir. 1998) (assignment in ERISA standing; replacement of beneficiary)
- Eastman Kodak Co. v. STWB, Inc., 452 F.3d 215 (2d Cir. 2006) (exhaustion and plan procedure requirements under ERISA)
- Aetna Health Inc. v. Davila, 542 U.S. 200 (U.S. 2004) (ERISA preemption framework; preemption of state claims)