Katz v. Travelers
241 F. Supp. 3d 397
E.D.N.Y2017Background
- Dr. Michael J. Katz, a New York physician, was on Exam Works’ list of IME (independent medical examination) providers and performed IMEs for insurers including Travelers for over 20 years.
- At a 2013 trial (Bermejo), Judge Hart concluded from a video and testimony that Dr. Katz lied about the length/content of a second IME, called him a liar repeatedly on the record, and declared a mistrial; the judge threatened to publicize the record and pursue perjury proceedings.
- The Appellate Division, Second Department reversed/criticized the trial court in 2015, stating the record did not support findings of perjury and noting uncertainty whether the video captured the entire exam (Bermejo v. N.Y.C. Health & Hosp. Corp.).
- After the mistrial, Travelers allegedly directed Exam Works to place Katz on a “Do Not Use” list; Katz claims widespread dissemination of Judge Hart’s accusations led insurers and IME vendors to cancel engagements, causing > $1.5 million in losses.
- Katz sued Exam Works and Travelers in New York state court asserting tortious interference with contract, tortious interference with business advantage, prima facie tort, and breach of contract against Travelers; Travelers removed to federal court on diversity jurisdiction.
- On Rule 12(b)(6) motions, the district court dismissed all claims against Exam Works, dismissed Katz’s tort claims as time-barred (characterizing them as defamation in substance), and dismissed Katz’s tortious-interference and prima facie tort claims against Travelers; the court allowed Katz’s breach-of-contract claim against Travelers to proceed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether tort claims are really defamation and time‑barred | Katz contends defendants disseminated Judge Hart’s accusations causing business loss; claims are torts (interference/prima facie tort) | Defendants say the alleged injury is reputational and therefore the claims are essentially defamation subject to CPLR §215(4)’s one‑year limit | Court: Claims are in substance defamation (injury flows from reputation) and are time‑barred; tort counts dismissed |
| Whether tortious interference claims pleaded adequately (specific contracts/relationships) | Katz alleges insurers and IME firms terminated relationships after defendants’ actions causing damages | Defendants argue allegations are conclusory and fail to identify specific third‑party contracts or relationships | Court: Complaint fails to identify specific contracts/third parties; interference claims dismissed |
| Prima facie tort — viable claim vs. defamation and statute of limitations | Katz asserts intentional, unjustified harm causing special damages | Defendants: claim governed by one‑year statute and is essentially defamation; lacks required ‘‘disinterested malevolence’’ and special damages | Court: Prima facie tort is time‑barred, overlaps with defamation, and lacks pleaded special damages; claim dismissed |
| Breach of contract against Travelers (claim sufficiency) | Katz alleges he was engaged by Travelers on six dates, earned $93,000 unpaid; claims breach | Travelers argues no valid contract alleged | Court: Allegations (engagements, fees unpaid) are sufficient at pleading stage to state plausible breach; claim survives dismissal |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (establishes plausibility standard for Rule 12(b)(6))
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard; courts need not accept legal conclusions)
- Finley v. Giacobbe, 79 F.3d 1285 (2d Cir.) (elements of tortious interference with a contract)
- Bermejo v. N.Y.C. Health & Hosp. Corp., 135 A.D.3d 116 (N.Y. App. Div.) (appellate decision rejecting perjury finding and discussing the video evidence)
- Restis v. Am. Coal. Against Nuclear Iran, Inc., 53 F. Supp. 3d 705 (S.D.N.Y.) (elements and high disfavor of prima facie tort)