Metz v. US LIFE INS. CO. IN CITY OF NEW YORK
662 F.3d 600
2d Cir.2011Background
- Metz holds a $25,000 deductible catastrophic care policy with U.S. Life; coverage starts after incurring $25,000 in reasonable and customary charges.
- Dispute centers on whether Metz incurred charges when physicians agreed with Medicare to forgo amounts before treatment.
- In 2007 Metz filed a claim for benefits after believing she incurred the deductible; U.S. Life denied the claim.
- The matter was removed to federal court and transferred to the Southern District of New York.
- The district court held Metz could not incur charges she was not liable for due to pre-agreed Medicare amounts, dismissing the claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| What does incurred mean under New York law? | Metz | U.S. Life | Incurrence requires actual legal liability for charges at treatment time. |
| Can Metz incur charges if doctors pre-agree to forgo amounts with Medicare? | Metz | U.S. Life | No; you cannot incur a charge for amounts you are not liable to pay. |
| Did the district court abuse its discretion by dismissing with prejudice without leave to amend? | Metz | U.S. Life | No abuse of discretion; amendment not warranted based on the record. |
Key Cases Cited
- Rubin v. Empire Mut. Ins. Co., 25 N.Y.2d 426 (N.Y. 1969) (incurred when liable to pay; liability may exist even if not ultimately paid)
- Green v. Mattingly, 585 F.3d 97 (2d Cir. 2009) (leave to amend standard on denial of motion to amend)
- Pacific Inv. Mgmt. Co. v. Mayer Brown LLP, 603 F.3d 144 (2d Cir. 2010) (abuse of discretion standard for leave to amend)
- Teamsters Local 445 Freight Div. Pension Fund v. Dynex Capital Inc., 531 F.3d 190 (2d Cir. 2008) (pleading standards; plausible claim requirement)
- ECA & Local 134 IBEW Joint Pension Trust of Chicago v. JP Morgan Chase Co., 553 F.3d 187 (2d Cir. 2009) (pleading standards for complaint sufficiency)