Chau v. Hartford Life Insurance

167 F. Supp. 3d 564, 2016 U.S. Dist. LEXIS 25135, 2016 WL 844831
District Court, S.D. New York·Decided March 1, 2016·No. 1:14-cv-8484-GHW·Published·Cited by 24 cases

Opinion

MEMORANDUM OPINION AND ORDER

GREGORY H. WOODS, District Judge

I. INTRODUCTION

Dr. Chau collected long term disability benefits for a number of years under a benefit plan administered by Hartford Life Insurance Company (“Hartford”). After an anonymous tipster told Hartford that Dr. Chau was faking her disability and committing insurance fraud, Hartford conducted an inquiry, and ultimately terminated Dr. Chau’s benefits. Dr. Chau brought this action against Hartford under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq., seeking restoration of her benefits. She also asserted a variety of state law claims against Hartford and the other defendants, including tortious interference with contract, negligence, and defamation. Because all of Dr. Chau’s state law claims relate to an ERISA plan, the Court finds that they are expressly preempted by ERISA and must be dismissed.

II. BACKGROUND1

Dr. Elizabeth Boey Chau worked as a primary care physician for West Carver Medical Associates from 1995 until April 2005. First Amended Complaint, Dkt. No. 26, ¶ 12. Dr. Chau’s employer subscribed to a long term employee benefits plan (the “Plan”), issued and administered by Hartford. Id. ¶ 14. Dr. Chau was a beneficiary of that Plan. Id. ¶¶ 14, 16. The parties agree that the Plan was covered by ERISA.

Unfortunately, in January 2005 Dr. Chau was diagnosed with a serious autoimmune disease. Id. ¶¶ 17-26, 28. The symptoms of her disease are severe. Id. Among other things, Dr. Chau has experienced several bouts with herpes zoster, a condition that causes Dr. Chau acute pain. Id. ¶¶ 21-24. The drug therapy prescribed to treat her various conditions put her at greater risk of contracting infectious diseases. Id. ¶ 26.

As a result of her serious illness, Dr. Chau became disabled within the meaning of her long term disability plan. Id. ¶ 28. Dr. Chau made a claim for disability benefits under the Plan. Id. ¶ 29. In connection with her claim, Dr. Chau provided Hartford with proof that her illness rendered her incapable of performing her work as a primary care physician. Id. ¶¶ 29, 30. Har-ford initially accepted Dr. Chau’s claim of disability, and began to pay her disability benefits in January .2005. Id. ¶¶ 32, 33. Dr. Chau received disability benefits from Hartford without issue for a number of years.

In July 2011, however, an “anonymous tipster” — named as defendant Jane Doe in this suit-called Hartford with scurrilous information about Dr. Chau. Id. ¶¶ 9, 70. Jane Doe told Hartford that “[s]he represents a group of concerned community members [and] they wanted to report what they felt was a serious insurance fraud ... had contacted [Hartford] to report this previously ... the claimant [Dr. Chau] is informing people that she is receiving benefits from [Hartford] ... but appears to be fully functional in going to the gym, spin classes, [and] travelling .... ” Id. ¶ 70. With this, Jane Doe accused Dr. Chau of [567] faking her disability, and committing insurance fraud. Id.

Hartford did not sit on Jane Doe’s accusations. Instead, it appears from the complaint that Hartford began an investigation of the tipster’s claims that Dr. Chau was faking her disability and committing insurance fraud. Hartford described the tip to a number of people and institutions involved in evaluating Dr. Chau’s claimed benefits, repeating the substance of the tip — that Dr. Chau was committing insurance fraud — several times over the course of the succeeding years. Id. ¶¶ 71-74. Hartford passed along that information to several doctors, all now defendants in this action: Dr. Howard Futerman, Dr. Evelyn Balogun, Dr. David Hoenig, and Dr. Dayton Dennis Payne.2 Id. Hartford also passed along the substance of the tip to two other defendants in this case: Reliable Review Services, Inc. (“Reliable”), and Ex-amWorks Group, Inc. (“ExamWorks”). Id. In addition, Hartford informed two other companies that perform risk assessment and analytics for insurance companies— Insurance Services, Office Inc. and Verisk Analytics, Inc. Id. Dr. Chau claims that all of Hartford’s communications regarding the substance of the anonymous tip were made maliciously, with full knowledge of falsity of the tip.

The complaint does not describe with specificity what happened between the date of the tip and March 27, 2013. We know that Hartford undertook a review of Dr. Chau’s claims, which the complaint describes without substantial factual detail as arbitrary, and contaminated by Hartford’s conflicting financial self-interest. Id. ¶¶ 38, 48-50, 54-66. At some point during that process, Dr. Futerman conducted a twenty minute examination of Dr. Chau, which she describes as “perfunctory” and “superficial.” Id. ¶ 64(g). More facts about what happened between the date of the tip and March 2013, the complaint does not care to share.

But on March 27, 2013, Hartford terminated Dr. Chau’s benefits under the Plan. Id. ¶ 38. Dr. Chau appealed Hartford’s decision to terminate her benefits on November 14, 2013. Id. ¶ 42. Hartford denied the appeal on January 10, 2014. Id. ¶ 44. As a result of Hartford’s decision to terminate Dr. Chau’s benefits, she has not received her expected monthly benefits payments since March of 2013. Id. ¶ 51.

The complaint contains a series of claims against the various defendants. Count I is a claim against Hartford under ERISA. Id. ¶¶ 37-68. In her ERISA claim, Dr. Chau asserts that Hartford’s termination of her disability benefits was arbitrary and capricious. Dr. Chau contends that Hartford failed to properly evaluate her medical condition, and that the evidence collected by Hartford in its evaluation of her claim does not support Hartford’s conclusion that Dr. Chau can perform the essen[568] tial duties of her former job as a primary-care physician. Id. ¶ 64. In support of this claim, Dr. Chau points to the superficial, twenty-minute examination by Dr. Futer-man, which, the complaint states, did not properly evaluate Dr. Chau’s physical limitations. Id. ¶ 64(g). Significantly, the relief requested under the ERISA claim includes a request that the Hartford’s decision be reversed, and that she be paid all of her prior missed benefits payments. Id. ¶ 68. Hartford has not moved to dismiss Dr. Chau’s ERISA claim.

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Chau v. Hartford Life Insurance, 167 F. Supp. 3d 564, 2016 U.S. Dist. LEXIS 25135, 2016 WL 844831 (S.D.N.Y. 2016).

167 F. Supp. 3d 564 (Chau v. Hartford Life Insurance) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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