Korman v. Consolidated Edison Co. of New York, Inc.

915 F. Supp. 2d 359, 54 Employee Benefits Cas. (BNA) 2427, 2013 WL 167934, 2013 U.S. Dist. LEXIS 6682
CourtDistrict Court, E.D. New York
DecidedJanuary 16, 2013
DocketNo. 12-CV-1561 (JFB)(ARL)
StatusPublished
Cited by3 cases

This text of 915 F. Supp. 2d 359 (Korman v. Consolidated Edison Co. of New York, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Korman v. Consolidated Edison Co. of New York, Inc., 915 F. Supp. 2d 359, 54 Employee Benefits Cas. (BNA) 2427, 2013 WL 167934, 2013 U.S. Dist. LEXIS 6682 (E.D.N.Y. 2013).

Opinion

MEMORANDUM AND ORDER

JOSEPH F. BIANCO, District Judge:

Plaintiff Barry S. Korman (“plaintiff’ or “Korman”) seeks relief pursuant to the Employee Retirement Security Act of 1974 (“ERISA”) and under common law against UnitedHealthCare Service LLC (“defendant” or “United”).1 Specifically, Korman seeks damages arising from United’s alleged misrepresentation as to the Lifetime Maximum Medical Benefits available to Korman under his employer’s benefits plans after he had retired from his job.2 United filed a motion to dismiss Korman’s amended complaint, pursuant to Federal Rule of Civil Procedure 12(b)(6), on the grounds that ERISA preempts Korman’s negligent misrepresentation claim.3 For the reasons set forth herein, the Court concludes that Korman’s negligent misrepresentation claim is preempted by ERISA and, because no claim lies against former claims administrator United under ERISA (as conceded by plaintiff), United’s motion to dismiss is granted.

I. Background

A. Factual History

The following facts are taken from the amended complaint and are not findings of fact by the Court. Instead, the Court assumes these facts to be true for purposes of deciding the pending motion to dismiss and will construe them in a light most favorable to plaintiff, the non-moving party.

1. The Employee Plan

Korman was an employee of Consolidated Edison Company (“Con Edison”) for [361]*361thirty-nine years; he first joined the company in 1970. (Am. Compl. ¶¶ 11, 20.) Throughout his employment, Korman participated in an open enrollment plan (“Employee Plan”). (Id. ¶ 12.) In March 2000, Korman received a letter that notified him of benefit updates to his Employee Plan, specifically, that the plan’s Lifetime Maximum Medical Benefit had increased from one million to two million dollars. (Id. ¶¶ 13-14.)4 Korman understood this language to mean that he was entitled to the referenced two million dollar benefit for his lifetime. (Id. ¶ 11-16.)

Con Edison self-insures two different employee welfare benefit plans. One is for active employees (the aforementioned Employee Plan), and the other, for retirees (“Retiree Plan”) (collectively, the “Plans”). (Id. ¶¶ 4-5.) United was the claims administrator of each Plan up to and including December 31, 2009, when all claims administration was conducted by Cigna Corporation (“Cigna”). (Id. ¶ 33.)

2. The Diagnosis

In April 2009, while still an employee at Con Edison, Korman received a different notification: he learned that he had a rare form of cancer. (Id. ¶ 17.) Korman informed Con Edison of his health status and began undergoing treatments at North Shore University Hospital. (Id. ¶¶ 17-19.)

On approximately April 13, 2009, David Schaffer (“Schaffer”), Con Edison’s retiree benefits representative, visited Korman in the hospital. (Id. ¶ 21.) During the visit, Schaffer encouraged Korman to retire; he claimed that retirement would be in Korman’s wife’s best interest because it would improve her pension-payment position. (Id. ¶ 23.) Specifically, Schaffer informed Korman that if he should die before retiring, his wife would only receive 50% of Korman’s pension; if Korman retired, took a lower pension, and then died, however, his wife would receive 100% of the lower pension. (Id. ¶¶ 21-23.) Korman claims he received no documentation from Schaffer during this visit. (Id. ¶ 24.)

Several nights later, Schaffer called Mrs. Korman. (Id. ¶25.) He informed her that he had papers for her husband to sign, and that he wanted to go to the hospital so that Korman could review them. (Id.) The following morning, Schaffer picked Mrs. Korman up and they drove together to the hospital. (Id. ¶ 27.) Once there, Schaffer handed Korman documents, which addressed the company’s retirement process and its corresponding change to his pension benefit status. (Id. ¶¶ 25, 27.) Schaffer instructed Korman to sign the paperwork. (Id. ¶ 27.) Korman asked if he and his wife could have time to review the paperwork. Essentially refusing Korman’s request, Schaffer said he was in a rush to leave and needed the documents signed then and there. (Id.) Korman did so and, as of May 1, 2009, was an official retiree of Con Edison. (Id. ¶¶ 25-27, 30.)

3. Back Problems with No Back-Up

On approximately August 27, 2009 (post-retirement), Korman received an explanation of benefit form (“EOB”) from United. (Am. Compl. Ex. D.) Dated August 19, 2009, the EOB had been issued in re[362]*362sponse to a claim for benefits for a medical procedure that Korman had undergone on April 9, 2009 (pre-retirement). The EOB stated that Korman had a “Lifetime Plan Maximum” of two million dollars, and a “Lifetime Maximum Remaining” of $1,526,405.50. (Am. Compl. ¶ 31.)

In 2010, there was a change in claim administration, ie., Cigna replaced United as claims administrator for Con Edison’s benefits. (Id. ¶ 33.) In December 2010, Korman, understanding United’s EOB to mean that he still carried a Lifetime Maximum Medical Benefit of two million dollars, had elective back surgery. (Id. ¶¶ 32, 34.) Approximately one year later, on October 15, 2011, Korman received an EOB from Cigna. (Id. ¶ 35.) The letter stated that Korman had exceeded his medical insurance limit of one million dollars. (Id. ¶¶ 31-32, 34-35.)

B. Procedural History

Korman filed the initial complaint in this action on March 30, 2012; he filed an amended complaint on June 20, 2012. On August 1, 2012, United moved to dismiss Korman’s amended complaint. Korman filed an opposition to the motion to dismiss on September 7, 2012. On September 21, 2012, United submitted its reply. Oral argument was conducted on November 26, 2012. Plaintiff filed a supplemental letter on December 10, 2012. The Court has fully considered the parties’ arguments and submissions.

II. Standard of Review

In reviewing a motion to dismiss pursuant to Rule 12(b)(6), the Court must accept the factual allegations set forth in the complaint as true and draw all reasonable inferences in favor of the plaintiff. See Cleveland v. Caplaw Enters., 448 F.3d 518, 521 (2d Cir.2006); Nechis v. Oxford Health Plans, Inc., 421 F.3d 96, 100 (2d Cir.2005). “In order to survive a motion to dismiss under Rule 12(b)(6), a complaint must allege a plausible set of facts sufficient ‘to raise a right to relief above the speculative level.’ ” Operating Local 649 Annuity Trust Fund v. Smith Barney Fund Mgmt. LLC, 595 F.3d 86, 91 (2d Cir.2010) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). This standard does not require “heightened fact pleading of specifics, but only enough facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570, 127 S.Ct. 1955.

The Supreme Court clarified the appropriate pleading standard in Ashcroft v. Iqbal,

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
915 F. Supp. 2d 359, 54 Employee Benefits Cas. (BNA) 2427, 2013 WL 167934, 2013 U.S. Dist. LEXIS 6682, Counsel Stack Legal Research, https://law.counselstack.com/opinion/korman-v-consolidated-edison-co-of-new-york-inc-nyed-2013.