Borden v. Blue Cross and Blue Shield of Western Ny, 05-CV-251S.

• Decision Date: 22 February 2006
• Docket Number: No. 05-CV-251S.,05-CV-251S.
• Citation: 418 F.Supp.2d 266
• Parties: Richard P. BORDEN, Plaintiff, v. BLUE CROSS AND BLUE SHIELD OF WESTERN NEW YORK, also known as, Healthnow N.Y., Inc., et al., Defendants.
• Court: U.S. District Court — Western District of New York

Page 266

418 F.Supp.2d 266

Richard P. BORDEN, Plaintiff, v. BLUE CROSS AND BLUE SHIELD OF WESTERN NEW YORK, also known as, Healthnow N.Y., Inc., et al., Defendants.

No. 05-CV-251S.

United States District Court, W.D. New York.

February 22, 2006.

COPYRIGHT MATERIAL OMITTED

Richard P. Valentine, Buffalo, New York, for Plaintiff.

Frank Balon, Michael P. McClaren, Webster & Szanyi LLP, Buffalo, New York, for Defendants.

DECISION AND ORDER

SKRETNY, District Judge.

I. INTRODUCTION

In this case, Plaintiff Richard P. Borden alleges that his health insurance provider, Defendant Blue Cross and Blue Shield of Western New York, also known as Health-Now, N.Y., Inc. ("HealthNow"), wrongfully refuses to waive its right of subrogation with respect to payments it made for his medical care after he was injured in a motorcycle accident. As a result, Plaintiff contends that he has been unable to execute a settlement with the parties responsible for his injuries. Plaintiff asserts that HealthNow's refusal to waive its right of subrogation constitutes a violation its contractual and fiduciary duties. He demands judgment compelling HealthNow to forego its subrogation claim, or in the alternative, to pay him the full amount offered to settle his claim. Currently before this Court is Defendants' Motion to Dismiss the Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. For the following reasons, Defendants' Motion is granted.

II. BACKGROUND

A. Factual History

In adjudicating Defendants' Motions to Dismiss, this Court assumes the truth of the following factual allegations contained in Plaintiff's Complaint. See Hosp. Bldg. Co. v. Trs. of Rex Hosp., 425 U.S. 738, 740, 96 S.Ct. 1848, 1850, 48 L.Ed.2d 338 (1976); see also Hamilton Chapter of Alpha Delta Phi, Inc. v. Hamilton Coll., 128 F.3d 59, 63 (2d Cir.1997). On September 6, 2004, while driving his motorcycle, Plaintiff collided with a vehicle owned by Defendant Oliver Kirkendall and operated by Defendant James Joy. (Compl., ¶ 8).¹ Having suffered serious physical injuries, Plaintiff was airlifted to Erie County Medical Center where he remained continuously hospitalized for several months. (Compl., ¶ 9). Defendant HealthNow paid more than $55,000.00 in medical expenses incurred as a result of the accident. (Compl., ¶ 15).

The employee benefit plan ("Plan") pursuant to which HealthNow rendered Plaintiff s medical payments contains a Rider that provides:

In the event that you suffer an injury or illness for which another party may be responsible, such as someone injuring you in an accident, and we have paid benefits as a result of that injury or illness, we will be subrogated and succeed to the right of recovery against the party responsible for your illness or injury to the extent of the benefits we have paid. This means that we have the right independently of you to proceed against the party responsible for your injury or illness to recover the benefits we have paid.

(Compl., ¶¶ 13 & 15; Balon Dec., Exh. C, p. 53). By letter dated February 3, 2005, HealthNow notified Plaintiff that it was not willing to waive its subrogation claim, but rather, intended to pursue recovery from any and all responsible persons directly. (Compl., ¶ 16).

Shortly thereafter, by letter dated February 24, 2005, Defendant State Farm Mutual Automobile Insurance Company ("State Farm"), on behalf of its insureds Kirkendall and Joy, offered to pay Plaintiff $100,000—the entire policy limit—to settle Plaintiff's claims. (Compl., ¶¶ 10 & 11). State Farm provided verification of the limits of coverage and a release, and demanded documentation of lien satisfaction as a condition of settlement. (Compl., ¶ 11). Plaintiff thereafter requested orally and in writing that HealthNow consent to the proposed settlement and waive its subrogation rights, or in the alternative, pay the amount of the proposed settlement to him directly. (Compl., ¶¶ 17-20). Health-Now declined to do either. On or about March 11, 2005, HealthNow provided Plaintiff with a courtesy copy of a Summons and Complaint substantiating that it had commenced a formal adversarial proceeding against Kirkendall and Joy. (Compl., ¶ 21 & Exh. F).

According to Plaintiff, Defendant Progressive Northwestern Insurance Company ("Progressive"), his secondary medical insurance carrier, paid approximately $5,000.00 in medical expenses incurred as a result of the accident. (Compl., ¶¶ 25-26). Progressive also failed or refused to waive its right of subrogation, which is provided for by its policy of insurance. (Compl., ¶¶ 27, 30).

B. Procedural History

Plaintiff commenced this case on March 16, 2005, by filing a Summons and Complaint in New York State Supreme Court, Erie County. Defendant HealthNow removed this case to the United States District Court for the Western District of New York on April 11, 2005. On April 14, 2005, HealthNow filed a Motion to Dismiss the Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure.² By Order entered on June 3, 2005, this Court cancelled argument as unnecessary.

III. DISCUSSION AND ANALYSIS

A. Notice of Removal: Non-Jurisdictional Requirements

A notice of removal in a civil action must be filed in accordance with 28 U.S.C. § 1446(a) & (b). Consistent with the removal statute, the notice must be signed in accordance with Rule 11 of the Federal Rules of Civil Procedure, and must contain a short and plain statement of the grounds for removal, together with a copy of all process, pleadings, and orders served upon such defendant or defendants in such action. 28 U.S.C. § 1446(a). Lastly, the notice must be filed within thirty (30) days of service of the summons or complaint. 28 U.S.C. § 1446(b); see also Payne v. Overhead Door Corp., 172 F.Supp.2d 475, 476-77 (S.D.N.Y.2001).

"Although there is no express statutory requirement that all defendants either join the petition for removal or consent to such removal, there is widespread agreement among the district courts, including those in the Second Circuit, that `all named [defendants] over whom the state court acquired jurisdiction must join in the removal petition for removal to be proper.'" Ell v. S.E.T. Landscape Design, Inc., 34 F.Supp.2d 188, 193 (S.D.N.Y. 1999) (internal citations omitted). This "rule of unanimity" applies regardless of whether the removing parties predicate federal subject matter jurisdiction on diversity or federal question. See Ell, 34 F.Supp.2d at 194 (citing Hewitt v. City of Stanton, 798 F.2d 1230, 1232 (9th Cir. 1986)).

There are, however, a few recognized exceptions to the general requirement that all defendants must join or consent to the petition for removal. The "rule of unanimity" is excused where: "(1) the non-joining defendants have not been served with service of process at the time the removal petition is filed; (2) the nonjoining defendants are merely nominal or formal parties; and (3) the removed claim is a separate and independent claim as defined by 28 U.S.C. § 1441(c)." Novick v. Bankers Life Ins. Co. of New York, No. CV 05-3085, 2006 WL 191945, at *1 (E.D.N.Y. Jan.9, 2006) (quoting Ell, 34 F.Supp.2d at 194). Generally, if a nonjurisdictional defect in the removal proceeding, such as the lack of unanimity, is not raised in a motion to remand, it is waived. See Page v. City of Southfield, 45 F.3d 128, 133 (6th Cir.1995) (stating that 28 U.S.C. § 1447(c) does not authorize sua sponte remands for purely procedural defects); see also Allstate Life Ins. Co. v. Hanson, 200 F.Supp.2d 1012, 1015 (E.D.Wis.2002) (holding that a defect in removal procedure within the meaning of Section 1447(c) must be raised by a motion to remand within thirty days after filing the notice of removal, or it is waived).

In its timely Notice of Removal, HealthNow asserts that Plaintiffs claim against it, which implicates an employee benefit plan, is a matter of exclusive federal concern. HealthNow further contends that it is the only Defendant in this action with grounds for removal to federal court, and therefore, that it is not required to obtain consent for removal from any of the other Defendants in this action. Plaintiff has not filed a motion to remand this case nor has he alleged any non jurisdictional defects in the removal procedure. Accordingly, this Court deems any objection to such defects waived, and focuses its inquiry on whether ERISA confers subject matter jurisdiction over Plaintiffs claim against HealthNow.

B. Subject Matter Jurisdiction Under ERISA

Under 28 U.S.C. § 1441(a), "any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants." 28 U.S.C. § 1441(a). When an action is removed from state court, the district court must initially determine whether it has subject matter jurisdiction over a plaintiff's claim before reaching the merits of a motion to dismiss, for summary judgment, or for other relief. See Univ. of South Alabama v. American Tobacco Co., 168 F.3d 405, 410 (11th Cir.1999); Macro v. Independent Health Ass'n, Inc., 180 F.Supp.2d 427, 431 (W.D.N.Y.2001). If removal was inappropriate, the court must remand for lack of subject matter jurisdiction, notwithstanding the pendency of the other motions. See 28 U.S.C. § 1447(c); see also Toumajian v. Frailey, 135 F.3d 648, 655 (9th Cir.1998).

As a general matter, a party asserting jurisdiction bears the burden of proving that a case is properly in federal court. United Food & Commercial Workers Union, Local 919, AFL-CIO v. Center-Mark Props. Meriden Square, Inc., 30 F.3d 298, 301 (2d Cir.1994); see also Varela v. Flintlock Const., Inc., 148 F.Supp.2d 297, 298-99 (S.D.N.Y.2001). "Where, as here, jurisdiction is asserted by a defendant in a removal petition, it follows that the defendant has the burden of establishing that removal is proper." CenterMark, 30 F.3d at 301. Moreover, "[r]emoval statutes are to be strictly construed...