Chau v. Hartford Life Ins. Co.

• Decision Date: 01 March 2016
• Docket Number: 1:14-cv-8484-GHW
• Parties: Elizabeth Boey Chau, M.D., Plaintiff, v. Hartford Life Insurance Company, Howard Futerman, M.D., Evelyn K. Balogun, M.D., David Hoenig, M.D., Dayton Dennis Payne, M.D., Reliable Services, Inc., Examworks Group, Inc., Jane Doe, Defendants.
• Court: U.S. District Court — Southern District of New York

167 F.Supp.3d 564

Elizabeth Boey Chau, M.D., Plaintiff,

v.Hartford Life Insurance Company, Howard Futerman, M.D., Evelyn K. Balogun, M.D., David Hoenig, M.D., Dayton Dennis Payne, M.D., Reliable Services, Inc., Examworks Group, Inc., Jane Doe, Defendants.

1:14-cv-8484-GHW

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

Signed March 1, 2016

Robert Joseph Rando, The Rando Law Firm PC, Uniondale, NY, for Plaintiff.

Michael H. Bernstein, Matthew Paul Mazzola, Sedgwick LLP, New York, NY, for Defendants.

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. Harford 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 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 ExamWorks 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 essential 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. Futerman, 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.

Count II of the complaint claims that Hartford defamed Dr. Chau by passing along to others the substance of Jane Doe's tip regarding Dr. Chau's alleged insurance fraud. Id. ¶¶ 69-84. Notably, the only corporations and individuals to whom the information was distributed were doctors and corporate entities that appear to have been involved in the investigation of Dr. Chau's case on behalf of Hartford. Id. ¶¶ 71-74. Still, Dr. Chau alleges that, at the time that the substance of the tip was communicated, Hartford “knew or should have known that the statements contained therein were untrue.” Id. ¶ 76. Hartford's “publication” of the tip to the people identified by Dr. Chau caused her “extreme humiliation and embarrassment.” Id. ¶¶ 76-84. Dr. Chau claims unspecified general and special damages, compensatory damages, and punitive damages for Hartford's alleged libel and slander. Id. ¶ 84.

Count III of the complaint claims that each of the physician defendants, Reliable, and ExamWorks tortiously interfered with a contract—Dr. Chau's contract with Hartford for long term disability benefits. Id. ¶¶ 85-96. In support of the claim, the complaint contains bare conclusory allegations with respect to each defendant that “[Insert Name of Defendant], with full knowledge of the contract ... acting with malice, and to advance her own interests, intentionally interfered with Plaintiff's rights in said contract ... and set out upon a course of conduct to induce [Hartford] to terminate the contract.” See, e.g. id ¶ 89. The complaint does not state any facts to support these assertions. But, again, tellingly, the relief requested includes a demand that the Court void the termination of Dr. Chau's benefits under the Plan, and that Hartford be ordered to pay her for her denied past benefits. Id. ¶ 96.

Count IV is a claim against Hartford for fraud. Id. ¶¶ 97-112. The complaint alleges that Hartford represented to Dr. Chau that it would act “as a fiduciary, without bias and/or conflict, and in the interest of beneficiaries including Plaintiff.” Id. ¶ 99. Dr. Chau relied on those representations, which she states were material. Id. ¶¶ 100-102. Dr. Chau asserts that “the material representations ... were knowingly fraudulent misrepresentations at the time they were made to Plaintiff.” Id. ¶ 103. Again, the complaint includes no facts to substantiate its conclusory allegations regarding Hartford's alleged fraud—Dr. Chau points to no specific representations, and no specific facts to support the claim of fraud. Again, tellingly, the relief requested includes a demand for “special damages” “in the amount of lost benefits ...” among other things. Id. ¶ 107.

The next three claims in the complaint are quasi-contractual state law claims against Hartford. Count V contains a claim for breach of the implied covenant of good faith and fair dealing. Id. ¶ 113–115. Count VI asserts a claim of unjust enrichment. Id. ¶¶ 116-119. Count VII is for promissory estoppel. Id. ¶¶ 120-125. All three counts are as thinly pleaded as the complaint's other state law claims. The relief demanded in connection with all three of these state law claims is also familiar: that the Court enter judgment against Hartford “declaring that the...