Egan v. NEW YORK CARE PLUS INSURANCE COMPANY, INC.

• Decision Date: 16 November 2000
• Citation: 277 A.D.2d 652,716 N.Y.S.2d 430
• Parties: MICHAEL EGAN, Respondent,<BR>v.<BR>NEW YORK CARE PLUS INSURANCE COMPANY, INC., et al., Appellants.
• Court: New York Supreme Court — Appellate Division

277 A.D.2d 652

716 N.Y.S.2d 430

MICHAEL EGAN, Respondent,

v.NEW YORK CARE PLUS INSURANCE COMPANY, INC., et al., Appellants.

Decided November 16, 2000.

Peters, Mugglin, Rose and Lahtinen, JJ., concur.

Crew III, J. P.

In 1997, plaintiff was diagnosed as having central nervous system Lyme disease. As a consequence, his physician sought from defendants, who insured plaintiff under a "Care Plus Health Care Contract," preapproval of intravenous antibiotic therapy. This request eventually was denied upon the basis that prolonged intravenous antibiotic therapy was not a generally accepted therapy in the treatment of such disease. Consequently, plaintiff commenced this action in January 1998 sounding in, inter alia, breach of contract, fraud and deceptive business practices in violation of General Business Law § 349. Specifically, plaintiff's complaint alleged fraud based upon defendants' purported "policy of limiting reimbursement for intravenous antibiotic treatment for Lyme disease" and defendants' practice of "knowingly maintain[ing] a policy of denying benefits on the ground that a given mode of therapy is not generally accepted," neither of which was disclosed in the insurance policy or defendants' marketing materials.

Following joinder of issue and discovery, defendants moved for partial summary judgment dismissing those causes of action sounding in fraud and predicated upon General Business Law § 349, as well as plaintiff's claims for punitive damages and counsel fees. Plaintiff cross-moved to amend his complaint to include additional factual averments, as well as additional causes of action sounding in fraud. Supreme Court denied defendants' motion and granted plaintiff's cross motion, prompting this appeal.

We reverse. Plaintiff's fraud claims are premised upon defendants' refusal to pay for plaintiff's extended treatment on the ground that it was not "medically necessary" as defined in the contract of insurance and, as such, essentially distill to a contract dispute. It is axiomatic that a cause of action for fraud does not arise where, as here, the fraud alleged relates to a breach of contract (see, e.g., Fourth Branch Assocs. Mechanicville v Niagara Mohawk Power Corp., 235 AD2d 962, 963). Thus, absent a legal duty owed to plaintiff by defendants, independent of that encompassed by the contract, plaintiff's causes of action grounded on fraud are not cognizable (see, e.g., Roklina v Skidmore Coll., 268 AD2d 765, 766-767, lv denied 95 NY2d 758). As no such independent legal duty has been...