Halprin v. Equitable Llife Assur. Soc. of U.S., CIV. Ol-B-1321 (CBS).
| Decision Date | 17 June 2003 |
| Docket Number | No. CIV. Ol-B-1321 (CBS).,CIV. Ol-B-1321 (CBS). |
| Parties | Arthur HALPRIN, M.D., Plaintiff, v. The EQUITABLE LIFE ASSURANCE SOCIETY OF the UNITED STATES, a New York corporation, Defendant. |
| Court | U.S. District Court — District of Colorado |
Joanne M. Zboyan, Springer & Steinberg, P.C., Denver, CO, for Plaintiff.
David Warren Feeder, II, Dorsey & Whitney, LLP, Denver, CO, Todd W. Miller, Eric L. Hilty, Thorvald A. Nelson, Holland & Hart, LLP, Greenwood Village, CO, for Defendant.
Plaintiff Arthur Halprin brings claims for: 1) breach of contract; 2) willful and wanton breach of contract; 3) bad faith breach of insurance contract; 4) violation of the Colorado Consumer Protection Act ("CCPA"); and 5) negligence against Defendant The Equitable Life Assurance Society of the United States ("Equitable"). Equitable moves for judgment on the pleadings with respect to plaintiffs second and fifth claims, for summary judgment with respect to all of plaintiffs claims pursuant to Fed.R.Civ.P. 56(b), and for partial summary judgment dismissing plaintiffs bad faith and CCPA claims. Dr. Halprin moves for partial summary judgment regarding entitlement to contract benefits. The motions are adequately briefed and argued. For the reasons set forth below, I GRANT Equitable's motion for judgment on the pleadings, GR.ANT Equitable's motion for summary judgment pursuant to Fed.R.Civ.P. 56(b), DENY AS MOOT Equitable's motion for piirtial summary judgment dismissing plaintiff s bad faith and CCPA claims, and DENY Dr. Halprin's motion for partial summary judgment regarding entitlement to contract benefits.
The following facts are undisputed unless otherwise noted. Doctor Arthur Halprin ("Dr. Halprin") was privately employed as a gastroenterologist by the Southern Colorado Clinic, P.C. ("SCC") in Pueblo, Colorado from 1979 until his 1999 termination. Dr. Halprin's practice included performance of surgery such as colonoscopies, liver biopsies, and gastroscopies.
SCC provided a comprehensive package of insurance to its physicians that included health, life and group disability insurance. SCC's Finance Committee and its Board of Directors addressed issues concerning that insurance, which was provided by Standard Insurance Company ("Standard Plan"). The Standard Plan was mandatory for physicians, and was paid from a shareholder income distribution pool.
Certain physicians carried additional individual disability insurance policies. One such policy—that of Dr. Halprin—is the subject of dispute here. Dr. Halprin's additional disability policy, like that of several of his colleagues, is administered by Equitable.
Some time in the early 1980's, Robert Redwine—an Equitable insurance agentmet with SCC's Clinic Administrator regarding such individual policies. Mr. Redwine and the Administrator agreed on a plan that would be offered to all doctors at the SCC. Mr. Redwine eventually participated in a meeting with the SCC Board of Directors at which he discussed the proposed policy. The Board then selected Mr. Redwine's offered plan, and a group of policies were subsequently issued to all SCC doctors, including Dr. Halprin.
In the following three to four years, SCC replaced the first Equitable plan with a competing policy from Lincoln National. Then, in 1989, Mr. Redwine again worked with the Clinic Administrator and designed another replacement group of policies from Equitable (the "Equitable Policy" or "Equitable Plan"). Thereafter, Equitable issued replacement policies to SCC physicians. The Equitable Plan consisted of nineteen individual policies issued together to nineteen SCC doctors. Dr. Halprin and the other physicians received a ten to twenty percent "group discount" on the premiums for the Equitable Policy.
Though SCC's involvement was limited, SCC issued checks for the doctors' premium payments. The payments were deducted from each shareholder's income distribution pool and debited from what would otherwise have been paid to them. The physicians' premiums are after-tax payments and are included on the physicians' W-2 forms. No evidence suggests that SCC held out the opportunity to acquire the Equitable Policy as part of its compensation package, and SCC was not involved in the addition of newly hired doctors to the Equitable Plan.
Some time in 1997, Dr. Halprin was accused of improper sexual relations and improper examinations. Around that same time, Dr. Halprin began exhibiting symptoms of severe depression. Dr. Halprin began seeing John Hardy, M.D., for psychiatric care. Shortly thereafter, Dr. Halprin ceased practicing medicine. In 1998, Dr. Halprin requested benefits under his Equitable Policy. Equitable denied Dr. Halprin's request based upon its conclusion that the request lacked proof that Dr. Halprin was under a doctor's "regular care." Equitable also concluded that the information Dr. Halprin submitted did not objectively support Dr. Hardy's diagnosis of depression. This suit followed.
Equitable first moves for judgment on the pleadings dismissing Dr. Halprin's second claim for willful and wanton breach of contract and fifth claim for negligence.
In support of its assertion regarding Dr. Halprin's "willful and wanton" claim, Equitable asserts that claim to be indistinguishable from Dr. Halprin's first claim for breach of contract. I agree.
Dr. Halprin argues to the contrary, asserting that a distinct willful and wanton breach of contract claim was recognized in Giampapa v. Am. Family Mut. Ins. Co., 64 P.3d 230 (Colo.2003), and Decker v. Browning-Ferris Indust, 931 P.2d 436 (Colo.1997). As Dr. Halprin accurately notes, the Colorado Supreme Court concluded that if a willful and wanton breach of contract is proven, the claimant may receive all non-economic damages that were foreseeable at the time of contracting and are a natural and probable result of the breach. Giampapa, 64 P.3d at 238. However, Giampapa and Decker contemplate the extent of damages available for a breach of contract when such a breach is willful and wanton. The cases do not create a distinct cause of action separate from common law breach of contract.
The language of Giampapa shows as much. For instance, Giampapa's introduction explains that the plaintiff sought recovery for "three types of actions" "contract law, tort law, and the Colorado Auto Accident Reparations Act." Id. at 234. The Court stated, "[u]nder the contract claim specifically, the jury awarded Giampapa $ 900,000 in economic and noneconomic 'special damages' for American Family's willful-and-wanton breach of contract." Id. It continued, "[o]n appeal today is the issue of whether Giampapa may recover complete non-economic damages under his common law contract claim." Id. (emphasis added). The Court referred to willful and wanton breach of contract and common law breach of contract interchangeably. The claims are one and the same. Because Dr. Halprin asserts a willful and wanton breach of contract claim and a claim premised on common law breach of contract, I grant Equitable's motion for judgment on the pleadings with respect to Dr. Halprin's second claim for willful and wanton breach of contract. That claim is therefore dismissed.
Equitable also moves for judgment on the pleadings as to Dr. Halprin's fifth claim premised upon negligence. Dr. Halprin agrees that a negligence claim is not appropriate here. I therefore grant Equitable's motion with respect to Dr. Halprin's fifth claim based on negligence. Equitable's motion for judgment on the pleadings is granted. Dr. Halprin's second and fifth claims are dismissed.
The purpose of a summary judgment motion is to assess whether trial is necessary. See White v. York Int'l Corp., 45 F.3d 357, 360 (10th Cir.1995). Rule 56(b) provides that summary judgment shall be granted if the pleadings, depositions, answers to interrogatories, admissions, or affidavits show that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. A party seeking summary judgment bears the initial responsibility of informing the court of the basis for its motion and identifying those portions of the pleadings, depositions, interrogatories, and admissions on file together with affidavits, if any, that it believes demonstrate the absence of genuine issues for trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Mares v. ConAgra Poultry Co., 971 F.2d 492, 494 (10th Cir. 1992). Once a properly supported summary judgment motion is made, the opposing party may not rest on the allegations contained in the complaint, but must respond with specific facts showing the existence of a genuine factual issue to be tried. Rule 56(e); see also Otteson v. United States, 622 F.2d 516, 519 (10th Cir. 1980). These facts may be shown "by any of the kinds of evidentiary materials listed in Rule 56(c), except the mere pleadings themselves." Celotex, 477 U.S. at 324, 106 S.Ct. 2548.
ERISA governs all "employee benefit plans." 29 U.S.C. § 1003(a). One form of an employee benefit plan is an "employee welfare benefit plan." Id. at 1002(3). An "employee welfare benefit plan" is "any plan, fund, or program ... established or maintained by an employer ... for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or othervrise ... medical, surgical, or hospital care benefits or benefits in the event of sickness, accident, disability, death or unemployment." 29 U.S.C. § 1002(1).
The Tenth Circuit has broken down the definition into five elements: (1) a "plan, fund, or program"; (2) established or maintained; (3) by an employer; (4) for the purpose of providing medical, surgical, or hospital care benefits (or benefits...
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