McGee v. State Farm Mutual Automobile Insurance Company, No. 1:2009cv03579 - Document 56 (E.D.N.Y. 2011)
Court Description: ORDER granting 22 Motion to Dismiss. For the foregoing reasons, the Court grants State Farm's motion to dismiss pursuant to Rule 12(b)(6) and hereby dismisses the amended complaint in its entirety. Because McGee has already amended his complaint once, and because any further amendment would be futile, dismissal is with prejudice. The Clerk of the Court is directed to close this case and enter judgment in favor of State Farm. Ordered by Senior Judge I. Leo Glasser on 11/8/2011.
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McGee v. State Farm Mutual Automobile Insurance Company Doc. 56 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK ------------------------------------------------------x J OHN MCGEE, Plaintiff, MEMORANDUM AND ORDER - against - 0 9 Civ. 3579 (ILG) (RLM) STATE FARM MUTUAL AUTOMOBILE INSURANCE CO., Defendant. ------------------------------------------------------x GLASSER, Senior United States District J udge: On J uly 28, 20 0 9 plaintiff J ohn McGee (“McGee”) initiated this diversity action against defendant State Farm Mutual Insurance Com pany (“State Farm ”) in New York State Suprem e Court, asserting, am ong other things, claim s for fraud and breach of contract. State Farm on August 18, 20 0 9 rem oved the action to this Court pursuant to 28 U.S.C. § 1441(a). On Septem ber 4, 20 0 9, McGee filed an am ended com plaint nearly identical to his original com plaint that added additional defendants—all New York residents—whose joinder would destroy diversity and also filed a m otion to rem and the action to state court. State Farm on Septem ber 8, 20 0 9 opposed McGee’s m otion to rem and and also m oved to dism iss both McGee’s original and am ended complaints. By Mem orandum and Order dated Novem ber 18, 20 0 9, the Court denied McGee’s m otion to rem and and ordered that the non-diverse parties nam ed in the am ended com plaint be dropped pursuant to Fed. R. Civ. P. 21. See McGee v. State Farm Mut. Auto. Ins. Co., 684 F. Supp. 2d 258, 265 (E.D.N.Y. 20 0 9). Currently before the Court is State Farm ’s m otion to dism iss the am ended com plaint pursuant to Rules 8(a)(2), 9(b), and 12(b)(6) of the Federal Rules of Civil Procedure. 1 Dockets.Justia.com For the reasons set forth below, State Farm ’s m otion is hereby GRANTED, and the am ended com plaint is dism issed in its entirety with prejudice. I. BACKGROU N D McGee is a licensed physician in the State of New York who provided m edical care to eligible insured persons covered by State Farm through autom obile insurance contracts. Am ended Com plaint dated August 31, 20 0 9 ¶ 1 (“Am . Com pl.”) (Dkt. No. 20 ). Asserting theories of fraud, breach of contract, breach of the duty of good faith and fair dealing, unjust enrichm ent, and equitable subordination, McGee alleges that he has sustained m ore than four m illion dollars in dam ages as a result of a schem e by State Farm to deny him paym ent for his treatm ent of its insureds. Am . Com pl. ¶ 55. 1 McGee previously brought a sim ilar action against State Farm that was before J udge Block and another against All State Insurance Com pany that was before J udge Vitaliano; both of those cases involved allegations nearly identical to those here, and both were dism issed. See McGee v. Allstate Ins. Co., No. 0 8– CV– 0 842 (ENV) (MDG), 20 11 WL 3497527 (E.D.N.Y. Aug. 3, 20 11) (dism issing fraud, breach of contract, unjust enrichm ent, breach of the duty of good faith and fair dealing, and equitable subordination claim s); McGee v. State Farm Mut. Auto. Ins. Co., No. 0 8-CV-392 (FB) (CLP), 20 0 9 WL 2132439 (E.D.N.Y. J uly 10 , 20 0 9) (“McGee I”) (dism issing civil RICO claim ). This action, like McGee’s previous actions in this district, involves certain aspects of New York’s no-fault insurance law. A brief review of that regim e is thus in order. 1 Elsewhere in the am ended com plaint, McGee alleges that he sustained dam ages in the am ount of only three m illion dollars. Am . Com pl. ¶ 224. 2 A. N e w Yo rk’s N o -Fau lt In s u ran ce Law Under the Com prehensive Motor Vehicle Insurance Reparation Act, New York’s no-fault insurance law, State Farm is required to indem nify all covered persons for the treatm ent of “personal injury arising out of the use or operation of a [covered] m otor vehicle.” N.Y. Ins. Law § 510 2(b) (McKinney 20 0 5). Treatm ent m ust be “necessary for the treatm ent of injuries sustained,” 11 N.Y.C.R.R. § 65.3.16(a)(6), and claim ants seeking reim bursem ent thus m ust substantiate their claim s by “subm it[ing] to a m edical exam ination by a physician selected by, or acceptable to, the [insurer] when, and as often as, the [insurer] m ay reasonably require,” 11 N.Y.C.R.R. § 65-1. These exam inations are referred to as “independent m edical exam inations” (“IMEs”). “Patients covered by no-fault insurance often assign their claim s to their health care providers rather than seek reim bursem ent from insurance carriers directly.” State Farm Mut. Auto Ins. Co. v. Mallela, 4 N.Y.3d 313, 319, 794 N.Y.S.2d 70 0 , 827 N.E.2d 758 (20 0 5) (citing 11 N.Y.C.R.R. § 65-3.11)). If a claim is approved, “[t]he insurer upon assignm ent by the applicant shall pay the providers of services directly.” Universal Acupuncture Pain Servs., P.C. v. State Farm Mut. Auto. Ins. Co., 196 F. Supp. 2d 378, 384 (S.D.N.Y. 20 0 2) (citation and internal quotation m arks om itted). A claim m ay not be approved where, for exam ple, the insurer determ ines as a result of an IME that treatm ent was not m edically necessary. McGee I, 20 0 9 WL 2132439, at *1. 3 B. Th e Co m p lain t 2 McGee provided m edical care to patients with no-fault autom obile insurance policies issued by State Farm who had assigned their policies to him . Am . Com pl. ¶¶ 1, 17, 20 9. State Farm requires claim ants to subm it to IMEs and uses various referral services to perform the IMEs. Am . Com pl. ¶ 13. McGee alleges that “[i]n order to m axim ize [its] profits as well as to reduce its exposure regarding claim s for policy benefits, STATE FARM conspired and agreed with the other Defendants to utilize illegal m edical referral services and/ or brokers to procure forged and fraudulent [IME] reports” to deny him reim bursem ent. Am . Com pl. ¶ 7. “STATE FARM engaged the other Defendants with the expectation that all reports received would be favorable to the insurance carrier” and “com m unicated with and to the other Defendants that if they did not provide sufficient denials within the evaluation reports then STATE FARM would not use their illegal m edical referral service.” Am . Com pl. ¶ 8. As a result of these fraudulent reports, McGee was, am ong other things, wrongfully denied reim bursem ent for healthcare services that he had already provided. Am . Com pl. ¶ 8. McGee avers that State Farm has been operating this schem e since Decem ber 1998 and that it has continued uninterrupted since that tim e. Am . Com pl. ¶ 55. He seeks com pensatory and punitive dam ages. State Farm m oves to dism iss the am ended com plaint on several grounds, arguing, am ong other things, that: (1) McGee lacks standing to assert his claim s; (2) his 2 The following allegations are taken from McGee’s com plaint and are accepted as true for the purpose of this m otion. 4 fraud claim is barred by collateral estoppel; (3) New York law does not recognize an independent cause of action for breach of the duty of good faith and fair dealing; (4) his breach of contract claim fails because he does not identify any specific contractual provision that State Farm breached; (5) his unjust enrichm ent claim is duplicative of his breach of contract claim ; and (6) his equitable subrogation claim fails because McGee cannot dem onstrate that he paid under com pulsion an existing debt owed by State Farm . Mem orandum of Law in Support of Motion to Dism iss the Com plaint dated Septem ber 8, 20 0 9 (“Def.’s Mem .”) at 11-33 (Dkt. No. 22). McGee on February 16, 20 10 filed his opposition to the m otion to dism iss, and State Farm on April 29, 20 10 filed its reply. See Mem orandum of Law in Opposition to State Farm ’s Motion to Dism iss the Com plaint dated February 15, 20 10 (“Pl.’s Opp’n”) (Dkt. No. 46); State Farm ’s Reply in Support of its Motion to Dism iss the Com plaint dated April 29, 20 10 (“Def.’s Reply”) (Dkt. No. 47).3 II. D ISCU SSION A. Le gal Stan d ard Rule 8(a)(2) of the Federal Rules of Civil Procedure requires a com plaint to include “a short and plain statem ent of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). To survive a m otion to dism iss pursuant to Rule 12(b)(6), McGee’s pleading m ust contain “sufficient factual m atter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1940 , 173 L. Ed. 2d 868 (20 0 9) (quoting Bell Atl. Corp. v. Twom bly, 550 U.S. 3 McGee delayed filing his opposition until after the Court ruled on his m otion for reconsideration of the Court’s Mem orandum and Order dated J anuary 14, 20 10 denying his m otion to rem and the action to state court. 5 544, 570 , 127 S. Ct. 1955, 167 L. Ed. 2d 929 (20 0 7). 4 A claim has facial plausibility “when the plaintiff pleads factual content that allows the Court to draw the reasonable inference that the defendant is liable for the m isconduct alleged.” Iqbal, 129 S. Ct. at 1949. Although detailed factual allegations are not necessary, the pleading m ust include m ore than an “unadorned, the-defendant-unlawfully-harm ed-m e accusation;” m ere legal conclusions, “a form ulaic recitation of the elem ents of a cause of action,” or “naked assertions” by the plaintiff will not suffice. Id. at 1949 (alteration in original) (internal quotations, citations, and alterations om itted). This plausibility standard “is not akin to a ‘probability requirem ent,’ but it asks for m ore than a sheer possibility that a defendant has acted unlawfully.” Id. (quoting Twom bly, 550 U.S. at 556). B. Article III Stan d in g State Farm first contends that McGee lacks standing to bring this action. Def.’s Mem . at 11-12. Standing is a threshold issue and “an essential and unchanging part of the case-or-controversy requirem ent of Article III.” Lujan v. Defenders of Wildlife, 50 4 U.S. 555, 560 , 112 S. Ct. 2130 , 119 L. Ed. 2d 351 (1992) (citing Allen v. Wright, 468 U.S. 737, 751, 10 4 S. Ct. 3315, 82 L. Ed. 2d 556 (1984)). Article III standing “requires that an injury be concrete, particularized, and actual or im m inent; fairly traceable to the challenged action; and redressable by a favorable ruling.” Monsanto Co. v. Geertson Seed Farms, 130 S. Ct. 2743, 2752, 177 L. Ed. 2d 461 (20 10 ) (citing Horne v. Flores, 557 4 In addition to the facts alleged in the com plaint, a district court considering a m otion to dism iss pursuant to Fed. R. Civ. P. 12(b)(6) m ay also consider “docum ents attached to the com plaint as exhibits, and docum ents incorporated by reference in the com plaint.” DiFolco v. MSNBC Cable L.L.C., 622 F.3d 10 4, 111 (2d Cir. 20 10 ) (citing Cham bers v. Tim e Warner, Inc., 282 F.3d 147, 153 (2d Cir. 20 0 2)). 6 U.S. —, 129 S. Ct. 2579, 2591-92, 174 L. Ed. 2d 40 6 (20 0 9)). “[I]n all standing inquiries, the critical question is whether [the plaintiff] has ‘alleged such a personal stake in the outcom e of the controversy as to warrant his invocation of federal-court jurisdiction.’” Hornes, 129 S. Ct. at 2592 (quoting Sum m ers v. Earth Island Inst., 555 U.S. 488, 492, 129 S. Ct. 1142, 1148-49, 173 L. Ed. 2d 1 (20 0 9)). State Farm argues that McGee has suffered no injury and thus has no such personal stake because his alleged standing depends on his having received assignm ents of rights from his patients, various State Farm insureds—a fact that he has failed to allege sufficiently. Def.’s Mem . at 11-13. State Farm also contends that McGee cannot base his standing upon State Farm ’s alleged infringem ent of his purported “constitutional right to practice m edicine.” Def.’s Reply. at 4-5. State Farm ’s latter contention is correct because, contrary to McGee’s assertions based on a Fourteenth Am endm ent property deprivation theory, Pl.’s Opp’n at 3-5, no such constitutional right exists. The Fourteenth Am endm ent applies only to state actors, not private defendants such as State Farm . See, e.g., Lugar v. Edm ondson Oil Co., Inc., 457 U.S. 922, 937, 10 2 S. Ct. 2744, 73 L. Ed. 2d 482 (1982). In any event, even if the Fourteenth Am endm ent did apply, there is no due process right to practice one’s profession free of any restraints. See, e.g., Conn v. Gabbert, 526 U.S. 286, 291-92, 119 S. Ct. 1292, 143 L. Ed. 2d 399 (1999). Regarding State Farm ’s form er contention, though McGee’s allegations concerning the assignm ent of his patients’ insurance claim s to him are hardly the m odel of clarity, McGee does in fact allege that he is the claim s’ assignee. See Am . Com pl. ¶ 218 (“STATE FARM breached the contract which Dr. McGee is an assignee of [sic] those 7 rights under the insurance contract.”); Am . Com pl. ¶ 223 (“Dr. McGee is an assignee for the receivable which are [sic] being sought.”). Further, McGee has attached to the com plaint a single denial-of-claim form that has the “Yes” box check-m arked in response to the question whether the claim was brought “as assignee.” Com pl. Ex. A. Accepting as true McGee’s allegations and construing the com plaint in favor of McGee as the Court m ust, see, e.g., Connecticut v. Physicians Health Servs. of Conn., Inc., 287 F.3d 110 , 114 (2d Cir. 20 0 2) (since standing is challenged on basis of pleadings, courts m ust accept all allegations as true and construe com plaint in favor of com plaining party), the Court concludes that the com plaint has sufficiently alleged McGee’s standing. See McGee I, 20 0 9 WL 2132439, at *3 (citing Am . Med. Ass’n v. United Healthcare Corp., No. 0 0 Civ. 280 0 (LMM) (GWG), 20 0 2 WL 31413668, at *2 (S.D.N.Y. Oct. 23, 20 0 2)) (even where denial of claim form s attached to com plaint indicated that McGee was not assignee of those claim s, single allegation that McGee was “assignee of [his patients’] policy benefits” was sufficient to create standing). Having concluded that McGee has standing, the Court now turns to each of McGee’s specific claims against State Farm below. C. Frau d McGee’s first claim sounds in fraud, Am . Com pl. ¶¶ 129-53, and thus it m ust m eet the particularity requirem ents of Rule 9(b) of the Federal Rules of Civil procedure.5 To satisfy Rule 9(b), a com plaint m ust “(1) specify the statem ents that the plaintiff contends were fraudulent, (2) identify the speaker, (3) state where and when the statem ents were 5 Fed. R. Civ. P. 9(b) provides that “[i]n alleging fraud or m istake, a party m ust state with particularity the circum stances constituting fraud or m istake. Malice, intent, knowledge, and other conditions of a person’s m ind m ay be alleged generally.” 8 m ade, and (4) explain why the statem ents were fraudulent.” Shields v. Citytrust Bancorp, Inc., 25 F.3d 1124, 1128 (2d Cir. 1994) (internal citations and quotation m arks om itted). State Farm contends that McGee’s fraud claim fails to m eet the particularity requirem ents of Rule 9(b) on several grounds, Def.’s Mem . at 13-26, but as a threshold m atter contends that collateral estoppel bars McGee from asserting fraud claim s against it in this action. Def.’s Mem . at 15-19. “The elem ents of fraud under New York law are: (1) a m isrepresentation or a m aterial om ission of fact which was false and known to be false by defendant, (2) m ade for the purpose of inducing the other party to rely upon it, (3) justifiable reliance of the other party on the m isrepresentation or m aterial om ission, and (4) injury.” Prem ium Mortg. Corp. v. Equifax, Inc., 583 F.3d 10 3, 10 8 (2d Cir. 20 0 9) (internal quotation m arks and citation omitted).6 State Farm contends that McGee has not alleged that he justifiably relied upon any alleged m isrepresentation by State Farm and that he is barred from arguing otherwise under the principles of collateral estoppel. Def.’s Mem . at 15. More specifically, State Farm m aintains that J udge Block’s conclusion in McGee I dism issing McGee’s civil RICO claim s on the grounds that the allegedly fraudulent IME reports were not calculated to deceive McGee or his patients bars McGee’s fraud claim . Def.’s Mem . at 16-17. McGee does not respond to this argum ent in detail; instead, he states that “State Farm ’s argum ent is based on RICO which this case at bar has not m ade a RICO claim [sic] and therefore is an irrelevant argum ent . . . .” Pl.’s Opp’n at 7. He 6 Because this is a diversity case, New York law applies. See, e.g., Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496-97, 61 S. Ct. 10 20 , 85 L. Ed. 1477 (1941). 9 thus appears to contend that because the prior case involved a civil RICO claim , and this case involves a fraud claim , collateral estoppel is inapplicable. The Court disagrees. Collateral estoppel, also known as issue preclusion, bars litigants from relitigating any fact or issue that has already been fully and fairly litigated in a prior proceeding that produced a final judgm ent on the m erits. See Bank of N.Y. v. First Millenium , Inc., 60 7 F.3d 90 5, 918 (2d Cir. 20 10 ) (citing Purdy v. Zeldes, 337 F.3d 253, 258 (2d Cir. 20 0 3)). The party seeking the benefit of collateral estoppel with respect to an issue m ust dem onstrate that the issue decided in the prior proceeding is identical to the issue in the subsequent action while the party resisting the application of collateral estoppel “has the burden of establishing the absence of a full and fair opportunity to litigate the issue.” Evans v. Ottim o, 469 F.3d 278, 281-82 (2d Cir. 20 0 6) (internal quotation m arks and citation omitted). Further, contrary to McGee’s contention, collateral estoppel m ay apply to claim s in a second action between the parties other than those they previously litigated; the specific causes of action need not be the sam e. See, e.g., Cooper v. Fed. Reserve Bank of Richm ond, 467 U.S. 867, 874, 10 4 S. Ct. 2794, 81 L. Ed. 2d 718 (1984) (“A judgm ent in favor of either side is conclusive in a subsequent action between them on any issue actually litigated and determ ined, if its determ ination was essential to that judgm ent.”); Allen v. McCurry, 449 U.S. 90 , 94, 10 1 S. Ct. 411, 66 L. Ed. 2d 30 8 (1980 ) (prior “decision m ay preclude relitigation of the issue in a suit on a different cause of action involving a party to the first case”). State Farm has m et its burden here. State Farm raised the identical issue— whether McGee can show reliance on any alleged m isrepresentation of State Farm in or associated with its allegedly fraudulent IME reports—in this action and the prior action 10 before J udge Block in McGee I. There, J udge Block addressed, am ong other things, whether McGee’s com plaint sufficiently alleged a civil RICO claim against State Farm and ultim ately concluded that it did not. McGee I, 20 0 9 WL 2132439, at *5-6. J udge Block reasoned that McGee failed to plead the alleged predicate acts of m ail or wire fraud with the requisite particularity. Id. at *4-5. He also reasoned that the predicate acts did not constitute m ail or wire fraud as a m atter of law because establishing m ail or wire fraud “requires showing a schem e or artifice to defraud or obtain m oney by m eans of false pretenses, representations, or prom ises, and such a showing fundam entally requires that som eone be deceived,” Id. at *5 (internal citations and quotation m arks om itted), a showing McGee failed to m ake in the com plaint. J udge Block stated as follows: In the conspiracy which McGee alleges, however, none of the defendants’ conduct is calculated to deceive anyone. The Providers’ allegedly falsified IME reports are not calculated to deceive State Farm because State Farm ordered the falsification in the first place. Neither are the reports calculated to deceive McGee: he knows full well what his own patients’ true condition is, and defendants’ reports are not intended to convince him otherwise. Nor are the reports calculated to deceive McGee’s patients, who apparently do not even receive them , and who are aware of their own injuries in any event. In sum , while defendants’ alleged conduct is dishonest and unfair, no one is intended to be duped or taken in. Id. at *6. It follows that if McGee cannot establish that anyone was deceived by an allegedly false IME report, he also cannot establish that anyone relied upon such a report—a point J udge Block him self recognized. Id. at *5 n.9. Here, in order to sufficiently allege a fraud claim , McGee m ust allege am ong other things, “justifiable reliance . . . on [State Farm ’s] m isrepresentation[s].” Equifax, 583 F.3d at 10 8, or, in other words, that he was actually deceived by them . And, as in McGee I, the m isrepresentations at issue here pertain to purportedly false IME reports. 11 See, e.g., Am . Com pl. ¶ 130 (“Such representations were deceitful and were perpetrated as part of a covert plan or schem e contrived by STATE FARM to procure false and contrived reports, designed in advance to attribute losses to policy exclusions through peer review reports.”); Am . Com pl. ¶ 134 (“STATE FARM m aterially m isrepresented that the peer review reports were accurate and based in science and for the purpose of treatm ent of the patient and not in attem pt to m axim ize profits.”). Accordingly, because the issue decided in McGee I—whether McGee can show reliance on any alleged m isrepresentation of State Farm in or associated with its allegedly fraudulent IME reports—is identical to the issue here and because there is no question that McGee had a full and fair opportunity to litigate the issue previously as he subm itted briefing on this very sam e point, McGee I, No. 0 8-CV-0 0 392, Dkt. No. 130 , at 16 (“A regular RICO claim with assertions of m ail fraud requires pleading som eone relied on the m isrepresentations . . . .”), collateral estoppel bars McGee from relitigating the issue here, and McGee’s fraud claim is therefore dism issed. Even if the Court were to conclude that the fraud claim is not barred by collateral estoppel, it would still dism iss the claim on the grounds that its generalized and conclusory allegations are insufficient to satisfy the pleading requirem ents of Fed. R. Civ. P. 9(b). Indeed, J udge Vitaliano recently dism issed McGee’s fraud claim against All State Insurance Com pany on this ground, and the allegations regarding fraud in that case were nearly identical to those here. See All State Ins., 20 11 WL 3497527, at *3 & n.1. There, “the crux of McGee’s fraud claim [was] that Allstate created a system of peer reviews and IMEs with the purpose of denying coverage to [State Farm insureds], regardless of the m edical necessity of treatm ent. Specifically, he claim [ed] that Allstate 12 dem anded a finding denying paym ent and a finding that the treatm ent rendered by Dr. McGee to be m edically unnecessary.” Id. (quotations om itted). The sam e is true here. McGee alleges that State Farm “dictated . . . that the evaluations and reports m ust deny the m edical necessity for future treatm ent as well as lack of m edical necessity for prior treatm ent.” Am . Com pl. ¶ 7. Moreover, there, as here, McGee purported to provide specificity to his claim by providing claim num bers along with corresponding dollar am ount that the insurance com pany allegedly failed to pay him . See Allstate Ins., 20 11 WL 3497527, at *3; Am . Com pl. ¶¶ 68-119. But “[t]he only thing that these details establish is that plaintiff sought paym ent for services that [State Farm ] refused. . . . [T]hey are not false statem ents or m isrepresentations on their face and McGee says nothing that explains why they are fraudulent.” Allstate Ins., 20 11 WL 3497527, at *3. D . Bre ach o f Co n tract & Bre ach o f Im p lie d D u ty o f Go o d Faith & Fair D e alin g McGee also asserts claim s for breach of contract and breach of the im plied duty of good faith and fair dealing. Am . Com pl. ¶¶ 212-20 1 at 47-49, 20 2-18 at 49-52.7 Like the allegations underlying McGee’s other claim s, the allegations relevant to these claim s are alm ost entirely conclusory. To m ake out a breach of contract claim under New York law a plaintiff m ust show “(1) the existence of a contract between itself and that defendant; (2) perform ance of the plaintiff’s obligations under the contract; (3) breach of the contract by that defendant; and (4) dam ages to the plaintiff caused by that defendant’s breach.” Diesel Props S.r.l. 7 Since the am ended com plaint contains inconsistent num bering of the paragraphs in these sections, the Court notes the pages num bers associated with the relevant allegations as well. 13 v. Greystone Bus. Credit II LLC, 631 F.3d 42, 52 (2d Cir. 20 11) (citations om itted). “‘In pleading these elem ents, a plaintiff m ust identify what provisions of the contract were breached as a result of the acts at issue,’” CreditSights, Inc. v. Ciasullo, No. 0 5 Civ. 9345 (DAB), 20 0 8 WL 4185737, at *10 (S.D.N.Y. Sept. 5, 20 0 8) (quoting Wolff v. Rare Medium , Inc., 171 F. Supp. 2d 354, 358 (S.D.N.Y. 20 0 1)); accord Owens v. Gaffken & Barriger Fund, LLC, No. 0 8 Civ. 8414 (PKC), 20 0 9 WL 30 73338, at *14 (S.D.N.Y. Sept. 21, 20 0 9) (citations om itted). All contracts also carry an im plicit covenant of good faith and fair dealing. This m eans that each party to a contract “em braces a pledge that ‘neither party shall do anything which will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract.’” Dalton v. Educ. Testing Serv., Inc., 87 N.Y.2d 384, 639 N.Y.S.2d 977, 663 N.E.2d 289, 291 (1995) (quoting Kirke La Shelle Co. v. Arm strong Co., 263 N.Y. 79, 79, 188 N.E. 163 (1933)). State Farm argues that the breach of contract claim should be dism issed because the com plaint fails to identify a single contract or contractual provision that State Farm has breached. Def.’s Mem . at 28. It further contends that the claim for breach of the im plied duty of good faith and fair dealin g should be dism issed because the claim is based upon the sam e allegations that give rise to the plaintiff’s breach of contract claim , and it is therefore redundant. Def.’s Mem . at 27. McGee responds that his com plaint does, in fact, identify the contract provisions at issue, Pl.’s Opp’n at 12, and m aintains that New York does “recognize good faith and fair dealings claim s,” Pl.’s Opp’n at 8. McGee’s com plaint contains vague references to several agreem ents that purport to provide the basis of his breach of contract claim : “POLICY FORM 9332P.6” and a 14 NEW YORK STATE PRIVATE PASSENGER AUTO INSURANCE POLICY endorsem ent.” Am . Com pl. ¶ 20 5 at 49. These agreem ents, McGee avers, provide “m andatory personal injury protection along with other additional coverage such as bodily injury liability and property dam age.” Am . Com pl. ¶ 20 5 at 50 . Though McGee alleges that “STATE FARM breached . . . duties owed to [him ] as an assignee of the policyholders, . . .” by “repeatedly denying [his] claim s for coverage benefits after m ultiple and tim ely requests for reim bursem ent,” Am . Com pl. ¶ 20 9, he fails to identify any specific provision of these agreem ents that State Farm has breached and does not attach the agreem ents to the com plaint. Further, the only provision in each of these agreem ents that he does identify does not relate to the duties owed by State Farm to its policyholders. Am . Com pl. ¶ 20 8. Instead, the provision applies to the obligations of State Farm ’s injured policy holders to, upon request of State Farm , subm it to an IME: “[t]he eligible injured person shall subm it to m edical exam ination by physicians selected by or acceptable to, the Com pany, when, and as often as the Com pany m ay reasonably require.” Am . Com pl. ¶ 20 8. Further, in the portion of the am ended com plaint containing McGee’s allegations as to fraud, McGee references another agreem ent—Medical Paym ents Coverage-Sym bol C (“Med Pay”), a “private insurance contract which is optional and fall [sic] outside the New York No-Fault statutes,” Am . Com pl. ¶ 148, and cites the “Coverage” portion of the policy, Am . Com pl. 149. It provides that that “[w]e will pay, subject to the lim its of the liability, for reasonable expenses incurred for m edical and funeral services that are necessary due to bodily injury to an insured caused by an accident.” Am . Com pl. ¶ 149. To the extent that McGee contends that State Farm breached a Med Pay agreem ent, the 15 am ended com plaint contains no such allegations. Nor does it contain allegations that any of his patients had such coverage, or if they did, that they also m et any of the preconditions for obtaining it, thus bringing the agreem ent into force. 8 In a scattershot approach, McGee alleges the nature of State Farm ’s purported breach in generalities, fraught with legal conclusions not entitled to the assum ption of truth.9 See Iqbal, 129 S. Ct. at 1950 . He avers, for exam ple, that “[u]pon inform ation and belief, STATE FARM breached non-delegable and express and im plied duties owed to the Plaintiff,” by, am ong other things, failing to conduct an “honest peer review of treatm ent rendered by Dr. McGee” and failing to “single loss adjust and voluntarily reim burse Dr. McGee.” Am . Com pl. ¶ 210 at 50 -51. But McGee fails to tie any of the allegations to a specific provision of any agreem ent between State Farm and an insured who has assigned his or her policy to McGee. For this reason, McGee’s allegations are insufficient to state a claim for breach of contract, and the claim is therefore dism issed. 10 See, e.g., Eaves v. Designs for Fin., Inc., 785 F. Supp. 2d 229, 259 (S.D.N.Y. 20 11) (citing Owens, 20 0 9 WL 30 73338, at *14) (breach of contract claim dism issed where plaintiffs 8 McGee acknowledges that “[w]hen paym ent or coverage is not available for whatever reason under the No Fault Endorsem ent or No Fault law than [sic] State Farm is required under [Med Pay] to pay for the m edical treatm ent,” Pl.’s Opp’n at 12, but the am ended com plaint nevertheless contains no allegations as to whether Med Pay was even available to any of the patients he treated and, if it was, how specifically State Farm breached the agreem ent. 9 The sam e is true of a vast m ajority of the pleadings in McGee’s am ended com plaint. Though at 55 pages, the com plaint is hardly “a short and plain statem ent of the claim ,” Fed. R. Civ. P. 8(a), it nevertheless contains very few well-pleaded factual allegations. 10 Because the Court resolves the breach of contract claim on this ground, it will not reach the issue of whether the claim passes m uster under Rule 8(a)(2). 16 failed to identify “which docum ents and which provisions of those docum ents [defendant] allegedly breached”); CreditSights, 20 0 8 WL 4185737, at *11 (breach of contract counterclaim dism issed because “New York law is em inently clear that a proper breach of contract claim m ust identify specifically breached contract term s [and] [n]one are so alleged in the counterclaims”); Lewis Tree Serv., Inc., et al. v. Lucent Techs., Inc., et al., No. 99 Civ. 8556 (J GK), 20 0 0 WL 127730 3, *5 (S.D.N.Y. Sept. 8, 20 0 0 ) (breach of contract claim dism issed because plaintiffs failed to identify contractual provisions that defendant had breached); Shah v. Wilco System s, Inc., 126 F. Supp. 2d 641, 653 (S.D.N.Y. 20 0 0 ) (sam e). McGee’s claim for breach of the im plied duty of good faith and fair dealing is also fatally flawed. New York law does not recognize a separate claim for breach of the im plied duty of good faith and fair dealing based on the sam e facts as a claim for breach of contract. See, e.g., L-7 Designs, Inc. v. Old Navy, LLC, 647 F.3d 419, 433 n.17 (2d Cir. 20 11) (“‘[B]reach of [the duty of good faith and fair dealing] is m erely a breach of the underlying contract.’” (quoting Fasolino Foods Co. v. Banca Nazionale del Lavoro, 961 F.2d 10 52, 10 56 (2d Cir. 1992))). And there is no question that McGee’s breach of contract and breach of the im plied duty of good faith and fair dealing claim s are based on the sam e facts. Com pare Am . Com pl. ¶ 214 at 47 (“Under New York law, an insurer’s duty to an insured for autom obile policies im poses a non-delegable obligation to m ake a prom pt, thorough, and reasonable investigation of the m erits of claim s subm itted.”) and Am . Com pl. ¶ 219 at 48 (“STATE FARM breached and willfully violated the duty of good faith and fair dealing owed to Dr. McGee which am ong other things required that STATE FARM be honest in dealing with Dr. McGee’s claim s.”), with Am . Com pl. ¶ 20 9 17 at 50 (“STATE FARM breached non-delegable, express and im plied duties owed to the Plaintiff as an assignee of policyholders, . . . by repeatedly denying Plaintiff’s claim s for coverage benefits after m ultiple and tim ely requests for reim bursem ent.”). Accordingly, because McGee’s breach of the duty of good faith and fair dealing claim is redundant of his breach of contract claim , it is dism issed. See, e.g., FlightSafety Int’l, Inc. v. Flight Options, LLC, 418 F. Supp. 2d 10 3, 111 (E.D.N.Y. 20 0 5), vacated in part on other grounds, 194 F. App’x 53 (2d Cir. 20 0 6) (per curiam ) (breach of covenant of good faith and fair dealing claim dism issed as redundant of breach of contract claim ); Tevdorachvili v. Chase Manhattan Bank, 10 3 F. Supp. 2d 632, 642 (E.D.N.Y. 20 0 0 ) (citations om itted) (sam e). E. U n ju s tm e n t En rich m e n t McGee also asserts a claim of unjust enrichm ent, alleging, am ong other things, that “STATE FARM has been paid for the insurance contracts which it entered with Dr. McGee’s patient. [sic] STATE FARM has failed to pay over 3 m illion dollars of services rendered to [sic] Dr. McGee.” Am . Com pl. ¶ 225. As State Farm correctly notes, Def.’s Mem . at 31, in order to state a claim for unjust enrichm ent under New York law, a plaintiff m ust allege, “(1) that the defendant benefitted; (2) at the plaintiff’s expense; and (3) that equity and good conscience require restitution.” Beth Israel Med. Ctr. v. Horizon Blue Cross & Blue Shield of N.J . Inc., 448 F.3d 573, 586 (2d Cir. 20 0 6) (citing Kaye v. Grossm an, 20 2 F.3d 611, 616 (2d Cir. 20 0 0 )); accord Mandarin Trading Ltd. v Wildenstein, 16 N.Y.3d 173, 182, 944 N.E.2d 110 4, 919, N.Y.S.2d 465 (20 11). 18 An unjust enrichm ent claim is duplicative of a breach of contract claim where the cause of action stem s from the contractual relationship. See, e.g., Clark-Fitzpatrick, Inc. v. Long Island R.R. Co., 70 N.Y.2d 382, 388, 521 N.Y.S.2d 653, 516 N.E.2d 190 (1987) (“The existence of a valid and enforceable written contract governing a particular subject m atter ordinarily precludes recovery in quasi contract for events arising out of the sam e subject m atter.”); Leibowitz v. Cornell Univ., 584 F.3d 487, 50 7 (2d Cir. 20 0 9) (“[I]t is an elem entary principle of contract law that, where there exists an express contract for com pensation, an action outside that contract will not lie.” (citation and quotation m arks om itted)). Here, McGee’s unjust enrichm ent claim stem s from the alleged contractual relationship between State Farm and McGee as an assignee of his patients. It is thus duplicative of McGee’s breach of contract claim and is dism issed. See, e.g., Allstate, 20 11 WL 3497527, at *5 n.3 (dism issing McGee’s unjust enrichm ent claim against Allstate based on nearly identical allegation s because it was duplicative of breach of contract claim ).11 F. Equ itable Su bro gatio n McGee also invokes the doctrine of equitable subrogation, again alleging that he rendered services to State Farm insureds and has not received paym ent from State Farm . Am . Com pl. ¶¶ 227-50 . This claim fails as well. “Rooted in equity, the purpose of 11 Even if the unjust enrichm ent claim was not duplicative of the breach of contract claim , it would still fail as McGee has not alleged that any m edical services he rendered to his patients bestowed a benefit upon State Farm or that the benefit was “bestowed [by him ] at the defendant’s behest.” Barbagallo v. Marcum LLP, — F. Supp. 2d —, No. 11 Civ. 1358 (J BW), 20 11 WL 50 680 86, at *13 (E.D.N.Y. Oct. 25, 20 11) (citations om itted). 19 the subrogation doctrine is to afford a person who pays a debt that is owed prim arily by som eone else every opportunity to be reim bursed in full.” Chem . Bank v. Meltzer, 93 N.Y.2d 296, 30 4, 712 N.E.2d 656, 690 N.Y.S.2d 489 (1999). The doctrine is broad enough to include every instance in which one party pays a debt for which another is prim arily answerable and which in equity and good conscience should have been discharged by the latter, so long as the paym ent was m ade either under com pulsion or for the protection of som e interest of the party m aking the paym ent, and in discharge of an existing liability. Travelers Cas. & Sur. Co. v. Dorm itory Auth., State of N.Y., 735 F. Supp. 2d 42, 90 (S.D.N.Y. 20 10 ) (citation and quotation m arks om itted). The doctrine has “allow[ed] insurers to stand in the shoes of their insured to seek indem nification by pursuing any claim s that the insured m ay have had against third parties legally responsible for the loss.” All State Ins. Co. v. Mazzola, 175 F.3d 255, 258 (2d Cir. 1999) (citation om itted). Courts have also applied the doctrine in the m ortgagee or lienholder context where the m ortgagee m akes a paym ent to satisfy an existing debt or lien on property. See, e.g., United States v. Baran, 996 F.2d 25, 28-29 (2d Cir. 1993) (“New York courts have routinely applied subrogation ‘where the funds of a m ortgagee are used to satisfy the lien of an existing, known incum brance when, unbeknown to the m ortgagee, another lien on the property exists which is senior to his but junior to the one satisfied with his funds.’” (quoting King v. Pelkofski, 20 N.Y.2d 326, 333-34, 282 N.Y.S.2d 753, 758, 229 N.E.2d 435, 439 (1967))). But “New York courts have never applied the doctrine of equitable subrogation on behalf of a m edical professional seeking third party paym ent,” AllState, 20 11 WL 3497527, at *4, exactly what McGee contends the Court should do here. 20 McGee argues that the doctrine applies because “State Farm owes a debt to Dr. McGee” in light of the m edical services he provided to State Farm ’s insureds. Pl.’s Opp’n at 14. Yet he provides the Court with no authority to support this assertion— reason enough to dism iss this claim . See AllState, 20 11 WL 3497527, at *4. There are other problem s with this claim as well. McGee does not allege that he treated his patients under com pulsion or for the protection of his own interest; he avers m erely that “[u]pon inform ation and belief, STATE FARM [insureds] requested and sought treatm ent by Dr. McGee.” Am . Com pl. ¶ 230 . This allegation is insufficient to show com pulsion. See, e.g., Underpinning & Foundation Skanska, Inc. v. Travelers Cas. & Sur. Co. of Am ., 726 F. Supp. 2d 339, 353 (S.D.N.Y. 20 10 ) (“A paym ent is not involuntary sim ply because it was dem anded by the person paid.” (citation and quotation m arks om itted)). Finally, the Court rejects McGee’s contention that he was com pelled to treat his patients because he was un der an ethical obligation to do so. Pl.’s Opp’n at 14. The com plaint contains no such allegation, and “[a] party m ay not am end its com plaint . . . through statem ents m ade in its m otion papers.” Siti-Sites.com , Inc. v. Verizon Com m c’ns, Inc., No. 10 Civ. 3751 (DLC), 20 10 WL 5392927, at *5 (S.D.N.Y. Dec.29, 20 10 ) (citing Wright v. Ernst & Young LLP, 152 F.3d 169, 178 (2d Cir. 1998)). In any event, “[a] physician has no duty to render services to every person seeking them . . . . [A] physician’s decision of whether to treat a person am ounts to a decision of whether to enter into a contractual relationship.” William s v. United States, 242 F.3d 169, 176 (4th Cir. 20 0 1) (internal quotation m arks and citation om itted). For all of these reasons, McGee has failed to sufficiently plead his equitable subordination claim , and it is therefore dism issed. 21 III. CON CLU SION For the foregoing reasons, the Court grants State Farm ’s m otion to dism iss pursuant to Rule 12(b)(6) and hereby dism isses the am ended com plaint in its entirety. Because McGee has already am ended his com plaint once, and because any further am endm ent would be futile, dism issal is with prejudice. The Clerk of the Court is directed to close this case and enter judgm ent in favor of State Farm . SO ORDERED. Dated: Brooklyn, New York Novem ber 8, 20 11 / s/ I. Leo Glasser Senior United States District J udge 22
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