St. Elizabeth Med. Ctr. v Soults

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St. Elizabeth Med. Ctr. v Soults 2020 NY Slip Op 34602(U) September 3, 2020 Supreme Court, Oneida County Docket Number: Index No. EFCA2019-001166 Judge: Bernadette T. Clark Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [*FILED: 1] ONEIDA COUNTY CLERK 09/03/2020 11:47 AM NYSCEF DOC. NO. 41 INDEX NO. EFCA2019-001166 RECEIVED NYSCEF: 09/03/2020 At aa term tenn of of Supreme Supreme Court Court of of the the State of At State of New New York York held held inin and and for for the the County County of of Oneida at at the the Oneida Oneida County County Courthouse, Courthouse, Oneida 200 Elizabeth Elizabeth Street, Street, Utica, Utica, New New York York on on 200 300m th the day of of July, .July, 2020. 2020. the 30 day BERNADETTE T. T. CLARK, CLARK, J.S.C J.S.C PRESENT: HON. HON. BERNADETTE PRESENT: COURT OF Of THE TIIE STATE OF SUPREME COURT SUPREME STATE OF NE\V YORK YORK NEW COUNTY OF OF ONEIDA ONEIDA COUNTY ST. ELIZABETH ST. ELIZABETH MEDICAL MEDICAL CENTER, CENTER, Plaintirt: Plaintiff, DECISION DECISION AND AND ORDER ORDER Vs. Vs. Index Index No.: No.: EFCA2019-001166 EFCA2019-001166 RJI No.: No.: RJI 32-20-0165 32-20-0165 CLIFFORD B. B. SOULTS, :tv1D CLIFFORD MD SOULTS, COMPUTERSHARE COMPUTERSHARE TRUST TRUST COMPANY, COJvlPANY, N.A., N.A., Defendants. Defendants. APPEARANCES: APPEARANCES: HARRIS BEACH, HARRIS BEACH, PLLC PLLC Esq. By: Kyle Kyle D. D. Gooch, Esq. Gooch, Plaintiff' Center for Plainti!J, St. Elizabeth Elizabeth Medical Afedical Center Attorney for St. Attorney 99 Garnsey Garnsey Road Road 99 NY 14534 Pittsford, NY 14534 Pittsford, (585) 419-8800 419-8800 (585) By: COHEN COMPAGNI COMP AGNI BECKMAN DECKMAN APPLER APPLER & & KNOLL, KNOLL, PLLC PLLC COHEN By: By: Laura Laura LL. Spring, Spring, Esq. Esq. Attorncyfor Defendant, Clifford B. Soults, Saults, MD .MD for Clifford B. Defendant, Attorney 507 Plum Plum Street, Street, Suite Suite 310 310 507 NY 13204 Syracuse, NY 13204 Syracuse, (315) 477-6293 4 77-6293 (315) RIVKIN RADLER LLP RIVKIN RADLER LLP By: Michael Michael P, P. Versiclielli, Esq. Esq. Versichelli, Computershare Trust AUorneyfor for Computershare Trust Company, N.A. N.A. Company, Attorney 926 Rxr Plaza Rxr Plaza 926 NY 11556 11556 Uniondale, NY Uniondale, 357-3000 (516) 357-3000 (516) By: 1 Filed In Oneida Gñeida Clerks Office Filed In County Clerks Office County 9/3/2020 9/3/2020 1 of 12 AM 11:47:39 AM 11:47:39 Index # EFCA2019-001166 EFCA2019-001166 Index# [*FILED: 2] ONEIDA COUNTY CLERK 09/03/2020 11:47 AM NYSCEF DOC. NO. 41 INDEX NO. EFCA2019-001166 RECEIVED NYSCEF: 09/03/2020 J. Clark,J. Clark, Procedural History Procedural History Sn== Motion for Summary Judgment filed St. Elizabeth Elizabeth Before the is for Judgment filed by St. Before the Court Court is a Motion Plaintiff, by Plaintiff, for Summary Judgment filed Hospital Medical Center (hereinafter, SEMC) and for Judgment filed Hospital Medical Center and a Cross-Motion Cross-Motion (hereinaner, Summary SEMC) Dr. Soults). Soults). Considered on the the Motion Motion for by Clifford B. MD Dr. Considered on for Clifford B. Soults, MD (hereinafter, (hereinafter, Defendant, Soults, by Defendant, Memorandum of Law Law in in Plaintiff were an Attorney by were an Affinnatfon; Memorandum of Summary Judgment Judgment Affirmation; Suunuary by Plaintiff Attorney Notice of Cross-Motion Cross-Motion Support of filed on 26, Defendant, Dr. Notice of of Motion, filed on February Dr. Soults Soults Support 26, 2020; 2020; Defcñdant, Motion, February Memorandum of Law Law in in on May for Judgment and filed on Memorandum of for Summary Judgment and Affinnation Affirmation filed 27, 2020; 2020; May 27, Summary support filed on to Cross-Motion and in in further further of Motion Motion Plaintiff's Opposition to and support of by Attorney, filed on Opposition Cross-Motion Attorney, by PlaintifPs filed on July Memorandum of Law Law in in Reply Defcndañts July and of by Attorney, filed on 29, and Memorandum 29, Attorney, July Reply by Defendants July 23, 23, 2020; 2020; Judgment to the the demutualization demutualization proceeds 2020. Both parties in sought a Declaratory Judgment to proceeds 2020. Both parties in this this action action sought Declaratory reserved decision. from MLMIC. Oral was on and reserved decision. 2020 and the the Court Court from MLMIC. Oral argument argument was held held on July 30, 2020 July 30, Facts entitled action from over who who to specific, identifiable funds This action arose from a dispute over is to identifiable funds This arose dispute is entitled specific, Defa3aant currently being held by Computershare Trust Company (hereinafter, Computcrshare Trust in escrow escrow held in (hereinafter, Company by Defendant, currently being d= of the talization of Medical Medical of of Computershare). The funds are Computershare). The escrowed escrowed funds are the the proceeds proceeds the demutualization Mutual MLMIC). Dr. Soults Soults was employed employed Liability Mutual Insurance Company (hereinafter, MLMIC). Dr. was by Insurance (hereinafter, by Liability Company employment contract SEMC was SEMC and an contract. Pursuant to contract SEMC was SEMC and executed executed an employment employment contract. Pursuant to his his employment required toto provide provide professional professional medical medical liability liability insurance insurance on on an an annual annual basis. basis. There There isis no no required dispute that that both both parties parties performed performed under under the the contract. contract. SEMC chose MLMIC MLMIC toto provide provide liability liability SEMC chose dispute insurance and and paid paid the the animal annual premium. premium. Dr. Dr. Soults was the the insured/policy insured/policy holder. holder. Pursuant Pursuant toto aa Soults was insurance \Vritten designation designation made made by by Dr. Dr. Soul SEMC beame became the the policy policy admiAfrator. administrator. SEMC was the the SEMC was Soults, ts, SEMC written 2 2 2 of 12 [*FILED: 3] ONEIDA COUNTY CLERK 09/03/2020 11:47 AM NYSCEF DOC. NO. 41 INDEX NO. EFCA2019-001166 RECEIVED NYSCEF: 09/03/2020 administrator and Dr. Dr. Soults Soults beeme the policy policy administrator and became the policy holder, pursuant to policy. pursuañt to the the liability policy. holder, liability policy There is that selected MLMIC as carrier, negotiated the policies There is no no dispute dispute that SEMC SEMC selected MLMIC as the the insurance insurance ñégetlated the policies carrier, served as the administrator all of of the served as policy administrator and paid all premiums. the policy and paid the insurance insumnce premiums. mutual is maintained and as As insurance company, MLMIC As a a mutual insurance MLMIC is organized, maintaiñcd and operated operated as a a . compañy, organized, non-stock corporation for its The declaration declaration for the the non•stock corporation for who are policy holders. The pages for its members members who are the the policy holders. pages relevant time periods show Dr. is policyholder as and as policy relevant time show Dr. Soults Soults the policyholder as the the insured insured and SEMC SEMC as the the policy periods is the puremnt administrator. As the the designated designated to the the policy MLMIC administrator. As policy administrator, pursuant to policy MLMIC Mministrator, policy when designation form executed by Dr. SEMC dividends on policy when declared designation form executed Dr. Soults, SEMC received received dividends on this this policy declared Soults, by of Directors of MLMIC. MLMIC. of of by the the Board Board Directors by to National On 15, MLMIC's Board of approved aa sale National Indemnity 2016 MLMIC's Board of Directors Directors approved sale to On July 15, 2016 Indemnity July Company. As a a result, MLMIC was required required York State Insurance Law §7307 §7307 to file file an an Company. As MLMIC was by New York State Insurance Law to result, by New application with the of Services for permission to and application with the Department Department of Financial Financial Services for permission to demutualize demutualize and convert convert stock Plan of Conversion Conversion to corporation. Thereafter, on MLMIC published its of to a a stock corporation. on June June 22, MLMIC published its Plan Thereafter, 22, 2018, 2018, (hereinafter POC) through aa Policyholder Information Statement (hereinafter, PIS). These (hereinafter through Policyholder Information Statement PIS). These (hereinafter, POC) documents policy holders or documents established that would provide eligible established that the the conversion conversion would provide eligible holders or their their policy designees with cash (See NYSCEF Doc. No. 22) Once the was desigñëês with cash consideration consideration (See POC, NYSCEF Doc. No. Once the cash cash amount amount was POC, 22) paid to policyholder as the policyholder's membership rights would be to the the policyholder as its its designee designee the policyholder's rights would be membership paid extinguished. extinguished. On January On 14, DFS aa Decision Order that: 1) policyholders are DFS issued issued Decisiõñ Order eligible are that: policyholders 14, 2019, 2019, January 1) eligible to receive receive the demutualization to the proceeds; 2) policy administrators who were not entitled entitled demutualization who were administrators not proceeds; 2) policy policyholders' designated as a a designee designee could dispute the policyholders' right designated as could still dispute the to still to the the demutualization right demutualization mechmim and 3) dispute resolution proceeds; and resolution mechanisms were in place for Dr. did were in place for that that purpose. Soults did purpose. Dr. Saults 3) dispute precceds; 3 3 3 of 12 [*FILED: 4] ONEIDA COUNTY CLERK 09/03/2020 11:47 AM NYSCEF DOC. NO. 41 INDEX NO. EFCA2019-001166 RECEIVED NYSCEF: 09/03/2020 MLMIC coñscñt consent form form or or an an assignment assignment agreement agreement designating designating SEMC SEMC to to receive receive the the not sign sign aa MLMIC not demutualization demutualization proceeds.¹ procccds. 1 Analvsis Analysis SEMC pressed pressed two two distinct distinct theories theories upon upon which which they they are are seeking seeking Summsy Summary Judgment Judgment on on SEMC The first first theory theory isis unjust unjust enrichment enrichment and and the the·second is based based their Declaratory Declaratory Judgm=t Judgment action action. The their second is law. upon contract contract law. upon to SEMC's SEMC's claim claim for for unjust unjust enrichment, emichment, SEMC SE1v1C argued argued that that aa party party may may \Vith regard regard to With if expense recover for for unjust unjust enrichmcñt enrichment if itit pleads pleads and and proves proves that that aa Defendant Defendant was was enriched enriched at at its its expense recover and that that itit would would be be against against equity equity and and good good conscience conscience to to permit pennit the the Defendant Defendant to to retain retain what what and SEMC claimed claimed that that these these elements elements are are satisfied satisfied "if "if Dr. Dr. Soults Soults isis is sought sought toto be be recovered. recovered. SEMC is MUvUC demutualization dcmutualization proceeds proceeds attributable attributable to to aa policy policy that that SEMC SE~,fC pcm1ittcd to to obtain obtain the the MLMIC permitted \Vill be be enriched enriched at at the the Medical )'vf edical Center's Center's expense. expense. As As aa matter matter of or bought and and paid paid for, for, Dr. Dr. Soults Soults will bought Law, that that enrichment enrichment would \Vould be be Law, unjust." unjust." Plaintiff's Plaintiffs M.O.L., M.O.L., pg. pg. 9. 9. Second, SEMC, SBMC, argued argued that that the the Court Court should should "construe "construe Dr. Dr. Soults Soults employment employmenl Second, ooment" agreement" according to to the the objective objective evidence evidence that that the the parties parties would would have have intendM intended SEMC ag according SE:rv1C toto SEMC asserted asse1ied that that receive any any demutualization demutualization proceeds proceeds had had the the parties parties considered considered the the issue. issue. SEMC receive the Court Court should should "fill "fill inin the the gap" gap" left left because because the the demutualization demurualization was \Vas not not anticipated anticipated at at the the time time the the ecñtract contract was was executed. executed. the SHvfC argued argued further further that that Dr. Dr. SEMC Soults' Soults' intent intent was was demonstrated demonstrated when when the hospital hospital received the dividends dividends from MLMIC and that that the the demutualization demutualization also a a the received the from MLMIC and proceeds, also proceeds, would have been been treated treated in the the same same fashion. membership right, would have in fashion. right, membership physicians' 11 During oral argument, Counse! for for Plaintiff Plaintiff stated that that other other physicians' employees êmpicyces /po!imbolders have executed executed Counsel stated /policyholders have During oral argument, a designation favor ofSEMC. a In designation in favor of SEMC. 4 4 4 of 12 [*FILED: 5] ONEIDA COUNTY CLERK 09/03/2020 11:47 AM NYSCEF DOC. NO. 41 INDEX NO. EFCA2019-001166 RECEIVED NYSCEF: 09/03/2020 First, with with regard regard to to the the contract contract theory, theory, while whi]e itit isis true true that that neither neither party party anticipated anticipated the the First, demutua1ization of of MLMIC MLMIC at at the the time time the the contract contract was was executed, executed, the the Court Court isis not not persuaded persuaded that that demutualization "objective evidence of of the the parties' parties' intent intent overwha=ing'y ovenvhelmingly supports supports SEMC's claim that that the the parties parties SEMC's claim "objective evidence would have have intended intended itit to to receive receive the the dentualization dcmutualization would proceeds." proceeds." PlaintifPs Plaintiff's M.O.L. M.O.L. p. p. 8. 8. his Cross-Motion Cross-Motion for for Summary Judgment, argued argued that that he he isis the the Dr. Soults, Soults, injn his Dr. Judgment, Smmnmy insurcd/polic:yholder and and as as the the owner owner of of the the policy policy isis entitled entitled to to all all of of the the membership membership rights. rights. InIn insured/policyholder the addition, Dr. Dr. Soults claimed that that New New York York Insurance Insurance Law Law §7307(e)(3), the language language of of the the Soults claimed §7307(e)(3), addition, policy, §6.3(t) of the the POC POC Order Order all all support support his his claim claim that that the the demutualization demutualization proceeds proceeds be be paid paid of policy, §6.3(f) to him him as as the the policyholder. policyholder. Dr. Dr. Soults Soults also also argücd argued that that the the DFS DFS Decision/Order Decision/Order dated dated January January to 14, 2019 provided provided that tl1at the the policy!::!±rs policyholders are arc the the persons persons entitled entitled to to the the demutualization demutualization proceeds proceeds 14, 2019 unless the the insured insured has has affirmatively affinnatively designated designate.ditto receive the the proceeds. proceeds. Dr. Dr. Sou1ts stated that that it to receive Soults stated unless lv1Uv1IC had had specific specific forms fomlS for for the the purpose purpose of of allowing allowing insureds insureds to to the record record revealed revealed that that MLMIC the designate another another entity entity to to receive receive the the demütealization demutualization proceeds. proceeds. designate It isis undisputed undisputed that that Dr. Dr. Soults Soults It did not not sign sign or or make make :my such designation designation or or waiver waiver with with regard regard to to the the demutualization demutualization did any such was procecds 2 • In In this this Court's Court's view, view, and and contrary contrary to to SEMC'S argument, the the fact fact that that Plaintiff Plainti!Tvvas proceeds2. SEMC'S argumcñt, w1iting by by Dr. Dr. Soults Soults to to allow allow SEMC to be be the the policy policy administrator, administrator, the the policy policy designated inin writing SEMC to designated administrator; pay pay the the premiums premiums and and use use any any divideds dividends to to offset offset premium premium costs, costs, has has no no bearing beaiing administrator; on the the fact fact that that Dr. Dr. Soults Soults isis the the policyhcldcr policyholder entitled entitled to to the the demutualizatism demutualization proceeds. proceeds. on The documcatary documentary evidence evidence clearly clearly established established that that the the only only way way for for the the demutualization demutualization The if the policyholder in writing that proceeds to be be paid paid to to the the policy administrator is if the policyholder designates proceeds to administrator is designates in that writing policy funds. another such as as the the Policy is to to receive receive those now escrowed escrowed another entity, such Administrator, is those now funds. entity, Administrator, Policy 22 The Dr. Soults designation form naming administrator which also also The record record reveals reveals that that Dr. Soults did did sign sign a a designation SEMC policy form which naming SEMC policy administrator entitled them to to dividends dMdëñds MVHS to to keep dividêñda to offset offset premiums. premiums. entitled them allowing MVHS to allowing keep any any dividends 5 5 5 of 12 [*FILED: 6] ONEIDA COUNTY CLERK 09/03/2020 11:47 AM NYSCEF DOC. NO. 41 INDEX NO. EFCA2019-001166 RECEIVED NYSCEF: 09/03/2020 by SEMC SEMC to to sign sign over over aa portion portion of of the the According to to this this record, record, Dr. Dr. Soults Soul ts was \Vas asked asked by According dcmutualization proceeds proceeds and and he demiinialization he has has steadfastly steadfastly refused refused to to do do so. so. This This procMure, procedure, outlined outlined inin it the documeñta-y documentary evidence evidence presented presented here here makes makes it very very clear clear that that the the policyhcider, policyholder, Dr. Dr. Soults, Soults, the option of of signing signing over over the the demutualization demutualization proceeds proceeds however however he he isis not not mandated mandated to to do do has the the option has so. In In fact, fact, this this record record demonstrates demonstrates that that SEMC SEMC has has already already approached and received received written written approached and so. assignments from from several several of of its its physician/employees physician/employees transferring transferring the the denmtnalization demutualization proceeds proceeds to to assignments SEMC/MVHS. Thus, Thus, SEMC SEMC was was fully fully aware aware that that the the demutualization demutualization procccds proceeds belong belong toto the the SEMC/MVHS. vvrittcn assignment assignment isis the the only only way way itit can can secure secure policyholder/physician and and that that obtaining obtaining their their written policyholdcr/physician unless they they demonstrate demonstrate aa right right to to these these proceeds. proceeds. Moreover, Moreover, the the POC POC stated stated that that the the these funds, funds, unless these he cash distribution distribution would would be be made made to to the the policyholder policyholder unless unless he or or she she cash a or Policy Administrator Administrator to to receive receive such such amount amount on on his his or her her behalf. behalf. a Policy "Affirmatively" "Aflirmatively" designated designated here. Such Such isis not not the the case case here. Dr. Soults Saults has has mfused refused SEMC's SEMC's request request to to designate designate the the hospital hospital to to receive receive the the demutualization demutualization Dr. proceeds. proceeds. SEMC urges urges this this Court Court to to disregard disregard the the holding holding inin Maple-Gate 1\1aple-Gate Anesthesiciõgists, Anesthesiologists, PC PC v.v. SEMC Nasrin, 182 AD 3d 3d 984 984 (4* (4th Dept. Dept. 2020), 2020), because because that that case case only only cassidered considered aa claim claim for for unjust unjust 182 AD Nasrin, enrichment. However, However) Dr. Dr. Soults Soul ts urges urges that that the the Maple-Gate J.Waple-Gate case case isis not not only only binding binding authority authority enrichment. on this Court, Court, itit was was decided decided on on virtually virtually identical identical facts. facts. on this Maple-Gate Dr. Soults Soul ts argued argued that that Maple-Gate Dr. considered the the claim claim ofunjust of unjust enrichment, enrichment, as as well well as as the the contractual contractual issues issues including including the the claim claim considered to demutualization demutualization proceeds proceeds since since they they were were policy policy adsiñis'rators administrators and and that they they were were entitled entitled to that paid for policy. Dr. also that is paid the the premium premium for the the MLMIC MLMIC policy. Dr. Soults Soults also responded responded that there there is no no factual factual on distinction between the Maple-Gate case case authority on distinction between the Maple-Gate case and and the the instant instant case and and that that it it is is binding binding authority this Court. Court. this 6 6 6 of 12 [*FILED: 7] ONEIDA COUNTY CLERK 09/03/2020 11:47 AM NYSCEF DOC. NO. 41 INDEX NO. EFCA2019-001166 RECEIVED NYSCEF: 09/03/2020 in Schooch Dr. further urged this to the in v. Lake Champlain Dr. Soults Soults further urged this Court Court to follow follow the rationale rationale Schooch v. Lake Champlain (3rdrd OP 03444 03444 Dept. because it supports supports his claim claim for the the OB-GYN, PC, NY Slip (3 Dept. 2020) because it his for OB-GYN, PC, NY Slip OP 2020) demutualization proceeds. In Schooch, the Court Court held that: demutualization proceeds. In the held that: Schooch, designation as policy naministrator gave it no no greater greater "[D]efendants designation as administrator gave it "[D]efendants policy P1nintiff cash consideration and not assign right to assign right to the the cash consideration and Plaintiff did did not explicitly explicitly that right to and to Maple-Gate v. that right to Defendant Defendant and declined declined to do do so. so. (See (See Maple-Gate v. (4thth Although conversion Nasrin,, 182 2020). Although the Nasrin 182 AD AD 3d 3d 984 984 (4 Dept Dept. 2020). the conversion plan gives administrator the right right to object object if it it believes believes that plan gives aa policy administrator the to if that policy legal right the cash cash the right to object carries it right to consideration, the rig/it to object carries it has has a a legal to the consideration, in and and of to the consideration and the objector objector must no in itself, to the consideration and the must no rights rights of itself, legal failed to provide provide prove its legal right thereto. Defendant has to prove its claimed claimed right thereto. Defendant has failed Plaintiff any in regard, as that Plaintiff proof in that that as it it has has not not demonstrated demonstrated that regard, any proof or contractual contractual assigned it right through aa designation form or assigned it that that right through designation form added)." arrangement (emphasis added)." See Id. arrangement (emphasis See Id. This Court agrees with the in that (here. must prove Court agrees with the decision decision in Schooch, that the the objector objector must prove This Schooch, (here, SEMC) SEMC) its legal However, SEMC to that his claimed legal right. right. SEMC has has failed failed to demonstrate demoratrate that Dr. Dr. Soults Soults assigned assigned his rights rights its claimed However, through form or or through through distinct contractual arr=g=ent. SEMC argues that either the fonn a distinct contractual arrangement. SEMC argues that either through the designation designaticñ neither Maple-Gate nor are in Instead, SEMC urges this neither Maple-Gate nor Schooch Schooch are detenninative determinative in this this case. case. SEMC urges this Court Court Instead, powers" look what the parties have intended given the nature nature to at the "would have intended given the to powers" to use use its its "gap-filling to look at what parties "would "gap-filling all of other of the employment agreements and what what we of and all terms of agreements and we of the the relationship and given given of the the other terms the employment relationship them." know that the parties would have know about them." See M.O.L., p. claimed that would have about See Plaintiff's Plaintiff's p. 7. 7. SEMC SEMC claimed the parties M.O.L., hospital when the given these proceeds to if it the given these demutualization demutualization proceeds to the the hospital if they had considered considered it when they had proof support this claim claim was employment contracts were drafted. The proof offered by to this was employment contracts were drafted. The only offered SEMC to support only by SEMC that the the physicians their right to receive receive dividends in a form form their membership right to policy dividends in that assigned physicians assigned membership policy by MLMIC. MUvflC. SEMC SE.l\1C argued argued that that the the evidence evidence of of the the parties' parties' intent, intent, that that the the hospital hospital required by required should receive receive the the proceeds proceeds of of the the demutualization, demutualization, manated emanated from from the the hospital's hospital's right right to to receive receive should a.11 of of the the dividends. dividends. When \V]1en asked asked during during oral oral argume argument whether whether the the doctors doctors were were given given aa form fonn to to all sign there isis sign allowing allowing the the hospital hospital to to obtain obtain the the policy policy dividends, dividends, Counsel Counsel for for SEMC replied, "no, there SEMC.replied, "no, 7 7 7 of 12 [*FILED: 8] ONEIDA COUNTY CLERK 09/03/2020 11:47 AM NYSCEF DOC. NO. 41 INDEX NO. EFCA2019-001166 RECEIVED NYSCEF: 09/03/2020 objection about that. think it just happened and it it happened happened without nothing in about that. II think it just happened and without any in the the record record any objection nothing day." know Tr. Oral Oral lines 2-5. from anybody, you to Argument, 16, 2-5. from you know to this this day." Tr. Argument, 16, lines anybody, misstatement Plaintiff counsel was corrected corrected by Plaintiff counsel was by However, this misstatement this apparent apparent However, by by responded that: counsel for who that: counsel for Dr. Dr. Soults Soults who responded Exhibit to direct the Court's attention to Plaintiff •~1 to the attention to (SEMC), Exhibit Plaintiff want direct Court's "I want (SEMC), physician the signed both as the and ... it is by both the physician, as the insured and the policy 18 the insured is signed 18 ..,,,it policy by hospital and... ... the physician of the the physician on of and administrator administrator on behalf behalf the hospital dividends if that ... and it that dividends if designates aa policy administrator designates administrator...and it stated stated policy administrator on declared will be to and administrator on will be credited credited the policy and policy declared to the policy policy Directors." 28-29. P 28-29. declared the Board Board of Directors." P record as declared by or record as of of the the date date by the that the the hospital hospital received Court is convinced convinced that ~e the mere mere fact that Consequently, this is that fact received this Court Consequently, distribution of demutualization dentualization proceeds. dividends is as to of proceeds. Contrary is of of no no moment moment as it it r~lates relates to the the distribution dividends Contrary "right" to receive receive the dividends, the to belief, the did the the the fact fact is is that that SEMC SEMC did not not have have the the "right" to to SEMC's SEMC's dividends, belief, "right" insured In the the Court's Court's the fact fact that that the the physician, as the the insured "right" belonged to In view, the physician, as belonged to Dr. Dr. Soults. Soults. view, rights is critical. critical. There is and policyholder, is and the rights is There is and policyholder, is the the member member and as as such such controls controls the membership membership own determination to: 1) no that as and policyholder, made his determination to: that Dr. Dr. Soults, the member member and policyholder, made his own no doubt doubt as the 1) Soults, offset designate the as policyholder and the to use any to hospital and 2) allowed the hospital hospital to use dividends to offset designate the hospital as policyholder any dividends 2) allowed is the the individual individual the premium cosl The maker, in insurance company, is the premium The decision decision in a a mutual mutual insurance cost. company, maker, "right" or assign assign the dividends dividends to The have and dividends or the to member. have the the "right" to to vote vote and receive receive divideds mcmbcr. The members members "right" the member member has the the "right" to to decide decide whether to be used to the premium. Likewis~ the has whether to to reduce reduce the premium. Likewise, be used or to to decide decide not to to assign assign proceeds to policyholder or not assign its assign its share share of of the the demutualization demütualization proceeds to the the policyholder their of demutualization. demetenzation. record reflects that many their share the proceeds of The here that share and and keep the proceeds The record here reflects many keep designation members did choose choose to assign assign their share of of the the proceeds to SEMC SEMC the designation members did to their share proceeds to by signing the by signing Plaintiff form when A close exaiiiiiiation of PlaintiffSEMC's SEMC's Exhibit 18 is is fonn when asked by SEMC. A examination of Exhibit 18 asked SEMC. close by form form entitled: illuminating. First, Exhibit 18 illuminating. Exhibit 18 is is a MLMIC MLMIC entitled: First, 8 8 8 of 12 [*FILED: 9] ONEIDA COUNTY CLERK 09/03/2020 11:47 AM NYSCEF DOC. NO. 41 INDEX NO. EFCA2019-001166 RECEIVED NYSCEF: 09/03/2020 Administrator Designation and/or provides in "Policy Administrator -- Designation and/or change, provides in change, "Policy relevant party: 1) own Administrator, unless relevant party: you are are your your own Policy unless Administrator, 1) you Policy you another party; 2) the policy administrator is the you designate designate another the administrator is the agent agent party; 2) policy (physicians)...for .•. for the the paying of for (physicians) of premium, requesting for all all insureds insureds premium, paying requesting in ... and for dividends and changes changes in the the policy policy...and for receiving dividends and any return any return receiving election when of Administrator can premiums when due ••• ; 3) the election of Policy Administrator can premiums the due...; 3) Policy if declared, will only be changed by 4) if will be be changed the insured; be insured; dividends, declared, 4) dividends, only by the Administrator on of credited to and Policy Administrator on record as of the credited to the the Policy and record as the Policy Policy Directors." Board of Directors." date declared by the of date declared the Board by each specific specific Soults. The Exhibit 18 of as physician, here The Exhibit 18 lists lists the the name name of the the Insured Insured as each here Dr. Dr. Soults. physician, Administrator and then then Exhibit Exhibit 18 is is signed signed the physician hospital is as Administrator and 18 by the physician hospital is designated designated as the the Policy by Policy Insured" under of MLMIC as well well as a a hospital hospital here SEMC. ofMLMIC Insured" as as representative, here SEMC. under "signature "signature representative, hospital because the However, despite Counsel for argument, the went to because the despite Counsel for SEMC's SEMC's the dividends dividends went to the the hospital argument, However, their the dividends dividends to go go to to SEMC, that is is precisely what insured/physicians specifically allowed the to that precisely what their insured/physicians allowed SEMC, specifically Counsel for SEMC SEMC argued that dividends dividends were own Exhibit 18 provides. Counsel for argued that were a membership own Exhibit 18 clearly provides. membership clearly that if ifthe considered the by the which demonstrates that the parties parties considered the right and retained right and yet yet were were retained the hospital hospital which demonstrates by of demutualization demutualization those proceeds should likewise flow to the the hospital, here possibility of those proceeds should likewise flow direct]y to here hospital, directly possibility SEMC. SEMC. had the the The strongly disagrees with this Dr. as had The Court Court disagrees with this conclusion. conclusion. Dr. Soult5> as a a member, Soults, member, strongly Administrator all times. More and the Administrator at More importantly, absolute right to right to choose choose and to to change change the Policy at all times. absolute importantly, Policy offby executing the form, Dr. allowed the dividends to to Dr. Soults Soults allowed the declared declared dividends to go go to to SEMC SEMC to offw the MLMIC MLMIC fonn, executing by "right" assign the set premium cost. However, it to that "right" to the set the the premium cost. it is is critical critical to note note that the the membership to assign However, membership parties' demutualization was not not expressly dealt with in the the parties' dealt with in dividends and/or demutualization proceeds was dividends and/or proceeds expressly in the contract. Since the contract contract was silent, SEMC is urging the Court Court to "fill "fill the employment contract. Since the was SEMC is urging the to in employment silent, the demutnalization to SEMC. gaps", directing the proceeds to demutualization proceeds SEMC. gaps", directing to SEMC. There is that were assigned in by Dr. to There is no no question question that the the dividends dividcads were assigned in writing Soults SEMC. Dr. Soults writing by In with their Exhibit 18, received and those dividends to premium In accordance accordance with their Exhibit SEMC received and applied applied those dividends to premium 18, SEMC 9 9 9 of 12 [*FILED: 10] ONEIDA COUNTY CLERK 09/03/2020 11:47 AM NYSCEF DOC. NO. 41 INDEX NO. EFCA2019-001166 RECEIVED NYSCEF: 09/03/2020 without objection. SEMC has has acknowledged acknowledged that their their contract with Dr. Soults Soults is costs any SEMC that contract with Dr. is costs without any objection. silent on payment of and proceeds ... which begs begs the why silent on the the payment of dividends dividcñds and demutualization demutualization proceeds...which the question, question, why is now objecting to of assignment for proceeds is SEMC SEMC now to the the efficacy of a written written assignment for demutualization dematualization proceeds objecting efficacy when acceptable to $EMC when the by Dr. when the procedure was to when the executed executed Dr. Soults Soults the identical identical procedure was acceptable SEMC by dividends were used their premium costs. dividends were used to to reduce reduce their premium costs. its' parties' As a result, in view, the with regard to rights in this this Court's Court's the parties' intent intent with regard to its' membership rights result, view, membership As a member, had the the exclusive exclusive and control control over for is The as had authority and over for the the insured insured is clear. clear. The insured, as a insured, member, authority what rights, if to Administrator. Simply stated, each what if any, it assigned assigned to the the Policy Administrator. each stated, rights, any, it Simply Policy able to decide for herself herself on himself himself the demutualization demutu-liation insured/physicians is for on who obtains the insured/physicians is able to decide who obtains form SEMC stated that physician/insureds signed the form assigning proceeds. Here, SEMC stated that many physician/insureds signed the MLMIC MLMIC assigning Here, many proceeds. the proceeds to ... that was absolute right as By the proceeds SEMC...that was their their absolute right as a member. member. the same same logic-the logic-the to SEMC By the who did not not sign sign the the fo~ had an an absolute absolute right "holdouts", as to members who did had right as SEMC SEMC referred referred to those those members form, "holdouts", to demutualization proceeds. to keep the demutualization proceeds. keep the gaps" parties' "fill in the the gaps" of of the the parties' employment employmcat in Nonetheless, SEMC urges the to SEMC urges the Court Court to "'fill Nonetheless, with that to This Court strenuously disagrees with that contract allowing the proceeds to contract the proceeds to flow flow to SEMC. SEMC. This Court disagrees strenuously allowing option. failed that it it should should obtain the demutualization demutualization proceeds. The to prove that obtain the proceeds. The option. SEMC SEMC has has failed to prove assignment of dividends dividends to the the distribution distribution of demutualization demuMelization attempt by SEMC to bootstrap the of to of attempt SEMC to bootstrap the assignment by distinct procedures and proceeds is unavailing and As above, MLMIC had procedures and is unavailing and unconvincing. unconvincing. As opined opined MLMIC had distinct above, proceeds of these circumstances. Dr. Soults the absolute absolute separate forms in place for exact circumstances. Dr. had separate forms in place for each each of these exact Soults had the to exercise under separate and distinct distinct circumstances. the to his under these two and circumstances. Clearly, the authority exercise his rights rights these two separate Clearly, authority form first signed the physician/members could have been drafted the form first signed by the physician/members could have been drafted to the to allow allow by "rights" assign all future physician/members to aU membership decisions and policy to assign future decisions and "rights" to to the the policy membership physiciañ/members the case case here. administrator ...however, that Therefore, the declines SEMC's that was was not not the here. the Court Court declines SEMC's administrator...however, Therefore, 10 10 10 of 12 [*FILED: 11] ONEIDA COUNTY CLERK 09/03/2020 11:47 AM NYSCEF DOC. NO. 41 INDEX NO. EFCA2019-001166 RECEIVED NYSCEF: 09/03/2020 gaps" parties' invitation "fill in the in the empleyment invitation to in contract. In opinion to "fill the gaps" in the parties' employment centract. In this this Court's Court's opinion parties' transform SEMC,s actual request is to and the SEMC's actual request is for for the the Court Court rewrite employment to rewrite and transform the parties' employment contract. It is is beyond well-settled that courts courts are powerless to rewrite contract to make make it more contract. lt beyond well-settled that are powerless to a contract to it rewrite more reasonable or to parties. White v. Casualty Co. N.Y.3d reasonable or advantageous advantageous to one one of of the the parties. White v. Continental Continental Co. 9 9 N.Y.3d Casualty it is of the the agreement which Court of Appeals 264, Moreover, it plain text which the of says (2007). is the the plain text of agreement the Court Appeals says is is 264, (2007). Moreover, the best source of the the parties intent Go!d::: v. White, 11 N.Y.3d (2008). Based upon the of parties intent Goldman v. 11 N.Y.3d 173, Based upon the the best source White, 173, (2008). parties' Court nor will will such a a drastic the parties' record here, this cannot nor not measure to the record this Court cannot not talce take such drastic measure to rewrite rewrite here, contract. contract. This Court also agrees agrees with the rationale rationale and holdings holdiñgs in Maple-Gate and Schooch. that and in Maple-Gate and that This Court also with the Schooch, there is no no viable viable claim for unjust unjust enrichment under these circumstances. The Maple-Gate trial there is claim for enrichment under these circumstances. The Maple-Gate trial enrichm=t Court concluded that "[m]ere "{m]ere is not not enough enough to warrant warrant and an an allegation allegation that to liability and that Court concluded that enrichment is liability the Defendants Defendants received is insufficient insufficient to establish establish the cause cause of action. action. the received benefits, standing alone, is to the of benefits, alone, standing unjust." Critical is that that the the enrichment enrichment be Maple-Gate 63 Misc Misc Critical is be unjust." Maple-Gate Anesthesiciogists, Anesthesiologists, P.C. P.C. v. Nasrin, 63 v. Nasrin, 3d Ct. aff'dMaple-Gate Anesthesiologists, P.C. v. Nasrin, 2020 N.Y. 3d 703 703 (Sup. (Sup. Ct. Erie Erie Co. Co. 2019) aff'd Maple-Gate P.C. v. Nastin, 2020 N.Y. Anesthesiologists, 2019) (4* th Div N.Y. Slip (4 Dep't, April 24 App. Div Lexis 2521, 2020 App. Lexis 2020 N.Y. 02389 April 24 2020). 2020). 2521, Dep't, Slip Op Op 02389 in that was enrichment because Moreover, the reasoned the Court Court reasoned in Schooch Schoech that there there was no no unjust unjust enrichment because Moreover, 6= party here bargained for proceeds ... neither party party actually paid for ''neither "neither here bargained for the the demutualization =+=ªization proceeds...neither paid for actually party them, because membership interests in insurance company are paid for by policy policy because interests in a mutual mutual insurance are not not paid for by them, membership company but rather as of of premiums; such are such rights rights are acquired acquired....at ....at no no cost cost but rather as an an incident incident of the the structure structure of premiums; policies.," insurance mutual insurance policies.," through operation oflaw charter and mutual through operation of law and and the the company's charter and by company's laws. by laws. Schooch 3d (2020) (3d Dep't Schooch v. Lake Champlain Ob-gyn. P.C.• NYS NYS 3d N.Y. Slip Op (3d May v. Lake Champlain N.Y. 03444. Dep't Ob-gyn, P.C., (2020) Slip Op 03444. May enrichme-nt 2020). SEMC is not not the the victim victim of an an unjust in favor favor of Dr. 20, Thus, SEMC is of unjust enrichment in of Dr. Dr. Soults. Soults. Dr. 20, 2020). Thus, Soults' decision Soults' decision to proceeds was to keep the demutualization demüt alization proceeds was and and is alone. is his his and and his his alone. keep the 11 11 11 of 12 [*FILED: 12] ONEIDA COUNTY CLERK 09/03/2020 11:47 AM INDEX NO. EFCA2019-001166 NYSCEF DOC. NO. 41 RECEIVED NYSCEF: 09/03/2020 Plaintiff's Motion for Summary Judgment action Therefore, Plaintifrs Motion for Judgment action seeking a Declaratory Therefore, Summary seeking Declaratory denied Judgment is denied in its its entirety. entirety. Dr. Soults Soults Cross-Motion for Summary Defendant, Dr. Cross-Motion for Judgment Judgment is in Judgment Defendant, S=1---_7 is and that Dr. is to proceeds relative relative is granted, and it it is is declared declared that Defendant, Dr. Soults Soults is entitled entitled to the the entire entire proceeds granted, Defendant, to policy. Computershare is to the funds to to his his MLMIC MLMIC policy. Computershare is directed directed to release release the escrow escrow funds to Dr. Dr. Soults. Soults. it Accordingly, it is, Accordingly, is, Motion for Summary ADJUDGED and DECLARED, ORDERED, ADJUDGED and that Motion for that Plaintiff's PhintifPs ORDERED, DECLARED, Srre-y Judgment seeking a declaratory judgment is it and Judgmcat judgment is DENIED DENIED it its its entirety, and it it is is further further entirety, seeking declaratory ORDERED, ADJUDGED and that Dr. Motion for ADJUDGED and DECLARED, that Defendant, Dr. Soults Soults Motion for ORDERED, DECLARED, Defendant, Jüdginent judgment him to demutualization Summary Judgment seeking a declaratory judgment entitling him demutualization to the the entire entire Summary seeking declaratory entitling proceeds relative to policy which are by Computershare is relative to his his MLMIC MLMIC which are held held in in escrow escrow Computershare is hereby policy by hereby proceeds and it it is is further further GRANTED; and GRANTED; ADJUDGED and DECLARED, that Defendant Defendant Computershare release the ORDERED, ADJUDGED and that Computershare release the ORDERED, DECLARED, demutualization proceeds held in in escrow escrow to Dr. Dr. Soults. Soults. to demutualization proceeds held Dated: Dated: September September n .IJ.J 2020 , 2020 E NewNork. Utica, NeWoif' Utica, Hon. Bernadette 12 12 12 of 12 T. Clark, J.S.C.

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