Taller v Aetna Dental Inc.

[*1] Taller v Aetna Dental Inc. 2022 NY Slip Op 50895(U) Decided on September 22, 2022 Civil Court Of The City Of New York, Bronx County Crawford, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on September 22, 2022
Civil Court of the City of New York, Bronx County

Samuel Taller, Plaintiff,

against

Aetna Dental Inc., Aetna Health Inc., and Aetna Life Insurance Company, Defendants.



Index No. CV-017160-21/BX


Plaintiff, pro se.

Fox Rothschild LLP, by Katelyn Rauh, Esq. and John Wait, Esq., for Defendants.
Ashlee Crawford, J.

Recitation as Required by CPLR §2219(a): The following papers were read on this Motion

Papers Numbered
Defendant's Notice of Motion, Memorandum of Law, Affirmation,
and Exhibits in Support 1
Plaintiff's "Memorandum" and Exhibits in Opposition 2
Defendant's Affirmation and Exhibits in Reply 3 Ashlee Crawford, J.

In this action, pro se plaintiff Samuel Taller alleges that he terminated his professional network agreement with the Aetna defendants, but defendants did not process the termination, causing plaintiff loss of income from his dental patients. Plaintiff seeks compensatory damages in the sum of $25,000, with interest from December 16, 2020, as well as punitive damages. Defendants now move to dismiss the complaint pursuant to CPLR § 3211(a)(7) and (a)(8); to compel arbitration pursuant to CPLR § 7503(a); and for sanctions pursuant to 22 NYCRR 130-1.1.

Background

In 2011, plaintiff, who is a dentist, entered into a network agreement with Aetna Health, Inc., on behalf of itself and its affiliates. The agreement contains an arbitration clause, which provides in pertinent part that "[a]ny controversy or claim arising out of or relating to this Agreement or the breach, termination, or validity thereof, except for temporary, preliminary, or permanent injunctive relief or any other form of equitable relief, shall be settled by binding arbitration administered by the American Arbitration Association ("AAA")" (Ex. 3 to Wait Affirm. at ¶ 10.2.2).

Plaintiff alleges that in October 2020, Aetna notified him that he would be reimbursed for client care at a lower rate, effective December 16, 2020, unless he rejected the lower fee schedule. By letter dated October 19, 2020, plaintiff notified Aetna that he rejected the lower fee schedule and apparently demanded to be reimbursed with a 15% increase, effective January 1, 2021. The letter provided that "[n]on-response within 30 days is deemed as Aetna's acceptance [*2]of the new [increased] fees" (Opp at 1; Ex. B). Plaintiff apparently did not receive a response to his letter. By follow-up letter dated November 25, 2020, plaintiff declared that "Aetna's non-response constitutes acceptance of the new [plaintiff] fee schedule. If Aetna refuses to comply, then due to the [sic] Aetna's breach of contract, I officially terminate for cause, effective the date Aetna wants to lower the fee schedule without my consent, which Aetna settled as December 16, 2020. Please send written confirmation" (Ex. B).

Plaintiff filed a complaint with the New York Department of Financial Services ("DFS") about this matter. By letter dated April 15, 2021, Aetna responded to DFS, setting forth the factual background of the parties' dispute, including efforts by Aetna's Dental Network Liaison, Brian Leake, to reach plaintiff by email and telephone in October and November 2020. Aetna confirmed receipt of plaintiff's October 19th letter and acknowledged that the letter "was assigned to a Network Relations Consultant that mishandled the request. When it was received it should have been forwarded to Brian Leake to address" (Ex. O to Opp).

On June 13, 2022, an Aetna employee emailed plaintiff

"confirming that your direct relationship with Aetna was in fact terminated as you requested on April 5, 2021 On another note, I do see that you are effective with Dental Health Alliance a/k/a SunLife effective 5/15/2022 (not Aetna) and appearing as participating through that network lease arrangement. If you wish to terminate participation, you will need to [contact] Dental Health Alliance. As well, the [Explanation of Benefits] you attached does reflect the Dental Health Alliance network as participating and Aetna paid according to your Dental Health Alliance fees. If the fee is incorrect, you will need to [contact] Dental Health Alliance as well [Ex. K to Opp].

Plaintiff alleges that despite the foregoing communications from Aetna, Aetna refused to record his termination and has not responded to his phone calls and letters. He claims that Aetna or someone else reinstated him by signing him up for SunLife's plan using his stolen personal information (Opp at 3-5).

Litigation and Arbitration

In 2021, plaintiff commenced litigation in this Court against Aetna Group Inc. (Index No. CV-017160-21/BX). Aetna Group Inc. moved to enforce the arbitration clause in the parties' agreement and to dismiss the complaint, arguing that plaintiff had sued the wrong entity. It emphasized that the agreement was entered into between plaintiff and Aetna Health, Inc., with which it is unaffiliated. By order of this Court entered May 12, 2022, the Court (Connie Morales, J.) granted the motion to dismiss, finding that plaintiff had named the wrong defendant. Specifically, the Court held that "plaintiff has failed to establish a nexus between Aetna Group, Inc., and the separate Aetna entities with which plaintiff corresponded, as well as Aetna Life Insurance Co., which previously paid out plaintiff's dental claims." The Court did not find that the parties had agreed to arbitrate, stating that the excerpts of the agreement in the record were insufficient for it to do so.

The following month, in June 2022, plaintiff filed a demand for arbitration with the AAA. However, plaintiff apparently did not pay the $725 filing fee balance or provide the AAA with an agreement providing for their administration of the arbitration; thus, the arbitration was withdrawn (Exs. 5-7, 9 to Wait Affirm.; Opp at Ex I-J).

Within days, plaintiff returned to this Court, commencing this action against Aetna [*3]Health, which is party to the agreement, and two other Aetna entities — Aetna Dental Inc. and Aetna Life Insurance Company. In the pro se complaint, he alleges that he "terminated an insurance contract with Aetna" and "Aetna did not process the termination, causing damages, loss of income and notified insureds to not pay me."

Now, in support of their motion, defendants argue that plaintiff's claim should be dismissed for failure to state a cause of action, because the allegations are entirely lacking in detail. To the extent plaintiff attempts to assert a claim for breach of contract, defendants maintain that he has not alleged the requisite elements of such a claim. In any event, defendants argue, the parties should be compelled to arbitrate. They urge that the arbitration clause, with its "arising out of or relating to" language, is particularly broad and covers this dispute. Finally, defendants seek sanctions in the form of attorneys' fees, because plaintiff has filed a claim without merit; plaintiff knows the parties are bound to arbitrate; and plaintiff is aware from the Court's order in the 2021 action that he has a contractual relationship only with Aetna Health, yet he has named two additional Aetna entities in this case. Defendants also contend that plaintiff has harassed and intimidated their employees over the telephone.

In opposition, plaintiff calls into question the authenticity of the excerpted agreement and arbitration clause in the record. While he acknowledges the authenticity of the execution page reflecting the parties' signatures, he claims the page numbers at the bottom of the agreement do not follow a logical sequence. Notably, plaintiff does not himself provide a copy of the agreement to support his challenges to the document in the record. Additionally, plaintiff contends that the arbitration was withdrawn, because there is no signed arbitration agreement between the parties that he could provide to the AAA. He also insists that Aetna may not unilaterally change the fee schedule, and that he terminated the parties' contractual relationship in his October 19th letter, effective December 16, 2020. Despite his termination, defendant argues, Aetna improperly reimbursed him under the lower fee schedule.

In reply, defendants submit a redacted copy of the parties' full agreement, including the execution sheet signed by plaintiff and the arbitration clause. [FN1] Addressing plaintiff's assertion that the page numbers at the bottom of the agreement do not make sense, defendants explain that the first three pages are execution pages followed by the full agreement, and that the agreement allows for execution in counterparts. Defendants emphasize plaintiff's admission that the execution sheet reflecting the parties' signatures is valid, as well as his admission that he contracted with Aetna. Finally, defendants maintain that it was plaintiff's burden to properly commence the arbitration, which he did not, despite being in possession of the arbitration clause.

On September 2, 2022, the Court heard oral argument on this motion, with particular focus on that part of the motion seeking to compel arbitration. Plaintiff acknowledged the existence of the arbitration agreement, but insisted that, by its terms, it does not apply. He specifically argued that this dispute does not "arise out of or relate to" the termination of the agreement, because the wrong he suffered arose after he terminated the agreement. The Court disagrees for the reasons that follow.

Discussion

New York has a "long and strong public policy favoring arbitration," and "courts interfere as little as possible with the freedom of consenting parties to submit disputes to arbitration" (Matter of Smith Barney Shearson v Sacharow, 91 NY2d 39, 49-50 [1997][internal quotation omitted]; see also American International Specialty Lines, 35 NY3d 64, 70 [2020]). A court's role in the first instance is "to determine whether parties have agreed to submit their dispute to arbitration and, if so, whether the dispute generally comes within the scope of their arbitration agreement" (Sisters of St. John the Baptist, Providence Rest Convent v Geraghty Constructor, 67 NY2d 997, 998 [1986]). "The court's inquiry ends, however, where the requisite relationship is established between the subject matter of the dispute and the subject matter of the underlying agreement to arbitrate" (id.). "In disputes subject to arbitration, interpretation of a particular contract term must be left for the arbitrators" (id.).

Notably, courts have ruled that the terms "arising out of" and "relating to" employed in an arbitration clause evince a broad application (see Crana Elec., Inc. v Battery Park City Authority, 153 AD3d 1206, 1206-1207 [1st Dept 2017]; DS-Concept Trade Invest LLC v Wear First Sportswear, Inc., 128 AD3d 585 [1st Dept 2015]; State v Philip Morris Inc., 8 NY3d 574, 580 [2007]; State v Philip Morris Inc., 30 AD3d 26, 31 [1st Dept 2006]).

The Court finds that the parties entered into the network agreement containing the arbitration clause, which reflects their clear and unambiguous agreement to submit to binding AAA arbitration "[a]ny controversy or claim arising out of or relating to this Agreement or the breach, termination, or validity thereof" (Ex. 3 to Wait Affirm. at ¶ 10.2.2). This dispute clearly falls within that very broad provision, which must be enforced.

Accordingly, that part of defendants' motion seeking to compel arbitration is granted, and the complaint is dismissed with prejudice on that ground. The Court will not address the remainder of defendants' motion, over which it lacks jurisdiction.

This constitutes the decision and order of the Court.

_________________________________
HON. ASHLEE CRAWFORD, J.C.C.
Dated: Bronx, New York
September 22, 2022 Footnotes

Footnote 1: Aetna explains that it has redacted the agreement, because it is confidential. It offered the full agreement for the Court's inspection under seal.