Hudson Neurosurgey, PLLC v. UMR, Inc.

Background

Hudson Neurosurgery, PLLC, a neurosurgery medical practice, and Yvonne Dixon sued UMR, Inc. under New York law. The plaintiffs alleged that Hudson performed emergency back surgery on Dixon and later submitted a $709,341.00 payment claim to UMR on Dixon’s and Hudson’s behalf. UMR paid $40,484.55 and did not pay the remaining amount alleged in the complaint.

The Second Amended Complaint asserted four causes of action: negligence as to Dixon, negligence as to Hudson, breach of contract as to Dixon, and unjust enrichment. Plaintiffs sought $668,856 in damages, plus interest, attorney’s fees, and costs. UMR moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim.

Court’s Analysis

Negligence. Plaintiffs alleged that UMR had a duty to use reasonable care when administering claims for Dixon’s medical services and for services provided by Hudson. UMR argued that any duties arose from the contract and therefore could not support separate negligence claims. Plaintiffs responded that New York insurance statutes created an independent duty concerning emergency-care coverage. The court did not decide whether those statutes impose duties on third-party administrators because Plaintiffs had not cited those provisions in the Second Amended Complaint. The court explained that Plaintiffs could not add a new legal theory through their opposition brief.

Breach of contract. Plaintiffs alleged that UMR breached the relevant health-insurance plan by failing to pay for the services. UMR argued that Dixon had not satisfied a required appeal condition under the County of Westchester Group Health Benefit Plan. The court did not reach that issue. Instead, it held that Plaintiffs failed to identify the contract or the specific contract provision that UMR allegedly breached, which the court described as an essential requirement for a breach-of-contract claim.

Unjust enrichment. The court held that Plaintiffs’ unjust-enrichment claim was duplicative. Plaintiffs relied on the same alleged failure to pay that supported the breach-of-contract claim and sought the same $668,856 in damages. Under New York law, the court explained, unjust enrichment generally cannot replace or duplicate a conventional contract or tort claim based on the same facts and damages.

Disposition

The court granted UMR’s motion to dismiss. Because this was the first adjudication of Plaintiffs’ claims, the court dismissed the claims without prejudice. The court gave Plaintiffs 30 days from the date of the Opinion and Order to file a third amended complaint alleging additional facts and addressing the identified deficiencies. The Clerk of Court was directed to terminate the pending motion.