Professional Documents
Culture Documents
Plaintiff,
vs.
Defendants.
_______________________________________/
hereby files this its Amended Complaint and Demand for Jury Trial against UNITED HEALTH
diversity of citizenship between the Plaintiff and Defendants, and the amount
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Case 8:12-cv-02321-JSM-MAP Document 26 Filed 01/08/13 Page 2 of 12 PageID 151
such that they would reasonably anticipate being personally haled into a
Florida court.
2. Venue is proper in the Middle District of Florida and the Tampa Division
pursuant to 28 U.S.C § 1391 in that the events, actions and omissions giving
rise to this cause occurred in the Tampa Division of the Middle District.
Parties
Nevada corporation that manages health care facilities throughout Florida and
other states.
UHP.
corporation.
administrators.
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in the state of New York. SCHWARTZ is the president of GARDEN and the
president of OXFORD.
insurance broker and agent since 2002. SCHWARTZ provided insurance and
10. In the first half of 2009 and in the midst of upcoming health insurance
changes and cost increases, TSM endeavored to maintain health insurance for
11. TSM, through its chairman of the board, Ben Atkins, sought the advice of its
like other clients. TSM told SCHWARTZ that it did not want to take the risk
of a self-insurance program.
would take the risk of loss and also all the benefits of being self-insured. The
risk would be the responsibility to pay covered health claims to the extent they
exceed the premiums paid by TSM. The benefit would be the retention of
premiums to the extent they exceed the amounts paid on covered health
claims. The cost to TSM would be similar to premiums charged by Aetna and
other like health insurers. SCHWARTZ’ and his affiliated companies would
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13. TSM accepted the Schwartz Self Insurance Program as described above. In
met with employees of health facilities that TSM managed, explained the
entrusted with premiums paid by TSM for the purpose of paying covered
15. UHP undertook the fiduciary responsibility of processing and paying health
16. TSM and the health facilities it managed paid premiums in excess of $4.7
million for employee health benefits for the months between September 1,
17. In addition to the premiums received, the Defendants received proceeds from
1 To the extent premiums exceeded covered employee health claims, these Defendants would receive the
benefit of the surplus.
2 To lessen the risk it undertook, the corporate Defendants purchased stop loss insurance to provide coverage
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18. By early summer 2011, TSM became aware that legitimate employee health
claims were not being processed or paid. Some claims were over a year old. A
majority of the claims were several months old. At that time, the aggregate
also questioned the failure to pay claims when sufficient premiums had been
paid to cover the health claims. Rubinstein replied that SCHWARTZ took
19. TSM demanded that UHP, GARDEN, and OXFORD process and pay the
20. The amount of the unprocessed and unpaid claims became so large that TSM
requested the claims documentation so that TSM, at its own cost and to mitigate
damages, could pay health claims for employees who were damaged due to non-
payment. TSM has paid over $700,000 in employee health claims which were the
21. In contravention of the Schwartz Self Insured Program, UHP, GARDEN, and
OXFORD:
timely manner;
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22. Despite demand, the Defendants have refused to return any of the premium
payments which they have improperly withheld and diverted. And, there remain
over 500 unpaid health claims which the Defendants are required to pay but still
refuse.
23. Prior to the filing of this complaint, all conditions precedent have been performed
24. TSM realleges and reincorporates paragraphs 1 through 23 as though fully set
forth herein.
26. SCHWARTZ and TSM had a fiduciary relationship for over a decade.
consultant since calendar year 2002. TSM depended on SCHWARTZ for advice
and protection regarding TSM’s insurance needs and specifically, the Schwartz
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27. While using this relationship of trust and confidence to his advantage,
SCHWARTZ.
28. SCHWARTZ undertook to advise and counsel TSM regarding the Schwartz Self
29. This fiduciary relationship required SCHWARTZ to act with candor, good faith,
and fair dealing toward TSM. Instead, SCHWARTZ obfuscated and concealed
material facts.
30. SCHWARTZ acquired and abused TSM’s trust and has caused TSM damages
by:
health claims.
31. SCHWARTZ’ actions were undertaken willfully and in conscious disregard for
WHEREFORE, TSM prays for entry of Judgment in its favor and against
Defendants for damages, punitive damages, costs, interest, and such other remedies this
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32. TSM realleges and reincorporates paragraphs 1 through 23 as though fully set
forth herein.
33. This claim is against UHP, GARDEN, and OXFORD for breach of fiduciary
duty.
34. UHP, GARDEN, and OXFORD, on one hand, and TSM, on the other hand,
to act with candor, good faith, and fair dealing toward TSM. Instead, these
35. SCHWARTZ, president of GARDEN and OXFORD and affiliated with UHP,
served TSM as a trusted and experienced broker and insurance consultant since
calendar year 2002. TSM depended on SCHWARTZ for advice and protection
regarding TSM’s insurance needs and specifically, the Schwartz Self Insurance
Program.
36. While using this relationship of trust and confidence to his advantage,
37. In addition, Rubinstein, president of UHP, influenced and advised TSM to accept
the Schwartz Self Insurance Program. In turn, TSM reposed confidence and trust
38. After acquiring TSM’s trust, UHP, GARDEN, and OXFORD undertook duties to
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39. UHP, GARDEN, and OXFORD abused TSM’s trust and has caused TSM
damages by:
claims,
WHEREFORE, TSM prays for entry of Judgment in its favor and against
Defendants for money damages, costs, interest, and such other remedies this Court deems
40. TSM realleges and reincorporates paragraphs 1 through 23, 26 through 30, and
premiums.
43. Defendants purposefully retained these benefits while ignoring and failing to pay
44. As such, Defendants have been unjustly enriched at the expense of TSM.
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disgorgement of all monies accepted which were not utilized for payment of
premiums paid by TSM and under the control of Defendants, for an entry of Judgment in its
favor and against Defendants for money damages, costs, interest, and such other remedies
47. Plaintiff realleges and reincorporates paragraphs 1 through 23, 26 through 30,
48. Through the course of TSM’s relationship with Defendants, TSM entrusted
Defendants with its premiums and Defendants owed TSM the duty to pay
49. When Defendants failed to cover employee health claims, TSM paid over
$700,000 to cover such claims that should have been processed and paid by
Defendants.
50. TSM operates as the management company for certain health care facilities. TSM
paid these employee health claims in connection with its duties as manager. TSM
Defendants. TSM paid these claims after Defendants refused to cover them and
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51. TSM is wholly without fault and the sole parties at fault were Defendants who
wrongly withheld monies owed for the payment of covered employee health
claims.
WHEREFORE, TSM prays for entry of Judgment in its favor and against
Defendants to indemnify it and reimburse TSM for all monies paid by TSM and the facilities
it managed to cover employee health claims, for money damages related thereto, costs,
interest, and such other remedies this Court deems just and appropriate.
52. TSM realleges and reincorporates paragraphs 1 through 23, 26 through 30, and
54. This matter involves extensive and complicated accounts. Any remedy at law is
55. TSM has a right to an accounting based upon the fiduciary relationship between
the parties.
Defendants to cover employee health claims, the exact amounts diverted to others
order requiring the Defendants to produce all documents relating to (a) accounts which
received premiums paid by TSM, (b) accounts which made payment of employee health
claims, and (c) all other accounts of Defendants to render a full accounting; an order
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requiring the Defendants to account for all payments of employee health claims; an order
awarding costs and damages relating to an accounting, and all other remedies this Court
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 8th day of January, 2013, I electronically filed the
foregoing with the Clerk of Court using the CM/ECF system which will send a notice of
electronic filing to: Marion Hale, Esq., (marion@jpfirm.com and sharonk@jpfirm.com) and
copy of the foregoing has been furnished by email directly to: Marion Hale, Esq.,
(wignatuck@traditionsmanagement.net).
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