Stern v. Gozinsky, Esq. et al

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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SHARONE STERN,
Plaintiff,
MEMORANDUM
v. 	AND ORDER
24-CV-6962-SJB-LGD
ANDREW P. GOZINSKY,
Defendant.
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BULSARA, United States District Judge:
Defendants, one an insurance carrier and the other an insurance broker, removed
this case to federal court on the theory that the Employee Retirement Income Security
Act (“ERISA”) preempted all claims in the Complaint, which were all brought under
state law. Following removal, Plaintiff voluntarily dismissed the sole claim against the
insurance carrier for violating the terms of the ERISA-governed policy. The only
remaining claims are Plaintiff’s state law claims against the insurance broker who
procured the policy. For the reasons below, the remaining state law claims are not
preempted by ERISA and the parties are not diverse, and as a result, there is no subject
matter jurisdiction and the Court must remand the case back to state court.
BACKGROUND AND PROCEDURAL HISTORY
Plaintiff Stern (“Plaintiff” or “Stern”) filed this case against Andrew P. Gozinsky
(“Gozinsky”) and First Reliance Standard Life Insurance Company (“First Reliance”) in
Nassau County Supreme Court on August 22, 2024. (Compl., attached to Defs.’ Notice
of Removal as Ex. A, Dkt. No. 1-2 at 11). Gozinsky and First Reliance were served on
September 5, 2024 and timely removed the case to this Court. (Defs.’ Notice of Removal
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filed Oct. 2, 2024 (“Notice of Removal”), Dkt. No. 1 ¶ 8). The “action arises out of a long
and short-term disability policy” between Stern and First Reliance that was obtained by
Gozinsky. (Compl. ¶ 1). Removal was premised on federal question jurisdiction,
because the policy “is an employee welfare benefit plan that is governed by the
Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001-1461.”
(Notice of Removal ¶ 3).
Following removal, Gozinsky filed a motion to dismiss, (Def.’s Mot. to Dismiss
filed Feb. 27, 2025, Dkt. No. 17), and then Stern settled with First Reliance and
dismissed it from the case, (Stipulation of Discontinuance with Prejudice as to Def. First
Reliance filed Aug. 14, 2025, Dkt. No. 23). As a result, only Stern’s claims against
Gozinsky for breach of contract, (Compl. ¶¶ 29–31), error and omission, (id. ¶¶ 32–34),
malpractice, (id. ¶¶ 35–36), breach of fiduciary duty of care, (id. ¶¶ 37–39), and
negligent misrepresentation, (id. ¶¶ 40–43), remain, all of which relate to Gozinsky’s
conduct in securing an insurance plan for Stern. After the settlement with First
Reliance, the parties filed a status report in which Stern indicated an intent to file a
motion to remand back to state court, contending that the claim against First Reliance
was the only basis for federal question jurisdiction. (Status Report dated July 18, 2025,
Dkt. No. 22 at 2). In response, Gozinsky argued that the claims against him are
preempted by ERISA and therefore the Court retained subject matter jurisdiction. (Id. at
2–3). Because the status report called into question the Court’s jurisdiction, the Court
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directed the parties to brief that issue and denied Gozinsky’s motion to dismiss without
prejudice to renewal.1 (Order dated Aug. 19, 2025).
The Complaint alleges that Gozinsky is an insurance broker who secured
disability policies for Stern’s podiatry practices, which operated through four separate
entities. (Compl. ¶¶ 1, 4–5). Gozinsky and Stern agreed that the disability insurance,
including a short-term and long-term policy, would cover Stern’s “annual earnings
from all practices.” (Id. ¶¶ 6–7). A dispute arose after Stern “became totally disabled
and unable to work” in October 2022. (Id. ¶ 10). First Reliance found Stern “totally
disabled” and approved his disability claim, but calculated benefits due according to
his income from just one of his practices, instead of all four. (Id. ¶¶ 12–13). Stern
alleges this erroneous determination was justified by First Reliance because no entities
were listed on the policy document in the place where subsidiaries or affiliates are to be
named. (Id. ¶ 14). Upon learning of this justification, Stern asked Gozinsky to clarify
the coverage of the policy with First Reliance. (Id. ¶ 16). And at the same time, Stern
lodged an objection to the initial calculation directly with First Reliance, and then
appealed when First Reliance confirmed its original calculation. (Compl. ¶¶ 17–20).
Despite these efforts, First Reliance did not change its determination. (Id. ¶ 21).
1 The Court initially set a briefing schedule for a motion to remand after receipt
of the parties’ July 18 status report. (Order dated July 24, 2025). But Plaintiff elected not
to file such a motion, and so the Court proceeded to issue an Order to Show Cause
directing briefing on the issue of subject matter jurisdiction. (Order dated Aug. 19,
2025).
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LEGAL STANDARD
There are two branches of preemption doctrine that concern ERISA, one of which
bears on this Court’s subject matter jurisdiction.2 That is the “complete preemption”
branch, which “substitutes a federal remedy for [a claim under state] law, thereby
creating an exclusive federal cause of action.” Briarpatch Ltd., L.P. v. Phoenix Pictures,
Inc., 373 F.3d 296, 305 (2d Cir. 2004).
ERISA’s civil enforcement mechanism, set forth in § 502(a)(1)(B), provides that
“[a] civil action may be brought . . . by a participant or beneficiary . . . to recover benefits
due to him under the terms of his plan, to enforce his rights under the terms of the plan,
or to clarify his rights to future benefits under the terms of the plan.” An action brought
under this provision confers federal subject matter jurisdiction. The provision also
“completely pre-empt[s]” state causes of action within its scope. Aetna Health Inc. v.
Davila, 542 U.S. 200, 214 (2004). In so doing, it makes those state law claims removable
to federal court. Id. Section 502(a)(1)(B), in other words, serves as an “exception to the
well-pleaded complaint rule.” Arditi v. Lighthouse Int’l, 676 F.3d 294, 298 (2d Cir. 2012),
as amended (Mar. 9, 2012).
2 The other is the “express preemption” branch, which is “one of the ‘three
familiar forms’ of ordinary defensive preemption (along with conflict and field
preemption).” Wurtz v. Rawlings Co., LLC, 761 F.3d 232, 238 (2d Cir. 2014) (quoting
Sullivan v. Am. Airlines, Inc., 424 F.3d 267, 273 (2d Cir. 2005)). ERISA’s provision
expressly “supersed[ing] any and all State laws insofar as they may now or hereafter
relate to any employee benefit plan” is one such example. ERISA § 514(a); see Wurtz,
761 F.3d at 240. “As an ordinary defensive preemption claim, express preemption
cannot support federal jurisdiction because it would not appear on the face of a well-
pleaded complaint.” Wurtz, 761 F.3d at 238 (citing Metro. Life Ins. Co. v. Taylor, 481 U.S.
58, 63 (1987); Sullivan, 424 F.3d at 272).
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Two relevant principles flow from ERISA’s complete preemptive effect. “[O]nce
a district court determines that a state law claim has been completely preempted . . . the
court must then dismiss the claim for failing to state a cause of action.” Gordon v.
McGinley, 502 F. App’x 89, 90 (2d Cir. 2012) (quoting Briarpatch, 373 F.3d at 309). And
second, “[w]hile district courts generally have discretion to decline to exercise
supplemental jurisdiction over state law claims pursuant to 28 U.S.C. § 1367(c), where
the state law claims are completely preempted by federal law such discretion is
lacking.” Id.
“Under the Supreme Court’s test in Davila, ERISA preempts a cause of action
where: (1) ‘an individual, at some point in time, could have brought his or her claim
under ERISA § 502(a)(1)(B);’ and (2) ‘no other independent legal duty . . . is implicated
by a defendant’s actions.’” Arditi, 676 F.3d at 299 (quoting Davila, 542 U.S. at 210). The
first prong of the Davila test itself has a two-part analysis: courts first consider “whether
the plaintiff is the type of party that can bring a claim pursuant to § 502(a)(1)(B),” and
then ask “whether the actual claim that the plaintiff asserts can be construed as a
colorable claim for benefits pursuant to § 502(a)(1)(B).” Montefiore Med. Ctr. v. Teamsters
Loc. 272, 642 F.3d 321, 328 (2d Cir. 2011). As to the second “independent duty” prong,
“a duty is sufficiently independent of ERISA if it creates obligations that did not exist
under an ERISA-regulated plan and the requested remedy would not ‘tend to control or
supersede central ERISA functions . . . [such as] the determination of eligibility for
benefits, amounts of benefits, or means of securing unpaid benefits.’” Levy v. Young
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Adult Inst., Inc., No. 13-CV-2861, 2014 WL 12917436, at *5 (S.D.N.Y. Mar. 31, 2014)
(quoting Stevenson v. Bank of New York Co., Inc., 609 F.3d 56, 59 (2d Cir. 2010)).
DISCUSSION
The only remaining claims in this case are Stern’s five state law claims against his
insurance broker for error and omission, breach of contract, malpractice, breach of
fiduciary duty of care, and negligent misrepresentation. These claims are not subject to
complete preemption under ERISA.
Even assuming that Davila’s first prong is satisfied, the second is not, because
these claims implicate Gozinsky’s “independent legal dut[ies].” Montefiore Med. Ctr.,
642 F.3d at 328. “[A]n independent duty arises where no ERISA plan confers the
contested benefits and duties, and thus relief would not interfere with the interpretation
or administration of any ERISA plan.” Levy, 2014 WL 12917436, at *6; e.g., Stevenson, 609
F.3d at 61 (“Because Stevenson’s state law claims derive from this promise [from his
employer to maintain his benefits during an international move] rather than from an
ERISA benefits plan, their resolution does not require a court to review the propriety of
an administrator’s or employer’s determination of benefits under such a plan.”). When
ERISA is merely the “contextual background” for “garden variety” fraud or torts that
give rise to common law claims, they “in no way compromise” ERISA’s purpose.
DaPonte v. Manfredi Motors, Inc., 157 F. App’x 328, 331 (2d Cir. 2005) (quoting Geller v.
Cnty. Line Auto Sales, Inc., 86 F.3d 18, 22–23 (2d Cir. 1996)); see also Stevenson, 609 F.3d at
61 (“Because Stevenson’s suit neither interferes with the relationships among core
ERISA entities nor tends to control or supersede their functions, it poses no danger of
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undermining the uniformity of the administration of benefits that is ERISA’s key
concern.”).
The duties invoked by Stern’s state law claims are sufficiently independent from
and cannot interfere with core administration or interpretation of any ERISA plan.
Stern’s claims allege misconduct by his insurance broker—such claims are ordinarily
not preempted. See Gerosa v. Savasta & Co., 329 F.3d 317, 324 (2d Cir. 2003) (“[C]ourts
routinely find that garden-variety state-law malpractice or negligence claims against
non-fiduciary plan advisors, such as accountants, attorneys, and consultants, are not
preempted.”) (collecting cases). Stern’s claims cannot be construed as seeking benefits
under an ERISA plan, because they are necessarily pre-plan claims: because of
Gozinsky’s alleged misconduct, Stern did not get a policy that he sought. They do not
implicate the precise terms of the plan, or dispute what Stern is owed under the plan,
but rather, they concentrate on Gozinsky’s dealings with Stern and what Stern should
receive from Gozinsky’s alleged misconduct.
The contract and error and omission claims assert that Stern is entitled to recover
for Gozinsky’s breach of the terms of his engagement as Stern’s insurance broker, not
the ERISA plan, based on Gozinsky’s failure to procure adequate coverage. (Compl.
¶¶ 30, 33). The malpractice and negligence claims (for breach of Gozinsky’s fiduciary
duty as an insurance broker and for misrepresentations in selling Stern the policy)
similarly contemplate Gozinsky’s independent failure to meet his obligations to Stern,
not any failure of an ERISA plan to comply with its obligations. (Id. ¶¶ 35–43). Indeed,
these are not claims the Court could construe under ERISA, because they are based on
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the assumption that the ERISA plan does not make Stern whole. E.g., DaPonte, 157 F.
App’x at 331 (no preemption where plaintiffs were not covered by ERISA plan, and
complaint alleged defendants misrepresented amount of medical coverage to be
provided). These claims, therefore, are not preempted.
Gozinsky has articulated no alternative basis for federal question jurisdiction
beyond ERISA preemption, and the parties are not diverse. (Compl. ¶¶ 2, 4). Thus,
because Stern has voluntarily dismissed the sole federal claim, the Court now lacks
subject matter jurisdiction, and the case is remanded. See Royal Canin U.S.A., Inc. v.
Wullschleger, 604 U.S. 22, 39 (2025) (“When a plaintiff, after removal, cuts out all her
federal-law claims, federal-question jurisdiction dissolves. And with any federal anchor
gone, supplemental jurisdiction over the residual state claims disappears as well. The
operative pleading no longer supports federal jurisdiction, and the federal court must
remand the case to the state court where it started.”).3
3 Supplemental jurisdiction may remain discretionary where a plaintiff’s federal
claims have been subject to involuntary dismissal, such as through a motion to dismiss
or summary judgment. E.g., Allen v. City of New York, No. 24-2589, 2025 WL 3152723, at
*2 (2d Cir. Nov. 12, 2025). But that is not the case here. Stern’s affirmative act of
voluntary dismissal in this case is akin to amendment of the operative pleading, and it
deprives this Court of subject matter jurisdiction. See Royal Canin, 604 U.S. at 39 (“By
adding or subtracting claims or parties, and thus reframing the suit, that pleading can
alter a federal court’s authority.”); e.g., Walker v. Arizona, 158 F.4th 971, 977, 981 (9th Cir.
2025) (“Following Royal Canin . . . . does a joint stipulation by the parties to dismiss
claims function the same as amendment under Rule 15(a)(1)(B)? We hold that it does
because it alters the substance of the complaint. . . . Walker therefore did not ‘amend’
his complaint in the same manner as the plaintiff in Royal Canin did. But for assessing
jurisdiction under Royal Canin, that makes no difference.”).
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CONCLUSION
Stern’s state law claims are not subject to complete preemption under ERISA. As
a result, the Court lacks subject matter jurisdiction. The Clerk is directed to remand this
case to state court.
SO ORDERED.
/s/ Sanket J. Bulsara
SANKET J. BULSARA
United States District Judge
Date: 	December 18, 2025
Central Islip, New York
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