[EDITOR'S NOTE: This case is unpublished as indicated by the issuing court.]
Presently before the court is the application of the plaintiff for a temporary injunction prohibiting Anthem from (1) terminating the plaintiff's participation in the Anthem provider network, (2) terminating its participation agreement with the plaintiff and/or (3) ordering the plaintiff to remove all signs and written information in the plaintiff's office that identifies him as a member of the Anthem programs. The plaintiff's ex parte application for a temporary restraining order prohibiting Anthem from taking the above enumerated actions was granted by the court, Beach, J., on July 21, 2001, and remains in effect to the present date. This court held hearings on the plaintiff's application for a temporary injunction on March 8, 2002, March 12, 2002, April 25, 2002, and April 29, 2002. In addition, the parties have each filed post-hearing memoranda. From the testimony and evidence submitted at the hearings, the court finds the following facts.
The court heard testimony from George Dolan, an agent with the Federal Bureau of Investigation (FBI) in Connecticut, who testified that the federal government began investigating alleged Medicare/Medicaid fraud in connection with the sale and distribution of a cancer-treating drug in the summer of 1999.1 As relevant to the present case, similar investigations were being conducted in Massachusetts and Connecticut. Dolan first asked the plaintiff to assist the FBI as a cooperating witness in connection with the Connecticut investigation in late July or early August 1999. One of the guidelines issued by the federal government for cooperating in a federal investigation is not to disclose such cooperation to anyone outside of the FBI or United States Attorney's Office. In 1999, the plaintiff was in fact directed not to disclose his cooperation with federal authorities in the Connecticut investigation. At that time, Dolan was aware that the plaintiff was himself a target of the Massachusetts investigation for alleged illegal billing practices involving the aforementioned cancer drug. Thus, to the extent that doing so might compromise the plaintiff's ability to gather evidence for use in the Connecticut investigation, the plaintiff was further directed not to disclose that he was a target of the Massachusetts investigation to certain individuals.
On November 3, 2000, as a result of the Massachusetts investigation, the United States Attorney for the District of Massachusetts filed a criminal information charging the plaintiff with the felony crime of conspiring to defraud the United States in violation of18 U.S.C. § 371.2 The plaintiff pleaded guilty in United States District Court for the District of Massachusetts to this charge on December 27, 2000, and, at the time of the hearings before this court, was still awaiting sentencing.3 The federal criminal file was not sealed, and several prominent newspapers carried articles regarding the plaintiff before and after his guilty plea. In fact, the United States Attorney's Office issued a press release announcing the charge against the plaintiff on the date the criminal information was filed.4 In short, the charge against the plaintiff and his resulting guilty plea were matters of public record.
The plaintiff did not notify Anthem of the Massachusetts investigation, of the felony charge against him or of his guilty plea. Anthem first learned of these events in February 2001, when, in the course of verifying the plaintiff's December 2000 recredentialing application,5 Anthem was informed by the department of public health (DPH) that an investigation was pending in regard to his licensure. CT Page 11289-c Anthem then generated a letter dated February 19, 2001 to the plaintiff requesting details of the investigation within ten days. Counsel for the plaintiff responded to Anthem's request by letter dated February 22, 2001, explaining that because the investigation by the federal government was ongoing and active, the plaintiff was constrained to provide a detailed explanation at that time. Counsel referred Anthem to the Assistant United States Attorney, Michael K. Loucks, Health Care Fraud Chief, to whom any questions should be directed. Further, the plaintiff's counsel attached a letter from Lewis Morris, a representative from the Office of Inspector General, Department of Health Human Services, and a letter from Loucks, representing that "Dr. Zamstein will not be excluded from Medicare or Medicaid and that no conduct by Dr. Zamstein affected the care provided to any of his patients."6
By letter dated May 22, 2001, Anthem notified the plaintiff that his participation as a provider of specified Anthem programs and products was being terminated effective June 1, 2001. No reason for the termination was given. Anthem, however, by letter dated June 1, 2001, corrected the original June 1, 2001 termination date, extending it to August 1, 2001, thereby providing sixty days notice of termination,7 and further provided as a reason for the termination the plaintiff's failure to comply with a notification provision of the provider agreement. The provision referenced, as contained in the 1999 provider agreement in evidence, states in Section II.E. that "[t]he Group [i.e., Jacob Zamstein, M.D., LLC] shall notify Anthem BCBS in writing within seven (7) days after the occurrence of . . . (vii) Any criminal action against the Group or a Represented Provider . . ." The letter states that Anthem did not receive notice of the criminal action against the plaintiff until February 26, 2001, when it received the Loucks letter attached to the plaintiff's counsel's letter dated February 22, 2001, referencing the criminal charges filed against the plaintiff. Anthem in its letter further informed the plaintiff of his right to appeal the termination.
Thereafter, the plaintiff exercised his right to appeal the termination to an Anthem hearing panel. At the appeal hearing the plaintiff presented evidence that federal government officials had ordered him to refrain from disclosing information concerning his interactions with the federal government regarding the ongoing investigation. Nevertheless, Anthem upheld its decision terminating the plaintiff as a provider.
In analyzing the four-part test for issuance of a temporary injunction under the facts of the present case, this court finds that the plaintiff cannot meet at least one of the four prongs, that is, the plaintiff has not established that he is likely to prevail on the merits.8 For this reason, the plaintiff's application for a temporary injunction must be denied. Although the plaintiff has limited his motion to count one (breach of contract) and count two (breach of the covenant of good faith and fair dealing), the likelihood of success on the merits as to all four counts is addressed herein.9
These arguments are without merit. The interpretation of "criminal action" advocated by the plaintiff is unduly narrow and would severely undermine a primary purpose of the notification provision. The plaintiff's interpretation would mean that only a criminal action brought against a provider which results in a conviction and sentencing would have to be disclosed, with disclosure required only after the sentencing stage. Along the same vein, only a civil action, for example, for malpractice, which resulted in a judgment against the provider would have to be disclosed, and only after judgment has been rendered. The possibility exists that, in the individual case, sentencing or judgment could take years to reach. A primary purpose behind the notification provision, however, is to aid Anthem in protecting the health and safety of its members from physicians who are charged with malpractice or criminal activity and who therefore pose a possible risk to member health and safety. Prompt notification enables a prompt investigation by Anthem to determine whether immediate termination is warranted. This is reflected in the termination provisions themselves, providing for prompt termination in specified cases where member health and safety may be implicated. See footnote 7. Even if this court were to hold that "criminal action" as used in the provider agreement is ambiguous, the interpretation of "criminal action" advocated by the plaintiff is unreasonable based on the undisputed evidence presented at the hearing and this court therefore declines to accept it. Whatever event ultimately is held to have triggered the seven-day notification period, whether it be the filing of the information against the plaintiff on November 3, 2000, his arrest or the entering of and acceptance of his guilty plea on December 27, 2000, it is clear that each of them unambiguously constitutes criminal action and that the plaintiff failed to notify Anthem of any of these events within seven days of their occurrence, in violation of his obligation to do so under the provider agreement.
The court also rejects the plaintiff's argument that he was prohibited by government directives from complying with the notification provision. While there is evidence that the federal authorities in Connecticut directed him not to discuss his cooperation with anyone, there is no evidence that the federal authorities in Massachusetts directed him not to disclose his very public criminal prosecution in the District of Massachusetts. It is illogical that the federal government would instruct the plaintiff not to disclose his arrest and/or the investigation and charges brought against him and at the same time issue a press release about this event.10 Once the criminal charge against him was made CT Page 11289-f public by way of a press release on November 3, 2000, and he pleaded guilty in open court on December 27, 2000, the plaintiff could not reasonably claim that he was obligated to federal authorities not to disclose that he was subject to a Medicare or Medicaid investigation. Moreover, even if the government had instructed the plaintiff not to notify Anthem of the criminal action instituted and pending against him, the plaintiff's choice to cooperate with the government and comply with its nondisclosure instructions — and therefore to breach his contract with Anthem — was voluntary. While the court is sympathetic to the difficulty in choosing between a reduced sentence and remaining a participant in the Anthem provider network, such difficulty in no way excuses the plaintiff's voluntary breach of his private contractual obligations.11 The plaintiff therefore accepted the risk that Anthem would terminate him for such breach when he chose to cooperate with federal authorities. In addition, in accordance with the provision of both the 1994 and 1999 provider agreements, either party could terminate the agreement with or without cause upon sixty (60) days prior written notice. It is undisputed that Anthem's June 1, 2001 letter provided the plaintiff with sixty days' written notice of termination.
"`The common-law duty of good faith and fair dealing implicit in every contract requires that neither party [will] do anything that will injure the right of the other to receive the benefits of the agreement . . . Essentially it is a rule of construction designed to fulfill the reasonable expectations of the contracting parties as they presumably intended' . . . Elm Street Builders, Inc. v. Enterprise Park CondominiumAssn., Inc., 63 Conn. App. 657, 665, 778 A.2d 237 (2001). `Bad faith means more than mere negligence; it involves a dishonest purpose.' Habetzv. Condon, 224 Conn. 231, 237, 618 A.2d 501 (1992). `Bad faith in general implies both actual or constructive fraud, or a design to mislead or deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake as to one's rights or duties, but by some interested or sinister motive' . . . Id."Cadle Co. v. Ginsberg, 70 Conn. App. 748, 768 (2002). CT Page 11289-g
In the present case, there was no evidence whatsoever presented showing or suggesting bad faith on the part of Anthem. The plaintiff has therefore failed to establish that he is likely to prevail as to count two.
As discussed in the previous section, no evidence whatsoever was produced tending to show or suggest that Anthem acted fraudulently, maliciously, with an improper motive or with improper conduct. The plaintiff therefore has failed to establish that he is likely to prevail as to count three.
Anthem's actions in terminating the plaintiff as a result of his failure to notify it of the criminal action against him within seven days does not run afoul of any established public policy. This is so particularly in light of this court's determination above that the plaintiff's failure to comply with the notification provision of the provider agreement by disclosing the criminal action brought against him was not excused or justified by the federal government's directives not to disclose his involvement in the investigation.
Moreover, this court agrees with the vast majority of Superior Court decisions concluding that, "absent allegations [and proof] of sufficient aggravating circumstances, [a] simple breach of contract, even if intentional, does not amount to a violation of CUTPA . . ." (Internal quotation marks omitted.) Princeton Capital Finance Co., LLC v. WebsterBank, Superior Court, judicial district of Hartford, Docket No. CV 99 590676 (February 4, 2002, Peck, J.) (31 Conn.L.Rptr. 360, 362-63); see also Derrig v. Thomas Regional Directory Co., Superior Court, judicial district of Hartford, Docket No. CV 98 583548 (June 22, 1999, Peck, J.). Thus, even if Anthem did breach the contract, and even if such breach was intentional, the plaintiff has simply failed to present any evidence whatsoever that the actions of Anthem were undertaken in bad faith, amounted to a deceptive or fraudulent practice or were immoral, unethical, oppressive, unscrupulous or in violation of public policy. For this reason, the plaintiff has failed to establish that he is likely to CT Page 11289-i prevail on the CUTPA claim.
Peck, J.