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WALKER v. ROSE

June 10, 1998

MARIE WALKER et al., Plaintiffs,
v.
JUSTIN ROSE et al., Defendants.



The opinion of the court was delivered by: BROWN

MEMORANDUM OPINION

 BROWN, District Judge

 This matter comes before the Court on defendants' motion to dismiss plaintiffs' complaint pursuant to FED. R. CIV. P. 12(b)(6) and plaintiffs' cross-motion for summary judgment pursuant to FED. R. CIV. P. 56. For the reasons set forth in this Memorandum Opinion, the Court will deny defendants' motion to dismiss and grant plaintiffs' cross-motion for summary judgment.

 I. BACKGROUND

 Defendant Justin R. Rose is a dependent participant in the Health and Welfare Plan for Employees and Dependents of Dick Greenfield Dodge, Inc. (hereinafter "the Plan"). On or about September 2, 1996, Justin, a nine-year old, was injured by an explosion and fire which occurred when an aerosol can was thrown into a picnic bonfire. As a result of the explosion, Justin suffered second and third degree burns covering 77% of his body. On August 20, 1997, Justin and his parents (the defendants in this case) filed an action in the Superior Court of New Jersey, Law Division, Mercer County, against the third parties alleged to be responsible for Justin's injuries. The state court action names as defendants Gregory and Nancy Apai, and Dale Mertz. In connection with the injuries Justin suffered in the accident, the Plan has paid over $ 1.2 million on his behalf. See Affidavit of Marci Ryan P 2.

 Plaintiffs filed a complaint in this Court on November 12, 1997, and an amended complaint on December 8, 1997, seeking injunctive relief under ERISA to prevent defendants from violating the terms of the Plan, to redress past violations of the Plan, and to enforce the terms of the Plan. The amended complaint also seeks declaratory relief under the Declaratory Judgment Act. Plaintiffs essentially contend that defendants are in the process of finalizing a settlement in the state court action with the alleged responsible third parties for $ 600,000, but that defendants have indicated that they will not turn over the full settlement amount to the plaintiffs as required by the Plan's terms. In fact, to date, defendants have only been willing to reimburse the Plan $ 50,000, despite the fact that the terms of the Plan provide for full reimbursement.

 II. DISCUSSION

 A. ABSTENTION

 Defendants argue that this Court should abstain from exercising jurisdiction over this action because of "a pending state court action which will address the availability, disbursement and allocation of any settlement funds which may resolve the claim of Justin Rose, the minor child." See Defendants' Brief in Support of Motion to Dismiss at 4. Specifically, defendants contend that this Court should not entertain plaintiffs' declaratory judgment action since plaintiffs seek to circumvent the procedural and substantive requirements of New Jersey law with regard to the settlement of claims of minors. Defendants maintain that the state court action was filed in August 1997, and although not named as defendants, plaintiffs have been notified of all proceedings in that action. Defendants further claim that plaintiffs have not attempted to intervene in the state court action, nor have they brought a companion or consolidated claim to address their potential rights.

 Plaintiffs' amended complaint seeks injunctive relief under ERISA, pursuant to 29 U.S.C. § 1132(a)(3), to prevent defendants from violating the terms of the Plan, to redress past violations of the Plan, and to enforce the terms of the Plan. See Amended Complaint, Count One PP 6, 14. The amended complaint also seeks declaratory relief under the Declaratory Judgment Act, pursuant to 28 U.S.C. §§ 2201 & 2202. See Amended Complaint, Count Two. ERISA specifically provides that a federal district court has exclusive jurisdiction over civil actions brought under 29 U.S.C. § 1132(a)(3) by the Secretary, participant, beneficiary or fiduciary of an ERISA plan to enforce the terms of the plan. See 29 U.S.C. § 1132(e). Thus, as this Court has exclusive jurisdiction over plaintiffs' claim for injunctive relief under ERISA, abstention is clearly inappropriate. See, e.g., Retirement Fund Trust of the Plumbing v. Franchise Tax Bd., 909 F.2d 1266, 1274 (9th Cir. 1990) ("The actions before us were brought by the trusts as federal law claims under ERISA. . . . ERISA grants federal courts exclusive jurisdiction over such claims. The trusts could not have initiated an action in state court in their fiduciary capacity. Abstention is inappropriate under these circumstances."); Great Lakes Steel v. Deggendorf, 716 F.2d 1101, 1105 (6th Cir. 1983) (declining to abstain from exercising jurisdiction over a claim brought under 29 U.S.C. § 1132(a)(3) since the court had exclusive jurisdiction over such a claim pursuant to 29 U.S.C. § 1132(e)); Schutte v. Maleski, 1993 U.S. Dist. LEXIS 6980, *16, 1993 WL 183845 *7 (E.D. Pa. 1993) (holding that the court could not abstain from considering plaintiff's ERISA claims brought pursuant to 29 U.S.C. § 1132(a)(3), since the court had exclusive federal jurisdiction); Northwest Airlines, Inc. v. Gomez-Bethke, 1984 U.S. Dist. LEXIS 18009, *13, 1984 WL 1040 *5 (D. Minn. 1984) ("abstention is clearly inappropriate when, as previously noted, this court has exclusive jurisdiction over Northwest's ERISA claims pursuant to 29 U.S.C. § 1132(e)(1).").

 With regard to plaintiffs' request for declaratory relief, this Court will not exercise its discretion to abstain. The decision of whether to abstain from exercising jurisdiction over a declaratory judgment action pending the resolution of state court proceedings is discretionary and is not limited to cases involving exceptional circumstances. See Wilton v. Seven Falls Co., 515 U.S. 277, 115 S. Ct. 2137, 2143, 132 L. Ed. 2d 214 (1995) (reaffirming the holding in Brillhart v. Excess Ins. Co. of America, 316 U.S. 491, 86 L. Ed. 1620, 62 S. Ct. 1173 (1942), that a discretionary standard applies to abstention decisions in declaratory judgment actions); see also NYLife Distributors, Inc. v. Adherence Group, Inc., 72 F.3d 371, 378 (3d Cir. 1995), cert. denied, 517 U.S. 1209 (1996). This discretion is not unbounded, and the Third Circuit has indicated that in exercising this discretion, district courts should lean toward allowing declaratory judgment actions to proceed. See United States v. Commonwealth of Pa., 923 F.2d 1071, 1073 (3d Cir. 1991).

 In Brillhart, the Supreme Court stated that district courts have the discretion to dismiss a declaratory judgment action when "it would be uneconomical as well as vexatious for a federal court to proceed in a declaratory judgment suit where another suit is pending in a state court presenting the same issues, not governed by federal law, between the same parties." See Brillhart, 316 U.S. at 495. "The Court did not articulate all of the considerations which should guide a district court's decision in this regard; it did provide, however, that the court 'should ascertain whether the questions in controversy between the parties to the federal suit[] . . . can be better settled in the proceeding pending in state court[]', assess 'the scope of the pending state proceeding and the nature of the defenses open there[]', and evaluate 'whether the claims of all parties in interest can satisfactorily be adjudicated in that proceeding, whether necessary parties have been joined, [and] whether such parties are amenable to process in that proceeding, etc.'" See NYLife, 72 F.3d at 376-77 (quoting Brillhart, 316 U.S. at 495).

 In the matter at hand, abstention is clearly inappropriate for several reasons. First, the pending state court action does not involve the same issues or parties. The state court action alleges claims for personal injury, while this action seeks injunctive relief under ERISA and the declaratory judgment act to compel defendants to comply with the Plan. Moreover, the defendants in the state court action are not parties to this action, nor is the Plan or Plan Administrator a party to the state court action. Second, since this Court has exclusive jurisdiction over the Plan's ERISA claims, the Plan's interests cannot be satisfactorily adjudicated in the state court proceedings. Thus, in its discretion, this Court will not abstain from exercising jurisdiction.

 B. DEFENDANTS' MOTION TO DISMISS AND PLAINTIFFS' CROSS-MOTION FOR SUMMARY JUDGMENT

 A motion to dismiss pursuant to FED. R. CIV. P. 12(b)(6) may be granted only if, accepting all well pleaded allegations in the complaint as true, and viewing them in the light most favorable to plaintiff, plaintiff is not entitled to relief. Bartholomew v. Fischl, 782 F.2d 1148, 1152 (3d Cir. 1986); Angelastro v. Prudential-Bache Sec., Inc., 764 F.2d 939, 944 (3d Cir.), cert. denied, 474 U.S. 935 (1985). The Court may not dismiss a complaint unless plaintiff can prove no set of facts which would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957); Angelastro, 764 F.2d at 944. "The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." Scheuer v. Rhodes, 416 U.S. 232, 236, 40 L. Ed. 2d 90, 94 S. Ct. 1683 (1974). In setting forth a valid claim, a party is required only to plead "a short plain statement of the claim showing that the pleader is entitled to relief." FED. R. CIV. P. 8(a).

 Summary judgment may be granted only if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. FED. R. CIV. P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 322, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). In a summary judgment motion, the non-moving party receives the benefit of all reasonable doubts and any inferences drawn from the underlying facts. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986). If the non-moving party bears the burden of proof at trial as to a dispositive issue, Rule 56(e) requires him to go beyond the pleadings and designate specific facts showing that there is a genuine issue for trial. Celotex, 477 U.S. at 324; Schoch v. First Fidelity Bancorporation, 912 F.2d 654, 657 (3d Cir. 1990). Issues of material fact are genuine only "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986).

 "While ERISA was enacted to provide security in employee benefits, it protects only those benefits provided in the plan. . . . ERISA mandates no minimum substantive content for employee welfare benefit plans, and therefore a court has no authority to draft the substantive content in such plans." See Hamilton v. Air Jamaica, Ltd., 945 F.2d 74, 78 (3d Cir. 1991), cert. denied, 503 U.S. 938, 117 L. Ed. 2d 622, 112 S. Ct. 1479 (1992). Moreover, "notwithstanding 'the ennobling purposes which prompted passage of ERISA, courts have no right to torture language in an attempt to force particular results . . . the contracting parties never intended or imagined. To the exact contrary, straightforward language . . . should be given its natural meaning.'" See Ryan v. Federal Express Corp., 78 F.3d 123, 126 (3d Cir. 1996) (quoting Burnham v. Guardian Life Ins. Co. of Am., 873 F.2d 486, 489 (1st Cir. 1989)).

 The Plan at issue contains a reimbursement provision which allows the Plan to recoup monies paid by it which should have been paid by the third-party responsible for the injuries. The Plan provides, in ...


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