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Patrick Larzik and Joanne Larzik v. Local 464a United Food and Commercial Workers Union Welfare Service Benefit Fund

May 10, 2013

PATRICK LARZIK AND JOANNE LARZIK, PLAINTIFF,
v.
LOCAL 464A UNITED FOOD AND COMMERCIAL WORKERS UNION WELFARE SERVICE BENEFIT FUND, ET AL.,
DEFENDANTS.



The opinion of the court was delivered by: William J. Martini, U.S.D.J.

OPINION

Plaintiff Patrick Larzik brings this action against Local 464A United Food and Commercial Workers Union Welfare Service Benefit Fund ("Defendant" or "the Fund"), alleging violations of ERISA, breach of contract, and bad faith.*fn1 This matter comes before the Court on Defendant's motion to dismiss under Federal Rule of Civil Procedure 12(b)(6). There was no oral argument. Fed. R. Civ. P. 78(b). For the reasons set forth below, Defendant's motion to dismiss is GRANTED.

I. BACKGROUND

Patrick Larzik was a member of the United Food and Commercial Workers' Local Union No. 464A (the "Union"). Compl. ¶ 7. The Fund is the Union's employee benefit plan. Id. ¶ 3. The terms of the benefit plan are spelled out in a plan document (the "Plan"). See Local 464A Group Reimbursement Welfare Plan for Full-Time Members Summary Plan and Description, ECF No. 12.

From October 1998 through May 5, 2012, Larzik worked as a meat cutter at A&P. Compl. ¶ 6. On June 18, 2011, a work-related injury forced Larzik to go on disability leave. Id. ¶ 10, 11. At a certain point after he went out on disability, Larzik was no longer entitled to health insurance under the Plan. As a consequence, Larzik signed up for COBRA continuation coverage on October 29, 2011. Id. ¶ 22. COBRA refers to the Consolidated Omnibus Budget Reconciliation Act of 1985, 29 U.S.C. § 1161, et seq. "COBRA requires that group health plans grant 'qualified beneficiaries,' . . . who would lose coverage because of a 'qualifying event,' . . . the opportunity to elect to receive continuation coverage under the plan for 18 months following that event." Communications Workers of America v. NYNEX Corp., 898 F.2d 887, 888 (2d Cir. 1990).

In December 2011, Larzik learned that his October 29, 2011 application for COBRA continuation coverage had not been accepted. Larzik appealed to the Fund. Compl. ¶ 26. In his appeal, Larzik asked to be reimbursed for private health insurance premiums and out-of-pocket medical expenses he incurred because his continuation coverage never went through. Larzik also requested that his October 29, 2011 application be granted retroactively.

Before the appeal was decided, Larzik entered into a separation agreement with A&P (the "Agreement"). Meece Certification, Ex. E, ECF No. 5-3. The Fund was not a signatory to the Agreement. The Agreement provided that Larzik's employment at A&P would end effective May 5, 2012. The Agreement gave Larzik a choice. Larzik could choose to take a lump sum payment. Id. at 1. Alternatively, Larzik could choose to "continu[e] [his] existing company sponsored health insurance coverage for a total of 8 months after the Effective Date of this Agreement. Id. at 1. If Larzik chose the second option, A&P agreed to "continue to make contributions to the applicable health and welfare fund on [Larzik's] behalf." Id.

On June 15, 2012, the Fund granted Larzik's appeal in part and denied it in part. Meece Certification, Ex. F., ECF No. 5-3. The Fund denied the appeal to the extent it sought reimbursement of private insurance premiums and out of pocket medical expenses. The Fund granted the appeal to the extent it sought to provide Larzik with COBRA continuation coverage. The Fund acknowledged that it made a mistake when it rejected Larzik's October 29, 2011 application for COBRA continuation coverage. Accordingly, the Fund offered to provide Larzik with COBRA continuation coverage retroactive to September 1, 2011.*fn2 Larzik was given 45 days to provide the monthly contributions for September 2011 through April 2012. If Larzik provided those monthly contributions, the Fund would take the money A&P provided pursuant to the Agreement with Larzik, and it would use that money to pay Larzik's COBRA premiums for May 2012 through December 2012. It appears that Larzik failed to make his monthly contributions. Though the Fund refused to provide Larzik with COBRA continuation coverage, it appears that the Fund has not returned the eight months' worth of policy premiums provided by A&P.

II. LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a complaint, in whole or in part, if the plaintiff fails to state a claim upon which relief can be granted.

The moving party bears the burden of showing that no claim has been stated. Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005). In deciding a motion to dismiss under Rule 12(b)(6), a court must take all allegations in the complaint as true and view them in the light most favorable to the plaintiff. See Warth v. Seldin, 422 U.S. 490, 501 (1975); Trump Hotels & Casino Resorts, Inc. v. Mirage Resorts Inc., 140 F.3d 478, 483 (3d Cir. 1998).

Although a complaint need not contain detailed factual allegations, "a plaintiff's obligation to provide the 'grounds' of his 'entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Thus, the factual allegations must be sufficient to raise a plaintiff's right to relief above a speculative level, such that it is "plausible on its face." See id. at 570; see also Umland v. PLANCO Fin. Serv., Inc., 542 F.3d 59, 64 (3d Cir. 2008). A claim has "facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (citing Twombly, 550 U.S. at 556). While "[t]he plausibility standard is not akin to a 'probability requirement' . . . it asks for more than a sheer possibility." Iqbal, 129 S.Ct. at 1949 (2009).

"In evaluating motions to dismiss, courts consider 'allegations in the complaint, exhibits attached to the complaint, matters of public record, and documents that form the basis of a claim.'" Banco Popular v. Ghandi, 184 N.J. 161 (2003) (citing Lum v. Bank of Am., 361 F.3d 217, 222 n.3 (3d Cir.), cert. denied, 543 U.S. 918, (2004)). A document forms the basis of a claim if the document is "integral to or explicitly relied upon in the complaint." Lum, 361 F.3d at 222 n.3 (citing Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997)). "The purpose of this rule is to avoid the situation where a plaintiff with a legally deficient claim that is based on a particular document can avoid dismissal of that claim by failing to attach the relied upon document." See Pension Benefit Guar. Corp., 998 F.2d at 1196. Considering such a document is not unfair to a plaintiff because, by relying on the document, the plaintiff is on notice that the document will be considered. See Burlington Coat ...


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