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PAINTERS OF PHILADELPHIA DIST. COUNCIL NO. 21 WELF

November 14, 1988

PAINTERS OF PHILADELPHIA DISTRICT COUNCIL NO. 21 WELFARE FUND and WILLIAM DALTON, HAROLD JOHNSON, GEORGE CLARK, GERARD DOTO, HERBERT TIEDEKEN, RICHARD SCHROEDER, HERBERT LEWIN, AS TRUSTEES OF PAINTERS OF PHILADELPHIA, DISTRICT COUNCIL NO. 21 WELFARE FUND
v.
PRICE WATERHOUSE



The opinion of the court was delivered by: HANNUM

 JOHN B. HANNUM, SENIOR UNITED STATES DISTRICT JUDGE

 Background

 The plaintiffs in the above-captioned action are an employee welfare fund and its trustees. ("Plaintiffs" or "the Fund.") The defendant is an international accounting firm which served as auditor for the Fund from 1976 to 1982. ("Price Waterhouse"). *fn1" See Complaint, paragraph 14.

 Plaintiffs in their Complaint allege that the Fund's former administrators negligently managed the Fund and grossly overcharged the Fund for Administrative services.

 Plaintiffs also allege that Price Waterhouse failed to perform the audits consistently with its statutory duty to do so. (Complaint, Paragraph 16) and failed to acknowledge, investigate, itemize, evaluate or report the alleged improprieties of the administrator to the trustees. (Complaint, Paragraph 17).

 The Complaint is divided into four Counts. They are:

 Count I: Breach of a fiduciary duty imposed upon Price Waterhouse by the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C.A. § 1001 et seq. (West 1985 & Supp. 1988).

 Count II: Breach of general statutory duty implied in ERISA.

 Count III: Breach of contract.

 Count IV: Negligence.

 Price Waterhouse has moved, pursuant to Fed.R.Civ.P. 12(b)(6), to dismiss Counts I and II for failure to state a claim upon which relief may be granted. Price Waterhouse has concurrently moved for dismissal of Counts III and IV. Price Waterhouse argues that if Counts I and II are dismissed, the Court should not exercise prudent jurisdiction over Counts III and IV. *fn2"

 For the reasons stated below, the Court will grant the motion of Price Waterhouse and dismiss the entire Complaint.

 Discussion

 Pursuant to Fed.R.Civ.P. 12(b)(6), this Court must take the allegations of the Complaint as true, granting dismissal only when it is beyond doubt that the plaintiffs can prove no set of facts entitling them to relief. Conley v. Gibson, 355 U.S. 41, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957).

 In Count I, plaintiffs allege that Price Waterhouse "owed the Fund and its participants a fiduciary duty to conduct its audits in accordance with generally accepted auditing standards." Complaint, Paragraph 23. Additionally, plaintiffs allege that "Price Waterhouse breached its fiduciary duty described above by failing to acknowledge, investigate, itemize, evaluate or notify . . . of the improper and unreasonable fees and expenses charged by [the administrator]." Complaint, Paragraph 24.

 ERISA defines fiduciary as follows:

 
[A] person is a fiduciary with respect to a plan to the extent (i) he exercises any discretionary authority or discretionary control respecting management of such plan or exercises any authority or control respecting management or disposition of its assets, (ii) he renders investment advice for a fee or other compensation, direct or indirect, with respect to any moneys or other property of such plan, or has any authority or responsibility to do so, or (iii) he has any discretionary authority or discretionary responsibility in the administration of such plan . . . .

 29 U.S.C.A. § 1002(21)(A) (West Supp. 1988).

 Nowhere in their Complaint do plaintiffs allege that Price Waterhouse performed any of these services for the Fund. In fact, Price Waterhouse could not have performed any of the services listed in § 1002(21)(A) and still have been qualified to do the audits. 29 U.S.C.A. § 1023 (a)(3)(A) (West 1985) provides:

 
The administrator of an employee benefit plan shall engage, on behalf of all plan participants, an independent qualified public accountant, who shall conduct . . . an examination of any financial statements of the plan, and of other books and records of the plan, as the accountant may deem necessary to enable the accountant to form an opinion as to whether the financial statements and schedules . . . are presented fairly in conformity ...

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