The opinion of the court was delivered by: J. CURTIS JOYNER
Defendant Equitable Beneficial Life Insurance Company has, for the fourth time, moved this Court to dismiss a complaint filed by Plaintiffs David and Carol Arber and their employer, Omni Finishing Systems, Inc. This, the Third Amended Complaint, alleges violations of the Employment Retirement Income Security Act of 1974, 29 U.S.C.A. §§ 1001-1461 (1985 & Supp. 1994) (ERISA) and common law. Earlier in this litigation, Equitable filed a motion to dismiss the original complaint, which was dismissed in part with leave to amend. The Plaintiffs did amend their complaint, and a second motion to dismiss was filed. This motion to dismiss was withdrawn when Plaintiffs decided to further amend their complaint. A third motion to dismiss was then filed, which motion was again granted in part, with leave to amend. Plaintiffs did so amend, which brings us to this motion to dismiss.
In the Third Amended Complaint, referred to here simply as the Amended Complaint, Plaintiffs make the following allegations which we accept as true for the purposes of this Motion. Plaintiffs David and Carol Arber were at all relevant times employees of Plaintiff Omni Finishing Systems, Inc. In 1992, Omni, through an agent of Equitable, submitted a Group Enrollment Form for group medical insurance benefits for its employees. After receiving the Group Enrollment Form, and in the normal course of its business, Equitable issued Omni a Certification of Group Insurance that covered the Arbers and other Omni employees. A copy of the Group Enrollment Form, the Certification of Group Insurance, and the Omni Welfare Plan are attached to the Amended Complaint.
According to the Amended Complaint, the Group Insurance is an "employee welfare benefit plan" within the meaning of ERISA and is referred to by the parties as the "Omni Welfare Plan" or "the Plan." 29 U.S.C. § 1002(1). The Arbers are "participants" of the Omni Welfare Plan, and Omni is its "sponsor" and "administrator," as well as a "fiduciary." 29 U.S.C. § 1002(16)(A) & (B) & § 1002(21). Equitable is also a "fiduciary" of the Omni Welfare Plan as a result of having control over funds used to pay claims and having discretionary authority to determine whether a medical expense is covered by the Plan.
In 1992, Equitable obtained Carol Arber's medical records from her doctor. Three months later, a different doctor opined that she needed surgery to relieve certain back pain. Due to this opinion, Carol Arber sought pre-certification that the surgery would be covered by the Omni Welfare Plan. Equitable did, in fact, pre-certify the surgery, and Carol Arber had the surgery on reliance of the pre-certification, and incurred substantial medical expenses. The bills for Carol Arber's surgery, as well as bills for David Arber's routine medical expenses were submitted to Equitable. Equitable refused coverage for Carol Arber's claim, and terminated the Omni Welfare Plan retroactively to its start date. This had the effect of refusing coverage for David Arber's bills as well. According to Equitable, it terminated the Omni Welfare Plan and refused the Arbers' claims when it discovered that the Arbers had made several material misrepresentations in the Group Enrollment Form.
In considering a Rule 12(b)(6) motion, a court must primarily consider the allegations contained in the complaint, although matters of public record, orders, items appearing in the record of the case and exhibits attached to the complaint may also be taken into account. Chester County Intermediate Unit v. Pennsylvania Blue Shield, 896 F.2d 808, 812 (3d Cir. 1990). The Court must accept as true all of the allegations in the pleadings and must give the plaintiff the benefit of every favorable inference that can be drawn from those allegations. Schrob v. Catterson, 948 F.2d 1402, 1405 (3d Cir. 1991); Markowitz v. Northeast Land Co., 906 F.2d 100, 103 (3d Cir. 1990). A complaint is properly dismissed only if it appears certain that the plaintiff cannot prove any set of facts in support of its claim which would entitle it to relief. Ransom v. Marrazzo, 848 F.2d 398, 401 (3d Cir. 1988).
In Count One, Carol and David Arber seek to recover benefits due to them under the terms of an ERISA-covered Plan pursuant to 29 U.S.C. § 1132(a)(1)(B). This count alleges that Equitable had no discretion to determine general eligibility requirements to become a participant, to determine that an existing participant could no longer remain a participant, or to construe the terms of the Omni Welfare Plan. As a result, the Arbers allege that Equitable has wrongfully refused their claims and this Court should apply a de novo standard of review to Equitable's actions. This count is mirrored in Count Two, which differs only in that it avers that Equitable did have discretionary authority, and that its refusal of coverage was arbitrary and capricious.
Equitable seeks to dismiss Count One on the ground that the arbitrary and capricious review standard applies, not the de novo standard. In Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 103 L. Ed. 2d 80, 109 S. Ct. 948 (1989), the Supreme Court determined that in claims for ERISA benefits, courts should review denials of benefits de novo, unless "the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan." Id. at 115. Only if the administrator or fiduciary has discretion in those areas will a court defer to a denial of benefits. Id.
Equitable cites many clauses from the Omni Welfare Plan to demonstrate that it had discretionary authority to determine eligibility for benefits or to construe the terms of the Omni Welfare Plan. Notably, however, none of the cited clauses expressly grants Equitable those specific powers. Moreover, it appears that ...