Unpublished Disposition, 888 F.2d 1394 (9th Cir. 1986)

MEMORANDUM^* 

Raymond Van Beenen appeals the district court's order dismissing his ERISA (Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001-1461) action.

Van Beenen, as an employee of Sonshine Auto Body, became the beneficiary of an ERISA Plan and was eligible for health care benefits on or about August 31, 1986. On August 25, 1986 during a routine physical examination a lump was found in his throat. On September 9, 1986 the lump was excised, and Van Beenen was diagnosed as having Hodgkin's disease. The defendants denied benefits for the treatment of this disease on the basis that it was excluded under a pre-existing condition clause.

Van Beenen then filed this lawsuit against his employer, the ERISA Plan administrator, and the ERISA Plan. The complaint alleged four causes of action: 1. breach of fiduciary duty; 2. failure to provide Plan benefits; 3. failure to provide requested information; and 4. wrongful termination. The employer was named defendant only in the fourth cause of action.

The ERISA Plan and its administrator filed a motion to dismiss. The motion was based on Van Beenen's failure to exhaust Plan remedies by submitting the claims to arbitration as required by the Plan documents, and in the alternative for failure to state a claim. The defendant employer filed an answer to Van Beenen's complaint.

After oral argument, the district court granted the defendants' motion to dismiss as to all four causes of action, with the provision that the fourth cause of action would be recalendared if the arbitration did not proceed within 30 days. Van Beenen filed a notice of appeal to this court. Subsequently, he abandoned his appeal as to the first and fourth causes of action, and filed a stipulation signed by all parties dismissing those causes of action.

The remaining causes of action are for failure to provide benefits due under the ERISA Plan, brought pursuant to 29 U.S.C. § 1132(a) (1) (B), and for failure to provide information to which Van Beenen is entitled, brought under 29 U.S.C. § 1132(c).

JURISDICTION

The defendants contend that this court does not have jurisdiction because the district court's decision was not final. The general rule is that a district court's decision is final if it " 'ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.' " Coopers & Lybrand v. Livesay, 437 U.S. 463, 467 (1978) (quoting Catlin v. United States, 324 U.S. 229, 233 (1945)). Generally, an order dismissing all claims is final. See 15 C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure Sec. 3914 at 541 (1976). An order compelling arbitration of all claims is dispositive of the case and is final. See Lopez v. Dean Witter Reynolds, Inc., 805 F.2d 880, 883 (9th Cir. 1986)¹ . Even though the fourth cause of action was dismissed with the provision that it would be recalendared if arbitration did not proceed within 30 days, the order was final and appealable.

STANDARD OF REVIEW

Van Beenen's action was dismissed under Rule 12(b) (6) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief could be granted. Such a dismissal is reviewed de novo. Nieto v. Ecker, 845 F.2d 868, 870 (9th Cir. 1988).

DISCUSSION

The district court erred in dismissing Van Beenen's third cause of action, for failure to provide information. The district court did not err in dismissing the second cause of action, for benefits due under the plan.

In the Ninth Circuit, a plaintiff must exhaust internal Plan remedies before bringing an ERISA action in federal court for benefits due under the ERISA Plan. Fujikawa v. Gushiken, 823 F.2d 1341, 1346 (9th Cir. 1987) (citing Amato v. Bernhard, 618 F.2d 559, 561 (9th Cir. 1980)), cert. denied, 108 S. Ct. 2913 (1988). A plaintiff is not required to exhaust internal Plan remedies before bringing an ERISA action in federal court for statutory benefits. Fujikawa, 823 F.2d at 1345 (citing Amaro v. Continental Can Co., 724 F.2d 747, 751 (9th Cir. 1984)). There is an inter-circuit conflict on this issue, with some circuits holding that an ERISA plaintiff must always exhaust internal Plan remedies. See Mason v. Continental Group, Inc., 474 U.S. 1087 (1986) (Justices White and Brennan dissenting from the denial of certiorari). The law in the Ninth Circuit, however, is clear.

Because Van Beenen's second cause of action was for benefits due under the Plan, and Van Beenen failed to comply with the Plan's requirement that such disputes be submitted to arbitration, that cause of action was appropriately dismissed.²  Van Beenen's third cause of action was based on a statutory right, 29 U.S.C. § 1132(c), which provides that an ERISA Plan administrator who fails or refuses to supply requested Plan information which the administrator is required to supply under the provisions of ERISA is liable to the beneficiary for up to $100 per day and such other relief as the court deems proper. Because the action was based on a statutory right, Van Beenen was not required to exhaust internal Plan remedies, and was entitled to proceed directly to federal court. Thus, this cause of action should not have been dismissed.

ATTORNEY'S FEES

Van Beenen requests attorney's fees on appeal pursuant to 29 U.S.C. § 1132(g) (1). This section provides that "the court in its discretion may allow a reasonable attorney's fee and costs of action to either party." A party need not "prevail" to be entitled to fees under this section. Fujikawa, 823 F.2d at 1348. The factors to be considered in determining the appropriateness of an award of fees are:

the culpability and good faith of the opposing party; the ability of the party to pay fees; the increased deterrence that would result from the award; whether a number of beneficiaries would benefit from the award of fees; and the relative merits of the parties' positions.

Id. (citing Hummel v. S.E. Rykoff & Co., 634 F.2d 446, 453 (9th Cir. 1980)). We conclude that Van Beenen is not entitled to attorney's fees on appeal.

It is difficult on this record to determine the culpability or good faith of the opposing parties. Similarly, it is difficult on this record to determine the parties' ability to pay fees. The increased deterrence that would result from an award of fees cuts both ways in this case: the defendants should not insist on arbitration of a non-arbitrable claim, but neither should the plaintiff file a federal suit without complying with the necessary prerequisites. The number of beneficiaries an award of fees would benefit in this case is one, weighing against an award of fees. Finally, on the relative merits of the parties' positions, we affirm the dismissal of the claim for benefits and reverse the dismissal of the claim for failure to provide information. Thus, the relative merits are close. On balance, we conclude that an award of attorney's fees is not appropriate on this record.

AFFIRMED in part, REVERSED in part, and REMANDED.