November 12, 1999
DALE EDWIN SANDERS, APPELLANT/CROSS-APPELLEE,
INTERNATIONAL SOCIETY FOR PERFORMANCE IMPROVEMENT, APPELLEE/CROSS-APPELLANT.
Before Wagner, Chief Judge, Farrell, Associate Judge, and King,
Senior Judge. *fn1
The opinion of the court was delivered by: King, Senior Judge
Appeals from the Superior Court of the District of Columbia (Hon. Stephen F. Eilperin, Trial Judge)
(Argued May 21, 1998 Decided November 12, 1999)
These cross-appeals arise from a dispute between International Society for Performance Improvement ("ISPI") and the estate of Dr. Paul W. Tremper ("estate") over the terms of the deceased's employment contract. Dr. Tremper was employed by ISPI as its Executive Director from 1985 until just before his death in August of 1993. We publish this opinion solely to address an issue that is presented to us for the first time: Does the employee's estate, which is not a named beneficiary, have standing to bring an action against the employer under the Employee Retirement Income Security Act ("ERISA")? *fn2 We conclude that it does.
Dale E. Sanders, executor of the estate, brought an action against ISPI seeking to recover, among other things, proceeds from a life insurance policy in the amount of $100,000. The estate sued for breach of fiduciary duty under the civil enforcement provisions of ERISA *fn3 after ISPI refused Dr. Tremper's attempt to convert a life insurance policy (which named ISPI as a beneficiary) into his sole ownership as provided by the employment contract. In a comprehensive written order, the trial Judge found for the estate and entered judgment in its favor. *fn4 In the same order, the trial court denied the estate's request for an award of attorney's fees pursuant to 29 U.S.C. § 1132 (g) (1994).
On appeal, the estate claims only that the trial court abused its discretion in denying the request for an award of attorney's fees. ISPI cross-appeals, contending that: (1) the estate lacked standing to bring a common law action on the insurance policy; (2) the estate lacked standing to maintain an action under ERISA; and (3) the trial court erred in ruling that Dr. Tremper had satisfied the conditions precedent set forth in the contract in order to exercise his right to the insurance policy. Because we conclude the trial court neither erred nor abused its discretion in any of its rulings, we affirm.
This case presents only one substantial issue for our review: Whether an estate, which is not a named beneficiary, has standing to sue an employer under ERISA. *fn5 The parties agree that under the statute "beneficiaries" and "participants" have standing to sue for benefits under ERISA. 29 U.S.C. § 1132 (a)(1)(B). ISPI urges a strict construction of that provision, contending that because the estate is neither a beneficiary nor a participant it lacks standing. *fn6 We disagree and conclude that the participant's estate, even if not a beneficiary, has standing to bring this action.
A number of federal courts have allowed an estate to maintain an action under ERISA without actually addressing the standing issue. *fn7 Moreover, those federal courts that have expressly considered the standing issue where an estate is not the beneficiary have ruled in favor of the estate. See Shea v. Esensten, 107 F.3d 625, 628 (8th Cir.), cert. denied, 522 U.S. 914 (1997) (estate representative has standing to assert deceased's breach of fiduciary duty claim under ERISA); cf. Yarde v. Pan American Life Ins. Co., Nos. 94-1167, 94-1312, 1995 U.S. App. LEXIS 25883 (4th Cir. Sept. 12, 1995) (treating participant's estate as an assignee to establish standing under derivative standing doctrine); Psychiatric Inst. of Washington, D.C., Inc. v. Connecticut Gen. Life Ins. Co., 780 F. Supp. 24, 29 (D.D.C. 1992) (assignee has derivative standing to sue employee's insurer under ERISA). *fn8 No federal court has held otherwise and ISPI has cited no authority supporting such a narrow construction of ERISA.
ERISA, although "comprehensive," Nachman Corp. v. Pension Benefit Guaranty Corp., 446 U.S. 359, 361 (1980), does not address the question of an estate's standing where it is not a designated beneficiary. There is no basis for concluding, however, that Congress intended to preclude a participant's estate from bringing an action which the participant could maintain if still alive. See Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 113 (1989) (intent behind ERISA is to safeguard the "interests of employees and . . . to protect contractually defined benefits") (citations omitted). It is now a generally accepted principle that where an action survives the death of a decedent, the personal representative of the estate can ordinarily bring that action on the deceased's behalf. 31 Am. Jur. 2d Executors and Administrators § 1242 (1989). *fn9
Similarly, "a valid assignment confers upon the assignee standing to sue in place of the assignor." Misic, supra note 7, 789 F.2d at 1378 (citing United States Fidelity & Guaranty Co. v. Bartlett, 231 U.S. 237, 243 (1913)). As one court has opined, "[f]rom Congress' silence . . . it follows that assignments of health benefit claims are not barred [by ERISA]." Washington Hosp. Ctr. Corp. v. Group Hospitalization & Med. Servs., Inc., 758 F. Supp. 750, 753 n.2 (D.D.C. 1991). Thus, although ERISA did not expressly provide for assignment of its benefits, the federal courts are virtually unanimous that an assignee has standing to maintain an action.
We think it equally clear that Congress did not intend to bar estates from bringing an action that the participant could have brought. Accordingly, we conclude that Dr. Tremper's estate has standing to challenge ISPI's breach of fiduciary duty. To hold otherwise would frustrate ERISA's intent. See Firestone Tire, supra.