Opinion
Case No. 1:03-cv-926.
July 5, 2006
ORDER JOINING CAROL SUE BAINUM, IN HER INDIVIDUAL CAPACITY, AS PLAINTIFF
This matter comes before the Court on Defendants Bakery, Confectionary, Tobacco Workers and Grain Millers International Union's ("International's") and Bakery and Confectionary Union and Industry International Pension Fund's ("Fund's") (collectively, "Defendants'") Motion to Correct Order Granting Plaintiffs' Motion for Substitution ("Correction Motion") (doc. #65); this Court's Order Denying Without Prejudice Defendants' Motion and Ordering Briefing on Substitution ("Briefing Order") (doc. #66); and Defendants' brief in response to that Order ("Supplemental Brief") (doc. #67).
For the reasons below, the Court hereby JOINS Carol Sue Bainum to this action in her individual capacity pursuant to Federal Rule of Civil Procedure 19(a)(2)(i).
This Court's prior Briefing Order provides more background on this action and Defendants' Substitution Motion. (See Doc. #66.)
On November 1, 2005, Plaintiff Gary Bainum passed away. (See, e.g., doc. #51.) On February 8, 2005, Plaintiff's counsel filed a Motion to Substitute Carol Sue Bainum, Gary Bainum's surviving spouse, in her official or fiduciary capacity as executor for Gary Bainum's estate ("Plaintiff Estate"), for Gary Bainum pursuant to Rule 25 ("Substitution Motion"). (Doc. #63; see also Fed.R.Civ.P. 25.) The Court notationally granted the Substitution Motion and substituted Carol Bainum, in her official or fiduciary capacity as executor of Plaintiff Estate, for Gary Bainum. (Doc. #64.)
Four days after the Court's Order granting Plaintiffs' Substitution Motion, Defendants filed their Correction Motion. (Doc. #65.) In said motion, Defendants argued that Carol Bainum, in her individual capacity, is also a proper party to substitute for Gary Bainum under the meaning of Rule 25. (Doc. #67.) Defendants asserted that Carol Bainum, as the surviving spouse of Gary Bainum, has an exclusive right to collect those pension benefits of Mr. Bainum's that were to be paid following his death, and is consequently the only party with standing to petition for any increase to those post-mortem pension payments. (Id.) Defendants argued that accordingly the "Court should amend" its February 2006 Order granting Plaintiffs' Substitution Motion "to also substitute Mr. Bainum's wife in her individual capacity" pursuant to Rule 25. (Id. at 1-2.) Defendants asserted that this additional substitution was both necessary and proper, but — as the Court later noted in its Briefing Order — did not submit "any applicable law or verified facts that would assist the Court in evaluating . . . this substitution" and did not indicate whether or not Plaintiffs agreed with their Correction Motion. (Doc. #66 at 3-4.)
The Court, requiring more information in order to properly evaluate the proposed substitution, then ordered all parties to file briefs on:
1. The appropriate allocation of any award of pension benefits in this case to or between Plaintiff Estate and Carol Bainum in her individual capacity as surviving spouse; and
2. The role of the state probate court presiding over distribution of Bainum's estate; if any, in determining the appropriate allocation or distribution of any award.
(Id. at 5.) In anticipation of further briefing on these issues, the Court also denied Defendants' Correction Motion (doc. #65) without prejudice. (Doc. #66 at 1, 6.)
Defendants submitted their Supplemental Brief in response to the Court's Order on March 14, 2006. (Doc. # 67.) No other party has submitted a brief in response to the Court's Briefing Order, and the sixty day time period in which to do so has expired.
II. ANALYSIS
A. Defendants' Arguments
In their Supplemental Brief, Defendants contend that under the applicable Fund terms, Mr. Bainum's authority (and consequently the authority of Plaintiff Estate and Carol Sue Bainum as executor) to pursue increases to his pension benefits is limited to those monthly payments made to Mr. Bainum before his death. (Id. at 2-5 (citing in part Rules and Regulations of the Pension Fund ("Defendants' Attachment 1") at 7, § 8.02(a).)) Defendants submit a copy of Mr. Bainum's pension application, as well as the sworn statement of Fund Manager Lewis Davis ("Defendants' Attachment 2" and "Defendants' Attachment 3," respectively), as further evidence of Plaintiff Estate's limited claim on the benefits in question. (Id at 3.) Defendants then argue that authority to pursue increases to pension payments made in the months after Mr. Bainum's death is vested solely in Carol Bainum in her individual capacity as surviving spouse. (Id. at 2-5.) As proof, Defendants again cite the terms of Mr. Bainum's pension plan and the statement of Fund Manager Davis, as well as the general requirements for pension plans codified in the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq. (Id.; see also 29 U.S.C. § 1055(a)(1) and 29 U.S.C. § 1055(d)(1).) Defendants also assert that pursuant to the terms of Mr. Bainum's "Husband and Wife Pension" Plan, the Fund has been making postmortem payments in the amount of 50% of Mr. Bainum's pre-death payments to Carol Sue Bainum and will continue to do so until Mrs. Bainum's death. (See doc. #67 at 4 and Defendants' Attachment 3 at 2.) Addressing the Court's second concern regarding the role of the probate courts, Defendants argue that ERISA, and its provisions for the distribution of pension benefits to surviving spouses, preempts any state law that might set up conflicting distributional standards. (Doc. #67 at 6-7.) Defendants cite ERISA's preemption clause as well as the Supreme Court's holding in Boggs v. Boggs, 520 U.S. 833 (1997). (Id; see also 29 U.S.C. § 1144(a).)
ERISA provides that "in the case of a vested participant who does not die before the annuity starting date, the accrued benefit payable to such participant shall be provided in the form of a qualified joint and survivor annuity." 29 U.S.C. § 1055(a)(1). The survivor annuity should be in an amount "not less than 50 percent of . . . the annuity which is payable during the joint lives of the participant and the spouse." 29 U.S.C. § 1055(d)(1).
B. Substitution and Joinder of Parties Under Federal Rules 25 and 19
Rule 25 of the Federal Rules of Civil Procedure addresses the substitution of parties after death, and states in relevant part:
(a) Death.
(1) If a party dies and the claim is not thereby extinguished, the court may order substitution of the proper parties. The motion for substitution may be made by any party or by the successors or representatives of the deceased party. . . . Unless the motion for substitution is made not later than 90 days after the death is suggested upon the record by service of a statement of the fact of the death as provided herein for the service of the motion, the action shall be dismissed as to the deceased party.
Fed.R.Civ.P. 25(a)(1) (emphasis added).
Rule 19 of the Federal Rules of Civil Procedure addresses the joinder of parties to an action, and states in relevant part:
(a) Persons to Be Joined if Feasible. A person who is subject to service of process and whose joinder will not deprive the court of jurisdiction over the subject matter of the action shall be joined as a party in the action if . . . (2) the person claims an interest relating to the subject of the action and is so situated that the disposition of the action in the person's absence may (i) as a practical matter impair or impede the person's ability to protect that interest. . . .
Fed.R.Civ.P. 19(a)(2)(i) (emphasis added).
Pursuant to Rule 25, the Court has already granted Plaintiffs' Substitution Motion and substituted Carol Bainum — in her official capacity as executor of Plaintiff Estate — for Gary Bainum. (See doc. #64.) However, upon review of Defendants' Supplemental Brief (doc. #67) to its Correction Motion (doc. #65), Defendants' attachments, and relevant authority, the Court agrees with Defendants that Plaintiff Estate has a claim only to that share of Gary Bainum's pension benefits payable to Gary Bainum during his lifetime. Accordingly, the Court determines that Plaintiff Estate, as represented by Carol Bainum in her fiduciary or executory capacity, has no standing to pursue claims related to those monthly pension payments that have been or will be made after Gary Bainum's death. Carol Bainum, in her personal or individual capacity as a surviving spouse, is the only person with a claim to these postmortem payments. As such, she is the only person with standing to pursue adjustments in the amount of those payments.
An additional Rule 25 substitution, however, does not appear to be in order here. Rule 25 governs the substitution of one or more parties for a deceased party, the purpose of the substitution being to represent any interest of the deceased's that is not extinguished by his death. See, e.g., Fariss v. Lynchburg Foundry, 769 F.2d 958, 962 (4th Cir. 1985). But when the deceased party's interest in a claim ends upon his death, as did Mr. Bainum's claim to his monthly pension payments, the joinder of a person with a separate but related interest is more properly governed by Rule 19. Rule 19 requires a party with an interest that is bound to an ongoing action to be joined to that action if that person's absence "impair[s] or impede[s] the person's ability to protect that interest." Fed.R.Civ.P. 19(a)(2)(I).
Because Fund rules apparently provide for Mrs. Bainum to receive postmortem surviving spouse pension payments from Defendants in the amount of 50% of Gary Bainum's pre-death payments, the question of whether or not Mr. Bainum — and consequently Plaintiff Estate — was entitled to higher payments during his lifetime bears directly on the level of postmortem payments Carol Bainum is now entitled to receive. Her interest in postmortem payments as surviving spouse thus relates directly to the success of Plaintiff Estate's claim for an increase in pre-death payments. Because Carol Bainum's absence from this action in an individual capacity may prohibit her from safeguarding that personal interest, the Court sua sponte finds that a Rule 19 joinder is in order.
The Court recognizes that in this particular case, this may be largely an abstract concern. Because the Court has already joined Mrs. Bainum as plaintiff in her executive capacity, she will be party to this action regardless of whether or not the Court also joins her in an individual capacity. However, in light of the legal issue of standing to claim postmortem payments, the Court feels that a Rule 19 joinder is still proper.
Although no party has moved to join Carol Bainum to this action under Rule 19, the Rule provides in part that if an appropriate person "has not been so joined the court shall order that the person be made a party." Fed.R.Civ.P. 19 (emphasis added).
C. Conflict of Interest
In its Briefing Order, the Court noted a potential conflict of interest between Plaintiff Estate, as represented by Carol Bainum in her official capacity, and Carol Bainum in her individual capacity as a surviving spouse. (See doc. #66 at 5.) The Court suggested that this conflict, if established, might necessitate the appointment of separate counsel for Carol Bainum in her individual capacity and for Plaintiff Estate. Having received more information regarding the allocation of the benefits in question, and in particular the arithmetic relationship between the levels of pre-mortem and postmortem payments payable through the Fund, the Court is satisfied that there is no conflict of interest. The Fund terms state, in relevant part:
The Husband and Wife Pension is the normal form of pension payable to a married Participant. It provides a lifetime pension for the married Participant plus a lifetime pension for the surviving spouse after the death of the Participant. The monthly amount to be paid to the surviving spouse is one-half the monthly amount paid to the Participant.
(Doc. #67, Defendants' Attachment 1 at 3, § 6.01 (emphasis added); see also Doc. #67, Defendants' Attachment 3 at 2 (reiterating 50% formula).)
Here, both Plaintiff Estate and Carol Bainum in her individual capacity have an interest in obtaining positive adjustments to Gary Bainum's monthly pension payments. Because Carol Bainum in her individual capacity can only receive an increase in her postmortem payments if Plaintiff Estate also receives an upward adjustment in Mr. Bainum's pre-death payments, and any such increases would be proportional, Plaintiff Estate's and Carol Bainum's individual interests are aligned and there is essentially no conflict. This is so even though the Estate's and Carol Bainum's individual interests are not one and the same for standing purposes. As such, the Court does not see the need for separate counsel.
C. Role of Probate Courts
The Court is satisfied that the relevant provisions of ERISA preempt those of state probate law for purposes of the issues discussed above. (See doc. # 67 and Boggs, 520 U.S. at 836-44.) As such, the question regarding the probate court's role in the distribution of Gary Bainum's future pension benefits is moot, at least for the purposes of the present joinder issue.
III. CONCLUSION
For the reasons above, the Court JOINS Carol Sue Bainum to this action in her individual capacity pursuant to Rule 19(a)(2)(i).
As noted above, the Court has already denied without prejudice Defendants' Correction Motion (doc. #65) urging the substitution of Carol Bainum in her individual capacity under Rule 25. (See doc #66 and Part I, supra.)
IT IS SO ORDERED.