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Riordan v. Commonwealth Edison Company

October 17, 1997




Appeal from the United States District Court for the Northern District of Illinois, Eastern Division.

No. 95 C 1207--George W. Lindberg, Judge.

Before POSNER, Chief Judge, and MANION and KANNE, Circuit Judges.

MANION, Circuit Judge.



Rosemary Riordan was married to James Riordan for over twenty years. They had five children. But in 1977 they separated and nine years after that they divorced. When James died in 1992, his employer, Commonwealth Edison ("ComEd"), paid a $50,000.00 death benefit to his second wife, Irene. Rosemary sued ComEd under ERISA; she claimed plan documents revealed James' intent that she receive the death benefit rather than Irene. After the case was removed to federal court, both sides agreed that the dispute could be resolved on the basis of the record and each filed a motion for summary judgment. The court granted ComEd's motion and denied Rosemary's. We affirm.


When James and Rosemary separated in 1977, they obtained a Judgment for Legal Separation from Cook County Circuit Court. The judgment did not legally end the marriage (only a Judgment for Dissolution can do that, In Re Sutton, 557 N.E.2d 869, 872 (Ill. 1990)), but it did order James to maintain his employer-sponsored life insurance policy for the benefit of his minor children. About a year after the order was issued, James filled out a "designation of beneficiary form" with ComEd in which he named Rosemary (on behalf of the children) as the beneficiary of his $50,000.00 death benefit. But because he was doing so pursuant to a court order, ComEd's benefits supervisor typed the word "irrevocable" on the face of the form.

By 1986 James' marriage to Rosemary was officially over; this time the circuit court issued a Judgment for Dissolution. According to the order, James Riordan was to name his remaining minor child (James) as his "irrevocable" beneficiary on his life insurance policy until the child turned 18, which would occur one year later in 1987. After reviewing the divorce decree the plan administrator wrote James stating: "You previously had the $50,000 irrevocably payable to your ex-wife (copy attached). The current divorce decree indicates irrevocable insurance to the minor child. Please complete the enclosed beneficiary card naming the minor child for the $50,000.00 and the balance payable to ___. Please sign and return." For whatever reason, James never got around to that, but in 1988, he married Irene, and shortly thereafter filed a new designation of beneficiary form with ComEd naming Irene as his sole beneficiary. Under the terms of ComEd's summary plan description, employees could change their beneficiaries "at any time by submitting a new Beneficiary Designation card" to the company. So when James died in 1992, ComEd paid his death benefit to Irene. Under the divorce decree, Rosemary received a portion of James' pension.

About a year before he died, James asked his daughter (from his marriage to Rosemary) to keep some of his personal papers at her house. Two years after James' death, the daughter discovered his initial designation of beneficiary form that assigned his death benefit to Rosemary. She showed the form (with the notation "irrevocable" typed on its face) to her mother. Rosemary brought suit under ERISA, claiming that the $50,000.00 death benefit paid to Irene should have been paid to her.


At the outset, ComEd argues that Rosemary Riordan has committed a fatal mistake by suing the wrong entity--ComEd (her ex-husband's employer and the plan administrator) rather than the plan itself. It is true that ERISA permits suits to recover benefits only against the plan as an entity, Jass Prudential Health Care Plan, Inc., 88 F.3d 1482, 1490 (7th Cir. 1996), but we are not inclined to make this case known for that rule. ComEd did not pursue summary judgment on this basis. While we can affirm the judgment of the district court on any basis supported by the record, McClendon v. Indiana Sugars, Inc., 108 F.3d 789, 796 (7th Cir. 1997), the exact relationship between ComEd and the plan is not clearly set out. The plan documents themselves refer to ComEd and the plan nearly interchangeably, and the company designated itself as the plan's agent for service of process. So it is not surprising that Rosemary sued ComEd instead of the plan.

Of more immediate concern is a jurisdictional issue. The parties apparently agree that Rosemary Riordan has standing to sue ComEd, but such acquiescence is not enough. National Org. for Women, Inc. v. Scheidler, 114 S. Ct. 798, 802 (1994) ("Standing represents a jurisdictional requirement which remains open to review at all stages of the litigation."). Only participants, beneficiaries or fiduciaries (and the Secretary of Labor) may sue under ERISA, 29 U.S.C. sec. 1132(a), and the district court treated Rosemary as a beneficiary. A "beneficiary" is defined by ERISA, sec. 1002(8), as "a person designated by a participant, or by the terms of the employee benefit plan, who is or may become entitled to a benefit thereunder." The typical beneficiary in an ERISA plan is a spouse, which obviously Rosemary no longer was. Nevertheless, the Eleventh Circuit has held "that the term 'Beneficiary' . . . is broad enough to include the ex-wife of a participant of a plan, when she seeks benefits under the plan." Brown v. Connecticut General Life Ins., 934 F.2d 1193, 1196 n.4 (11th Cir. 1991); see also McMillan v. Parrott, 913 F.2d 310, 312 (6th Cir. 1990) (never questioning former wife's standing to sue under sec. 1132).

In reality the familial relationship between the plaintiff and the participant is irrelevant. Nothing under ERISA prevents the participant from designating a friend rather than a family member to be the beneficiary, or, as in this case, a second wife in lieu of a first. But where a family member such as a present or former spouse is not chosen as the beneficiary, she obviously is more likely to sue. That happened in Sladek v. Bell System Mgmt. Pension Plan, 880 F.2d 972 (7th Cir. 1989), the only case cited by Brown to support its decision allowing ex-wives standing under ERISA. Sladek actually involved a spouse, not an ex-spouse, who sought to set aside her husband's election to accept increased lifetime benefits instead of a survivor annuity. Sladek wanted to set aside her husband's election on the basis of his alleged incompetency (he suffered from Alzheimer's disease), and we allowed her standing to sue because she was a potential beneficiary under her husband's plan. Under that plan, the annuity option was automatic if the participant made no election whatsoever, and the surviving spouse then was awarded the annuity. So if Sladek had been successful in setting aside her husband's election to forego the survivor annuity, the annuity would have been ...

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