Bowles v. Reade, 198 F.3d 752 (9th Cir. 1999)-Bowles and the plans appealed from the denial of a motion for leave to amend the complaint to reflect that Reade is the trustee of the Robert B. Reade Trust in this action for breach of fiduciary duty under ERISA. Appellants also appealed from the final judgment dismissing this action following the order granting summary judgment in favor of Ms. Reade.
This court vacated the order granting summary judgment in favor of Ms. Reade on the grounds that the sole basis for the judgment was the mistake in accurately pleading her representative capacity. Since she had notice that, but for the mistaken identification, she would be a defendant in the action, this court found that the district court abused its discretion in denying the plans' motion to amend the complaint to properly name Ms. Reade’s capacity.
The district court properly denied Ms. Reade's motion to dismiss the action against her because it concluded that Bowles could not release her claims of breach of fiduciary duty without the consent of The Plans. Although Bowles invoked 29 U.S.C. § 1132(a)(3), she did not request individual relief, but instead sought relief for The Plans and all participants in The Plans, including herself.
Ms. Reade further asserted that the district court erred in realigning the parties because an ERISA plan has no standing to pursue a claim for breach of fiduciary duty because it is not an enumerated party under 29 U.S.C. § 1132(a). However, a trustee, as plan fiduciary, has standing to bring claims for breach of fiduciary duty, and Ms. Reade failed to demonstrate that she was prejudiced by the Plans’ addition of Stone, the trustee, without a formal request for leave to add him as required by Federal Rules of Civil Procedure 7(b). Thus, the district court did not abuse its discretion when it allowed Stone to be joined as a replacement trustee to represent the plan participants' interests.
Ms. Reade finally argued that a new plaintiff (Stone) and new claims had been added that were time barred. "An ERISA claim is time barred if filed after the earlier of six years after the last act which constituted a part of the breach of fiduciary duty, or three years after the earliest date on which the plaintiff had actual knowledge of the breach." However, under Rule 15(c) of the Federal Rules of Civil Procedure, an amendment to a pleading relates back to the date of the original pleading if the amended claims arose out of the same conduct, transaction, or occurrence, and the defendant received timely notice of the institution of the action and is not prejudiced. Similarly, an amendment adding or substituting plaintiffs will relate back if there is an identity of interests between the plaintiffs. This court found that these requirements were met, and there was no prejudice to Ms. Reade in allowing Stone's claims in the first amended complaint to relate back to the original complaint filed by Bowles.
