The HONORABLE JOHN F. NANGLE, Senior United States District *

Judge for the Eastern District of Missouri, sitting by designation.

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

_____________

No. 97-3653

____________

Billy E. Bennett, Jr., *

*

Appellant, *

*

v. * Appeal from

the United States

* District Court for the

Western

Federated Mutual Insurance Company * District of

Arkansas.

as plan administrator of the Federated *

Mutual Insurance Company Career *

Growth Bonus Plan and as plan *

administrator of the Federated Mutual *

Insurance Company Golden Cash *

Reserve Plan; Federated Mutual *

Insurance Company Career Growth *

Bonus Plan; Federated Mutual *

Insurance Company Golden Cash *

Reserve Plan, *

*

Appellees. *

____________

Submitted: March 12, 1998

 

Filed: April 2, 1998 

____________

Before MORRIS SHEPPARD ARNOLD and FLOYD R. GIBSON,

Circuit Judges, and NANGLE, Senior District Judge. *

____________
 The HONORABLE H. FRANKLIN WATERS, United States District ***

Court for the Western District of Arkansas.

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____________

NANGLE, Senior District Judge.

Billy E. Bennett, Jr. appeals from the district

court’s grant of summary judgment in favor of appellees ***

in his suit for recovery of pension benefits under ERISA.

The district court ruled that appellant’s suit was barred

by the statute of limitations because his cause of action

accrued on the date of his termination of employment

rather than on the date that his claim for benefits was

denied. We affirm.

Appellant began working for Federated Mutual Insurance

Company (“Federated”) in 1980. At some point after his

initial hiring, appellant was selected for transfer to

Compensation Plan II. Transfer to Plan II is within the

sole discretion of Federated and is an incentive plan

reserved for its top performers. Under Plan II, appellant

began participating in the Federated Mutual Insurance

Company Career Growth Bonus Plan (the “ Bonus Plan”).

Only select employees are allowed to participate in the

Bonus Plan as a reward for being a top performer. The

Bonus Plan does not payout during active employment and no

funds are deposited or transferred into individual

accounts for plan participants. Credit in the Bonus Plan

is earned when the employee has met certain goals and is

not payable until retirement, permanent disability or

death. Credit is forfeited upon termination for any other

reason. According to the Bonus Plan, upon forfeiture an

employee has sixty days to contest said forfeiture. 
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Appellant alleges the Bonus Plan is an “employee

pension benefit plan” as defined by ERISA. Appellant

resigned from Federated on May 31, 1990. At that time, he

had accumulated credit in the amount of $57,992 in the

Bonus Plan. It is undisputed that Appellant had a copy of

the Bonus Plan which contains the forfeiture clause. It

is also undisputed that while still working at Federated,

two of appellant’s superiors told
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him that if he resigned he would automatically forfeit all

plan credit and interest accumulated under the Bonus Plan.

Further, upon appellant’s resignation, he received a

letter informing him that he would automatically forfeit

any credit and interest accumulated in the Bonus Plan. 

In a letter dated January 18, 1996, appellant demanded

payment of benefits due him under the Bonus Plan. The

Bonus Plan denied the claim on March 20, 1996. Appellant

appealed the denial through the Plan and said denial was

upheld by letter dated May 20, 1996. Appellant did not

contest the denial within sixty days as required by the

Bonus Plan. Appellant filed the present action on

November 11, 1996, seeking payment of his vested pension

benefits. Appellees filed for summary judgment, which the

district court granted. The court ruled that appellant’s

cause of action had accrued on the date of his termination

of employment and therefore the suit was barred by the

statute of limitations.

We review the district court’s grant of summary

judgment de novo, using the same standards as the district

court. See Mayard v. Hopwood, 105 F.3d 1226, 1227 (8th

Cir. 1997). Summary judgment is only appropriate when the

record demonstrates there is no genuine issue of material

fact and the moving party is entitled to judgment as a

matter of law after viewing the facts and inferences in

the light most favorable to the nonmoving party. See Fed.

R. Civ. P. 56(c); Matsushita Elec. Indus. Co. v. Zenith

Radio Corp., 475 U.S. 574, 587 (1986). 

Under Eighth Circuit law, a “claim for ERISA benefits

is characterized as a contract action for statute of

limitations purposes.” See Adamson v. Armco, 44 F.3d 650,
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652 (8th Cir. 1995). Although the court looks to state

statutes of limitations, federal law determines when the

cause of action accrues. See Connors v. Hallmark & Son

Coal Co., 935 F.2d 336, 341 (D.C. Cir. 1991); Dixon v.

Anderson, 928 F.2d 212, 215 (6th Cir. 1991); Cada v.

Baxter Healthcare Corp., 920
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F.2d 446, 450 (7th Cir. 1990), cert. denied, 501 U.S. 1261

(1991); Northern California Retail Clerks Union & Food

Employers Joint Pension Trust Fund v. Jumbo Markets, Inc.,

906 F.2d 1371, 1372 (9th Cir. 1990). The parties agree

that the Arkansas five year statute of limitations applies

to this case. See Ark. Code Ann. § 16-56-111(West,

WESTLAW through 1997 Reg. Sess.). 

The only issue on appeal is whether the discovery rule

should apply to determine when the statute of limitations

begins to run or whether the statute of limitations should

begin to run when a claim for benefits is made and denied.

This issue was recently decided by a panel of this Court

in Union Pacific Railroad Co. v. Beckham, 1998 WL 79003

(8th Cir. Feb. 26, 1998). In Union Pacific, the Court

noted that absent a contrary mandate from Congress, the

discovery rule, which states that a cause of action

accrues when a plaintiff “discovers or with due diligence

should have discovered, the injury that is the basis of

the litigation,” determines when a cause of action accrues

in a federal question case. Id. at * 4. The Court

reasoned that in an ERISA action “[c]onsistent with the

discovery rule, the general rule . . . is that a cause of

action accrues after a claim for benefits has been made

and has been formally denied.” Id. at * 5. There are

times, however, when “an ERISA beneficiary’s cause of

action accrues before a formal denial, and even before a

claim for benefits is filed ‘when there has been a clear

repudiation by the fiduciary which is clear and made known

to the beneficiar [y].’” Id. (citing Miles v. New York

State Teamsters Conf. Pension & Retirement Fund Employee

Pension Benefit Plan, 698 F.2d 593, 598 (2nd Cir. 1983)).
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In the present case, it is undisputed that appellees

informed appellant by letter on the date of his

resignation that he forfeited any credit and interest

accumulated in the Bonus Plan. This letter was a clear

repudiation by the fiduciary which was “clear and made

known” to appellant, the beneficiary. Id. Consistent

with the discovery rule, appellant knew or should have

known on the date of his resignation that he would forfeit

his benefits because he had a copy of the Bonus Plan which
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included the forfeiture clause, he had been told by two

superiors that if he resigned he would forfeit his

benefits and he received a clear repudiation in the form

of a letter upon his resignation. Appellant’s cause of

action accrued on the date of his resignation and the

district court correctly held that the statute of

limitations barred his suit. Affirmed.

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.