Opinion ID: 2755019
Heading Depth: 2
Heading Rank: 1

Heading: Six-Year Limitations Period

Text: Because Congress did not specify a limitations period for a claim-of-benefits ERISA action, district courts must apply the forum state’s statute of limitations for the most closely analogous action. Blue Cross & Blue Shield of Ala. v. Sanders, 138 F.3d 1347, 1356 (11th Cir. 1998). Because the parties do not dispute that the district court properly borrowed Alabama’s six-year statute of limitations for this case, we will apply that statute. “When a federal court borrows a limitations period from state law for use in implementing a federal law that does not possess a self-contained statute of limitations, the court is nonetheless applying federal law.” Harrison, 183 F.3d at 1238. Accordingly, although state law specifies the duration of the limitations period, federal law determines the date on which that period begins. Accord Bowling v. Founders Title Co., 773 F.2d 1175, 1178 (11th Cir. 1985) (stating, in 11 Case: 14-11349 Date Filed: 11/25/2014 Page: 12 of 25 the context of RICO, that “although state law specifies the duration of the limitations period, federal law determines the date on which that period begins”). B. The Limitations Period Begins to Run When the Cause of Action Accrues Here, the parties’ main dispute is over when the six-year limitations period began to run on Witt’s ERISA claim. Witt contends the limitations period did not begin to run until May 4, 2012, when MetLife issued a final, conclusive, and written decision denying him benefits. Witt claims he never received MetLife’s 1997 letter terminating his benefits and, therefore, the statute of limitations did not begin running back in 1997. In response, MetLife contends that the limitations period began to run when MetLife stopped making monthly payments to Witt because, at that point, Witt knew or should have known that his claim had been denied. In the context of claims for health benefits under ERISA, our prior decisions suggest that the statute of limitations generally begins to run when a cause of action accrues and the plaintiff can file suit. See, e.g., Harrison, 183 F.3d at 1241 n.8 (“It is undisputed that if a one-year statute of limitations is applied, Harrison’s claims are time barred because it is clear from the face of her complaint that she did not file her claims within a year from the time her cause of action accrued.”); see also Heimeshoff v. Hartford Life & Accident Ins. Co., 571 U.S. ___, ___, 134 S. Ct. 604, 610 (2013) (“As a general matter, a statute of limitations begins to run 12 Case: 14-11349 Date Filed: 11/25/2014 Page: 13 of 25 when the cause of action accrues—that is, when the plaintiff can file suit and obtain relief.” (quotations omitted)). The more difficult issue here is: When did Witt’s ERISA cause of action accrue? An ERISA cause of action generally “does not accrue until an application [for benefits] is denied.” Paris v. Profit Sharing Plan for Emps. of Howard B. Wolf, Inc., 637 F.2d 357, 361 (5th Cir. 1981)4; see also Heimeshoff, 571 U.S. at ___, 134 S. Ct. at 610 (“A participant’s cause of action under ERISA . . . does not accrue until the plan issues a final denial.”). But what happens when the defendant says it issued a formal denial letter and the plaintiff says he never received the letter, but it is undisputed the defendant terminated benefits and did not pay the plaintiff any benefits for 12 years? This Court has not addressed this situation before. This Court has suggested, however, that an ERISA cause of action may accrue when a claimant receives an underpayment on his benefits claim. See In re Managed Care, 756 F.3d 1222, 1238 (11th Cir. 2014) (stating that claimants’ “ERISA claims based on the denial 4 This Court adopted as binding precedent all Fifth Circuit decisions prior to October 1, 1981. Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc). In Paris, the plaintiffs, former employees, sought benefits under a retirement plan that was adopted on February 21, 1974, and made retroactive to June 1, 1973. Paris, 637 F.2d at 35859. In 1975, several plaintiffs sought information regarding their benefits, but the defendants interpreted the plan’s terms, as of the 1974 change, to exclude the plaintiffs. Id. at 359-60. The Fifth Circuit considered whether the plaintiffs’ cause of action accrued before or after January 1, 1975, as ERISA-based federal jurisdiction existed only for causes of action that accrued after that date. Id. at 359. The Fifth Circuit concluded that “for purposes of ERISA a cause of action does not accrue until an application is denied.” Id. at 361. Accordingly, although the policy was adopted prior to January 1, 1975, the cause of action accrued after that date because the plaintiffs’ attempts to collect benefits under the plan were not denied until later. Id. 13 Case: 14-11349 Date Filed: 11/25/2014 Page: 14 of 25 or underpayment of benefits” would not have accrued “absent a denial or underpayment” (emphasis added)). In Managed Care, this Court considered, inter alia, whether the plaintiffs’ ERISA claims were barred by an earlier settlement agreement. 756 F.3d at 123740. The settlement agreement released the defendant from all claims “arising on or before the Effective Date, that are, were or could have been asserted” against it. Id. at 1226. This Court noted that a cause of action under ERISA for denial of benefits does not accrue—and “an ERISA lawsuit cannot be filed in federal court”—until a claim for benefits is denied. Id. at 1238. We held that release did not apply to the plaintiffs’ causes of action that were based on claims that were not denied until after the settlement agreement’s effective date “because, absent a denial or underpayment on or before the Effective Date, such claims would not have accrued”—and therefore could not have been “asserted” at the time of the settlement. Id. (emphasis added). In the absence of a final or formal denial, three circuits have squarely concluded that an ERISA cause of action accrues—and the limitations period begins to run—when the claimant has reason to know that the claim administrator has clearly repudiated the claim or amount sought. See Riley v. Metro. Life Ins. Co., 744 F.3d 241, 245 (1st Cir. 2014) (“[A]n ERISA cause of action accrues when, after a claim for benefits is made and a specific sum is sought, the ERISA 14 Case: 14-11349 Date Filed: 11/25/2014 Page: 15 of 25 plan repudiates the claim or the sum sought, and that rejection is clear and made known to the beneficiary.”); Miller v. Fortis Benefits Ins. Co., 475 F.3d 516, 52021 (3d Cir. 2007) (“In the ERISA context, . . . a non-fiduciary cause of action accrues when a claim for benefits has been denied. . . . Notably, a formal denial is not required if there has already been a repudiation of the benefits by the fiduciary which was clear and made known the beneficiary.”); Gordon v. Deloitte & Touche, LLP Grp. Long Term Disability Plan, 749 F.3d 746, 750-51 (9th Cir. 2014) (“Under federal law, an ERISA cause of action accrues either at the time benefits are actually denied or when the insured has reason to know that the claim has been denied.” (quotations omitted)). In Gordon, a plan participant filed a claim, began receiving benefits, had the claim terminated for failure to support, did not appeal that decision, and then sought review years later. 749 F.3d at 749-50. The Ninth Circuit noted that the claim administrator sent a letter terminating the claimant’s benefits but did not mention a final or formal denial at any point. See id. Rather, the Ninth Circuit held that the statute of limitations begins to run “either at the time benefits are actually denied or when the insured has reason to know that the claim has been denied.” Id. at 750-51. The Ninth Circuit explained this standard, stating that a claimant “has reason to know that the claim has been denied where there has been a clear and continuing repudiation of a claimant’s rights under a plan such that the 15 Case: 14-11349 Date Filed: 11/25/2014 Page: 16 of 25 claimant could not have reasonably believed but that his benefits had been finally denied.” Id. (quotations omitted). Applying that principle, the Ninth Circuit concluded that the lawsuit was untimely because the statute of limitations began to run “no later than” the final day on which the claimant could have initiated an internal appeal. Id. at 751. In the First Circuit’s Riley, a claimant filed a claim for long-term disability benefits, the claim administrator approved his claim, and the claim administrator began paying monthly benefits. 744 F.3d at 243. The claimant later alleged that the claim administrator miscalculated the appropriate amount for his monthly benefits. Id. at 243-44. After having one state-court lawsuit dismissed and another federal lawsuit dismissed, the claimant filed a third action ten years after initially submitting his claim and seven years after first receiving benefits. Id. at 244. Although the claimant never received a formal denial, the First Circuit held that the cause of action was barred by the statute of limitations based upon when he “was aware of his claim for underpayment,” id. at 245, and that a new claim does not arise each month the plan submitted an alleged underpayment, id. at 246. In the Third Circuit’s Miller, an individual filed a claim for long-term disability benefits in 1987, which was subsequently approved. 475 F.3d 518. In 2002, the claimant realized that the initial calculation of his benefits was incorrect and that he had been undercompensated every month for the previous 15 years. Id. 16 Case: 14-11349 Date Filed: 11/25/2014 Page: 17 of 25 The Third Circuit held that the “statute of limitations begins to run when a plaintiff discovers or should have discovered the injury that forms the basis of his claim,” id. at 520, and that “a formal denial is not required if there has already been a repudiation of the benefits by the fiduciary which was clear and made known the beneficiary,” id. at 520-21. In addition, at least three other circuits have applied a clear-repudiation accrual rule, although under distinguishable fact patterns, and concluded that an ERISA cause of action may accrue prior to a final or formal denial of the plaintiff’s claim. See Carey v. Int’l Bhd. of Elec. Workers Local 363 Pension Plan, 201 F.3d 44, 49 (2d Cir. 1999) (“[W]e hold that a cause of action under ERISA accrues upon a clear repudiation by the plan that is known, or should be known, to the plaintiff— regardless of whether the plaintiff has filed a formal application for benefits.”); Morrison v. Marsh & McLennan Cos., Inc., 439 F.3d 295, 302 (6th Cir. 2006) (“[W]hen a fiduciary gives a claimant clear and unequivocal repudiation of benefits[,] that alone is adequate to commence accrual, regardless of whether the repudiation is formal or not.”); Union Pac. R.R. Co. v. Beckham, 138 F.3d 325, 330 (8th Cir. 1998) (“[A]n 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 repudiation by the fiduciary which is clear and made known to the beneficiary.” (quotations and alterations omitted)). 17 Case: 14-11349 Date Filed: 11/25/2014 Page: 18 of 25 With this background, we turn to the facts of Witt’s case. C. Witt’s Case Although MetLife contends it sent Witt a formal denial letter in 1997, Witt avers he never received it. But it is undisputed that MetLife ceased providing benefit payments to Witt after April 30, 1997 and for over 12 years thereafter. Even assuming that Witt did not receive MetLife’s termination letter sent on May 22, 1997, MetLife’s conduct nonetheless demonstrated a clear and continuing repudiation of Witt’s rights by failing to provide him any monthly benefits after April 30, 1997. Even if we were to require an entire year of denied payments before holding MetLife’s nonpayment to constitute a “clear and continuing” repudiation of Witt’s rights, Witt would undoubtedly have had reason to know of the repudiation at least by May 1, 1998, and the six-year statute of limitations expired by May 1, 2004, at the latest. Thus, under the facts here, we need not decide the exact number of missing monthly benefits payments that were required to put Witt on notice that his claim had been clearly repudiated and thus denied. In order to decide this case, we simply hold that, after the 12 months of nonpayment under the facts of this case, Witt could not have reasonably believed but that his claim had been denied. We reject Witt’s attempt to inexorably tie the start of the limitations period to a formal denial letter that must also be produced in order to enforce the statute. 18 Case: 14-11349 Date Filed: 11/25/2014 Page: 19 of 25 One reason for the existence of statutes of limitations is that “[j]ust determinations of fact cannot be made when, because of the passage of time, the memories of witnesses have faded or evidence is lost.” Wilson v. Garcia, 471 U.S. 261, 271, 105 S. Ct. 1938, 1944 (1985) (emphasis added), superseded by statute on other grounds, 28 U.S.C. § 1658(a). Thus, we reject Witt’s attempt to exploit MetLife’s failure to locate a 12-year-old document where Witt had reason to know of the acts giving rise to his cause of action, regardless of whether he received the 1997 letter. Adopting Witt’s position would undermine the very purpose of statutes of limitations, which “characteristically embody a policy of repose, designed to protect defendants” and “foster the elimination of stale claims, and certainty about . . . a defendant’s potential liabilities.” Lozano v. Montoya Alvarez, 572 U.S. ___, ___, 134 S. Ct. 1224, 1234 (2014) (quotations omitted). In sum, we conclude Witt’s ERISA complaint in 2012 for benefits from May 1, 1997 forward is barred by the six-year statute of limitations. D. The Alleged “New Claim” In the alternative, Witt argues that the statute of limitations could not have run on his cause of action because MetLife “treated [his] claim for benefits after May 1, 1997, as a new claim unaffected by its termination of his benefits on or before that date for failure to support.” The thrust of Witt’s argument is that MetLife’s January 26, 2010 letter asked for documentation of Witt’s disability 19 Case: 14-11349 Date Filed: 11/25/2014 Page: 20 of 25 after May 1, 1997—when the benefits were terminated—and it therefore treated Witt’s submission of post-1997 documentation as a new claim for benefits. The record refutes this argument. MetLife’s letter stated that Witt’s claim was paid for the period of December 29, 1995 through April 30, 1997. The 2010 letter also informed attorney Sullivan that Witt’s claim was “[t]erminated effective May 1, 1997,” but that MetLife would review that claim “for benefits beyond May 1, 1997” if Witt submitted supporting medical documentation. MetLife thus referred to an old claim that it might be willing to reinstate, not a separate, new claim. And the fact that MetLife asked for medical documentation after May 1, 1997, does not convert the review of Witt’s old claim into a new-claim review. Witt received benefits through April 30, 1997, and his claim was thereafter terminated for failure to provide supporting documentation. Accordingly, the only relevant medical records MetLife required were ones subsequent to 1997. MetLife’s recognition of this fact is entirely consistent with a claim administrator treating the situation as a courtesy review of a prior claim, not as a “new” claim. Additionally, Witt’s own actions demonstrate that it was not a “new” claim: Of the 10 documents Witt submitted in support of his claim in 2011, three were from 1995—prior to May 1, 1997. 20 Case: 14-11349 Date Filed: 11/25/2014 Page: 21 of 25 For all of these reasons, the statutory clock did not begin to run anew in 2012. Because Witt brought this action on June 14, 2012—more than 14 years after the commencement of the statutory period, his claim is time-barred.