Opinion ID: 612382
Heading Depth: 3
Heading Rank: 1

Heading: erisa statute of limitations

Text: We first address whether Withrow's claim is time-barred under ERISA's statute of limitations. Bache Halsey argues, here and in the district court, that Withrow had reason to know in 1990 that her claim regarding the miscalculation and underpayment of disability benefits had been denied, because she had been contacted by someone at Reliance who explained that the calculation of her disability benefits was correct and would remain the same. Withrow contends that her claim only accrued when she received notice from Reliance that her administrative appeal had been denied on January 14, 2004. Withrow initiates this action under 29 U.S.C. § 1132(a)(1)(B), which authorizes a claim by a benefit plan participant to recover benefits due to [her] under the terms of [her] plan, to enforce [her] rights under the terms of the plan, or to clarify [her] rights to future benefits under the terms of the plan. ERISA does not provide its own statute of limitations for suits to recover benefits under 29 U.S.C. § 1132(a)(1)(B). Under Ninth Circuit precedent, district courts must apply the state statute of limitations that is most analogous to an ERISA benefits-recovery program. Wetzel, 222 F.3d at 646. In this case, California's four-year statute of limitations for contract disputes applies. See id. at 647 & n. 3. However, federal law governs the issue of when an ERISA cause of action accrues and thereby triggers the start of the limitation period. See Wise v. Verizon Commc'ns, Inc., 600 F.3d 1180, 1188 (9th Cir.2010). 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. Wetzel, 222 F.3d at 649 (internal citations omitted). A claimant has a reason to know under the second prong of the accrual test when the plan communicates a clear and continuing repudiation of a claimant's rights under a plan such that the claimant could not have reasonably believed but that his or her benefits had been finally denied. Wise, 600 F.3d at 1188 (citation omitted); Martin v. Constr. Laborer's Pension Trust for S. Cal., 947 F.2d 1381, 1384 (9th Cir.1991). Withrow's benefits were actually denied on January 14, 2004, when her attorney was informed by phone that her appeal had been denied. See Wetzel, 222 F.3d at 650 (holding that benefits were not actually denied until the appeal was denied or the time for appeal had run); LaMantia, 401 F.3d at 1117-18. If Withrow's claim accrued on that date, her complaint, which was filed on February 16, 2006, was timely under the applicable ERISA four-year statute of limitations. We now turn to the second prong of the accrual test to determine whether Withrow's cause of action may have accrued earlier than the date her benefits were actually denied because of a clear and continuing repudiation of her rights by Reliance such that she could not have reasonably believed but that her benefits had been finally denied. See Wise, 600 F.3d at 1188. The district court found that Withrow's ERISA cause of action for underpayment of benefits did accrue earlier than the actual denial, in 1990, because at that time she had reason to believe the calculation used by Reliance in determining the amount of her benefits was incorrect. The court stated as follows in its Conclusions of Law No. 5: In this case, plaintiff had reason to believe the calculation was incorrect as early as 1990, when plaintiff called the plan to inquire about underpayment in August 1990, and subsequently wrote a letter to formally inquire about the alleged underpayment in October 1990. Plaintiff was advised at that time that the plan would not increase her benefits. Plaintiff received monthly benefits reflecting the alleged miscalculated amount for nearly twelve years. Plaintiff did nothing further to pursue her claim until May 2002. At the outset, we disagree with the district court's conclusion in its Conclusion of Law No. 5 that Plaintiff was advised in October 1990 that the plan would not increase her benefits. We note that, in its Findings of Fact No. 9, the district court also stated, in reference to Withrow's October 1, 1990 letter, that the record is unclear as to whether the plan responded to this inquiry. This directly contradicts its Conclusion of Law No. 5. Our independent review of the record convinces us that it is unclear what exactly transpired between Withrow and Reliance in 1990. What is clear is that Withrow called and then wrote two letters to Reliance stating her concerns. The substance of Reliance's response is far less clear. The only evidence of Reliance's response is a handwritten notation by a Reliance employee on one of Withrow's letters to Reliance that someone had called Withrow back regarding her inquiry and left a message on her answering machine that the original determination of salary stays the same. It is unclear who made the call, what exactly was said, and whether Withrow was provided with guidance concerning the steps to take if she wished to submit her claim for review. Based on this evidence, such a response is insufficient to constitute a clear and continuing repudiation of Withrow's claim such that she could not have reasonably believed that the plan had not finally denied her claim. If such a response was sufficient to constitute a clear and continuing repudiation, then virtually any correspondence or communication with a plan concerning the calculation or awarding of benefits could be interpreted as such. Such a reading of the clear and continuing repudiation test goes well beyond what our circuit has previously recognized. The district court relied on our decision in Chuck v. Hewlett Packard Co., 455 F.3d 1026, 1031 (9th Cir.2006), as support for its analysis. In Chuck, we made clear that only an unusual combination of circumstances would warrant a finding that a claim was time-barred despite a plan's failure to comply with its duties of proper notification and review under ERISA. Otherwise, failure to `provide adequate notice in writing to any participant or beneficiary whose claim for benefits under the plan has been denied' and failure to `afford a reasonable opportunity to any participant whose claim for benefits has been denied for a full and fair review' will militate[ ] strongly against a finding that the statute of limitations has begun to run. Id. at 1030, 1032 (quoting 29 U.S.C. § 1133). We find the unusual combination of circumstances present in Chuck to be readily distinguishable from the series of events that occurred between Withrow and Reliance. The circumstances in Chuck that demonstrated he had reason to know of the final denial of his claim because of a clear and continuing repudiation of his claim such that he could not have reasonably believed but that his claim was time-barred are as follows: 1) he knew that the plan was going to take the position for further pension benefits beyond what he had already received; 2) the plan consistently communicated to Chuck that it was taking the position he expected; 3) Chuck had actual notice that a lump sum payment of benefits, if made, would constitute his only payment option; 4) Chuck had actual notice that his acceptance of a payment by lump sum would be irrevocable; 5) Chuck subsequently accepted the plan's check constituting a lump sum payment in the amount set by the plan; and 6) when Chuck did raise the issue again with the plan, a plan administrator sent Chuck a letter noting that the plan had paid him and unequivocally stating that no further retirement benefits are payable from our U.S. plans. See id. at 1037. Based on these circumstances, we held that Chuck had no reasonable basis for believing that the handling of his benefits claim was not final, and that Chuck's own actions and understandings play a large role in foreclosing the possibility that he did not have reason to know his claim had been conclusively denied. Id. at 1038. Here, Withrow's situation is similar in only one respect: she knew as early as 1987 that Reliance was taking the position that its calculation of her disability benefits was correct. However, Withrow's circumstances diverge from Chuck's at that point. Chuck was provided with actual notice that any acceptance of benefits would be irrevocable. Although Withrow knew that Reliance had taken the position its calculation was correct, she was never provided with anything from Reliance that would give her reason to know that her acceptance of continued payment of benefits amounted to an irrevocable or final determination by Reliance of the amount of her benefits and a denial by it of a claim concerning that calculation. Further, when Chuck contacted his plan to raise the issue of his benefits after he accepted their payment, he was told unequivocally that he would receive no further benefits. Withrow's experience with Reliance was very different. In fact, in 2002, twelve years after Withrow's first conversations with Reliance about the underpayment of her benefits, Reliance encouraged her to submit more documentation and to prove the benefits calculation was wrong. Further, Withrow's actions throughout the approximately fifteen years between her initial contact with Reliance and the phone call denying her appeal demonstrate that she did not ever understand that Reliance had finally denied her claim that her benefits were being underpaid. Rather, she reached out repeatedly to Reliance to voice her concerns and was met with indications that the plan disagreed but also with encouragement to her to continue communicating with the plan and to provide more information. We therefore conclude that Withrow's claim did not accrue in 1990 with regard to the ERISA statute of limitations, as the district court found, but rather accrued when her claim was finally denied on January 14, 2004. Withrow's action, filed on February 16, 2006, was commenced within the four-year statutory limitations period for ERISA claims.