According to the Court’s
opinion, the plaintiff had filed his LTD claim in August 2001, but it and his
subsequent appeal were denied, most recently in November 2001. He filed a new claim in August 2008, which
was granted. He then sought review of
his 2001 claim and when it was denied again, he filed suit in federal court in
December 2009. The district court concluded that “[t]he plan
requires participants to file an ERISA claim within “3 years after the time
proof of claim is required.” Therefore, his lawsuit was untimely in March 2005.
The Sixth Circuit rejected the plaintiff’s contention that
the 2000 version of 29 C.F.R. § 2560.503-1(f) required the Plan to disclose the
shortened statute of limitations in its claim denial letters. Instead, the Court “construe[d] the phrase “appropriate
information” as requiring only the disclosure of information pertaining to internal
processes, not judicial review.” (emphasis in original). The ERISA regulations were amended effective
January 1, 2002 at 29 C.F.R. § 2560.503-1(g)(1)(iv) to require the disclosure
of “a description of the plan’s review procedures and the time limits
applicable to such procedures, including a statement of the claimant’s right to
bring a civil action” to challenge adverse benefit determinations.”
Moreover, the Court rejected the plaintiff’s argument that the
Plan’s 2008 invitation to submit additional information about his 2001 claim
and then refusal to reconsider the 2001 claim re-started the limitations
period. “When an adverse benefit
determination is justified in the first instance and later denials are premised
on the initial reason, there has been a “full and fair review” that satisfies §
1133 and its regulations.”
The plaintiff also argued that the SPD did not comply with 29
C.F.R. § 2520.102-3 because it failed to disclose the shortened statute of
limitations for seeking judicial review even though it was required to address “applicable
time limits” and remedies for the
claimant to seek redress of claims. “Because SPDs lack controlling effect in
the face of plan language to the contrary, we do not feel compelled to read the
regulation in a manner that requires sweeping, comprehensive disclosure, as [the
plaintiff] asks us to do.” Instead, the
Court interpreted the regulation’s general phrase “applicable time limits” to
extend “only to the terms that precede it, i.e., time limits need only be
disclosed with respect to the processing of claims.”
Mindful of this
interpretation, we conclude that Unum’s SPD complied with the regulation. The
SPD provided “applicable time limits” as to certain parts of the claims process,
such as the plan administrator’s obligation to provide a claim response within 90
to 180 days and the claimant’s right to seek plan documents by filing suit in
federal court after 30 days of noncompliance. Unum complied with the
requirement of disclosing the time limits for the “remedies available under the
plan for the redress of claims” by (1) explaining the internal appeals process;
and (2) noting the claimant’s right to “file suit in a state or federal court”
for claims that have been denied or ignored.
In addition, the Court
rejected the claimant’s common law waiver argument based on the Plan’s offer reconsider his 2001 claim if he submitted
additional information.
As there is no established
federal common law in this circuit that governs the question of whether a plan
administrator has affirmatively waived a contractual limitations provision, we
“look to state-law principles for guidance.” . . . While contractual limitations
periods are generally enforced irrespective of state law so long as they are
reasonable . . . the present case does
not raise the question as to whether the period is reasonable, but whether
the period was waived.
The Court had
previously relied on Hounshell v. American States Insurance Co., 424 N.E.2d
311, 314 (Ohio 1981) where
“[a]n insurer . . . loses the
right to assert its contractual statute of limitations if, ‘by its actions or declarations,
it evidences a recognition of liability under the policy, and the evidence reasonably
shows that such expressed recognition of liability and offers of settlement have
led the insured to delay in bringing an action on the insurance contract.’” . . . An
insurer’s decision to reconsider the validity of a claim, however, “does not
constitute a waiver of the limitations clause.
While there may be alternatives to waiving a right than as
discussed in Hounshell, the Court
required “more than mere relinquishment—the waiver must be “a clear,
unequivocal, and decisive act of the party against whom the waiver is
asserted.” The Plan’s “December 2008
letter lacks the clarity, directness, and decisiveness that the general waiver
rule demands.” More importantly, it “says
nothing about waiving the limitations period.”
Finally, the Court rejected the equitable tolling argument
on the grounds, among other things, that the plaintiff was not diligent in
pursuing his rights. Moreover, there was
no evidence of bad faith.
NOTICE: This summary is designed merely to inform and alert you
of recent legal developments. It does not constitute legal advice and does not
apply to any particular situation because different facts could lead to
different results. Information here can change or be amended without notice.
Readers should not act upon this information without legal advice. If you have
any questions about anything you have read, you should consult with or retain
an employment attorney.
