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ERISA Cause of Action Accrues when Participant Has Reason to Know that Claim Has Been Denied

ERISA Cause of Action Accrues when Participant Has Reason to Know that Claim Has Been Denied

Witt v. Metropolitan Life Ins. Co., 2014 WL 6655794 (11th Cir. Nov. 25, 2014)

ERISA and Life Insurance News
(January 16, 2015)

Witt submitted a claim for disability benefits under an ERISA plan in May 1997, asserting that he was entitled to benefits beginning December 29, 1995.  Although the claim was untimely, MetLife, the claims administrator, approved the claim and granted retroactive benefits.  Benefits were terminated effective May 1, 1997, for failure to provide supporting medical documentation.  MetLife's internal records reflected that a termination letter was sent to Witt on May 22, 1997.  Witt later contended that he never received the letter.

Nothing was heard from Witt during the next 12 years, until May 29, 2009, when his attorney contacted MetLife and requested a status update on the claim.  After reviewing Witt's file, MetLife wrote to his attorney and stated that if Witt wished to have his claim reviewed beyond May 1, 1997, then supporting medical documentation would be required.  More than a year later, MetLife received some additional notes from Witt's doctors.  After reviewing the notes, MetLife informed Witt's attorney by letter dated March 21, 2011, that the claim would remain terminated.  The letter indicated that Witt could submit an administrative appeal.

Witt appealed, and the decision was upheld by MetLife by letter dated May 4, 2012.  MetLife's letter stated that administrative remedies had now been exhausted and that Witt had the right to bring a civil action under ERISA.  The letter did not assert a time bar.

On June 3, 2012, Witt filed suit.  During the litigation, MetLife moved for summary judgment on the grounds that Witt's action was barred by the applicable six-year statute of limitation.  The district court granted judgment in favor of MetLife based on the expiration of the statute of limitation.

On appeal, the Eleventh Circuit addressed the question "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 that defendant terminated benefits and did not pay the plaintiff any benefits for 12 years?"

The court determined that the cause of action had accrued when Witt had reason to know of the repudiation of his claim for benefits.  Even assuming that he had not received the denial letter, MetLife's conduct "demonstrated a clear and continuing repudiation of Witt's rights by failing to provide him any monthly benefits after April 30, 1997."  Given the length of time that had elapsed, the court did not need to "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."

Even if the court were to require 12 months of nonpayment, Witt "could not have reasonably believed but that his claim had been denied" by May 1, 1998.   As a result, the six-year limitation period (based on Alabama's most analogous state law statute of limitation) had expired by May 1, 2004.

The court also rejected Witt's argument that the limitations period must be tied to a formal denial letter.  "[W]e 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 whether he received the 1997 letter," the court wrote.

Finally, the court rejected Witt's theory that MetLife's silence concerning time bars in the 2012 correspondence and MetLife's statement concerning the right to bring a civil action constituted a waiver.  As the court noted, the statute of limitation had expired before Witt's attorney contacted MetLife in 2009.  "MetLife's voluntary reconsideration of Witt's benefit claim cannot revive or resurrect that already-time-barred claim," the court added.   Moreover, the court noted, Witt could identify no document which contained an express waiver of the statute of limitation defense, and he failed to establish that MetLife had the "requisite intent" to waive the defense.

Click here to view the full January 2015 Edition of the ERISA and Life Insurance News.

H. Sanders Carter
T (404) 962-1015
F (404) 962-1220
Andrea K. Cataland
T (404) 962-1045
F (404) 962-1255
Kenton J. Coppage
T (404) 962-1065
F (404) 962-1256

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