As an ERISA plan participant, Wilson was insured under a disability insurance policy issued by Standard. She sued to recover Long Term Disability ("LTD") benefits, but her complaint was filed 34 months after expiration of the three-year contractual limitations period provided by the policy. The district court granted summary judgment to the claims administrator, and the Eleventh Circuit affirmed.
Wilson argued that the limitations period was equitably tolled because the claim denial letter did not inform her that the policy imposed a time to sue period shorter than the six-year statute of limitation for contract actions that otherwise would have been borrowed from state law.
According to Wilson, this violated ERISA claims procedure regulation 29 C.F.R. § 2560.503–1(g)(1)(iv), which provides that notice to the claimant must "set forth … [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 under section 502(a) of the Act following an adverse benefit determination on review …."
The Eleventh Circuit noted that while the regulation "clearly" required notice of the time limits for administrative procedures, and the right to bring a civil action, "what is anything but clear … is whether the regulation also requires a claims denial letter to include notice about the time limits applicable to filing a civil action," as Wilson argued.
However, even construing the ambiguity in Wilson's favor, the court determined that "it does not follow that Standard's failure to interpret the ambiguous regulation that way renders the contractual limitations period unenforceable," given the Supreme Court's opinion in Heimeshoff v. Hartford Life & Accident Ins. Co.,134 S.Ct. 604, 612 (2013), in which the Court emphasized: "The principle that contractual limitations provisions ordinarily should be enforced as written is especially appropriate when enforcing an ERISA plan. The plan, in short, is at the center of ERISA."
Wilson would be entitled to equitable tolling, the court said, only if she could show both extraordinary circumstances and diligence in pursuing her rights. With respect to the latter, "[w]e have held that there is no equitable tolling when 'the plaintiffs had notice sufficient to prompt them to investigate and ... had they done so diligently, they would have discovered the basis for their claims.'"In finding that Wilson failed to show diligence, the court stated:
In the present case, the basis for Wilson's claim was no mystery to anyone. In January 2007 Standard sent Wilson a letter stating that her request for benefits had been denied, the administrative review process was complete, and she had a right to bring a civil action under ERISA § 502. Not only that, but the letter also alerted her to the fact that she could request any documents she might need to pursue her claim … free of charge. She finally requested a copy of her policy and received it on June 21, 2011 … four years after the administrative review process of her denied claim was complete ….
Wilson could have requested a copy of the policy, which was central to her claim, and which contained the applicable contractual limitations provision. Her lawsuit could have been timely filed if she had exercised even minimal diligence in discovering the terms of the policy.
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