Burnett v. Southwestern Bell Telephone, 96,793.

• Decision Date: 02 February 2007
• Docket Number: No. 96,793.,96,793.
• Citation: 151 P.3d 837
• Parties: Karen BURNETT, Plaintiff, v. SOUTHWESTERN BELL TELEPHONE, L.P., Defendant.
• Court: Kansas Supreme Court

151 P.3d 837

Karen BURNETT, Plaintiff, v. SOUTHWESTERN BELL TELEPHONE, L.P., Defendant.

No. 96,793.

Supreme Court of Kansas.

February 2, 2007.

Alan V. Johnson, of Sloan, Eisenbarth, Glassman, McEntire & Jarboe, L.L.C., of Topeka, argued the cause and was on the brief for plaintiff.

Bruce A. Ney, of Southwestern Bell Telephone, L.P., of Topeka, argued the cause, and Timothy S. Pickering and Melanie N. Sawyer, of Topeka, were with him on the brief for defendant.

The opinion of the court was delivered by DAVIS, J.:

This case comes before us on a certified question from the United States District Court for the District of Kansas, pursuant to K.S.A. 60-3201. Karen Barnett filed suit in federal court against her former employer, Southwestern Bell Telephone, L.P. (Southwestern Bell), alleging that she was wrongfully terminated in violation of the Family and Medical Leave Act (FMLA), 29 U.S.C. § 2611 et seq. (2000), and § 510 of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1140 (2000).

Southwestern Bell moved to dismiss Barnett's ERISA claim on the basis that it was brought more than 2 years after she was terminated, and thus is barred by the 2-year statute of limitations under K.S.A. 60-513(a)(4). Barnett countered that the proper statute of limitations was the 3-year period in K.S.A. 60-512(2), which applies to liabilities created by statute. Because the statute of limitations issue could be determinative of Barnett's claim under ERISA, and because the district court found no controlling Kansas precedent on this issue, it certified the question to this court.

CERTIFIED QUESTION

WITH RESPECT TO PLAINTIFF'S CLAIM THAT DEFENDANT TERMINATED HER EMPLOYMENT TO PREVENT HER FROM OBTAINING LONG-TERM DISABILITY BENEFITS UNDER ERISA, WHAT IS THE APPLICABLE STATUTE OF LIMITATIONS?

ANSWER

For reasons set forth in this opinion, our answer to the certified question is that the plaintiff's claim is one created by statute which is governed by a 3-year statute of limitations in accordance with K.S.A. 60-512(2).

FACTS

The following factual account is taken directly from the certification order from the United States District Court in this case:

"From August of 1996 through March of 2003, plaintiff worked as a service representative for defendant. Defendant has an income disability plan which offers both short-term and long-term disability benefits. On August 13, 2002, plaintiff began experiencing serious health problems and was unable to work. A doctor diagnosed plaintiff with depression and post-traumatic stress disorder. Plaintiff applied for FMLA leave and short-term disability benefits, which defendant approved for August 30 through November 14, 2002. On December 4, 2002, defendant notified plaintiff that it was denying short-term disability benefits effective November 15, 2002. Plaintiff appealed, and received short-term disability benefits through December 15, 2002. On an unspecified date, plaintiff's immediate supervisor notified her that if she did not return to work on December 16, 2002, defendant would terminate her employment. On December 17, 2002, shortly after plaintiff arrived at work, someone sent her home because of serious health conditions. Plaintiff was hospitalized from December 26 through December 31, 2002, and she received short-term disability benefits from December 17, 2002 through January 31, 2003. Plaintiff returned to work in February of 2003. On February 6, 2003 defendant told plaintiff that absences dating back to October 29, 2002 had been `unprotected' time. On February 8, 2003, defendant placed plaintiff on `decision making leave' for unsatisfactory attendance. Two days later, plaintiff returned to work.

"From March 6 to March 16, 2003, plaintiff was hospitalized for an acute pulmonary embolism. On March 21, 2003, defendant terminated her employment for unsatisfactory attendance. Plaintiff received approval for short-term disability benefits from March 13 through May 4, 2003.

"On December 9, 2005, plaintiff filed suit, asserting that defendant (1) violated the FMLA by terminating her employment because she took protected medical leave under the FMLA (Count I); and (2) wrongfully discharged her to prevent her from obtaining long-term disability benefits under ERISA (Count II). Defendant seeks to dismiss Count II of plaintiff's claim under Rule 12(b)(6), Fed.R.Civ.P., arguing that the statute of limitations for ERISA claims bars plaintiff's claim for relief on Count II."

On its own motion pursuant to K.S.A. 60-3201, the United States District Court for the District of Kansas certified this question regarding the applicable statute of limitations for actions brought under ERISA § 510, 29 U.S.C. § 1140, to this court on June 14, 2006.

STANDARD OF REVIEW

This court has jurisdiction to answer questions certified to it by a United States District Court under K.S.A. 60-3201, which provides that the Kansas Supreme Court may answer certified "questions of law of this state which may be determinative of the cause then pending in the certifying court and as to which it appears to the certifying court there is no controlling precedent in the decisions of the supreme court and the court of appeals of this state." Because certified questions must, by definition, turn on legal issues, this court's review of such questions is unlimited. Danisco Ingredients USA, Inc. v. Kansas City Power & Light Co., 267 Kan. 760, 764-65, 986 P.2d 377 (1999). Furthermore, the interpretation of a statute is a question of law over which this court has unlimited review. See Foster v. Kansas Dept. of Revenue, 281 Kan. 368, 374, 130 P.3d 560 (2006). "The answer to a certified question must be based on [Kansas] precedent, not on federal rulings interpreting Kansas law." Hysten v. Burlington Northern Santa Fe Ry. Co., 277 Kan. 551, 554, 85 P.3d 1183 (2004) (citing Flenker v. Willamette Industries, Inc., 266 Kan. 198, 201-02, 967 P.2d 295 [1998]).

Federal Courts' Determinations of Claims Predicated Upon a Violation of Rights Under § 510 of ERISA (29 U.S.C. § 1140)

Before discussing the legal question regarding the proper analogue to a § 510 ERISA claim under Kansas law, it is helpful to review how federal courts have treated the nature of ERISA claims generally, and § 510 in particular, with regard to the appropriate statute of limitations.

ERISA

ERISA, first enacted in 1974, is a "comprehensive statute designed to promote the interests of employees and their beneficiaries in employee benefit plans." Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 90, 103 S.Ct. 2890, 77 L.Ed.2d 490 (1983). ERISA's initial policy statement explains the policy of the respective chapter of the Act:

"It is hereby declared to be the policy of this chapter to protect interstate commerce and the interests of participants in employee benefit plans and their beneficiaries, by requiring the disclosure and reporting to participants and beneficiaries of financial and other information with respect thereto, by establishing standards of conduct, responsibility, and obligation for fiduciaries of employee benefit plans, and by providing for appropriate remedies, sanctions, and ready access to the Federal courts." 29 U.S.C. § 1001(b) (2000).

"It is hereby further declared to be the policy of this chapter to protect interstate commerce, the Federal taxing power, and the interests of participants in private pension plans and their beneficiaries by improving the equitable character and the soundness of such plans by requiring them to vest the accrued benefits of employees with significant periods of service, to meet minimum standards of funding, and by requiring plan termination insurance." 29 U.S.C. § 1001(c).

One of the primary reasons for Congress' adoption of such a broad-sweeping statute was "to enable employers `to establish a uniform administrative scheme, which provides a set of standard procedures to guide processing of claims and disbursement of benefits.'" Egelhoff v. Egelhoff, 532 U.S. 141, 148, 121 S.Ct. 1322, 149 L.Ed.2d 264 (2001) (quoting Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 9, 107 S.Ct. 2211, 96 L.Ed.2d 1 [1987]).

In enacting ERISA, Congress recognized that "[u]niformity is impossible, however, if plans are subject to different legal obligations in different states." Egelhoff, 532 U.S. at 148, 121 S.Ct. 1322. To effectuate this goal of uniformity in application and administration, ERISA contains a provision that specifically preempts any state law that "relates to" employee benefits plans. See 29 U.S.C. § 1144(a) (2000) ("the provisions of this subchapter and subchapter III of this chapter shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan described in section 1003(a) of this title"). The Act defines "`State law'" to include "all law, decisions, rules, regulations, or other State action having the effect of law, of any State." 29 U.S.C. § 1144(c)(1). The United States Supreme Court has interpreted ERISA's preemption provision broadly, finding that a statute "relates to" an ERISA program for preemption purposes "`if it has a connection with or reference to such a plan.'" Egelhoff, 532 U.S. at 147, 121 S.Ct. 1322 (citing Shaw, 463 U.S. at 97, 103 S.Ct. 2890).

Other Courts' Analysis of the Applicable Statute of Limitations for Claims Under § 510

Section 510 of ERISA provides

"It shall be unlawful for any person to discharge, fine, suspend, expel, discipline, or discriminate against a participant or beneficiary for exercising any right to which he is entitled under the provisions of an employee benefit plan, this subchapter, section 1201 of this title, or the Welfare and Pension Plans Disclosure Act [29 U.S.C. 301 et seq.], or for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan, this subchapter, or the Welfare and Pension Plans Disclosure Act. It shall be unlawful for any person...