183 F.3d 1235 (11th Cir. 1999), 98-8932, Harrison v Digital Health Plan

Docket Nº:98-8932
Citation:183 F.3d 1235
Party Name:BRENDA HARRISON, Plaintiff-Appellant, v. THE DIGITAL HEALTH PLAN; DIGITAL EQUIPMENT CORPORATION; JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY, Defendants-Appellees.
Case Date:August 09, 1999
Court:United States Courts of Appeals, Court of Appeals for the Eleventh Circuit
 
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183 F.3d 1235 (11th Cir. 1999)

BRENDA HARRISON, Plaintiff-Appellant,

v.

THE DIGITAL HEALTH PLAN; DIGITAL EQUIPMENT CORPORATION;

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY, Defendants-Appellees.

No. 98-8932

IN THE UNITED STATES COURT OF Appeals, FOR THE ELEVENTH CIRCUIT

August 9, 1999

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Appeal from the United States District Court for the Northern District of Georgia D.C. Docket No. 1:98-CV-0348-MHS

Before BLACK and BARKETT, Circuit Judges, and GOLD[*], District Judge.

PER CURIAM:

Brenda Harrison appeals from an order dismissing her lawsuit brought under the Employee Retirement Income Security Act, (ERISA), 29 U.S.C. §§ 1001, et seq, against her former employer and health plan administrator for wrongful denial of medical benefits, breach of fiduciary duty, and failure to give proper notice of COBRA continuation of coverage. The district court found that the claims were time barred or failed to state a claim upon which relief may be granted. On appeal, the only issue meriting discussion is whether the district court erred when it borrowed Georgia's one-year statute of limitations applicable to workers' compensation claims rather than the six-year limitations period applicable to actions on a simple contract when it considered the timeliness of Harrison's action for wrongful denial of medical benefits under ERISA. 1 We hold that the district court should have borrowed the limitations period governing contract actions because an action for breach of a contractual relationship is the Georgia claim most analogous to plaintiff's ERISA section 502(a)(1)(B) claim for wrongful denial of medical benefits even though some of the medical claims denied were for the treatment of work-related illnesses.

I. BACKGROUND

Brenda Harrison was employed by Digital Equipment Corporation from March 1, 1982 through August 6, 1992. During her employment, she participated in Digital's self-funded employee health plan which was administered in part by John Hancock Mutual Life Insurance Company. The plan covers employees' expenses for non-experimental care that is medically necessary for the treatment of injury or disease.

In 1989 Harrison became sick after her employer moved her into a new office building. Doctors diagnosed Harrison as suffering from several medical conditions, including multiple chemical sensitivity secondary to "sick building" syndrome. Harrison underwent extensive treatment, including detoxification at the Dallas Environmental Health Center. She submitted her medical claims to the plan for reimbursement, but most were denied. On January 2, 1998, almost three years after

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she received her final denial letter from the defendants, Harrison filed a lawsuit against Digital, the Digital Health Plan, and John Hancock Mutual Life Insurance Company asserting claims under ERISA for wrongful denial of medical benefits, breach of fiduciary duty, and failure to provide proper notice of COBRA continuation coverage. 2 The trial court dismissed all counts of the complaint finding that the claims for wrongful denial of medical benefits and for failure to provide notice of COBRA continuation of coverage were barred by the statute of limitations and that the claim for breach of fiduciary duty failed to state a cause of action. 3

II. ANALYSIS

The district court's interpretation and application of a statute of limitations is a question of law that this Court may review de novo. United States v. Gilbert, 136 F.3d 1451, 1453 (11th Cir. 1998); Pinnacle Port Community Ass'n, Inc., v. Orenstein, 952 F.2d 375, 377 (11th Cir. 1992).

Civil enforcement of ERISA is provided for in section 502 of the Act, codified at 29 U.S.C.A. § 1132.4 No federal statute of limitations is provided in ERISA for lawsuits to recover benefits under section 502. Northlake Reg'l Med. Ctr., v. Waffle House Sys. Employee Benefit Plan, 160 F.3d 1301, 1303 (11th Cir. 1998). When Congress has not established a statute of limitations for a federal cause of action, the settled practice is for federal courts to borrow the forum state's limitations period for the most analogous state law cause of action when "it is not inconsistent with federal law or policy to do so," Wilson v. Garcia, 471 U.S. 261, 266-67, 105 S.Ct. 1938, 1941-42, 85 L.Ed.2d 254 (1985), and there does not exist "a more closely analogous federal statute of limitations." Byrd v. MacPapers, Inc., 961 F.2d 157, 159 n.1 (11th Cir. 1992). There is a longstanding presumption that state law will be the source of the missing federal limitations period. North Star Steel Co. v. Thomas, 515 U.S. 29, 35, 115 S.Ct. 1927, 1930, 132 L.Ed.2d 27 (1995). Federal courts should decline to follow a state limitations period "only 'when a rule from elsewhere in federal law clearly provides a closer analogy than available state statutes, and when the federal policies at stake and the practicalities of litigation make that rule a significantly more appropriate vehicle for interstitial lawmaking.' "Id. (quoting Reed v. United Transportation Union, 488 U.S. 319, 324,109 S.Ct. 621, 625, 102 L.Ed.2d 665 (1989)).

When a federal court borrows a limitations period from state law for use in implementing a federal law that does not possess a self-contained statute of limitations, the court is nonetheless applying federal law. For in borrowing the state

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statute of limitations to impose a time limitation on the federal cause of action, the federal court is "closing the gap" left by Congress in order to fashion a body of federal common law to supplement the federal statutory cause of action. See Holmberg v. Armbrecht, 327 U.S. 392, 395, 66...

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