Wetzel v. Ehlers Disability Ins. Program

Decision Date05 March 1999
Docket NumberNo. 97-56437,97-56437
Citation222 F.3d 643
Parties(9th Cir. 2000) CHARLES WETZEL, Plaintiff-Appellant, v. LOU EHLERS CADILLAC GROUP LONG TERM DISABILITY INSURANCE PROGRAM; RELIANCE STANDARD LIFE INSURANCE COMPANY, Defendants-Appellees. Office of the Circuit Executive
CourtU.S. Court of Appeals — Ninth Circuit

Ronald Dean, Pacific Palisades, California, for the plaintiff-appellant.

David A. Lingenbrink and Jennifer L. Kerzon, Galton & Helm, Los Angeles, California, for the defendants-appellees.

Shawn Hanson, Pillsbury Madison & Sutro, LLP, San Francisco, California, for amicus curiae Standard Insurance Company.

Mary Ellen Signorille, American Association of Retired Persons, Washington, D.C., for amicus curiae American Association of Retired Persons.

Appeal from the United States District Court for the Central District of California, D.C. No. CV-97-03461-LGB; Lourdes G. Baird, District Judge, Presiding

Before: Procter Hug, Jr., Chief Judge, and James R. Browning, Diarmuid F. O'Scannlain, Stephen S. Trott, Pamela Ann Rymer, Thomas G. Nelson, A. Wallace Tashima, Sidney R. Thomas, Barry G. Silverman, M. Margaret McKeown and William A. Fletcher, Circuit Judges.

T.G. NELSON, Circuit Judge:

Charles Wetzel appeals from the district court's summary judgment in his ERISA suit seeking long-term disability benefits under his employer's group disability plan. Relying on our prior decisions in Williams v. UNUM Life Ins. Co., 113 F.3d 1108 (9th Cir. 1997), and Nikaido v. Centennial Life Ins. Co., 42 F.3d 557 (9th Cir. 1994), the district court determined that Wetzel's claim was not filed within the applicable statute of limitations period and was therefore statutorily time-barred. A panel of this court reversed the district court, holding that the district court erred in determining the proper accrual date for Wetzel's claim. Wetzel v. Lou Ehlers Cadillac Group, 189 F.3d 1160 (9th Cir. 1999). The panel opinion was withdrawn when this court voted to rehear the case en banc. Wetzel v. Lou Ehlers Cadillac Group, 199 F.3d 1111 (9th Cir. 2000). We now overrule our prior decisions in Williams and Nikaido, and hold that Wetzel's claim was not time-barred under the applicable statute of limitations. Because the parties did not have an opportunity to fully develop the issue of whether Wetzel's case may be contractually time-barred, we remand to the district court for further proceedings.

I.1

Wetzel, as an employee of Lou Ehlers Cadillac, was a participant in the Lou Ehlers Cadillac Group Long Term Disability Insurance Program (the "Plan"), which is an employee welfare benefit plan established by Lou Ehlers Cadillac for its employees. Reliance Standard Life Insurance Company ("Reliance") funded a long-term disability benefit (the "LTD Benefit") contained in the Plan for the Plan's participants.

The LTD Benefit was set out in its own separate policy (the "LTD Policy" or "policy"). The LTD Policy provided monthly benefits to participants for periods during which they met the LTD Policy's definition of "total disability." The LTD Policy defined "total disability" during the first two years of a claim as an inability to perform the material duties of the participant's own occupation and thereafter required the participant to be totally disabled from all occupations to continue receiving benefits. The LTD Policy limited claims relating to a mental disorder to a two-year benefit period unless the participant was confined in a hospital or institution.

Wetzel submitted a claim for long-term disability benefits to Reliance in August 1991, alleging that he was totally disabled as a result of stomach pain, diarrhea, headaches, hand tremors, and insomnia. Reliance began paying monthly benefits pursuant to the LTD Policy in March 1992, retroactive to July 1991.

By letter dated August 5, 1992, Reliance notified Wetzel that it viewed his claim as psychiatric in nature and that because benefits were payable only for a maximum of twentyfour months if a disability resulted from a mental or nervous disorder, Wetzel's benefits would terminate upon the completion of twenty-four months, on July 30, 1993. Reliance then informed Wetzel that, "[s]hould you disagree with this determination, we would be happy to review any additional information you wish to submit in support of your claim for continued benefits."

Reliance discontinued Wetzel's benefits in August 1993. In an August 13, 1993, letter, Reliance reiterated its position that Wetzel's benefits were based upon a mental or nervous disorder and indicated that "no benefits will be paid beyond August 1, 1993." Finally, in an October 4, 1993, letter, Reliance again reiterated its position that "all of the medical information we have received indicates that the primary cause of [Wetzel's] disability is due to [his] mental/nervous condition" and, consequently, that "no additional benefits can be paid as a result of [his] claim."

After further correspondence, as well as assistance by the California Department of Insurance, Wetzel filed suit against Reliance and the Ehlers Plan on May 6, 1997. Defendants later moved for summary judgment on statute of limitations grounds. The district court subsequently granted the motion. Wetzel now timely appeals from the resulting judgment in favor of defendants.

II.
A. Standard of Review

We review a district court's grant of summary judgment de novo. See Robi v. Reed, 173 F.3d 736, 739 (9th Cir. 1999). "Viewing the evidence in the light most favorable to the nonmoving party, the appellate court determines whether there are any genuine issues of material fact and whether the district court correctly applied the relevant substantive law." Id. The interpretation of ERISA is a question of law reviewed de novo. See Babikian v. Paul Revere Life Ins. Co. , 63 F.3d 837, 839 (9th Cir. 1995). We review the district court's interpretation of state law, including state statutes, de novo. See In re McLinn, 739 F.2d 1395, 1397-98 (9th Cir. 1984) (en banc).

B. Jurisdiction

Wetzel's cause of action arises under the Employee Retirement Income Security Act of 1974, 29 U.S.C. S 1001-1461 ("ERISA"). His action was brought under 29 U.S.C. S 1132(a), and the district court had jurisdiction under 29 U.S.C. S 1132(e). We have jurisdiction under 28 U.S.C. S 1291.

III.
A. Applicable Statute of Limitations

There is no specific federal statute of limitations governing claims for benefits under an ERISA plan. Flanagan v. Inland Empire Elec. Workers Pension Plan, 3 F.3d 1246, 1252 (9th Cir. 1993). We must therefore look to the most analogous state statute of limitations. Id. Because Wetzel's claim for benefits arose in California we look to California law for the most analogous statute of limitations.

In Nikaido v. Centennial Life Ins. Co., 42 F.3d 557 (9th Cir. 1994), which also involved a claim under an ERISA disability plan arising in California, we held that California Insurance Code Section 10350.112 provided the applicable statute of limitations for such a claim. Id. at 559. In so holding, we rejected the beneficiary's argument that the proper limitations period was the four-year period for actions based on a written contract under California Code of Civil Procedure Section 3373 because we found that Section 10350.11 "provide[d] a closer analogy to this case than does the more general breach of contract provision [of Section 337]." Nikaido, 42 F.3d at 559. For the following reasons, we hold that the Nikaido analysis was in error.

Section 10350.11 is one of several Compulsory Standard Provisions required by California law to be included in "each disability policy delivered or issued for delivery to any person" in California.4 Cal. Ins. Code S 10350. Forty-two states, Puerto Rico and the Virgin Islands all have statutes requiring identical or virtually identical language in certain insurance contracts.5 The courts that have addressed limitations period defenses to suits involving insurance policies containing this required language have consistently focused on the resulting policy provisions--rather than the statutes mandating their inclusion--and have found that the provisions create enforceable contractual limitations periods for bringing suit on an insurance contract.6

Similarly, California courts have treated policy provisions that arise out of the application of Section 10350.11 as contractual limitations periods which operate distinct and apart from the statutory limitations period set by the state legislature. See Mize v. Reserve Life Ins. Co., 121 Cal. Rptr. 848, 853 (Cal. Ct. App. 1975).7 Any lawsuit between the parties to the policy would seek to interpret and enforce the terms of the disability policy itself and not Section 10350.11.8 These contractual limitations periods are thus subject to rules governing the interpretation of contracts and contractual defenses.9 See, e.g., NN Investors Life Ins. Co., Inc. v. Superior Court, 256 Cal. Rptr. 598, 600 (Cal. Ct. App. 1989).

By this statutory device, California has taken the limitation off the law library shelves and made it a matter of contract, available in the policy itself for review by the insured, the beneficiaries and the insurer's claims administrators. What results from application of this statute is a contractual provision relating to the handling of claims. The claims themselves are, however, administered pursuant to the terms of the contract, and not by reason of the statute.

In sum, although Section 10350.11 performs much the same functions as would a statute of limitations, it is not itself a statute of limitations. We therefore overrule Nikaido on this point and hold that California's statute of limitations for suits on written contracts, California Code of Civil...

To continue reading

Request your trial
91 cases
  • Heighley v. J.C. Penney Life Ins. Co.
    • United States
    • U.S. District Court — Central District of California
    • April 14, 2003
    ... ... , such as that at issue here, fall within the definition of "disability insurance" under the Insurance Code. Croskey, Heeseman & Johnson, Cal ... Wetzel v. Lou Ehlers Cadillac Grp. Long Term Disability Ins. Program, 222 F.3d ... ...
  • White v. Sun Life Assur. Co. of Canada
    • United States
    • U.S. Court of Appeals — Fourth Circuit
    • April 26, 2007
    ... ... Laboratories, Incorporated Employee Long Term Disability Plan; Plan Administrator of the Greer Laboratories, ... Aetna Life Ins. Co., 901 F.2d 662, 664 (8th Cir. 1990). This means that ... See Wetzel v. Lou Ehlers Cadillac Group Long Term Disability Ins ... ...
  • Thomas v. Smithkline Beecham Corp.
    • United States
    • U.S. District Court — Eastern District of Pennsylvania
    • December 22, 2003
    ... ... Life Ins. Co. of North America, 2000 WL 876581, at *2 ... Co. v. Beckham, 138 F.3d 325, 330 (8th Cir.1998); Wetzel v. Lou Ehlers Cadillac Group Long Term Disability Ins ... Program, 222 F.3d 643, 649 (9th Cir.2000) (citations omitted) ... ...
  • Hemphill v. Estate of Ryskamp
    • United States
    • U.S. District Court — Eastern District of California
    • March 21, 2008
    ... ... As explained in Nissan Fire & Marine Ins. Co. v. Fritz Companies, 210 F.3d 1099, 1102-1103 (9th ... Jacobs Eng'g Group Long Term Disability Plan, 896 F.2d 344 (9th Cir.1989), held that a Plan's ... ) for exercising his or her rights under the benefit program" or ERISA. In pertinent part, the Ninth Circuit held: ... \xC2" ... its objects", Defendants refer to the holding in Wetzel v. Lou Ehlers Cadillac Group Long Term Disability Ins ... ...
  • Request a trial to view additional results
1 books & journal articles
  • Erisa: Fumbling the Limitations Period
    • United States
    • University of Nebraska - Lincoln Nebraska Law Review No. 84, 2021
    • Invalid date
    ...the ERISA statute of limitation to the benefits due lawsuit. See Wetzel v. Lou Ehlers Cadillac Group Long Term Disability Ins. Program, 222 F.3d 643 (9th Cir. 2000) (stating that it only applies to breaches of fiduciary duty, not claims against plan for benefits); Nikaido v. Centennial Life......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT