401 F.3d 222 (4th Cir. 2005), 04-1476, Gayle v. United Parcel Service, Inc.

Docket Nº:04-1476.
Citation:401 F.3d 222
Party Name:Lisa GAYLE, Plaintiff-Appellant, v. UNITED PARCEL SERVICE, Incorporated; Flexible Benefits Plan-United Parcel Service Long Term Disability Plan, Defendants-Appellees.
Case Date:March 09, 2005
Court:United States Courts of Appeals, Court of Appeals for the Fourth Circuit

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401 F.3d 222 (4th Cir. 2005)

Lisa GAYLE, Plaintiff-Appellant,


UNITED PARCEL SERVICE, Incorporated; Flexible Benefits Plan-United Parcel Service Long Term Disability Plan, Defendants-Appellees.

No. 04-1476.

United States Court of Appeals, Fourth Circuit.

March 9, 2005.

Argued: Dec. 3, 2004

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[Copyrighted Material Omitted]

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Robert Edward Hoskins, Foster Law Firm, L.L.P., Greenville, South Carolina, for Appellant.

Patrick Connors DiCarlo, Alston & Bird, Atlanta, Georgia, for Appellees.


D. Michael Kelly, Suggs & Kelly, Columbia, South Carolina, for Appellant.

Peter M. Varney, Alston & Bird, L.L.P., Atlanta, Georgia; David W. Overstreet, Carlock, Copeland, Semler & Stair, L.L.P., Charleston, South Carolina, for Appellees.

Before WIDENER and WILKINSON, Circuit Judges, and Norman K. MOON, United States District Judge for the Western District of Virginia, sitting by designation.

Affirmed by published opinion. Judge WILKINSON wrote the opinion, in which Judge WIDENER and Judge MOON joined.


WILKINSON, Circuit Judge:

Lisa Gayle retained a law firm to represent her as she sought to preserve her disability benefits. For nearly seven months, the firm did nothing to press her claim. By the time it rediscovered her case, Gayle's opportunity to appeal the denial of her disability benefits claim had expired. Under the terms of her ERISA-governed employee welfare benefit plan, Gayle could not pursue her claim in federal court until she had exhausted the internal appeals process. But the plan declined to consider her appeal since it was almost two months late. In this case, we consider whether attorney negligence justifies equitable tolling sufficient to excuse the lack of compliance with the plan's appeal procedure. We conclude that it does not.


Lisa Gayle had been employed by United Parcel Service ("UPS") for twenty-three years before she suffered health problems serious enough to require her to stop working in March 2001. She was a participant in the Flexible Benefits Plan ("Plan"), which is fully-funded by UPS and is an employee welfare benefit plan governed by ERISA, 29 U.S.C. § 1001 et seq. (2000). The Plan is administered by the UPS Claims Review Committee ("Committee"). Claims are processed by a third-party claims administrator.

Gayle received short-term disability benefits for six months, and long-term disability benefits from September 2001 until January 2003. At that point, she received a letter informing her that a review of her

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medical documentation showed she was no longer eligible for disability benefits.

In bold print, the letter also stated that "[i]f you disagree with this determination, you must submit an appeal within one hundred eighty (180) days from your receipt of this letter." This internal appeal requirement was consistent with the appeal process described in the Summary Plan Description ("SPD"). ERISA and federal regulations also mandate that each welfare benefit plan include such internal review. See 29 U.S.C. § 1133 (2000) (employee benefit plans shall "afford a reasonable opportunity ... for a full and fair review" of a denial of benefits); 29 C.F.R. § 2560.503-1 (2004).

The SPD states that upon the denial of benefits, plan participants may file a "first level appeal" with claims administrators within 180 days of receiving the denial. If this appeal is unsuccessful, a "second level appeal" is available. It should be filed with the Committee within 60 days of receiving the denial of the first level appeal. The SPD notes that "[e]ach level of appeal will be independent from the previous level (i.e., the same person(s)... involved in a prior level of appeal will not be involved in the appeal)" and that "[o]n each level of appeal, the claims reviewer will review relevant information that you submit even if it is new information." Particularly important for this case, the SPD also states: "You cannot file suit in federal court until you have exhausted these appeals procedures."

Gayle's denial letter arrived on January 21, 2003. Six weeks later, on March 6, 2003, she retained the Columbia, South Carolina, law firm of Suggs & Kelly to assist her in navigating the appeal process. Ordinary practice at Suggs & Kelly is to take in an ERISA case like Gayle's, and then send it to an attorney at the Foster Law Firm in Greenville, South Carolina. Suggs & Kelly either mistakenly "thought [it] had appealed" Gayle's case (the reason suggested to the Plan) or, "through an administrative oversight, ... thought that the file had been sent to [the Foster Law Firm] when, in reality, it had not" (the reason provided on appeal). Whatever the reason, the attorney handling the appeal pending before us--who we emphasize was in no way responsible for the mistake--acknowledges that Gayle's case simply "fell through the cracks."

The claims administrator--and ultimately the Committee itself--declined to make an exception to their rules for Gayle. Instead, they adhered to their interpretation of the Plan's timeliness requirements, and refused consideration of her internal appeal when she sought review on September 18, 2003. They pointed out that Gayle's request for an appeal was due no later than July 19, 2003. Gayle then brought suit in the District of South Carolina under ERISA, 29 U.S.C. § 1132(a)(1)(B) (2000). She asked the court to remand the claim to the Plan, requiring it to consider the merits of her appeal. The district court dismissed the motion to remand with prejudice and dismissed the underlying ERISA claim without prejudice.

We review grants of summary judgment de novo, Bailey v. Blue Cross & Blue Shield, 67 F.3d 53, 56 (4th Cir. 1995). For the reasons...

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