Chuck v. Hewlett Packard Co.

• Citation: 455 F.3d 1026
• Decision Date: 25 July 2006
• Docket Number: No. 04-36094.,04-36094.
• Parties: Kenneth CHUCK, Plaintiff-Appellant, v. HEWLETT PACKARD CO., a foreign corporation; The Hewlett Packard Company Deferred Profit Sharing Retirement Plan; John Corcoran, in his capacity as the Plan Administrator; Jane and John Does, 1-10, in their capacity as Plan Administrators and/or Trustees, Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

455 F.3d 1026

Kenneth CHUCK, Plaintiff-Appellant, v. HEWLETT PACKARD CO., a foreign corporation; The Hewlett Packard Company Deferred Profit Sharing Retirement Plan; John Corcoran, in his capacity as the Plan Administrator; Jane and John Does, 1-10, in their capacity as Plan Administrators and/or Trustees, Defendants-Appellees.

No. 04-36094.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted December 6, 2005.

Filed July 25, 2006.

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Karl G. Anuta and David S. Foster, of Sokol & Anuta, Portland, OR, for the plaintiff-appellant.

Joseph P. Busch, III, of Gibson, Dunn & Crutcher, Irvine, CA; and Richard F. Liebman and Allyson Krueger, of Barran Liebman, Portland, OR, for the defendants-appellees.

Appeal from the United States District Court for the District of Oregon; Anna J. Brown, District Judge, Presiding. D.C. No. CV-03-01685-AJB.

Before: D.W. NELSON and O'SCANNLAIN, Circuit Judges, and BURNS,^* District Judge.

D.W. NELSON, Senior Circuit Judge:

Kenneth Chuck appeals the district court's grant of the summary judgment motion put forward by several Hewlett Packard Company defendants (collectively, "HP"). Chuck's principal claim is that the Hewlett Packard Company Deferred Profit-Sharing Retirement Plan (the "Plan"), which is governed by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., owes him additional retirement benefits arising from his employment at HP until 1980. He also seeks relief for the Plan's alleged breach of its fiduciary duties and for its failure to provide him with Plan-related documents as required by 29 U.S.C. §§ 1021-1024.

At the heart of this case, we are faced with an issue of first impression in this circuit: whether ERISA's statute of limitations may bar a claim for benefits notwithstanding a plan's failure to fulfill its disclosure and review obligations under ERISA § 503, 29 U.S.C. § 1133. We hold that a plan's material violation of § 1133 is a factor that militates strongly against a finding that the statute of limitations has begun to run against a claimant, but that a compelling showing of circumstances in this case nevertheless indicates that Chuck's benefits claim is time-barred. Furthermore, because Chuck's benefits claim is time-barred on account of his own actions, we hold that Chuck lacks statutory standing to bring his claims under ERISA.

I

Chuck worked for HP from 1968 to 1972, and then again from 1974 to 1980. In 1978 and 1979, HP appears to have calculated Chuck's pension credit and provided him with annual benefit statements as though there had been no break in his service with HP. Shortly before Chuck's resignation from HP in December 1980, however, HP recalculated Chuck's accrual of pension benefits in light of the gap in his employment with HP. The result was a significant decrease in the benefits that had vested to Chuck under the Plan. Chuck promptly brought to HP's attention his dispute with the benefits recalculation. According to Chuck, he was entitled to the original, higher benefits calculation as a condition of his agreement to return to HP in 1974.

In late December 1980, soon after Chuck's resignation, HP sent Chuck a "Retirement Benefit Claim Form" with instructions regarding the election of a method for pension benefit payment. The option to receive a lump sum payment had been pre-selected for Chuck, and every other option had been crossed out. The form also noted that "[o]nce a lump sum benefit payment has been elected or approval for lump sum payment obtained, the choice is irrevocable." Chuck never returned the form, because, as Chuck alleges, instructions on the form signaled that an annuity commencing at age 65 would be the default method of payment to Chuck if no timely election were made. Chuck then wrote a letter to an HP administrator asking that the amount of his vesting as announced on that form be corrected to reflect his original hire date with HP in 1968.

A Plan administrator sent a letter to Chuck dated January 28, 1981, in which she re-affirmed the decrease in Chuck's vested benefits and explained that the change was "due to the fact that from September, 1972 to August, 1974 you were not an HP employee." This letter also declared that "corrected" trust statements for 1978 and 1979 were attached and that Chuck would be receiving shortly his "final trust statement for the October 31, 1980 quarter." Chuck admits that he was aware at this time that HP was going to take the position that he was not eligible for any further pension benefits. Soon afterward, Chuck received a lump sum payment of $3,269.06, which in HP's view constituted a full and complete distribution of Chuck's benefits under the plan.

In late 1991 and early 1992, Chuck sent a series of letters to HP seeking clarification of the benefits he could anticipate receiving when he retired. HP replied in a letter dated March 6, 1992, noting that Chuck had been paid the $3,269.06 in 1981 and that "[n]o further retirement benefits are payable from our U.S. plans." For the next several years, and then again starting in early 2001, Chuck sent numerous letters to HP seeking to reestablish his entitlement to a benefits calculation based on continuous service with HP. Some of these letters also requested basic Plan documentation, which HP had never given Chuck. HP did not respond to many of these letters and did not provide Chuck with the Plan documentation.

Chuck filed his complaint in the district court on December 5, 2003. HP moved for summary judgment, and the district court granted the motion. The district court held that ERISA's statute of limitations bars Chuck's benefits claim and related fiduciary duty claims, and that consequently he lacked standing under ERISA to bring his claims for plan documents and information.

II

Our jurisdiction arises under 28 U.S.C. § 1291, and we review the district court's grant of summary judgment de novo. Wetzel v. Lou Ehlers Cadillac, 222 F.3d 643, 646 (9th Cir.2000) (en banc). Because this is a review of a grant of summary judgment, we view the evidence "in the light most favorable to the nonmoving party . . . [and] determine[ ] whether there are any issues of material fact and whether the district court correctly applied the relevant substantive law." Id. (quoting Robi v. Reed, 173 F.3d 736, 739 (9th Cir.1999)). The district court's interpretation of ERISA also receives de novo review. Id.

III

A

We first address Chuck's claim that HP has wrongfully denied him benefits to which he is entitled. HP argues that this claim is time-barred because it was filed after the expiration of ERISA's statute of limitations. Chuck contends that his cause of action never accrued, and therefore that the statute of limitations never began to run, because HP failed to provide him with adequate information regarding either his benefits denial or his rights to an internal review of that denial. We hold that a plan's violation of its notification and review obligations under ERISA is a highly significant factor, but not a dispositive one, in determining whether a claim has accrued for benefits under ERISA. In this case, an unusual combination of circumstances indicates that Chuck's claim is time-barred notwithstanding HP's failure to provide proper notification and review.

Chuck brings his benefits claim under 29 U.S.C. § 1132(a)(1)(B), which creates a cause of action for a benefit plan participant "to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan." Because there is "no specific federal statute of limitations governing claims for benefits under an ERISA plan," we "look to the most analogous state statute of limitations" to determine the length of the limitations period. Wetzel, 222 F.3d at 646. In this case, which arose in Oregon, there is no dispute that the most analogous state statute is Oregon's six-year statute of limitations for breach of contract claims. See Or.Rev. Stat. § 12.080(1). Once his cause of action accrued, Chuck therefore had six years to bring his suit in federal court.

Federal law, however, governs the issue of when a cause of action accrues and thereby triggers the start of the limitations period. Wetzel, 222 F.3d at 646. We have earlier established that "an ERISA cause of action accrues either at the time benefits are actually denied or when the insured has reason to know that the claim has been denied." Id. at 649 (citations omitted). A participant need not file a formal application for benefits before having "reason to know" that his claim has been finally denied. See Martin v. Construction Laborer's Pension Trust, 947 F.2d 1381, 1384-85 (9th Cir.1991). Instead, a cause of action accrues when a pension plan communicates "a clear and continuing repudiation" of a claimant's rights under a plan, id. at 1385, such that the claimant could not have reasonably believed but that his benefits had been "finally denied." Wetzel, 222 F.3d at 650.

The central issue in this case, then, is whether Chuck had reason to know of such a denial more than six years before he filed suit in 2003.

B

Chuck argues that there could not have been a clear and continuing repudiation of his claim for further benefits if the Plan failed to provide Chuck with proper notice of that denial or with an opportunity to exhaust the Plan's internal review procedures. Cf. Martin, 947 F.2d at 1385 (relying on both the denial of a claim and the exhaustion of internal remedies to find a clear and continuing denial). We agree that the record demonstrates that the Plan violated its ERISA obligations to provide Chuck with adequate justification for its denial of benefits and with a reasonable opportunity for review. We do not agree, however, that these failures necessarily mean that Chuck lacked reason to know that the denial of his...