Miller v. Fortis Benefits Ins. Co.

• Decision Date: 29 January 2007
• Docket Number: No. 05-2539.,05-2539.
• Parties: Paul MILLER, Appellant v. FORTIS BENEFITS INSURANCE COMPANY and Resorts International Hotel.
• Court: U.S. Court of Appeals — Third Circuit

475 F.3d 516

Paul MILLER, Appellant v. FORTIS BENEFITS INSURANCE COMPANY and Resorts International Hotel.

No. 05-2539.

United States Court of Appeals, Third Circuit.

Argued September 14, 2006.

Filed January 29, 2007.

Robert P. Merenich (Argued), Gemmel, Todd & Merenich, Linwood, NJ, for Appellants.

Randi F. Knepper, Joshua A. Zielenski (Argued), McElroy, Deutsch, Mulvaney & Carpenter, Morristown, NJ, for Appellees.

Before: FUENTES, FISHER, and McKAY,^* Circuit Judges.

FUENTES, Circuit Judge.

Appellant Paul Miller appeals the District Court's dismissal of his complaint under Federal Rule of Civil Procedure 12(b)(6). The focus of Miller's appeal is the accrual date of his cause of action to recover benefits under the Employee Retirement Income Security Act ("ERISA"). We must determine whether his cause of action accrued in 1987, when he first began receiving a miscalculated benefit award, or in 2003, when his request to correct that award was first denied. For the reasons that follow, we conclude that his cause of action accrued in 1987, when he first received the erroneously calculated award. Because Miller did not file his claim within the applicable statutory period, we will affirm the order of the District Court.

I. Background

Paul Miller became disabled on October 6, 1986 after undergoing heart surgery. About fourteen months before the surgery, Miller was employed by Resorts International Hotel ("Resorts") as a casino floor worker making $690 per week. However, immediately before becoming disabled, he worked as an outside marketing salesman earning $768 per week. In April 1987, he filed a claim for employee disability benefits under a long term disability policy ("the LTD plan") issued by Mutual Benefit Life Insurance Company ("Mutual Benefit"). Under the LTD plan, Miller was entitled to ongoing disability payments of sixty percent of his current salary until he reached the age of sixty-five. According to Miller's complaint, when Resorts reported his salary to Mutual Benefit, it mistakenly stated that he still held his old position as a casino floor worker earning $690. In April 1987, Miller began receiving disability payments erroneously based on this former salary.

It was not until 2002, about fifteen years after he began receiving benefits, that Miller realized the calculation was incorrect. On November 12, 2002, after consulting with an accountant, he sent a letter to Fortis Benefits Insurance Company ("Fortis"), which had acquired Mutual Benefit, seeking an upward adjustment to reflect his 1987 salary. Fortis agreed to investigate the matter, but subsequently informed Miller by letter that the relevant pay records were no longer available. According to Fortis, since Resorts kept pay information for only seven years, it no longer had the information needed to determine the merits of Miller's claim.

In August 2003, Miller filed a complaint in New Jersey Superior Court which was removed to the District of New Jersey. In his amended complaint, Miller alleged, under 29 U.S.C. § 1132(a)(1)(B), that Fortis and Resorts unlawfully denied him disability benefits, and, under 29 U.S.C. § 1132(a)(3), that they breached a fiduciary duty to him by misrepresenting his proper salary and failing to investigate thoroughly his claim for adjustment. Resorts and Fortis moved to dismiss Miller's complaint for failure to state a claim upon which relief could be granted. Specifically, they contended that Miller's claims were barred by a six-year statute of limitations which began to run in 1987.

Miller conceded that the six-year limitations period applied, but disagreed with Fortis about the appropriate date of accrual.¹ The District Court ruled that the six-year statute of limitations began to run in July 1987, based on the following language in the LTD plan:

Proof of Loss

Written proof of loss must be given to Us at Our Home Office or one of Our Regional Group Claim Offices. For any loss for which the Policy provides periodic payment, the written proof of loss must be given within 90 days after the end of the first month or lesser period for which We may be liable. After that, proof must be given at such intervals as We may reasonably require. For any other loss, the written proof of loss must be given within 90 days after the date of loss.

. . .

Legal Actions

No action at law or in equity may be brought to recover on the Policy any earlier than 60 days after the required proof of loss has been given. No action may be brought after the expiration of the statute of limitations in the state having jurisdiction. In no event may action be brought any later than 6 years after the time required for submitting the proof has elapsed.

(Appendix at 57-58.) Relying on the LTD plan, the District Court reasoned:

The "Proof of Loss" section refers to the end of the "first month ... for which we may be liable." The policy establishes that the insured must be totally disabled for six months before benefits are payable. Since Miller was disabled on October 6, 1986, Fortis would first become liable in March or April 1987. The policy also provides that the proof of loss must be sent in writing to Fortis within 90 days of the period that Fortis first became liable. Thus, if Fortis first became liable in March or April of 1987 then the time that Miller needed to provide written proof of loss expired in June or July of 1987. Consequently, the plan dictates that Miller had six years from this time, in June or July of 1987, to file a claim.

Miller v. Fortis Benefits Ins. Co., 363 F.Supp.2d 700, 704-05 (D.N.J.2005). Since Miller filed his complaint more than six years after 1987, the District Court dismissed the case. This appeal followed.

II. Jurisdiction and Standard of Review

The District Court had jurisdiction pursuant to 28 U.S.C. § 1441(a), because of "original jurisdiction" under § 502(e) of ERISA. 29 U.S.C. § 1132(e). This Court has jurisdiction pursuant to 28 U.S.C. § 1291. We exercise plenary review over a grant of a motion to dismiss. Brown v. Card Servs. Ctr., 464 F.3d 450, 452 (3d Cir.2006). When considering an appeal from a Rule 12(b)(6) dismissal, our review is limited to "the contents of the complaint and any attached exhibits." Yarris v. County of Delaware, 465 F.3d 129, 134 (3d Cir.2006). We accept as true all well-pled allegations in the complaint and draw all reasonable inferences in favor of the nonmoving party. In re Rockefeller Ctr. Props., Inc. Sec. Litig., 311 F.3d 198, 215 (3d Cir.2002).

III. Discussion

A. Construing Miller's Claim

ERISA provides plan beneficiaries with both fiduciary and non-fiduciary causes of action. Miller's complaint does not make clear whether he is pursuing both types of claim. In Count I, he seeks an adjustment of benefits under 29 U.S.C. § 1132(a)(1)(B), which provides a non-fiduciary cause of action 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." In Count II, Miller seeks equitable relief under 29 U.S.C. § 1132(a)(3), which provides a general cause of action "(A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan." Also under Count II, Miller asserts that Resorts "intentionally misrepresented" his salary to Mutual Benefit in 1986 and failed to investigate fully his 2002 claim that he had been underpaid. Yet, nowhere in his complaint does Miller mention what substantive provision of ERISA his § 1132(a)(3) claim relies on, nor does he state the elements of a fiduciary cause of action. See Burstein v. Ret. Account Plan For Employees of Allegheny Health Educ. and Research, 334 F.3d 365, 387 (3d Cir. 2003) (reciting the elements of an ERISA fiduciary duty claim).

Read as a whole, Count II suggests an attempt to make out a fiduciary claim under 29 U.S.C. § 1104(a), which imposes a standard of care on plan fiduciaries. See Meagher v. Int'l Ass'n of Machinists and Aerospace Workers Pension Plan, 856 F.2d 1418, 1423 (9th Cir.1988) (evaluating underpayment of benefits as violation of 29 U.S.C. § 1104(a)); George L. Flint, ERISA: Fumbling the Limitations Period, 84 Neb. L.Rev. 313, 354-55 (2005) (arguing that federal courts should construe all claims for benefits due as fiduciary claims). Even so, we need not address whether Miller has properly asserted a fiduciary claim under ERISA because, on appeal, Miller only pursues a non-fiduciary claim for benefits under § 1132(a)(1)(B). His brief mentions neither ERISA's fiduciary provisions nor § 1132(a)(3). Furthermore, Miller cites only case law pertaining to non-fiduciary claims, even though fiduciary claims are governed by separate precedent. Accordingly, we consider any fiduciary or § 1132(a)(3) claims to be waived on appeal and therefore limit our discussion to his non-fiduciary claim for benefits under § 1132(a)(1)(B).

B. Accrual Date of a Non-Fiduciary ERISA Claim

The parties agree that a six-year statute of limitations applies, but dispute the relevant date of accrual.² Fortis contends that the District Court was correct in utilizing the terms of the LTD plan in determining the accrual date. Fortis relies principally on Doe v. Blue Cross & Blue Shield United of Wisconsin, 112 F.3d 869, 873-75 (7th Cir.1997), in which the Seventh Circuit held that an agreed-upon limitations period, embodied in an ERISA plan, will control if the court considers it to be reasonable. Fortis's reliance on Doe, however, is misplaced. In Doe, the court determined the applicable statute of limitations for a non-fiduciary ERISA claim—here, we must determine the proper accrual date.

As we have explained previously, the accrual date for federal claims is governed by federal law, irrespective of the source...