Pierce v. Metropolitan Life Ins. Co.

• Decision Date: 05 March 2004
• Docket Number: No. CIV. 03-435-JD.,CIV. 03-435-JD.
• Court: U.S. District Court — District of New Hampshire
• Parties: Anne "Juni" PIERCE v. METROPOLITAN LIFE INSURANCE COMPANY

307 F.Supp.2d 325

Anne "Juni" PIERCE v. METROPOLITAN LIFE INSURANCE COMPANY

No. CIV. 03-435-JD.

United States District Court, D. New Hampshire.

March 5, 2004.

David L. Nixon, Nixon, Raiche, Manning, Casinghino & Leach, Manchester, NH, for Plaintiff.

William D. Pandolph, Sulloway & Hollis, Concord, NH, for Defendant.

ORDER

DICLERICO, District Judge.

On August 20, 2003, Anne "Juni" Pierce filed suit against her insurer, MetLife, alleging that it had wrongfully stopped making its monthly disability benefit payments to her as of July 10, 1999. Given the more than three years between these two dates, MetLife has moved to dismiss the action on statute of limitations grounds. Pierce objects under alternative theories: first, that MetLife's cessation of its monthly benefit payment causes her claim to re-accrue each month the payment was withheld, and second, that MetLife's lack of responsiveness to her correspondence in the wake of the termination of her benefits tolled the running of the statute.

Background

The facts set forth in Pierce's complaint are as follows. She became disabled on March 10, 1997, and remains "subject to medical disabilities" in the form of pain and a limited range of motion in her right knee. As the beneficiary of a policy of disability insurance issued by MetLife, Pierce began receiving a disability payment in the approximate amount of $1,600 on the 10th of each month beginning on June 10, 1997. The policy requires MetLife to continue making these payments for a certain period, depending on Pierce's age at the time she became disabled and provided she remains totally disabled within the meaning of the policy. Pierce received the last of the payments on June 10, 1999. At that point, MetLife stopped making the payments "without just cause" and "has continued to neglect, fail, and refuse to pay [Pierce] the benefits to which she is entitled." Pierce seeks both a monetary award in the form of the payments withheld by MetLife to date, plus enhanced damages and attorneys' fees, and a declaration that MetLife must resume the payments.

In opposing MetLife's motion to dismiss, Pierce submitted an affidavit which contains the following additional facts. After the payments from MetLife stopped, Pierce exercised her right under the policy to appeal the denial of further benefits. In a letter dated July 19, 1999, MetLife informed Pierce that her appeal had been denied. The letter stated that "no further administrative appeals are available to you concerning your disability benefit" and advised Pierce to consult the information concerning her rights set forth in the summary plan description if she wished to pursue the matter further.

After the denial of her appeal, Pierce attempted to contact MetLife for an explanation of its reason for cutting off her benefits. Her efforts in this regard consisted largely of a series of letters sent to the insurer between January 18, 2000, and December 10, 2002. While Pierce's correspondence primarily takes issue with MetLife's stated reasons for denying her appeal, she also makes repeated requests for a response and references to the fact that one has not been forthcoming. In a letter of February 3, 2001, Pierce cites to a television news program about

how insurance companies terminate benefits they are obligated to pay.... The insurance companies do not even reply to repeated requests for fair play. They just do not communicate with the person who has been denied benefits, hoping that person will give up. The only choice the person has is to hire a lawyer.

Most of Pierce's subsequent letters express an intention to hire a lawyer or go to court if MetLife does not restore her benefits.

Pierce does not claim that MetLife ever responded to any of her correspondence. Instead, she asserts that she "was never advised by MetLife that any statute of limitations was running" and that she was thereby "tricked into believing that [she] was in no danger of waiving any legal rights by MetLife's silence" even though she "had specifically asked for guidance from the trustees of the benefit plan on whether [she] needed a lawyer." Pierce ultimately retained counsel and commenced suit against MetLife in Hillsborough County Superior Court on August 20, 2003. MetLife removed the case to this court on diversity grounds.

Standard of Review

Pierce relies on materials beyond the complaint, including her affidavit and a number of attached documents, in opposing MetLife's motion to dismiss. In its reply brief, MetLife has availed itself of the opportunity to respond to these materials. Accordingly, the court will treat MetLife's motion to dismiss as a motion for summary judgment, considering Pierce's affidavit and the accompanying exhibits in making its decision. See Collier v. City of Chicopee, 158 F.3d 601, 603-604 (1st Cir.1998).

The court may grant a motion for summary judgment only if the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). The party seeking summary judgment bears the initial burden of establishing the lack of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The court must view the entire record in the light most favorable to the plaintiff, "`indulging all reasonable inferences in that party's favor.'" Mesnick v. General Elec. Co., 950 F.2d 816, 822 (1st Cir.1991) (quoting Griggs-Ryan v. Smith, 904 F.2d 112, 115 (1st Cir.1990)).

Discussion

The parties agree that the statute of limitations issues presented by this case should be resolved under New Hampshire law.¹ The New Hampshire statute of limitations generally requires an action to be commenced within three years of the act or omission of which the plaintiff complains. N.H.Rev.Stat. Ann. § 508:4, I. The limitations period on a contract action begins running at the time of the alleged breach. Coyle v. Battles, 147 N.H. 98, 100, 782 A.2d 902 (2001); Bronstein v. GZA GeoEnvironmental, Inc., 140 N.H. 253, 255, 665 A.2d 369 (1995).

Pierce does not dispute that more than three years elapsed between when MetLife rejected her claim for continued disability benefits — either by stopping its monthly payments to her or by denying her appeal of that decision — and the commencement of this suit. She argues instead that her claim did not accrue upon the occurrence of either of these events because "MetLife breaches its contract each month when it fails to provide [her] with monthly benefits while [she] suffers an ongoing disability," continually resetting the statute of limitations clock.

New Hampshire follows the "universal rule that when an obligation is to be paid in installments the statute of limitations runs only against each installment as it becomes due ...." Gen. Theraphysical, Inc. v. Dupuis, 118 N.H. 277, 279, 385 A.2d 227 (1978); see also Seasons at Attitash Owners Ass'n v. Country Gas, Inc., No. 96-10-B (D.N.H. Sept. 12, 1997), available at http://www.nhd.uscourts.gov; Barker v. Strafford County Sav. Bank, 61 N.H. 147, 148 (1881) (holding that separate limitations period on claim to recover usurious interest commenced with each loan payment); accord Berezin v. Regency Sav. Bank, 234 F.3d 68, 73 (1st Cir.2000) (applying Massachusetts law); 9 Arthur Linton Corbin, Corbin on Contracts § 951 (interim ed.2002).²

In essence, this rule treats each missed or otherwise deficient payment as an independent breach of contract subject to its own limitations period. See, e.g., Keefe Co. v. Americable Int'l, Inc., 755 A.2d 469, 472 (D.C.2000). Accordingly, a party bringing an action on an installment contract can "recover only for those [payments] relating to the [periods] for which the applicable statute of limitations ha[s] not expired at the time plaintiff file [s] suit ...." County of Morris v. Fauver, 153 N.J. 80, 707 A.2d 958, 971 (1998); see also Gen. Theraphysical, 118 N.H. at 279, 385 A.2d 227 (noting that plaintiff could claim "only those payments coming due ... within the six-year period of limitations ..."); 9 Corbin § 951.

The parties agree that the New Hampshire Supreme Court has never considered whether the payment of insurance benefits on a regular basis constitutes an "obligation to be paid in installments" so that the date of each payment commences a separate limitations period. As a federal tribunal exercising diversity jurisdiction over the plaintiffs' state law claim, this court must predict that court's future course on this issue. See FDIC v. Ogden Corp., 202 F.3d 454, 460-61 (1st Cir.2000). This task requires "`an informed prophecy of what the [New Hampshire Supreme Court] would do in the same situation,' seeking `guidance in analogous state court decisions, persuasive adjudications by courts of sister states, learned treatises, and public policy considerations identified in state decisional law.'" Walton v. Nalco Chem. Co., 272 F.3d 13, 20 (1st Cir.2001) (quoting Blinzler v. Marriott Int'l, Inc., 81 F.3d 1148, 1151 (1st Cir.1996)).

"Courts have used the `installment contract' approach in a variety of situations." Metromedia Co. v. Hartz Mountain Assocs., 139 N.J. 532, 655 A.2d 1379, 1381 (1995); see also Berezin, 234 F.3d at 73 ("[a] contract need not specifically reference installments to be deemed an installment contract"); F.D. Stella Prods. Co. v. Scott, 875 S.W.2d 462, 465 (Tex.App.1994). These situations have included the breach of a contractual duty to make a regular benefit payment analogous to the obligation which an insurer owes under a policy of disability insurance. For example, the underpayment of regular disbursements from a pension fund has generally been treated as the breach of an installment contract for statute of limitations purposes. See, e.g., Jackson v. Am. Can Co., 485 F.Supp. 370,...