Rice v. Jefferson Pilot Financial Ins. Co.

• Decision Date: 24 August 2009
• Docket Number: No. 08-4180.,08-4180.
• Citation: 578 F.3d 450
• Parties: Jerry RICE, Plaintiff-Appellant, v. JEFFERSON PILOT FINANCIAL INSURANCE COMPANY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

578 F.3d 450

Jerry RICE, Plaintiff-Appellant, v. JEFFERSON PILOT FINANCIAL INSURANCE COMPANY, Defendant-Appellee.

No. 08-4180.

United States Court of Appeals, Sixth Circuit.

Argued: August 4, 2009.

Decided and Filed: August 24, 2009.

ARGUED:

Tony C. Merry, Law Offices of Tony C. Merry, LLC, Columbus, Ohio, for Appellant. Adam Jay Hubble, Law Office, Dublin, Ohio, for Appellee.

ON BRIEF:

Tony C. Merry, Law Offices of Tony C. Merry, LLC, Columbus, Ohio, for Appellant. Todd Austin Brenner, Law Office, Dublin, Ohio, for Appellee.

Before: KEITH, GIBBONS, and KETHLEDGE, Circuit Judges.

OPINION

JULIA SMITH GIBBONS, Circuit Judge.

Plaintiff-appellant Jerry Rice appeals the dismissal of his suit pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., against defendant-appellee Jefferson Pilot Financial Insurance Company, NKA, Lincoln Financial Group ("Jefferson Pilot"). Rice brought a claim against Jefferson Pilot in the United States District Court for the Southern District of Ohio challenging the denial of his application for long-term disability benefits. The district court granted Jefferson Pilot's motion for judgment as a matter of law, finding that Rice's complaint was barred by the applicable statute of limitations. On appeal, Rice challenges the district court's determination of the date on which his claim accrued.

For the following reasons, we employ a different analysis than the district court but ultimately affirm the dismissal of Rice's ERISA claim.

I.

Rice was employed by Rite Rug Company ("Rite Rug") in Columbus, Ohio as a floor covering installer from October of 1997 through May of 2002. According to Rice, he stopped working because he became disabled on May 22, 2002. He applied for disability benefits from the Social Security Administration ("SSA"), and the SSA determined that Rice was disabled. Jefferson Pilot's records show that Rice stopped working on June 1, "due to fatigue, headaches, aches/pains and an inability to stay focused secondary to depression and chronic fatigue syndrome."

Rite Rug established a long-term disability plan insured by Jefferson Pilot for its employees. An employee became eligible under the plan for long-term disability benefits if he had been disabled for 180 days. The plan also gave Jefferson Pilot the "sole authority to administer claims, to interpret [plan] provisions, and to resolve questions arising under this [plan] ... includ[ing] ... determin[ing] Employees' eligibility for insurance and entitlement to benefits." Significantly for this case, the plan included a statute of limitations: "No legal action may be brought more than three years after written proof of claim is required to be given."

After he ceased working, Rice applied for long-term disability benefits under the plan in October of 2002. Jefferson Pilot denied Rice's claim on December 23, 2002, finding that his medical records did not support a finding that he was "disabled" for purposes of disability benefits under the plan. Rice appealed this decision, and Jefferson Pilot denied his appeal on February 3, 2003. Rice then filed a second appeal, but he declined to submit any additional information to support his application. Jefferson Pilot obtained an opinion from an outside physician, who determined, based on the record, that Rice was not disabled. Based on this physician's opinion, Jefferson Pilot denied Rice's second appeal on September 24, 2003.

Rice filed suit against Jefferson Pilot pursuant to ERISA in the United States District Court for the Southern District of Ohio in November of 2003. While the litigation was pending, the parties filed a joint motion to stay in order that Rice's claim could be remanded to the claims administrator for re-adjudication. The district court granted the motion. The district court further ruled that if the dispute had not been settled by April 22, 2005, either party could file a notice re-opening the case before April 30, 2005. Jefferson Pilot conducted surveillance of Rice and submitted the surveillance report, which noted that "[d]uring the time of our surveillance we did not observe Mr. Rice engaged in any physical activity." However, Jefferson Pilot received anonymous telephone calls and affidavits from Rice's brother-in-law and cousin supporting a finding that Rice was not disabled and including statements that Rice had engaged in such physical activities as scuba diving and water skiing. Rice declined to submit any additional information, and Jefferson Pilot once again denied Rice's claim on April 20, 2005. Neither party filed a notice to re-open the federal lawsuit.

On June 8, 2007, Rice filed a second complaint in the district court against Jefferson Pilot. Jefferson Pilot filed a motion for judgment as a matter of law, and Rice filed a motion for judgment as a matter of law on the administrative record. Applying the clear repudiation rule, the district court granted Jefferson Pilot's motion, finding that Rice's complaint was barred by the applicable statute of limitations. Rice v. Jefferson Pilot Fin. Ins. Co., No. 2:07-CV-0547, 2008 WL 4059885 (S.D.Ohio Aug.25, 2008). The district court held that September 24, 2003, the date of final denial of Rice's appeal, was the date on which Rice's claim accrued. Applying the three-year statute of limitations provided by the policy plan, the district court held that Rice had until September 24, 2006, to file a legal claim and found that his June 8, 2007, claim was thus barred. Rice timely appealed to this court.

II.

We review a district court's determination of a motion for judgment as a matter of law de novo. See Parker v. Gen. Extrusions, Inc., 491 F.3d 596, 602 (6th Cir. 2007). We also review de novo "a district court's determination that a complaint was filed outside of the statute of limitations." Bonner v. Perry, 564 F.3d 424, 430 (6th Cir.2009) (quoting Wolfe v. Perry, 412 F.3d 707, 713 (6th Cir.2005)).

A.

Because ERISA does not contain a statute of limitations for claims seeking benefits, courts normally borrow the most analogous state statute of limitations to apply to ERISA claims. See Redmon v. Sud-Chemie Inc. Ret. Plan for Union Employees, 547 F.3d 531, 534-35 (6th Cir. 2008). However, both parties agree in this case that the plan's statute of limitations applies. "[C]hoosing which statute to borrow is unnecessary when the parties have contractually agreed on a limitations period and that limitations period is reasonable." Med. Mut. of Ohio v. k. Amalia Enters., 548 F.3d 383, 390 (6th Cir.2008); Order of United Commercial Travelers of Am. v. Wolfe, 331 U.S. 586, 608, 67 S.Ct. 1355, 91 L.Ed. 1687 (1947) ("[I]n the absence of a controlling statute to the contrary, a provision in a contract may validly limit, between parties, the time for bringing an action on such contract to a period less than prescribed in the general statute of limitations, provided that the shorter period itself shall be ... reasonable...."). Rite Rug's long-term policy plan states that "[n]o legal action may be brought more than three years after proof of claim is required to be given." Both Rice and Jefferson Pilot agree that this language imposes a three-year statute of limitation on Rice's ERISA claim. We have upheld a limitations period of three years as reasonable numerous times. See, e.g., Med. Mut. of Ohio, 548 F.3d at 390; Morrison v. Marsh & McLennan Cos., 439 F.3d 295, 301-03 (6th Cir.2006).

The dispute arises over the date on which the three-year limitations period began to run. Rice initially argued before the district court that his claim accrued on September 24, 2003, the date of Jefferson Pilot's third denial of his application for benefits. The district court viewed the facts in the light most favorable to Rice and agreed that the accrual date was September 24, 2003. Rice, 2008 WL 4059885, at *6. On appeal, Rice now argues that the accrual date was April 20, 2005, the date on which Jefferson Pilot denied his claim after the parties had stayed the district court litigation. Jefferson Pilot claims that Rice waived this argument by failing to raise it before the district court.

In determining whether an argument is waived, the "general rule [is] that an issue not raised before the district court is not properly before us." Foster v. Barilow, 6 F.3d 405, 409 (6th Cir.1993). We have found that this general policy is justified by two main policy goals: "First, the rule eases appellate review by having the district court first consider the issue. Second, the rule ensures fairness to litigants by preventing surprise issues from appearing on appeal." Scottsdale Ins. Co. v. Flowers, 513 F.3d 546, 552 (6th Cir.2008) (internal citations and quotation marks omitted). Only in "exceptional cases or particular circumstances or when the rule would produce a plain miscarriage of justice," id. (quoting Foster, 6 F.3d at 407 (internal quotation marks omitted)), do we exercise our discretion to entertain arguments not raised before the district court.

In this case, Rice not only failed to argue that the accrual date was April 20, 2005, before the district court, but he vehemently argued that his claim accrued on a different date — September 24, 2003. Furthermore, the district court, "err[ing] on the side of caution," agreed to accept Rice's proposed date of accrual. Rice, 2008 WL 4059885, at *6. Rice has neither attempted to explain the discrepancy in his arguments, nor even acknowledged that he is now presenting an entirely different argument. Because Rice has not demonstrated that exceptional or particular circumstances exist that would weigh in favor of exercising discretion, we find that Rice has waived his argument that his claim accrued on April 20, 2005.

Even if the argument were not waived, we find that the statute of limitations expired before Rice filed the instant case. The contractual language binds the parties further than the three-year limitations period; the...