Riley v. Metro. Life Ins. Co.

• Decision Date: 04 March 2014
• Docket Number: No. 13–2166.,13–2166.
• Citation: 744 F.3d 241
• Court: U.S. Court of Appeals — First Circuit
• Parties: Robert RILEY, Plaintiff, Appellant, v. METROPOLITAN LIFE INSURANCE COMPANY, d/b/a MetLife, Defendant, Appellee.

744 F.3d 241

Robert RILEY, Plaintiff, Appellant,

v.METROPOLITAN LIFE INSURANCE COMPANY, d/b/a MetLife, Defendant, Appellee.

No. 13–2166.

United States Court of Appeals,First Circuit.

March 4, 2014.

Valeriano Diviacchi for appellant.

James F. Kavanaugh, Jr., with whom Johanna L. Matloff and Conn Kavanaugh Rosenthal Peisch & Ford, LLP were on brief, for appellee.

Before LYNCH, Chief Judge, SOUTER,^* Associate Justice, and LIPEZ, Circuit Judge.

LYNCH, Chief Judge.

In 2012, plaintiff Robert Riley filed suit under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq., against defendant Metropolitan Life Insurance Co. (“MetLife”), arguing that MetLife had been underpaying his monthly benefits since its 2005 denial of his assertion that he was entitled to a larger payment calculation under his long-term disability insurance plan. The district court granted MetLife's motion for summary judgment on the grounds that Riley's suit was barred by the six-year statute of limitations. See Riley v. Metro. Life Ins. Co., 971 F.Supp.2d 186, 2013 WL 5009618 (D.Mass. Sept. 11, 2013). We affirm, rejecting Riley's argument that this long-term disability plan must be analogized to an installment payment plan so as to alter the accrual date of his claim. In doing so, we join three other circuits. We also reject his claim that the plan documents here create a different accrual rule for him based on a principle of “symmetry” and reject his equitable arguments.

I.

The relevant facts of this case are undisputed. Riley began working at MetLife in 1988. By 1999, Riley had been promoted to associate general manager and earned approximately $80,000 per year. In February 2000, however, Riley began experiencing chronic back, neck, knee, and shoulder pain, which also led to a bout of depression. Riley left work and received short-term disability (STD) benefits from February 2000 through July 2000. His claim for continued benefits beyond July 2000 was denied.

In the spring of 2001, Riley returned to MetLife, this time in a non-managerial role in which he earned much less than he had previously as a manager. In May 2002, however, Riley's pain returned, and he left work again. Riley received STD benefits until November 2002. He then made a claim for long-term disability (LTD) benefits. Riley's claim for LTD benefits was approved in March 2005.

The MetLife LTD plan (“the Plan”) is governed by ERISA and explicitly gives MetLife authority in its discretion to interpret the terms of the contract. The plan provided that, if on LTD, Riley would receive half of his pre-disability earnings, offset by any disability payments from Social Security and certain other sources of income. To calculate Riley's benefits, MetLife utilized his non-managerial salary from 2002, before he applied for LTD. Use of that salary gave Riley LTD benefits of $871 per month, which was fully offset by Riley's Social Security benefits to leave a net benefit of $50 per month, the plan minimum. Had MetLife used Riley's managerial salary from 2000 (before his STD leave) as its starting point, Riley would have been entitled to benefits of about $3,000 per month, leaving a net of about $1,400 per month after the Social Security offset. In May 2004, when he submitted forms in support of his claim for LTD benefits, Riley contacted MetLife through his (since fired) counsel and argued that his sum of each monthly LTD benefit should be based on his managerial salary from 2000, not his lesser salary from 2002. MetLife disagreed.

MetLife issued Riley his first LTD benefits check for $50, which was less than the amount he felt he was owed, on April 15, 2005. Riley refused to cash it. He likewise refused to cash any of the subsequent checks he received, returning them all to MetLife in December 2005. He also called MetLife in December 2005 to request that MetLife stop sending him the benefit checks. Riley had retained counsel and, in October 2005, his counsel threatened MetLife with suit based on MetLife's decision to base the LTD benefits on Riley's 2002 non-managerial salary rather than his 2000 managerial salary.

On February 7, 2007, Riley, still represented by former counsel, filed suit against MetLife in Massachusetts state court, alleging violations of Mass. Gen. Laws ch. 93A. MetLife removed the case to federal court, which dismissed Riley's claims as preempted by ERISA in November 2007. This court affirmed the dismissal in an unpublished order on October 14, 2009. Riley asserts that his then-lawyers never told him that the suit had been dismissed or that the dismissal was affirmed on appeal.

Early in 2011, Riley expressed concerns to his former lawyers that the statute of limitations period would run on his claim. In response, on March 18, 2011, Riley's counsel filed a second suit, this time in federal court. The 2011 complaint did not conform to the district court's Local Rules and was not properly served on MetLife. MetLife moved to dismiss the complaint and Riley's counsel failed to oppose the motion. The district court then dismissed the complaint in January 2012.

Riley retained present counsel, who filed this suit on March 22, 2012. Riley's new complaint presented an ERISA claim for unpaid disability benefits under 29 U.S.C. § 1132(a).¹ The district court allowed limited discovery on the statute of limitations question, after which MetLife moved for summary judgment on the grounds that Riley's suit was untimely. In a thoughtful and thorough opinion, the district court granted MetLife's motion. Riley appeals.

II.

We review the district court's entry of summary judgment de novo. Fidelity Co–operative Bank v. Nova Cas. Co., 726 F.3d 31, 36 (1st Cir.2013). Summary judgment is appropriate when there is no genuine dispute of material fact and the moving party is entitled to judgment as a matter of law. Id.

ERISA does not provide a statute of limitations with respect to actions to recover unpaid benefits from non-fiduciaries under its civil enforcement provision, 29 U.S.C. § 1132(a). See Santaliz–Ríos v. Metro. Life Ins. Co., 693 F.3d 57, 59 (1st Cir.2012). Federal courts “borrow the most closely analogous statute of limitations in the forum state.” Id. The most closely analogous statute of limitations here is the six-year period Massachusetts applies to breach of contract claims. SeeMass. Gen. Laws ch. 260, § 2.

While state law governs the length of the limitations period, federal common law determines when an ERISA claim accrues. See Edes v. Verizon Commc'ns, Inc., 417 F.3d 133, 139 (1st Cir.2005). Ordinarily, a cause of action for ERISA benefits accrues “when a fiduciary denies a participant benefits.” Cottrill v. Sparrow, Johnson & Ursillo, Inc., 100 F.3d 220, 223 (1st Cir.1996), partially abrogated by Hardt v. Reliance Std. Life Ins. Co., 560 U.S. 242, 130 S.Ct. 2149, 176 L.Ed.2d 998 (2010).

Here, MetLife allowed Riley's LTD claim, but with its first check for $50, MetLife denied his explicit assertion that any award of that sum was inaccurate. This was not a complete repudiation or a formal denial of all LTD benefits. But it was a clear repudiation of Riley's assertion that he was entitled to more than the amount MetLife actually awarded. We agree with those circuits which, in like circumstances, have concluded that an ERISA cause of action accrues when, after a claim for benefits is made and a specific sum is sought, the ERISA plan repudiates the claim or the sum sought, and that rejection is clear and made known to the beneficiary. See, e.g., Miller v. Fortis Benefits Ins. Co., 475 F.3d 516, 520–21 (3d Cir.2007) (“In the ERISA context, the discovery rule has been ‘developed’ into the more specific ‘clear repudiation’ rule whereby a non-fiduciary cause of action accrues when a claim for benefits has been denied.... [T]he clear repudiation rule does not require a formal denial to trigger the statute of limitations.” (emphasis omitted) (quoting Romero v. Allstate Corp., 404 F.3d 212, 222 (3d Cir.2005))); Union Pac. R.R. Co. v. Beckham, 138 F.3d 325, 330 (8th Cir.1998); Daill v. Sheet Metal Workers' Local 73 Pension Fund, 100 F.3d 62, 66 (7th Cir.1996); see also Novella v. Westchester Cnty., 661 F.3d 128, 147 (2d Cir.2011) (holding that limitations period begins to run “when there is enough information available to the pensioner to assure that he knows or reasonably should know of the miscalculation,” and explaining its view that its standard is consistent with the Third Circuit's reasoning in Miller ).

Other provisions of ERISA support this interpretation. In Edes, we applied a discovery rule to suits under § 510 of ERISA, to hold that plaintiffs discovered the supposed miscalculation of their status when they were hired. 417 F.3d at 139. In the context of suits against fiduciaries, ERISA itself establishes that the limitations period runs from “the earliest date on which the plaintiff had actual knowledge of the breach or violation.” 29 U.S.C. § 1113(2).²

There is no dispute that Riley's suit is untimely as to MetLife's initial calculation of Riley's benefits and its first payments. The facts show that Riley argued to MetLife that it should use his managerial salary before he began receiving payments, then saw the $50 amount on his checks, refused to cash them, and threatened to sue MetLife. Together, these facts demonstrate that Riley certainly was aware of his claim for underpayment when he received his first $50 check in April 2005. That was approximately six years and eleven months before he filed this suit and thus falls outside the six-year limitations period. And there has been no recalculation of benefits thereafter.

Riley argues, however, that even though his suit is untimely as to the initial calculation and the first few monthly payments, it is still timely as to all of the monthly payments made within six years of the time he filed his complaint in this case. He argues his ERISA Plan with MetLife is better...