Wise v. Verizon Communications Inc.

• Decision Date: 08 April 2010
• Docket Number: No. 08-35866.,08-35866.
• Citation: 600 F.3d 1180
• Parties: Nancy WISE, Plaintiff-Appellant, v. VERIZON COMMUNICATIONS INC., formerly known as GTE, a Delaware corporation; Plan For Group Insurance; Metropolitan Life Insurance Company, a foreign insurer licensed to do business in the State of Washington, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

600 F.3d 1180

Nancy WISE, Plaintiff-Appellant, v. VERIZON COMMUNICATIONS INC., formerly known as GTE, a Delaware corporation; Plan For Group Insurance; Metropolitan Life Insurance Company, a foreign insurer licensed to do business in the State of Washington, Defendants-Appellees.

No. 08-35866.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted December 8, 2009.

Filed April 8, 2010.

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Steven P. Krafchick, Krafchick Law Firm, Seattle, WA, for the plaintiff-appellant.

Timothy J. O'Connell (argued) and Elena C. Burt, Stoel Rives LLP, Seattle, WA, for the defendants-appellees.

Before RONALD M. GOULD and RICHARD C. TALLMAN, Circuit Judges, and ROGER T. BENITEZ,^* District Judge.

GOULD, Circuit Judge:

I

Nancy Wise worked for GTE in 1997 when she was diagnosed with multiple sclerosis. Later that year, Wise left GTE to work for another employer, Qwest, where her employee benefits included a long-term disability plan that covered her multiple sclerosis. In 1999, GTE sought to recruit Wise to return to work for GTE, but Wise hesitated to leave Qwest and abandon her benefits coverage without assurances that she would have full benefits coverage upon her return to GTE. To induce Wise to return, GTE promised Wise that her benefits coverage would "bridge" back to her original employment date in 1995, such that Wise's benefits eligibility would be retroactive and not subject to coverage limitations based on pre-existing conditions. The GTE recruitment team understood that the bridging of benefits was a standard practice at the company.

Wise accepted GTE's offer and returned to the company as a sales representative in March 1999. After a merger, GTE became Verizon Communications Inc., but the employee welfare benefit plan, including the long-term disability plan, remained the same. Wise was diagnosed with breast cancer in 2000, which was complicated by her multiple sclerosis. She applied for long-term disability benefits and her application was initially approved by the Metropolitan Life Insurance Company (MetLife), the administrator of Verizon Communications' benefit plan. In 2001, Wise's multiple sclerosis specialist sent a letter to MetLife containing her opinion that Wise's physical and cognitive symptoms were worsening and that Wise was unlikely to be able to return to work.

A month later, MetLife terminated Wise's disability benefits, concluding, contrary to Wise's multiple sclerosis specialist, that Wise was able to perform the regular duties of her normal sales job. Wise appealed, submitting additional medical documentation of her limitations. MetLife upheld its decision to terminate benefits, concluding that even if Wise could not perform her previous job, there was insufficient medical documentation to show that she could not perform any work. MetLife added, for the first time, that it deemed Wise's multiple sclerosis a condition that pre-existed her benefits eligibility, and that, accordingly, the multiple sclerosis was not covered by Wise's long-term disability plan.

Wise appealed once more, and was later sent a responsive letter dated March 14, 2002, stating in part:

On March 8, 2002, the Verizon Claims Review Committee . . . reviewed your request for Long-Term Disability (LTD) benefits under The Plan for Group Insurance.. . . Based on all of the information available to the Committee and after a thorough review of your claim file, your appeal for LTD benefits must be denied. . . . Please be advised that all decisions of the Committee are final.

The Verizon Claims Review Committee, which administered the long-term disability plan along with MetLife, concluded that Wise's multiple sclerosis was a pre-existing condition that was not covered by the long-term disability plan. Disregarding any limitations caused by multiple sclerosis, the Verizon Claims Review Committee determined that Wise was capable of performing part-time, sedentary work and was therefore not disabled. The letter told Wise that she had a right to bring a civil action under the Employee Retirement Income Security Act (ERISA) to appeal the final denial of benefits.

Wise filed this action in federal court on March 11, 2008. She pleaded three claims against MetLife and the Verizon Claims Review Committee (collectively "Plan Administrators") under ERISA, requesting past and future disability benefits, removal of the Plan Administrators as plan fiduciaries, and other appropriate equitable relief. Wise also pleaded one claim against her former employer, Verizon Communications, alleging that its conduct in recruiting and rehiring her constituted fraud, misrepresentation, and negligence in violation of Washington statutory and common law. The defendants filed a joint motion to dismiss all of Wise's claims under Federal Rule of Civil Procedure 12(b)(6).

The district court granted the defendants' motion to dismiss in its entirety. The district court held that Wise's benefits-recovery claim was governed by Washington's three-year statute of limitations for partly oral contracts instead of being governed by the six-year limitations period that Wise urged should be applied. Under the three-year statute of limitations, Wise's claim was time barred, though under the six-year statute the claim might have proceeded. The district court held that the claims for breach of fiduciary duty and for equitable relief were duplicative of the benefits-recovery claim and thus barred. Finally, the district court held that Wise's state law claims were preempted by ERISA, or, in the alternative, were barred by the applicable Washington statute of limitations for fraud, misrepresentation, and negligence.

Wise timely appealed. We review de novo the district court's dismissal under Rule 12(b)(6). Scharff v. Raytheon Co. Short Term Disability Plan, 581 F.3d 899, 903(9th Cir.2009).

II

We first address Wise's claim to recover benefits under 29 U.S.C. § 1132(a)(1)(B). ERISA does not contain its own statute of limitations for suits to recover benefits under 29 U.S.C. § 1132(a)(1)(B). Under our precedent, district courts apply the state statute of limitations that is most analogous to an ERISA benefits-recovery action. Wetzel v. Lou Ehlers Cadillac Group Long Term Disability Ins. Program, 222 F.3d 643, 646-47 (9th Cir.2000) (en banc). Before applying the proper Washington statute of limitations, we must first consider the threshold question of how many statutes of limitations may properly apply to an ERISA benefits-recovery claim arising in any one state.

A

It is not uncommon for Congress to create a federal claim that does not include an explicit statute of limitations. See, e.g., 18 U.S.C. § 1964(civil enforcement action under the Racketeer Influenced and Corrupt Organizations Act); 29 U.S.C. § 412(civil action under the Labor-Management Reporting and Disclosure Act); 29 U.S.C. § 185(civil action under the Labor-Management Relations Act); 42 U.S.C. § 1983 (enforcement action for deprivation of civil rights). With such statutes, "the settled practice has been to adopt a local time limitation as federal law if it is not inconsistent with federal law or policy to do so." Wilson v. Garcia, 471 U.S. 261, 266-67, 105 S.Ct. 1938, 85 L.Ed.2d 254 (1985), superseded by statute on other grounds, Pub.L. No. 101-650, 104 Stat. 5089, 5114-15 (1990).

Two important Supreme Court precedents suggest that federal courts engaged in "limitations borrowing" should select only one limitations period per state for any given federal claim. In Wilson v. Garcia, the Supreme Court addressed the proper limitations period for a civil rights claim under 42 U.S.C. § 1983. 471 U.S. at 262, 105 S.Ct. 1938. The Court phrased the task before it as a determination of "the most appropriate state statute of limitations to apply to § 1983 claims." Id. (emphasis added). A uniform rule was desirable because the lower courts that had "predicated their choice of the correct statute of limitations on an analysis of the particular facts of each claim" had found themselves refereeing limitations litigation that was "ever-increasing," "unproductive," and "useless." Id. at 272, 275, 105 S.Ct. 1938. The Supreme Court explained that allowing the particular facts of each § 1983 claim to control the limitations period meant that "counsel could almost always argue . . . that two or more periods of limitations should apply to each § 1983 claim. Moreover, under such an approach different statutes of limitations would be applied to the various § 1983 claims arising in the same State, and multiple periods of limitations would often apply to the same case." Id. at 274, 105 S.Ct. 1938. The Court in Wilson rejected the idea that Congress would have considered such extensive collateral litigation consonant with the "remedial purpose" of § 1983, and the Court rather chose the option of requiring a "simple, broad characterization" of § 1983 claims for limitations purposes: a personal injury tort action for damages. Id. at 272, 276, 105 S.Ct. 1938.

Wilson was followed four years later by Owens v. Okure, 488 U.S. 235, 109 S.Ct. 573, 102 L.Ed.2d 594 (1989), which again disfavored a case-by-case approach to determining the proper statute of limitations for a § 1983 claim. Id. at 240, 109 S.Ct. 573. In the wake of Wilson, the courts of appeals had conflicted in their decisions over whether to apply the intentional-tort statute of limitations or the state's residual limitations period for torts. Id. at 241-42, 109 S.Ct. 573. The Supreme Court in Owens selected the residual period alone, emphasizing that permitting more than one statute of limitations to operate per state creates "chaos and uncertainty." Id. at 243, 249-50, 109 S.Ct. 573. The adoption of one limitations period in each state advanced the federal interest in predictability, "a primary goal of statutes of limitations." Id. at 240, 109 S.Ct. 573.

The rationales underlying the rules of Wilson and Owe...