April 2, 2014

ERISA-Second Circuit Affirms Summary Judgment Granting Long-Term Disability Benefits

In Donachie v. Liberty Life Assurance Company of Boston, Nos. 12-2996-cv (Lead), 12-3031 (XAP) (2nd Cir. 2014), one issue on appeal is whether the district court erred by entering sua sponte summary judgment for plaintiff on his claim for long-term disability ("LTD") benefits pursuant to ERISA.

In this case, the plaintiff ("Donachie") suffered anxiety stemming from the noise made by a prosthetic valve inserted into him through surgery. Donachie submitted a claim for LTD benefits to defendant Liberty Life Assurance Company of Boston ("Liberty"), the administrator of his employer's LTD plan (the Plan"). On the basis of its own doctor's recommendation, Liberty denied Donachie's claim. Ultimately, this suit ensued.

In analyzing the case, the Second Circuit Court of Appeals (the "Court") said that a sua sponte grant of summary judgment to the plaintiff is permissible only if the facts before the district court were fully developed so that the defendant suffered no procedural prejudice and the court is absolutely sure that no issue of material fact exists. Here, Liberty does not contend that it was denied the opportunity to place all relevant evidence in the record. Accordingly, the district court's grant of summary judgment was not procedurally deficient. Further, upon review of the record, the Court concluded that Liberty's denial of LTD benefits was arbitrary and capricious. Liberty ignored substantial evidence from Donachie's own treating physicians that he was incapable of performing his current occupation, while failing to offer any reliable evidence to the contrary. Accordingly, the Court affirmed the District Court's judgment under which it entered summary judgment for Donachie on his ERISA claim for LTD benefits.

April 1, 2014

ERISA-District Rules That Defendants, Who Own And Control An Employer, Are Liable For A Judgment Obtained Against The Employer For Failing To Make Required Contributions To Multiemployer Health And Welfare Funds

In The Construction Industry and Laborers Health and Welfare Trust v. Archie, No. 2:12-CV-225 JCM (VCF), (D.C. Nevada 2014), the following situation arose. The plaintiffs claim to be fiduciaries, for the purposes of ERISA, of certain multiemployer health and welfare funds (the "Funds"). According to the plaintiffs, the defendants were the officers, directors and/or owners of a corporation named Floppy Mop. This corporation and the Laborers International Union of North America, Local No. 872 signed a collective bargaining agreement (the "CBA"). The CBA required Floppy Mop to submit monthly remittance reports and to make timely contributions based on those reports to the plaintiffs, for deposit in the Funds, on behalf of each employee who performed work covered by the CBA.

In a prior lawsuit, the plaintiffs obtained a judgment against Floppy Mop in the amount of $535,158, based on its failure to make required contributions to the Funds. Plaintiffs have now filed the instant lawsuit against Sheryl Archie and James McKinney, the defendants, whom plaintiffs claim are personally liable for Floppy Mop's outstanding judgment by virtue of their ownership and control of Floppy Mop.

In analyzing the case, the district court said that, contrary to the defendants' assertion, the $535,158 judgment is valid. Further, the unpaid contributions to the Funds are considered to be "plan assets" under ERISA, since the Funds' governing documents identify unpaid employer contributions as plan assets. The documents provide that "all money owed to the [Funds], which money (whether paid, unpaid, segregated or otherwise traceable, or not) becomes a [Fund] asset on the Due Date" and have other, similar language creating plan asset status.

The district court continued, by stating that, since the unpaid contributions are plan assets, the plaintiffs must demonstrate that the defendants exercised authority or control over those assets, so that they become fiduciaries under ERISA, and are personally liable for the judgment. The court then concluded that the plaintiffs have provided ample evidence, taken from the defendants' own depositions,that demonstrate that the defendants did exercise control and authority over Floppy Mop's operations and financials, including over the corporation's payment of the contributions to the Funds, and therefore are ERISA fiduciaries. By virtue of their failure to direct Floppy Mop to make the contributions to the Funds, as required by the CBA, defendants Archie and McKinney are both individually and personally liable for the judgment against Floppy Mop.

March 31, 2014

Employee Benefits-Reminder: Tomorrow Is April 1: Don't Forget Your Required Minimum Distribution From Your Company Retirement Plan Or IRA

An Internal Revenue Service News Release reminds taxpayers who turned 70½ during 2013 that in most cases they must start receiving required minimum distributions (RMDs) from Individual Retirement Accounts (IRAs) and workplace retirement plans by Tuesday, April 1, 2014. The Press Release offers some helpful points and may be found here.

March 28, 2014

Employee Benefits-Supreme Court Rules That Severance Payments Are Wages Subject FICA Tax

In United States v. Quality Stores, Inc., No. 12-1408 (S.Ct. 2014), Quality Stores, Inc. and its affiliates (collectively "Quality Stores") made severance payments to employees who were involuntarily terminated as part of Quality Stores' Chapter 11 bankruptcy. Payments-which were made pursuant to plans that did not tie payments to the receipt of state unemployment insurance-varied based on job seniority and time served. Quality Stores paid and withheld FICA taxes on the payments, treating the payments as wages. Later believing that this treatment, and payment and withholding of FICA taxes, was not correct, Quality Stores sought a refund from the Internal revenue Service (the "IRS") on behalf of itself and about 1,850 former employees. When the IRS did not allow or deny the refund, Quality Stores initiated proceedings in the Bankruptcy Court, which granted summary judgment in its favor. The District Court and Sixth Circuit affirmed, concluding that severance payments are not wages under FICA.

The Supreme Court reversed the decisions of the lower courts, holding that the severance payments are wages subject to FICA tax. The Supreme Court said that FICA defines "wages" broadly as "all remuneration for employment." IRC §3121(a). As a matter of plain meaning, severance payments fit this definition: They are a form of remuneration made only to employees in consideration for employment. "Employment" is "any service . . . performed . . . by an employee" for an employer. IRC §3121(b). By varying according to a terminated employee's function and seniority, the severance payments at issue confirm the principle that "service" "mea[ns] not only work actually done but the entire employer-employee relationship for which compensation is paid." Social Security Bd. v. Nierotko (S.Ct.) This broad definition is reinforced by the specificity of FICA's lengthy list of exemptions, none of which apply in the instant case.

The Supreme Court added that the Internal Revenue Code's provisions for income-tax withholding would similarly treat the severance payments at issue as wages. Consistent with the major principle of Rowan Cos. v. United States (S.Ct.), for simplicity of administration and consistency of statutory interpretation, the meaning of "wages" should be in general the same for income-tax withholding and for FICA calculations.

March 27, 2014

Employee Benefits-IRS Provides Guidance On Application of One-Per-Year Limit on IRA Rollovers

In Announcement 2014-15, the Internal Revenue Service ("IRS") addresses the application to Individual Retirement Accounts and Individual Retirement Annuities (collectively, "IRAs") of the one-rollover-per-year limitation of § 408(d)(3)(B) of the Internal Revenue Code (the "Code") and provides transition relief for owners of IRAs. Here is what the Announcement says:

Section 408(d)(3)(A)(i) of the Code provides generally that any amount distributed from an IRA will not be included in the gross income of the distributee to the extent the amount is paid into an IRA for the benefit of the distributee no later than 60 days after the distributee receives the distribution. Section 408(d)(3)(B) provides that an individual is permitted to make only one rollover described in the preceding sentence in any 1-year period. Proposed Regulation § 1.408-4(b)(4)(ii) and IRS Publication 590, Individual Retirement Arrangements (IRAs), provide that this limitation is applied on an IRA by IRA basis.

However, a recent Tax Court opinion, Bobrow v. Commissioner, T.C. Memo. 2014-21, held that the limitation applies on an aggregate basis, meaning that an individual could not make an IRA-to-IRA rollover if he or she had made such a rollover involving any of the individual's IRAs in the preceding 1-year period. The IRS anticipates that it will follow the interpretation of § 408(d)(3)(B) in Bobrow and, accordingly, intends to withdraw the proposed regulation and revise Publication 590 to the extent needed to follow that interpretation. These actions by the IRS will not affect the ability of an IRA owner to transfer funds from one IRA trustee directly to another, because such a transfer is not a rollover and therefore is not subject to the one-rollover-per-year limitation of section 408(d)(3)(B). Revenue Ruling 78-406, 1978-2 C.B. 157.

The IRS has received comments about the administrative challenges presented by the Bobrow interpretation of § 408(d)(3)(B). The IRS understands that adoption of the Tax Court's interpretation of the statute will require IRA trustees to make changes in the processing of IRA rollovers and in IRA disclosure documents, which will take time to implement. Accordingly, the IRS will not apply the Bobrow interpretation of § 408(d)(3)(B) to any rollover that involves an IRA distribution occurring before January 1, 2015. Regardless of the ultimate resolution of the Bobrow case, the Treasury Department and the IRS expect to issue a proposed regulation under § 408 that would provide that the IRA rollover limitation applies on an aggregate basis. However, in no event would the regulation be effective before January 1, 2015.

March 26, 2014

ERISA-Eighth Circuit Finds That Float Generated By 401(k) Plan Contributions Is Not A Plan Asset

In Tussey v. ABB, Inc., No. 12-2056, etc. (8th Cir. 2014), the Eighth Circuit Court of Appeals (the "Court") faced, among other things, the issue of whether the defendants' handling of float constituted a violation of the ERISA fiduciary duty of loyalty.

In this case, Fidelity Management Trust Company ("Fidelity") was the trustee and recordkeeper of a 401(k) plan (the "Plan"). When a Plan participant or his/her employer made a contribution to the Plan, Fidelity processed the contribution to the Plan investment option designated by the participant and credited the participant's account with shares in that investment option. The Plan became the owner of the selected investment option as of the date the contribution was made, entitling the Plan to any dividends or any other change in the fund that day. The actual contribution flowed into a depository account held at Deutsche Bank for the benefit of the Plan investment options (as opposed to the Plan itself). For logistical reasons, the contribution could not be distributed to the investment option until the next day. Money sitting in the depository account overnight before it is distributed to the Plan investment options is often described as "float."

Fidelity temporarily transferred the float to secured investment vehicles to earn interest often called "float interest" . The following day Fidelity transferred the principal back to the depository account. Fidelity used the float income to pay fees on float accounts before allocating the remaining income to the investment option selected by the participant (and, again, not to the Plan itself) . The float income ultimately benefitted all the shareholders of the investment option receiving it. Fidelity did not receive the float or float interest.

The question for the Court: did the use and treatment of the float by Fidelity violate the ERISA fiduciary duty of loyalty to the Plan, on the grounds that Fidelity failed to distribute the float and float interest to the Plan itself instead of the investment options? Here is how the Court answered this question:

The Court said that the issue here is whether the float is a "plan asset". Although ERISA does not exhaustively define the term "plan assets", the Secretary of Labor has repeatedly defined "plan assets" consistently with ordinary notions of property rights. Here, the participants failed to adduce any evidence that the Plan had any property rights in the float or float income. To the contrary, the record evidence indicates that, when a contribution was made, Fidelity credited the participant's Plan account and the Plan became the owner of the shares of the selected investment option--typically shares of a mutual fund--the same day the contribution was received. The Plan received the full benefit of ownership--including any capital gains or dividends from the purchased shares--as of the purchase date. The participants do not rebut Fidelity's simple assertion that once the Plan became the owner of the shares, it was no longer also owner of the money used to purchase them, which flowed to the investment options through the depository account held for their benefit. Under the evidence and circumstances of this case, the Plan investment options-as opposed to the Plan-held the property rights in the depository float and were entitled to the float income.

The Court concluded that, since neither the float or float income was a Plan assets, Fidelity could not have breached its ERISA fiduciary duties based on the way it handled the float.

March 25, 2014

ERISA-Eighth Circuit Affirms One And Reverses Other Rulings That Defendants Breached ERISA Fiduciary Duty

In Tussey v. ABB, Inc., No. 12-2056, etc. (8th Cir. 2014), the Eighth Circuit Court of Appeals (the "Court") considered an appeal in a class action brought by representatives of a class of current and former employees of ABB, Inc. ("ABB") who participated in two ABB 401(k) retirement plans (together, the "Plan"). The district court had entered judgment against the defendants on a claim that they had violated their fiduciary duties under ERISA concerning the Plan. The defendants were, among others, ABB, the Plan fiduciaries and Fidelity Management Trust Company and an affiliate.

The particular fiduciary duties the district court found violated related to: (1) failing to control recordkeeping costs, (2) investment selection for the Plan, (3) exchanging one Plan investment for another (mapping) and (4) treatment of float. The Court affirmed the finding as to (1), and vacated and remanded the case back to the district court as to the findings in (2) (on district court's failure to give deference to fiduciary decision), (3) (same as for (2)) and (4) (concluding that no breach of duty of loyalty arose since float is not a plan asset).

March 24, 2014

ERISA-DOL Proposes Amendment To 408(b)(2) Regulations, To Provide Rules To Help A Fiduciary Review Lengthy And Detailed Information Received From Service Providers

On March 12, 2014, the U.S. Department of Labor (the "DOL") proposed an amendment to its regulations under ERISA section 408(b)(2), which will provide rules to help plan fiduciaries review lengthy and detailed disclosures provided by the plan's service providers. The DOL has also issued a Fact Sheet, which discusses the proposed amendment. Here is what the Fact Sheet says:

In General. Regulations under ERISA section 408(b)(2) require covered pension plan service providers to furnish detailed disclosures to plan fiduciaries before entering into, extending or renewing contracts or arrangements for services. The DOL is proposing to amend these regulations to require covered service providers to furnish a guide along with the required disclosures, if the disclosures are contained in multiple or lengthy documents.

Background. ERISA's fiduciary provisions require plan fiduciaries, when selecting and monitoring service providers and plan investments, to act prudently and solely in the interest of the plan's participants and beneficiaries. Responsible plan fiduciaries also must ensure that arrangements with their service providers are "reasonable" and that only "reasonable" compensation is paid for services. Fundamental to the ability of fiduciaries to discharge these obligations is obtaining information sufficient to enable them to make informed decisions about an employee benefit plan's services, the costs of such services, and the service providers.

In 2012, the DOL published final regulations under ERISA section 408(b)(2) requiring specific disclosures from plan service providers to ensure that responsible plan fiduciaries are provided the information they need to meet their fiduciary obligations when selecting and monitoring service providers for their plans. These regulations allow covered service providers the flexibility to satisfy their disclosure obligations using different documents from various sources as long as the documents, collectively, contain the required disclosures.

Overview of Proposed Amendment to 408(b)(2) Regulations. The DOL now proposes to require covered service providers who make their disclosures through multiple or lengthy documents to furnish a guide to such documents. The guide must specifically identify the document, page, or, if applicable, other sufficiently specific locator, such as section, that enables the responsible plan fiduciary to quickly and easily find the specified information, as applicable to the contract or arrangement. The proposed provision requires a specific locator, including the identity of the document and where the information is located within the document.

If a guide is required, the covered service provider must direct the fiduciary to the place in the disclosure documents where the fiduciary can find:
• The description of services to be provided;
• The statement concerning services to be provided as a fiduciary and/or as a registered investment adviser;
• The description of: all direct and indirect compensation, any compensation that will be paid among related parties, compensation for termination of the contract or arrangement, as well as compensation for recordkeeping services;
• The required investment disclosures for fiduciary services and recordkeeping and brokerage services, including annual operating expenses and ongoing expenses, or if applicable, total annual operating expenses.

The guide will assist responsible plan fiduciaries by ensuring that the location of all information required to be disclosed is evident and easy to find.

Effective Date And Comments. The DOL proposes that the amendment to the final rule become effective 12 months after publication of a final amendment in the Federal Register. Public comment on the proposed amendment is invited.

March 21, 2014

Employee Benefits-IRS Offers Some Thoughts On Roth Options For Retirement Plan Participants

In Retirement Plan News For Employers, February 24, 2014, the IRS offers some thoughts on Roth options for retirement plan participants. Here is what the IRS says.

If you participate in a 401(k), 403(b) or governmental 457(b) retirement plan that has a designated Roth account, you should consider your Roth options. With a designated Roth account, you can:

• make designated Roth contributions to the account; and

• if the plan permits, roll over certain amounts in your other plan accounts to the
Roth account.

Designated Roth Contributions

Unlike pre-tax salary deferrals, which are not taxed when you contribute them to the plan, you have to pay taxes on your designated Roth contributions. This means your gross income for the year you make designated Roth contributions will be higher than if you had made only pre-tax salary deferrals.

However, any pre-tax salary deferrals and related earnings are taxable when you
withdraw them from the plan. Roth contributions, on the other hand, are not taxed when you withdraw them from the plan. Earnings on Roth contributions are also not taxed when they are withdrawn from the plan if your withdrawal is a qualified distribution. A "qualified distribution" is a distribution that is made:

• at least 5 years after the first contribution to your Roth account; and

• after you're age 59½ or on account of your being disabled, or to your beneficiaryafter your death.

In-Plan Roth Rollovers

Your plan may allow you to transfer amounts to your Roth account in the plan if the amounts are:

• eligible rollover distributions from your other plan accounts; or

• any amounts, including those not otherwise eligible for a distribution, from your
other plan accounts.

You must include in gross income in the year of transfer any previously untaxed amount you roll over to your designated Roth account. You don't include in gross income any withdrawal of the amount you rolled over to the Roth account.
However, you may have to pay:

• a special recapture tax; and

• tax on the earnings on the rolled over amounts that are withdrawn, unless the
withdrawal is a qualified distribution.

Check with your employer to find out if your plan has a Designated Roth account and whether it allows in-plan Roth rollovers.

March 19, 2014

Employee Benefits-IRS Provides Tips For Sole Proprietor On SIMPLE IRAs

In Retirement Plan News For Employers, February 24, 2014, the IRS provides tips to sole proprietors in calculating and reporting their own plan contributions to a SIMPLE IRA. The tips are here.

March 18, 2014

Employee Benefits-Reminder: NYC Requirements For Paid Sick Time Go Into Effect On April 1

Beginning April 1, private New York City employers, which have at least 5 employees, must allow their employees to start earning and taking up to 5 days of paid sick time each year. Want the details? I wrote a paper on the Paid Sick Time requirements. If you want a copy, please contact me through the blog.

March 13, 2014

ERISA-Fifth Circuit Rules That Investment Advisor, Who Allegedly Made Misrepresentations About A Proposed Investment, Is Not An ERISA Fiduciary And Thus Is Not Liable For the Statements

In Tiblier v. Dlabal, No. 13-50344 (5th Cir. 2014), a pension plan (the "Plan") of a small cardiology practice had invested in the bonds of an oil and gas company. After the company stopped making interest payments on the bonds, the plaintiffs filed suit alleging violations of ERISA against the investment advisor, Paul Dlabal ("Dlabal"). The plaintiffs claimed Dlabal had made multiple oral misrepresentations to plaintiffs about investment in the oil and gas company in violation of his ERISA fiduciary duties. The district court granted summary judgment in favor of Dlabal. The plaintiffs appeal. The question for the Fifth Circuit Court of Appeals is whether Dlabal is an ERISA fiduciary of the Plan.

In analyzing the case, the Court concluded that Dlabal is not a fiduciary as defined by ERISA. The Court said that, in order for Dlabal to be liable for his advice regarding the oil and gas company, he must first be such a fiduciary of the Plan. Under ERISA, Dlabal is only a fiduciary: to the extent (i) he exercises any discretionary authority or discretionary control respecting management of the Plan or exercises any authority or control respecting management or disposition of its assets, (ii) he renders investment advice for a fee or other compensation, direct or indirect, with respect to any moneys or other property of the Plan, or has any authority or responsibility to do so, or (iii) he has any discretionary authority or discretionary responsibility in the administration of the Plan. 29 U.S.C. § 1002(21)(A). The Court said that it is not enough for the plaintiffs to show that Dlabal acted in a general fiduciary capacity. Rather, the plaintiffs must establish that Dlabal acted as a fiduciary with regard to the specific transaction about which they complain: the investment in the oil and gas company.

With regard to this transaction, the Court continued, Dlabal is not a fiduciary under any of the three categories. Dlabal is not a fiduciary under (i) because he did not exercise discretionary authority or control over the oil and gas investment, as he did not cause the Plan's trustees to relinquish their independent discretion in investing the Plan's funds and to instead follow the course that he prescribed. Dlabal is not a fiduciary under (ii) because he did not receive a fee from the Plan in connection with the oil and gas company investment; he received a fee only from a third party. The plaintiffs concede that (iii) does not apply, as Dlabal played no part in the administration of the Plan.

Since it concluded that Dlabal is not an ERISA fiduciary, the Court affirmed the district court's judgment.

March 12, 2014

Employee Benefits-IRS Offers Guidance On Fixing A SEP When Employees Of A Related Business Have Been Improperly Excluded

In Retirement Plan News For Employers, February 24, 2014, the IRS provides guidance on how to fix a SEP when employee of a related business have been improperly excluded from participating. The guidance is here.

March 11, 2014

Employee Benefits-Self-Insured Multiemployer Health Plans Could Be Exempt From ACA Reinsurance Fee In 2015 And 2016

The Department of Health and Human Services issued a final rule, on March 5, 2014, on the reinsurance fee imposed under the Affordable Care Act. The reinsurance fee is imposed on group health plans-if the plan is insured, the insurer pays the fee, and if the plan is self-insured, the plan itself pays the fee. The reinsurance fee applies in 2014, 2015 and 2016. It equals the yearly rate times the number of individuals covered by the plan, with the yearly rate being $63 for 2014, $44 for 2015 and to be announced for 2016.

Multiemployer health plans are subject to the reinsurance fee. The final rule does not provide any relief for these plans for 2014. However, for 2015 and 2016, the final rule exempts from the fee any multiemployer plan which is both self-funded and self-administered. It is easy to determine whether the plan is self-funded. The key question is whether the plan is self-administered.

The final rule says the following on whether the plan is self-administered:

--To be self-administered, the plan must retain responsibility for claims payment, claims adjudication (including internal appeals), and enrollment (such functions being the "core functions"). Thus, if the plan uses a third party for these functions, it would not be treated as self-administered for these purposes.

-- As exceptions, the plan does not fail to be treated as self-administered merely because it-

(1) outsources core functions to an unrelated third party, provided that the underlying benefits are pharmacy benefits or ACA-excepted benefits;

(2) outsources a de minimis amount of its activity, even if core functions, for non-pharmacy or non-ACA-excepted benefits to a third party administrator (a "de minimis amount" means up to 5 percent, as measured generally by the number or cost of enrollment or claims processing transactions for non-pharmacy and non-ACA-excepted benefits which are outsourced);

(3) "leases" a network from an unrelated third party and also obtains provider network development, claims repricing, and similar services; or

(4) it uses a service provider that is affiliated with the plan, other than with an employer that contributes to the plan (admittedly this exception (4) is less than clear).

March 10, 2014

ERISA-First Circuit Rules That Claim Of Underpayment Of LTD Benefit Was Not Timely Filed; The Statute Of Limitations Begins To Run When An Assertion For Higher Payments Is Denied, And Does Not Apply Separately For Each Benefit Payment

In Riley v. Metropolitan Life Insurance Company, 13-2166 (1st Cir. 2014), the plaintiff, Robert Riley ("Riley"), had filed suit under ERISA against the defendant, Metropolitan Life Insurance Co. ("MetLife"). Riley's claim is that MetLife had been underpaying his long-term disability ("LTD") 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 "LTD Plan"). MetLife is the employer sponsoring, and the entity administering, the LTD Plan The district court granted MetLife's motion for summary judgment, on the grounds that Riley's suit was barred by ERISA's six-year statute of limitations. Riley appeals.

In this case, Riley's claim for LTD benefits was approved by MetLife in March 2005. However, 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 asked MetLife to stop sending him checks. Riley filed this suit against MetLife- for unpaid LTD benefits- on March 22, 2012. But was this suit timely filed?

In analyzing the case, the First Circuit Court of Appeals (the "Court") said that 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). Rather, with respect to these actions, Federal courts borrow the most closely analogous statute of limitations in the forum state. The most closely analogous statute of limitations here is the six-year period Massachusetts applies to breach of contract claims. Also, while state law governs the length of the limitations period, federal common law determines when an ERISA claim accrues. Ordinarily, a cause of action for ERISA benefits accrues when a fiduciary denies a participant benefits.

In this case, the Court continued, 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. The Court concluded that this repudiation, of which Riley was aware, caused Riley's cause of action to accrue, thereby causing the statute of limitations to start to run. As March 22, 2012 is more than 6 years after the applicable repudiation-which occurred in March 2005-the statute of limitations has expired.

The Court then reviewed the issue that, while the foregoing conclusion mandates that the statute of limitations has expired at least with respect to MetLife's initial calculation of Riley's benefits and its first benefit payments, what about payments that should have been made within the 6-year limitations period, like under an installment contract? The Court concluded that here, when the act complained of is a one-time miscalculation, the statute of limitations does not start separately for each payment.

As such, the Court ruled that the statute of limitations on Riley's claim had expired, so that his suit was not timely filed, and it affirmed the district court's decision.