In Bond v. Marriott International, Inc., Nos. 15-1160, 15-1199 (4th Cir. 2016) (Unpublished Opinion), Dennis Bond and Michael Steigman (the “Plaintiffs”), filed this action against their former employer, Marriott International, Inc., alleging that Marriott’s Deferred Stock Incentive Plan (the “Plan”), a tax-deferred Retirement Award program, violates the vesting requirements of ERISA. After targeted discovery on the statute of limitations, the district court found that the claims were timely and granted summary judgment to the Plaintiffs on that issue. Marriot appeals. Upon reviewing the case, the Fourth Circuit Court of Appeals (the “Court”) concluded that the Plaintiff’s claims were time barred, and granted judgment to Marriot.
In reaching this decision, the Court said that, except for breach of fiduciary duty claims, ERISA contains no specific statute of limitations, and we therefore look to state law to find the most analogous limitations period. Here, Maryland’s three year statute of limitations for contract actions applies. However, while we apply this three-year state limitations period, the question of when the statute begins to run is a matter of federal law. In most cases an ERISA cause of action does not accrue until a claim of benefits has been made and formally denied.
However, the Court continued, while the “formal denial” rule is generally applied in ERISA cases, we recognized that in limited circumstances the rule is impractical to use, such as cases-like the present one- which do not involve an internal review process and a formal claim denial. In such cases, the Court will look at the time at which some other event, other than a denial of a claim, should have alerted the plaintiff to his entitlement to the benefits he did not receive. Under this approach, a formal denial is not required if there has already been a repudiation of the benefits by the fiduciary which was clear and made known to the beneficiary.