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.