In Gordon v. Deloitte & Touche, LLP Group Long Term Disability Plan, No. 12-55114 ( 9th Cir. 2014), the plaintiff, Bridget Gordon (“Gordon”), was appealing the district court’s summary judgment in favor of the defendant, Deloitte & Touche, LLP Group Long Term Disability Plan (the “Plan”) “), based on her failure to file suit within the applicable limitation period. The Plan is insured and administered by Metropolitan Life Insurance Company (“MetLife”).
In this case, while Gordon was working for Deloitte & Touche, she learned that she was HIV positive and claimed she could no longer work due to depression. She filed a claim for long-term disability (“LTD”) benefits under the Plan. MetLife initially determined that she was eligible for LTD benefits under the Plan, and began paying the benefits, but later gave notice that it had terminated further payments, on the grounds that Gordon had failed to furnish continuing proof of disability as required by the Plan. Later, MetLife sent Gordon a letter, dated November 4, 2003 letter, saying that additional LTD benefits had been approved for the limited period of January 1, 2003 through March 2, 2003, because she was disabled during that period by her major depression, but the Plan limited payments to 24 months since the disability stemmed from a mental illness. The letter advised Gordon that she could appeal the decision limiting LTD benefits within 180 days.
Gordon failed to appeal, and took no action for more than four years. Later, spurred on by a letter from California’s Department of Insurance , MetLife reopened the case. However, on December 8, 2009, MetLife informed Gordon in writing that it was upholding its original decision to terminate her benefits based on the Plan’s 24-month limitation for disabilities resulting from mental illness. The letter said Gordon could appeal this decision, and also stated that if such appeal were to be denied, Gordon would have the right to bring a civil action under § 502(a) of ERISA. Gordon timely appealed, but on January 31, 2011, before MetLife’s review of the appeal was completed, Gordon filed this suit pursuant to § 502(a) of ERISA in the district court. The district court granted summary judgment for the Plan. It concluded that Gordon’s ERISA action was barred by the applicable four-year statute of limitation (found in analogous California law on contract claims), as well as by a three-year contractual limitation period contained in the Plan itself. The district court also rejected Gordon’s arguments that the reopening of her file in 2009 reset the statute of limitation and that the Plan waived its limitation defense or was estopped from asserting it. The Ninth Circuit Court of Appeals (the “Court”) agreed with the district court, and it affirmed the district court’s decision.
The Court explained that the length of the statute of limitations is borrowed from state law, as was done by the district court. Also, an ERISA cause of action accrues – that is, the statute of limitations starts to run- either at the time benefits are actually denied or when the claimant has reason to know that the claim has been denied. A claimant has such reason to know where there has been a clear and continuing repudiation of a claimant’s rights under a plan, such that the claimant could not have reasonably believed but that his benefits had been finally denied. Here, Gordon’s claim was denied in the November 4, 2003 letter from Metlife. Assuming arguendo that the November 4 letter was not a final denial, because Gordon still had an administrative appeal option, the letter also stated that the right to appeal would expire 180 days from November 4, 2003, which meant on or about May 4, 2004. The Court then concluded that Gordon’s right to file an ERISA action accrued no later than May 4, 2004. Gordon did not file the pending complaint until January 31, 2011. The result is that her suit is barred by the four-year statute of limitation. In addition, the Court said that MetLife’s reopening of the claim does not restart the statute of limitations under Federal law.