Defendants have recently received three favorable decisions involving contractual and statutory limitations defenses. In each case, a federal court held that claims for benefits under ERISA plans were time-barred. Costa v. Astoria Fed. Sav. and Loan Ass’n, 2014 U.S. Dist. LEXIS 14292 (E.D.N.Y. Feb. 4, 2014); Paulus v. Isola USA Corp. Ret. Plan, 2014 U.S. Dist. LEXIS 14474 (W.D. Wis. Feb. 5, 2014); and Munro-Kienstra v. Carpenters’ Health & Welfare Trust Fund, 2014 U.S. Dist. LEXIS 18156 (E.D. Mo. Feb. 13, 2014).
In Costa, plaintiff claimed that in 2005 defendants refused to provide her with the necessary pension-benefit application forms upon her request and informed her that she was not eligible for pension benefits at that time. In 2012, plaintiff wrote to defendants requesting review of her eligibility for pension benefits. Defendants did not respond to that letter. Plaintiff filed suit later that year, and argued that the limitations period began to run when defendants failed to respond to the 2012 request letter. The court disagreed, explaining that “ERISA claims begin to accrue upon a clear repudiation . . . regardless of whether the plaintiff has filed a formal application for benefits.” The court found that defendants’ alleged refusal to provide plaintiff with the application forms in 2005 (seven years before the case was commenced) constituted a “clear repudiation,” unequivocally notifying plaintiff that any claim for pension benefits would be denied. Thus, plaintiff’s claim for pension benefits were time barred, despite the fact that she had not exhausted the claims review procedures.
In Paulus, the court found that plaintiff’s ERISA claims were time-barred because they were brought more than ten years after plaintiff had received a copy of the worksheet used by defendant to calculate the amount of the pension benefits to which he was entitled. The worksheet was provided to plaintiff in 2001 when his employment with defendant was terminated. Plaintiff, however, did not contest the pension calculation until he began receiving benefits in 2011. The court held that the worksheet constituted a “clear repudiation” of plaintiff’s rights because it demonstrated that “defendant had not included what [plaintiff] believed to be compensable pay and credited service” in the benefit calculation.
In Munro-Kienstra, the court, relying on the Supreme Court’s decision in Heimeshoff v. Hartford Life & Acc. Ins. Co., 134 S. Ct. 604 (2013), found that a claim for welfare benefits was barred by virtue of a plan provision setting a two-year limit on the filing of lawsuits for benefits thereunder. Plaintiff’s claims were initially denied in December 2008 and January 2009. After appealing the denials, plaintiff was informed in July 2009 that the appeals were also denied. Plaintiff commenced the case in January 2012, two and one half years after the final denial. Because plaintiff was informed of the limitation period at the time of the initial denial, the court found that it could not ignore the plan’s “clear mandate” that suits be filed within two years of the denial of the appeal.
In combination, the three cases, together with the authorities on which they rely, provide some increased hope to plan administrators and sponsors that, with proper administration, they can limit the risks of defending claims based on dated events.