Santaliz-Rios v. Metropolitan Life Insurance Co, et al

Filing

OPINION issued by Juan R. Torruella, Appellate Judge; Bruce M. Selya, Appellate Judge and Kermit V. Lipez, Appellate Judge. Published. [11-1279]

Case: 11-1279

Document: 00116425469

Page: 1

Date Filed: 08/30/2012

Entry ID: 5671014

United States Court of Appeals
For the First Circuit

No. 11-1279
LUIS ARTURO SANTALIZ-RÍOS,
Plaintiff, Appellant,
v.
METROPOLITAN LIFE INSURANCE COMPANY,
Defendant, Appellee,
MONARCH PHARMACEUTICALS, INC.; KING PHARMACEUTICAL, INC.;
KING PHARMACEUTICALS WELFARE BENEFIT PLAN,
Defendants.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. José Antonio Fusté, U.S. District Judge]

Before
Torruella, Selya, and Lipez, Circuit Judges.
Luis A. Vivaldi Oliver, with whom Luis Vivaldi Oliver Law
Offices was on brief, for appellant.
Frank Gotay-Barquet, with whom Gotay & Pérez, P.S.C. was on
brief, for appellee.

August 30, 2012

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Document: 00116425469

Page: 2

LIPEZ, Circuit Judge.
appeal

is

Security

whether
Act

claim

Entry ID: 5671014

The only issue before us in this

appellant's

("ERISA")

Date Filed: 08/30/2012

Employee
for

Retirement

reinstatement

of

and

Income

disability

benefits is time-barred. The district court found that appellant's
claim was time-barred, and that his various arguments regarding
tolling of the limitations period had no merit.

Accordingly, it

granted appellee's motion to dismiss.
On appeal, appellant renews his tolling arguments and
also raises new arguments concerning the applicable limitations
period and the sufficiency of the information that he received from
the appellee concerning the terms of its insurance coverage.
Finding no error in the district court's decision, and declining to
consider arguments raised for the first time on appeal, we affirm
the judgment of the district court.
I.
Appellant Luis Arturo Santaliz-Ríos was an employee of
Monarch

Pharmaceuticals,

Inc.,

a

subsidiary

of

King

Pharmaceuticals, Inc. Monarch offers its employees the opportunity
to participate in the King Pharmaceuticals Welfare Benefit Plan
(the "Plan").

Metropolitan Life Insurance Company ("MetLife")

provides insurance coverage for the Plan and serves as claims
administrator,

adjudicating

claims

of

disability

and

paying

benefits. While employed by Monarch, Santaliz-Ríos participated in
the Plan.

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Entry ID: 5671014

On September 17, 2001, appellant left his job with
Monarch because of a mental disability.

The Plan's insurance

policy with MetLife covers "[m]ental or [n]ervous [d]isorder[s] or
[d]isease[s]," and provides that disability benefits for those
conditions are limited to twenty-four months, unless the disability
results from, inter alia, bipolar disorder.
long-term

disability

benefits

are

paid

Under the policy, no
during

a

ninety-day

"Elimination Period" after the disability first arises.

Thus,

appellant became eligible for long-term disability benefits on
December 16, 2001.

From that date, MetLife provided him monthly

disability benefits until December 16, 2003, when the twenty-fourmonth eligibility period expired.
At that time, appellant requested reconsideration of the
decision to cease paying benefits, arguing that he suffered from
bipolar disorder and thus the twenty-four-month cap on benefits
should

not

apply

to

him.1

MetLife

reconsideration on February 27, 2004.

1

denied

his

request

for

In the following months,

It is unclear when appellant was first diagnosed with
bipolar disorder, and no allegation concerning this diagnosis
appears on the face of the complaint. However, in connection with
his opposition to appellee's motion to dismiss, appellant submitted
correspondence concerning his diagnosis to the district court. This
correspondence suggests that appellant was not originally diagnosed
with bipolar disorder, but that his diagnosis was changed to
include bipolar disorder sometime around the expiration of the 24month eligibility period. MetLife rejected this new diagnosis on
the ground that the change was "based solely on information
reported by [appellant], without direct observation or correlative
clinical findings."
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Entry ID: 5671014

appellant repeatedly requested information from MetLife, including
documents, records, and other information relevant to his claim,
but, according to appellant, MetLife never responded to these
requests.
On December 15, 2004, appellant filed a complaint in
Puerto

Rico

benefits.
15,

2005,

state

court

seeking

reinstatement

of

disability

However, he voluntarily withdrew this complaint on June
because

of

difficulties

obtaining

medical

necessary to support the allegations in the complaint.2

records

Five years

later, on May 28, 2010, he filed the complaint triggering this
action in the United States District Court for the District of
Puerto

Rico.

Pursuant

to

29

U.S.C.

§

1132(a)(1)(B),

the

appellant's ERISA claim sought to recover the accumulated balance
of unpaid disability benefits and to reinstate the monthly payments
for the duration of his condition.
The group policy between the Plan and MetLife contains a
three-year limitations period on legal claims against MetLife.
Before the district court, appellant acknowledged that this period
is generally applicable to claims such as his.

However, he argued

that the limitations period should not apply in this case for two
reasons: 1) it should be deemed tolled by the 2004 complaint he
filed in Puerto Rico state court, and 2) it would be unfair to

2

The Puerto Rico court dismissed the case without prejudice
on June 20, 2005.
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subject his claim to a three-year limitations period because of the
difficulty of diagnosing bipolar disorder.

The district court

rejected both of these arguments and granted the appellee's motion
to dismiss.

This appeal ensued.
II.

We review a district court's decision to grant a motion
to dismiss de novo.

Ocasio-Hernández v. Fortuño-Burset, 640 F.3d

1, 7 (1st Cir. 2011).
A.

The Applicable Limitations Period
Congress has not established a limitations period for

ERISA claims brought pursuant to 29 U.S.C. § 1132(a)(1)(B). Island
View Residential Treatment Ctr. v. Blue Cross Blue Shield of Mass.,
Inc., 548 F.3d 24, 27 (1st Cir. 2008).

Therefore, in adjudicating

ERISA claims, federal courts borrow the most closely analogous
statute of limitations in the forum state.

Id. (citing Edes v.

Verizon Commc'n, Inc., 417 F.3d 133, 138 (1st Cir. 2005)).

In

Puerto Rico, the default limitations period applicable to contract
claims is fifteen years.

P.R. Laws Ann. tit. 31, § 5294; Caribbean

Mushroom Co. v. Gov't Dev. Bank for P.R., 102 F.3d 1307, 1312 (1st
Cir. 1996) ("[C]ontract claims that are covered by the Commerce
Code but are not designated for special prescriptive treatment
automatically fall under the Civil Code's fifteen-year catch-all
provision.").

This period has been applied to ERISA claims where

no alternative limitations period was agreed upon by the parties.

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See Nazario Martinez v. Johnson & Johnson Baby Prods., Inc., 184 F.
Supp. 2d 157, 159-62 (D.P.R. 2002).
However, where the contract at issue itself provides a
shorter limitations period, that period will govern as long as it
is reasonable.

See Island View, 548 F.3d at 27 (applying a

contractually agreed-upon limitations period to ERISA claim); RiosCoriano v. Hartford Life & Accident Ins. Co., 642 F. Supp. 2d 80,
83 (D.P.R. 2009) ("Choosing which state statute to borrow is
unnecessary, however, where the parties have contractually agreed
upon a limitations period, provided the limitations period is
reasonable."

(internal quotation marks omitted)).

In this case, the Plan's policy stated that "[n]o legal
action of any kind may be filed against [MetLife]: (1) within the
60 days after proof of Disability has been given; or (2) more than
three years after proof of Disability must be filed."

Given that

we have previously found a contractual provision setting a two-year
limitations period on ERISA claims reasonable, see Island View, 548
F.3d at 27, we have no difficulty concluding that the three-year
period provided by the policy at issue here is also reasonable, see
Rios-Coriano, 642 F. Supp. 2d at 83 (finding three-year limitations
period on ERISA claims reasonable).

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Accordingly, we find, as did

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the district court, that the contractually agreed-upon three-year
limitations period applies to appellant's claim.3
B.

Tolling of the Limitations Period
Pursuant to the limitations provision, no beneficiary may

file claims against MetLife "more than three years after proof of
Disability must be filed."

Here, appellant asserts that he became

disabled on September 17, 2001.

Thus, under the policy, he was

required to provide proof of disability by March 16, 2002.4

Of

course, in this case, appellant did receive disability benefits for
twenty-four months and did not seek to challenge MetLife's decision
to apply the twenty-four-month cap to his benefits until after that
period had elapsed.

MetLife's denial of appellant's request for

3

For the first time on appeal, appellant argues that the
fifteen-year period provided by section 5294 applies to his claim.
However, this argument is based on a misunderstanding of the nature
of this action. Appellant acknowledges that the three-year period
applies to claims against MetLife, but asserts that the fifteenyear period should apply to his claim against the Plan. Although
appellant named the Plan as a defendant, process was never served
on the Plan and the Plan never appeared before the district court.
MetLife is the only defendant over which the district court had
personal jurisdiction and it is the only appellee before us now.
Furthermore, "absent the most extraordinary circumstances, legal
theories not raised squarely in the lower court cannot be broached
for the first time on appeal," River St. Donuts, LLC v. Napolitano,
558 F.3d 111, 114 (1st Cir. 2009) (quoting Teamsters, Chauffeurs,
Warehousemen and Helpers Union, Local No. 59 v. Superline Transp.
Co., 953 F.2d 17, 21 (1st Cir. 1992)), and there are no
extraordinary circumstances present in this case.
4

The policy provides that proof of disability must be
provided within three months of the end of a ninety-day waiting
period. Therefore, appellant's waiting period ended on December
16, 2001, and he was required to provide proof of disability by
March 16, 2002.
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Entry ID: 5671014

reconsideration of its decision did not come until February 27,
2004. Accordingly, there is some question as to whether the threeyear limitations period should begin to run on March 16, 2002, when
appellant was required to file proof of disability (and MetLife
failed to recognize his disability as bipolar disorder), or on
February

27,

2004,

when

MetLife

reconsideration of its decision.

rejected

his

request

for

We need not resolve this issue.

Using either date, the three-year limitations period provided by
the policy expired several years before appellant finally brought
this claim on May 28, 2010.
In an attempt to escape this conclusion, appellant argues
that the limitations period should be deemed to have been tolled.5
First, he argues that the limitations period was tolled by the
complaint he filed in Puerto Rico state court in 2004.
argument fails.

This

Even if the limitations period was tolled by the

earlier filing, the period began to run again when he voluntarily
withdrew the complaint and the case was dismissed without prejudice
on June 20, 2005.

Under Puerto Rico law, the institution of a

legal action does not merely pause the running of the limitations
period, but begins the period anew.

5

Rodríguez v. Suzuki Motor

Appellee briefly argues that the three-year limitations
period is a period of "caducity" under Puerto Rico law, and thus
not susceptible
to tolling.
See
Ortega
Candelaria v.
Orthobiologics LLC, 661 F.3d 675, 678 n.4 (1st Cir. 2011)
(discussing principle of caducity).
We need not take up this
argument because, for the reasons stated, the appellant has failed
to show that tolling would be appropriate, even if available.
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Corp., 570 F.3d 402, 407 (1st Cir. 2009) (quoting López-González v.
Municipality of Comerío, 404 F.3d 548, 552 (1st Cir. 2005)).
However,

even

applying

this

generous

rule,

the

three-year

limitations period began on June 20, 2005, and expired on June 20,
2008, almost two years before appellant initiated this case.
Alternatively, appellant argues that the nature of his
bipolar disorder, and the inherent difficulty of diagnosing it,
would make it unjust to apply the three-year limitations period.
However, appellant provides no legal authority for the proposition
that such an exception to the limitations period should apply.
Additionally, appellant has not alleged facts suggesting that
diagnosis of his condition was not feasible within the three-year
limitations period.

Moreover, he did not develop this argument

before the district court or on appeal.

Accordingly, we reject

this argument as well.
Finally, appellant makes a handful of related arguments
for equitable tolling, pointing to MetLife's alleged failure to
provide him with requested information and the supposed ambiguity
of the insurance policy with regard to the limitations period.
However, these arguments were not made before the district court
and we decline to consider them for the first time at this stage.
See River St. Donuts, 558 F.3d at 114.

Moreover, appellant's

briefing demonstrates that these arguments have no merit.
Affirmed.

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