Homesley v. Hartford, The et al

Filing 44

ORDER granting 33 defendants' motion for summary judgment...judgment will be entered once the case is concluded with respect to all issues; the parties are directed to confer regarding defendants' counterclaim and advise the court by appropriate filing within 10 days from this order as to whether an agreed disposition of that claim can be reached. Signed by Honorable Joe Heaton on 07/01/2011. (lam)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
TERESA HOMESLEY,
Plaintiff,
vs.
HARTFORD LIFE AND ACCIDENT
INSURANCE COMPANY, ET AL.,
Defendants.

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NO. CIV-10-0610-HE

ORDER
Plaintiff Teresa Homesley filed this action seeking long-term disability benefits under
the U.S. Foodservice, Inc. Group Disability Income Insurance Plan (“the Plan”), an
employee welfare benefit plan governed by the Employee Retirement Income Security Act
(“ERISA”), 29 U.S.C. §§ 1001-1461. US Foodservice, plaintiff’s former employer, is the
plan sponsor and administrator. Plan benefits are provided by a group policy issued by
Hartford Life and Accident Insurance Company (“Hartford”).1 Hartford administers claims
for plan benefits.

Plaintiff alleges she became disabled due to multiple medical

complications and initially was paid disability benefits. She claims defendants then
arbitrarily and capriciously terminated her benefits and has sued to have them reinstated.
Defendants Hartford and the Plan have filed a motion for summary judgment seeking the
dismissal of plaintiff’s claim on the ground it is barred by the Plan’s limitation of actions

1

The policy funding long term disability benefits under the Plan was originally issued by
Continental Casualty Company (“CCC”). Hartford purchased CCC’s group disability business
in 2003, and assumed CCC’s rights and obligations under the group policy. Since the acquisition
Hartford has insured Plan benefits and administered benefit claims.

clause. The court concludes defendants’ motion should be granted.2
Background3
In 2000, while employed by U.S. Foodservice and enrolled as a participant in the Plan,
plaintiff filed a claim for long term disability benefits. She asserted she was disabled due to
“multiple medical complications including severe cervical stenosis, severe degenerative disc
and facet disease, severe cervical spondylosis, severe multi level formaninal stenosis, lupus,
migraine headaches, and shoulder dysfunction.” Complaint, ¶22. Hartford approved her
claim on July 18, 2000, and plaintiff began receiving benefits under the Plan’s “Own
Occupation” disability definition. A participant’s eligibility for benefits under that standard
depends in part on his or her being “continuously unable to perform the Material and
Substantial Duties of [his or her] Regular Occupation.” Defendants’ Exhibit A, Bates No.
000016.4 After an participant has received long term disability benefits for 24 months the
eligibility test changes. To continue to receive benefits the participant must, because of
injury or sickness, be “continuously unable to engage in any occupation for which [he or she]
[is] or become[s] qualified by education, training or experience.” Id. (emphasis added).
Plaintiff exhausted the 24 months of “Own Occupation” long term disability benefits

2

Plaintiff’s gratuitous comments about defendants and their arguments in plaintiff’s brief
are inappropriate and detract from her brief.
3

With the exception of the applicable limitations period and the date the period commenced,
plaintiff agreed to defendants’ factual assertions for purposes of defendants’ motion for summary
judgment. Plaintiff’s response, p. 3, ¶ 4. The facts have been taken from defendants’ Statement of
Facts.
4

The court will cite to Bates numbers to identify pages in defendants’ exhibits.

2

on July 18, 2002. Hartford continued to pay her benefits under the “Any Occupation”
standard, “subject to Hartford’s ongoing claim review process.” Defendants’ motion, p. 4.
Pursuant to the Plan’s Continuing Proof of Disability provision, Hartford could ask
a participant to submit proof within thirty days that he or she continued to be disabled.5 By
letter dated November 15, 2004, Hartford informed plaintiff that it needed additional
information regarding her long term disability claim. She was asked to complete a Claim
Authorization and Disability Claim Form.6 Hartford received the completed form, dated
November 22, 2004, from plaintiff and continued to pay her benefits until June 18, 2005. By
letter dated June 9, 2005, Hartford advised plaintiff it had completed its review of her claim
and determined she no longer met the policy definition of disability. Hartford terminated
her long term disability benefits effective 6/18/05.
Plaintiff, through counsel, appealed Hartford’s denial of her claim for continuing
benefits by letter dated October 24, 2005. Hartford informed plaintiff by letter dated
February 23, 2006, that “Appeal’s finds the previous decision of June 9, 2005, to be correct
and proper.” Defendants’ Exhibit F, Bates No. 000120. Plaintiff was advised of her right
to bring a civil action under Section 502(a) of ERISA to challenge Hartford’s decision. She
filed this action on June 8, 2010.

5

The provision states that “[r]equests of this nature will only be as often as We feel
reasonably necessary.” Defendants’ Exhibit A, Bates No. 000021.
6

It appears from the November 15, 2004, letter that plaintiff had been sent a Claim
Authorization form on October 27, 2004, but had not returned it. Hartford advised plaintiff that she
had 10 days to submit the form or else her benefits might be disrupted. Defendants’ Exhibit B.

3

Analysis
Hartford contends plaintiff’s action is untimely because it was filed more than three
years after plaintiff’s deadline for submitting proof of her continuing disability. Hartford
relies on the Plan provisions pertaining to “Legal Actions” and “Continuing Proof of
Disability,” which state:
Legal Actions
No legal action of any kind may be filed against Us:
1. within the 60 days after proof of Disability has been given; or
2. more than 3 years after proof of Disability must be filed, unless the law in
the state where You live allows a longer period of time.
Continuing Proof of Disability
You may be asked to submit proof that You continue to be Disabled and are
continuing to receive Appropriate and Regular Care of a Doctor. Requests of
this nature will only be as often as We feel reasonably necessary. If so, this
will be at Your expense and must be received within 30 days of Our request.
Defendants’ Exhibit A, Bates No. 000022, 000021.7
Defendants assert the limitations period began on December 15, 2004, thirty days after
it requested proof of continuing disability. They contend plaintiff had until December 15,
2007, approximately one year and ten months after she exhausted the administrative appeals
process, to commence this action. They claim the three year limitation of actions clause “is
a statutorily mandated term that is required to be included in the policy form in order for it
7

Because ERISA does not include a limitations provision for benefit claims under 29 U.S.C.
§1132(a), courts generally look to the most analogous state statute of limitations. Salisbury v.
Hartford Life & Accident Co., 583 F.3d 1245, 1247 (10th Cir. 2009) However, as “‘[a]n ERISA
plan is nothing more than a contract, in which parties as a general rule are free to include whatever
limitations they desire, id. (quoting Northlake Regional Med. Ctr. v. Waffle House Sys. Employee
Benefit Plan, 160 F.3d 1301, 1303 (11th Cir.1998)), the Tenth Circuit has held“reasonable ERISAplan limitations periods are enforceable.” Id.

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to be sold in Oklahoma.” Defendants’ motion, p. 8. Defendants argue that because the three
year term is required by 26 Okla. Stat. §4405(A)(11),8 and because Oklahoma does not have
a specific limitations statute for claims asserted under disability insurance policies,
Oklahoma does not “allow[] a longer period of time” for a Plan participant to file suit.
Plaintiff responds that her suit was timely because the limitations period began to run
on June 18, 2005, the date defendants withheld or denied benefits, and because the applicable
limitations period is five, not three, years. She contends defendants ignore Plan language
expressly authorizing a longer limitations period when the participant lives in a state, such
as Oklahoma, that “allows a longer period of time.” She claims defendants’ reliance on
§4405(A)(11) is misplaced because the statute does not apply to group insurance plans.
Commencement date of limitations period
Plaintiff claims the five year statute began to run on June 18, 2005, when the contract
allegedly was breached. Under her interpretation of the policy language, the proof of
disability filing triggers the limitations period only if the contractual, three year limitation
period applies. Otherwise, plaintiff argues, then “it would be quite possible for an insurer
to issue a demand for proof of disability and simply wait three years and one month to [sic]
before deciding to terminate payments.” Plaintiff’s response, p. 12. That scenario generally

8

Section 4405(A)(11) of Title 36 Okla. Stat., provides that every accident and health policy
delivered in Oklahoma shall contain the following provision: “ LEGAL ACTIONS: No action at law
or in equity shall be brought to recover on this policy prior to the expiration of sixty (60) days after
written proof of loss has been furnished in accordance with the requirements of this policy. No such
action shall be brought after the expiration of three (3) years after the time written proof of loss is
required to be furnished.”

5

would not occur, though, due to the time limits set by ERISA for administrative decisions on
long term disability benefit claims. See 29 C.F.R. § 2560.503-1(f)(3), (h)(3)(i),(h)(4),(i)(3).
The contractual limitations period also would not be applied in such a situation because it
would not be reasonable. See Salisbury v. Hartford Life & Accident Co., 583 F.3d 1245,
1247-48 (10th Cir. 2009).
“The Supreme Court has directed us to interpret an ERISA plan like any contract, by
examining its language and determining the intent of the parties to the contract.” Capital
Cities/ABC, Inc. v. Ratcliff 141 F.3d 1405, 1411 (10th Cir. 1998). “[A] reasonable person
in the position of the plan participant ... would have understood the words [in the Legal
Action clause] to mean,” Salisbury, 583 F.3d at 1248, that, regardless of the applicable
limitations period, it commences on the date by which the proof of disability must be filed.
See generally id. at 1248-49 (court rejected argument that plan’s limitations period, triggered
by proof of loss due date and not date of exhaustion of administrative review process, was
unenforeceable because claim accrued before appeal process ended).

Under the

unambiguous terms of the Plan, the limitations period commenced on December 15, 2004.9
Limitations period
The crux of defendants’ argument is that 36 Okla. Stat. §§ 4405(A)(11) and 4505
“mandate that group benefit policies, such as the one at issue here, include a provision
specifying a three-year contractual limitations period, running from the time proof of loss is

9

Plaintiff does not dispute that December 15, 2004, was the filing date for proof of disability.

6

required to be furnished.” Defendants’ reply, p. 9. While defendants acknowledge that
§4405(A)(11) applies to individual disability policies, they argue that 36 Okla. Stat. § 4505
requires that group insurance policies contain a similar limitations provision. The court
disagrees with their interpretation of § 4505. The statute provides:
The provisions of Article 44 (Individual Accident and Health Insurance) shall
not apply to group accident and health or blanket accident and health insurance
policies, but no such policy of group or blanket accident and health insurance
shall contain any provision relative to notice or proof of loss, or to the time for
paying benefits, or to the time within which suit may be brought on the policy,
which is less favorable to the individuals insured than would be permitted by
the standard provisions required for individual accident and health insurance
policies.

Section 4505 does not mandate that group health policies contain a limitations provision
similar to that found in § 4405(A)(11). Rather, it precludes them from including a provision
that is more restrictive than that required pursuant to § 4405(A)(11) for individual health
policies. See 36 Okla. Stat. § 4411(3).
As a three year period is not mandated by state law, the question becomes whether
plaintiff is correct that Oklahoma law provides a longer limitations period than three years.
She relies on Wright v. Southwestern Bell Telephone Co., 925 F.2d 1288 (10th Cir. 1991),
in which the Tenth Circuit held that (in the absence of a valid contractual limitations period)
Oklahoma’s five-year statute of limitations on written contracts applies to an ERISA action
for benefits.10 Defendants argue that “[b]ecause the Plan’s limitations period is measured

10

Although defendants describe the ERISA plan’s limitation of actions clause in Salisbury,
as being nearly identical to that present here, it is distinguishable in one significant respect – it did

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from the time ‘proof of Disability must be filed,’ the exception is specifically intended for
use in states that allow insureds suing on a disability policy a ‘longer period of time’ in which
to bring suit after proof of disability must be filed.” Defendants’ reply, p. 7. Since
Oklahoma’s general statute of limitations for written contracts does not refer to disability
insurance or proof of disability, defendants contend that statute is not incorporated into the
Plan.11
Defendants claim their interpretation of the contract language is supported by White
v. Metropolitan Life Ins. Co., 2011 WL 682893 (5th Cir. 2011) (per curiam) (unpublished).
However, the pertinent contact language in White is dissimilar. The ERISA plan in that case
provided that no legal action could be filed “‘more than three years after proof of Disability
must be filed. This will not apply if the law in the area where you live allows a longer period
of time to file proof of Disability.’” Id. at *1. To reach the result defendants seek here, the
Plan would have had to include language to the effect that the limitations period was three
years “unless the law in the state where You live allows a longer period of time to sue to
recover disability benefits.” Defendants cite no pertinent authority – statutory or case – that
supports their contention that the limitations period for plaintiff’s claim was three years. In

not include the “unless the law in the state ... allows a longer period of time” language. Salisbury,
583 F.3d at 1248.
11

Defendants argue that if plaintiff’s position is accepted, then the Plan’s limitations period
would be a nullity because the statutes of limitation for breach of contract in 42 states is longer than
three years. However, if the clause is construed as defendants propose, the “unless the law in the
state ....” language must be ignored. Contrary to defendants’ assertion, interpreting the provision
as they suggest does not “give[] meaning to the entirety of the Plan’s limitation of actions
provision.” Defendants’ sur-sur-reply, p. 2.

8

fact, several courts have held to the contrary.
In Harris v. The Epoch Group, L.C., 357 F.3d 822 (8th Cir. 2004) the plaintiff sued
when his claim for health benefits under an ERISA plan was denied. The district court
dismissed his lawsuit as time-barred and he appealed, presenting “simply a matter of
straightforward contract interpretation.” Id. at 825. The Eighth Circuit had to determine
“what the parties meant when they said the limitations period was “three years ... or such
longer period as required by applicable state laws.” Id. The plan and its administrator
contended the phrase referring to state laws was mere surplusage. They claimed there were
no “applicable” state laws because the health plan was governed by ERISA and federal law.
The appellate court disagreed, concluding that the phrase meant exactly what it said:
The plan says three years, or longer if required by state law. Thus, the parties
intended to give plan participants a minimum of three years within which to
bring suit, even if state law might provide for a shorter period. But if state law
provided for a longer period, plan participants got the benefit of the longer
period.
Id. The court then applied Missouri’s ten year statute for “[a]n action upon any writing ...
for the payment of money or property.” Mo.Rev.Stat. § 516.110(1). 12 Following Harris, the

12

The Eighth Circuit had held previously held that Mo.Rev.Stat. § 516.110(1) was “the most
analogous statute of limitations under Missouri law for a claim for ERISA benefits.” Harris, 357
F.3d at 825 (citing Johnson v. State Mut. Life Assurance Co. Of Am., 942 F.2d 1260, 1266 (8th Cir.
1991). The court recognizes that Harris is distinguishable in several respects. The Eighth Circuit
concluded that because the ERISA plan in that case was self-funded, Harris’ claim for benefits
“more resemble[d] a straightforward contract action than a claim for benefits under an insurance
policy.” Id. at 827. Also, in Missouri, group health insurance policies (rather than individual
policies as in Oklahoma) were required “to include a provision stating ‘that no action at law or in
equity shall be brought to recover on the policy ... unless brought within three years from the
expiration of the time within which proof of loss is required by the policy.’”). Id. at 826. The court
does not find that these differences mandate a different analysis or conclusion.

9

court in Tinker v. Versata, Inc. Group Disability Income Ins. Plan, 2008 WL 781971
(E.D.Cal. 2008), concluded that California’s statute of limitations for suits on written
contracts applied to a lawsuit for disability benefits under a plan which provided that “No
legal action of any kind may be filed against Us: ... more than 3 years after proof of
Disability must be filled [sic], unless the law in the state where You live allows a longer
period of time.” Id. at *1, n.6.
As defendants note in their motion, the court does not have discretion to redraft
ERISA plan terms. It must enforce the Plan’s limitations provision as written. The court
concludes the unambiguous terms of the Plan allowed plaintiff to bring suit within five years
of December 15, 2004, the date she had to submit proof of her continuing disability.
Plaintiff’s action, filed after December 15, 2009, was untimely.
Accordingly, defendants’ motion for summary judgment is GRANTED. Judgment
will be entered once the case is concluded with respect to all issues. Fed.R.Civ.P. 54(b). The
parties are directed to confer regarding defendants’ counterclaim and advise the court by an
appropriate filing within ten (10) days as to whether an agreed disposition of that claim can
be reached.
IT IS SO ORDERED.
Dated this 1st day of July, 2011.

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