BIDLINGMEYER v. BROADSPIRE et al

Filing 16

MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE MARY A. MCLAUGHLIN ON 9/27/2011. 9/27/2011 ENTERED AND COPIES E-MAILED. (ems)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
LISA BIDLINGMEYER

:
:
:
:
:

v.
BROADSPIRE, et al.

CIVIL ACTION

11-812

MEMORANDUM
McLaughlin, J.

September 27, 2011

This action arises from the denial of disability
benefits under an employee benefits plan.

The defendants moved

for judgment on the pleadings pursuant to Rule 12(c) of the
Federal Rules of Civil Procedure.

I.

The Court grants the motion.

Factual Background
The plaintiff, Lisa Bidlingmeyer, was employed by

defendant Johnson & Johnson.

As part of her employee benefits

package, Bidlingmeyer was entitled to short-term and long-term
disability coverage under the Long Term Disability Income Plan
for Choices Eligible Employees of Johnson & Johnson and
Affiliated Companies (“the Plan”).

After Bidlingmeyer sustained

a permanent disabling injury as defined by the Plan, she made a
claim for long-term disability benefits.

Bidlingmeyer received

benefits from January 25, 2001 until December 2004, when Johnson
& Johnson informed her that her claim for benefits would be
denied.

On September 23, 2005, Johnson & Johnson issued a final

decision denying benefits.

Thereafter, Defendant Broadspire, an

insurer, refused to pay disability benefits to Bidlingmeyer.
Bidlingmeyer filed a complaint against defendants
Broadspire and Johnson & Johnson on February 2, 2011, bringing
claims under the Employee Retirement Income Security Act of 1974
(“ERISA”), 29 U.S.C. § 1001 et seq., and, in particular, §
1132(a)(1)(B).

The defendants answered on April 4, 2011.

On the

same date, the defendants filed the instant motion, attaching a
copy of the Plan.1

II.

Analysis
A.

Legal Standard
A Rule 12(c) motion for judgment on the pleadings based

on the defense that the plaintiff has failed to state a claim is
analyzed under the same legal standards that apply to a Rule
12(b)(6) motion to dismiss.

Revell v. Port Auth., 598 F.3d 128,

134 (3d Cir. 2010); Turbe v. Gov’t of the V.I., 938 F.2d 427, 428
(3d Cir. 1991).

Therefore, the Court accepts all factual

allegations in the complaint as true and draws all reasonable
inferences in favor of the plaintiff.

1

Revell, 598 F.3d at 134.

In considering a 12(b)(6) motion, “a court may consider an
undisputedly authentic document that a defendant attaches as an
exhibit to a motion to dismiss if the plaintiff’s claims are
based on the document.” Steinhardt Group, Inc. v. Citicorp, 126
F.3d 144, 145 (3d Cir. 1997) (citing Pension Benefit Guar. Corp.
v. White Consol. Indus., 998 F.2d 1192, 1196 (3d Cir. 1993)).
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A Rule 12 motion to dismiss may be granted based on a statute of
limitations defense when noncompliance is apparent from the face
of the complaint.

W. Penn Allegheny Health Sys., Inc. v. UPMC,

627 F.3d 85, 105 n.13 (3d Cir. 2010).

B.

Statute of Limitations
The defendants argue that the plaintiff’s claims are

untimely because (1) the express terms of the Plan require any
lawsuit challenging denial of benefits to be filed within one
year after the Plan administrator’s final decision, or
alternatively, (2) the claims are subject to a four-year statute
of limitations, which expired in 2009.

The Court concludes that

Bidlingmeyer’s claims are untimely under the four-year statute of
limitations.

1.

Claims for Breach of Fiduciary Duty

The plaintiff contends that the six-year statute of
limitations for breach of fiduciary duty claims under ERISA, 29
U.S.C. § 1113, is the appropriate limitations period.

As a

preliminary matter, the Court notes that the complaint does not
appear to bring claims for breach of fiduciary duty under ERISA,
29 U.S.C. § 1132(a)(2).

Rather, the preliminary statement

declares that the action arises under § 1132(a)(1)(B).
at 1.

Complaint

That subparagraph provides a non-fiduciary cause of action

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“to recover benefits due to him under the terms of his plan, to
enforce his rights under the terms of the plan, or to clarify his
rights to future benefits under the terms of the plan.”

29

U.S.C. § 1132(a)(1)(B); Miller v. Fortis Benefits Ins. Co., 475
F.3d 516, 519 (3d Cir. 2007) (noting that § 1132(a)(1)(B) claims
are non-fiduciary claims).
The complaint mentions breach of fiduciary duty twice
in passing.

Complaint ¶¶ 15, 22.

However, “Section 1132(a)(2)

actions are derivative in nature inasmuch as the plaintiff must
assert a loss to the ERISA plan itself (not merely an individual
claim for extracontractual damages).”

Leckey v. Stefano, 501

F.3d 212, 217 (3d Cir. 2007) (citing Mass. Mut. Life Ins. Co. v.
Russell, 473 U.S. 134, 147 (1985)).

Here, Bidlingmeyer does not

seek recovery on behalf of the ERISA plan itself.

The heart of

Bidlingmeyer’s claims in this case is not that a plan fiduciary
mismanaged plan assets or implemented a policy that reduced her
share of benefits, but rather that she was denied payment of
benefits.

See Graden v. Conexant Sys. Inc., 496 F.3d 291, 301

(3d Cir. 2007) (discussing the difference between suits under
(a)(1)(B) and (a)(2)); Bamgbose v. Delta-T Group, Inc., 638 F.
Supp. 2d 432, 442 (E.D. Pa. 2009).

Thus, ERISA’s statute of

limitations for breach of fiduciary duty claims may not even
apply to Bidlingmeyer’s claims.

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Even if Bidlingmeyer had clearly stated claims for
breach of fiduciary duty under 29 U.S.C. § 1132(a)(2), however,
the applicable statute of limitations in this case would be at
most three years, not six.2

Under 29 U.S.C. § 1113, an action

for breach of fiduciary duty may not be commenced after the
earlier of:
(1) six years after (A) the date of the last action which
constituted a part of the breach or violation, or (B) in the
case of an omission, the latest date on which the fiduciary
could have cured the breach or violation, or
(2) three years after the earliest date on which the
plaintiff had actual knowledge of the breach or violation;
except that in the case of fraud or concealment, such action
may be commenced not later than six years after the date of
discovery of such breach or violation.
The U.S. Court of Appeals for the Third Circuit has
held that “actual knowledge of a breach of violation” requires
that a plaintiff have knowledge of (1) the facts on which she
relies to establish a breach of fiduciary duty and (2) “all
relevant facts at least sufficient to give the plaintiff
knowledge that a fiduciary duty has been breached or ERISA
provision violated.”

Gluck v. Unisys Corp., 960 F.2d 1168, 1178

(3d Cir. 1992); Roush, Inc. Profit Sharing Plan v. New England
Mut. Life Ins. Co., 311 F.3d 581, 587 (3d Cir. 2002).

2

This

Because the Court finds Bidlingmeyer’s claims time-barred
even when applying ERISA’s statute of limitations, the Court does
not address the defendants’ argument that the Plan’s one-year
contractual limitations period bars any breach of fiduciary duty
claims.
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knowledge can come from knowledge of a transaction’s harmful
consequences, or even actual harm.

Gluck, 960 F.2d at 1177.

The

court’s holding in Gluck does not require a plaintiff to meet
with a lawyer before the three-year limitations period begins to
run.

Id.
Here, Bidlingmeyer alleges breach of fiduciary duties

based on the wrongful denial of her benefits claim.
alleged fraud or concealment.

She has not

In Gluck, the Third Circuit held

that mere knowledge of amendments to a pension plan, the effect
of which was to cause accrued benefits not to fully vest, could
not be deemed “actual knowledge.”

Gluck, 960 F.2d at 1179.

In

that case, the amendment did not disclose and, in fact, masked
its harmful consequences on the participants’ benefits.

Id.

By

contrast, Bidlingmeyer had knowledge of harmful consequences, at
the latest, by September 23, 2005, when Johnson & Johnson made a
final decision denying her benefits.

By then, if not by December

2004, when she stopped receiving payments, Bidlingmeyer was well
aware that she would no longer receive disability benefits.

See

Connell v. Trustees of the Pension Fund, 118 F.3d 154, 158 (3d
Cir. 1997) (finding that plaintiffs had “actual knowledge” when
the pension fund cancelled their pension credits by enforcing a
rule that provides for cancellation of accrued credits after a
specified absence from covered employment); Koert v. GE Group
Life Assur. Co., 231 F. App’x 117, 121 (3d Cir. 2007) (affirming

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that ERISA’s three-year statute of limitations began to run the
day the plan participant’s benefits were terminated).
Therefore, to the extent Bidlingmeyer’s claims can be
construed as breach of fiduciary duty claims, they are timebarred by the three-year statute of limitations under ERISA, 29
U.S.C. § 1113(2).

2.

Claims for Denial of Benefits

Bidlingmeyer’s claims under 29 U.S.C. § 1132(a)(1)(B)
are likewise time-barred.

Although ERISA provides a limitations

period for claims for breaches of fiduciary duty, it does not
contain a limitations period for non-fiduciary claims.
960 F.2d at 1179.

Gluck,

Section § 1132(a)(1)(B) provides a non-

fiduciary cause of action to “recover benefits due to him under
the terms of his plan, to enforce his rights under the terms of
the plan, or to clarify his rights to future benefits under the
terms of the plan.”

Miller, 475 F.3d at 519.

In the absence of

an applicable ERISA statute of limitations, courts apply the
limitations period for the state claim “most analogous to the
ERISA claim pursued.”

Gluck, 960 F.2d at 1179 (citation

omitted).

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The statutory limitation most applicable to a claim for
benefits under § 1132(a)(1)(B) is a breach of contract claim.3
Hahnemann Univ. Hosp. v. All Shore, Inc., 514 F.3d 300, 305-06
(3d Cir. 2008) (citing Gluck, 960 F.2d at 1181). In Pennsylvania,
a breach of contract claim has a four-year statute of
limitations.

42 Pa. Cons. Stat. § 5525(a)(8); Hahnemann, 514

F.3d at 306.

To determine the accrual date of a federal claim,

the Third Circuit utilizes the federal “discovery rule” when
there is no controlling federal statute.
520.

Miller, 475 F.3d at

In the ERISA context, the discovery rule has been developed

into a “clear repudiation” rule whereby a non-fiduciary cause of
action accrues when a claim for benefits has been denied.

Id.

(citing Romero v. Allstate Corp., 404 4.3d 212, 221 (3d Cir.
2005)).

A formal denial is not required if there has already

been a repudiation of the benefits by the fiduciary which was
clear and known to the beneficiary.

Id. at 521.

In this case, Bidlingmeyer’s § 1132(a)(1)(B) claims
accrued, at the latest, when Johnson & Johnson made a final
decision denying benefits on September 23, 2005.

3

The four-year

The Plan includes a choice-of-law provision electing the
laws of New Jersey. Defs.’ Mot. for J. on Pleadings, Ex. A, at
25. However, “[c]hoice of law provisions in contracts do not
apply to statutes of limitations, unless the reference is
express.” Gluck, 960 F.2d at 1179. Because the Plan does not
contain express reference to the New Jersey statute of
limitations, and the plaintiff does not argue that New Jersey law
applies, the Court applies the Pennsylvania statute of
limitations for contracts claims.
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limitations period expired long before Bidlingmeyer filed suit on
February 2, 2011.

The Court therefore need not address the

parties’ arguments regarding whether the one-year limitations
period specified in the 2004 version of the Plan controls and
bars Bidlingmeyer’s actions.

An appropriate order shall issue separately.

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