Belrose v. The Hartford Life & Accident Insurance Company

Filing 17

MEMORANDUM OPINION re 5 MOTION to Dismiss by The Hartford Life & Accident Insurance Company. Signed by District Judge Leonie M. Brinkema on 11/15/2010. (tche)

-TRJ Belrose v. The Hartford Life & Accident Insurance Company

Doc. 17

IN THE UNITED STATES DISTRICT COURT FOR THE [p
EASTERN DISTRICT OF VIRGINIA

Alexandria Division

NOV l5 2010

1

BENJAMIN BELROSE,

Plaintiff,
v.

CLERK, U.S. DISTRICT COURT ALEXANDRIA, VIRGINIA

l:10cv764 (LMB/TRJ)

HARTFORD LIFE & ACCIDENT, INSURANCE COMPANY,
Defendant. MEMORANDUM OPINION

Before the C o u r t is d e f e n d a n t H a r t f o r d L i f e & A c c i d e n t

Insurance Company's Motion to Dismiss [Dkt. No. 5], which the

parties have fully briefed.

We dispense with oral argument

because the facts and legal contentions are adequately presented
in the materials before us and argument would not aid the decisional process. For the reasons stated below, the motion

will be g r a n t e d as to a l l claims.
I. B a c k g r o u n d

This civil action, brought under the Employee Retirement

Income Security Act of 1974, 29 U.S.C. § 1001, et sea. {"ERISA"),
arises from defendant Hartford Life and Accident Insurance

Company's ("Hartford") termination of plaintiff Benjamin
Belrose's long-term disability benefits.

Belrose worked as a systems engineer for Camber Corporation,

which provided an employee benefit plan, including a disability
plan insured by Hartford. The disability insurance policy

contains a three-year limitations period for any legal action

Dockets.Justia.com

against Hartford.1

On September 10, 2002, Belrose underwent
Belrose

knee surgery, which he claims resulted in an infection.

did not return to work, and he received short-term disability benefits beginning in September 2002 and long-term disability
benefits beginning in December 2002. Belrose alleges that in

August 2003, he experienced chest pains and angina, preventing
h i m f r o m r e t u r n i n g to work. Hartford determined that Belrose was

capable of performing sedentary work, and on October 5, 20 05

terminated his disability benefits.

Belrose administratively

appealed, and Hartford issued a final denial on June 14, 2006.

Belrose filed this one-count civil action on July 9, 2010,

alleging that Hartford's termination of his long-term disability
benefits violated ERISA. Compl. at H 26, The complaint's

preliminary statement also alleges *illegal discharge" under
Section 510 of ERISA, Compl. at 1 1, and negligent

misrepresentation, Compl. at f 2; however, the complaint does not
discuss these claims further or state them as counts. Hartford has filed a motion to dismiss under Fed. R. Civ. P.

12(b)(6), arguing that the insurance contract's three-year
limitations period bars the ERISA claim regarding the denial of
benefits. Hartford also argues that the Section 510 claim is

1 Although Belrose did not quote the policy's limitations period in his complaint, Hartford attached the policy to its motion to
dismiss. It is proper to consider this attachment because it was "integral to and explicitly relied on in the complaint."

Phillips v. LCI Int'l. Inc.. 190 F.3d 609, 618 (4th Cir. 1999).

invalid because Hartford was never Belrose's employer, and the
negligent m i s r e p r e s e n t a t i o n c l a i m fails b e c a u s e B e l r o s e does not
a l l e g e a n y facts t o s u p p o r t the claim.
II* A. ERISA claim Discussion

Belrose alleges that Hartford's termination of his benefits

caused him "to lose long-term disability benefits, wagealternates, and lost retirement benefits, and other fringe benefits and consequential damages." Compl. at H 26. Hartford

argues that the policy's three-year limitations period bars this
claim, Mem. in Supp. of Def.'s Mot. to Dismiss, at 10.

A court should a p p l y an insurance policy's limitations

period if it is reasonable and not contrary to public policy.
See, e.g.. Mirabile v. Life Ins. Co. of N.A., 293 Fed. Appx. 213
(4th Cir. 2008); N o r t h l a k e Reg'l Med. Ctr. v. W a f f l e House Svstem

Employee Benefit Plan. 160 F.3d 1301 (11th Cir. 1998).

If a

court does not apply an insurance policy's limitations period, it
w i l l a p p l y t h e s t a t e ' s s t a t u t e of l i m i t a t i o n s f o r b r e a c h o f

written contract, which is five years in Virginia, Va. Code §
8.10-246(2).

Belrose argue3 that the five-year Virginia statute of

limitations should apply because Hartford's contractual provision
is unreasonable. The insurance policy at issue states that an

insured must file a civil action no later than "three years after

the time written Proof of Loss is required to be furnished according to the terms of the Policy." Ex. 2 at 25. Decl. of Mariann Letson,

Belrose argues that the policy's limitations period

began to run when he underwent knee surgery on September 10,
2002, and that he was obliged under the policy to file this civil
action no later than September 10, 2005. Because that was nine

months before Hartford denied Belrose's appeal, Belrose argues,
the contractual l i m i t a t i o n s p e r i o d is u n r e a s o n a b l e a n d v i o l a t e s

public policy.

Memo, in Supp. of Plaintiff's Opp. to Def.'s Mot.
a t 3.

Pursuant to Rule 12(b)(6)

Belrose ignores the Fourth Circuit's holding that the
limitations period for an ERISA claim begins to run when the

plaintiff exhausts all administrative appeals.

See White v. sun

Life Assur, Co.. 488 F.3d 240, 246 (4th Cir. 2007) ("This means

that the statute of limitations begins to run at the moment when

the plaintiff may seek judicial review, because ERISA plaintiffs
must generally exhaust administrative remedies before seeking judicial review."). Even if an insurance policy states that the

limitations period begins to run when proof of loss is submitted,
the period will not begin to run until the insurer issues a final

denial.

See Mirabile, 293 Fed. Appx. at 215*2

Accordingly, the

As did Hartford's policy, the insurance policy in Mirabile stated that the plaintiff must bring an action within three years of "the time within which proof of loss is required by the policy," Mirabile v. Life Ins. Co, of H.A.. 2:06cv573f 2007 U.S.
Dist. LEXIS 42999, at *5 (E.D. Va. June 12, 2007). The Fourth

Circuit, citing White, affirmed the district court's holding that

three-year limitations period is not unreasonable or contrary to
public policy when viewed as starting-to run once all
administrative a p p e a l s are exhausted.

Because Belrose filed his complaint more than a year after
the three-year limitations period expired, his ERISA claim must
be dismissed.

B.

Section 510 discharge claim
The c o m p l a i n t a l l e g e s t h a t B e l r o s e s e e k s " t o r e d r e s s h i s

illegal discharge, which was done pretextually with the purpose
of interfering with continuing rights to which he was entitled

under an employee benefit plan."

Compl. at 1 1.

The complaint

does not provide any details about the alleged discharge.
Section 510 of ERISA states:

It shall be unlawful for any person to discharge, fine, suspend, expel, discipline, or discriminate against a

participant or beneficiary for exercising any right to
which he is entitled under the provisions of an
employee b e n e f i t plan, this title, s e c t i o n 3001
USCS § 1201], or the Welfare and Pension Plans

{29

Disclosure Act, or for the purpose of interfering with the attainment of any right to which such participant
may become entitled under the plan, this title, or the
W e l f a r e a n d P e n s i o n P l a n s D i s c l o s u r e Act. I t s h a l l be

unlawful for any person to discharge, fine, suspend,
expel, or discriminate against any person because he
has g i v e n i n f o r m a t i o n o r h a s t e s t i f i e d o r is a b o u t to

testify in any inquiry or proceeding relating to this
Act o r the W e l f a r e a n d P e n s i o n P l a n s D i s c l o s u r e Act.

the limitations p e r i o d b e g a n to run once the denial of the

plaintiff's claim became final, and the three-year contractual limitations period was reasonable. 293 Fed. Appx, at 215.

29 U . S . C . § 1 1 4 0 .

Hartford argues that this claim should be

d i s m i s s e d b e c a u s e S e c t i o n 510 of E R I S A p r o v i d e s a c a u s e of a c t i o n against employers who r e t a l i a t e against e m p l o y e e s w h o assert t h e i r

ERISA rights, and Hartford never employed Belrose.
of D e f . ' s Mot. to D i s m i s s , a t 11.

Mem. in Supp.

in response, Belrose admits

that he was not an employee of Hartford, which is the o n l y defendant named in this lawsuit. Plaintiff's Resp. to Def.'s Mot.

to Dismiss and Mot. to A p p l y Statutory Limitations of Actions at H 3. This admission is fatal to any claim of illegal discharge
S e e C o n k w r i q h t v. W e s t i n g h o u s e E l e c t r i c C o r p . .

against Hartford.

933 F.2d 231, 237 (4th Cir. 1991)

("[T]he primary focus of § 510

is to prevent[] unscrupulous employers from discharging or
h a r a s s i n g t h e i r e m p l o y e e s in o r d e r to k e e p t h e m f r o m o b t a i n i n g
v e s t e d p e n s i o n rights.") (internal q u o t a t i o n m a r k s a n d c i t a t i o n s

omitted).
dismissed.

Therefore, Belrose's illegal discharge claim will be

C.

Negligent m i s r e p r e s e n t a t i o n
B e l r o s e " s e e k s c o m p e n s a t o r y d a m a g e s f o r h i s c l a i m of

negligent misrepresentation brought as a supplemental state claim
under Virginia state law." Compl. at H 2.

Hartford correctly argues that Belrose "does not allege what

facts were misrepresented, who stated those facts, when they were
s t a t e d , o r h o w h e w a s h a r m e d b y the m i s r e p r e s e n t a t i o n . " Mem. i n

Supp* of Def.'s Mot. to Dismiss, at 13.

In response, Belrose

admits that he fails to state a valid negligent misrepresentation
claim. Plaintiff's Resp. to Def.'s Mot. t o D i s m i s s a n d Mot. to

Apply Statutory Limitations of Actions at 1 4.

Therefore,

Belrose's claim of n e g l i g e n t m i s r e p r e s e n t a t i o n w i l l be dismissed.
III. Conelus ion

For the reasons stated above. Defendant's Motion to Dismiss

[Dkt. No. 5] will be GRANTED as to all claims by an Order to be
i s s u e d w i t h this Opinion.
E n t e r e d this J S ' day of November, 2010.

Alexandria, Virginia

U^MBnSL^
United States District Judge