Courtesy Disability Appeal Does Not Extend the Deadline For Filing Lawsuit in ERISA Disability Claim

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Following the U.S. Supreme Court’s Decision in Heimeshoff, Lawyers are being extra-careful in determining the deadline for filing a lawsuit in court to protect a clients’ rights. Unfortunately, the insurers do not believe they are responsible to advise their insured if a deadline is approaching. A recent example of the insurer outfoxing the insured is Gordon v. Deloitte & Touche, LLP Group Long Term Disability Plan, 2014 U.S.App. LEXIS 6688 (9th Cir. April 11, 2014).
Ms. Gordon had appealed the denial of her claim several times. She let the claim lay stagnant, and then recontacted MetLife and requested they consider another appeal. Following intervention by the Department of Insurance, MetLife agreed to reevaluate the claim and did so. Detailed exchanges commenced, and the ultimate outcome was MetLife’s upholding its denial. Gordon filed a lawsuit and the 9th Circuit upheld the application of the Plans’ statute of limitations deadline for filing a lawsuit. The court held that MetLife’s reopening of Gordon’s claim file does not in and of itself revive the statute of limitations because it would discourage reconsideration by insurers even when reconsideration might be warranted.
Commentary: One would consider estoppel or waiver in this circumstance. Firstly, it is well established law that “a defendant will be estopped from setting up a statute of limitations defense when its own prior representations or conduct have caused the plaintiff to run afoul of the statute and it is equitable to hold the defendant responsible for that result.” However, in this case, the statute of limitations had already run before MetLife agreed to review the appeal again. Secondly, caselaw suggests that waiver requires an intentional relinquishment of a known right and consideration for the alleged waiver. In this case, there is no evidence that MetLife intentionally relinquished its right for the statute of limitations defense. However, MetLife did advise Gordon that she should file an appeal of their decision and in the event her appeal is denied she would then have the right to bring a civil action under ERISA. Unfortunately for Gordon, she embarked on a costly comprehensive appeal expecting that she would have the right to contest a denial in court, but that would not be the outcome.
In this circumstance, I suggest writing to the insurer, requiring notice as to their assessment of the deadline for filing a lawsuit before taking appeal action on my client’s behalf. We at Bonny G. Rafel LLC handle all appeal issues and protect our client’s rights to the fullest extent possible. Contact us to review your case, but be mindful of the strict deadlines for filing a lawsuit!