The 11th Circuit recently decided an important case in the grey area of when does the deadline for filing litigation expire in a disability claim. In Witt v. MetLife,2014 U.S. App. LEXIS 22321 (11th Circuit 11/25/14), Mr. Witt was denied benefits in 1997 but did not contact MetLife to contest the denial until 12 years later. MetLife performed a courtesy review consisting of an administrative review of documentation and evidence. MetLife ultimately upheld its earlier denial of 12 years before and in its final letter to Witt, noted that he had exhausted his administrative remedies under the plan and had the right to bring civil action under Section 502a or ERISA.
MetLife’s letter did not assert a time bar or statute of limitations defense, and MetLife never noted in its letters or interaction with Witt’s attorney that it would ever exert a statute of limitations as a defense to litigation. When Witt filed a lawsuit several years later, MetLife successfully dismissed the claim and the 11th Circuit upheld the District Court’s decision. The court reasoned that it was not necessary for MetLife to expressly state in writing that it was preserving its right to exert the statute of limitations as a defense.
MetLife was entitled to perform a “courtesy review” of the claim without thereafter binding it to a re-initiation of a statute of limitations. The court was concerned that if they require an insurer to expressly state that its reconsideration of a stale claim preserved its right to a statutory timeliness defense, “that outcome would prevent plan participants with meritorious though untimely claims from receiving a review and possibly benefits. At the same time, it would aid only those individuals who fail to file claim in a timely fashion and then have their subsequent claims denied on the merits”.
The lesson from this decision is that while a claimant can request that an insurance company review a claim which is untimely, the insurer is under no legal obligation to review that claim. Further, if the insurance company agrees to review the claim, it is “without prejudice” to its later asserting the timeliness defense. Apparently some insurance companies will voluntarily review a claim and it seems worthwhile to pursue an appeal, although the insured must be aware that it has no right to civil litigation if the voluntary review by the insurance company fails to result in a reversal of a denial.
As counsel on disability matters, we at >Bonny G. Rafel LLC are very mindful of statute of limitations and proactively calendar such deadlines. Reopening a claim that has been closed after much time has passed, carries with it the risk that the review will not result in a reinstatement and has no relevancy to the deadlines for filing a civil action. Hence, if the statute of limitations is approaching on a matter, it doesn’t appear to be worthwhile to seek a “voluntary appeal” because the insurer is under no obligation to waive its statute of limitations defense.
Alternatively, we have been successful in approaching insurance companies and having them expressly, in writing, waive a statute of limitations defense or toll the running of statute of limitations during the review. That only occurs if we handle the appeal and the statute of limitations has not already expired.