Opinion
Cause No. IP 98-1241-C H/G.
December 28, 2000.
ENTRY ON DEFENDANTS' SUMMARY JUDGMENT MOTIONS
Plaintiff Sarah Robyns alleges that her former employer Community Centers of Indianapolis (CCI) and its insurer, Reliance Standard Insurance Company, have wrongfully denied her long-term disability benefits in violation of the Employee Retirement Income Security Act (ERISA). Robyns also claims that defendants failed to inform her of her administrative review rights and that they breached fiduciary duties toward her. In 1994, Robyns asserted similar claims against these defendants in an action before this court captioned Sarah Robyns v. Community Centers of Indianapolis, Inc. Reliance Standard Life Insurance Company, IP 94-0440-C-T/G ("Robyns I").
In 1991, Robyns was placed on a long-term disability leave related to conditions including fibromyalgia and depression. Her benefit payments were suspended in late 1993 after Reliance learned from Robyns herself that she might not be totally disabled. Reliance asked Robyns to submit to an independent medical examination (IME) so that it could obtain additional information about her condition before making a final determination about her benefit status.
Before she appeared for the IME, Robyns filed Robyns I asserting claims for benefits, for breach of fiduciary duty (which was stated in several counts but treated as one count by Judge Tinder), and for fines under ERISA for failure to disclose information. See Robyns I, Amended Complaint. Judge Tinder granted summary judgment for defendants on Robyns' denial of benefits claim because Robyns had failed to exhaust her administrative remedies. She had brought suit before she complied with Reliance's request for the IME. Robyns I, Entry on Defendants' Motions for Summary Judgment, dated October 2, 1996 ("Robyns I Summary Judgment Entry"). Judge Tinder granted summary judgment for defendants on Robyns' breach of fiduciary duty claim because Robyns' allegations did not support that claim or its related remedy theory as a matter of law. See id. Robyns did not oppose defendants' motion for summary judgment on her claim for fines under ERISA. Judge Tinder dismissed Robyns' claims "with prejudice" and later denied Robyns' motion to alter the judgment on the denial of benefits claim to make it a dismissal without prejudice. Robyns I, Entry on Plaintiff's Motion to Alter or Amend Judgment, dated December 3, 1996.
Robyns I was assigned to the undersigned district judge when I took office in October 1994. On May 11, 1995, before I had taken any judicial action in that case, it came to my attention that CCI was represented by Baker Daniels. At that time, other Baker Daniels attorneys who were not involved in this case were representing me and other defendants in several lawsuits arising out of the transition of a new Indiana Attorney General in 1992-93, whom I assisted as transition director. On my own motion, I therefore disqualified myself from Robyns I as of May 11, 1995. That case was reassigned to Judge Tinder. I have not disqualified myself from this case because the other lawsuits were resolved several years ago, thus removing the grounds for disqualification.
The Seventh Circuit affirmed Judge Tinder's grant of summary judgment in Robyns v. Reliance Standard Life Ins. Co., et al., 130 F.3d 1231 (7th Cir. 1997). Both Judge Tinder and the Seventh Circuit agreed that Robyns had brought suit prematurely before a final decision was made about her long-term disability status.
Several months after the Seventh Circuit's decision, Robyns' counsel sent Reliance a letter to continue, as he put it, Robyns' appeal of her benefits claim. Reliance responded that the request untimely and declined to undertake any further review. This second lawsuit followed. Defendants have moved for summary judgment in separate motions. For the reasons discussed below, the court grants CCI's motion and denies Reliance's motion.
Summary Judgment Standard
The purpose of summary judgment is to "pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). Summary judgment is not a substitute for a fact-finder's determination about credibility or about whether a reasonable inference should be drawn from circumstantial evidence of a person's intentions. Under Rule 56(c) of the Federal Rules of Civil Procedure, the court should grant summary judgment if and only if there is no genuine issue as to any material fact, and the moving party is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(c); Pafford v. Herman, 148 F.3d 658, 665 (7th Cir. 1998).
On a summary judgment motion, the moving party must first come forward and identify those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, that the party believes demonstrate the absence of a genuine issue of material fact. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Where the moving party has met the threshold burden of supporting the motion, the opposing party must "set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e).
In determining whether a genuine issue of material fact exists, the court must construe all facts in the light most favorable to and draw all reasonable inferences in favor of the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); Haefling v. United Parcel Service, Inc., 169 F.3d 494, 497 (7th Cir. 1999). However, the existence of "some alleged factual dispute between the parties," or "some metaphysical doubt" does not create a genuine issue of fact. Piscione v. Ernst Young, L.L.P., 171 F.3d 527, 532 (7th Cir. 1999). The proper inquiry is whether a rational trier of fact could reasonably find for the party opposing the motion with respect to the particular issue. See, e.g., Vitug v. Multistate Tax Comm'n, 88 F.3d 506, 512 (7th Cir. 1996).
Undisputed Facts
For purposes of defendants' summary judgment motions, the following facts are either undisputed or reflect the record in the light reasonably most favorable to Robyns, the non-moving party.
The Seventh Circuit already has summarized the facts relevant to Robyns' first lawsuit as follows:
Robyns began working as a clinical supervisor for CCI in April 1991. This position is primarily a sedentary one requiring Robyns to sit for seven of her eight working hours each day. Robyns oversaw the provision of treatment services to adolescents involved in substance abuse and counseled their families. She enrolled in an employee welfare benefit plan offered by CCI, administered and funded by Reliance, and governed by ERISA, 29 U.S.C. § 1001 et seq. On September 26, 1991, CCI placed Robyns on short-term disability leave due to several ailments, including fatigue syndrome and fibromialgia. During this leave, she received benefits from CCI's employee welfare benefit plan.
In March 1992, Robyns applied for long-term disability benefits. Reliance approved this claim on July 20, 1992 retroactive to March 25, 1992. Its decision was based in part on a June 30, 1992 certification by Robyns' physician, Dr. Steven H. Neucks, who diagnosed Robyns as having fibromialgia with a "very low prognosis" for returning to work. Reliance also had a diagnosis on June 5, 1992 from Dr. Wayne Pribble, a clinical psychologist, which concluded that Robyns was suffering from major depression that would "exacerbate and complicate" her physical condition.
On August 6, 1992, as part of a standard followup procedure, Robyns informed Reliance that she hoped to return to work on a part time basis in November 1992. She also mentioned that she had been making and selling jewelry. This information prompted Reliance to request further medical records from Robyns. It received a diagnosis of fibromialgia from Dr. Linda Huck.
In early 1993, Reliance re-examined Robyns' disability status in accordance with its long term disability policy. Reliance's Susan Dioguardi, R.N., performed the medical review of Robyns' case file. Claims examiner Janice Harrison examined other parts of the file to ensure Robyns was unable to work. Harrison requested that Robyns submit her 1992 tax return and that Robyns' treating psychologist (Dr. Pribble) evaluate her prognosis for returning to work as a clinical supervisor.
Dr. Pribble responded by stating he did not "feel competent to comment on the medical severity of the conditions." He suggested that Reliance contact Robyns' treating physician to confirm that she was totally disabled. Reliance then wrote Robyns on February 23, 1993 and March 24, 1993, requesting the name of her treating physician, Dr. Linda Huck.
Reliance wrote Dr. Huck on April 30, 1993, asking her help in "clarifying the claimant's current medical status." It did not receive a response. On June 15, 1993, Reliance wrote Robyns, notifying her that her benefits would be suspended if it did not receive Dr. Huck's reply within thirty days. On July 1, 1993, Dr. Huck responded. She stated that there were intervals of time when Robyns' pain "is such that she would be able to carry on duties as described for a social worker" but that frequent exacerbations prevented her from sustaining a steady job. Thus, Dr. Huck concluded Robyns was disabled.
After an internal audit of her claim left the insurer with unanswered questions, Reliance wrote Robyns on August 6, 1993 to request: 1) a copy of 1992 tax returns (for the second time); 2) a completed disability statement form from an attending physician; 3) the names and addresses of all physicians who treated her in 1993 and the conditions for which she was treated; and 4) a listing of all jewelry shows she attended that year. It did not receive a response. Reliance repeated this request on September 7, 1993. On October 9, 1993, Reliance again wrote Robyns with this same request. Finally, Reliance spoke with Robyns on October 12, 1993. At this time, she informed Reliance that she had retained an attorney and that the attorney had previously sent the information and had repeatedly called Reliance. Reliance has no record of these contacts.
Unable to contact Robyns' lawyer, Reliance wrote her on October 19, 1993 to ask for the same information initially requested in August 1993. It then received some of the requested information, including a list of jewelry shows Robyns attended in Illinois, Ohio, and Kentucky. These materials did not include a completed disability form from an attending physician. Reliance contacted Dr. Huck's office. Her staff explained that there would be a delay because they only received the request to complete the form on October 19 and the doctor was on vacation.
On October 25, 1993, Reliance wrote Robyns' attorney requesting additional information as Robyns had not yet satisfied Reliance's earlier requests. Reliance did not receive a response. It resent this letter on November 11, 1993. At this time, Dioguardi reviewed these latest events and the entire case file to date. She recommended that Reliance deny the claim. Robyns, however, received her monthly disability check on November 28.
On December 1, 1993, Reliance received Robyns' attorney's reply to its October 25 letter. This reply did not explain how Robyns could travel through the Midwest to sell her jewelry and yet not perform the sedentary duties associated with her former position as a social worker. To resolve this issue, Reliance elected to conduct an independent medical examination of Robyns. It scheduled this examination through a third party vendor, General Rehabilitation Services, Inc. During this same time period, opposition to Robyns' claims was building within Reliance. By early December, a collection of handwritten notes establish that at least two employees at Reliance wished to deny her claims. There is no evidence in the record to suggest that either of these employees has final decision-making authority. In December, Robyns did not receive a disability check from Reliance. Robyns believes that these handwritten notes confirm that Reliance had effectively denied her claim and that any subsequent action was simply pretextual.
In early January 1994, Reliance notified Robyns by mail of her scheduled medical examination. Robyns canceled the appointment because her attorney was unable to attend at the scheduled time and she wished her attorney to be present at the appointment. Reliance rescheduled the appointment and notified Robyns and her attorney in writing on
January 24, 1994 that Reliance would interpret a failure to attend this appointment as an indication that Robyns was not interested in cooperating with Reliance.
The January 24 letter also informed Robyns that "[y]our benefits ceased because your medical condition was not consistent with the physical activities involved with the selling of your jewelry. It was felt you were not totally disabled from performing sedentary duties." The letter continued, stating that "[o]ur decision to have you examined is not an attempt to stall benefit payment, but to determine if you are capable of performing sedentary work. . . . Upon receipt of the results [of the individual medical examination] and our review, we will notify your attorney of our decision." The letter did not inform Robyns of Reliance's internal appeals procedure.
In response, Robyns filed suit against Reliance and CCI on January 28, 1994. On February 4, 1994, she did submit to Reliance's independent medical examination. The examining physician, Dr. Kern, then requested a functional capacity evaluation. This testing was performed on February 14, 1994. Dr. Kern reported the results of this testing to Reliance on February 21, 1994. He stressed that the testing evinced "a high degree of symptom magnification and inappropriate illness behavior. In addition, the patient did not display a bell-shaped curve on the handheld grip strength testing. This indicated a submaximal effort." Dr. Kern admitted that he had "several questions regarding the patient's permanent and total disability status." Yet, even though he had "difficulty understanding why she cannot return to her previous occupation," he recommended a vocational rehabilitation referral to a certified rehabilitation counselor to allow for a final determination.
Meanwhile, the [first] litigation ensued. In Autumn 1996, the parties filed motions for summary judgment. On October 2, 1996, the district court granted summary judgment in favor of the defendants. In denying Robyns' claims under 29 U.S.C. § 1132, the court exercised its discretionary ability to require a plaintiff to exhaust her administrative remedies before filing a claim for wrongful denial of benefits in federal court.
Robyns, 130 F.3d at 1233-35 (footnote omitted). Thus, on November 25, 1997, the Seventh Circuit affirmed Judge Tinder's grant of summary judgment.
About seven months later, on June 16, 1998, an attorney representing Robyns sent Reliance a letter constituting her "formal, continued, appeal of Reliance Standard Life Insurance Company's interim decision to deny" Robyns' benefits. Reliance Ex. F. The letter stated: "Although federal court litigation has interrupted the process, Ms. Robyns is nonetheless entitled to insist, and does insist, that Reliance now complete the independent medical examination process in order to make a final determination whether it will accept or deny her claim." See id.
Through its inside counsel, Reliance responded to Robyns' letter on June 24, 1998. Reliance's letter first summarized the course of the litigation in Robyns I. See Reliance Ex. G. Reliance concluded the letter by stating that "the time for Ms. Robyns to pursue her administrative remedies has long passed and Reliance Standard respectfully declines your request for an appeal of our decision to deny the above claim." Id. Reliance's letter did not inform Robyns of any internal appeals procedure. See id.
There is no record evidence that Reliance ever referred Robyns to a rehabilitation counselor, as Dr. Kerns recommended in his February 21, 1994 letter to Reliance, or that Reliance ever issued a final determination on Robyns' claim.
With respect to timing, Reliance's summary plan document provides as follows:
LEGAL ACTIONS: No legal action may be brought against us to recover on the Policy within sixty (60) days after written proof of loss has been given as required by the Policy. No action may be brought after three (3) years . . . from the time written proof of loss is received.
Group Long Term Disability Insurance Program at 4.1 (Claims Provisions), Reliance Ex. B. Robyns commenced this action on September 9, 1998. Additional facts are stated below, using the standard for deciding a motion for summary judgment.
Discussion
Robyns asserts three ERISA violations. In Count I and at the core of this dispute, Robyns alleges that defendants wrongfully denied her long-term disability benefits. See 29 U.S.C. § 1132(a)(1)(B) (authorizing actions for denial of benefits). In Count II, Robyns alleges that defendants failed to provide her proper notice of the denial of benefits in violation of 29 U.S.C. § 1133. In Count III, Robyns alleges that, by engaging in the conduct complained of in Counts I and II, defendants breached their fiduciary duties to her in violation of 29 U.S.C. § 1109.
In support of summary judgment, CCI argues, among other grounds, that it is not a proper defendant and that Robyns fails to state a claim for breach of fiduciary duty against it. Reliance contends that Robyns' claims are barred by res judicata and by the statute of limitations or the doctrine of laches. The court addresses the defendants' separate motions in turn.
I. Employer CCI's Motion
CCI argues that it is not a proper defendant in this lawsuit because a plan participant can recover benefits only from the plan and because CCI is not a plan fiduciary. The court agrees.
It is well established in the Seventh Circuit that a plaintiff seeking benefits under an ERISA plan must sue the plan. See Jass v. Prudential Health Care Plan, Inc., 88 F.3d 1482, 1490 (7th Cir. 1996) ("ERISA permits suits to recover benefits only against the Plan as an entity. . . ."); Riordan v. Commonwealth Edison Co., 128 F.3d 549, 551 (7th Cir. 1997) ("It is true that ERISA permits suits to recover benefits only against the plan as an entity. . . . "); see also Witowski v. Tetra Tech, Inc., 38 F. Supp.2d 640, 644 (N.D. Ill. 1998) ("[T]he Seventh Circuit has made its position clear: only the plan as an entity is the appropriate party to sue."); Anderson v. Illinois Bell Telephone Co., 961 F. Supp. 1208, 1212-13 (N.D. Ill. 1997) (dismissing suit for benefits against plan fiduciary and observing that it is "well established that the proper defendant to a § 1132(a)(1)(B) suit is the plan.").
In addition, an employer is a proper party to a breach of fiduciary duty claim under ERISA only if it acts as a plan fiduciary. See Klosterman v. Western General Management, Inc., 32 F.3d 1119, 1122 (7th Cir. 1994) (ERISA breach of fiduciary claim is valid only against a "fiduciary"). A plan fiduciary is anyone who "exercises any discretionary authority or discretionary control respecting management of such plan . . . or has any discretionary authority or discretionary responsibility in the administration of such plan." Id., citing 29 U.S.C. § 1002(21)(A). The Seventh Circuit has routinely rejected breach of fiduciary duty claims against employers based on decisions about issues including plan funding and benefit amounts. See, e.g., Johnson v. Georgia-Pacific Corp., 19 F.3d 1184, 1188 (7th Cir. 1994) (collecting cases).
As Robyns correctly points out, an employer can be liable under ERISA for a breach of fiduciary under certain circumstances. See Varity Corp. v. Howe, 516 U.S. 489 (1996). In Varity, however, the employer itself served as the administrator of the ERISA plan at issue. Id. at 492. The employer's liability was based on its conduct in its role as administrator. See id. at 498-505.
Here, CCI sponsored the plan that provided Robyns' long-term disability benefits, but CCI is not the plan itself and it does not administer the plan. See First Amended Cplt. ¶¶ 4-6. In response to CCI's summary judgment motion, Robyns has come forward with no evidence that CCI is an ERISA fiduciary. On this record, CCI is not a proper defendant to Robyns' claims for benefits and breach of fiduciary duty as a matter of law. Accordingly, CCI is entitled to summary judgment on Counts I and III of Robyns' complaint.
Even if CCI were a proper defendant to Robyns' breach of fiduciary claim, Robyns' allegations fail to state a claim for breach of fiduciary duty against it. See Schoonmaker v. Employee Savings Plan of Amoco Corp., 987 F.2d 410, 414 (7th Cir. 1993) ("to breach one's fiduciary duty, an ERISA [fiduciary] must do more (and worse) than wrongfully construing the plan provisions."). Judge Tinder reached the same conclusion in Robyns I regarding the suspension of Robyns' benefits. See Robyns I Summary Judgment Entry at 8-9.
Robyns also has responded to CCI's position that it is not a proper defendant by noting that she has asserted a separate claim against it for violation of 29 U.S.C. § 1133, which governs the notice of claim denials. See Robyns Br. at 8 n. 3. However, even if technical violations of ERISA's notice provisions would support an independent cause of action, but see Andersen v. Chrysler Corp., 99 F.3d 846, 859 (7th Cir. 1996) (citation omitted) ("We have repeatedly held that technical violations of ERISA's notification requirements, without a showing of bad faith, active concealment or detrimental reliance, do not state a cause of action."), Robyns has not come forward with any evidence that CCI itself violated ERISA's notice provisions or that it could be responsible for any such violation by Reliance or by the plan. Accordingly, CCI also is entitled to summary judgment on Count II of Robyns' complaint.
II. Defendant Reliance's Motion for Summary Judgment
A. Res Judicata Based on Robyns I
Reliance argues that Robyns' present action is barred by res judicata. Because Robyns' first lawsuit was dismissed "with prejudice," Robyns can maintain this case against Reliance only to the extent that it is not barred by Robyns I.
Federal law of res judicata determines whether Robyns I bars this action because the prior litigation was adjudicated in federal court. See In re Energy Cooperative, Inc., 814 F.2d 1226, 1230 (7th Cir. 1987). For res judicata to apply, three requirements must be met: (1) an identity of the parties; (2) an identity of the causes of actions; and (3) a final judgment on the merits. Id., citing Federated Dep't Stores, Inc. v. Moitie, 452 U.S. 394, 398 (1981); Car Carriers, Inc. v. Ford Motor Co., 789 F.2d 589, 595 n. 9 (7th Cir. 1986). The only disputed requirement in this case is whether there is a sufficient identity of the causes of action.
A "cause of action" for res judicata purposes consists of "a core of operative facts which give rise to a remedy." In re Energy Cooperative, Inc., 814 F.2d at 1230. In other words, to trigger the res judicata bar, the second action must arise from the same "transaction" or "the same, or nearly the same, factual allegations." Andersen v. Chrysler Corp., 99 F.3d 846, 852 (7th Cir. 1996) (rejecting application of res judicata in ERISA pension case where second action was based on, among other things, different acts at different times). The court must examine the specific facts at issue to determine whether res judicata applies. See id. at 852-53.
This present action does not arise out of the same "transaction" or "core of operative facts" that gave rise to Robyns' first lawsuit. The distinguishing and additional fact is that Robyns' present action is based on Reliance's denial of benefits to Robyns in June 1998. Both Judge Tinder and the Seventh Circuit agreed that Robyns had not been denied benefits at the time she filed suit in 1994. That is precisely why Robyns lost Robyns I. In rejecting Robyns' allegation that Reliance failed to comply with the ERISA regulations that govern denial of benefits notices, Judge Tinder observed: "It would be somewhat odd to require RSL to supply notice of the procedure for reviewing a denial of benefits in this case, since suit was filed before RSL had even made a final decision in this case." Robyns I Summary Judgment Entry at 8 n. 1. The Seventh Circuit agreed. See Robyns, 130 F.3d at 1237, quoting Robyns I Summary Judgment Entry at 8 n. 1 and Tolle v. Carroll Touch, Inc., 23 F.3d 174, 180 (7th Cir. 1994) ("Plans are not required to comply with the conditions under § 503 and related regulations prior to denying a participant or a beneficiary's claim for benefits."). Robyns' first suit was dismissed precisely because it was premature, "a classic case of jumping the gun." Robyns, 130 F.3d at 1232.
In addition, even though Judge Tinder dismissed Robyns' claims "with prejudice," his ruling on Robyns' motion to alter the judgment indicated that the dismissal would not bar Robyns from pursuing all claims against the defendants in the future. Judge Tinder noted that the entry of summary judgment "does not necessarily mean, however, that Robyns will be unable to go back to her administrative remedies. `Judgment on this theory will not prevent plaintiffs from exhausting their plan remedy, assuming they are not barred by lapse of time.'" Robyns I, Entry on Plaintiff's Motion to Alter or Amend Judgment, dated December 3, 1996, quoting Smith v. Blue Cross Blue Shield of Wisconsin, 959 F.2d 655, 658 (7th Cir. 1992). It is evident that Judge Tinder did not intend for his grant of summary judgment to extinguish any future rights that Robyns might have.
In Robyns I, the defendants argued they were entitled to summary judgment because of plaintiff's "failure to exhaust administrative remedies." Nevertheless, the record demonstrates that "administrative remedies" in the usual sense were not at issue. See 29 C.F.R. § 2560.503-1(g)(1) ("Every plan shall establish and maintain a procedure by which a claimant . . . has a reasonable opportunity to appeal a denied claim . . . and under which a full and fair review of the claim and its denial may be obtained."). Instead, defendants argued that plaintiff's claim was premature because she filed suit before complying with Reliance's request for an IME.
The parties, Judge Tinder, and the Seventh Circuit apparently used "failure to exhaust administrative remedies" as a shorthand for Robyns' failure to submit to the IME as a precondition to the final determination on her claim. See Robyns I Summary Judgment Entry at 6 ("The Defendants argue that this claim [for benefits] is barred because the Plaintiff did not exhaust her administrative remedies. RSL came to believe that there was insufficient proof of Robyns' disability, and requested, as allowed under the Plan, that Robyns undergo a medical examination. Before this occurred, however, Robyns filed suit, claiming that the suspension was a wrongful denial of benefits. It seems clear, therefore, that she did not take advantage of the procedure (namely the examination) provided by the Plan and RSL which may have allowed her to continue receiving benefits.") (emphasis added); see also Robyns, 130 F.3d at 1237 ("This evidence suggests that Reliance had not made a final determination about Robyns' claims before she filed suit and that this is a classic case of jumping the gun.").
By the time of Judge Tinder's summary judgment entry — indeed, within a few weeks after Robyns prematurely filed her first lawsuit — Robyns had satisfied the "administrative" prerequisite that was the subject of that defendants' summary judgment motion by appearing for the IME discussed in Reliance's January 24, 1994 letter. The Seventh Circuit acknowledged that Robyns had appeared for the examination. Robyns, 130 F.3d at 1234.
Because the key fact underlying Robyns' present action — the belated denial of her benefits by Reliance in June 1998 — had not occurred at the time of the judgment in Robyns I, it could not have been part of the "transaction" or "core of operative facts" giving rise to that suit. Although Robyns I bars any subsequent action based on the suspension of her benefits — the transaction at issue in that case — this present action is not barred by res judicata.
B. Statute of Limitations
Robyns filed her first lawsuit too early. Reliance contends now that Robyns filed her present claim for benefits too late. The key provision in the plan provides in relevant part: "No legal action may be brought against us to recover on the Policy within sixty (60) days after written proof of loss has been given as required by the Policy. No action may be brought after three (3) years . . . from the time written proof of loss is received." Robyns and Reliance agree that the plan's three-year limitations period applies. They disagree on the decisive issue, which is when the limitations period began to run.
Reliance argues rather generally that the plan's three-year limitations period bars plaintiff's "action." See Reliance Br. at 8-12. However, not all of plaintiff's claims are governed by the same statute of limitations analysis. ERISA provides a three- or six-year statute of limitation for breach of fiduciary duty claims, depending on the situation in which they arise. See 29 U.S.C. § 1113 (establishing six-year period for claims based on omission, fraud or concealment and three-year period for claims where plaintiff has actual knowledge of the breach or statutory violation). In addition, Reliance has not addressed what statute of limitation applies to Robyns' § 1133 claim. Because the court is not inclined to make arguments for parties, the court considers only whether Robyns' claim for benefits (Count I) against Reliance is time-barred.
ERISA does not contain a statute of limitations for benefits claims. Instead, benefit claims are governed by analogous state law statutes of limitation or, if they are reasonable, by the limitations period set forth in plan documents. See Doe v. Blue Cross Blue Shield United of Wisconsin, 112 F.3d 869 (7th Cir. 1997) (ERISA claim governed by plan's three-year limitations period where court assumed that most analogous Wisconsin statute provided six-year limitation).
Reliance contends that the three-year limitations period began to run on Robyns' claim with its January 24, 1994, letter which, according to Reliance, required Robyns to submit "proof of loss" by submitting to the IME. Reliance relies on the Seventh Circuit's decision in Doe v. Blue Cross Blue Shield United of Wisconsin, where the court held that the plan's three-year limitations period (and not the most analogous state statute of limitation) governed the action to recover benefits. 112 F.3d 869. In Doe, the plan's limitation period was similar to the language in the plan at issue in this case. In particular, the plan provided that an action had to be brought within three years "from the time written proof of loss was required to be filed" or "within thirty-nine (39) months of the first date of services on which the action is based." 112 F.3d at 872-73.
The Seventh Circuit did not address in Doe the specific issue of when the limitations period began to run. In Doe, the plaintiff sought reimbursement for expenses incurred during a several month period before he received notice that the defendant had denied his claim for benefits. See 112 F.3d at 872.
For present purposes, the principal teaching of Doe is simply that the courts will enforce reasonable limitations provisions in ERISA plans. The problem in this case is applying the language of the provision in the plan, which is triggered by "the time written proof of loss is received." This limit appears to have been written for the type of claim in which the plan participant seeks payment for health care services already received (as in Doe itself) or seeks payment of long-term disability benefits. It is less clear how the limit should be applied to this case, in which benefits that were being paid have been terminated.
Reliance argues that "Robyns had three years from the date she was required to submit `written proof of loss' to Reliance Standard to file suit." Reliance Br. at 12 (emphasis added). However, the plan limit is not triggered by the date that written proof of loss was required to be submitted. By its plain terms, the limitations period is triggered by Reliance's actual receipt of written proof of loss. Reliance has not explained when the limitations period began based on that plain language. Robyns contends that the three-year limitations period began to run on her benefit claim when it was denied in June 1998. See Daill v. Sheet Metal Workers' Local 73 Pension Fund, 100 F.3d 62, 65, 67 (7th Cir. 1996) ("causes of action under this section [502] accrue when a claim for benefits is denied"; "a clear and unequivocal repudiation of a claim to benefits starts the limitations period"); Jenkins v. Local 705, Int'l Brotherhood of Teamsters Pension Plan, 713 F.2d 247, 254 (7th Cir. 1983) (same); Tolle, 977 F.2d at 1142 (same).
Under Robyns' theory, her present claim for benefits is timely because she filed this case less than three months after Reliance's June 24, 1998, letter which, according to Robyns, denied her claim for benefits "for the first and only time." See Robyns Br. at 7; see also Robyns, 130 F.3d at 1237 ("Reliance's January 24 [1994] letter is not a denial of benefits. It is an attempt to explain why Reliance suspended its payments and why Reliance is requesting an additional examination.").
The plan's three-year limitations provision applies to Robyns' denial of benefit claim. In the absence of evidence that Reliance received written proof of loss earlier than September 9, 1995 (three years before suit was filed), the court concludes that the limitations period began to run no sooner than June 24, 1998, when Reliance indicated for the first time that it would give no further consideration to her claim. Robyns' benefit claim against Reliance therefore is not time-barred.
C. The Laches Defense
Reliance also argues that it is entitled to summary judgment on Robyns' claims under the equitable doctrine of laches. Laches requires a showing of both inexcusable delay and resulting prejudice. Dickinson v. Indiana State Election Bd., 933 F.2d 497, 502 (7th Cir. 1991). The court need not consider the question of prejudice here because there evidence does not show inexcusable delay as a matter of law.
The evidence shows that on February 4, 1994, Robyns appeared for the IME that Reliance requested in its letter of January 24, 1994. About two weeks later, Reliance's expert, Dr. Kern, wrote about Robyns, "I find it difficult to be able to register the patient as totally disabled." Kern letter dated February 21, 1994, H0000031. However, Dr. Kern also wrote:
In order to fully evaluate the patient's disability status, I would recommend a vocational rehabilitation referral. Certainly, a certified rehabilitation counselor would be able to exhaust all positions which the patient could be seen as a candidate for. This would allow a final determination of permanent and total disability.
Id. at 2.
There is no record evidence showing whether Reliance ever referred Robyns to a vocational expert or whether Reliance ever made the "final determination" that Dr. Kern mentioned in his letter. (According to CCI, Reliance neither gave Robyns a written notice of the denial of her claim nor followed up on Dr. Kern's suggestion. CCI Reply Br. at 4 n. 3.) Furthermore, there presently is no evidence before the court that Reliance complied with its obligations under ERISA to provide appropriate notice of the denial of Robyns' claim and to describe available administrative remedies. See Halpin v. W.W. Grainger, Inc., 962 F.2d 685, 688 (7th Cir. 1992) (plan administrator must provide specific reasons for denial to ensure the claimant receives an opportunity to obtain a "full and fair review" by the administrator); see also 29 U.S.C. § 1133; 29 C.F.R. § 2560. 503-1(f) (setting forth notice requirements). Finally, Robyns commenced this action less than three months after Reliance informed her for the first time that it would no longer consider her claim for benefits. For these reasons, on this record, Reliance has not shown as a matter of law that Robyns engaged in any inexcusable delay in pursuing her claims. The delay that occurred between February 1994 and September 1998 appears to be attributable, at least in part, to Reliance's own failure to follow-through on Robyns' claim, as well as to Robyns' decisions concerning litigation and the administrative appeal process.
Conclusion
For the foregoing reasons, the court GRANTS summary judgment to defendant Community Centers of Indianapolis, Inc. on all claims and DENIES summary judgment to defendant Reliance Standard Life Insurance Company on all claims. No separate judgment shall issue at this time. The case will be set for a court trial (not a jury trial, because the claims are under ERISA) on January 29, 2001, with a final pretrial conference at 4:00 p.m. on January 19, 2001.
So ordered.