Does telling a claimant that you “will be happy to reconsider the claim” waive a contractual limitations provision? No.
Here is a great new case that highlights virtually every argument that could be used to trump (unsuccessfully) a statute of limitations or contractual limitations provision. Engleson v. Unum Life Insurance Company of America, __ F.3d __, 2013 WL 3336741 (6th Cir. July 3, 2013) [pdf].
FACTS: Engleson waited eight (8) years before seeking judicial review of his long-term disability claim denial, managed by Unum. He sued, claiming that: (a) Unum violated ERISA regulations, which tolled the limitations period; (b) Unum waived the limitations period by saying it would be “happy to” reconsider the claim; (c) the SPD was silent as to applicable contractual and judicial time limits which resulted in a conflict with regard to the applicable limitations period; and (d) Unum was equitably estopped from asserting a contractual limitations provision.
TRIAL COURT HELD: Trial Court Dismissed Plaintiff’s Claims.
Sixth Circuit Court of Appeals HELD: UNUM’s Denial of Claim Affirmed.
It was not fatal that the SPD failed to disclose applicable time limits for judicial review. Summary Plan Descriptions (SPD) are not “legally binding” nor parts of the benefit plans themselves. Op. at 11. “Silence in the SPD regarding a term the plan defines more explicitly does not make out a ‘conflict[.]’” Op. at 10-11.
Unum did not have to prove what was in the administrative file to rebut Plaintiff’s equitable tolling defense. Equitable tolling is a defense to the assertion that a suit is out of time by statute or contract. But the burden of proof rests with the party invoking the defense. Plaintiff failed in his burden of proving Unum failed to provide him the administrative record. Unum had no burden to prove what was in the file. Op. at 14.
Unum did not waive the contractual limitation period when it said in its denial letter that it would be “happy to” reconsider upon submission of additional information. Op. at 13.
What is full and fair review? “When an adverse benefit determination is justified in the first instance and later denials are premised on the initial reason, there has been a ‘full and fair review’ that satisfies [the regulations].” Op. at 10.
Since the denial of benefits did not deviate from prior appeal determinations, “Unum had no need to repeat the specific reasons for declining to reconsider Engleson’s appeal.” Op. at 10.