ERISA And Time Limitations For Appeal

ERISA lawyers can tell you that the rules with ERISA claims are pretty tough. This is illustrated by a Dallas Division opinion issued in March 2016. The style of the case is, Sharon Smith v. The Boeing Company.
Sharon sued Boeing seeking spousal pension benefits from her deceased husband’s retirement plan. On January 1, 2008, Henry Smith designated his former spouse, Trinette Smith as his primary beneficiary. Henry and Trinette later divorced, and Henry married Sharon in 2011. Henry attempted in a letter dated May 14, 2012, to change the primary beneficiary to Sharon. The request was denied because Henry had already begun receiving his pension benefit.
After Henry’s death in July 2013, Sharon requested that Boeing recognize her as the beneficiary. In a letter dated October 14, 2013, Boeing informed Sharon her request was being denied because she was not the listed spouse at the time of Henry’s retirement. Sharon was also informed of rights under ERISA and under Section 502(a) she had no later than 180 days to appeal the decision which she did.
On August 13, 2014, Sharon was notified that she had 180 following August 12, 2014 to file a lawsuit on the appeal that had been denied. She filed suit on July 30, 2015, more than 180 days after the decision on appeal.
Sharon’s complaint listed various reasons for why the benefits should not have been denied. Boeing relied on the lapse of 180 days as a reason for her lawsuit to be dismissed and that over 5 months had lapsed since this contractual limitations period expired.
Sharon contends the 180 day limitations period is unreasonable under Texas law.
Boeing defense is a limitations defense and is an affirmative defense to the claims asserted by Sharon.
Because ERISA does not provide a specific limitations period for denial of benefits lawsuits, courts apply the most analogous state statute of limitations. In this case, the most analogous Texas statute of limitations is the four-year period that governs suits on contracts. Where a plan designates a reasonable, shorter time period, however, that lesser limitations schedule governs.
Case law in this area notes several factors that support the determination that a 180 day limitations period is reasonable: (1) does the plan give notice specifying the limitations period; (2) does the plan require that there be prompt notification of a decision on appeal; and (3) does the limitations period not begin until the end of the appeal process.
Texas Civil Practice & Remedies Code, Section 16.070(a) provides that a person may not enter into a stipulation, contract, or agreement that purports to limit the time in which to bring a suit on the stipulation, contract, or agreement to a period shorter that two years.
In dismissing Sharon’s claim due to limitations the court stated:
To commit ourselves to every incidental feature of the borrowed statute of limitations without considering whether the policies of ERISA would be advanced or retarded by contractual limitations periods would be to grope in the dark — as well as to risk creating a national crazy quilt of ERISA limitations law, with contractual limitations enforceable in some states but not in others, contrary to the uniformitarian policy of the statute.
District courts often afford plaintiffs at least one opportunity to cure pleading deficiencies before dismissing a case, unless it is clear that the defects are incurable. Here, the defects in Sharon’s complain are incurable. The plan required Sharon to file suit no more than 180 days after the August 12, 2014 appeal decision, which the court holds is a reasonable limitations period as a matter of law, and she did not file suit until July 30, 2015. Boeing’s successful affirmative defense appears clearly on the face of Sharon’s complaint and referenced documents, and Sharon’s lawsuit is therefore barred by limitations.