:: “Clear Repudiation Rule” Applied In Determination That Benefits Claim Was Time-Barred

Underpayment of a benefit constitutes a repudiation of full benefits and triggers the statute of limitations. Id. at 521. The record is clear that the plaintiff was well aware of the underpayment more than four years before filing suit, as evidenced by a number of letters between the defendant and Mr. Bryer’s then-counsel, culminating in the letter of March 4, 2005, appealing the denial of increased benefits.

Bryer v. Metro. Life Ins. Co., 2010 U.S. Dist. LEXIS 42867 (E.D. Pa. May 3, 2010)

The district court in Bryer v. Metro. Life Ins. Co. applied the “clear repudiation rule” to find that the plaintiff’s claims were time-barred.

The disability plan that covered the plaintiff provide for an increase in benefits that he did not receive according to the complaint:

According to the complaint, the plaintiff was awarded long-term disability benefits effective July 21, 2002, and pursuant to the relevant benefits plan, he is entitled to a seven percent increase in his monthly benefit amount each year beginning 13 months after the award of benefits (i.e., starting on August 21, 2003). The plaintiff never received the increase.

Correspondence concerning an appeal played an important role by indicating the denial of the claimed benefits:

By letter dated March 4, 2005, then-counsel for Mr. Bryer appealed the denial  of the disputed benefits; the request for an adjustment of benefits was denied by letter dated May 4, 2005, in which the defendant writes that the decision “concludes the administrative review process” and the plaintiff has “the right to bring a civil action under Section 502(a)” of ERISA.

In evaluating when the limitations period began to run, the court stated that:

In this Circuit, the “statute of limitations begins to run when a plaintiff discovers or should have discovered the injury that forms the basis of his claim.” Miller v. Fortis Benefits Ins. Co., 475 F.3d 516, 520 (3d Cir. 2008). A cause of action for unpaid benefits accrues when there has been “a repudiation of the benefits by the fiduciary which was clear and made known [to] the beneficiary.” Id. at 520-21. Underpayment of a benefit constitutes a repudiation of full benefits and triggers the statute of limitations. Id. at 521.

The opinion underscores the importance that correspondence may play in indicating a repudiation that begins the limitations period. For example, the court observed that:

The record is clear that the plaintiff was well aware of the underpayment more than four years before filing suit, as evidenced by a number of letters between the defendant and Mr. Bryer’s then-counsel, culminating in the letter of March 4, 2005, appealing the denial of increased benefits. Accord Lutz v. Philips Electronics North Am. Corp., 347 Fed. Appx. 773 (3d Cir. 2009) (unpublished) (holding that an ERISA claim accrued “when the [plaintiffs] began their ‘repeated’ complaints about the incorrect calculation of benefits.”)