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Faciane v. Sun Life Assurance Company of Canada

United States Court of Appeals, Fifth Circuit

July 25, 2019

MICHAEL FACIANE, Plaintiff - Appellant

          Appeals from the United States District Court for the Eastern District of Louisiana

          Before OWEN, SOUTHWICK, and HIGGINSON, Circuit Judges.

          STEPHEN A. HIGGINSON, Circuit Judge:

         Michael Faciane, a beneficiary of a long-term disability plan governed by the Employee Retirement Income Security Act of 1974 (ERISA) and administered by Sun Life Assurance Company of Canada, alleged that Sun Life had miscalculated his benefits since 2008. Sun Life argued that the contractual limitations period for Faciane's claim had long since lapsed. The district court granted summary judgment to Sun Life, and we affirm.


         Michael Faciane was employed by Capital One Financial Corporation and was a member of its long-term disability (LTD) benefits plan when he suffered a work-related injury in June 2006.[1] Sun Life Assurance Company of Canada administers the LTD plan, and in March 2008, it determined that Faciane was eligible for benefits. At this point, Faciane and Sun Life had a dispute: whether Faciane had a "buy up plan" or just the standard plan. If he had the buy-up plan, his benefits would pay out 66.67% of his "basic monthly earnings"; if not, just 50%. A "claim control log" maintained by Sun Life shows various calls with Faciane and inquiries by Sun Life employees in early and mid-2008 to determine which percentage should apply.

         In a letter dated March 31, 2008, Sun Life said that Faciane was entitled to a benefit amount of 50% of his basic monthly earnings, explaining that it did not have enough information to determine that he had the buy-up plan.[2] The letter also indicated that Sun Life had calculated Faciane's basic monthly earnings as $5, 134.16. Due to various offsets, his monthly net benefit was the plan minimum, $100.

         According to the claim control log, a phone conversation between Faciane and a Sun Life employee occurred on May 22, 2008. The employee's entry in the log makes three noteworthy points. First, the log shows they discussed Faciane's basic monthly earnings figure, the subject of this appeal. Second, Faciane was disputing just the percentage used in the calculation of his benefits, not the monthly earnings figure to which the percentage would be applied. Third, Faciane seemed to have received the March 31 letter explaining his benefit calculation but had misplaced it.

         The percentage dispute was eventually resolved in April 2011, when Sun Life was finally convinced that Faciane had the buy-up plan. A Sun Life employee conveyed this information to Faciane by phone in mid-April and then by an acknowledgment letter posted the same day. The letter confirmed the change to 66.67% of basic monthly earnings, while reiterating the same monthly earnings figure as the March 2008 letter: $5, 134.16. Faciane's monthly net benefit remained $100, due to offsets. The letter also informed Faciane of the internal appeal process and his right to sue under ERISA.

         On June 26, 2017, six years later, Faciane administratively appealed, raising two issues. First, he argued that his average monthly earnings in the year preceding his injury, counting salary and bonuses, were $8, 118.52, not $5, 134.16 as Sun Life had determined. He thus argued that his benefits had been miscalculated since 2008. Counting offsets, Faciane believed he should have received $960 per month since 2008, not $100. Second, Faciane had reached a settlement as to worker's compensation, and he contested its implications for his LTD benefits. In a September 2017 letter, Sun Life resolved the settlement issue favorably to Faciane but stood by its calculation of his basic monthly earnings and net monthly benefit from a decade before.

         Faciane filed suit under ERISA in the Eastern District of Louisiana in December 2017. His complaint focused on the basic monthly earnings figure, $5, 134. Faciane argued that Sun Life should have used his earnings as of June 2006, immediately prior to his disabling injury, not his earnings as of January 1 preceding the injury. Faciane alleged he had received a pay increase after January 1, 2006 but before his injury in June 2006, so Sun Life's decision to use his earlier earnings allegedly deprived him of benefits. Faciane also argued for inclusion of a certain bonus in the earnings figure.

         Sun Life moved to dismiss, citing the LTD plan's three-year contractual limitations provision. Following reassignment to a different district judge, [3] the district court converted Sun Life's filing to a motion for summary judgment and called for supplemental briefing. Faciane's new brief advanced an argument not made in his earlier response to Sun Life's motion. While his response had acknowledged the "initial letter" of March 31, 2008, Faciane now argued that he had not actually received the letter and thus that his ERISA claim did not accrue then. Instead, he contended that the accrual of his claim should be dated to the denial of his administrative appeal in 2017.[4]

         The district court began its analysis with the plan's limitations provision, which provides beneficiaries three years to file suit "after the time Proof of Claim is required." Following Supreme Court precedent, the district court considered whether the contractual provision would permit Faciane a "reasonable" time to file suit. See Heimeshoff v. Hartford Life & Acc. Ins. Co., 571 U.S. 99, 106-07 (2013). The accrual date of Faciane's miscalculation claim was not necessarily the same date as the commencement of the limitations period, because Sun Life had recognized that Faciane was entitled to benefits. The asserted injury came later, when Sun Life allegedly miscalculated those benefits.

         The district court observed that no Fifth Circuit case expressly stated an accrual rule for miscalculation claims, so it looked elsewhere: to a Second Circuit decision pegging accrual to the time at which "there is enough information available to the pensioner to assure that he knows or reasonably should know of the miscalculation," Novella v. Westchester County, 661 F.3d 128, 147 (2nd Cir. 2011); and to a Third Circuit decision ruling that an award of benefits could trigger accrual of a miscalculation claim if it constituted a "repudiation" of the beneficiary's entitlement to greater benefits "that is clear and made known to the beneficiary," Miller v. Fortis Benefits Ins. Co., 475 F.3d 516, 521 (3rd Cir. 2007).

         The district court considered the March 31, 2008 letter the accrual event for Faciane's claim. The court applied Fifth Circuit precedent on the presumption that mail is received when it has been properly dispatched, and it concluded there was no fact issue that Faciane had received the letter. The court found that the letter apprised Faciane of the monthly earnings figure Sun Life was using and that this information was adequate for Faciane's miscalculation claim to accrue. The court added that, even if Faciane had not received the letter, his effort to contest the percentage used in the benefit calculation showed he knew and understood the calculation Sun Life had used. The court figured that the contractual limitations period would end in March 2010 because Faciane's proof of claim was required by March 2007. With accrual in March 2008, the workings of the plan's administrative appeals process would still leave Faciane "at least a year, and most likely longer," to sue before the expiration of the limitations period. The court deemed this reasonable, permitting enforcement of the limitations period, so it granted summary judgment to Sun Life, dismissing the suit with prejudice as untimely.[5]

         Faciane moved for reconsideration, contending that the district court had misapplied the law governing accrual of miscalculation claims. The motion focused on Withrow v. Halsey, 655 F.3d 1032 (9th Cir. 2011), in which the Ninth Circuit ruled that an ERISA miscalculation claim was timely despite a gap of many years between the plan and beneficiary's initial correspondence and the beneficiary's suit. Id. at 1038. Faciane faulted the district court for not applying Withrow, though he had not previously cited it, and he argued that its application would change the result in his favor. The district court refused to consider Withrow because it was neither binding nor new, and it reiterated its application of Novella and Miller. Faciane's appeal followed.


         ERISA permits a plan beneficiary to bring a civil action "to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan." 29 U.S.C. § 1132(a)(1)(B). "Standard summary judgment rules control in ERISA cases." Ramirez v. United of Omaha Life Ins. Co., 872 F.3d 721, 725 (5th Cir. 2017) (quotation omitted). "Summary judgment is warranted 'if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.'" Id. (quoting Fed.R.Civ.P. 56(a)). This court reviews a grant of summary judgment de novo. Id.



         ERISA does not provide a statute of limitations for suits to recover benefits.[6] Heimeshoff, 571 U.S. at 105. The limitations period for analogous claims under state law may fill the gap. See, e.g., Hall v. Nat'l Gypsum Co., 105 F.3d 225, 230 (5th Cir. 1997); Hogan v. Kraft Foods, 969 F.2d 142, 145 (5th Cir. 1992). Alternatively, the parties may fill the gap by agreement: "Absent a controlling statute to the contrary, a participant and a plan may agree by contract to a particular limitations period, even one that starts to run before the cause of action accrues, as long as the period is reasonable." Heimeshoff, 571 U.S. at 105-06. In Heimeshoff, the LTD plan at issue had a limitations period prohibiting legal action "3 years after the time written proof of loss is required to be furnished according to the terms of the policy." Id. at 103. This period began before the cause of action accrued, but this was permissible because, even after the plan's administrative review process, the beneficiary would have at least a year to file suit. Id. at 109. Accordingly, the Supreme Court gave effect to the plan's limitations provision. Id.

         Heimeshoff is a problem for Faciane because the limitations provision upheld in that case is the same as the one in Faciane's plan: three years from the time required to submit proof of claim. To obtain reversal of the district court, Faciane must demonstrate that the plan's limitations provision would leave him an unreasonably short period to file suit from ...

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