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Statute of Limitations Tolled During Administrative Review Process In Eleventh . . .

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  • Statute of Limitations Tolled During Administrative Review Process In Eleventh . . .

    Statute of Limitations Tolled During Administrative Review Process In Eleventh Circuit - S.D. Ga.

    In Zorn v. Principal Life Insurance Company, plaintiff seeks long term disability benefits against the insurer of his ERISA governed plan, Principal. Principal originally denied plaintiff’s claim in November 2005 and plaintiff filed suit in November of 2009. Principal contended that the three year statute of limitations period began to run when the claim was first denied so that the statute ran in November of 2008. Zorn argued that the statute of limitations was equitably tolled during the pendency of his administrative process which concluded with Principal’s final decision on August 30, 2007. The court agrees with the plaintiff based upon Eleventh Circuit authority.

    PLIC, however, contends that the three-year limitations period commenced on November 17, 2005, the date that Zorn first received notice of discontinuation of his claim. See id. Thus, according to PLIC, when Zorn filed this lawsuit on November 10, 2009, he ran afoul of the November 17, 2008 deadline by nearly a year, and his claim is barred. See id. Zorn argues that the beginning of the limitations period should be
    equitably tolled until Zorn exhausted all administrative remedies on August 30, 2007, meaning that his November 10, 2009 complaint did not transgress the August 30, 2011 deadline. See Doc. 75 at 9.

    An ERISA cause of action arises when an application for benefits is denied. See Hogan v. Kraft Foods, 969 F.2d 142, 145 (5th Cir. 1992); Gray v. Greyhound Ret. & Disability Trust, 730 F. Supp. 415, 417 (M.D. Fla. 1990). “It is well-established law in this Circuit that plaintiffs in ERISA cases must normally exhaust available administrative remedies under their ERISA governed plans before they may bring suit in federal court.” Springer v. Wal-Mart Assocs.’ Grp. Health Plan, 908 F.2d 897, 899 (11th Cir. 1990). Courts measuring limitations periods from the date that claims are first denied “must take care to ensure the limitations period is reasonable and that the specter of the substantial compression of a Plaintiff's time to sue does not materialize.” See Ponstein v. HMO Louisiana Inc., 2009 WL 1309737, at *4 (E.D. La. May 11, 2009) (concerning limitations period purporting to arise when disputed care was first rendered).

    Courts in this Circuit dealing with contractual limitations periods for § 1132(a)(1)(B) claims have determined that limitations periods are tolled until the end of an administrative review process. See Amos v. Hartford Life & Acc. Ins. Co., 2009 WL 1804989, at *2 (N.D. Ala. June 24, 2009) (“[T]olling the limitations period, whether set by contractual provision or a borrowed state statute of limitations, until a plaintiff exhausts her administrative remedies best comports with the statutory language . . . .”);
    Fetterhoff v. Liberty Life Assurance Co., 2007 WL 1589539, at *2 (S.D. Ala. May 31, 2007) (“Such limitations periods are tolled for the period necessary for the claimant to exhaust his administrative remedies.”); Jeffries v. Trs. of Northrop Grumman Sav. & Inv. Plan, 169 F. Supp. 2d 1380, 1382 (M.D. Ga. 2001) (“[T]he statute of limitations was tolled while Plaintiff exhausted his administrative remedies.”). But cf. Radford v. Gen. Dynamics Corp., 151 F.3d 396, 400 (5th Cir. 1998) (holding that 29 U.S.C. § 1113 is a statute of repose for breach of fiduciary duty ERISA claims to which tolling does not apply).

    The court also holds that Principal abused its discretion and awards plaintiff benefits. A copy of the decision is attached.
    Attached Files