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  • Challenge to Monthly Earnings Amount Raised After the SOL...

    Challenge to Monthly Earnings Amount Raised After the SOL Contained in the Policy Untimely – 5th Cir.

    Attached is a case out of the Fifth Circuit, Faciane v. Sun Life Assurance Company of Canada. The case is before the court from a district court appeal determining that plaintiff’s claim that defendant was using the incorrect monthly earnings amount to calculate his benefits was untimely.

    Plaintiff began drawing LTD benefits in 2008. In 2017, plaintiff filed an administrative appeal asserting that defendant was calculating his LTD benefits incorrectly because it was not using the appropriate average monthly earnings. Defendant denied the appeal, and plaintiff filed suit. Defendant moved to dismiss alleging that plaintiff’s claim was time barred pursuant to the 3 year limitation in the policy.

    We also affirm the district court’s conclusion that the March 2008 letter contained enough information for Faciane’s miscalculation claim to accrue. The issue Faciane raises here is a simple one. He believes his monthly earnings were nearly $3,000 higher than the $5,134 figure that Sun Life reported in the letter. The disputed figure was displayed prominently on the first page of the March 2008 letter. Moreover, the alleged discrepancy is so large, and it concerns a matter so fundamental to any working person, that we conclude the letter clearly repudiated Faciane’s entitlement to greater benefits. To see the issue, Faciane did not need to decipher complex formulae or piece together inferences from incomplete information, as other circuit courts have observed in declining to find clear repudiation. See Osberg, 862 F.3d at 207–08; Kifafi, 701 F.3d at 722–23. Much more similar are the percentage-of-earnings calculation at issue in Miller and the simple count of pension credits at issue in Kennedy. See Miller, 475 F.3d at 522; Kennedy, 954 F.2d at 1120–21. As in those cases, the information was clear and simple enough that Faciane could and should have spotted the problem right away.

    In affirming the district court, we reject Faciane’s theory that his claim accrued only with Sun Life’s formal denial of his administrative appeal in 2017. He bases this argument on Baptist Memorial Hospital–Desoto Inc. v. Crain Automotive Inc., 392 F. App’x 288 (5th Cir. 2010) (“BMHD”), but the case does not support Faciane’s argument.

    Faciane chiefly relies on BMHD’s discussion of ERISA’s administrative exhaustion requirement and its regulation of formal denials of benefits. See 29 C.F.R. § 2560.503-1(g)(1) (requiring an explanation of reasons, reference to relevant plan provisions, and other information). A hospital was seeking reimbursement from Crain Automotive, which self-funded its employees’ health insurance. 392 F. App’x at 290–92. Our court cited Crain’s failure to comply with the regulation’s requirements in excusing the hospital’s failure to exhaust administrative remedies. Id. at 292–94. Faciane believes that, because he did not receive a formal denial compliant with ERISA regulations until 2017, his claim did not accrue until then.

    But exhaustion and accrual are different inquiries. Accrual may happen before any administrative review has started, much less ended, as Heimeshoff and the clear-repudiation caselaw make clear. See Heimeshoff, 571 U.S. at 105–06 (explaining that a claim may accrue before administrative proceedings have begun); Miller, 475 F.3d at 522 (finding accrual before any administrative proceedings); Union Pac. R. Co., 138 F.3d at 330–31 (same). Consequently, BMHD does not help Faciane’s accrual argument.

    Accrual of miscalculation claims is, and should remain, a “case-by-case reasonableness inquiry.” Novella, 661 F.3d at 147. In this instance, that inquiry leads us to affirm the district court.

    Faciane’s main challenge to the district court’s ruling is the issue he raised in his motion for reconsideration: that the court did not apply Withrow v. Halsey, 655 F.3d 1032 (9th Cir. 2011). But Faciane makes no arguments with reference to the abuse of discretion standard under which we review rulings on motions for reconsideration. In any event, Withrow’s facts simply differ, so its application does not change the result.

    As the district court observed, Faciane’s motion for reconsideration did not invoke any particular rule of the Federal Rules of Civil Procedure. Because Faciane had filed it within twenty-eight days of final judgment, the court appropriately construed it as a motion to alter or amend the judgment under Rule 59(e). See Matter of Life Partners Holdings, Inc., 926 F.3d 103, 128 (5th Cir. 2019). Rule 59(e) motions are for the narrow purpose of correcting manifest errors of law or fact or presenting newly discovered evidence. Templet v. HydroChem, Inc., 367 F.3d 473, 479 (5th Cir. 2004). They “cannot be used to raise arguments which could, and should, have been made before the judgment issued.” Life Partners Holdings, 926 F.3d at 128 (quotation omitted). Our court reviews a district court’s ruling on a Rule 59(e) motion for abuse of discretion. Volvo Fin. Servs. v. Williamson, 910 F.3d 208, 211 (5th Cir. 2018).

    Faciane’s brief discusses Withrow at length but says nothing about Rule 59(e) or the district court’s ruling thereunder. Our court routinely dismisses arguments as abandoned when parties fail to brief them. See, e.g., Smith v. Green, 756 F. App’x 447, 448 n.1 (5th Cir. 2019); Pool v. Trump, 756 F. App’x 446, 447 (5th Cir. 2019); Kingham v. Pham, 753 F. App’x 336, 337 (5th Cir. 2019). The same is suitable here, given Faciane’s lack of briefing on the Rule 59(e) standard.

    In any event, application of Withrow to Faciane’s case does not change the result. Withrow is part of a line of Ninth Circuit cases applying the same clear-repudiation rule as other circuit courts. See 655 F.3d at 1036; see also Wise v. Verizon Comm’cns, Inc., 600 F.3d 1180, 1188 (9th Cir. 2010); Chuck v. Hewlett Packard Co., 455 F.3d 1026, 1031 (9th Cir. 2006). Withrow, a participant in an LTD plan, tried repeatedly to raise a problem with her benefit amount, starting in 1987, but never got a conclusive response from Reliance, the insurer. 655 F.3d at 1034. After an internal appeal in 2003, she sued. Id. at 1034–35. The Ninth Circuit deemed her suit timely despite the passage of so many years:

    Although Withrow knew that Reliance had taken the position its calculation was correct, she was never provided with anything from Reliance that would give her reason to know that her acceptance of continued payment of benefits amounted to an irrevocable or final determination by Reliance of the amount of her benefits and a denial by it of a claim concerning that calculation.
    Id. at 1038 (emphasis added). Faciane makes much of Withrow’s “final or irrevocable determination” language. He points to passages in Sun Life’s March 2008 letter suggesting that Sun Life had not finally determined the calculation of his benefits. For example, one sentence indicated that the calculation was “based on the information we have currently in your file.” Faciane stresses the uncertainty these passages convey, but it is clear from context that the uncertainty concerned Faciane’s purchase of a buy-up plan rather than a standard plan. Nothing in the letter suggests uncertainty about his basic monthly earnings.

    Withrow also differs from Faciane’s case in that Withrow had diligently pursued the miscalculation issue. 655 F.3d at 1036–38. The lack of finality owed not to her failure to raise the issue, but to the plan’s failure to provide a clear answer to her repeated inquiries. As such, the clarity required by the clear-repudiation rule was absent. Faciane, by contrast, never called his basic monthly earnings figure into question until 2017. Sun Life presented that figure to him in 2008, and he waited almost a decade before challenging it.

    In sum, Withrow does not help Faciane, and the district court did not abuse its discretion by denying Faciane’s motion.
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