What happens when a claim denial letter was issued, but the claimant denies ever receiving it, and the administrator can’t produce it?

How does that affect the statute of limitations? 

Here’s the case of Witt v. Met Life Ins. Co., __ F.3d __, 2014 WL 6655794 (November 25, 2014)  

FACTS: Witt made a claim for ERISA-governed disability benefits in 1997. MetLife administered the claim and on May 1, 1997 issued a letter terminating benefits because Witt failed to provide adequate medical records.

For 12 years Witt did not challenge the termination of benefits.  Then, in 2009 Witt wanted to know where his benefits were. He claimed he never received the termination letter. MetLife was unable to produce a copy of the denial letter and agreed to review Witt’s claim, and additional records from 1997-2009. For over a year Met Life heard nothing, and then received some additional records.  On May 4, 2012 Met Life upheld its decision to leave Witt’s claim terminated because the newer records also failed to show functional impairment.  Witt then sued.

ISSUE: Witt claimed he never received MetLife’s 1997 letter terminating benefits, so the limitations period should start as of May 4, 2012, when MetLife issued a final denial.

HELD: Claim was barred by the statute of limitations

  1. Congress did not specify a limitations period for ERISA claims. Alabama’s six year statute was applied. Op. at 8
  2. The limitations period begins when the cause of action accrues. Op. at 8
  3. “[A] cause of action accrues—and the limitations period begins to run—when the claimant has reason to know that the claim administrator has clearly repudiated the claim or amount sought.”  Op. at 9.
  4. MetLife’s decision to cease providing benefit payments after April 30,1997, and for 12 years thereafter, constitutes “clear and continuing repudiation of Witt’s rights[.]”  Op. at 10.
  5. MetLife clearly repudiated Witt’s benefits claim by May 1, 1998.  “We reject Witt’s attempt to exploit MetLife’s failure to locate a 12-year-old document where Witt had reason to know of the acts giving rise to his cause of action, regardless of whether he received the 1997 letter.”  Op. at 10, 13.
  6. By agreeing to review the terminated claim, MetLife did not waive the statute of limitations defense. “[R]equiring ERISA claim administrators to expressly base their reconsideration of a stale claim on timeliness grounds is likely to lead to plans declining to offer courtesy reviews, or any reopening of the administrative process—for fear of waiving a statutory timeliness defense.”  Op. at 12-13.