You already know that contractual limitations provisions in ERISA plans are generally enforceable and can bar untimely claims.

But when does the court apply “equitable tolling” to extend the time by which a claimant may file suit beyond the contractual limitations provision? Rarely.

And, what happens if the claim denial letter fails to set out the date by which a claimant must file suit? The contractual limitations provision still may be enforceable.  

Here’s the case of Wilson v. Standard Insurance Company, 2015 WL 3477864 (11th Cir. June 3, 2015)(Equitable tolling rejected even though claim denial letter failed to state date by which civil claim must be brought.)

The case also provides some guidance on what should go into a claim denial letter.

FACTS: Wilson filed her lawsuit seeking ERISA-governed long term disability benefits 34 months after the three year contractual limitations period expired. Wilson contended the three year period should be “equitably tolled” because the letter denying her claim “did not give her notice” that the policy imposed a three year limitations period, rather than the six year contractual limitations period under state law. The district court dismissed the claim as untimely and Wilson appealed.

ISSUE: When does “equitable tolling” trump a contractual limitations provision?

11th CIRCUIT HELD: AFFIRMED—Plaintiff’s Claim Dismissed: Equitable tolling does not trump the contractual limitations provision.

1. “’[W]e must give effect to [an ERISA] Plan’s limitation provision unless we determine either that the period is unreasonably short, or that a ‘controlling statute’ prevents the limitations provision from taking effect.’ Neither of those two exceptions applies in this case.” Op. at 2.
2. “Heimeshoff left open the possibility that equitable tolling ‘may apply,’ but only ‘[t]o the extent the participant has diligently pursued both internal review and judicial review but was prevented from filing suit by extraordinary circumstances.’” (Emph. added by court.) Op. at 3.
3. ERISA regulations require “that a claims denial letter include notice about the administrative review procedures and the time limits for filing…as well as the fact that the claimant has a right to bring a civil action under 502(a) of ERISA. “ Op. at 5.
4. “What is anything but clear, however, is whether the regulation also requires a claims denial letter to include notice about the time limits applicable to filing a civil action.” Op. at 5.
5. “[F]or purposes of this opinion only we will construe the regulation in Wilson’s favor and assume the correct interpretation of it is that a claim denial letter must notify the claimant of her time limit for filing a lawsuit under ERISA….” Op. at 5-6.
6. “Even with that assumption in Wilson’s favor, however, it does not follow that Standard’s failure to interpret the ambiguous regulation that way renders the contractual limitations period unenforceable.” Op. at 6.
7. “Equitable tolling generally does not apply in the absence of diligence.” Op. at 7.
8. “’Wilson has not explained why she waited more than four years to request a copy of the LTD policy, and she has not demonstrated that [Standard] discouraged her from seeking a copy of the policy sooner.’” Op. at 8.
9. “A plaintiff is not reasonably diligent when she fails to investigate basic issues that are relevant to her claim or to proceed with it in a reasonably prompt fashion…. Her lawsuit easily could have been timely filed if she had exercised even minimal diligence in discovering the terms of the policy.” Op. at 9.