This article has been published in “The Advocate”, a bimonthly publication of the Arizona Association for Justice/Arizona Trial Lawyers Association, September/October2012 issue, @2012 by Steven J. Bruzonsky, Esq.
ERISA LIENS – STATUTE OF LIMITATIONS
There have been many cases in federal courts involving employer ERISA health plans, and also employer ERISA disability plans, particularly employers seeking to enforce ERISA health plan
lien/subrogation plan provisions and to obtain reimbursement from their insured’s personal injury claims settlements. Section 502(a)(3) of ERISA, 29 U.S.C. § 1132(a)(3),provides that a fiduciary may bring a civil action “to enjoin any act or practice which violates - - - the terms of the plan” or “to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce - - - the terms of the plan.” Section 502(e)(1) of ERISA, 29 U.S.C. § 1132(e)(1), gives the federal district courts exclusive jurisdiction of civil actions under this subchapter brought by ... [a] fiduciary."
The ERISA statute (Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001 et seq) does not include any statute of limitations for actions brought by ERISA plan fiduciaries under Section 502(a)(3) or Section 502(e)(1) of ERISA.
Vanderbilt University v. Pesak, 2011 WL 4001115 (M.D.Tenn., 9-8-2011) is a recent U.S. District Court case which has an excellent discussion of how to determine the applicable ERISA statute of limitations in ERISA lien cases:
“ERISA does not contain a statute of limitations for a claim brought under § 502(a)(3). In cases under ERISA in which there is an "absence of a federally mandated statute of limitations, the court should apply the most analogous state law statute of limitations." Redmon v. Sud-Chemie Inc. Ret. Plan for Union Emps.,547 F.3d 531, 534 (6th Cir. 2008)(quoting Meade v. Pension Appeals & Review Comm.,966 F.2d 190, 194-95 (6th Cir. 1992)). While the Sixth Circuit has yet to squarely address the issue, most courts that have had to determine the statute of limitations governing § 502(a)(3) reimbursement claims brought by plan fiduciaries apply the forum state's statute of limitations governing contract actions generally. See, e.g., Blue Cross & Blue Shield of Ala. v. Sanders,138 F. 3d 1347, 1357 (11th Cir. 1998); The W. & S. Life Ins. Co. v. Wall,903 F. Supp. 1155, 1161 (E.D. Mich. 1995). This situation is to be contrasted with claims brought by plan participants or beneficiaries seeking relief for violations of specific ERISA requirements, which the Sixth Circuit has found to be governed by the forum state's statute of limitations for statutory penalties. Redmon,547 F.3d at 535(applying Kentucky's limitations period for statutory penalties); see also Elliott v. Council Health Plan, No. 3:09-cv-00661 (M.D. Term. Jan. 14, 2009) (recommendation of magistrate judge that motion to dismiss in an ERISA civil enforcement action should be granted due to Tennessee's one-year statute of limitations for statutory penalties, a finding later adopted by district judge).”
Following are statute of limitations periods, under Arizona law, that you might contend apply in a given case, depending upon the facts of the case and the plan documents:
1. If the official Plan Document governing day to day plan operations, or an amendment thereto [adopted in writing by authorized Plan official(s)] provides a specific statute of limitations, then per A.R.S. §12-541(3) (see below), that specific statute of limitations may be controlling.
2. If the plan’s Summary Plan Description (SPD) provides a specific statute of limitations, then per A.R.S. §12-541(3) (see below), that specific statute of limitations may be controlling. However, Cigna Corp. v. Amara, No. 09-804, 563 U.S. ___ , 130 S. Ct. 1754 (5-16-2011) discusses that the SPD is only a summary of plan provisions required by ERISA; that the SPD does not constitute the contract between the plan participants and the ERISA plan; and that the official Plan Document (see #1 above) is the binding contract in this regard.
3. A.R.S. §12-541(3) sets forth a one year statute of limitations “For breach of an oral or written employment contract including contract actions based on employee handbooks or policy manuals that do not specify a time period in which to bring an action.” This one year statute of limitations
appears to be applicable if the official Plan Document doesn’t specify the time period in which to bring an action. However, what if only the SPD specifies the time period in which to bring an action. Is the SPD time period inapplicable, because the SPD does not constitute the contract, per Cigna Corp. v. Amara? Or does A.R.S. §12-541(3) authorize application of the time period stated in the “employee handbooks or policy manuals”?
4. A.R.S. §12-548 sets forth a six year statute of limitations for “A contract in writing that is executed in this state”; and also sets forth a three year statute of limitations “For debt where the indebtedness is not evidenced by a contract in writing.” However, it appears that A.R.S. §12-541(3) specifically applies to employment contracts and that A.R.S. §12-548 is inapplicable.
5. A.R.S. §12-542 sets forth a two year statute of limitations for certain tort actions including the tortious “conversion of property” (“For detaining the personal property of another and for converting such property to one’s own use.”). Sereboff v. Mid Atlantic Medical Services, Inc., 547 U.S. 356, 126 S. Ct. 1869 (2006) held that the ERISA health plan’s subrogation/lien claim imposed a constructive trust on the injury settlement proceeds. If the plan documents do not include a time period in which to bring an action, and the A.R.S. §12-541(3) one year statute of limitations has expired, perhaps the court might apply this two year period.
6. A.R.S.§12-550 sets forth a 4 year statute of limitations for “Actions other than for recovery of real property for which no limitation is otherwise prescribed”. I am unable to envision any circumstance where this limitations period would apply.