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«No. 13-2166 ROBERT RILEY, Plaintiff, Appellant, v. METROPOLITAN LIFE INSURANCE COMPANY, d/b/a METLIFE, Defendant, Appellee. APPEAL FROM THE UNITED ...»

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United States Court of Appeals

For the First Circuit

No. 13-2166


Plaintiff, Appellant,



Defendant, Appellee.



[Hon. Douglas P. Woodlock, U.S. District Judge]

Before Lynch, Chief Judge, Souter,* Associate Justice, and Lipez, Circuit Judge.

Valeriano Diviacchi for appellant.

James F. Kavanaugh, Jr., with whom Johanna L. Matloff and Conn Kavanaugh Rosenthal Peisch & Ford, LLP were on brief, for appellee.

March 4, 2014 * Hon. David H. Souter, Associate Justice (Ret.) of the Supreme Court of the United States, sitting by designation.

LYNCH, Chief Judge. In 2012, plaintiff Robert Riley filed suit under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., against defendant Metropolitan Life Insurance Co. ("MetLife"), arguing that MetLife had been underpaying his monthly benefits since its 2005 denial of his assertion that he was entitled to a larger payment calculation under his long-term disability insurance plan. The district court granted MetLife's motion for summary judgment on the grounds that Riley's suit was barred by the six-year statute of limitations.

See Riley v. Metro. Life Ins. Co., ___ F. Supp. 2d ___, 2013 WL 5009618 (D. Mass. Sept. 11, 2013). We affirm, rejecting Riley's argument that this long-term disability plan must be analogized to an installment payment plan so as to alter the accrual date of his claim. In doing so, we join three other circuits. We also reject his claim that the plan documents here create a different accrual rule for him based on a principle of "symmetry" and reject his equitable arguments.


The relevant facts of this case are undisputed. Riley began working at MetLife in 1988. By 1999, Riley had been promoted to associate general manager and earned approximately $80,000 per year. In February 2000, however, Riley began experiencing chronic back, neck, knee, and shoulder pain, which also led to a bout of depression. Riley left work and received short-term disability

-2- (STD) benefits from February 2000 through July 2000. His claim for continued benefits beyond July 2000 was denied.

In the spring of 2001, Riley returned to MetLife, this time in a non-managerial role in which he earned much less than he had previously as a manager. In May 2002, however, Riley's pain returned, and he left work again. Riley received STD benefits until November 2002. He then made a claim for long-term disability (LTD) benefits. Riley's claim for LTD benefits was approved in March 2005.

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interpret the terms of the contract. The plan provided that, if on LTD, Riley would receive half of his pre-disability earnings, offset by any disability payments from Social Security and certain other sources of income. To calculate Riley's benefits, MetLife utilized his non-managerial salary from 2002, before he applied for LTD. Use of that salary gave Riley LTD benefits of $871 per month, which was fully offset by Riley's Social Security benefits to leave a net benefit of $50 per month, the plan minimum. Had MetLife used Riley's managerial salary from 2000 (before his STD leave) as its starting point, Riley would have been entitled to benefits of about $3,000 per month, leaving a net of about $1,400 per month after the Social Security offset. In May 2004, when he submitted forms in support of his claim for LTD benefits, Riley contacted MetLife

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$50, which was less than the amount he felt he was owed, on April 15, 2005. Riley refused to cash it. He likewise refused to cash any of the subsequent checks he received, returning them all to MetLife in December 2005. He also called MetLife in December 2005 to request that MetLife stop sending him the benefit checks. Riley had retained counsel and, in October 2005, his counsel threatened MetLife with suit based on MetLife's decision to base the LTD benefits on Riley's 2002 non-managerial salary rather than his 2000 managerial salary.

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counsel, filed suit against MetLife in Massachusetts state court, alleging violations of Mass. Gen. Laws ch. 93A. MetLife removed the case to federal court, which dismissed Riley's claims as preempted by ERISA in November 2007. This court affirmed the dismissal in an unpublished order on October 14, 2009. Riley asserts that his then-lawyers never told him that the suit had been dismissed or that the dismissal was affirmed on appeal.

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court then dismissed the complaint in January 2012.

Riley retained present counsel, who filed this suit on March 22, 2012. Riley's new complaint presented an ERISA claim for

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We review the district court's entry of summary judgment de novo. Fidelity Co-Operative Bank v. Nova Cas. Co., 726 F.3d 31, 36 (1st Cir. 2013). Summary judgment is appropriate when there is no genuine dispute of material fact and the moving party is

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respect to actions to recover unpaid benefits from non-fiduciaries 1 The complaint filed by Riley's present counsel also included claims against Riley's prior counsel for malpractice. The parties settled those claims and stipulated to their dismissal with prejudice.

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Santaliz-Ríos v. Metro. Life Ins. Co., 693 F.3d 57, 59 (1st Cir.

2012). Federal courts "borrow the most closely analogous statute of limitations in the forum state." Id. The most closely analogous statute of limitations here is the six-year period Massachusetts applies to breach of contract claims. See Mass. Gen.

Laws ch. 260, § 2.

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period, federal common law determines when an ERISA claim accrues.

See Edes v. Verizon Commc'ns, Inc., 417 F.3d 133, 139 (1st Cir.

2005). Ordinarily, a cause of action for ERISA benefits accrues "when a fiduciary denies a participant benefits." Cottrill v.

Sparrow, Johnson & Ursillo, Inc., 100 F.3d 220, 223 (1st Cir.

1996), partially abrogated by Hardt v. Reliance Std. Life Ins. Co., 560 U.S. 242 (2010).

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first check for $50, MetLife denied his explicit assertion that any award of that sum was inaccurate. This was not a complete repudiation or a formal denial of all LTD benefits. But it was a clear repudiation of Riley's assertion that he was entitled to more than the amount MetLife actually awarded. We agree with those circuits which, in like circumstances, have concluded that an ERISA cause of action accrues when, after a claim for benefits is made and a specific sum is sought, the ERISA plan repudiates the claim

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the beneficiary. See, e.g., Miller v. Fortis Benefits Ins. Co., 475 F.3d 516, 520-21 (3d Cir. 2007) ("In the ERISA context, the discovery rule has been 'developed' into the more specific 'clear repudiation' rule whereby a non-fiduciary cause of action accrues when a claim for benefits has been denied.... [T]he clear repudiation rule does not require a formal denial to trigger the statute of limitations." (emphasis omitted) (quoting Romero v.

Allstate Corp., 404 F.3d 212, 222 (3d Cir. 2005))); Union Pac. R.R.

Co. v. Beckham, 138 F.3d 325, 330 (8th Cir. 1998); Daill v. Sheet Metal Workers' Local 73 Pension Fund, 100 F.3d 62, 66 (7th Cir.

1996); see also Novella v. Westchester Cnty., 661 F.3d 128, 147 (2d Cir. 2011) (holding that limitations period begins to run "when there is enough information available to the pensioner to assure that he knows or reasonably should know of the miscalculation," and explaining its view that its standard is consistent with the Third Circuit's reasoning in Miller).

Other provisions of ERISA support this interpretation.

In Edes, we applied a discovery rule to suits under § 510 of ERISA, to hold that plaintiffs discovered the supposed miscalculation of their status when they were hired. 417 F.3d at 139. In the context of suits against fiduciaries, ERISA itself establishes that the limitations period runs from "the earliest date on which the

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payments, then saw the $50 amount on his checks, refused to cash them, and threatened to sue MetLife. Together, these facts demonstrate that Riley certainly was aware of his claim for underpayment when he received his first $50 check in April 2005.

That was approximately six years and eleven months before he filed this suit and thus falls outside the six-year limitations period.

And there has been no recalculation of benefits thereafter.

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untimely as to the initial calculation and the first few monthly payments, it is still timely as to all of the monthly payments made within six years of the time he filed his complaint in this case.

He argues his ERISA Plan with MetLife is better characterized as an installment contract,3 giving him a separate cause of action and a 2 Riley has not alleged that MetLife is a fiduciary for purposes of this suit. There is no inconsistency between the statutory rule and our approach to accrual. See Pisciotta v.

Teledyne Indus., Inc., 91 F.3d 1326, 1332 (9th Cir. 1996) (per curiam).

3 Installment contracts are used in different settings.

Installment contracts typically involve an asset transfer in the form of a sale of goods. See, e.g., Black's Law Dictionary 372,

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individual monthly underpayment. He argues this must be so under a provision in the Plan's terms allowing MetLife to recover overpayments regardless of when they were made and argues that "symmetry" and equity require that he be allowed to recover underpayments, at least for those payments made within the six-year limitations period.4 We address each of these arguments in turn.

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reject Riley's argument that the ERISA plan must be treated as a 868 (9th ed. 2009) (referring "installment contract" to "retail installment contract," which involves a "sale of goods"); 15 Williston on Contracts § 45:2 (4th ed. 2013) (observing that installment contracts, "for the sale of goods," are governed by the Uniform Commercial Code); see also Pride Hyundai, Inc. v. Chrysler Fin. Co., 369 F.3d 603, 607 (1st Cir. 2004) (discussing operation of installment contracts, which "allow the customer to pay for an automobile over the course of an extended period of time," in the context of car sales); cf. Berezin v. Regency Sav. Bank, 234 F.3d 68, 73 (1st Cir. 2000) (promissory note requiring monthly principal and interest payments on loan financing purchase of real estate for business venture is an installment contract).

4 On appeal, Riley has waived any argument that the statute of limitations should be equitably tolled as a result of his original attorneys' malpractice. See DeCaro v. Hasbro, Inc., 580 F.3d 55, 64 (1st Cir. 2009).

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accrual date starting a new limitations period for each payment.

We join the three other circuits which have squarely confronted and rejected the plaintiff's accrual theory in this ERISA context. They have concluded that the plaintiff's theory of accrual is inapplicable where the alleged wrong is based on an alleged one-time miscalculation of ERISA benefits of which the plaintiff is aware.

The Third Circuit rejected the plaintiff's accrual theory in Miller, 475 F.3d at 516. In Miller, the plaintiff had begun receiving allegedly miscalculated disability benefits in 1987 but did not file suit until 2003. The Third Circuit held that the plaintiff's claim had accrued in 1987, and that a suit filed in 2003 was untimely. Id. at 522. The court held that the plaintiff should have been alerted to the fact that he was being underpaid as 5 In his briefing, Riley used the terms "continuing violation" and "installment contract" interchangeably for his argument that a new accrual period began with each benefits check.

The district court used the term "installment contract" but equated the two theories. At oral argument and contrary to his briefing, Riley disavowed the "continuing violation" language and to characterize his claim as involving only an installment contract.

The difference between the two theories, he says, goes to the number of back payments that can be recovered: in the installment contract theory, only those payments starting six years before he filed suit may be recovered, while in the continuing violation theory, all payments may be recovered as long as the most recent violation was within six years. While we accept his disavowal of any continuing violation theory, we do not engage this debate, and use the terms as alternate expressions for Riley's accrual theory, as he did in his briefing.

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resolution of disputes, repose for defendants, and avoidance of litigation involving lost or distorted evidence," id. at 522 (quoting Romero, 404 F.3d at 223) -- and was "consistent with the broad, beneficiary-protective goals of ERISA," id.

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accrual theory, with some glosses on the precise accrual date,6 in 6 Those glosses do not require exploration on the facts of this case. Riley was well aware of his claim for underpayment from

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plaintiff's theory, explaining that "that method is appropriate in ERISA cases, as elsewhere, only 'where separate violations of the same type, or character, are repeated over time,'" and that "it is not as clear a fit in cases where, as here, 'the plaintiff['s] claims are based on a single decision that results in lasting negative effects.'" Id. at 146 (alteration in original) (emphasis added) (quoting L.I. Head Start Child Dev. Servs., Inc. v. Econ.

Opportunity Comm'n of Nassau Cnty., Inc., 558 F. Supp. 2d 378, 400, 401 (E.D.N.Y. 2008)).

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