Summary
stating that “the date on which the plaintiff here discovered [the breach] is immaterial for purposes of determining when the statute of limitations began to run.”
Summary of this case from Steen v. MurrayOpinion
No. 8:99CV141
March 13, 2001
MEMORANDUM ORDER AND JUDGMENT
I. Introduction
Before me are 1) the defendant's motion (Filing No. 36) for summary judgment, 2) the plaintiff's motion (Filing No. 50) for leave to submit a supplemental brief opposing the summary judgment motion, and 3) the defendant's motion (Filing No. 52) for leave to file a responsive memorandum. The latter two motions are hereby granted.
In a previous order dated February 16, 2000, I granted the defendants motion (Filing No. 8) to dismiss Counts II, III, and V of the plaintiff's second amended complaint. See Filing No. 29. The defendant now seeks summary judgment on the remaining claims, Count I (seeking benefits under ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B)), and Count IV (seeking a declaratory judgment under the same section), on the ground the plaintiff did not timely file this suit. The parties appeared at a hearing on the defendant's motion on February 16, 2001. I have now carefully reviewed the record, the parties' briefs and indexes of evidence (Filing Nos. 37 and 42), the arguments from the hearing, and the applicable law, and I conclude that the defendant's motion should b granted and this action dismissed.
II. Summary Judgment Standard
Summary judgment is proper if no disputed issues of material fact exist and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). The court must view the evidence and the inferences which may be reasonably drawn from the evidence in the light most favorable to the nonmoving party. Enterprise Bank v. Magna Bank, 92 F.3d 743, 747 (8th Cir. 1996). Furthermore, the court's function is not to weigh the evidence, but merely to determine whether there is sufficient evidence favoring the nonmovant for a finder of fact to return a verdict in that party's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). Essentially, the court performs the threshold inquiry of determining whether a trial is necessary. Id. at 250.
The Eighth Circuit has recognized that primarily legal issues and particularly questions of contract interpretation are issues amenable to summary disposition. See, e.g., Mansker v. TMG Life Ins. Co., 54 F.3d 1322, 1326 (8th Cir. 1995); Mumford v. Godfried, 52 F.3d 756, 759 (8th Cir. 1995); and Crain v. Board of Police Comm'r, 920 F.2d 1402, 1405-06 (8th Cir. 1990). Therefore, because the issues presented for resolution are essentially legal in nature, summary disposition of this case is appropriate.
III. Discussion
From October 1, 1992, until September 30, 1993, the plaintiff was covered under a health insurance policy ("Younkers policy") issued by the defendant, UHL (now known as UHIC), to her then-husband's employer, Younkers. During this period, she alleges that she had four claims on which she paid higher percentage co-payments than required under the Younkers policy because the co-payments did not reflect UHL's discounts and contracted rates with providers. She alleges that the Younkers policy did not disclose that it withheld ten percent of UHL's copayment from the physician or hospital, and that consequently she was effectively made to reimburse the provider in an amount greater than the percentage co-payment that the policy obliged her to make. In this suit, she seeks to recover those excess co-payments — all of $26.18, the defendant contends — for herself and for the class comprised of all individuals covered by UHL or UHIC policies governed by ERISA and sold to Nebraska employers.
The plaintiff filed the complaint in this action on April 16, 1999. UHL argues in its motion for summary judgment that even under the most generous reading of the Younkers policy, the filing came a year too late.
ERISA itself is little help in determining the correct statute of limitations, since section 1132(a)(1)(B) contains no statute of limitations. Generally, the most analogous state statute of limitations would apply. See Adamson v. Armco, Inc., 44 F.3d 650, 652-54 (8th Cir. 1995). UHL contends, however, that if an ERISA plan has a limitations period, that period would control instead, so long as the period is reasonable. See, e.g., Doe v. Blue Cross Blue Shield United, 112 F.3d 869, 875 (7th Cir. 1997) (Posner, J.) (finding a thirty-nine month limitations period reasonable not only in that case but in general); Moore v. Berg Enterprises, Inc., 1999WL 1063823 at *2 (10th Cir. 1999) (unpublished opinion) (ninety-day period for proof of loss combined with a subsequent three-year limitation period found reasonable); Chilcote v. Blue Cross Blue Shield United, 841 F. Supp. 877, 880 (E.D. Wis. 1993) (three-year limitation period found reasonable); Adamson v. Armco, Inc., 44 F.3d 650, 653-55 (8th Cir. 1995) (applying plan's two-year period for benefit claims). UHL therefore contends that the limitations period in the Younkers policy controls.
The Younkers policy required preferred providers to submit claims for health services directly to UHL. Filing No. 37, R. Coffman Aff., Ex. 1 at 30. The plaintiff's four claims involved health services provided by two preferred providers, Immanuel Medical Center and Bishop Clarkson Memorial Hospital. Id., ¶¶ 5-9. Their provider contracts with UHL required them to submit claims no more than ninety days after the last day of the covered member's hospital admission or from the date of service for outpatient services. Id., Ex. 2 at 3, § 4.2; Ex. 3 at 3, § 4.2. But the Younkers policy also contained a provision requiring that any legal action on the policy be brought "prior to the end of 60 days after due written proof of loss has been given in the time required by this Policy. No such action may be brought after 3 years from the time written proof of loss is required to be given." Id., Ex. 1 at 30. UHL argues that under these two provisions, a covered person would have to bring suit within three years and ninety days from the last date covered services were provided. Since the plaintiff received services for the last time on September 30, 1993, UHL contends that her suit had to be filed by December 30, 1996, to be timely.
In the alternative, UHL argues, the Younkers policy also states that "[i]n any event, the proof of loss must be given no later than 15 months after the loss occurred." Id. If this deadline controls rather than the ninety-day proof-of-loss deadline in the provider contracts, then the plaintiff's suit is still untimely: suit should have been filed by December 30, 1997.
The plaintiff does not deny that the limitation period in the Younkers policy bars her complaint. She argues instead that the provision is unenforceable because an ERISA plan cannot contractually limit the state statute of limitations in a claim for ERISA benefits. I agree. In this circuit, a suit for ERISA benefits under section 1132(a)(1)(B) is characterized as a contract action for statute of limitations purposes, and "the most analogous statute of limitations under Nebraska law is the five-year statute of limitations for actions on written contracts." Schroeder v. Phillips Petroleum Co., 970 F.2d 419, 420 (8th Cir. 1992) (reversing district court's application of Nebraska's three-year statute of limitations for actions upon a liability created by federal statute for which no period of limitations is provided); Neb. Rev. Stat. Ann. § 25-205(1) (Michie 1995) (action on a written contract "can only be brought within five years"). See also Union Pacific R.R. Co. v. Beckham, 138 F.3d 325, 329 (8th Cir. 1998) (applying Nebraska's five-year statute of limitations for actions on written contracts to a claim for denial of benefits under ERISA).
In addition, Nebraska law provides that an insurance policy cannot limit "the time within which an action may be brought to less than the regular period of time prescribed by the statute of limitations of this state, unless otherwise prescribed by this chapter." Neb. Rev. Stat. § 44-357. See Hiram Scott College v. Insurance Co. of North America, 188 N.W.2d 688 (Neb. 1971) (reforming a health insurance policy by replacing the policy's one-year limitations period with the statutory five-year limitations period); see also Wulf v. Farm Burt Ins. Co., 205 N.W.2d 640, 641 (Neb. 1973) (same result). Thus, the defendant could not shorten the five-year Nebraska statute of limitations in its Younkers policy.
The defendant argues, however, that the plaintiff's claim is time-barred under the plain language of the policy because other Nebraska statutes expressly provide that group sickness and accident policies such as the Younkers policy may contain three-year statutes of limitations running from the date written proof of loss is required to be furnished. See Neb. Rev. Stat. §§ 44-767 and 44-710.03 (11); Duchek v. Blue Cross Blue Shield of Nebraska, 153 F.3d 648 (8th Cir. 1998). Those statutes do not apply in this case, however. In Duchek, the plaintiff brought suit when Blue Cross denied a portion of a claim as not medically necessary. No administrative denial of a claim for benefits ever occurred in this case. The plaintiff's preferred providers timely submitted their bills for medical services rendered to the plaintiff and the defendant paid them. The plaintiff's claims are not subject to any administrative remedies, thus taking the case outside the scope of Duchek The plaintiff here instead seeks to enforce the co-payment terms of the policy, not challenge a denial of benefits.
Under Nebraska's five-year statute of limitations for written contracts, a cause of action accrues at breach or when a party fails to perform as promised, "irrespective of any knowledge on the part of the plaintiff or any actual injury occasioned to him or her." Cavanaugh v. City of Omaha, 580 N.W.2d 541, 545 (Neb. 1998) (citing Hooler Heft v. Estate of Weinberger, 279 N.W.2d 849 Web. 1979)). Likewise, in cases not subject to administrative remedies, a cause of action accrues under federal common law at breach. "It is that breach of duty, not its discovery, that normally is controlling." Unexcelled Chemical Corp. v. United States, 345 U.S. 59, 65 (1953). Therefore, the date on which the plaintiff here discovered that she allegedly had paid higher percentage co-payments than required under the Younkers policy is immaterial for purposes of determining when the statute of limitations began to run.
Nebraska's five-year statute of limitations for written contracts therefore controls in this case. To be timely, the plaintiff had to have filed suit by September 30, 1998, five years after her coverage under the Younkers policy terminated. Since the plaintiff did not file suit until April 16, 1999, her claims are time-barred and will be dismissed with prejudice. The claims of the putative class will also be dismissed, but without prejudice. See Great Rivers Coop. v. Farmland Indus., Inc., 120 F.3d 893, 899 (8th Cir. 1997) (class claims dismissed along with named plaintiff's claims); Mason v. Anheuser-Busch, Inc., 579 F. Supp. 871, 873 n. 1 (E.D. Mo. 1884) (plaintiff whose claims are time-barred cannot represent a class).
IT IS THEREFORE ORDERED:
1. The defendant's motion (Filing No. 36) for summary judgment is granted;
2. The plaintiff's motion (Filing No. 50) for leave to submit a supplemental brief opposing the summary judgment motion is granted;
3. The defendant's motion (Filing No. 52) for leave to file a responsive memorandum is granted;
4. Judgment is hereby entered for the defendant and against the plaintiff; and
5. The claims of the putative class are dismissed without prejudice.