The Sixth Circuit has penned numerous opinions relating to the Employee Retirement Income Security Act of 1974 ("ERISA"), specifically involving the alleged wrongful denial of benefits. Most recently, the Sixth Circuit addressed ERISA's preemption of state-law claims and reasonableness of limitations period in Mazur v. Unum Ins. Company, 2014 U.S. App. LEXIS 20784 (6th Cir. Oct. 28, 2014).
FI&C has defended companies and plan administrators in multiple ERISA denial-of-benefits cases. One of the threshold issues is whether any of the claims, even if not expressly identifying ERISA, relate to an ERISA plan. A company can remove a case from state court to federal court if the facts of the claims are related to an ERISA plan. Not only are a plaintiff's state-law claims that relate to the ERISA plan preempted, but a company identifying the applicability of ERISA benefits from the statutory and common law of ERISA that is "built around reliance on the face of written plan documents." Mazur, 2014 U.S. App. LEXIS 20784, at *6 (quoting US Airways, Inc. v. McCutchen, 133 S. Ct. 1537 (2013)). As one example, courts generally uphold the limitations periods set forth in an ERISA policy that govern the time period in which a plan participant or beneficiary must make a claim, as the Sixth Circuit recognized in Mazur (discussed below).
In Mazur, the Sixth Circuit followed its own precent and Supreme Court caselaw that provides that ERISA "completely preempts all state-law claims that 'relate to' – even tangentially – an ERISA plan such as the policy here." Moreover, the Sixth Circuit clarified that it will uphold the limitations periods set forth in ERISA plans, so long as the periods are reasonable.
In Mazur, an ex-husband (Mazur) claimed that he was entitled to his deceased ex-wife's life insurance policy death benefit in the amount of $79,600, which was a policy she had with UNUM Insurance Company ("UNUM"). The couple divorced on November 2, 1998, and the ex-wife added Mazur as the beneficiary of her life insurance policy at a later time, but did not inform Mazur that she had done so. The ex-wife died one year after the divorce, on November 3, 1999.
The policy included a limitations provision, which required that a notice of claim be filed within 30 days of loss, a proof of claim be filed within 90 days after the date of loss, and that any legal action be commenced within 3 years after the time the proof of claim was required. Mazur filed a claim on the policy on June 9, 2010 – more than 10 years after his ex-wife's death, which UNUM denied as untimely. Mazur filed a state-court complaint in Michigan, alleging claims for breach of contract and misrepresentation. UNUM removed the case to federal court on the basis that the allegations related to an ERISA case.
The U.S. District Court for the Western District of Michigan granted UNUM's dispositive motion, finding that Mazur failed to give timely notice of loss to UNUM. The Sixth Circuit agreed with the district court that Mazur's state-law claims for breach of contract and misrepresentation were preempted by ERISA. In addition, the Sixth Circuit agreed that the limitations periods set forth in the policy were reasonable, and held that Mazur's claim for life insurance benefits was untimely. The Sixth Circuit rejected Mazur's argument that the discovery rule equitably tolled the limitations period, finding that even if equitable estoppel applied, Mazur first notified UNUM of the loss more than 30 days after Mazur became aware that he was a beneficiary of the policy; thus, his claims were still untimely.
The Sixth Circuit's opinion in Mazur is another reminder of how ERISA plays an important role in providing predictability and uniformity with employee benefit plans. Otherwise, companies could be subject to claims for losses years, and possibly decades, later.