Summary
holding that plan language stating that "[n]o action may be brought after three years . . . from the time written proof of loss is received" was enforceable and barred plaintiff's action
Summary of this case from Rotondi v. Hartford LifeOpinion
CIVIL ACTION NO. 3:04cv1662 (SRU).
November 29, 2006
MEMORANDUM OF DECISION
This dispute arises from the denial of Joanne Kraynak's claim for long-term disability benefits by Reliance Standard Life Insurance Company ("Reliance"). Reliance argues that Kraynak failed to file this action within three years of that denial, as required by her benefit plan. Kraynak argues that the three-year limitation period does not apply because she never received the summary plan description ("SPD") that set forth the limitation, and thus had no notice of the provision. On October 31, 2006, I held an evidentiary hearing to determine whether Kraynak actually received the SPD. For reasons that follow, I find that Reliance has shown, by a preponderance of the evidence, that Kraynak received the SPD. Her claims against defendants are therefore dismissed as untimely.
I. Background
Kraynak worked as an administrative assistant for the Financial Accounting Foundation ("FAF") from April 1995 until October 1998. In October 1998, Kraynak became unable to work due to headaches and uncontrollable shaking of the left side of her face and left arm. In March 1999, Kraynak applied to Reliance for disability benefits. Reliance initially agreed to pay her benefits. On August 13, 1999, however, Reliance reexamined its benefit determination and terminated her benefits. Kraynak appealed Reliance's decision to terminate her benefits, but Reliance denied Kraynak's appeal. On October 4, 2004, more than three years after Reliance denied her claim for benefits, Kraynak filed the instant suit in which she challenges Reliance's final determination.
The principal issue raised by the present motion is the timeliness of Kraynak's claim. ERISA does not contain a statute of limitations for a suit to recover benefits, so the contract statute of limitations applies as the "most analogous" state statute. Cole v. Aetna Life Cas., 2002 U.S. Dist. LEXIS 19656, *16 (D. Conn. 2002). The statute of limitations for contract claims in Connecticut is six years.
Reliance's long-term disability plan provides that an individual may challenge a plan provider's decision to deny benefits in federal court, but limits the time period in which a party may bring suit. The plan states:
LEGAL ACTIONS: No legal action may be brought against us to recover on the Policy within sixty (60) days after written proof of loss has been given as required by the Policy. No action may be brought after three (3) years (Kansas, five (5) years; South Carolina, six (6) years) from the time written proof of loss is received.
Such contractual limitations periods can be valid. Parties to a plan may agree to a shorter limitations period provided that the limitations period itself is a reasonable. Order of United Commercial Travelers of America v. Wolfe, 331 U.S. 586, 608 (1947). Kraynak does not dispute the validity of the agreement or the reasonableness of the time period.
Defendants filed a motion for summary judgment in which they argued that Kraynak's claim was time-barred because Kraynak did not file her complaint within the three-year period. Kraynak argued that the three-year limitation period does not apply because she never received the SPD and thus had no notice of the provision. On September 22, 2006, I denied defendants' summary judgment motion because a disputed issue of material fact existed with regard to whether Kraynak actually received the SPD. After I ruled on the motion, the parties agreed that it would be more efficient to litigate the statute of limitations issue to completion before addressing the merits of Kraynak's disability claim. Therefore, on October 31, 2006, I held a hearing to resolve the factual dispute whether Kraynak had notice of the three-year limitation period. Both sides presented evidence. The defendants now bear the burden of proof, and must prove by a preponderance of the evidence that Kraynak received a copy of the SPD.
II. Discussion
At the hearing, the defendants presented credible evidence to prove that they provided Kraynak a copy of the SPD. The defendants elicited testimony from two long-time FAF human resources employees. Elana Colafrancesco, FAF's human resources manager, testified that Shirley O'Neill, FAF's personnel manager, prepared packets to send to all new hires that included disability benefit booklets. The booklets contained the SPD. Colafrancesco also testified that she met with Kraynak, as she did with all new hires, on Kraynak's first day of employment to discuss benefits. Colafrancesco did not recall Kraynak indicating that she did not receive the packet or the long-term disability booklet. In fact, Colafrancesco did not recall any employee ever telling her they did not receive the long-term disability booklet, nor did she recall the company ever running out of booklets to give to new hires.
O'Neill testified that she sent all new hires a confirmation packet in which she enclosed a letter and certain necessary forms, including the long-term disability booklets that included the SPD. O'Neill also testified that she sent, or personally delivered, the confirmation packet to Kraynak, and that in all her years at FAF, the company has never run out of disability plan booklets.
Further, O'Neill kept a checklist for every new employee to ensure that all new hires received the necessary documents. The checklist included a section that listed the documents O'Neill sent to each employee at the time they began work at FAF. Defendants' Ex. 4. That list states:
Mail employment letter with explanatory cover sheet and the below listed forms and booklets to be filled out and returned:
Report re: Investments, Personal Activities, etc. (To be returned before first working day.)
I-9 Immigration Form
Group Insurance Booklets
Medical, Dental and Life booklets and application forms
Long term Disability
Pension Materials
Calculate 1st year Vacation accrual ___ and 1st year Floating Holidays ___ (include in ltr).Id.
At the hearing, the defendants produced the checklist O'Neill used to track Kraynak's documents. The checklist is fairly comprehensive and contains multiple handwritten notations indicating whether O'Neill had completed various procedures and the dates upon which O'Neill did so. Id. The box adjacent to the mailing list on Kraynak's checklist was checked and dated "4-3-95," indicating that the materials were sent or handed to Kraynak on that date. Id. Additionally, the checklist contained notations when tasks were not completed or not applicable. The "Long Term Disability" item on the checklist, however, contains no notations. Id. O'Neill testified that if she did not give the disability booklet to Kraynak or if the booklet was unavailable, she definitely would have made a notation on the checklist. Finally, Kraynak certainly received other items on the mailing checklist. Specifically, she received her I-9 form, completed the form, and executed the form on April 3, 1995. Defendants' Ex. 1. As with the "Long Term Disability" booklet item, O'Neill made no notations adjacent to the "I-9 Immigration Form" item on the checklist. Id.
Kraynak argues that several pieces of evidence show that she never received the long term disability booklet that contained the SPD. First, Kraynak argues that there is a discrepancy with regard to whether O'Neill sent the packet to Kraynak through the mail or actually hand-delivered the packet to Kraynak. The discrepancy exists because most of FAF's new employees are hired externally, and thus their packets are mailed. Kraynak, however, had been a temporary employee at FAF for ten weeks prior to her hiring. Defendants' Ex. 4. O'Neill testified that, because Kraynak was physically present at FAF at the time she was hired, O'Neill might have actually handed the packet to Kraynak, as opposed to sending it through the mail. In fact, O'Neill apparently did hand-deliver the packet, because Kraynak signed and dated her I-9 form on April 3, 1995, the same date that O'Neill marked the packet as sent on the checklist. Id., Defendants' Ex. 1. Regardless of whether she received the booklet through the mail or through personal delivery, I find that Kraynak received the booklet and thus had notice of the three-year limitation for filing a lawsuit challenging denial of benefits.
Second, Kraynak had asserted that she wrote a note on the cover of the "Group Benefits Plan" booklet when she returned from her initial human resources meeting with Elena Colafrancesco on April 5, 1995 indicating that "Elena ran out of CTD Booklets — will send when they come in. Best buy in insurance." Plaintiff's Ex. 1. The last page of the Group Benefits Plan booklet, however, shows that the booklet was printed on "3-96." Kraynak Decl. Ex. 1 p. 2. Kraynak acknowledged at the hearing that she could not have written that note after her meeting with Colafrancesco in 1995, because that document was not created until months later.
Third, Kraynak testified that she kept all of her employment information in a file drawer at her house, and the long-term disability booklet was not in her file. That fact, even if true, does not necessarily mean that the defendants never supplied Kraynak with the booklet. There could be many other reasons why the long-term disability booklet was not in Kraynak's file drawer.
The defendants have proven by a preponderance of the evidence that they did supply Kraynak with a long-term disability booklet that included a copy of Reliance's SPD. Kraynak thus had notice of the three-year time limitation. Because she filed her claim outside of the three-year period, her claims against the defendants are time-barred.
III. Conclusion
For the foregoing reason, judgment shall enter in favor of the defendants and against Kraynak. The clerk shall close the file.
It is so ordered.