This is yet another case shedding light on the importance of timely exhausting administrative remedies before filing an ERISA lawsuit. In this recent case, which was decided by a U.S. District Court in Arkansas, Mr. Deaton, a former Walmart Stores employee, was on claim for disability with Walmart’s disability insurer, Hartford Life and Accident Insurance Company (“Hartford”).
On April 4, 2012, Hartford approved Mr. Deaton’s previously made claim for long term disability benefits. On December 17, 2012, Mr. Deaton received a letter from Hartford discontinuing his benefits effective March 25, 2013. Like most termination letters terminating benefits under an ERISA governed disability plan, the letter stated that Mr. Deaton had the right to appeal the decision within 180 days from the receipt of the December 17, 2012 letter (180 days from the date of the letter would have been June 15, 2013).
On May 2, 2013, Mr. Deaton, through his lawyer, replied to Hartford by a letter requesting a copy of the policy at issue, additional time to submit an appeal, and confirmation that the appeal period began on March, 25, 2013 (the effective date the claim was terminated).
Hartford responded by providing a copy of the policy but did not address the other issues that Mr. Deaton’s attorney had raised. On July 8, 2013, Mr. Deaton’s attorney contacted Hartford by phone. After the conversation, during which a Hartford representative had informed Mr. Deaton’s attorney that a request for additional time should be submitted in writing and that there was no “foreseeable reason why the request would be denied,” Mr. Deaton’s attorney submitted a written request the same day.
On August 7, 2013, Hartford denied Mr. Deaton’s request for additional time to appeal.
On October 16, 2013, Mr. Deaton filed a lawsuit against Hartford in the Circuit Court of White County, Arkansas. The action was removed by Hartford to Federal Court on December 2, 2013 and on January 8, 2014 Hartford filed a motion to dismiss Mr. Deaton’s complaint arguing that Mr. Deaton’s complaint must be dismissed because Mr. Deaton failed to exhaust his administrative remedies. Hartford argued that Mr. Deaton failed to file a timely administrative appeal and that the time for doing so had passed.
In response to Hartford’s motion, Mr. Deaton argued that his correspondence with Hartford satisfied the exhaustion requirement because it provided adequate notice of an appeal by clearly bringing the issue to Hartford’s attention.
However, the Court, relying on 8th Circuit precedent, determined that Hartford reasonably could have construed the May letters as not providing adequate notice of an appeal or constituting an appeal but instead as mere requests for documents that Mr. Deaton’s lawyer sought to review before determining whether to file an appeal in the future.
The Court ultimately granted Hartford’s motion and dismissed Mr. Deaton’s action with prejudice.
It is unclear at what point Mr. Deaton sought an attorney to handle his claim. The facts suggest that, like many disability claimants whose ERISA claims have been denied, Mr. Deaton waited until only a few weeks were remaining to file an appeal before retaining an attorney. It would seem that, although Mr. Deaton received the letter of termination on December 17, 2012, the effective date benefits were terminated did not occur until March 25, 2013 and so Mr. Deaton may have felt no immediate pressure to submit an appeal until after his benefits had run out.
Unfortunately, Mr. Deaton and his attorney ran out of time and may have not realized the importance of the 180-day deadline in ERISA governed disability claims. This case serves as an additional reminder of the importance of seeking advice from an experienced ERISA attorney as early as possible after your claim is denied.