In Riley v. MetLife, a case decided in March 2014 in the United States Court of Appeal for the First Circuit, Plaintiff Riley first made a claim for LTD benefits in 2000 when he was employed as an associate general manager. He received LTD benefits, but returned to work in 2001 in a non-managerial position where he earned substantially less. In 2002, Riley left work once again and made another claim for LTD benefits. Riley’s LTD claim was eventually approved in 2005, and he received his first LTD benefit check in April of 2005 for an amount based on his non-managerial salary, which was substantially less than he would have received based on his managerial salary. Since Riley disputed the amount of his lower LTD benefits based on his non-managerial salary, he refused to cash the checks and threatened to file suit.

Although Riley threatened to file suit, a proper lawsuit was not filed against MetLife for the unpaid LTD benefits until March 22, 2012. MetLife moved for Summary Judgment arguing that the claim was untimely and barred by an applicable 6 year statute of limitations since the cause of action accrued in April of 2005 (6 years and 11 months prior to filing the lawsuit). Riley argued a new cause of action accrued every time Riley received a check for LTD benefits for a lesser amount than he was entitled.

The lower Court agreed with MetLife and dismissed Riley’s claim. The First Circuit Court of Appeals affirmed the lower Court’s ruling concluding “[A]n 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 or the sum sought, and that rejection is clear and made known to the beneficiary.” The Court reasoned that although there was not a complete repudiation or formal denial of all LTD benefits in Riley’s case, MetLife’s action in sending Riley a check in an amount based on his non-managerial salary was a clear repudiation of Riley’s assertion that he was entitled to a greater amount based on his managerial salary. Thus, there does not need to be a formal denial to trigger the statue of limitations and the statute of limitations will begin to run once a claimant knows or reasonably should have known of a miscalculation in benefits.

The ruling by the First Circuit Court of Appeals places a burden on a claimant to raise any issues of a miscalculation of benefits in a timely manner, or as in Riley’s case, your claim may be completely barred without any recourse by the Courts. However, the ruling leaves open the question of whether the statute of limitations will begin to run if a claimant never raises an issue of a miscalculation or is not aware of any miscalculation.

In light of the Court’s ruling and the ambiguity that still exists regarding when the statue of limitations may bar your claim, the best thing to do is to consult a legal professional in a timely manner once you suspect there may be a miscalculation of your LTD benefit award. If you suspect your LTD benefits have been miscalculated by your insurance company, please do not hesitate to contact Attorney Alexander Palamara at Dell & Schaefer for a free consultation.