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Sixth Circuit addresses statute of limitations issues under ERISA

In Rice v. Jefferson Pilot Financial Insurance Co., the Sixth Circuit upheld the dismissal of a disability suit brought by a floor covering installer who suffered from depression and chronic fatigue syndrome.  The installer, Jerry Rice, was deemed disabled by the Social Security Administration, but his claim for disability benefits under his employer's ERISA contract was denied by the insurer.  When he subsequently sued, the lawsuit was dismissed in response to Jefferson Pilot's argument that Rice did not comply with the three-year statute of limitations expressly incorporated into the disability insurance contract. 

In analyzing the decision, the panel reached several holdings that may be relevant to other disabled persons making a claim for insurance benefits:

    1.  The Court recognized that the parties may agree upon a limitation period in their contract, provided the period in the contract is reasonable.  If they do, this limitation period will be honored, rather than following the normal ERISA procedure of borrowing the most analogous state limitation period.

    2.  The Court held that Rice's time to sue was not "tolled" or extended by the lawsuit Rice filed initially, because that lawsuit was voluntarily dismissed without prejudice. 

    3.  The Court held that a contract may also stipulate when the claimant's disability rights "accrue"--in other words, when his statute of limitations begins to run (again, provided this stipulation is a reasonable one and would not, for example, allow the period to run before the claimant became aware of his rights).

    4.  The Court held that the "repudiation doctrine" (i.e., the idea that a cause of action does not begin to run until the insurer actually denies or repudiates a claim) would not apply under these facts, because this contract contained different, reasonable terms, and the latter doctrine only applies where a state limitation period is being applied.

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