Michael Faciane v. Sun Life Asuc Co. of Canada
931 F.3d 412
| 5th Cir. | 2019Background
- Faciane was eligible for long-term disability (LTD) benefits administered by Sun Life after a 2006 workplace injury; Sun Life paid benefits beginning in March 2008.
- A central dispute: whether Faciane had a "buy-up" plan (66.67% of earnings) or the standard plan (50%); Sun Life’s March 31, 2008 letter calculated his Basic Monthly Earnings (BME) as $5,134.16 and applied a percentage that initially produced a $100 net monthly benefit after offsets.
- Sun Life’s claim-control log documents phone contacts in 2008 about the calculation; Faciane disputed the percentage then but did not challenge the BME until 2017.
- Sun Life changed the percentage to the buy-up rate in April 2011 but did not change the BME; Faciane administratively appealed in 2017 contesting the BME (arguing it should be ~$8,118) and the workers’ compensation offset. Sun Life resolved the offset issue but kept the original BME.
- Faciane sued under ERISA in December 2017. Sun Life moved to dismiss based on the plan’s three-year contractual limitations period ("3 years after the time Proof of Claim is required"). The district court converted the motion to summary judgment and held the claim accrued in March 2008 (when Faciane received Sun Life’s letter), so the suit was time-barred.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| When did Faciane's ERISA miscalculation claim accrue? | Accrual did not occur in 2008 because Faciane did not receive a clear denial; accrual should be dated to the 2017 denial of his administrative appeal. | Accrual occurred in March 2008 when Sun Life’s letter disclosed the BME used—Faciane knew or reasonably should have known of the miscalculation then. | Accrual occurred with receipt of the March 31, 2008 letter; claim is time-barred. |
| Was there a genuine dispute of material fact about receipt of the March 2008 letter? | Faciane disputes receipt and points to lack of direct proof that the letter was mailed/received. | Sun Life produced affidavit and claim-log entries; mailbox presumption and contemporaneous notes support receipt. | No genuine dispute; mailbox presumption and corroborating evidence establish receipt. |
| Is the plan’s three-year contractual limitations period enforceable under Heimeshoff? | Argued limitations period would be unreasonable if accrual dated to 2008; alternatively urged longer state prescriptive period or estoppel. | The three-year period is permissible under Heimeshoff because beneficiaries still get a reasonable time to sue after accrual (administrative process plus at least a year). | Three-year limitation is enforceable; Faciane had a reasonable time to sue. |
| Does Ninth Circuit Withrow compel a later accrual date here? | Withrow shows accrual may occur only after a final/irrevocable determination; thus Faciane’s claim accrued in 2017. | Withrow is factually different: there the claimant repeatedly pressed the issue and the insurer never gave a clear answer; Faciane waited nearly a decade to challenge the BME. | Withrow does not change outcome; Faciane’s motion for reconsideration was properly denied. |
Key Cases Cited
- Heimeshoff v. Hartford Life & Acc. Ins. Co., 571 U.S. 99 (Sup. Ct.) (upholding a reasonable contractual limitations period in an ERISA plan)
- Novella v. Westchester County, 661 F.3d 128 (2d Cir.) (accrual when beneficiary has enough information to know or reasonably should know of a miscalculation)
- Miller v. Fortis Benefits Ins. Co., 475 F.3d 516 (3d Cir.) (award of benefits can constitute a clear repudiation triggering accrual)
- Withrow v. Halsey, 655 F.3d 1032 (9th Cir.) (accrual may be delayed where insurer never gives a final or unequivocal determination despite repeated inquiries)
- Kifafi v. Hilton Hotels Ret. Plan, 701 F.3d 718 (D.C. Cir.) (declining clear-repudiation where complex plan rules would prevent a layperson from recognizing miscalculation)
- Osberg v. Foot Locker, Inc., 862 F.3d 198 (2d Cir.) (refusing clear-repudiation where beneficiaries would need to draw opaque inferences)
- Kennedy v. Electricians Pension Plan, IBEW No. 995, 954 F.2d 1116 (5th Cir.) (plan notices can trigger accrual when they clearly inform beneficiaries of the relevant data)
- Duron v. Albertson's LLC, 560 F.3d 288 (5th Cir.) (mailbox presumption requires corroboration of mailing practices)