In Schmitz v. Sun Life Assurance Company of Canada (Sun Life), the claimant, Jeff Schmitz, was fired by Banner Engineering in July 2008 on the grounds his work performance was poor. In October 2011, Schmitz was diagnosed with multiple sclerosis. He then filed for disability benefits under the policy which covered him during his employment with Banner. He claimed symptoms caused by his multiple sclerosis were what caused his poor performance resulting in him being terminated. Therefore, he argued, he was disabled at the time he was fired.
Sun Life denied his application and his appeal of the denial on the grounds that he was not disabled when he was employed by Banner or at the time he was fired. Schmitz filed an ERISA law suit in the Minnesota District Court located in Minneapolis. The District Court granted Sun Life’s motion for summary judgment on the grounds that the lawsuit had been filed after the expiration of the statute of limitations. Schmitz appealed to the U.S. Court of Appeals for the Eighth Circuit.
The Circuit Court agreed with Sun Life and the District Court and held that the ERISA lawsuit was barred by the statute of limitations that was clearly laid out in the disability insurance contract. After reviewing the District Court decision, the Circuit Court commented, “Because we conclude that Schmitz’s lawsuit was untimely, we affirm.”
Minnesota Law Concerning Proof of Loss Does Not Apply to this Case
Schmitz argued that his claim was timely under Minnesota statutes which say that claimant’s do not need to provide proof of loss until 90 days after the disability terminates. The Circuit Court held that the statute upon which Schmitz relied “does not apply to group insurance policies like the one at issue here.”
Although ERISA does not establish a statute of limitations for actions concerning disability benefits, when there is a “reasonable limitations period in their contract” it will be honored. After a careful and detailed analysis of the contract, the Court concluded that the last date for plaintiff to file his proof of claim was December 29, 2008, and the last day for filing an ERISA lawsuit was December 29, 2011. His lawsuit was not filed until March 2013, “well after the contractual limitations period had expired.”
The Issue is Limited to Schmitz’s Untimely Filing of his ERISA Lawsuit
Schmitz argued that Minnesota law requires the insurer to prove it suffered prejudice before denying a claim for benefits as untimely. But, the Court said, “That is not the issue presented by this case.” The issue was the timeliness of the filing of the lawsuit and “Minnesota law does not require a showing of prejudice in this context.”
The Circuit Court ultimately concluded, “Because Schmitz did not file his lawsuit until after the limitations period set by the insurance policy had expired, we conclude that his lawsuit was untimely and affirm the judgment of the district court.”
This case was not handled by our office, but it may provide claimants guidance in their pursuit of long term disability benefits when their insurer refuses to take action on their claim. If you need assistance with a similar matter, or any other issue relevant to your disability claim, please contact any of our lawyers for a free consultation.