{"id":7474,"date":"2020-04-07T16:19:32","date_gmt":"2020-04-07T21:19:32","guid":{"rendered":"https:\/\/www.nickortizlaw.com\/?p=7474"},"modified":"2024-01-04T17:38:19","modified_gmt":"2024-01-04T22:38:19","slug":"faciane-v-sun-life-court-rules-in-favor-of-sun-life-in-underpayment-suit","status":"publish","type":"post","link":"https:\/\/www.nickortizlaw.com\/faciane-v-sun-life-court-rules-in-favor-of-sun-life-in-underpayment-suit\/","title":{"rendered":"Faciane v. Sun Life – Court Rules In Favor of Sun Life In Underpayment Suit"},"content":{"rendered":"

In Faciane vs.\u00a0Sun Life Assurance Company of Canada<\/a>, the claimant received a monthly benefit for long term disability<\/a> benefits pursuant to an ERISA-regulated<\/a> group insurance policy. The group policy covered employees of Capital One Financial Corporation. He alleged that Sun Life had been underpaying him for years. The material facts of the case were not in dispute. Mr. Faciane had been receiving a minimum benefit of $100 since December 1, 2006. In a March 31, 2008 letter to Faciane, Sun Life explained to the claimant how it had calculated his benefit amount. At some point in time, Faciane realized that his benefits may have been underpaid.<\/p>\n

However, Faciane did not challenge Sun Life\u2019s March 2008 calculation until June 26, 2017 \u2013 almost 10 years later!<\/strong><\/p>\n

After his administrative appeal with Sun Life was denied, Faciane filed a lawsuit against Sun Life seeking a higher monthly benefit. Unfortunately, Faciane offered no explanation either in his complaint or in his filings with the Court as to why the information available to him in 2008 was insufficient to put him on notice of an alleged major miscalculation and underpayment of LTD benefits.<\/p>\n

Time Limit to File a Lawsuit Under the Policy<\/strong><\/u><\/p>\n

The long term disability insurance policy provides, in a subsection titled \u201cLegal Proceedings\u201d:<\/p>\n

\u201cNo legal action may start:<\/p>\n

1. until 60 days after Proof of Claim has been given; nor<\/p>\n

2. more than 3 years after the time Proof of Claim is required.\u201d<\/p><\/blockquote>\n

Based on his date of disability, Mr. Faciane\u2019s \u201cProof of Claim\u201d was required by early March 2007. Therefore, the policy\u2019s bar on the start of a lawsuit \u201cmore than 3 years after the time Proof of Claim is required\u201d took effect in early March 2010\u2014years before Faciane initiated his case.<\/p>\n

The Court\u2019s Evaluation of Sun Life\u2019s Argument That the Claim Should be Dismissed Due to Untimeliness<\/strong><\/u><\/p>\n

The court followed so-called \u201cclear repudiation concept\u201d and concluded that \u201can erroneously calculated award of benefits under an ERISA plan can serve as an event other than a denial that triggers the statute of limitations<\/a>, as long as it is (1) a repudiation (2) that is clear and made known to the beneficiary.\u201d<\/p>\n

The Court concluded that Faciane had \u201cenough information available to [him] to assure that he [knew] or reasonably should [have known] of the [alleged] miscalculation\u201d at the time that he received Sun Life\u2019s March 31, 2008 letter.<\/p>\n

Under the terms of the policy (set forth above), Faciane\u2019s claim was not time-barred until early March 2010 (3 years after the time Proof of Claim was required). Thus, Faciane had about two years in which to administratively challenge the calculation of his \u201cBasic Monthly Earnings\u201d and, depending on the outcome, bring a lawsuit.<\/p>\n

Yet, Faciane did not file a lawsuit until December 2017. This was way past the time limit to file a lawsuit.<\/p>\n

In short, the Court concluded that the application of the limitations period defined in the policy was enforceable and that Faciane\u2019s miscalculation claim against Sun Life was time-barred. Accordingly, the Court granted Sun Life\u2019s Motion for Summary Judgment on the issue of timeliness and dismissed the case with prejudice.<\/p>\n

What About the \u201cContinuing Violation Theory\u201d?<\/strong><\/u><\/p>\n

A savvy plaintiff might argue something like the \u2018continuing violation theory\u2019, whereby a new cause of action would accrue upon each underpayment of benefits owed under the plan.<\/p>\n

However, several courts have rejected the \u2018continuing violation theory\u2019 in an ERISA miscalculation claim, noting that the theory \u201cis not as clear a fit in cases where the plaintiff[\u2019s] claims are based on a single decision that results in lasting negative effects.\u201d Here is another quote from another case: \u201cWhile Plaintiffs may have felt the ongoing effects of their ineligibility for ERISA benefits every time they received a paycheck from a third-party payroll agency, Plaintiffs\u2019 own allegations make clear that Defendants\u2019 wrongful conduct, if any, involved the misclassification of Plaintiffs as off-payroll employees at their time of hire in April 1994. The district court properly dismissed Plaintiffs\u2019 ERISA \u00a7 510 claim as time-barred.\u201d<\/p>\n

In short, Federal Courts do not seem to be adopting the \u2018continuing violation theory\u2019 in ERISA disability cases.<\/p>\n[Note: this claim was not handled by the Ortiz Law Firm. It is merely summarized here for a better understanding of how Federal Courts are handling long term disability insurance claims.]\n

Here is a copy of the decision in PDF: Faciane v. Sun Life<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

In Faciane vs.\u00a0Sun Life Assurance Company of Canada, the claimant received a monthly benefit for long term disability benefits pursuant to an ERISA-regulated group insurance policy. The group policy covered employees of Capital One Financial Corporation. He alleged that Sun Life had been underpaying him for years. The material facts of the case were not …<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[1],"tags":[263],"_links":{"self":[{"href":"https:\/\/www.nickortizlaw.com\/wp-json\/wp\/v2\/posts\/7474"}],"collection":[{"href":"https:\/\/www.nickortizlaw.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nickortizlaw.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nickortizlaw.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nickortizlaw.com\/wp-json\/wp\/v2\/comments?post=7474"}],"version-history":[{"count":0,"href":"https:\/\/www.nickortizlaw.com\/wp-json\/wp\/v2\/posts\/7474\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.nickortizlaw.com\/wp-json\/wp\/v2\/media?parent=7474"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nickortizlaw.com\/wp-json\/wp\/v2\/categories?post=7474"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nickortizlaw.com\/wp-json\/wp\/v2\/tags?post=7474"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}