UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 05-1341
DEAN I. SINGLETON,
Plaintiff - Appellant,
versus
TEMPORARY DISABILITY BENEFITS PLAN FOR
SALARIED EMPLOYEES OF CHAMPION INTERNATIONAL
CORPORATION #505; LONG TERM DISABILITY
BENEFITS PLAN FOR SALARIED EMPLOYEES OF
CHAMPION INTERNATIONAL CORPORATION #506;
CHAMPION INTERNATIONAL SALARIED RETIREMENT
PLAN #001; CHAMPION INTERNATIONAL CORPORATION,
as Administrator of the above-named defendant
plans; CHAMPION CREDIT UNION, as Sponsor and
Administrator of the above-named defendant
plans,
Defendants - Appellees.
Appeal from the United States District Court for the Western
District of North Carolina, at Asheville. Dennis L. Howell,
Magistrate Judge. (CA-03-64-1)
Argued: March 16, 2006 Decided: May 19, 2006
Before WILKINSON and SHEDD, Circuit Judges, and Cameron McGowan
CURRIE, United States District Judge for the District of South
Carolina, sitting by designation.
Reversed and remanded by unpublished per curiam opinion.
ARGUED: Michael L. Miller, Asheville, North Carolina; Allan Paul
Root, ROOT & ROOT, Weaverville, North Carolina, for Appellant.
Bruce McCoy Steen, MCGUIREWOODS, L.L.P., Charlotte, North Carolina,
for Appellees. ON BRIEF: Susan P. Dion, MCGUIREWOODS, L.L.P.,
Charlotte, North Carolina, for Appellees.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
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PER CURIAM:
Plaintiff Dean Singleton sought and was denied an award of
disability benefits for his depression. Finding that both
Singleton and the employer-sponsored benefit plans have mishandled
the administrative resolution of his claim, we remand this case to
the district court with directions to remand it to the plan
administrator for a determination of whether Singleton is disabled
as defined in the plans.
I.
Dean Singleton was employed with Champion International
Corporation for almost thirty years, eventually serving as Chief
Executive Officer of the Champion Credit Union. As a Champion
employee, he participated in the company’s temporary and long-term
disability benefit plans (hereafter “the Plans”), which are
governed by the Employee Retirement Income Security Act of 1974
(ERISA), 29 U.S.C.A. § 1001 et seq. (West 2005).
During the summer of 1996, a bank audit revealed that
Singleton had engaged in various improprieties. On August 8, 1996,
the Credit Union’s Board of Directors placed Singleton on
administrative leave. Several weeks later, on September 19, 1996,
Singleton wrote the Board requesting disability sick leave instead
of termination or resignation. In this letter, Singleton explained
that he was “currently under . . . care for depression” which he
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had experienced “for some time,” and which in his opinion was the
reason for “the unfortunate circumstances” at the Credit Union. On
September 30, 1996, Singleton’s employment with Champion was
terminated.
Over the next several years, Singleton and the Plans exchanged
correspondence concerning Singleton’s eligibility for disability
benefits. On December 23, 1997, more than a year after his
termination, Singleton’s attorney sent a letter to the Plans
indicating that Singleton believed himself eligible for disability
benefits, had requested such benefits in September 1996, and was
still awaiting an answer. On January 12, 1998, the Plans responded
that they had no record of any September 1996 claim for benefits.
They accordingly requested a copy of the 1996 claim, as well as any
other supporting documentation.
Singleton did not promptly respond to this letter. On
December 30, 1999, nearly two years later, Singleton’s new attorney
sent the Plans another letter requesting benefits. On January 31,
2000, the Plans answered that Singleton had not corresponded with
them since January 1998, and that his claim was deemed denied due
to his inaction. The letter further explained that Singleton was,
in any event, ineligible for disability benefits because he was
never disabled during the time that he was an active Champion
employee, a period that did not include the administrative leave
directly preceding his termination.
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On March 31, 2000, Singleton requested an internal review of
the Plans’ denial of benefits. The Plans agreed, noting that the
administrative appeal would be “in furtherance of ERISA’s
requirements that plan participants and beneficiaries be extended
full and fair review of benefit claims.” On June 15, 2000, the
Plans’ Claims Review Committee convened to consider Singleton’s
appeal and upheld the initial denial of disability benefits.
According to a letter sent to Singleton the following day,
Singleton was ineligible because “he [had] requested disability
benefits” during his administrative leave, when he was not an
active employee and thus not covered by the disability plans. The
letter also indicated that the now-resolved appeal “constituted
[Singleton’s] final appeal as required by [ERISA].”
Singleton filed suit in federal court on March 20, 2003,
contending that the Plans improperly denied him benefits and that
they breached their fiduciary duties.1 The district court concluded
that Singleton’s claims were time-barred.2 This appeal followed.
1
We have reviewed with care Singleton’s claims that the Plans
breached their fiduciary duties, and find them to be without merit.
2
We hold that Singleton timely filed his claim for benefits in
federal court. ERISA contains no limitations period for private
causes of action for plan benefits, and federal courts thus look to
the most analogous state statute of limitations. See, e.g.,
Rodriguez v. MEBA Pension Trust, 872 F.2d 69, 73 n.1 (4th Cir.
1989). The parties agree that North Carolina’s three-year
limitations period for breach of contract is the proper analogy
here. See N.C. Gen. Stat. § 1-52(1) (2005).
Under ERISA, employee benefit plans must provide claimants
with “a full and fair review” of a denial of benefits, 29 U.S.C. §
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II.
Champion’s temporary and long-term disability policies vest
the Plans with discretion both to determine benefits eligibility
and to construe plan terms. Under these circumstances, we review
the Plans’ denial of benefits for abuse of discretion, “asking
whether the denial of benefits was reasonable.” Stup v. UNUM Life
Ins. Co. of Am., 390 F.3d 301, 307 (4th Cir. 2004); see also Baker
1133(2) (2000); see also 29 C.F.R. § 2560.503-1(h) (2005); Gayle v.
United Parcel Serv., 401 F.3d 222, 225 (4th Cir. 2005), and a plan
participant “must both pursue and exhaust plan remedies before
gaining access to the federal courts,” Gayle, 401 F.3d at 226. The
statute of limitations thus does not ordinarily begin to run until
the statutorily mandated internal appeals process is exhausted.
See, e.g., Thomas v. Eastman Kodak Co., 183 F.3d 38, 52 (1st Cir.
1999) (collecting cases); Mason v. Aetna Life Ins. Co., 901 F.2d
662, 664 (8th Cir. 1990) (per curiam); Dameron v. Sinai Hosp. of
Balt., Inc., 815 F.2d 975, 981-82 & n.7 (4th Cir. 1987) (measuring
initiation of the statute of limitations from the notice of the
denial of an internal appeal); Kemp v. Control Data Corp., 785 F.
Supp. 74, 76 (D. Md. 1991); see also Veltri v. Bldg. Serv. 32B-J
Pension Fund, 393 F.3d 318, 325 (2d Cir. 2004) (collecting cases).
Activating the statute of limitations before a required internal
review has run its course would start the clock at a time when a
claimant could not file suit, and would only serve to undermine
“the strong federal policy encouraging private resolution of ERISA-
related disputes.” Gayle, 401 F.3d at 228 (internal quotation
marks omitted). There is also little concern for undue delay in
these situations, because plans may limit the time for filing
internal appeals, see, e.g., 29 C.F.R. § 2560.503-1(h)(2)(I), and
a failure to timely file such an appeal is considered a failure to
exhaust administrative remedies, see Gayle, 401 F.3d at 226. The
Plans do not contend that Singleton failed to exhaust his
administrative remedies here.
Rather, in this case the Plans conducted an internal review of
the initial denial of benefits on June 15, 2000 -- a review they
acknowledged was “in furtherance of ERISA’s requirement[]” of an
administrative appeal -- and the following day apprised Singleton
of their decision upholding the initial denial of benefits.
Singleton filed suit in federal court on March 20, 2003, within the
three-year statute of limitations.
6
v. Provident Life & Accident Ins. Co., 171 F.3d 939, 941 (4th Cir.
1999). “An administrator’s decision is reasonable ‘if it is the
result of a deliberate, principled reasoning process and if it is
supported by substantial evidence.’” Stup, 390 F.3d at 307
(quoting Bernstein v. CapitalCare, Inc., 70 F.3d 783, 788 (4th Cir.
1995)).
On the record before us, we cannot conclude that the Plans’
denial of benefits was reasonable. In the first place, there is
significant confusion about the basis for the denial. In their
January 31, 2000 letter, the Plans stated that they were denying
benefits to Singleton because he was never disabled at the time
that he was an active employee, and that he was not an active
employee while on administrative leave. When denying his internal
appeal in June 2000, however, the Plans switched gears, explaining
that they were denying benefits because Singleton “was not an
active employee when he requested disability benefits.” In fact,
the Plans indicated that only the timing of his application was
relevant, because “[t]he issue in this case is not whether Mr.
Singleton was or is disabled.” The Plans continued to maintain
this position in the proceedings in the court below, stating in
their pleadings that Singleton was denied benefits because he “was
not an active employee eligible for benefits at the time he applied
for disability benefits.” In this appeal, the Plans reversed
course once again, and now concede that the proper inquiry for
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benefits eligibility is not whether Singleton requested benefits
when he was an active Champion employee, but rather whether he
became disabled during that time. This view, however, was never
consistently adhered to in the administrative process. See 29
U.S.C. § 1133(1) (2000) (plan administrator must “set[] forth the
specific reasons” for denying benefits “in a manner calculated to
be understood by the participant”).
Relatedly, the Plans have never addressed evidence in the
record tending to show that Singleton may have suffered from
depression prior to being placed on administrative leave. In the
September 19, 1996 letter to the Board of Directors, for example,
Singleton indicated that he had experienced depression “for some
time,” and that this depression caused the problems identified in
the bank audit. A letter dated September 18, 1996 from Singleton’s
pastoral counselor, Diane Stamey, likewise states that “[b]ecause
of the severity of his depression, I believe that [Singleton] has
been depressed for at least a year, if not longer.” On November
17, 1996, Stamey submitted a revised letter indicating that after
treating both Singleton and his wife over the past several months,
“[i]n retrospect, in my professional opinion, Mr. Singleton has
probably been depressed for approximately two years.” This view is
corroborated by a letter from Dr. T. Glen Snyder, a psychiatrist,
who in November 1996 wrote that after evaluating Singleton, “I
suspect that in fact [he] has been depressed for a couple of
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years.” Nothing in the Plans’ correspondence with Singleton
indicates that they have considered any of the above evidence, much
less that they have addressed whether Singleton was disabled prior
to being placed on administrative leave.
The administrative process in this case was thus not a clean
one, but we note that Singleton himself is partly to blame.
Singleton at times diligently pursued his disability benefits, but
at other points treated them with an almost lackadaisical
disinterest. He waited until over a year after his termination
from Champion to inquire further about his September 1996 letter.
And when the Plans responded with a request for additional
information in January 1998, he was silent for close to two years.
Under these circumstances, the proper course is to send this case
back to square one. We thus remand the case to the district court
with directions to remand it to the Plans for an appropriate
determination of Singleton’s eligibility for disability benefits,
see Berry v. Ciba-Geigy Corp., 761 F.2d 1003, 1007 n.4 (4th Cir.
1985). We express no opinion on whether Singleton is in fact
entitled to disability benefits, a decision vested in the first
instance in the sound discretion of the plan administrator.
III.
For the foregoing reasons, we reverse the judgment of the
district court and remand for proceedings consistent with this
opinion.
REVERSED AND REMANDED
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