FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
VALERIE J. WITHROW, FKA Valerie
J. Hunt,
No. 09-55024
Plaintiff-Appellant,
D.C. No.
v.
CV-06-0369 JAH
BACHE HALSEY STUART SHIELD, (RBB)
INC., SALARY PROTECTION PLAN
OPINION
(LTD),
Defendant-Appellee.
Appeal from the United States District Court
for the Southern District of California
John A. Houston, District Judge, Presiding
Argued and Submitted
October 4, 2010—San Francisco, California
Filed August 23, 2011
Before: Kim McLane Wardlaw, William A. Fletcher,
Circuit Judges, and Robert J. Timlin,* District Judge.
Opinion by Judge Timlin
*The Honorable Robert J. Timlin, United States District Judge for the
Central District of California, sitting by designation.
11449
11452 WITHROW v. BACHE HALSEY STUART SHIELD
COUNSEL
Susan L. Horner, Miller, Monson, Peshel, Polacek, &
Hoshaw, for the plaintiff-appellant.
Victoria E. Fuller, Huggs, Fletcher & Mack LLP, for the
defendant-appellee.
OPINION
TIMLIN, District Judge:
Valerie Withrow appeals the district court’s dismissal of
her ERISA action against Bache Halsey Stuart Shield, Inc.
WITHROW v. BACHE HALSEY STUART SHIELD 11453
Salary Protection Plan (“Bache Halsey”) as not timely filed.
We have jurisdiction pursuant to 28 U.S.C. § 1291. We hold
that the district court erred in dismissing her action, and
accordingly, we reverse.
I.
BACKGROUND
Ms. Withrow was employed by Bache Halsey as a stock-
broker in 1979, which paid her on a commission basis. Bache
Halsey provided her with long-term disability coverage under
the Bache Halsey Stuart Shield, Inc. Salary Protection Plan
(“plan”), as it did for all its employees. The plan is insured by
a group disability policy issued by Reliance Standard Life
Insurance Company (“Reliance”).1
Starting in 1982, Withrow had been disabled periodically
from her employment, due to degenerative disc disease with
chronic lumbar pain, as well as other various medical condi-
tions. She has been totally disabled from employment from
December 6, 1986 to the present.
Around January 15, 1987, Withrow applied for long-term
disability benefits. Some time in the beginning of 1987,
Withrow had a conversation with an employee of Reliance,
Dominic Lorenzo, concerning Withrow’s belief that she
should have been receiving the maximum benefit under the
plan of $5,000 per month, rather than the $3,950 to which
Reliance had calculated she was entitled. At that time, they
spoke at length and reviewed Withrow’s records. According
1
Although Bache Halsey is the named party defendant in this ERISA
action and Reliance is not a party, the discussion will relate in most part
to the provisions of Reliance’s group disability policy (“the policy”),
which funds and insures the plan’s benefits for its members. The policy
contains the provisions which apply in this case and therefore must be
interpreted by this court.
11454 WITHROW v. BACHE HALSEY STUART SHIELD
to a letter written by Withrow in 1990, Lorenzo explained
“how the timing worked” for ERISA claims.
Three years later, on August 14, 1990, Withrow again cal-
led Reliance, saying that she believed there was an error in the
amount of her benefits. At that time, she was advised by Reli-
ance to put her concerns in writing, but she was not told of
any time deadlines within which to do so. Withrow then wrote
to Lorenzo on October 1, 1990. In that letter, she said she was
“not convinced” she was receiving the proper benefits and
asked that Lorenzo review her file and discuss the matter with
her until she felt “satisfied that the issue of the benefit amount
[was] at rest.”
Withrow did not receive a response to that letter, and she
wrote another letter to Lorenzo on November 5, 1990 asking
Lorenzo to respond. According to a notation made by a Reli-
ance employee on that letter, someone at Reliance called
Withrow after November 5, 1990 and left a message on her
answering machine, stating that Reliance’s “original determi-
nation of [her] salary” stayed the same.
Twelve years then passed, with no communication between
Withrow and Reliance other than her monthly receipt of a dis-
ability check. Then, in January of 2002, Withrow called
Joseph Tierney, a Benefits Manager at Bache Halsey (which
by then had changed its name to Prudential Securities) to say
that she was concerned her benefits were being underpaid
based on a miscalculation of her maximum earnings for the
years 1985 and 1986. At that time, Tierney spoke to someone
at Reliance, who told him that the benefits calculation was
correct. Following her correspondence with Tierney, no one
contacted Withrow.
Five months later, Withrow wrote to Tierney, asking if he
could restore her lost income “to its proper level” and enclos-
ing documents regarding her disability benefit payments from
Reliance.
WITHROW v. BACHE HALSEY STUART SHIELD 11455
A week later, Withrow wrote to Rob Loy, Manager of LTD
claims at Reliance, requesting that he help her restore what
she believed to be a significant underpayment of her disability
benefits. No one responded.
On June 28, 2002, Withrow called Joseph C. Fischer, Jr.,
a supervisor and Senior Managing Benefit Consultant at Reli-
ance, to ask for his assistance in obtaining an audit for her
claim. She told him she had been trying for months to have
her benefits resolved. Loy responded that Reliance “needed a
little more time to complete [its] research, given that she has
been on claim for 16 years.” He told her that her claim file
was being reviewed, and someone would give her a call in a
few days.
Three and a half months later, on October 16, 2002,
Withrow again wrote to Mr. Loy and provided him with more
information to support her claim that her benefits were calcu-
lated incorrectly. When she received no response, she wrote
another letter to Mr. Loy on November 12, 2002; in that letter,
she noted that, if no reasonable settlement was reached within
20 days, she planned to request her attorney take action.
Loy responded to Withrow by letter on February 12, 2003,
thanking her for her patience while “the details of the cap-
tioned claim were investigated and reviewed” and explaining
that the investigation of her claim had been difficult as the
claim period dated back to 1986. He also explained that Reli-
ance had researched her claim and found that its calculation
of her benefits was correct, and her claim was denied. He also
informed her that she could appeal the denial of her underpay-
ment claim.
On July 21, 2003, Withrow presented an appeal to Reli-
ance. On January 14, 2004, someone in the Reliance Standard
Quality Review Unit left a message for her attorney indicating
that Reliance was upholding its denial of her claim. Reliance
never issued a written decision.
11456 WITHROW v. BACHE HALSEY STUART SHIELD
On February 16, 2006, Withrow filed her complaint in fed-
eral district court. After a bench trial, the district court dis-
missed her complaint as untimely. Withrow timely appealed.
II.
Our jurisdiction arises under 28 U.S.C. § 1291, and we
review de novo whether an ERISA claim is barred by the
applicable statute of limitations. See LaMantia v. Voluntary
Plan Adm’rs, 401 F.3d 1114, 1118 (9th Cir. 2005). The dis-
trict court’s factual findings are reviewed under the “clearly
erroneous” standard. Silver v. Exec. Car Leasing Long-Term
Disability Plan, 466 F.3d 727, 732-33 (9th Cir. 2006).
III.
[1] There are two parts to the determination of whether a
claimant’s ERISA action is timely filed: we must determine
first whether the action is barred by the applicable statute of
limitations, and second whether the action is contractually
barred by the limitations provision in the policy. See Wetzel
v. Lou Ehlers Cadillac Group Long Term Disability Ins. Pro-
gram, 222 F.3d 643 (9th Cir. 2000) (en banc). The district
court found Withrow’s complaint to be untimely under both
the applicable statute of limitations for ERISA claims and
also the limitations provision in the policy, because she had
reason to know in 1990 that her claim regarding miscalculated
benefits was denied. We conclude the district court erred
regarding both the timeliness of Withrow’s complaint under
the ERISA statute of limitations and the application of the
policy’s contractual limitation provision to Withrow’s claim.
Accordingly, we reverse and remand to the district court for
further proceedings.
A. ERISA STATUTE OF LIMITATIONS
We first address whether Withrow’s claim is time-barred
under ERISA’s statute of limitations. Bache Halsey argues,
WITHROW v. BACHE HALSEY STUART SHIELD 11457
here and in the district court, that Withrow had reason to
know in 1990 that her claim regarding the miscalculation and
underpayment of disability benefits had been denied, because
she had been contacted by someone at Reliance who
explained that the calculation of her disability benefits was
correct and would remain the same. Withrow contends that
her claim only accrued when she received notice from Reli-
ance that her administrative appeal had been denied on Janu-
ary 14, 2004.
[2] Withrow initiates this action under 29 U.S.C.
§ 1132(a)(1)(B), which authorizes a claim by a benefit plan
participant “to recover benefits due to [her] under the terms
of [her] plan, to enforce [her] rights under the terms of the
plan, or to clarify [her] rights to future benefits under the
terms of the plan.” ERISA does not provide its own statute of
limitations for suits to recover benefits under 29 U.S.C.
§ 1132(a)(1)(B). Under Ninth Circuit precedent, district
courts must apply the state statute of limitations that is most
analogous to an ERISA benefits-recovery program. Wetzel,
222 F.3d at 646. In this case, California’s four-year statute of
limitations for contract disputes applies. See id. at 647 & n.3.
[3] However, federal law governs the issue of when an
ERISA cause of action accrues and thereby triggers the start
of the limitation period. See Wise v. Verizon Commc’ns, Inc.,
600 F.3d 1180, 1188 (9th Cir. 2010). An ERISA cause of
action accrues “either at the time benefits are actually denied,
or when the insured has reason to know that the claim has
been denied.” Wetzel, 222 F.3d at 649 (internal citations omit-
ted). A claimant has a “reason to know” under the second
prong of the accrual test when the plan communicates a “clear
and continuing repudiation of a claimant’s rights under a plan
such that the claimant could not have reasonably believed but
that his or her benefits had been finally denied.” Wise, 600
F.3d at 1188 (citation omitted); Martin v. Constr. Laborer’s
Pension Trust for S. Cal., 947 F.2d 1381, 1384 (9th Cir.
1991).
11458 WITHROW v. BACHE HALSEY STUART SHIELD
[4] Withrow’s benefits were “actually denied” on January
14, 2004, when her attorney was informed by phone that her
appeal had been denied. See Wetzel, 222 F.3d at 650 (holding
that benefits were not “actually denied” until the appeal was
denied or the time for appeal had run); LaMantia, 401 F.3d
at 1117-18. If Withrow’s claim accrued on that date, her com-
plaint, which was filed on February 16, 2006, was timely
under the applicable ERISA four-year statute of limitations.
We now turn to the second prong of the accrual test to
determine whether Withrow’s cause of action may have
accrued earlier than the date her benefits were “actually
denied” because of a clear and continuing repudiation of her
rights by Reliance such that she “could not have reasonably
believed but that her benefits had been finally denied.” See
Wise, 600 F.3d at 1188.
[5] The district court found that Withrow’s ERISA cause
of action for underpayment of benefits did accrue earlier than
the actual denial, in 1990, because at that time she had “rea-
son to believe” the calculation used by Reliance in determin-
ing the amount of her benefits was incorrect. The court stated
as follows in its Conclusions of Law No. 5: “In this case,
plaintiff had reason to believe the calculation was incorrect as
early as 1990, when plaintiff called the plan to inquire about
underpayment in August 1990, and subsequently wrote a let-
ter to formally inquire about the alleged underpayment in
October 1990. Plaintiff was advised at that time that the plan
would not increase her benefits. Plaintiff received monthly
benefits reflecting the alleged miscalculated amount for
nearly twelve years. Plaintiff did nothing further to pursue her
claim until May 2002.”
At the outset, we disagree with the district court’s conclu-
sion in its Conclusion of Law No. 5 that Plaintiff was advised
in October 1990 that the plan would not increase her benefits.
We note that, in its Findings of Fact No. 9, the district court
also stated, in reference to Withrow’s October 1, 1990 letter,
WITHROW v. BACHE HALSEY STUART SHIELD 11459
that “the record is unclear as to whether the plan responded
to this inquiry.” This directly contradicts its Conclusion of
Law No. 5.
[6] Our independent review of the record convinces us that
it is unclear what exactly transpired between Withrow and
Reliance in 1990. What is clear is that Withrow called and
then wrote two letters to Reliance stating her concerns. The
substance of Reliance’s response is far less clear. The only
evidence of Reliance’s response is a handwritten notation by
a Reliance employee on one of Withrow’s letters to Reliance
that someone had called Withrow back regarding her inquiry
and left a message on her answering machine that the “origi-
nal determination of salary stays the same.” It is unclear who
made the call, what exactly was said, and whether Withrow
was provided with guidance concerning the steps to take if
she wished to submit her claim for review.
[7] Based on this evidence, such a response is insufficient
to constitute a “clear and continuing repudiation” of
Withrow’s claim such that she “could not have reasonably
believed” that the plan had not finally denied her claim. If
such a response was sufficient to constitute a “clear and con-
tinuing repudiation,” then virtually any correspondence or
communication with a plan concerning the calculation or
awarding of benefits could be interpreted as such. Such a
reading of the “clear and continuing repudiation” test goes
well beyond what our circuit has previously recognized.
The district court relied on our decision in Chuck v. Hewlett
Packard Co., 455 F.3d 1026, 1031 (9th Cir. 2006), as support
for its analysis. In Chuck, we made clear that only an “un-
usual combination of circumstances” would warrant a finding
that a claim was time-barred despite a plan’s failure to comply
with its duties of proper notification and review under ERISA.
Otherwise, failure to “ ‘provide adequate notice in writing to
any participant or beneficiary whose claim for benefits under
the plan has been denied’ ” and failure to “ ‘afford a reason-
11460 WITHROW v. BACHE HALSEY STUART SHIELD
able opportunity to any participant whose claim for benefits
has been denied for a full and fair review’ ” will “militate[ ]
strongly against a finding that the statute of limitations has
begun to run.” Id. at 1030, 1032 (quoting 29 U.S.C. § 1133).
We find the “unusual combination of circumstances” present
in Chuck to be readily distinguishable from the series of
events that occurred between Withrow and Reliance.
The circumstances in Chuck that demonstrated he had rea-
son to know of the final denial of his claim because of a clear
and continuing repudiation of his claim such that he could not
have reasonably believed but that his claim was time-barred
are as follows: 1) he knew that the plan was going to take the
position for further pension benefits beyond what he had
already received; 2) the plan consistently communicated to
Chuck that it was taking the position he expected; 3) Chuck
had actual notice that a lump sum payment of benefits, if
made, would constitute his only payment option; 4) Chuck
had actual notice that his acceptance of a payment by lump
sum would be irrevocable; 5) Chuck subsequently accepted
the plan’s check constituting a lump sum payment in the
amount set by the plan; and 6) when Chuck did raise the issue
again with the plan, a plan administrator sent Chuck a letter
noting that the plan had paid him and unequivocally stating
that “no further retirement benefits are payable from our U.S.
plans.” See id. at 1037. Based on these circumstances, we held
that Chuck had no reasonable basis for believing that the han-
dling of his benefits claim was not final, and that “Chuck’s
own actions and understandings play a large role in foreclos-
ing the possibility that he did not have reason to know his
claim had been conclusively denied.” Id. at 1038.
[8] Here, Withrow’s situation is similar in only one
respect: she knew as early as 1987 that Reliance was taking
the position that its calculation of her disability benefits was
correct. However, Withrow’s circumstances diverge from
Chuck’s at that point. Chuck was provided with actual notice
that any acceptance of benefits would be irrevocable.
WITHROW v. BACHE HALSEY STUART SHIELD 11461
Although Withrow knew that Reliance had taken the position
its calculation was correct, she was never provided with any-
thing from Reliance that would give her reason to know that
her acceptance of continued payment of benefits amounted to
an irrevocable or final determination by Reliance of the
amount of her benefits and a denial by it of a claim concern-
ing that calculation. Further, when Chuck contacted his plan
to raise the issue of his benefits after he accepted their pay-
ment, he was told unequivocally that he would receive no fur-
ther benefits. Withrow’s experience with Reliance was very
different. In fact, in 2002, twelve years after Withrow’s first
conversations with Reliance about the underpayment of her
benefits, Reliance encouraged her to submit more documenta-
tion and to prove the benefits calculation was wrong.
[9] Further, Withrow’s actions throughout the approxi-
mately fifteen years between her initial contact with Reliance
and the phone call denying her appeal demonstrate that she
did not ever understand that Reliance had finally denied her
claim that her benefits were being underpaid. Rather, she
reached out repeatedly to Reliance to voice her concerns and
was met with indications that the plan disagreed but also with
encouragement to her to continue communicating with the
plan and to provide more information.
We therefore conclude that Withrow’s claim did not accrue
in 1990 with regard to the ERISA statute of limitations, as the
district court found, but rather accrued when her claim was
finally denied on January 14, 2004. Withrow’s action, filed on
February 16, 2006, was commenced within the four-year stat-
utory limitations period for ERISA claims.
B. LIMITATIONS PROVISION IN POLICY
[10] The next inquiry is whether Withrow’s action is con-
tractually barred by the limitations provision in the policy.
Withrow’s policy provides that no legal action may be
brought “after the expiration of three years . . . after the time
11462 WITHROW v. BACHE HALSEY STUART SHIELD
written proof of loss is required to be furnished.” The proof
of loss provision of the policy states that this proof of loss
must be furnished “in case of claim for loss for which this
Policy provides any periodic payment contingent upon contin-
uing loss, within 90 days after the termination of the period
for which the company is liable.” Both provisions are required
by California law. See Cal. Ins. Code §§ 10350.7, 10350.11.
A now-overruled decision of our circuit, Nikaido v. Centen-
nial Life Ins. Co., 42 F.3d 557 (9th Cir. 1994), held that an
identical contract provision stated both the time that claims
accrue and the statute of limitations for ERISA claims. Id. at
559-60. Wetzel overruled Nikaido and, as discussed above,
held instead that (1) California’s four-year statute of limita-
tions for contract disputes applied to ERISA claims, and (2)
under ERISA, claims accrue when the applicant knows her
application has been denied. 222 F.3d. at 648-49. Wetzel also
held, however, that applicants for long-term disability benefits
must meet both ERISA and contractual limitations with
regard to the length of the limitation period and the accrual
date. Id. at 650. The Wetzel court did not decide how this con-
tract provision should be interpreted and instead remanded
that question to the district court. Id. at 650-51.
[11] Thus, contract limitations provisions in benefit poli-
cies still have force independent of ERISA in long-term dis-
ability benefit cases. Here, there is no dispute that the contract
terms create a shorter limitations period (three years instead
of four), but they also provide that claims accrue as a contrac-
tual matter “within 90 days after the termination of the period
for which the company is liable.” We have found it difficult
thus far to define “termination of the period for which the
company is liable.” The Nikaido court, struggling to fit lan-
guage and logic together, ultimately held that each month
constitutes a “period for which the company is liable.” 42
F.3d at 560. Thus, under Nikaido, an applicant for disability
benefits had to send in renewed proof of disability as proof of
loss 90 days after each month in which she received a disabil-
WITHROW v. BACHE HALSEY STUART SHIELD 11463
ity check. However, Nikaido has been overruled, and at pres-
ent, the Ninth Circuit has not interpreted the phrase “the
period for which the company is liable.” The Wetzel court
offered some observations suggesting that Nikaido had misin-
terpreted the contract provision — specifically, it noted that
the question of what disability benefits an applicant deserves
in the first instance is different than the question whether a
payment in a particular month was correct—but it did not sug-
gest a plausible interpretation of the mandatory contract lan-
guage. See 222 F.3d at 650.
[12] However, we need not reach the thorny issue of what
the phrase “the period for which the company is liable” means
with regard to disputes over whether or not an applicant is
actually disabled or is entitled to benefits at all. At oral argu-
ment, counsel for Bache Halsey forthrightly conceded that the
limitations provision in the policy here does not apply to dis-
ability cases in which the claimant contests the amount of
benefits or claims the benefits have been miscalculated.
Counsel acknowledged that the only time bar that applies in
this case was that created by ERISA, the four-year California
statute of limitations. We agree with counsel’s concession that
the language of this provision, as mandated by California
Insurance Code § 10350.7 and § 10350.11, is meaningless as
applied to disputes over the proper calculation of the amount
of monthly disability benefits, as opposed to disputes over
whether an applicant is entitled to benefits at all.
CONCLUSION
Accordingly, we VACATE the judgment of the district
court dismissing the ERISA claim in this action and
REMAND for proceedings consistent with this opinion.
REVERSED AND REMANDED.