James Moss v. UNUM Group , 638 F. App'x 347 ( 2016 )

Case: 15-30341 Document: 00513367001 Page: 1 Date Filed: 02/03/2016
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 15-30341 United States Court of Appeals
Fifth Circuit
FILED
JAMES L. MOSS, February 3, 2016
Lyle W. Cayce
Plaintiff - Appellant Clerk
v.
UNUM GROUP; PAUL REVERE LIFE INSURANCE COMPANY; NEW
YORK LIFE INSURANCE COMPANY,
Defendants - Appellees
Appeal from the United States District Court
for the Western District of Louisiana
USDC No. 5:13-CV-3152
Before STEWART, Chief Judge, and REAVLEY and DAVIS, Circuit Judges.
PER CURIAM:*
Plaintiff-Appellant James L. Moss alleges that Defendants-Appellees
(collectively “Unum”) unlawfully denied his claim for total disability benefits
under two insurance policies governed by the Employment Retirement Income
Security Act of 1974 (“ERISA”). The district court dismissed Moss’s claims with
prejudice for failure to exhaust administrative remedies. We affirm.
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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I.
Unum issued two disability insurance policies to Moss, a urologist. Moss
suffers from osteoarthritis. He alleges that his condition prevents him from
performing urological surgery.
Moss filed a claim with Unum for total disability benefits under the
policies. Unum denied the claim on June 5, 2009. Unum’s denial letter notified
Moss that, if he wanted to appeal Unum’s denial of his claim, he was required
to submit a written appeal within 180 days.
On June 30, 2009, Moss’s attorney called an Unum representative and
verbally informed him that he disagreed with Unum’s decision. Then, on July
16, 2009, Moss’s attorney mailed copies of Moss’s paychecks to Unum.
However, Moss did not file a formal written appeal.
On December 10, 2009, Unum sent Moss another letter reiterating its
denial of his claim for benefits. The December 10, 2009 denial letter again
informed Moss that he had 180 days to file a written administrative appeal.
Moss never filed an administrative appeal. Instead, Moss filed a lawsuit
against Unum, in which he argued that attempting to exhaust his
administrative remedies would be futile. The district court rejected Moss’s
futility argument and dismissed the case without prejudice.
On April 16, 2013, after the district court dismissed his first suit, Moss
asked Unum to allow him to file an administrative appeal. Unum responded
that it was unable to review the claim because Moss submitted his appeal
request far beyond the 180-day deadline.
Moss filed a second suit against Unum on October 21, 2013. The district
court ruled that Moss had failed to exhaust his administrative remedies by
failing to file a timely administrative appeal. Because Moss failed to
demonstrate that he would be able to timely exhaust his administrative
remedies in the future, the district court dismissed the case with prejudice.
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Moss now appeals the district court’s order dismissing his second suit
against Unum.
II.
This appeal presents only legal questions, so our standard of review is
de novo. 1
III.
Moss’s disability insurance policies are governed by ERISA. ERISA
authorizes a civil action by a participant “to recover benefits due to him under
the terms of his plan.” 2 However, “claimants seeking benefits from an ERISA
plan must first exhaust available administrative remedies under the plan
before bringing suit to recover benefits.” 3 This includes, inter alia, filing a
timely administrative appeal. 4
Moss did not file a timely administrative appeal. Thus, the district court
properly dismissed the case.
IV.
Moss nonetheless argues that we should excuse his failure to appeal. As
we explain below, none of Moss’s arguments have merit.
1 Sweatman v. Commercial Union Ins. Co., 39 F.3d 594, 601 (5th Cir. 1994).
2 29 U.S.C. § 1132(a)(1)(B).
3 Bourgeois v. Pension Plan for Emps. of Santa Fe Int’l Corps., 215 F.3d 475, 479 (5th
Cir. 2000) (citing Denton v. First Int’l Bank of Waco, 765 F.2d 1295, 1300 (5th Cir. 1985)).
“This court has recognized an exception to the affirmative defense of failure to exhaust
administrative remedies when such attempts would be futile.” Id. (citing Hall v. Nat’l
Gypsum Co., 105 F.3d 225, 232 (5th Cir. 1997)). Moss argued in his first case against Unum
that exhaustion would be futile, but the district court rejected that argument. Moss does not
pursue his futility argument in the instant case, nor could he.
4 See Lacy v. Fulbright & Jaworski, 405 F.3d 254, 257 (5th Cir. 2005).
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A.
Moss first relies on the following statement from Unum’s December 10,
2009 denial letter: “Unless there are special circumstances, the administrative
appeal process must be completed before you begin any legal action regarding
your claim.” Moss claims that Unum’s alleged bad faith in denying his claim
for disability benefits constitutes a “special circumstance” that excuses him
from his obligation to file an administrative appeal.
Because Unum’s denial letter does not define the term “special
circumstances,” Moss analogizes to the principle that courts should construe
ambiguous provisions in insurance contracts in the insured’s favor and against
the drafter. 5 According to Moss, “[c]onstruing this ambiguous term in favor of
Dr. Moss requires findings [sic] that a ‘special circumstance’ did exist when
Defendants-Appellees acted in bad faith, and, therefore, Dr. Moss had
exhausted his administrative remedies.”
We doubt that a denial letter is analogous to an insurance contract that
must be construed in Moss’s favor. But even if that were so, Moss’s
interpretation of “special circumstances” is meritless. As the district court
correctly reasoned, if a claimant could avoid the exhaustion requirement
simply by alleging in his complaint that the plan administrator denied his
claim in bad faith, then no claimant would ever be required to exhaust
administrative remedies before filing suit. Interpreting “special
circumstances” as Moss proposes would render the administrative appeal
requirement completely toothless. An exception to the appeal requirement that
is potentially available to every claimant is hardly a “special” circumstance.
5 See Johnston & Johnston v. Conseco Life Ins. Co., 732 F.3d 555, 562 (5th Cir. 2013).
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Because Moss’s interpretation of “special circumstances” is implausible,
we hold that Moss was indeed required to file a written administrative appeal
within 180 days.
B.
Moss next argues that even though he did not file a formal written
appeal, he “effectively exhausted” his administrative remedies by taking
informal actions that fulfilled “the underlying purpose of the exhaustion
requirement.” According to Moss, it is sufficient that he telephonically
informed Unum that he disagreed with its decision and mailed Unum copies of
his paychecks. Thus, claims Moss, “in substance, Dr. Moss did appeal [Unum]’s
denial of benefits.”
This argument is also meritless. “[A]llowing informal attempts to
substitute for the formal claims procedure would frustrate the primary
purposes of the exhaustion requirement.” 6 Unum clearly informed Moss that,
if he “want[ed] to appeal [its] claim decision,” he was required to submit “a
written appeal.” He nonetheless failed to file one. He has therefore failed to
exhaust his administrative remedies. 7
6 Bourgeois, 215 F.3d at 480 n.14.
7Moss cites two district court cases, Stormont-Vail Regional Medical Center v. Kansas
Building Trades Open-End Health & Welfare Fund Uninsured Benefit Plan, CIV. A. No. 88-
4146, 1990 WL 11377, at *3 (D. Kan. Jan. 8, 1990) and Keel v. Group Hospitalization Medical
Services, Inc., 695 F. Supp. 223, 227-28 (E.D. Va. 1988), for the proposition that a claimant
need not file a formal appeal if he takes informal actions that “are the functional equivalent
of the appeals process.” We do not read Stormont-Vail or Keel to stand for such a broad
proposition. In any event, we are bound by our published opinion in Bourgeois, which states
that “allowing informal attempts to substitute for the formal claims procedure would
frustrate the primary purposes of the exhaustion requirement.” 215 F.3d at 480 n.14.
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C.
Moss’s final argument is based on Louisiana Civil Code art. 3462, which
provides that “[p]rescription is interrupted when the owner commences action
against the possessor, or when the obligee commences action against the
obligor, in a court of competent jurisdiction and venue.” Moss argues that, by
filing his first suit against Unum on December 3, 2009, he tolled the 180-day
deadline for filing an administrative appeal. He asserts that “[t]he 180-day
‘statute of limitations’ began to run again on March 14, 2013, when the District
Court dismissed Dr. Moss’s lawsuit without prejudice.” Because Moss
requested an administrative appeal 33 days after the district court dismissed
his first suit, he claims that he timely filed an appeal and thereby exhausted
his administrative remedies.
Moss’s tolling argument is meritless. ERISA requires the claimant to
exhaust his administrative remedies within the time period specified in the
plan, which in this case was 180 days after denial. Moss offers no persuasive
reason why the Louisiana Civil Code would govern this purely federal ERISA
suit. 8 In any event, at least one other court in this Circuit has rejected an
identical tolling argument, and we find that court’s reasoning persuasive. 9
8 Moss cites Swanson v. Hearst Corp. Long Term Disability Plan, 586 F.3d 1016 (5th
Cir. 2009) for the proposition that an ERISA plan’s internal appeal deadlines are to be
followed “just as any statute of limitations,” but that language does not appear anywhere in
Swanson. Swanson does not stand for the proposition that state statutes of limitation apply
in federal ERISA cases.
9 See Poch v. Unum Grp., Civil Action No. 12-1878, 2013 WL 4404183, at *2 (W.D. La.
Aug. 15, 2013) (“This Court therefore finds that its decision to dismiss the first case without
prejudice did not extend Poch’s deadline to appeal his denial of benefits.”).
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V.
Because Moss did not timely file an administrative appeal, the district
court correctly dismissed his ERISA claim for failure to exhaust administrative
remedies.
AFFIRMED.
7