PHILADELPHIA – A federal judge has granted a motion for judgment on the pleadings, accepting the argument of a health fund that a benefit claim filed against it by a retired member of a local carpenters’ union was time-barred.
U.S. District Court for the Eastern District of Pennsylvania Judge Michael M. Baylson granted the motion on Feb. 26, filed on behalf of Local 158 Carpenter’s Union 1803, the United Brotherhood of Carpenters and Joiners of America and the Carpenters Benefit Funds of Philadelphia, against plaintiff Joseph Casale.
“Casale originally brought this case, alleging breach of contract arising from the denial of payment of health benefits, in Pennsylvania state court. Defendant Carpenters Benefit Funds of Philadelphia removed the case to this Court because Casale’s claim is preempted by the Employee Retirement Income Security Act. Presently before the Court is the Fund’s motion for judgment on the pleadings arguing that this suit is time barred,” Baylson said.
The Fund is an organization which provides health and welfare benefits to certain eligible active and retired Union carpenters. The terms of the benefits available are laid out in the Fund’s Plan of Benefits. Casale is a retired member of Local 158 Carpenter’s Union and at all relevant times was an Eligible Active Participant in the Fund, as defined by the Plan.
According to the Plan, a participant in the Fund must bring a civil action based on the denial of benefits within three years of the initial denial.
On Dec. 15, 2016, Casale was injured in a slip-and-fall accident. He suffered injuries and incurred medical expenses, and submitted a claim to the Fund. After conducting an investigation of Casale’s claim, the Fund issued an initial denial on Feb. 27, 2017.
This notice also advised Casale of his appeal rights and the Plan’s three-year limitations provision. Casale appealed the denial of his claim, and eventually received a final denial on June 6, 2017, which also informed Casale of his appeal rights and the Plan’s three-year limitations period.
Casale initially filed suit in the Philadelphia County Court of Common Pleas on Aug. 24, 2020 alleging one count of breach of contract, and on Sept. 17, 2020, the Fund removed this matter to federal court. On Oct. 15, 2020, the Fund filed its answer, followed by a motion for judgment on the pleadings on Nov. 25.
Baylson stated that during a Feb. 10 teleconference, the parties agreed that the three-year limitations period in the Plan is the controlling limitations period and that the latest possible date on which the limitations period began to run was June 6, 2017, the date of the final denial of Casale’s claim.
Casale filed this lawsuit on Sept.17, 2020, over three years after June 6, 2017.
The only remaining issue, according to Baylson, was whether the defendant adequately pleaded that this suit was time-barred in its answer to the complaint.
While Casale argued that the contractual limitations period of three years cannot be raised by the Fund because it was not included in the Fund’s answer, the Fund countered that the affirmative defenses included in its answer were sufficient to put Casale on notice of its argument that the complaint was time-barred.
“Casale’s argument is that the Fund’s defense is based on a “suit limitations provision” which is not the same as a statute of limitations. Casale argues that because Federal Rule of Civil Procedure 8(c)(1) requires certain affirmative defenses to be raised in a responsive pleading, and the ‘suit limitations provision’ was not specifically raised, that the Fund has waived this defense,” Baylson said.
“Defendant’s second affirmative defense states ‘plaintiff’s claims are barred by the applicable statutes of limitation.’ Defendant’s fifth affirmative defense states ‘the complaint is barred by the doctrines of waiver, laches, estoppel, and unclean hands. Plaintiff intentionally and without just cause, permitted an unreasonable delay in pursuing its claims against defendant.” The Fund argues that these defenses gave Casale fair notice that it intended to argue his complaint was not timely filed.”
Baylson explained that Federal Rule of Civil Procedure 8(c)(1) requires a defendant to affirmatively state certain defenses including a statute of limitations defense, and that the Fund put Casale on notice that they intended to defend against his lawsuit by contending that it was time-barred.
Baylson added that when viewed in context, the only possible time limitation argument was “based on the three-year suit limitations provision of the Plan, which is obviously shorter than the undisputed statute of limitations, which under state law is four years.”
“The Court finds that the Fund’s second affirmative defense raising the statute of limitations was adequately pleaded and the Fund has not waived the argument that this suit is time barred. Further, the Supreme Court has specifically noted the importance of suit limitations provisions in this context and that a three-year limitations provision, such as the one in this case, is reasonable,” Baylson said.
“The Court notes that when ‘a complaint is subject to a Rule 12(b)(6) dismissal, a district court must permit a curative amendment unless such an amendment would be inequitable or futile.’ Seeking to amend a complaint which would be barred by the statute of limitations is futile. As Casale brought this lawsuit after three years, any attempt at amending the complaint in this case would be futile.”
U.S. District Court for the Eastern District of Pennsylvania case 2:20-cv-04552
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com