Pierce v . Metropolitan Life I n s . C o . CV-03-435-JD 03/05/04 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
Anne “Juni” Pierce
v. Civil N o . 03-435-JD Opinion N o . 2004 DNH 039 Metropolitan Life Insurance Company
O R D E R
On August 2 0 , 2003, Anne “Juni” Pierce filed suit against
her insurer, MetLife, alleging that it had wrongfully stopped
making its monthly disability benefit payments to her as of
July 1 0 , 1999. Given the more than three years between these
two dates, MetLife has moved to dismiss the action on statute
of limitations grounds. Pierce objects under alternative
theories: first, that MetLife’s cessation of its monthly
benefit payment causes her claim to re-accrue each month the
payment was withheld, and second, that MetLife’s lack of
responsiveness to her correspondence in the wake of the
termination of her benefits tolled the running of the statute.
Background
The facts set forth in Pierce’s complaint are as follows.
She became disabled on March 1 0 , 1 9 9 7 , and remains “subject to
medical disabilities” in the form of pain and a limited range of motion in her right knee. As the beneficiary of a policy
of disability insurance issued by MetLife, Pierce began
receiving a disability payment in the approximate amount of
$1,600 on the 10th of each month beginning on June 1 0 , 1997.
The policy requires MetLife to continue making these payments
for a certain period, depending on Pierce’s age at the time she became disabled and provided she remains totally disabled
within the meaning of the policy. Pierce received the last of
the payments on June 1 0 , 1999. At that point, MetLife stopped
making the payments “without just cause” and “has continued to
neglect, fail, and refuse to pay [Pierce] the benefits to
which she is entitled.” Pierce seeks both a monetary award in
the form of the payments withheld by MetLife to date, plus
enhanced damages and attorneys’ fees, and a declaration that
MetLife must resume the payments. In opposing MetLife’s motion to dismiss, Pierce submitted
an affidavit which contains the following additional facts.
After the payments from MetLife stopped, Pierce exercised her
right under the policy to appeal the denial of further
benefits. In a letter dated July 1 9 , 1999, MetLife informed
Pierce that her appeal had been denied. The letter stated
that “no further administrative appeals are available to you
concerning your disability benefit” and advised Pierce to
2 consult the information concerning her rights set forth in the
summary plan description if she wished to pursue the matter
further.
After the denial of her appeal, Pierce attempted to
contact MetLife for an explanation of its reason for cutting
off her benefits. Her efforts in this regard consisted
largely of a series of letters sent to the insurer between
January 1 8 , 2000, and December 1 0 , 2002. While Pierce’s
correspondence primarily takes issue with MetLife’s stated
reasons for denying her appeal, she also makes repeated
requests for a response and references to the fact that one
has not been forthcoming. In a letter of February 3 , 2001,
Pierce cites to a television news program about how insurance companies terminate benefits they are obligated to pay. . . . The insurance companies do not even reply to repeated requests for fair play. They just do not communicate with the person who has been denied benefits, hoping that person will give u p . The only choice the person has is to hire a lawyer.
Most of Pierce’s subsequent letters express an intention to
hire a lawyer or go to court if MetLife does not restore her
benefits.
Pierce does not claim that MetLife ever responded to any
of her correspondence. Instead, she asserts that she “was
never advised by MetLife that any statute of limitations was
3 running” and that she was thereby “tricked into believing that
[she] was in no danger of waiving any legal rights by
MetLife’s silence” even though she “had specifically asked for
guidance from the trustees of the benefit plan on whether
[she] needed a lawyer.” Pierce ultimately retained counsel
and commenced suit against MetLife in Hillsborough County Superior Court on August 2 0 , 2003. MetLife removed the case
to this court on diversity grounds.
Standard of Review
Pierce relies on materials beyond the complaint,
including her affidavit and a number of attached documents, in
opposing MetLife’s motion to dismiss. In its reply brief,
MetLife has availed itself of the opportunity to respond to
these materials. Accordingly, the court will treat MetLife’s
motion to dismiss as a motion for summary judgment,
considering Pierce’s affidavit and the accompanying exhibits
in making its decision. See Collier v . City of Chicopee, 158
F.3d 6 0 1 , 603-604 (1st Cir. 1 9 9 8 ) .
The court may grant a motion for summary judgment only if
the “pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any, show
that there is no genuine issue as to any material fact and
4 that the moving party is entitled to a judgment as a matter of
law.” Fed. R. Civ. P. 5 6 ( c ) . The party seeking summary
judgment bears the initial burden of establishing the lack of
a genuine issue of material fact. See Celotex Corp. v .
Catrett, 477 U.S. 3 1 7 , 323 (1986). The court must view the
entire record in the light most favorable to the plaintiff, “‘indulging all reasonable inferences in that party’s favor.’”
Mesnick v . General Elec. C o . , 950 F.2d 8 1 6 , 822 (1st Cir.
1991) (quoting Griggs-Ryan v . Smith, 904 F.2d 1 1 2 , 115 (1st
Cir. 1990)).
Discussion
The parties agree that the statute of limitations issues
presented by this case should be resolved under New Hampshire
law. 1 The New Hampshire statute of limitations generally
requires an action to be commenced within three years of the
act or omission of which the plaintiff complains. N.H. Rev.
1 Although the parties’ submissions suggest that Pierce received her disability insurance through an employee benefit plan, neither argues that the Employee Retirement Income Security A c t , 29 U.S.C. § 1001 et seq., has any effect on the outcome of this motion. C f . Bennett v . Federated Mut. I n s . C o . , 141 F.3d 8 3 7 , 838 (8th Cir. 1998) (applying state statute of limitations to claim for benefits under ERISA but federal law to determine when cause of action accrued).
5 Stat. Ann. § 508:4, I . The limitations period on a contract
action begins running at the time of the alleged breach.
Coyle v . Battles, 147 N.H. 9 8 , 100 (2001); Bronstein v . GZA
GeoEnvironmental, Inc., 140 N.H. 2 5 3 , 255 (1995).
Pierce does not dispute that more than three years
elapsed between when MetLife rejected her claim for continued disability benefits--either by stopping its monthly payments
to her or by denying her appeal of that decision--and the
commencement of this suit. She argues instead that her claim
did not accrue upon the occurrence of either of these events
because “MetLife breaches its contract each month when it
fails to provide [her] with monthly benefits while [she]
suffers an ongoing disability,” continually resetting the
statute of limitations clock.
New Hampshire follows the “universal rule that when an obligation is to be paid in installments the statute of
limitations runs only against each installment as it becomes
due . . . .” Gen. Theraphysical, Inc. v . Dupuis, 118 N.H.
2 7 7 , 279 (1978); see also Seasons at Attitash Owners Ass’n v .
Country G a s , Inc., N o . 96-10-B (D.N.H. Sept. 1 2 , 1 9 9 7 ) ,
available at http://www.nhd.uscourts.gov; Barker v . Strafford
County Sav. Bank, 61 N.H. 1 4 7 , 148 (1881) (holding that
separate limitations period on claim to recover usurious
6 interest commenced with each loan payment); accord Berezin v .
Regency Sav. Bank, 234 F.3d 6 8 , 73 (1st Cir. 2000) (applying
Massachusetts l a w ) ; 9 Arthur Linton Corbin, Corbin on
Contracts § 951 (interim ed. 2002). 2
In essence, this rule treats each missed or otherwise
deficient payment as an independent breach of contract subject to its own limitations period. S e e , e.g., Keefe C o . v .
Americable Int’l, Inc., 755 A.2d 4 6 9 , 472 (D.C. 2 0 0 0 ) .
Accordingly, a party bringing an action on an installment
contract can “recover only for those [payments] relating to
the [periods] for which the applicable statute of limitations
ha[s] not expired at the time plaintiff file[s] suit . . . .”
2 In the interest of clarity, the court will refer to the principle described in these and like authorities as the “installment contract” rule. Although Pierce refers to the rule as the “continuing violation” doctrine, that term is generally used to denote a concept of tolling applied to employment discrimination claims. See generally Provencher v . CVS Pharmacy, 145 F.3d 5 , 14 (1st Cir. 1 9 9 8 ) . To the extent Pierce actually intends to rely on this form of the continuing violation doctrine in objecting to the motion to dismiss, her reliance is misplaced. See Fuller Ford, Inc. v . Ford Motor C o . , 2001 DNH 1 4 4 , 2001 WL 920035, at *6 (D.N.H. Aug. 6, 2001) (“while federal law recognizes the continuing violation doctrine in the context of employment discrimination claims, the New Hampshire Supreme Court has shown no inclination to incorporate the doctrine as an exception to the [s]tate’s general statutes of limitation”) (internal citation and footnote omitted).
7 County of Morris v . Fauver, 707 A.2d 9 5 8 , 971 (N.J. 1 9 9 8 ) ; see
also Gen. Theraphysical, 118 N.H. at 279 (noting that
plaintiff could claim “only those payments coming due . . .
within the six-year period of limitations
. . . ” ) ; 9 Corbin § 9 5 1 .
The parties agree that the New Hampshire Supreme Court has never considered whether the payment of insurance benefits
on a regular basis constitutes an “obligation to be paid in
installments” so that the date of each payment commences a
separate limitations period. As a federal tribunal exercising
diversity jurisdiction over the plaintiffs’ state law claim,
this court must predict that court’s future course on this
issue. See FDIC v . Ogden Corp., 202 F.3d 4 5 4 , 460-61 (1st
Cir. 2 0 0 0 ) . This task requires an “‘an informed prophecy of
what the [New Hampshire Supreme Court] would do in the same situation,’ seeking ‘guidance in analogous state court
decisions, persuasive adjudications by courts of sister
states, learned treatises, and public policy considerations
identified in state decisional law.’” Walton v . Nalco Chem.
C o . , 272 F.3d 1 3 , 20 (1st Cir. 2001) (quoting Blinzler v .
Marriott Int’l, Inc., 81 F.3d 1148, 1151 (1st Cir. 1996)).
“Courts have used the ‘installment contract’ approach in
8 a variety of situations.” Metromedia C o . v . Hartz Mountain
Assocs., 655 A.2d 1379, 1381 (N.J. 1 9 9 5 ) ; see also Berezin,
234 F.3d at 73 (“[a] contract need not specifically reference
installments to be deemed an installment contract”); F.D.
Stella Prods. C o . v . Scott, 875 S.W.2d 4 6 2 , 465 (Tex. App.
1994). These situations have included the breach of a contractual duty to make a regular benefit payment analogous
to the obligation which an insurer owes under a policy of
disability insurance. For example, the underpayment of
regular disbursements from a pension fund has generally been
treated as the breach of an installment contract for statute
of limitations purposes. S e e , e.g., Jackson v . Am. Can C o . ,
485 F. Supp. 3 7 0 , 374 (W.D. Mich. 1 9 8 0 ) ; Bauers v . City of
Lincoln, 514 N.W.2d 6 2 5 , 633-34 (Neb. 1 9 9 4 ) ; Zalobowski v . New
England Teamsters & Trucking Indus. Pension Fund, 410 A.2d 436, 438 ( R . I . 1 9 8 0 ) ; but see Miele v . Pension Plan of N.Y.
State Teamsters Conference Pension & Ret. Fund, 72 F. Supp. 2d
8 8 , 102-103 (E.D.N.Y. 1999) (figuring limitations period from
“single alleged miscalculation” which gave rise to reduced
pension payments).
Relatedly, courts have followed the installment contract
approach in the case of an employer’s obligation to make
regular contributions to an employee benefit plan. See Bettis
9 v . Potosi R-III Sch. Dist., 51 S.W.3d 1 8 3 , 188 (Mo. C t . App.
2 0 0 1 ) ; Jensen v . Janesville Sand & Gravel C o . , 415 N.W.2d 5 5 9 ,
561 (Wis. C t . App. 1 9 8 7 ) ; accord Adams v . City of Detroit, 591
N.W.2d 6 7 , 69 (Mich. App. 1998) (applying rule to employer’s
breach of agreement to pay retirees’ periodic health insurance
premiums). The Court of Claims has adopted the installment contract rule in determining the start of the limitations
period on a claim for annuity payments under the military’s
survivor benefit plan. Nicholas v . United States, 42 Fed. C l .
3 7 3 , 376-79 (1998). Indeed, the Supreme Court has called the
application of a separate limitations period to each payment
in a series “the standard rule for installment obligations.”
Bay Area Laundry & Dry Cleaning Pension Trust Fund v . Ferbar
Corp. of Calif., 522 U.S. 1 9 2 , 208 (1997) (treating employer’s
duty to reimburse pension fund through periodic payments in satisfaction of withdrawal liability under MPPAA as
installment contract).
Moreover, a number of courts have expressly held that the
statute of limitations on a claim arising out of a disability
insurer’s cessation of regular benefit payments runs
separately as to each payment. See Everhart v . State Life
I n s . C o . , 154 F.2d 3 4 7 , 356 (6th Cir. 1946) (applying Ohio
l a w ) ; Aetna Life I n s . C o . v . Moyer, 113 F.2d 9 7 4 , 981 (3rd
10 Cir. 1940) (applying Pennsylvania l a w ) ; Pac. Mut. Life I n s .
C o . of Calif. v . Jordan, 82 S.W.2d 2 5 0 , 252 (Ark. 1 9 3 5 ) ;
German v . Continental C a s . C o . , 373 N.E.2d 1058, 1059 (Ill.
App. C t . 1 9 7 8 ) ; Goff v . Aetna Life & C a s . C o . , 563 P.2d 1073,
1078 (Kan. App. 1 9 7 7 ) ; Columbian Mut. Life I n s . C o . v . Craft,
185 S o . 2 2 5 , 228 (Miss. 1 9 3 8 ) ; Alsup v . Travelers I n s . C o . , 268 S.W.2d 9 0 , 94 (Tenn. 1 9 5 4 ) ; Universal Life & Accident I n s .
C o . v . Shaw, 163 S.W.2d 3 7 6 , 379 (Tex. 1 9 4 2 ) ; 44A Am. Jur. 2d
Insurance § 1913 (2003). A leading treatise on contract law
also endorses this view. See 9 Corbin § 955 (“if the insured
becomes totally disabled and the insurer refuses the periodic
payments, action will lie at once for each payment as it falls
due. As to these the policy is an instalment [sic]
contract.”)
MetLife argues that the rule set forth in the cases from these other jurisdictions conflicts with existing New
Hampshire law, under which the statute of limitations starts
running “when [an] insurer reject[s] the insured’s claim for
benefits.” MetLife relies on Metro. Prop. & Liab. I n s . C o . v .
Walker, 136 N.H. 594 (1993), for this proposition. It is true
that the court in Walker held that the statute of limitations
on a claim for underinsured motorist coverage began running on
the day the insurer denied the request for coverage. Id. at
11 597-98. The benefit claimed by the insured in Walker,
however, was a one-time payment for injuries she had sustained
in a collision, rather than a series of periodic payments like
those made under a policy of disability insurance.
Accordingly, Walker in no way forecloses the use of the
installment contract approach to determine the start of the limitations period on a claim for discontinued disability
payments under New Hampshire law. 3 See Gen. Theraphysical,
118 N.H. at 279 (where claim arose from agreement calling for
payment of money in installments, declining to apply rule that
statute began running when debtor first stopped making
3 MetLife also argues that this court’s decision in Rochester Lincoln-Mercury, Inc. v . Ford Motor C o . , 2000 DNH 114 (D.N.H. May 1 0 , 2 0 0 0 ) , “squarely rejected” the “logic” underlying the installment contract approach. Like Walker, Rochester did not arise out of the breach of a contract to render performance in separate installments, but the defendant’s refusal to perform a single act which allegedly violated the parties’ agreement, namely the refusal to allow the plaintiff to purchase another Ford dealership. What this court rejected was the plaintiff’s argument that the limitations period on its claim did not start running until Ford sold the dealership to another buyer, rather than when Ford first communicated its refusal to let the plaintiff make the purchase. This argument, which the court identified as seeking to start the limitations clock on a contract claim when the plaintiff is damaged by the breach instead of at the breach itself, differs from the installment contract approach, which starts a new clock at every breach. This court’s reasoning in Rochester, then, does nothing to undercut the installment contract theory.
12 payments). MetLife also relies on the decisions of two federal courts of appeal which refused to treat an insurer’s cessation of regular disability payments as the breach of an installment contract for limitations purposes. See Lang v . Aetna Life Ins. C o . , 196 F.3d 1102, 1105 (10th Cir. 1 9 9 9 ) ; Dinerstein v . Paul Revere Life I n s . C o . , 173 F.3d 8 2 6 , 828-29 (11th Cir. 1999). Other federal courts have taken the same approach. See Wetzel v . Lou Ehlers Cadillac Group Long Term Disability Ins. Program, 222 F.3d 6 4 3 , 649 (9th Cir. 2000) (en b a n c ) ; Armbruster v . K-H Corp., 206 F. Supp. 2d 8 7 0 , 887-88 (E.D. Mich. 2 0 0 2 ) ; Hembree ex r e l . Hembree v . Provident Life & Accident I n s . C o . , 127 F. Supp. 2d 1265, 1272 (N.D. G a . 2 0 0 0 ) ; Allen v . Unionmutual Stock Life I n s . C o . of Am., 989 F. Supp. 9 6 1 , 966 n.3 (S.D. Ohio 1 9 9 7 ) .
In light of the depth of authority holding that a separate limitations period on an insured’s claim to recover unpaid disability benefits runs from each missed payment, however, the court does not find these contrary decisions persuasive in determining New Hampshire law on this issue. 4
4 A number of these cases simply reject the rule out of hand without any accompanying analysis of its wisdom or lack thereof. S e e , e.g., Wetzel, 222 F.3d at 649 (stating that the “‘rolling’ accrual rule is no longer the law of this circuit”
13 The court in Dinerstein, applying Florida law to determine
when the plaintiff’s claim to recover allegedly underpaid
disability benefits accrued, declined to treat the policy as
an installment contract, holding instead that the limitations
period commenced when the insurer made the first of its
monthly payments in the reduced amount. 173 F.3d at 8 2 9 . The court took this approach because in its view “the issue is not
whether the total amount due under a particular installment
was fully paid, but rather whether it was owed in the first
place.” Id. (footnote omitted).
Application of the installment contract rule, however,
does not depend on the presence of a dispute over whether the
periodic payments were “owed in the first place.” Courts have
routinely treated the failure to make payments according to an
agreed-upon schedule as the breach of an installment contract notwithstanding the defendant’s position that it had no
liability for any of those installments. S e e , e.g., Jackson,
485 F. Supp. at 374-75 (treating former employer’s cessation
of pension contributions as breach of installment contract
because prior application was based on misunderstanding of state statute); Hembree, 127 F. Supp. 2d at 1272 (declining to follow approach because only supporting authority cited by plaintiff had been overruled by Wetzel); Allen, 989 F. Supp. at 966 n . 3 (rejecting invocation of rule as “flawed” without further discussion).
14 even though payments halted due to employee’s alleged
violation of non-compete agreement); Jensen, 415 N.W.2d at
560-61 (applying rule in suit over discontinued pension
payments despite employer’s argument that it could
unilaterally terminate benefit). Moreover, courts which have
taken the installment contract approach to policies of
disability insurance have done so despite the insurer’s
contention that it had no obligation to continue periodic
payments “in the first place” because the insured did not
qualify for them under the policy. S e e , e.g., Everhart, 154
F.2d at 3 4 8 ; Columbian Mut., 185 S o . at 227-28; Shaw, 163
S.W.2d at 378-79.
As these authorities suggest, nearly every action seeking
to recover on a contract calling for periodic performances has
its genesis at the point where the defendant stops rendering
those performances through the first of what turns out to be a series of discontinued payments. If the Dinerstein court were
correct that this first missed or otherwise deficient payment
triggered the statute of limitations as to all future
payments, the installment contract rule would never apply.
Dinerstein’s analysis, then, simply cannot be squared with
existing New Hampshire law. C f . Gen. Theraphysical, 118 N.H.
at 2 7 9 .
15 This court also considers Lang unpersuasive. There, the
court rejected the insured’s characterization of her policy as an installment contract because under that theory
her claim would have an indefinite lifespan. Such a result would undermine the overriding purpose of a statute of limitations. Time limits are essential to promote justice by preventing surprises through the revival of claims that have been allowed to slumber until evidence has been lost, memories have faded, and witnesses have disappeared.
196 F.3d at 1105 (internal quotation marks omitted); see also
Armbruster, 206 F. Supp. 2d at 888-89 (relying on Lang in
declining to follow installment contract rule on the basis of
the “policies underlying statutes of limitations”).
As an initial matter, the court’s statement that the
installment contract approach gives an insured’s claim for
unpaid disability benefits “an indefinite lifespan” is not
correct. To the contrary, the approach limits the insured’s
recovery to those individual payments as to which suit was
brought before the limitations period expired. S e e , e.g.,
Everhart, 154 F.2d at 3 5 6 ; Moyer, 113 F.2d at 9 8 1 .
Recognizing this principle, courts have rejected the Lang
court’s reasoning that the rule makes the statute of
limitations on an installment contract “indefinite.” See Bay
Area Laundry, 522 U.S. at 2 1 0 ; Nicholas, 42 Fed. C l . at 378-
79. Due to its misunderstanding of the installment contract
16 approach, Lang overestimates the negative effect which the
rule would have on the policies underlying statutes of
limitations.
The Lang court also reached its assessment that the
installment contract rule “would undermine the overriding
purpose of a statute of limitations” without accounting for the fact that, despite such occasional criticism by litigants
seeking to avoid i t , the rule has become “universal.” Gen.
Theraphysical, 118 N.H. at 2 7 8 ; see also Nicholas, 42 Fed. C l .
at 379 n.3 (calling the rule “well-established”); 9 Corbin §
951 (noting that “there is much authority” for the r u l e ) .
Indeed, courts have continued to adhere to the rule in the
face of arguments similar to those which persuaded the Lang
court. See Keefe, 755 A.2d at 474 (retaining rule over
defendant’s objection that it would “allow a single cause of action to re-appear, phoenix-like, every month”); Phoenix
Acquisition Corp. v . Campcore, Inc., 612 N.E.2d 1219, 1222-23
(N.Y. 1993) (following rule despite recognition that it could
interfere with statutes’ promotion of certainty). As the
Supreme Court has recognized, the logic behind the installment
contract rule is that it requires a plaintiff to “wait until
the [defendant] misses a particular payment before suing to
17 collect that payment.” 5 Bay Area Laundry, 522 U.S. at 5 5 2 ;
see also Metromedia, 655 A.2d at 1381 (to reject installment
contract approach “would allow a claimant to trigger the
statute of limitations upon presentation of a claim rather
than having the existence of a claim trigger the statute of
limitations”). In any event, regardless of the merits of the Lang
court’s view as to the wisdom of the installment contract
approach, this court is not free to disregard that approach in
light of Gen. Theraphysical. Indeed, the Lang court’s
criticism of treating a disability insurance policy as an
installment contract for limitations purposes, i.e., the
limitations period potentially extends well beyond the
defendant’s rejection of the plaintiff’s right to continued
payments, is equally applicable to treating any agreement as
5 The Supreme Court’s holding in Bay Area Laundry gives the court further pause in relying on Lang and Dinerstein, which did not consider the case in rejecting the installment contract approach. C f . Nicholas, 42 Fed. C l . at 376-77 (relying on Bay Area Laundry to treat claim for military survivor benefits as suit on installment contract, overruling contrary Federal Circuit precedent); but see Miele, 72 F. Supp. 2d at 100-101 (declining to extend Bay Area Laundry to treat claim for underpayment of pension benefits as suit on installment contract).
18 an installment contract for limitations purposes. 6 The New
Hampshire Supreme Court was presumably aware of that criticism
when it decided Gen. Theraphysical, but nevertheless chose to
follow the installment contract rule there. Furthermore, Gen.
Theraphysical contains no indication that New Hampshire would
refrain from following the installment contract rule in cases arising out of disability insurance policies and neither
MetLife nor the authorities it cites offer any compelling
reason to do s o .
Accordingly, the court concludes that New Hampshire would
6 For example, a lessee might agree to make a payment of $1,000 each month over the ten-year term of an equipment lease, but stop making those payments after one year, notifying the lessor that the equipment no longer performs as warranted. Under the rule followed in Gen. Theraphysical, the lessor is entitled to wait until the three-year anniversary of the date the last payment was due under the lease--twelve years from when the lessor stopped making payments--to recover the amount of that final payment. By that point, it is likely that evidence will have been lost, memories will have faded, and witnesses will have disappeared as to the merits of the lessor’s claim, which presumably would depend on whether the equipment w a s , in fact, defective. In addition, the lessee is likely to be surprised by the lawsuit after having heard nothing from the lessor on the subject for more than a decade. (Of course, these disadvantages are mitigated by the fact that the lessor’s claim is limited to the amount of the very last payment, or $1,000.) Despite the seeming undesirability of such a result, it is permitted by the installment contract rule, which has become widely accepted nonetheless, including by the New Hampshire Supreme Court.
19 treat an insurer’s cessation of regular disability payments as
the breach of an installment contract for statute of
limitations purposes. A separate limitations period therefore
runs as to each of the monthly payments which MetLife withheld
from Pierce, beginning with the disbursement due in July of
1999. Because Pierce did not commence this action until August 2 0 , 2003, however, she can recover only for those
payments which would have come due within the preceding three-
year period. The statute of limitations bars her claim to
each of those payments allegedly due during the period
beginning on July 1 0 , 1999, and ending on August 1 9 , 2000.
See Gen. Theraphysical, 118 N.H. at 2 7 8 .
Pierce, however, contends that the reach of the statute
of limitations should not extend to any of the payments
withheld by MetLife. She argues that equitable tolling should apply because she completely relied upon MetLife for
“knowledge . . . about the appeals process and requirements
for further legal action by its beneficiaries” and that
MetLife had a “fiduciary duty to advise her of any statute of
limitations issues.”
“Conduct of a nature giving rise to an equitable estoppel
may be sufficient to toll the running” of a statute of
limitations under New Hampshire law. Guerin v . N.H. Catholic
20 Charities, Inc., 120 N.H. 5 0 1 , 504 (1980); see also In re
Kulacz, 145 N.H. 1 1 3 , 116 (2000); Fuller, 2001 WL 920035, at
*7. The application of equitable estoppel rests largely on
the facts and circumstances of a particular case. Goodwin
R.R. v . State, 128 N.H. 5 9 5 , 600 (1986). As with other
tolling doctrines, the party invoking equitable estoppel bears the burden of demonstrating its applicability. See Kulacz,
145 N.H. at 1 1 6 .
Pierce does not claim that MetLife fraudulently concealed
the fact that her benefits had been terminated. C f . Lakeman
v . LaFrance, 102 N.H. 3 0 0 , 301 (1959) (recognizing statute
could be tolled on medical malpractice claim where defendant
misrepresented progress of plaintiff’s recovery); Bowman v .
Sanborn, 18 N.H. 205 (1846) (tolling limitations period on
claim for partnership settlement where defendant concealed its true financial condition). Nor does she point to any other
affirmative conduct which MetLife undertook “to persuade [her]
not to file suit.” Fuller, 2001 WL 920035, at *7 (declining
to dismiss suit arising out of auto manufacturer’s refusal to
allow dealership to move where manufacturer forestalled suit
by promising to move dealership to third location, but then
failed to deliver); accord In re Cloutier Lumber C o . , 121 N.H.
4 2 0 , 422 (1981) (workers’ compensation insurer estopped from
21 raising statute of limitations by its statements to plaintiff
that benefits would resume if he failed in returning to w o r k ) .
Instead, Pierce argues that estoppel should apply because
MetLife provided “no assistance or warning that there was any
statute of limitations that was going to expire.” New
Hampshire recognizes that “[u]nder certain circumstances, an estoppel may arise from silence or inaction as opposed to an
actual misrepresentation. This form of estoppel, however, is
limited to situations where the silent party has knowledge and
a duty to make disclosure.” Guri v . Guri, 122 N.H. 5 5 2 , 555
(1982) (citation omitted); see also Concrete Constructors,
Inc. v . Harry Shapiro & Sons, Inc., 121 N.H. 8 8 8 , 893 (1981);
Margolis v . S t . Paul Fire & Marine I n s . C o . , 100 N.H. 3 0 3 , 308
(1956).
MetLife contends that it had no duty to advise Pierce that the limitations period was running on her claim for
unpaid benefits. Although the New Hampshire Supreme Court has
yet to consider this argument directly, it has refused to
extend an insurer’s duty to its insured beyond the obligation
to handle third-party claims with reasonable care. Lawton v .
Great Southwest Fire I n s . C o . , 118 N.H. 6 0 7 , 613-14 (1978).
In addition, courts in other jurisdictions have explicitly
held that an insurer has no duty to inform its insured that
22 the clock on a potential claim against the carrier is ticking.
See, e.g., A L I , Inc. v . Generali, 954 F. Supp. 1 1 8 , 120-21
(D.N.J. 1 9 9 7 ) ; Foamcraft, Inc. v . First State I n s . C o . , 606
N.E.2d 5 3 7 , 539 (Ill. App. 1 9 9 2 ) ; Blitman Constr. Corp. v .
Ins. C o . of N . Am., 489 N.E.2d 2 3 6 , 238 (N.Y. 1 9 8 5 ) ; Jet Set
Travel Club v . Houston Gen. I n s . Group, 639 P.2d 2 2 0 , 222 (Wash. App. 1 9 8 2 ) ; 16 Lee R. Russ et a l . , Couch on Insurance §
235:72 (3d ed. 1 9 9 5 ) ; c f . Union Auto. Indem. Ass’n v . Shields,
79 F.3d 3 9 , 42 (7th Cir. 1996) (under Indiana law, insurer’s
duty to inform claimant of deadline extends only to non-
parties to policy).
In the absence of any contrary authority or argument from
Pierce, the court concludes that MetLife’s lack of
responsiveness to Pierce’s correspondence regarding its denial
of continued benefits does not preclude MetLife from asserting the statute of limitations. 7 See LaChapelle v . Berkshire Life
Ins. C o . , 142 F.3d 5 0 7 , 510 (1st Cir. 1998) (upholding
7 Pierce relies on a United States Supreme Court case noting that equitable tolling has been permitted “‘where the complainant has been induced or tricked by his adversary’s misconduct into allowing the filing deadline to pass.’” Young v . United States, 535 U.S. 4 3 , 50 (2002) (quoting Irwin v . Dep’t of Veterans Affairs, 498 U.S. 8 9 , 96 (1990)). Given the absence of any misconduct on MetLife’s part, however, the principle recited in Young is inapposite.
23 rejection of equitable estoppel argument under Maine law where
insurer “told [plaintiff] straightaway that it intended to
stop paying benefits” and “then acted on that stated
intention”). If anything, Pierce’s letters (particularly
those of February 3 , 2001, and thereafter) demonstrate that
she knew that the wise course was to consult a lawyer as to a possible claim against MetLife. Her reluctance to do s o ,
while perhaps understandable, provides no basis for estopping
MetLife from raising a limitations defense as to those
payments allegedly due more than three years before Pierce
ultimately brought suit. MetLife’s motion to dismiss is
therefore granted as to so much of Pierce’s claim as seeks to
recover any payment of disability benefits which would have
been made before August 2 0 , 2000.
Conclusion
For the foregoing reasons, MetLife’s motion to dismiss
(document n o . 7 ) is GRANTED to the extent it seeks dismissal
of that portion of Pierce’s claim which arises out of payments
allegedly due under the policy before August 1 9 , 2000. The
motion is otherwise DENIED. Pursuant to Fed. R. Civ. P.
1 5 ( a ) , MetLife shall file a response to the complaint within
ten days of the date of this order.
24 SO ORDERED.
Joseph A . DiClerico, J r . United States District Judge March 5 , 2004
cc: David L . Nixon, Esquire William D. Pandolph, Esquire