United States: Statutory And Contractual Limitations Periods And The Events That Trigger Them: Insight From The Fourth Circuit

The Employee Retirement Income Security Act of 1974 (ERISA) does not contain a statute of limitations provision, and courts generally apply the most analogous state law statutory limitation. However, some plans fill the void with contractual limitations. In 2013, the U.S. Supreme Court held, in Heimeshoff v. Hartford Life & Accident Ins. Co., 134 S.Ct. 604 (2013), that reasonable contractual limitations periods in ERISA-governed plans are valid and enforceable. Since Heimeshoff, numerous courts have addressed residual issues, such as what event will trigger a contractual limitations period or in the absence of a contractual limitations provision, statutory limitations. Recently, the Fourth Circuit Court of Appeals addressed both scenarios.

Bond v. Marriott International, Inc.

The Deferred Stock Incentive Plan at issue in Bond v. Marriott International, Inc., No. 15-1160, 2016 U.S. App. LEXIS 1499 (4th Cir. Jan. 29, 2016), was established in 1970, and its vesting schedule and "bad boy" clauses violated the later-enacted ERISA statute. Noting, however, that top-hat plans are exempt from ERISA, Marriott determined that its plan qualified for the exemption, and in 1978 Marriott issued a prospectus that was filed with the Securities and Exchange Commission and distributed to its plan participants, advising all that the plan "is deemed a 'select plan' and thus is exempt from the participation and vesting, funding and fiduciary responsibility provisions [in ERISA]." Marriott took the same position when it issued updated prospectuses in 1980, 1986 and 1991. Plan participants, Dennis Bond, who resigned his position in 1991, and Michael Steigman, whose employment was terminated in the same year, received their vested shares under the terms of the written plan.

On January 19, 2010, the plaintiffs filed suit and argued that the plan's vesting requirements violated ERISA. They asserted a claim for equitable relief in the form of reformation and demanded an order requiring the plan to pay to them additional benefits. The district court agreed with Marriott that the plan was an ERISA-exempt top-hat plan and granted summary judgment to Marriott on that basis; however, earlier in the litigation the district court rejected Marriott's claim that the lawsuit was time-barred. When the plaintiffs appealed the top-hat plan decision, Marriott cross-appealed and argued that the lawsuit should have been dismissed as untimely. The Fourth Circuit agreed with Marriott and affirmed the judgment in Marriott's favor without ever addressing the merits of the case.

Because ERISA does not contain a statute of limitations provision, there was no dispute in Bond that the claim was governed by Maryland's three-year breach of contract statute of limitations. According to the Fourth Circuit, the only question was "when the statute begins to run," which is a "matter of federal law." Id. at 12. The common rule, which was applied by the district court, is the "formal denial" rule that is "generally applied in ERISA cases" and delays the trigger for the applicable statute of limitations until after a claim is formally denied. Id. at 12. However, in some cases, that rule is "impractical." Id. at 12 (citing Cotter v. E. Conference of Teamsters Ret. Plan, 898 F.2d 424 (4th Cir. 1990)). In cases such as Bond, where Marriott calculated and paid the plaintiffs their vested shares and there was no "formal denial," the Fourth Circuit held that the "clear repudiation" rule should have been applied. Under that rule, "a formal denial is not required if there has already been a repudiation of the benefits by the fiduciary which was clear and made known to the beneficiary." Id. at 13 (internal citations omitted).

When Marriott, in 1978 and again in 1980, 1986 and 1991, issued the prospectuses that "plainly state[d] that the Retirement Awards did not need to comply with ERISA's vesting requirements" because it was a "top hat plan 'exempt from the participation and vesting, funding and fiduciary responsibility provisions' of ERISA," it clearly repudiated any claim to the contrary. The plaintiffs waited more than 30 years to file suit, and the delay was fatal to their claim.

Hyatt v. Prudential Ins. Co. of America

Under a separate and distinguishable set of facts, the Fourth Circuit adopted the district court's application of the "formal denial" rule after the plan in Hyatt v. Prudential Ins. Co. of America denied the claimant's short-term disability claim and she failed to file suit within the three-year statute of limitations period. See Hyatt, No. 14-0035, 2014 U.S. Dist. LEXIS 155739 (W.D.N.C. Oct. 31, 2014), affirmed No. 14-2305, 2016 U.S. App. LEXIS 2676 (4th Cir. Feb. 17, 2016). However, the Court also tackled the issue of contractual limitations periods relative to the plaintiff's claim for long-term disability benefits under a policy that contained a three-year contractual limitations provision.

The plan at issue in Hyatt allowed a claimant to file a legal action "up to 3 years from the time proof of claim is required." Id. at 3.The plan required submission of written proof of a claim within 90 days of the end of the elimination period (i.e., in the plaintiff's case, by December 11, 2010). Only when it was not possible to submit proof within that 90-day period, the plan allowed proof to be submitted within one year of the deadline. The claimant, however, did not require the extension, and she submitted her proof of loss within the initial 90-day period. Regardless, she attempted to rely on the one-year extension provision to extend the contractual limitations period that governed her lawsuit for an additional year.

The Fourth Circuit rejected the plaintiff's claim and instead determined that the "additional 1 year provision of the LTD plan did not apply to her since it was possible for her to provide proof of her claim within 90 days." Id. at 6. Accordingly, "the three year contractual limitations period applicable to the Plaintiff's filing suit for LTD benefits under ERISA commenced to run at the end of that 90 days" (i.e., on December 11, 2013). The plaintiff's lawsuit was not filed until February 11, 2014, and she was "barred by the contractual limitations period from claiming LTD benefits in this case." Id. at 6.


Whether by applying the "formal denial" or the "clear repudiation" rules when analyzing statutory limitation claims or by holding a participant's feet to the fire when considering a violation of a reasonable contractual limitations period, the court's intent – to avoid the pitfalls of an untimely claim – appears clear. As stated in Bond, by applying the "clear repudiation" rule, the court achieves "the goals of the statute of limitations, to 'promote justice by preventing surprises through the revival of claims that have been allowed to slumber until the evidence has been lost, memories have faded, and witnesses have disappeared,' and to encourage 'rapid resolution of disputes.'" Id. at 13–14 (internal citations omitted). "These goals 'are served when the accrual date anchors the limitations period to a plaintiff's reasonable discovery of actionable harm.'" Id. at 14 (internal citation omitted).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Bradley Arant Boult Cummings LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Bradley Arant Boult Cummings LLP
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions