"dividend" or "refund"-was remitted to May.
The experience described above is summarized in the following table:
For each of the refunds through 1977, May received a check from Metropolitan and deposited the money in a special bookkeeping account. By November 1977, May had not been fully reimbursed for its retroactive premium and underwithholding payments, with total company payments exceeding reimbursements by $ 302,993. Nevertheless, in that month, the company established a "rate stabilization reserve" account at Metropolitan with $ 342,197 of the dividend from 1976. Under the 1977 arrangement between May and Metropolitan which established the reserve account, Metropolitan ceased making retroactive premium refunds to May for the contributory life insurance policies but, rather, retains these monies and credits them to the rate stabilization reserve. Thus, under the arrangement currently in effect, May will no longer be reimbursed for any of its voluntary contributions to the Plan during 1967-1978.
A. The Pre-ERISA Common Law Obligations of May
May contests the argument that it had a common law fiduciary obligation to use Plan dividends solely for the benefit of participating employees, arguing that its duties were purely contractual. May also contends that Corley's pre-ERISA (i.e., prior to January 1, 1975) common law claim is time-barred.
Under the District of Columbia statute of limitations, which governs this claim,
a contract action or an action for which no specific limitation is provided must be brought within three years of the time it accrues. D.C. Code § 12-301(7), (8). The right to maintain an action "accrues" when all the elements of the cause of action exist, Freedman & Sons, Inc. v. Hartford Insurance Company, 396 A.2d 195, 198 (D.C.App.1978), which in this case was at the time May deposited any refund into its general funds. Since plaintiff's complaint for redress of these pre-1975 acts was filed with the Court in September 1979, the defendants argue that the claim is barred by the statute. Plaintiff responds that, since she is asserting an equitable right to redress the breach of a fiduciary duty rather than a contract claim, the question of a time bar is governed by the doctrine of laches.
Corley's common law claim should be time-barred even if it is equitable in nature. While statutes of limitations do not control actions for equitable relief, Holmberg v. Armbrecht, 327 U.S. 392, 396, 66 S. Ct. 582, 584, 90 L. Ed. 743 (1946), the applicable statute is a guide in determining whether laches should permit a long-delayed claim to be enforced, Saffron v. Department of the Navy, 183 U.S. App. D.C. 45, 561 F.2d 938 (D.C.Cir.1977), cert. denied, 434 U.S. 1033, 98 S. Ct. 765, 54 L. Ed. 2d 780 (1978). Where plaintiff has not pursued her claim with diligence and the delay has prejudiced the defendant, laches will bar the action.
Corley has made no showing of due diligence in pursuing this action. And although she contends that May's practice of retaining the dividends for itself was fraudulently concealed from participating employees, May's annual reports
to the Department of Labor on the Plan disclose its receipt of dividends.
This information, coupled with plaintiff's knowledge that no benefits were directed to employees when these dividends were received, should have provided plaintiff with notice of May's practice. Moreover, if she had brought the breach claim in a timely fashion May could have altered the terms of its insurance coverage and minimized any damages for which it may now be liable. These factors indicate that defendants have been prejudiced by plaintiff's delay in bringing this action. Equally important, however, is the nature of plaintiff's request for reimbursement of past dividends. This is in the nature of a claim for legal relief and should be subject to the statute of limitations. See Blankenship v. Boyle, 329 F. Supp. 1089, 1112 (D.D.C.1971). Because any request for prospective equitable relief is completely redressable under ERISA, plaintiff's common law claim is barred by the statute of limitations.
Even if the statute of limitations does not bar the pre-ERISA claim, Corley's claim still could not succeed. The master contributory policy, which under the common law determines the extent and existence of May's duties with respect to the refunds, permitted reimbursement of May for its voluntary contributions. The relevant provision of the contract is Section 18, which states as follows:
Participation in Divisible Surplus. This policy is a participating contract and the Insurance Company shall annually ascertain and apportion any divisible surplus accruing under policies of this class. Any such divisible surplus apportioned to this Policy shall be paid in cash to the Employer or, upon written request from the Employer to the Insurance Company, shall be applied towards the payment of the aggregate of premiums next falling due under this Policy. In either event, in the case of Contributory Insurance, an amount equal to the excess, if any, of the Employees aggregate contribution toward the cost of the insurance provided hereunder over the net cost of such insurance shall be distributed or applied by the Employer for the sole benefit of the Employees. (Emphasis supplied).