Lisa Gayle v. UNITED PARCEL SERVICE, No. 04-1476  INCORPORATED

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
 LISA GAYLE,
Plaintiff-Appellant,
v.
UNITED PARCEL SERVICE, No. 04-1476 
INCORPORATED; FLEXIBLE BENEFITS
PLAN-UNITED PARCEL SERVICE LONG
TERM DISABILITY PLAN,
Defendants-Appellees. 
Appeal from the United States District Court
for the District of South Carolina, at Columbia.
Cameron McGowan Currie, District Judge.
(CA-03-3638-3-22)
Argued: December 3, 2004
Decided: March 9, 2005
Before WIDENER and WILKINSON, Circuit Judges,
and Norman K. MOON, United States District Judge
for the Western District of Virginia,
sitting by designation.
Affirmed by published opinion. Judge Wilkinson wrote the opinion,
in which Judge Widener and Judge Moon joined.
COUNSEL
ARGUED: Robert Edward Hoskins, FOSTER LAW FIRM, L.L.P.,
Greenville, South Carolina, for Appellant. Patrick Connors DiCarlo,

-- 1 of 11 --

ALSTON & BIRD, Atlanta, Georgia, for Appellees. ON BRIEF: D.
Michael Kelly, SUGGS & KELLY, Columbia, South Carolina, for
Appellant. Peter M. Varney, ALSTON & BIRD, L.L.P., Atlanta,
Georgia; David W. Overstreet, CARLOCK, COPELAND, SEMLER
& STAIR, L.L.P., Charleston, South Carolina, for Appellees.
OPINION
WILKINSON, Circuit Judge:
Lisa Gayle retained a law firm to represent her as she sought to
preserve her disability benefits. For nearly seven months, the firm did
nothing to press her claim. By the time it rediscovered her case,
Gayle’s opportunity to appeal the denial of her disability benefits
claim had expired. Under the terms of her ERISA-governed employee
welfare benefit plan, Gayle could not pursue her claim in federal court
until she had exhausted the internal appeals process. But the plan
declined to consider her appeal since it was almost two months late.
In this case, we consider whether attorney negligence justifies equita-
ble tolling sufficient to excuse the lack of compliance with the plan’s
appeal procedure. We conclude that it does not.
I.
Lisa Gayle had been employed by United Parcel Service ("UPS")
for twenty-three years before she suffered health problems serious
enough to require her to stop working in March 2001. She was a par-
ticipant in the Flexible Benefits Plan ("Plan"), which is fully-funded
by UPS and is an employee welfare benefit plan governed by ERISA,
29 U.S.C. § 1001 et seq. (2000). The Plan is administered by the UPS
Claims Review Committee ("Committee"). Claims are processed by
a third-party claims administrator.
Gayle received short-term disability benefits for six months, and
long-term disability benefits from September 2001 until January
2003. At that point, she received a letter informing her that a review
of her medical documentation showed she was no longer eligible for
disability benefits.
2 GAYLE v. UNITED PARCEL SERVICE

-- 2 of 11 --

In bold print, the letter also stated that "[i]f you disagree with this
determination, you must submit an appeal within one hundred eighty
(180) days from your receipt of this letter." This internal appeal
requirement was consistent with the appeal process described in the
Summary Plan Description ("SPD"). ERISA and federal regulations
also mandate that each welfare benefit plan include such internal
review. See 29 U.S.C. § 1133 (2000) (employee benefit plans shall
"afford a reasonable opportunity . . . for a full and fair review" of a
denial of benefits); 29 C.F.R. § 2560.503-1 (2004).
The SPD states that upon the denial of benefits, plan participants
may file a "first level appeal" with claims administrators within 180
days of receiving the denial. If this appeal is unsuccessful, a "second
level appeal" is available. It should be filed with the Committee
within 60 days of receiving the denial of the first level appeal. The
SPD notes that "[e]ach level of appeal will be independent from the
previous level (i.e., the same person(s) . . . involved in a prior level
of appeal will not be involved in the appeal)" and that "[o]n each level
of appeal, the claims reviewer will review relevant information that
you submit even if it is new information." Particularly important for
this case, the SPD also states: "You cannot file suit in federal court
until you have exhausted these appeals procedures."
Gayle’s denial letter arrived on January 21, 2003. Six weeks later,
on March 6, 2003, she retained the Columbia, South Carolina, law
firm of Suggs & Kelly to assist her in navigating the appeal process.
Ordinary practice at Suggs & Kelly is to take in an ERISA case like
Gayle’s, and then send it to an attorney at the Foster Law Firm in
Greenville, South Carolina. Suggs & Kelly either mistakenly "thought
[it] had appealed" Gayle’s case (the reason suggested to the Plan) or,
"through an administrative oversight, . . . thought that the file had
been sent to [the Foster Law Firm] when, in reality, it had not" (the
reason provided on appeal). Whatever the reason, the attorney han-
dling the appeal pending before us — who we emphasize was in no
way responsible for the mistake — acknowledges that Gayle’s case
simply "fell through the cracks."
The claims administrator — and ultimately the Committee itself —
declined to make an exception to their rules for Gayle. Instead, they
adhered to their interpretation of the Plan’s timeliness requirements,
3 GAYLE v. UNITED PARCEL SERVICE

-- 3 of 11 --

and refused consideration of her internal appeal when she sought
review on September 18, 2003. They pointed out that Gayle’s request
for an appeal was due no later than July 19, 2003. Gayle then brought
suit in the District of South Carolina under ERISA, 29 U.S.C.
§ 1132(a)(1)(B) (2000). She asked the court to remand the claim to
the Plan, requiring it to consider the merits of her appeal. The district
court dismissed the motion to remand with prejudice and dismissed
the underlying ERISA claim without prejudice.
We review grants of summary judgment de novo, Bailey v. Blue
Cross & Blue Shield, 67 F.3d 53, 56 (4th Cir. 1995). For the reasons
that follow, we affirm the judgment.
II.
A.
Gayle distinguishes between the two levels of appeal provided
under the Plan’s terms. She acknowledges that her first level appeal
was untimely, but argues that the court can remand her claim to the
Plan under the doctrine of equitable tolling. She believes that tolling
should be available in ERISA claims, and that her attorney’s negli-
gence (and her own innocence) justifies tolling here.
An ERISA welfare benefit plan participant must both pursue and
exhaust plan remedies before gaining access to the federal courts.
Makar v. Health Care Corp., 872 F.2d 80, 82 (4th Cir. 1989) (exhaus-
tion of plan’s remedies is "a prerequisite to an ERISA action for
denial of benefits"). The federal regulation governing such appeal
procedures authorize limited periods for claimants to file requests for
review of denied claims. See 29 C.F.R. § 2560.503-1(h) (2004).
Courts enforce these limits because
[h]aphazard waiver of time limits would increase the proba-
bility of inconsistent results where one claimant is held to
the limitation, and another is not. Similarly, permitting
appeals well after the time for them has passed can only
increase the cost and time of the settlement process.
4 GAYLE v. UNITED PARCEL SERVICE

-- 4 of 11 --

Terry v. Bayer Corp., 145 F.3d 28, 40 (1st Cir. 1998). In short, inter-
nal appeal limitations periods in ERISA plans are to be followed just
as ordinary statutes of limitations. Likewise, "[f]ailure to file a request
for review within [a plan’s] limitations period is one means by which
a claimant may fail to exhaust her administrative remedies." Gallegos
v. Mt. Sinai Med. Ctr., 210 F.3d 803, 808 (7th Cir. 2000). Gayle
therefore acknowledges that the exhaustion rule applies to her, at least
with respect to her first level appeal.
If available, however, equitable tolling would restore a claimant’s
right to review even though she otherwise would be time-barred. But
"[f]ederal courts have typically extended equitable relief only spar-
ingly." Irwin v. Dep’t of Veterans Affairs, 498 U.S. 89, 96 (1990). The
rarity of our resort to equity does not spring from miserliness. Rather,
equitable tolling "must be guarded and infrequent, lest circumstances
of individualized hardship supplant the rules of clearly drafted stat-
utes." Harris v. Hutchinson, 209 F.3d 325, 330 (4th Cir. 2000).
Equitable tolling, while rare, does allow for exceptions to the strict
enforcement of deadlines. Such exceptions are narrow, and none is
available here. Equitable tolling has been permitted "where the claim-
ant has actively pursued his judicial remedies by filing a defective
pleading during" the limitations period. Irwin, 498 U.S. at 96. In this
case, however, Gayle made no appeal to the Plan, defective or other-
wise, within the authorized period. Equitable tolling has also been
appropriate "where the complainant has been induced or tricked by
his adversary’s misconduct into allowing the filing deadline to pass."
Id. But the Plan sent Gayle a detailed denial letter. She does not dis-
pute receiving it, or that — far from tricking her into inaction — it
was anything short of clear on the simple procedures she should fol-
low should she disagree with the denial of benefits.
Gayle therefore fits none of the established justifications for equita-
ble tolling. She instead argues that equitable tolling is warranted here
because she was innocent and had acted to protect her rights by
retaining an attorney. The attorney’s negligence alone caused her
appeal to become untimely. Gayle’s argument boils down to a request
that we relieve her of her counsel’s negligent failure to observe
required procedure. However, the Supreme Court and our own case
law have already rejected such a distinction between the conduct of
5 GAYLE v. UNITED PARCEL SERVICE

-- 5 of 11 --

attorneys and their clients. Indeed, the Supreme Court has held that
there is
no merit to the contention that dismissal of petitioner’s
claim because of his counsel’s unexcused conduct imposes
an unjust penalty on the client. Petitioner voluntarily chose
this attorney as his representative in the action, and he can-
not now avoid the consequences of the acts or omissions of
this freely selected agent. Any other notion would be wholly
inconsistent with our system of representative litigation, in
which each party is deemed bound by the acts of his lawyer-
agent . . . .
Link v. Wabash R.R. Co., 370 U.S. 626, 633-34 (1962). See also In
re Walters, 868 F.2d 665, 668-69 (4th Cir. 1989) (applying Link).
In Irwin, which applied Link, the Supreme Court withheld equita-
ble tolling where the attorney’s omission was less severe than here.
Just as Gayle brought her denial letter to her attorney, Irwin for-
warded his right-to-sue letter from the EEOC to his attorney. But
Irwin’s attorney was out of the country. The suit had to be filed within
30 days of receipt of the letter. The attorney filed suit 29 days after
personally receiving it, but 44 days after it was received at his office.
Irwin, 498 U.S. at 91. The Court observed that Irwin "appeared by his
attorney in the EEOC proceeding." Id. at 92. In this context, the Court
found equitable tolling to be inappropriate.
In short, the Supreme Court has foreclosed Gayle’s argument by
emphasizing that "the principles of equitable tolling . . . do not extend
to what is at best a garden variety claim of excusable neglect." Id. at
96. Nor is our rejection of Gayle’s argument altered by accepting, as
we certainly do, Gayle’s insistence that her attorney’s mistake was
innocent. The law has always, and necessarily, held people responsi-
ble for innocent mistakes. The tort system, for example, is premised
on penalizing innocent yet negligent mistakes. Many attorney mis-
takes are innocent in that they involve oversights or miscalculations
attributable in some part to the sheer press of business. To accept such
mistakes as a ground for equitable tolling, however, would over time
consign filing deadlines and limitations periods to advisory status.
The ensuing confusion would contradict our prior observation that
6 GAYLE v. UNITED PARCEL SERVICE

-- 6 of 11 --

equitable tolling requires an "extraordinary circumstance beyond [the
plaintiff’s] control that prevented him from complying with the statu-
tory time limit." Harris, 209 F.3d at 330.
We concluded in Harris that, even though the attorney’s mistake
in construing a statute of limitations provision "appears to have been
innocent," id. at 330, it nonetheless was not an "extraordinary circum-
stance" justifying equitable tolling. We think that attorney negligence
— including allowing a client’s case to fall through the cracks — is
even less an extraordinary circumstance. Equity will not disadvantage
one party, who is entitled to rely on the mandated appeals procedures,
in order to mitigate the negligence of the other party’s freely-chosen
attorney. See, e.g., Link, 370 U.S. at 634 n.10 ("[K]eeping this suit
alive merely because plaintiff should not be penalized for the omis-
sions of his own attorney would be visiting the sins of plaintiff’s law-
yer upon the defendant.") (emphasis in original). While the defendant
thus remains free to reconsider a claim forfeited through attorney
error, no court may compel it to do so. We therefore hold that attor-
ney negligence does not justify equitable tolling.
B.
Because equitable tolling is inappropriate and will not restore her
first level appeal, we must address Gayle’s argument that her second
level appeal was timely. The SPD requires the first level appeal
within 180 days of receipt of the denial letter, and Gayle does not dis-
pute she missed that deadline. But Gayle argues that the second level
appeal deadline — sixty days after an adverse determination — had
not passed before her attorney contacted the Committee.1 Thus, even
though tolling is unavailable, Gayle argues that because she was not
late for the second level appeal, the court should remand her claim to
the Plan for an ab initio merits consideration at this level. She there-
fore asks that the underlying claim of entitlement to long term disabil-
ity benefits under 29 U.S.C. § 1132(a)(1)(B) be dismissed without
prejudice.
1We shall assume arguendo that the sixty-day limit had not passed, in
spite of our conclusion that Gayle had waived the first level appeal
through untimeliness.
7 GAYLE v. UNITED PARCEL SERVICE

-- 7 of 11 --

We cannot accept Gayle’s invitation to read the Plan’s two-tier
appeals process to excuse her from complying with the deadline for
first-tier review. The SPD clearly identifies one deadline that Gayle
had to meet in order to pursue any appeal — 180 days after the initial
denial of benefits. The first appeal is the sine qua non of the second
appeal, which cannot stand alone. Otherwise, Plan participants could
simply allow the 180-day deadline to elapse before contesting their
denial of benefits. Such procrastination would not only prejudice
more punctilious participants, but might well eviscerate the 180-day
deadline entirely. Plan participants cannot, in other words, leapfrog at
will over inconvenient steps in a unitary appeal process.
The statutory requirement that plans have a review process, see 29
U.S.C. § 1133, along with the well-established principle that plans
can craft their governing principles as they think best, see Curtiss-
Wright Corp. v. Schoonejongen, 514 U.S. 73, 78 (1995), further per-
suades us that Gayle’s argument lacks merit. Plan sponsors, not fed-
eral courts, are empowered by ERISA "to adopt, modify, or terminate
welfare plans." Id. Recognizing this, Gayle presses the language of
the SPD itself to argue that it permits stand-alone second appeals. The
SPD states that "[e]ach level of appeal will be independent from the
previous level (i.e., the same person(s) . . . involved in a prior level
of appeal will not be involved in the appeal)." It also promises that
"[o]n each level of appeal, the claims reviewer will review relevant
information that you submit even if it is new information." Taken
together, Gayle asserts that this language means that the two levels of
appeal are sealed off from each other, and that their "independence"
precludes any consequences of missing an initial deadline upon sub-
sequent appealability.
But this view misapprehends the import and the clarity of the SPD.
While it permits new evidence at each level of appeal, this permissive
rule simply advances "the strong federal policy encouraging private
resolution of ERISA-related disputes." Powell v. A.T. & T Comms.,
Inc., 938 F.2d 823, 825 (7th Cir. 1991). Accord Makar, 872 F.2d at
82-83. It makes such informal resolution possible for many Plan
participants — who may not wish to hire counsel for an internal
appeal — by allowing them to improve their arguments unconstrained
by unforgiving rules of evidence and waiver. The "independence"
Gayle repeatedly invokes does not mean that the appeal process is
8 GAYLE v. UNITED PARCEL SERVICE

-- 8 of 11 --

disjointed or is not unitary. It simply gives claimants assurance that
individuals deciding the first level appeal will not also be decision
makers for the second level appeal. This is hardly revolutionary; it
mirrors the commonplace that lower court judges will not hear
appeals of their own rulings.
The SPD’s description of its internal review procedures also
reflects the familiar principle that the chronological order of a case’s
appellate progress is significant. It specifically labels its appeals to
run consecutively, as "first" and "second." It dates the availability of
the latter from the resolution of the former. Rules of procedure in fed-
eral court provide an apt analogy. A dissatisfied litigant who misses
a deadline to file in the court of appeals cannot then blithely skip to
the Supreme Court and argue that the time limit for that subsequent
appeal has not passed. Similarly, a restaurant offering "free refills" is
entitled to assume that only an initial beverage purchase can trigger
the demand for a refill. A "second," by its nature, must be preceded
by a "first."
The Plan’s appeal process — like any appeal process — is struc-
tured such that the Committee, which hears second level appeals,
would receive the benefit of earlier review. See, e.g., Gallegos, 210
F.3d at 809 (the exhaustion "requirement is aimed at encouraging
claimants to pursue private remedies and develop a proper administra-
tive record"); Makar, 872 F.2d at 83 (noting that one "value of
ERISA’s internal claims procedures" is guaranteeing a "factual record
to assist" in review or appeals). The second level appeal is certainly
independent, but it is not intended to be blind. In the same way, de
novo review by this court is "independent" of the district court, but
it relies upon and derives benefit from that earlier level of review.
This is equally true of the Plan’s system of appeals, which is carefully
crafted to prevent the Committee from having to hit the case cold.
Gayle regards the time periods in the Plan as hostile, but they need
not be so. They encourage a reasonably prompt and informal resolu-
tion of claims which ultimately works to the benefit of the Plan’s par-
ticipants. This is consistent with ERISA’s purpose as "a
comprehensive statute designed to promote the interests of employees
and their beneficiaries in employee benefit plans." Shaw v. Delta Air
Lines, Inc., 463 U.S. 85, 90 (1983). Largely for this purpose, we have
9 GAYLE v. UNITED PARCEL SERVICE

-- 9 of 11 --

required exhaustion of internal remedies before coming to court, since
availing oneself of such dispute resolution procedures means that
"subsequent court action may be unnecessary in many cases because
the plan’s own procedures will resolve many claims." Makar, 872
F.2d at 83.
This advantage would appear to wane once the opportunity for
internal appeals has disappeared through missed deadlines. But
ERISA’s requirement that plans provide internal remedies also
"lead[s] courts to see that those remedies are regularly utilized." Id.
Only through insisting on adherence to plan remedies do we vindicate
"Congress’s apparent intent in mandating internal claims procedures
. . . [which] was to minimize the number of frivolous lawsuits; pro-
mote consistent treatment of claims; provide a non-adversarial dispute
resolution process; and decrease the cost and time of claims settle-
ment." Powell, 938 F.2d at 826. We respect ERISA’s values by avoid-
ing these "inconsistent results where one claimant is held to the
limitation, and another is not," along with the attendant costs of such
uncertainty to the settlement process. Terry, 145 F.3d at 40. Accord-
ingly, we decline to adopt a rule which would fail to penalize disre-
gard for a plan’s internal dispute resolution procedures.
C.
We therefore affirm the district court’s dismissal with prejudice of
plaintiff’s first cause of action for remand to the Plan. This must fol-
low from the legal conclusion that Gayle has neglected to exhaust her
Plan remedies, and for lack of timeliness, cannot now do so.
We did not dismiss with prejudice in Makar. There, like here, the
claimants resorted to federal court without availing themselves of the
plan process first. Unlike here, however, the claimants in Makar did
so without a prior conclusion that the deadline for a Plan appeal had
run. Therefore, in Makar, we directed that the underlying ERISA
claim be dismissed without prejudice "to allow the Makars the oppor-
tunity to pursue their remedies under" the terms of their plan. Makar,
872 F.2d at 83. Similarly, in Hickey v. Digital Equipment Corp., 43
F.3d 941, 945 (4th Cir. 1995), we found that the proper consequence
of failing to exhaust was a remand to the plan, and dismissal without
prejudice to allow that.
10 GAYLE v. UNITED PARCEL SERVICE

-- 10 of 11 --

But here, unlike in Makar or Hickey, it is clear that "the opportu-
nity to pursue [Gayle’s] remedies under" the Plan’s appeal process
has expired. The Plan was entitled to respect its appeals process
which it had announced plainly in advance, which it had applied con-
sistently, and which served the interests of claimants in a prompt reso-
lution of their claims. Dismissal without prejudice is appropriate
whenever a claim can still be brought. But since the pursuit and
exhaustion of internal Plan remedies is an essential prerequisite to
judicial review of an ERISA claim for denial of benefits, Norris v.
Citibank, N.A. Disability Plan, 308 F.3d 880, 884 (8th Cir. 2002);
Makar, 872 F.2d at 82, and since this is impossible here, Gayle’s
claims are barred. In such situations dismissal with prejudice is
required. Any remaining dispute must be resolved between the plain-
tiff and her lawyers. See Link, 370 U.S. at 634 n.10.2
III.
For the foregoing reasons, the judgment of the district court is
AFFIRMED.
2As to the second cause of action for judicial review of subsequent
denial of benefits, inasmuch as there can be no case or controversy with
respect to subsequent actions of any sort, the dismissal by the district
court of that claim was appropriate.
11 GAYLE v. UNITED PARCEL SERVICE

-- 11 of 11 --