Wetzel v. Lou Ehlers Cadillac Group Long Term Disability Insurance Program, 222 F.3d 643 (9^th Cir. 2000)-In dealing with statues of limitations in ERISA actions, this court overruled a prior key decision, Nikaido v. Centennial Life Ins. Co. 42 F.3d 557 (9^th Cir. 1994), which had established the "rolling accrual" rule.  This court also revised its earlier reliance on Nikaido's reasoning that California's most analogous statute of limitations [to ERISA] was a section of the California Insurance Code, rather than the more general [4 year] "breach of contract" provision of the California Code of Civil Procedure.

This court then considered the viability of Wetzel's long-term disability claim under the four-year statute of limitations, and remanded on whether Wetzel met the three-year period stated in the terms of his policy. Wetzel had received a letter from Reliance informing him of its decision to limit his benefits to twenty-four months based on the fact that his disability was due to a mental or nervous disorder. This occurred more than four years before the present suit. However, this court agreed with Wetzel that because a request for more information accompanied the denial while the company continued to pay benefits, it was reasonable for Wetzel to believe the plan had not finally denied his benefits.

An action for the payment of benefits accrues upon the insurer's "clear and continuing repudiation" of the insured's claim.  Thus, under federal law, an ERISA cause of action accrues either at the time the plan actually denies benefits, Menhorn v. Firestone Tire & Rubber Co., 738 F.2d 1496, 1501 (9^th Cir. 1984), or when the insured has reason to know that the plan has denied the claim.  Price v. Provident Life & Accident Ins. Co., 2 F.3d 986, 988 (9^th Cir. 1993).