Breach of Contract Cases

SIU S. TONG, et al., Plaintiffs v. DAVID DUNN, TIMOTHY KRONGARD, ED MASI, SOPHIA WONG and JANET WYLIE, Defendants No. COA12-1261 Filed 17 December 2013 1. Appeal and Error — motion to dismiss appeal — denied Defendants’ motion to dismiss the appeal under Hill v. West, 177 N.C. App. 132, was denied by the Court of Appeals. Hill has been repeatedly limited to its specific, unusual facts, which were not present here. 2. Collateral Estoppel and Res Judicata — claim splitting— federal and state actions — separate wrongs The trial court erred in an action by the founder of a company arising from a merger by concluding that the doctrines of claim-splitting and res judicata applied. A separate wrong was asserted in the federal action and in this case; plaintiff’s claims in the federal action involved claims arising out of his position as an employee while the current action involved a wrong inflicted upon plaintiff in his capacity as a common shareholder. Appeal by plaintiff from order entered 25 May 2012 by Judge James L. Gale in Orange County Superior Court. Heard in the Court of Appeals 9 April 2013. Poyner Spruill LLP, by Steven B. Epstein and Andrew H. Erteschik, for plaintiff-appellant. Kilpatrick Townsend & Stockton LLP, by John M. Moye, for defendants-appeUees. GEER, Judge. Plaintiff Siu S. Tong appeals from an order granting judgment on the pleadings to defendants David Dunn, Timothy Krongard, Ed Masi, Sophia Wong, and Janet Wylie on Mr. Tong’s claim for breach of fiduciary duty. Defendants contended and the trial court agreed that Mr. Tong’s claim in this case was barred by res judicata because the claim in this case arose from the same set of operative facts as the claims in Mr. Tong’s earlier employment action. We hold that the order is contrary to our Supreme Court’s holding in Bockweg v. Anderson, 333 N.C. 486, 428 S.E.2d 157 (1993), and, therefore, reverse and remand. Facts Mr. Tong was the founder of Engineous Software, Inc. (“Engineous”). During the events that gave rise to this action, Mr. Tong continued to be a key employee of Engineous, a common shareholder of Engineous, and a member of the Board of Directors of Engineous elected to represent the common shareholders. The common shareholders collectively owned a minority interest in the company. In Spring 2006, the Engineous Board of Directors, amajority of which were preferred shareholders, hired Wachovia Bank to explore opportunities to sell Engineous. Ultimately, Dassault Systems S.A. (“Dassault”) offered $35-40 million for Engineous. Although Mr. Tong believed that Dassault’s offer was not in the best interests of the common shareholders, the Board ultimately agreed to a merger with Dassault in which Dassault acquired Engineous for approximately $40 million and merged Engineous into ENG Acquisition, Inc. (“ENG”), a wholly-owned subsidiary of Dassault. On 11 July 2011, Mr. Tong filed suit in Wake County Superior Court against Dassault, Engineous, Dassault Systemes Simulia K.K. formerly known as Engineous Japan, Inc., Janet Wylie, Edward Masi, Tim Krongard, David Dunn, Sophia Wong, and Charles Johnson. This action was ultimately removed to federal court (“the federal action”). In an amended complaint, Mr. Tong alleged that the individual defendants knew that the proposed merger agreement between Engineous and Dassault made Mr. Tong’s continued employment a condition of Dassault purchasing Engineous. On 10 June 2008, however, Mr. Tong resigned from the Engineous Board of Directors because of his concerns regarding the manner in which the proposed sale of Engineous to Dassault would affect the common shareholders. On 13 June 2008, three days before the execution of the merger agreement, Engineous, acting through defendant Krongard with the knowledge and consent of the other individual defendants (all of whom were members of Engineous’ Board of Directors), promised Mr. Tong a payment of at least $300,000.00 (the “carve-out payment”) if he would execute an employment agreement agreeing to continue to work for Dassault after the merger. The amended complaint alleged that Mr. Krongard knew that Mr. Tong would have to also sign a release agreement in order to receive the carve-out payment, but Mr. Krongard intentionally or negligently, with the knowledge and consent of the other individual defendants, failed to inform Mr. Tong of that requirement. Mr. Tong asserted that Mr. Krongard’s offer of the carve-out payment without mention of the required release was intended to fraudulently induce Mr. Tong into signing an employment agreement with Dassault. Further, Mr. Tong alleged that Engineous and the individual defendants knew that he would likely exercise his rights as a minority shareholder to challenge the sale. On 16 June 2008, Mr. Tong signed the employment agreement with Dassault. On the same day, after Mr. Tong signed the employment agreement, Engineous and Dassault signed the merger agreement. The merger agreement required that Mr. Tong, as well as certain other Engineous employees, have active and valid employment agreements with Dassault at the time the merger closed in order for the deal to be consummated. On 8 July 2008, the shareholders approved the merger agreement. Mr. Tong did not vote in favor of the merger agreement and preserved his rights as a common shareholder to object to the merger. On 14 July 2008, however, defendant Janet Wylie, the CEO of Engineous, notified Mr. Tong for the first time that in order to receive the $300,000.00 carve-out payment, he would have to sign a release extinguishing any claims he had as a common shareholder to challenge the sale of Engineous. Because Mr. Tong refused to sign the release, he was not paid the $300,000.00 carve-out payment. On 21 July 2008, the merger closed and other Engineous executives who had signed employment contracts and releases were paid the promised carve-out payments. The federal amended complaint further alleged that Mr. Tong complied with his employment agreement by commencing work for Dassault. Mr. Tong alleged, however, that Dassault breached the employment agreement by not paying him performance bonuses and by undermining Mr. Tong’s ability to earn compensation specified in the agreement as part of an incentive plan. The amended complaint alleged that Dassault terminated Mr. Tong’s employment on 13 January 2010, but refused, in breach of the terms of the employment agreement, to pay reasonable business expenses and severance pay. Dassault also failed to pay a Japanese retirement allowance that Mr. Tong alleged was due for his service as a director of Engineous Japan, Inc. Mr. Tong asserted claims in the federal action against the individual defendants (defendants Krongard, Wylie, Masi, Dunn, Wong, and Johnson) and Engineous for fraudulent inducement and negligent misrepresentation based on Mr. Tong’s having been induced to sign the employment agreement in exchange for $300,000.00 without being told that receipt of the sum was conditioned on his signing a release of his claims as a common shareholder. Mr. Tong also alleged a claim for breach of contract against Engineous for failure to pay the $300,000.00 and against Dassault for tortious interference with the agreement to pay Mr. Tong $300,000.00. In addition, Mr. Tong sued Dassault for breach of the employment agreement, violation of the North Carolina Wage and Hour Act, and breach of contract and/or quantum meruit for failure to pay the Japanese retirement allowance. Mr. Tong stated in his amended complaint that he consented to arbitrate the claims brought against Dassault for breach of contract and violation of the Wage and Hour Act. On 20 July 2011, 10 days after he filed his first lawsuit, Mr. Tong and 47 other plaintiffs, all common shareholders of Engineous, filed this action in Orange County Superior Court against individual defendants David Dunn, Timothy Krongard, Ed Masi, Sophia Wong, and Janet Wylie, all of whom were preferred shareholders of Engineous and members of Engineous’ Board of Directors. Also joined as a defendant was ENG in its own capacity and as the successor to Engineous. The Orange County Superior Court complaint alleged that the individual defendants owed the common shareholders a fiduciary duty, which included a duty to maximize the value to all shareholders, including the common shareholders, in connection with Dassault’s acquisition of Engineous. The complaint alleged that “[t]he Individual Defendants breached these duties by knowingly and recklessly placing their own interests above those of all shareholders, self-dealing, and failing to adequately oversee the Engineous[] officers, failing to maximize the value of the sale of Engineous, thereby actually and proximately causing Mr. Tong and the other Common Shareholders to suffer damages in an amount to be proven at trial.” The complaint further asserted a claim for aiding and abetting these breaches of fiduciary duty against ENG. In support of these claims, plaintiffs alleged that Mr. Tong agreed to work with Mr. Krongard and Wachovia Bank to explore opportunities to sell Engineous. Although Mr. Tong’s efforts resulted in four well-known potential buyers expressing interest, with two of them entering a bidding process, the board of directors cut off Mr. Tong’s interactions with the potential buyers. The complaint further alleged that during board meetings, statements were made reflecting that certain board members were placing their own interests ahead of the common shareholders. Mr. Tong refused to sign board minutes for one of the key board meetings because, the complaint alleged, of “the omission of many statements and the failure to acknowledge the apparent agreement between the preferred board members that their individual interests should and would drive the decision making process going forward (casting aside the common shareholders’ interests).” The board and Engineous’ executive management then attempted to block Mr. Tong’s interaction with the potential buyer, Dassault, so as to limit the flow of information to Mr. Tong and the other common shareholders. Although board members recognized that Engineous was not in a strong position to sell and although Mr. Tong urged the board to wait until after the roll out of Engineous’ new enterprise product because it would likely significantly improve the company’s sale value, the board refused to wait. The board members justified that refusal by expressing concern about a potential cash flow shortage in the future, and yet awarded substantial executive bonuses to company officers, including the individual defendants. The complaint further alleged that the preferred stock board members, including the individual defendants, voted to set aside funds to reward employees and executives who supported the merger that favored preferred shareholders and to buy general releases from certain key employees. Dassault initially made an offer of $35 million to $40 million for Engineous. Mr. Dunn, a member of the board representing preferred shareholders, proposed that the board accept the sale price, while Mr. Tong proposed that the board wait for a competing offer from Siemens. Mr. Tong expected that an additional bidder would offer a higher price. The complaint alleged that the board, however, showed little interest in attempting to negotiate a higher sale price, but rather were more interested in proceeding to a closing that would benefit the preferred shareholders. The complaint alleged that Mr. Krongard stated that particular terms offered by Dassault -- including the speed at which the preferred shareholders would collect the sale proceeds, the size of the escrow, and the timing of the closing - were of paramount importance. Those terms did not, however, assist the common shareholders or protect the value of the common shareholders’ interests in Engineous. In addition, according to the complaint, throughout the merger and acquisition process, the individual defendants Ms. Wylie and Mr. Krongard interfered with Mr. Tong’s right, as a director representing common shareholders and as a common shareholder himself, to interact with participants and gather information about ongoing developments. Dassault acquired Engineous by merger with ENG for approximately $40 million. The complaint alleged that several board members made false representations to common shareholders to represent that the deal accorded with their fiduciary responsibilities when, in fact, the individual defendants “were considering their own self-interest first.” The complaint also asserted that had defendants acted in accord with their fiduciary responsibilities, the ultimate valuation of Engineous would have been higher which would have benefitted the common shareholders. Further, according to the complaint, “in closing this transaction in the manner described above, and as they did, the Defendants were not acting in the best interests of the Company and all its shareholders, but rather in their own self-interest, causing harm to Mr. Tong and the Common Shareholders.” As relief, the Orange County complaint sought a declaration that the Engineous board’s actions constituted breaches of fiduciary duty. The complaint also sought compensatory damages suffered as a result of defendants’ wrongdoing. The individual defendants filed an answer dated 19 September 2011. Defendant ENG filed a motion to dismiss pursuant to Rule 12(b)(6) of the North Carolina Rules of Civil Procedure on 29 September 2011. In the federal action, on 7 October 2011, Mr. Tong filed a stipulation of dismissal with prejudice of his claims against Engineous and the individual defendants for fraudulent inducement to contract and negligent misrepresentation, as well as his claims against Engineous for breach of contract and against Dassault for tortious interference with the contract to pay the carve-out payment. On 24 October 2011, the individual defendants in the Orange County action filed an amended answer adding an affirmative defense that “[p]laintiff Tong’s claims against the Individual Defendants are barred by the doctrines of res judicata and claim splitting, given that Plaintiff Tong filed a prior action against the Individual Defendants . . . and that action was dismissed with prejudice.” The answer contended that “[u] nder the doctrines of res judicata and claim splitting, the prior disposition of the Federal Action operates as a bar on Plaintiff Tong’s present action against the Individual Defendants, and thus Plaintiff Tong’s claims are subject to dismissal as a matter of law.” The individual defendants then moved for judgment on the pleadings as to Mr. Tong’s claims on 30 November 2011. The trial court granted ENG’s motion to dismiss on 26 March 2012. On 25 May 2012, the trial court also granted the individual defendants’ motion for judgment on the pleadings as to Mr. Tong’s claims. The court concluded “that issues Tong now seeks to litigate in the Present Action were raised by the pleadings in the [federal action] and res judicata applies. Rather than asserting different injuries arising from independent successive acts, Tong complains that Individual Defendants set out on a concerted course of action designed to complete the Merger, including buying Tong’s consent through false pretenses and at the same time extinguishing the rights of common shareholders, including Tong’s. While other shareholders . . . were not party to the [federal action] and are not then subject to res judicata, Tong’s claims are barred by his dismissal of the [federal action] with prejudice.” On 5 August 2012, the remaining plaintiffs other than Mr. Tong filed a notice of voluntary dismissal without prejudice. Mr. Tong filed a notice of appeal from the order granting judgment on the pleadings on 7 August 2012. Motion to Dismiss Anneal We first address defendants’ motion to dismiss Mr. Tong’s appeal. Defendants contend that this Court must dismiss the appeal under Hill v. West, 177 N.C. App. 132, 627 S.E.2d 662 (2006). This Court has, however, repeatedly limited Hill to the specific, unusual facts present in that case. The circumstances present in Hill are not found in this case and, therefore, Hill is not controlling here. In Hill, the plaintiffs filed a negligence action arising out of a traffic accident. Id. at 133,627 S.E.2d at 662-63. The trial court entered an order granting two defendants’ Rule 12(b)(6) motion to dismiss and a subsequent order granting summary judgment to three other defendants, with claims against one defendant remaining unresolved. Id. at 133-34, 627 S.E.2d at 663. This Court dismissed the plaintiffs’ appeal from the partial summary judgment order as interlocutory, noting in addition that the plaintiffs had failed to include a statement of grounds for appellate review in violation of the Rules of Appellate Procedure. Id. at 133, 627 S.E.2d at 663. On remand, the trial court entered a consent order that purported to be a voluntary dismissal pursuant to Rule 41(a)(1) of the Rules of Civil Procedure of the claims against the remaining defendant. Hill, 177 N.C. App. at 135, 627 S.E.2d at 664. The order, however, included a special provision stating that the trial court “ ‘specifically order[ed], with the consent of all parties, that if this case is remanded for trial, all claims against [the remaining defendant] may be reinstated as the Plaintiffs deem necessary and that the prior dismissals without prejudice will not be pled as a bar to said claims.’ ” Id. In other words, contrary to Rule 41(a)(1), the claims against the remaining defendant could be reinstated at any time without regard to the one-year limitation contained in Rule 41(a)(1). When the plaintiffs then appealed the summary judgment order a second time, this Court first noted that the plaintiffs had again violated the Rules of Appellate Procedure by failing to include a statement of the grounds for appellate review. Hill, 177 N.C. App. at 134, 627 S.E.2d at 633. Relying on Viar v. N.C. Dep’t of Transp., 359 N.C. 400, 402, 610 S.E.2d 360, 361 (2005), the Court found no basis for suspending the Rules of Appellate Procedure under Rule 2. Hill, 177 N.C. App. at 134, 627 S.E.2d at 663-64. The Court then pointed out, in addition, that the unique consent order was a “manipulation of] the Rules of Civil Procedure in an attempt to appeal the 2003 summary judgment that otherwise would not be appealable” and was not a final judgment within the meaning of Rule 54 of the Rules of Civil Procedure. Id. at 135, 627 S.E.2d at 664. Based on both the appellate rules violation and the attempt to manipulate the Rules of Civil Procedure, this Court dismissed the second appeal. Id. at 136, 627 S.E.2d at 664. In subsequent cases, this Court has declined to dismiss appeals under Hill under circumstances identical to those in this case. In Curl v. Am. Multimedia, Inc., 187 N.C. App. 649, 654, 654 S.E.2d 76, 80 (2007), this Court limited Hill’s holding “to the facts of that case,” noting that “Hill did not attempt to distinguish its holding from the significant body of case law holding contra” and that “the holding in Hill was apparently based in part on the appellants’ ‘manipulative’ behavior and failure to follow the Rules of Appellate Procedure[.]” See also Goodman v. Holmes & McLaurin Attorneys at Law, 192 N.C. App. 467, 472, 665 S.E.2d 526, 530 (2008) (declining to dismiss appeal based on Hill even though appeal followed voluntary dismissal without prejudice of claims surviving trial court’s order because plaintiff followed Rules of Appellate Procedure). This Court also rejected an identical argument based on Hill in Duval v. OM Hospitality, LLC, 186 N.C. App. 390, 651 S.E.2d 261 (2007). This Court explained: “The stipulation of dismissal did not contain any additional language purporting to give plaintiff any time beyond that permitted by Rule 41(a)(1) to pursue her claim against Days Inn. The procedural posture of this case does not

Julie HEIMESHOFF, Petitioner v. HARTFORD LIFE & ACCIDENT INSURANCE CO. et al. No. 12-729. Supreme Court of the United States Argued Oct. 15, 2013. Decided Dec. 16, 2013. Matthew W.H. Wessler, for Petitioner. Ginger D. Anders, for the United States as amicus curiae, by special leave of the Court, supporting the petitioner. Catherine M.A. Carroll, Washington, DC, for Respondents. Steven P. Krafchick, Carla Tachau Lawrence, Krafchick Law Firm, Seattle, WA, Peter K. Stris, Brendan S. Maher, Victor O'Connell, Stris & Maher LLP, Gardena, CA, Matthew W.H. Wessler, Leah M. Nicholls, Public Justice, P.C., Washington, DC, Leslie A. Brueckner, Arthur H. Bryant, Sarah E. Belton, Public Justice, P.C., Oakland, CA, for Petitioner. Seth P. Waxman, Catherine M.A. Carroll, Counsel of Record, Weili J. Shaw, Ari Holtzblatt, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, DC, for Respondents. Justice THOMAS delivered the opinion of the Court. A participant in an employee benefit plan covered by the Employee Retirement Income Security Act of 1974 (ERISA), 88 Stat. 829, as amended, 29 U.S.C. § 1001 et seq., may bring a civil action under § 502(a)(1)(B) to recover benefits due under the terms of the plan. 29 U.S.C. § 1132(a)(1) (B). Courts have generally required participants to exhaust the plan's administrative remedies before filing suit to recover benefits. ERISA does not, however, specify a statute of limitations for filing suit under § 502(a) (1)(B). Filling that gap, the plan at issue here requires participants to bring suit within three years after "proof of loss" is due. Because proof of loss is due before a plan's administrative process can be completed, the administrative exhaustion requirement will, in practice, shorten the contractual limitations period. The question presented is whether the contractual limitations provision is enforceable. We hold that it is. I In 2005, petitioner Julie Heimeshoff began to report chronic pain and fatigue that interfered with her duties as a senior public relations manager for Wal-Mart Stores, Inc. Her physician later diagnosed her with lupus and fibromyalgia. Heimeshoff stopped working on June 8. On August 22, 2005, Heimeshoff filed a claim for long-term disability benefits with Hartford Life & Accident Insurance Co., the administrator of Wal-Mart's Group Long Term Disability Plan (Plan). Her claim form, supported by a statement from her rheumatologist, listed her symptoms as " 'extreme fatigue, significant pain, and difficulty in concentration.' " App. to Pet. for Cert. 7. In November 2005, Hartford notified Heimeshoff that it could not determine whether she was disabled because her rheumatologist had never responded to Hartford's request for additional information. Hartford denied the claim the following month for failure to provide satisfactory proof of loss. Hartford instructed Heimeshoff that it would consider an appeal filed within 180 days, but later informed her that it would reopen her claim, without the need for an appeal, if her rheumatologist provided the requested information. In July 2006, another physician evaluated Heimeshoff and concluded that she was disabled. Heimeshoff submitted that evaluation and additional medical evidence in October 2006. Hartford then retained a physician to review Heimeshoff's records and speak with her rheumatologist. That physician issued a report in November 2006 concluding that Heimeshoff was able to perform the activities required by her sedentary occupation. Hartford denied Heimeshoff's claim later that November. In May 2007, Heimeshoff requested an extension of the Plan's appeal deadline until September 30, 2007, in order to provide additional evidence. Hartford granted the extension. On September 26, 2007, Heimeshoff submitted her appeal along with additional cardiopulmonary and neuropsychological evaluations. After two additional physicians retained by Hartford reviewed the claim, Hartford issued its final denial on November 26, 2007. On November 18, 2010, almost three years later (but more than three years after proof of loss was due), Heimeshoff filed suit in District Court seeking review of her denied claim pursuant to ERISA § 502(a)(1)(B). Hartford and Wal-Mart moved to dismiss on the ground that Heimeshoff's complaint was barred by the Plan's limitations provision, which stated: "Legal action cannot be taken against The Hartford ... [more than] 3 years after the time written proof of loss is required to be furnished according to the terms of the policy."Id ., at 10. The District Court granted the motion to dismiss. Recognizing that ERISA does not provide a statute of limitations for actions under § 502(a)(1) (B), the court explained that the limitations period provided by the most nearly analogous state statute applies. See North Star Steel Co. v. Thomas, 515 U.S. 29, 33-34, 115 S.Ct. 1927, 132 L.Ed.2d 27 (1995). Under Connecticut law, the Plan was permitted to specify a limitations period expiring "[not] less than one year from the time when the loss insured against occurs." Conn. Gen.Stat. § 38a-290 (2012); see App. to Pet. for Cert. 13. The court held that, under Circuit precedent, a 3-year limitations period set to begin when proof of loss is due is enforceable, and Heimeshoff's claim was therefore untimely. Id ., at 13, 15 (citing Burke v. PriceWaterHouseCoopers LLP Long Term Disability Plan, 572 F.3d 76, 79-81 (C.A.2 2009) (per curiam )). On appeal, the Second Circuit affirmed. 496 Fed.Appx. 129 (2012). Applying the precedent relied on by the District Court, the Court of Appeals concluded that it did not offend ERISA for the limitations period to commence before the plaintiff could file suit under § 502(a)(1)(B). Because the policy language unambiguously provided that the 3-year limitations period ran from the time that proof of loss was due under the Plan, and because Heimeshoff filed her claim more than three years after that date, her action was time barred. We granted certiorari to resolve a split among the Courts of Appeals on the enforceability of this common contractual limitations provision. 569 U.S. ----, 133 S.Ct. 1802, 185 L.Ed.2d 810 (2013). Compare, e.g., Burke, supra, at 79-81 (plan provision requiring suit within three years after proof-of-loss deadline is enforceable); and Rice v. Jefferson Pilot Financial Ins. Co., 578 F.3d 450, 455-456 (C.A.6 2009) (same), with White v. Sun Life Assurance Co. of Canada, 488 F.3d 240, 245-248 (C.A.4 2007) (not enforceable); and Price v. Provident Life & Acc. Ins. Co., 2 F.3d 986, 988 (C.A.9 1993) (same). We now affirm. II Statutes of limitations establish the period of time within which a claimant must bring an action. As a general matter, a statute of limitations begins to run when the cause of action " 'accrues' "-that is, when "the plaintiff can file suit and obtain relief." Bay Area Laundry and Dry Cleaning Pension Trust Fund v. Ferbar Corp. of Cal., 522 U.S. 192, 201, 118 S.Ct. 542, 139 L.Ed.2d 553 (1997). ERISA and its regulations require plans to provide certain presuit procedures for reviewing claims after participants submit proof of loss (internal review). See 29 U.S.C. § 1133 ; 29 C.F.R. § 2560.503-1 (2012). The courts of appeals have uniformly required that participants exhaust internal review before bringing a claim for judicial review under § 502(a)(1)(B). See LaRue v. DeWolff, Boberg & Associates, Inc., 552 U.S. 248, 258-259, 128 S.Ct. 1020, 169 L.Ed.2d 847 (2008) (ROBERTS, C.J., concurring in part and concurring in judgment). A participant's cause of action under ERISA accordingly does not accrue until the plan issues a final denial. ERISA § 502(a)(1)(B) does not specify a statute of limitations. Instead, the parties in this case have agreed by contract to a 3-year limitations period. The contract specifies that this period begins to run at the time proof of loss is due. Because proof of loss is due before a participant can exhaust internal review, Heimeshoff contends that this limitations provision runs afoul of the general rule that statutes of limitations commence upon accrual of the cause of action. For the reasons that follow, we reject that argument. Absent a controlling statute to the contrary, a participant and a plan may agree by contract to a particular limitations period, even one that starts to run before the cause of action accrues, as long as the period is reasonable. A Recognizing that Congress generally sets statutory limitations periods to begin when their associated causes of action accrue, this Court has often construed statutes of limitations to commence when the plaintiff is permitted to file suit. See, e.g., Graham County Soil & Water Conservation Dist. v. United States ex rel. Wilson, 545 U.S. 409, 418, 125 S.Ct. 2444, 162 L.Ed.2d 390 (2005) (resolving an ambiguity in light of "the 'standard rule that the limitations period commences when the plaintiff has a complete and present cause of action' " (quoting Bay Area Laundry, supra, at 201, 118 S.Ct. 542) ); Rawlings v. Ray, 312 U.S. 96, 98, 61 S.Ct. 473, 85 L.Ed. 605 (1941). At the same time, we have recognized that statutes of limitations do not inexorably commence upon accrual. See Reiter v. Cooper, 507 U.S. 258, 267, 113 S.Ct. 1213, 122 L.Ed.2d 604 (1993) (noting the possibility that a cause of action may "accru[e] at one time for the purpose of calculating when the statute of limitations begins to run, but at another time for the purpose of bringing suit"); see also Dodd v. United States, 545 U.S. 353, 358, 125 S.Ct. 2478, 162 L.Ed.2d 343 (2005) (the statute of limitations in the federal habeas statute runs from " 'the date on which the right asserted was initially recognized by the Supreme Court' " even if the right has not yet been " 'made retroactively applicable to cases on collateral review' "); McMahon v. United States, 342 U.S. 25, 26-27, 72 S.Ct. 17, 96 L.Ed. 26 (1951) (the limitations period in the Suits in Admiralty Act runs from the date of injury rather than when plaintiffs may sue). None of those decisions, however, addresses the critical aspect of this case: the parties have agreed by contract to commence the limitations period at a particular time. For that reason, we find more appropriate guidance in precedent confronting whether to enforce the terms of a contractual limitations provision. Those cases provide a well-established framework suitable for resolving the question in this case: "[I]n the absence of a controlling statute to the contrary, a provision in a contract may validly limit, between the parties, the time for bringing an action on such contract to a period less than that prescribed in the general statute of limitations, provided that the shorter period itself shall be a reasonable period." Order of United Commercial Travelers of America v. Wolfe, 331 U.S. 586, 608, 67 S.Ct. 1355, 91 L.Ed. 1687 (1947). We have recognized that some statutes of limitations do not permit parties to choose a shorter period by contract. See, e.g., Louisiana & Western R. Co. v. Gardiner, 273 U.S. 280, 284, 47 S.Ct. 386, 71 L.Ed. 644 (1927) (contractual provision requiring suit against common carrier within two years and one day after delivery was invalid under a federal statute "declar[ing] unlawful any limitation shorter than two years from the time notice is given of the disallowance of the claim"). The rule set forth in Wolfe recognizes, however, that other statutes of limitations provide only a default rule that permits parties to choose a shorter limitations period. See Riddlesbarger v. Hartford Ins. Co., 7 Wall. 386, 390, 19 L.Ed. 257 (1869) (finding "nothing in th[e] language or object [of statutes of limitations] which inhibits parties from stipulating for a shorter period within which to assert their respective claims"); see also Missouri, K. & T.R. Co. v. Harriman, 227 U.S. 657, 672-673, 33 S.Ct. 397, 57 L.Ed. 690 (1913) (citing examples). If parties are permitted to contract around a default statute of limitations, it follows that the same rule applies where the statute creating the cause of action is silent regarding a limitations period. The Wolfe rule necessarily allows parties to agree not only to the length of a limitations period but also to its commencement. The duration of a limitations period can be measured only by reference to its start date. Each is therefore an integral part of the limitations provision, and there is no basis for categorically preventing parties from agreeing on one aspect but not the other. See Electrical Workers v. Robbins & Myers, Inc., 429 U.S. 229, 234, 97 S.Ct. 441, 50 L.Ed.2d 427 (1976) (noting that "the parties could conceivably have agreed to a contract" specifying the " 'occurrence' " that commenced the statutory limitations period). B The principle that contractual limitations provisions ordinarily should be enforced as written is especially appropriate when enforcing an ERISA plan. "The plan, in short, is at the center of ERISA." US Airways, Inc. v. McCutchen, 569 U.S. ----, ----, 133 S.Ct. 1537, 1548, 185 L.Ed.2d 654 (2013)."[E]mployers have large leeway to design disability and other welfare plans as they see fit." Black & Decker Disability Plan v. Nord, 538 U.S. 822, 833, 123 S.Ct. 1965, 155 L.Ed.2d 1034 (2003). And once a plan is established, the administrator's duty is to see that the plan is "maintained pursuant to [that] written instrument." 29 U.S.C. § 1102(a)(1). This focus on the written terms of the plan is the linchpin of "a system that is [not] so complex that administrative costs, or litigation expenses, unduly discourage employers from offering [ERISA] plans in the first place." Varity Corp. v. Howe, 516 U.S. 489, 497, 116 S.Ct. 1065, 134 L.Ed.2d 130 (1996). Heimeshoff's cause of action for benefits is likewise bound up with the written instrument. ERISA § 502(a)(1)(B) authorizes a plan participant to bring suit "to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan. " 29 U.S.C. § 1132(a)(1)(B) (emphasis added). That "statutory language speaks of 'enforc [ing] ' the 'terms of the plan,' not of changing them." CIGNA Corp. v. Amara, 563 U.S. ----, ----, 131 S.Ct. 1866, 1877, 179 L.Ed.2d 843 (2011). For that reason, we have recognized the particular importance of enforcing plan terms as written in § 502(a)(1)(B) claims. See id., at ----, 131 S.Ct., at 1876-1877; Conkright v. Frommert, 559 U.S. 506, 512-513, 130 S.Ct. 1640, 176 L.Ed.2d 469 (2010) ; Kennedy v. Plan Administrator for DuPont Sav. and Investment Plan, 555 U.S. 285, 299-301, 129 S.Ct. 865, 172 L.Ed.2d 662 (2009). Because the rights and duties at issue in this case are no less " built around reliance on the face of written plan documents," Curtiss-Wright Corp. v. Schoonejongen, 514 U.S. 73, 83, 115 S.Ct. 1223, 131 L.Ed.2d 94 (1995), we will not presume from statutory silence that Congress intended a different approach here. III We must give effect to the Plan's limitations provision unless we determine either that the period is unreasonably short, or that a "controlling statute" prevents the limitations provision from taking effect. Wolfe, 331 U.S., at 608, 67 S.Ct. 1355. Neither condition is met here. A Neither Heimeshoff nor the United States claims that the Plan's 3-year limitations provision is unreasonably short on its face. And with good reason: the United States acknowledges that the regulations governing internal review mean for "mainstream" claims to be resolved in about one year, Tr. of Oral Arg. 22, leaving the participant with two years to file suit. Even in this case, where the administrative review process required more time than usual, Heimeshoff was left with approximately one year in which to file suit. Heimeshoff does not dispute that a hypothetical 1-year limitations period commencing at the conclusion of internal review would be reasonable. Id., at 4. We cannot fault a limitations provision that would leave the same amount of time in a case with an unusually long internal review process while providing for a significantly longer period in most cases. Heimeshoff's reliance on Occidental Life Ins. Co. of Cal. v. EEOC, 432 U.S. 355, 97 S.Ct. 2447, 53 L.Ed.2d 402 (1977), is therefore misplaced. There, we declined to enforce a State's 1-year statute of limitations as applied to Title VII employment discrimination actions where the limitations period commenced before accrual. We concluded that "[i]t would hardly be reasonable" to suppose that Congress intended to enforce state statutes of limitations as short as 12 months where the Equal Employment Opportunity Commission faced a backlog of 18 to 24 months, leaving claimants with little chance of bringing a claim not barred by the State's statute of limitations. Id., at 369-371, 97 S.Ct. 2447. In the absence of any evidence that there are similar obstacles to bringing a timely § 502(a)(1)(B) claim, we conclude that the Plan's limitations provision is reasonable. B Heimeshoff and the United States contend that even if the Plan's limitations provision is reasonable, ERISA is a "controlling statute to the contrary." Wolfe, supra, at 608, 67 S.Ct. 1355. But they do not contend that ERISA's statute of limitations for claims of breach of fiduciary duty controls this action to recover benefits. See 29 U.S.C. § 1113. Nor do they claim that ERISA's text or regulations contradict the Plan's limitations provision. Rather, they assert that the limitations provision will "undermine" ERISA's two-tiered remedial scheme. Brief for Petitioner 39; Brief for United States as Amicus Curiae 19. We cannot agree. 1 The first tier of ERISA's remedial scheme is the internal review process required for all ERISA disability-benefit plans. 29 C.F.R. § 2560.503-1. After the participant files a claim for disability benefits, the plan has 45 days to make an "adverse benefit determination." § 2560.503-1(f)(3). Two 30-day extensions are available for "matters beyond the control of the plan," giving the plan a total of up to 105 days to make that determination. Ibid. The plan's time for making a benefit determination may be tolled "due to a claimant's failure to submit information necessary to decide a claim." § 2560.503-1(f)(4). Following denial, the plan must provide the participant with "at least 180 days ... within which to appeal the determination." §§ 2560.503-1(h)(3)(i), (h)(4). The plan has 45 days to resolve that appeal, with one 45-day extension available for "special circumstances (such as the need to hold a hearing)." §§ 2560.503-1(i)(1)(i), (i)(3)(i). The plan's time for resolving an appeal can be tolled again if the participant fails to submit necessary information. § 2560.503-1(i)(4). In the ordinary course, the regulations contemplate an internal review process lasting about one year. Tr. of Oral Arg. 22. If the plan fails to meet its own deadlines under these procedures, the participant "shall be deemed to have exhausted the administrative remedies." § 2560.503-1(l ). Upon exhaustion of the internal review process, the participant is entitled to proceed immediately to judicial review, the second tier of ERISA's remedial scheme. 2 Heimeshoff and the United States first claim that the Plan's limitations provision will undermine the foregoing internal review process. They contend that participants will shortchange their own rights during that process in order to have more time in which to seek judicial review. Their premise-that participants will sacrifice the benefits of internal review to preserve additional time for filing suit-is highly dubious in light of the consequences of that course of action. First, to the extent participants fail to develop evidence during internal review, they risk forfeiting the use of that evidence in district court. The Courts of Appeals have generally limited the record for judicial review to the administrative record compiled during internal revi