[NOT FOR PUBLICATION - NOT TO BE CITED AS PRECEDENT]
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO [Hon. Raymond L. Acosta, Senior U.S. District Judge]
Antonio Rivera-D¡az and his daughter, Patricia Rivera-Falcón, appeal from a decision of the district court dismissing with prejudice their complaint against American Airlines. The complaint sought retroactive payment of early retirement benefits for Rivera, plus compensatory and punitive damages under both ERISA and state tort law.
Rivera was discharged from American Airlines in 1991, at which time he was not old enough to receive early retirement benefits. As he neared the age of eligibility, Rivera was sent two letters from American, in 1993 and 1995, notifying him that he would soon be eligible for benefits and instructing him on how to apply. In 1998, Rivera filed this lawsuit, without ever having applied for benefits as instructed in the 1993 and 1995 letters. 1 Accordingly, the district court was correct to dismiss Rivera's complaint due to his failure to exhaust administrative remedies. See Terry v. Bayer Corp., 145 F.3d 28, 35-36 (1st Cir. 1998) (ordinarily claimant for benefits under ERISA must exhaust plan's administrative remedies before suing).
The district court also dismissed on the ground that any claims under ERISA or in tort were time-barred. 2 We vacate that dismissal, as the record before the district court did not permit it to adjudicate the timeliness of plaintiffs' claims. The timeliness of Rivera's eventual claim for benefits may or may not be governed by the terms of the ERISA plan. But the timeliness of his claim for denial of benefits is a different matter. On this record, it appears that Rivera has not yet been denied any benefits -- retrospective or prospective --because he has not yet applied for them. Thus, his claim for denial of benefits, whether under ERISA or in tort, appears not yet to have accrued. See Cottrill v. Sparrow, Johnson & Ursillo, Inc., 100 F.3d 220, 223-24 (1st Cir. 1996) (ordinarily cause of action under ERISA accrues on the date plaintiff was denied benefits).
Given that we find the complaint should be dismissed only on exhaustion grounds, it is to be dismissed without prejudice. 3 See Donnelly v. Yellow Freight Sys., Inc., 874 F.2d 402, 410 n.11 (7th Cir. 1989) (proper remedy where complaint was dismissed due to failure to exhaust administrative remedies is to dismiss without prejudice). Plaintiffs remain free to pursue their administrative remedies under the plan, and to return to court to assert any claims they may have once they have exhausted these remedies.
We vacate and remand with instructions that a judgment of dismissal without prejudice be entered for failure to exhaust administrative remedies. No costs are awarded.
1. Rivera claims that the letters were erroneously addressed (despite defendant having his correct address) and that as a result he never received them. Subsequently, in the course of this litigation, American Airlines again instructed Rivera on how to apply for benefits, and provided him with the requisite application forms. Yet, it appears that to this day Rivera has still to complete the paperwork necessary to apply for the benefits he seeks.
2. Defendant suggests another ground for affirmance: that plaintiffs, in their opposition to dismissal, failed to respond to defendant's argument on this point. But this ground was not the basis of the trial court's order. The court only stated that it "agree[d] with the defendant's arguments that both the claims for benefits as well as those sounding in tort are time-barred."
3. The district court was correct, however, that as a matter of law, no punitive damages are available to the plaintiff under either ERISA, see Turner v. Fallon Community Health Plan, Inc., 127 F.3d 196, 198 (1st Cir. 1997) (explaining that ERISA "does not create compensatory or punitive damage remedies" where plaintiff is denied benefits under plan), or local Puerto Rico law, see Ganapolsky v. Park Gardens Dev. Corp., 439 F.2d 844, 846 n.1 (1st Cir. 1971). Should plaintiffs later pursue a claim for punitive damages after exhausting administrative remedies, they may subject themselves to sanctions.