Opinion
Case No. 04-CV-998.
April 21, 2008
OPINION AND ORDER
I. INTRODUCTION
On November 13, 2007, this Court issued an Opinion and Order (the "November 13 Order") finding that Defendant Unum Life Insurance Company of America ("Unum") acted arbitrarily and capriciously when it denied Plaintiff Phyllis Hollingsworth's claim for long-term disability benefits. Presently before the Court are: (1) Hollingsworth's motion to modify the Court's November 13 Order, and (2) Hollingsworth's application for a determination of disability benefits due and for a determination of attorneys' fees. For the reasons described below, the Court GRANTS Hollingsworth's motion to modify, FINDS that Unum has correctly calculated her retroactive disability award at $39,368.21 through January 13, 2008, ORDERS Unum to update its award calculation through the present, and ORDERS Unum to pay Hollingsworth's counsel $17,500 in attorneys' fees.
Although this case is captioned as "Hollingsworth v. Long Term Disability Plan for Employees of Huntington Banc Shares," there is no dispute that Unum is the proper defendant.
II. ANALYSIS A. Calculating Hollingsworth's Disability Award 1. The Applicable Time Period
In its November 13 Order, the Court concluded that Hollingsworth is entitled to retroactive disability benefits covering the period from September 30, 2002, through August 14, 2004. Hollingsworth has moved to modify the Order on the grounds that she is entitled to a disability award extending through the present date. Unum agrees with this contention. After reviewing the applicable case law, so does the Court. See e.g., Cooper v. Life Ins. Co. of N. Am., 486 F.3d 157, 173 (6th Cir. 2007) (concluding that the plaintiff was entitled to retroactive disability award beginning on the date her short-term disability payments ceased and noting that the defendant could require ongoing proof of the plaintiff's disability for her to continue to receive benefits); Kalish v. Liberty Mutual/Liberty Life Assur. Co., 419 F.3d 501, 513 (6th Cir. 2005) (remanding the case for entry of an order requiring the defendant to pay a retroactive disability benefits from the date on which the benefits ceased). Unum is obligated to continue paying Hollingsworth benefits until such time as it establishes that she is no longer disabled within the meaning of its Policy. See Administrative Record ("AR") at 534.In its response to Hollingsworth's motion to modify, Unum argues that Hollingsworth's benefits award must be calculated from February 25, 2003, not September 30, 2002, as set by the Court in its November 13 Order. Hollingsworth does not dispute this assertion, and neither does the Court. September 30, 2002, is the date upon which Hollingsworth became disabled. Unum points out, however, that Hollingsworth's Policy specifies an "elimination period" of 150 days, meaning that she was required to be continuously disabled for 150 days before she was eligible to receive benefits. The Policy further provides that if a claimant satisfies the elimination period requirement, "benefits begin the day after the elimination period is completed." Unum correctly notes that 150 days from September 30, 2002, is February 24, 2003, and so Hollingsworth's award should be calculated from February 25, 2003, the day after the completion of her elimination period.
For the foregoing reasons, the Court modifies its November 13 Order to direct Unum to pay Hollingsworth a retroactive disability award beginning on February 25, 2003.
2. The Amount of the Award
Hollingsworth's Policy spells out how benefits payments will be calculated. It states:
We will follow this process to figure your payment:
1. Multiply your monthly earnings by 60%.
2. The maximum monthly benefit is $25,000.
3. Compare the answer from Item 1 with the maximum monthly benefit. The lesser amount is your gross disability payment.
4. Subtract any deductible sources of income from Item 1. Do not subtract any amount your spouse or children are eligible to receive from Social Security.
5. Multiply your monthly earnings by 70% and subtract any deductible sources of income, including any amount your spouse or children are eligible to receive from Social Security.
6. Compare the answers from Item 4 and Item 5 with the maximum monthly benefit.
The lesser amount figured in Item 6 is your monthly payment.
Hollingsworth does not dispute that her benefit award should be calculated according to the foregoing formula. The parties disagree, however, about how much Hollingsworth's "monthly earnings" were, and they therefore reach different conclusions about the size of her award. Hollingsworth says that her monthly earnings were $2,154.82 because that is what she was making when she left her job in 2002. Unum rightly points out that the problem with Hollingsworth's reasoning is that she ignores the express terms of the Policy, which define "monthly earnings" as "the insured's average monthly earnings from the Employer in effect for two full calendar years prior to the date disability begins." Giving this provision effect, Unum says that Hollingsworth earned $22,488.05 in 2000 and $23,343.67 in 2001, which equals $45,831.72. Dividing this figure by the twenty-four months in the two calendar years yields a "monthly earnings" figure of $1,909.66. The Court finds that Unum has correctly calculated Hollingsworth's "monthly earnings" in accordance with the Policy.
Hollingsworth argues that her 2000 and 2001 salary information is not contained in the administrative record and therefore should not be relied upon. Hollingsworth is wrong. See A.R. at 601.
Unum moved to file a sur-reply to address the Policy's requirements with respect to computing Hollingsworth's "monthly earnings" and to point out the record evidence supporting its calculations. The Court hereby GRANTS Unum's motion.
Aside from her monthly earnings, Hollingsworth does not dispute any other aspect of Unum's calculation of her disability award. Applying the rest of the analysis as called for by the Policy, Unum argues that Hollingsworth's total award equals $39,368.21, which includes a base award of $33,883.15, plus pre-judgment interest in the amount of $5,485.06. The Court finds no error in Unum's calculations. Unum shall update the amount owed Hollingsworth through the present date and distribute her award accordingly.
B. Attorneys' Fees
ERISA permits courts to exercise their discretion to award attorneys' fees to prevailing parties. See 29 U.S.C. § 1132(g)(1). Unum has agreed to pay $17,500 in attorneys' fees (based on a rate of $350 per hour for fifty hours of work) and Hollingsworth has accepted this sum. Unum is therefore ORDERED to pay the agreed amount of $17,500 in attorneys' fees.