Opinion
Case No. 00-10417-BC
September 17, 2002
The plaintiff in this case, a physician employed by a professional corporation in a group medical practice, has filed an action challenging the decision of the defendant, UNUM Provident Corporation (UNUM), to set off against monthly disability payments an amount which UNUM claims to have overpaid to the plaintiff. UNUM has filed a counterclaim for recoupment of the overpayment. At issue is the interpretation of UNUM's disability insurance policy provisions which establish a formula for calculating monthly benefits, and the characterization of the periodic payments the plaintiff acknowledges having received from his employer's pension plan. The Court has conducted a de novo review of the administrative record compiled by the defendant under the applicable provisions of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1001, et seq., and concludes that the defendant's policy terms are ambiguous, the interpretation of the policy which would permit the deduction of the pension distributions the plaintiff received from the monthly disability payments is not correct under common law rules of contract interpretation, and no overpayment has occurred. The Court will therefore grant the plaintiffs motion for declaratory judgment, and deny the defendant's motion to affirm the administrator's decision and its cross-motion for declaratory judgment.
I.
Gerald Sieggreen joined Women's Clinic, P.C. in 1970 and specialized in obstetrical and gynecological medicine. He has been practicing medicine with Women's OB-GYN, P.C., ("Women's"), a successor corporation to Women's Clinic, P.C., since 1982 when the new corporation was formed. In that same year, Women's purchased from UNUM's predecessor, Union Mutual Stock Life Insurance Company, a group long-term disability insurance policy (the "Policy") for the benefit of its employees, including Sieggreen. It is this policy whose terms are in dispute.
Women's predecessor originally created a pension plan on March 1, 1968, which was assumed by the successor corporation via an Adoption Agreement signed on August 16, 1994. The pension plan was a defined contribution plan, see 29 U.S.C. § 1002(34), and allowed for the payment of benefits in the event of death, retirement or disability. The Adoption Agreement established normal retirement age at 65 years old, but an amendment was made on January 2, 1995 changing the normal retirement age to 55 years old. Sieggreen was a participant in the pension plan.
In 1988, Sieggreen began suffering from ulcerative colitis. He claimed that he had been working 80 to 100 hours per week before his illness, but now had reduced his work time to 40 hours per week and curtailed the obstetrical part of his practice. Sieggreen filed a claim for disability benefits, which was approved as a partial disability claim. UNUM proceeded to pay Sieggreen monthly partial disability benefits of approximately $4,000 to $5,700 pursuant to the formula in the Policy. The payments were intended to compensate Sieggreen for an approximate forty percent reduction in his W-2 earnings resulting from the disability. Sieggreen did not "retire" within the meaning of the pension plan. however, because he continued to work more than 1,000 hours per year and therefore continued to qualify for contributions to his pension account.
The formula for determining the monthly disability benefit is set forth in Section IV of the Policy as follows:
To figure the amount of monthly benefit:
(1) Take the lesser of:
(a) 70 percent of the insured's basic monthly earnings; or
(b) the amount of the maximum monthly benefit shown in the policy's specifications; and
(2) Deduct other income benefits shown below, from this amount.
"Other Income Benefits" was defined in the Policy to include "[t]he amount of disability and/or retirement benefits received by the insured under the Employer's Retirement Plan." The formula also contained provisions for periodic modifications of the monthly benefit for cost of living adjustments (COLA).
UNUM alleges that the plaintiff began receiving retirement distributions in 1992, which the plaintiff denies. The plaintiff acknowledges, however, that he began taking early distributions from his pension plan in 1995. As for the amounts reflected on the plaintiffs income tax returns as plan distributions in 1993, Sieggreen explains that the entry on the return reflects costs and attorney fees incurred in the establishment of the Adoption Agreement in August 1992 that were paid out of pension plan funds and therefore allocated to each of the participants as distributions.
It was in 1993. however, that UNUM apparently ceased making COLA and income level adjustments. The defendant was aware that Sieggreen's 1994 earnings were less than his 1993 earnings, yet the monthly benefits continued at an approximate rate of $5,577, which remained unadjusted for COLA or reduced earnings.
When the plaintiff began taking large annual distributions from the pension plan in 1995, he paid a 10% tax for early withdrawal pursuant to 26 U.S.C. § 72(t)(1) (1986). Sieggreen alleges that his tax returns clearly reflect the withdrawal of retirement benefits as income, thereby placing UNUM on notice of this practice; however UNUM contends that it was not receiving the plaintiffs tax returns. UNUM says that it requested the 1995 tax return in April 1996 and the 1996 tax return in December 1997. but that the 1995 return was not received until March 1998, and the 1996 return was received on November 11, 1998. A file memorandum suggests that UNUM actually received these returns on an earlier date, but simply failed to review them until later. See Admin. Rec. at CL2-353, CL2-470.
On January 2, 1998, UNUM issued Sieggreen a net monthly check for $5,150.55. Like others before it, the check was direct-deposited. On March 4, 1998, plaintiff informed defendant that his COLA was still not being paid as required and also requested an adjustment because of a decline in his earnings. UNUM heightened its review of Sieggreen's partial disability benefits, which totaled $62,000 annually. The plaintiffs tax returns, W-2, and 1099 documentation were again examined. In August, 1998, after receiving no response from UNUM on his COLA complaints, the plaintiff escalated his adjustment request by engaging counsel. The plaintiffs counsel sent correspondence following up on the request to UNUM on September 25, 1998.
On October 15, 1998. the defendant acknowledged that the plaintiffs disability benefits had been underpaid in 1994 in the amount of $18,865.35 and in 1995 by $19,605.34 due to the unadjusted COLA. A check was issued for these amounts on October 30, 1998. UNUM also stated that no calculation would be forthcoming for 1996 and 1997 until a copy of the plaintiffs personal tax return and Women's corporate tax return were furnished. These items were promptly sent. On November 3, 1998, UNUM acknowledged that 1996 disability benefits had been underpaid and issued a check in the amount of $13,439.93. Around the same time the November 3 disbursement was made. UNUM decided to arrange for a "visual assessment of insured" and instructed its field investigator to perform that task.
In March 1999, UNUM wrote to Women's requesting information on distributions made from the pension plan reflected in the plaintiffs tax returns. Women's replied that the retirement plan was a defined contribution plan funded entirely with employer contributions, and that Sieggreen had not received any "pension retirement benefits" up to that time in 1999. The defendant claims that this was its first exposure to the plaintiffs pension program. The defendant also claims that it knew nothing about the plaintiffs pension plan until it received answers to various questions on March 23, 1999.
In May 1999, the plaintiff sent UNUM his 1998 tax return as requested. On June 4, 1999, plaintiffs counsel sent a letter requesting a further response to the COLA adjustment issue. UNUM did not respond.
The plaintiff received his monthly benefit check for the month of June 1999 in the sum of $5,150.55. in early July, however, no disbursement was received, and the plaintiff had counsel contact UNUM regarding the perceived omission. UNUM representatives verbally replied to Women's. stating that future benefit checks to Sieggreen were suspended pending written notice to be issued by UNUM. At that time, UNUM representatives apparently did not have a copy of the Women's pension plan documents.
On August 4, 1999, UNUM mailed written notice from "recovery specialist" Deanne Story to plaintiff's counsel requesting that the plaintiff repay an alleged overpayment due to his receipt of "disability benefits" from the Women's Plan. The plaintiff objected on August 12, 1999 and September 7, 1999, and demanded both a copy of UNUM's file and a reinstatement of monthly benefits.
On September 2, 1999, plaintiff's counsel provided UNUM with a complete copy of the Women's Plan. On September 30, 1999, UNUM replied, reiterating that the distributions were "disability benefits" because the Women's Plan did not permit distributions prior to actual retirement. The plaintiff replied on October 6, 2000. At the end of calendar year 1999, UNUM issued Sieggreen a W-2 form for $33,463.26, representing six months of benefits at $5,577.21 per month.
On January 4, 2000, UNUM issued Sieggreen a $500 check for a payment period of December 16, 1999 through January 15, 2000. An "Explanation of Long Term Disability Benefits" accompanied the check. The statement appeared to assume a sum certain of pension income had been received by Sieggreen during the particular thirty-day pay period, notwithstanding Sieggreen's administrative appeal of the August 4, 1999 suspension of benefits. The explanation then calculated a net benefit of $1,081.92 for the month and took out $581.52 as an "overpayment reduction." UNUM later issued Sieggreen a W-2 form for $500 for the year 2000.
The plaintiff filed suit on September 28, 2000 in Saginaw Circuit Court to recover unpaid benefits, alleging common law estoppel, violation of various Michigan statutes, and violations of ERISA. UNUM removed the suit to this Court on November 1, 2000, filed an answer on November 8, and filed a counter-complaint in April, 2001 alleging overpayment of benefits of approximately $254,000. The parties have exchanged and filed the administrative record upon which UNUM made its decision to suspend benefits and seek recoupment, and have filed cross-motions for a declaration of the nature of the payments Sieggreen received. UNUM also seeks an affirmance of the administrative decision. The parties appeared for argument before the Court on September 4. 2002, at which time counsel for UNUM made an oral motion pursuant to Fed.R.Civ.P. 15(b) to allow an amendment to the counterclaim to request recoupment of paid benefits on equitable grounds. The plaintiff had no objection to the motion. and the Court took it under advisement, stating that it would grant it and allow time to file a written amendment to the counterclaim if the ruling on the remaining issues raised by the parties' motions warranted it. Because of the disposition of those motions, however, the motion to amend will be denied as moot.
II.
The parties agree that the disability policy at issue in this case constitutes insurance purchased to provide Women's employees with disability coverage, and therefore amounts to an "employee welfare benefit plan" governed by ERISA. See 29 U.S.C. § 1002(1)(A); Pegram v. Hendrich, 530 U.S. 211, 222-23 (2000). As such, benefits disputes are authorized by Section 502(a)(1)(B) of ERISA, 29 U.S.C. § 1132(a)(1)(B) ("A civil action may be brought . . . by a participant or beneficiary . . . 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.").
"[T]he validity of a claim to benefits under an ERISA plan is likely to turn on the interpretation of terms in the plan at issue." Firestone Tire Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). In such an action. the Court generally considers only that evidence presented to the plan administrator at the time he or she determined the employee's eligibility. Smith v. Ameritech, 129 F.3d 857, 863 (6th Cir. 1997). The Court's review is limited to the administrative record. Wilkins v. Baptist Healthcare System, Inc., 150 F.3d 609, 615 (6th Cir. 1998). However, the Court "may consider evidence outside of the administrative record if that evidence is offered in support of a procedural challenge to the administrator's decision. such as an alleged lack of due process afforded by the administrator or alleged bias on its part." Wilkins, 150 F.3d at 619.
"[A] plan administrator's decision is reviewed `under a de novo standard unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan.'" Shelby County Health Care Corp. v. Southern Council of Indus. Workers Health and Welfare Trust Fund, 203 F.3d 926, 933 (6th Cir. 2000) (quoting Firestone, 489 U.S. at 115). In this case, both parties agree that the UNUM plan does not confer such discretion upon the plan administrator, and that the appropriate standard of review is de novo.
When exercising de novo review, the Court reviews both factual and legal conclusions of the plan administrator by taking a "fresh look" at the issues raised in the record "without deference to the [administrator's] decision or any presumption of correctness." Wilkins, 150 F.3d at 613, 616-19; Perry v. Simplicity Engineering, 900 F.2d 963, 966 (6th Cir. 1990).
In this case. UNUM contends that it overpaid monthly disability benefits to Sieggreen beginning in 1995 because it failed to deduct "Other Income Benefits" from the monthly benefit as the Policy's formula entitled it to do. UNUM argues that the distributions from the Women's pension plan which Sieggreen began taking in 1995 must be characterized under the Policy as either "Disability Benefits" or "Retirement Benefits" and therefore are deductible under the Policy's formula. Sieggreen argues that the policy definitions of these terms are ambiguous, that the Policy must be construed against the drafter. and that, in all events, the Women's pension plan was modified to allow for distributions to participants who had attained age 55 but who were neither retired nor disabled and. therefore, do not constitute "Other Income Benefits."
UNUM's argument that the distributions taken by Sieggreen qualified as "Other Income Benefits" is based on a process of elimination that cannot be appreciated without a careful examination of the Policy language itself. The Policy provides the following definitions:
"Disability Benefits," when used with the term Retirement Plan, means money which:
1. is payable under a Retirement Plan due to disability as defined in that Plan; and
2. does not reduce the amount of money which would have been paid as retirement benefits at the normal retirement age under the plan if the disability had not occurred. (If the payment does cause such a reduction. it will be deemed a retirement benefit as defined in this policy.)
"Retirement Benefits," when used with the term Retirement Plan, means money which:
1. is payable under a Retirement Plan either in a lump sum or in the form of periodic payments;
2. does not represent contributions made by an employee; and
3. is payable upon:
a. early or normal retirement; or
b. Disability if the payment does reduce the amount of money which would have been paid at the normal retirement age under the plan if the disability had not occurred.
"Retirement plan," means a plan which provides retirement benefits to employees and which is not funded wholly by employee contributions. The term shall not include a profit-sharing plan. a thrift plan, an individual retirement account (IRA), a tax sheltered annuity (TSA), a stock ownership plan, or a non-qualified plan of deferred compensation.
The defendant reasons that distributions from the pension plan properly may be made only as retirement payments or disability payments. and so the money Sieggreen received must have been one or the other. The plaintiff observes that he is not retired, since he continues to work at least 1,000 hours per year; thus the payment are not on account of normal or early retirement. And although he is partially disabled, the distributions cannot be characterized as "Disability Payments" because, inasmuch as the Women's pension plan is a defined contribution plan, the distributions do in fact "reduce the amount of money which would have been paid as retirement benefits at the normal retirement age under the plan if the disability had not occurred."
The defendant responds. however, that because the distributions reduce the plaintiffs account within the pension plan, the Policy's parenthetical language "deems" the distribution a "retirement benefit." The defendant's argument continues that the distribution fits the Policy definition of "Retirement Benefit" because the payments were (1) payable under the Women's retirement plan, (2) did not come from employee contributions, and (3) were payable upon disability and reduced the normal retirement benefit.
The difficulty with this argument, based on the process of elimination, is that it does not account for all possible characterizations of the distribution payments, and therefore, when eliminating possible alternate sources of the payments, one is not necessarily left with an inevitable conclusion. For instance, if the distributions were made for another valid reason under the pension plan, of if they were made improperly, that is, contrary to the plan's language, they may be neither disability benefits nor retirement benefits. The plaintiff contends that the plan allows for a distribution that is neither a disability nor a retirement payment, and points to the following language in the plan and the Adoption Agreement in support of that contention. The pension plan states:
Article VI. Distribution From Trust Fund.
6.1 When Interests Become Distributable and Effect Thereof
(a) Commencement of Distributions The vested interest of a Participant becomes distributable as hereinafter provided in this Article VI following the date the Participant dies, suffers a disability or retires, subject to the restrictions on distribution the Employer has elected in the Adoption Agreement . . . The Employer may also elect in the Adoption Agreement to permit distributions prior to termination of employment for Participants who have attained Normal Retirement Age . . . Distribution shall not be permitted prior to the occurrence of one of the foregoing events other than to comply with the distribution commencement date requirements of Section 6.4 or to comply with a qualified domestic relations order under Section 6.9.
(b) Normal Retirement Age and Early Retirement Age
The Normal Retirement Age for each Participant shall be the age designated by the Employer in Section 11.30 of the Adoption Agreement, and the normal retirement date for each Participant shall be the first day of the month following the attainment of such age . . . A Participant shall be entitled to retire voluntarily on or after his normal or early retirement date. Following attainment of the Normal Retirement Age and until actual retirement, a Participant may, but shall not be required to, continue to participate in the Plan.
(Emphasis added.) An employee becomes "disabled" when he or she meets the definition in Section 11.16 of the plan which states:
A Participant shall be deemed to be Disabled if:
(a) He is unable to engage in any subsequent gainful activity by reason of permanent disfigurement, permanent loss, or loss of use of a member or function of the body; or
(b) Any other medically determined physical or mental impairment which can be expected to result in death or to be of a long, continued and indefinite nature. A Participant who claims to be so disabled shall present evidence of the same by means of two written statements from reputable physicians, approved by the Trustee.
The Adoption Agreement is in a form which provides optional language that may be elected by marking a box next to the applicable paragraph. The Women's Adoption Agreement states in part:
VI. Distribution Provisions
6.1 When Interests Become Distributable and Effect Thereof
(a) Commencement of Distribution
Distribution will be permitted to commence at the election of a Participant or beneficiary . . . as soon as administratively feasible following the earliest of:
(1) Termination of Employment. ( marked)
(7) Normal Retirement Age. ( marked)
(A) Distribution after Normal Retirement Age can commence before termination of employment. ( not marked)
(8) Disability. ( marked)
The plaintiff contends that when the normal retirement age was lowered from 65 to 55 in 1995, the plan trustees intended to change the Adoption Agreement as well to allow distributions to commence before termination of employment. The plaintiff points to conduct which is consistent with this intent, and contends that the failure to change the Adoption Agreement at the same time as the normal retirement age was reduced was a scrivener's oversight.
When construing ERISA plan provisions, the Court applies common-law rules of contractual construction, which are derived both from state law and general contract principles. Perez v. Aetna Lfe Ins. Co., 150 F.3d 550, 556 (6th Cir. 1998). A contract is ambiguous if it is susceptible to two or more reasonable interpretations. City of Wyandotte v. Consolidated Rail Corp., 262 F.3d 581, 585 (6th Cir. 2001); see also Ososkiv. St. Paul Surplus Lines, 162 F. Supp.2d 714, 715 (E.D.Mich. 2001). The determination of ambiguity is made by considering the ordinary and plain meaning of the words used by the contract, along with the context in which they are used. City of Wyandotte, 262 F.3d at 585. Ambiguities in an insurance contract are construed against the insurer who drafted them. See University Hosps. of Cleveland v. Emerson Elec. Co., 202 F.3d 839. 846-47 (6th Cir. 2000). The only exception to this rule is when the terms at issue are required by law or where both parties substantially contributed to the content of the contract at issue. See Restatement (Second) of Contracts § 206 cmts. a b (1981).
The defendant contends that this rule of construction. i.e., contra proferentum, is not the law of this Circuit with respect to ERISA plans, citing McMahan v. New England Mut. Life Ins. Co., 888 F.2d 426, 429 (6th Cir. 1989). The defendant, however, takes that case out of context. The Court there did not hold, as defendant contends, that contra proferentum is inapplicable to ERISA plans; what it held was that this rule of contractual construction could not be repackaged as a rule of insurance law to slip a state-law breach of contract claim through ERISA's back door. See id. at 429 ("[W]e think it clear beyond cavil that general principles of contract interpretation do not `regulate insurance' even if those principles are applied in an insurance context"). Furthermore. the defendant does not refute or even discuss the Sixth Circuit cases that do apply this rule of construction to ERISA plans. See, e.g., University Hospital, 202 F.3d at 846-47; Perez, 150 F.3d at 557 n. 7. The rule of contra proferentum is applicable in the present context.
If the pension plan allowed non-disability, non-retirement distributions, as the plaintiff contends, then resolution of this dispute would be straightforward and there would be no need to resort to rules of contract interpretation, inasmuch as the payments Sieggreen received would neatly avoid the Policy definition of "Other Income Benefits" and would not be deductible under the Policy formula. But the express terms of the pension plan, read together with the Adoption Agreement. do not permit that conclusion. Based on the documentation submitted, it is clear that such an early distribution privilege was an option offered but never elected by the Women's pension plan administrator. One might infer an intention to amend the Adoption Agreement to elect such an option based on the accounting treatment by the pension plan's administrator, James A. Matthews, evidenced in his response to UNUM's inquiries on March 23, 1999, when he stated that Sieggreen "is not receiving pension retirement benefits," and that the distributions were "voluntary withdrawals from the pension account as allowed by the plan." A.R. at CL2-393. Likewise, Sieggreen's own tax treatment of these distributions is consistent with such intent. But this Court is governed by the plain language of the plan when construing insurance agreements affected by it. see Perez, 150 F.3d at 557 (requiring courts to "read the contractual language in an ordinary and popular sense" to avoid "violat[ing] the basic principle of contract law that courts are not permitted to rewrite contracts by adding additional terms."), and it was not unreasonable for UNUM to rely on that language as well in concluding that the pension plan did not include an early distribution option.
In its argument based on Policy terms, UNUM concedes that the distributions cannot be considered "Disability Benefits" because they serve to "reduce the amount of money that would have been paid as retirement benefits." UNUM contends, however, that the distributions fit the definition of "Retirement Benefits" because they were paid upon disability and they reduced Sieggreen's future retirement benefits. UNUM is correct in its assessment of the effect of the distributions on Sieggreen's pension account; the distributions do in fact reduce the amount available to fund future retirement payments. That is the nature of a defined contribution plan. But the Policy's definitions of these terms contain other elements which require reference to the Women's pension plan.
The ambiguity that emerges in this case is not in the pension plan standing alone; it arises from the Policy definitions, which require the plan language to be read in conjunction with the Policy. In other words. the defendant's interpretation of its Policy definitions is reasonable in isolation, but the defendant's gloss on these terms does not withstand analysis when the plan requirements are necessarily considered. For instance, the Policy states that "Disability Benefits" must be "payable under a Retirement Plan due to disability as defined in that Plan." Likewise, "Retirement Benefits" must also be "payable under a Retirement Plan." Thus, the plan definitions and requirements are incorporated into the policy definitions.
Under the Women's plan. disability benefits are not payable unless one becomes "disabled." Although not a model of grammatical clarity, the plan's definition of disability requires that the participant be (1) "unable to engage in any subsequent gainful activity" (2) due to (a) "permanent disfigurement," (b) "permanent loss," (c) "loss of use of a member or function of the body", or (d) "[a]ny other medically determined physical or mental impairment which can be expected to result in death or to be of a long, continued and indefinite nature." In other words, disability under the plan requires total disability: the requirement of an inability to engage in "any subsequent gainful activity" applies to the causes of disability listed in both subsection (a) and (b) of Section 11.16. To read the total disability requirement out of subsection (b) renders the resulting sentence meaningless. Sieggreen was not totally disabled. Thus, no disability benefits were payable to him "under a Retirement Plan due to a disability as defined in that Plan."
Nor do the payments Sieggreen received fit the Policy's definition of "Retirement Benefits." The first requirement in the Policy definition of that term is that the distribution must be "payable under a Retirement Plan." However, under the pension plan, as effectuated by the Adoption Agreement, retirement benefits are payable only upon death, termination of employment, or disability. None of those events have occurred here; Sieggreen is still working, and he is not disabled (i.e., totally disabled) as defined by the pension plan.
The distributions in this case were not made in accordance with the literal plan language. They may have been early withdrawals (for which the plaintiff paid the 10% tax penalty), and they may have been made consistent with custom and an incomplete attempt to amend the plan language. However, the distributions were not made on account of retirement or disability.
At oral argument on the motions, the defendant asserted that if the payments from the pension plan were wrongfully or mistakenly made to Sieggreen by the Women's pension plan administrator, which they very well may have been given the absence of any express authority in the plan to make the distributions, then UNUM should be able to recover its payments taking into account the distributions and their effect on the Policy's payment formula. UNUM, in effect, would assert a right of recoupment based on the theory of unjust enrichment.
It is true that ERISA allows for the development of federal common law claims, including equitable claims for recoupment of payments made in error under the equitable remedy of unjust enrichment. See Whitworth Bros. Storage Co. v. Central States Southeast and Southwest Areas Pension Fund, 982 F.2d 1006, 1017-18 (6th Cir. 1993). A claim for recovery based on unjust enrichment requires that the claimant confer a benefit upon the defendant, knowledge of the benefit by the defendant-recipient, and retention of the benefit under circumstances rendering such retention unjust without payment. Reisenfeld Co. v. Network Group, Inc., 277 F.3d 856, 860 (6th Cir. 2002); Johnson v. Ventra Group, Inc., 191 F.3d 732, 748 (6th Cir. 1999).
In this case, UNUM conferred a benefit upon Sieggreen. but it was obliged to do so under the terms of the Policy. If there was an overpayment, it was made by the pension plan. Any claim for unjust enrichment, regarding the merits of which this Court expresses no opinion, lies with the pension plan administrator, not UNUM. UNUM is not entitled to stand in the shoes of a different fiduciary to assert an equitable claim, particularly where there is evidence in the record that the proper claimant may have assumed the propriety of the payments based on a mistaken belief that the plan was amended.
By construing any ambiguities in the policy definitions against the insurer who drafted them. the Court concludes that the distributions Sieggreen received from the Women's pension plan were neither disability nor retirement payments. Sieggreen' s disability payments should have been calculated without accounting for these distributions.
III.
The UNUM plan administrator did not act correctly in construing the distributions as "Other Income Benefits." UNUM did not have the right to deduct these distributions from the monthly partial disability payment under the Policy formula. Nor is there any overpayment that may be offset against these payments.
Accordingly, it is ORDERED that the plaintiffs motion for declaratory judgment [dkt #19] is GRANTED.
It is further ORDERED that the defendant's motion to affirm the administrator's decision and its cross-motion for declaratory judgment [dkt #18] are DENIED.
It is further ORDERED that the parties shall meet and confer on or before September 25, 2002 to determine the amounts owed by the defendant to the plaintiff in light of the Court's ruling herein. If there is a dispute as to the amount, the parties shall file a statement as to their respective positions with appropriate supporting affidavits on or before October 1, 2002. If there is no dispute. the plaintiff shall submit a proposed judgment to the Court on or before October 1, 2002.