Opinion
99 CV 0616 (TPG).
August 4, 2006
OPINION
Plaintiff Zbigniew Slupinski brought this action pursuant to the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1001 et seq., challenging the termination of long-term disability benefits he had been receiving from defendant Weil, Gotshal Manges Long Term Disability Income Plan (the "Plan"), which was administered and insured by defendant First Unum Life Ins. Co. Slupinski sought retroactive and prospective benefits, prejudgment interest, and attorney's fees.
First Unum moved for judgment on the administrative record and Slupinski cross-moved for summary judgment. In an opinion dated September 16, 2005, the court denied First Unum's motion, and granted Slupinski's cross-motion, which the court treated as a motion for judgment on the administrative record. See Slupinski v. First Unum Life Ins. Co., 99-CV-0616, 2005 U.S. Dist. LEXIS 21601 at *28 (S.D.N.Y. September 16, 2005). The court conducted a de novo review of the administrative record and found, contrary to First Unum's determination, that Slupinski was disabled within the meaning of the Plan. The court declined, however, to award prejudgment interest or attorney's fees.
First Unum has taken the position that this court's ruling only required the payment of benefits from the date they were terminated, January 11, 1996, through March 26, 1997, the date the administrative record was closed, but for no period thereafter. First Unum maintains that, because the court's review was limited to the administrative record, which ended with First Unum's March 26, 1997 final decision to terminate Slupinski's benefits, it did not intend to require First Unum to pay benefits for any later period. According to First Unum, Slupinski would only receive benefits for periods after March 26, 1997 if he submits information showing that he continued to be disabled at those times.
Slupinski has moved pursuant to Fed.R.Civ.P. 60(a) and (b) for an order clarifying the judgment to require First Unum to pay retroactive disability benefits from the date they were terminated through the present and to reinstate his benefits prospectively. Slupinski also moves, pursuant to Local Civil Rule 6.3 and Rule 54(d)(2), for reconsideration of that part of the court's September 16, 2005 opinion that denied attorney's fees.
The motion to clarify the judgment pursuant to Rule 60(a) is granted. The motion for reconsideration of the court's decision not to award attorney's fees is denied.
Motion to Clarify the Judgment
The facts of this case are contained in the court's September 16, 2005 opinion, knowledge of which shall be assumed. The court's findings were based upon a thorough de novo review of the administrative record. In the opinion, the court found, contrary to First Unum's determination, that Slupinski was disabled within the meaning of the Plan, — i.e., that he was unable to engage in any gainful occupation, due to his credible claims of "severe and chronic pain." The court therefore granted Slupinski judgment on the administrative record.
The court did not, however, explicitly state the period for which First Unum must pay Slupinski benefits. This omission has generated a dispute between the parties as to the effect of the court's opinion. First Unum argues that the court only intended to award benefits for the period prior to March 26, 1997, the date the administrative record was closed, because the court did not have before it information regarding Slupinski's subsequent entitlement to benefits. First Unum alternatively argues that, even if the court intended to award benefits for the period after March 26, 1997, it did not have jurisdiction to do so.
Slupinski, on the other hand, argues that the court's opinion requires First Unum to pay retroactive benefits for the entire period they were suspended, as well as prospective benefits until such time as First Unum determines that he is no longer disabled. Because First Unum has misinterpreted its obligations under the court's opinion, the court is obliged to clarify its opinion pursuant to Rule 60(a).
Rule 60(a) provides that "clerical mistakes in judgments . . . arising from oversight or omission may be corrected by the court at any time of its own initiative or on the motion of any party." Although the Rule uses the term clerical mistakes, case law makes clear that the more general purpose of Rule 60(a) "is to afford courts a means of modifying their judgments in order to ensure that the record reflects the actual intentions of the court."Employers Mut. Casualty Co. v. Key Pharmaceuticals, 886 F. Supp. 360, 363 (S.D.N.Y. 1995). Thus, an error is deemed to be "clerical" under Rule 60(a) when the opinion or judgment fails to reflect the actual intention of the court. Paddington Partners v. Bouchard, 34 F.3d 1132, 1140 (2d Cir. 1994); In re Frigitemp Corp., 781 F.2d 324, 327 (2d Cir. 1986); Lee v. Joseph E. Seagram Sons, Inc., 592 F.2d 39, 42 (2d Cir. 1979).
In the present case, First Unum's reading of the September 16, 2005 opinion is contrary to both its plain meaning and the court's intent. It is true that Slupinski bore the initial burden of demonstrating his entitlement to disability benefits under the Plan. See Maniatty v. UNUMprovident Corp., 62 Fed. Appx. 413, 413 (2d Cir. 2003). However, once initial eligibility has been established, the Plan provides that ongoing proof of disability must be given only "upon request."
It is thus clear that an insured is under no obligation to provide proof of continued eligibility for benefits unless explicitly requested to do so by First Unum. Here, because First Unum incorrectly determined that Slupinski was no longer disabled, it failed to request proof of disability after the date of that decision, and did not reevaluate his eligibility for benefits. Under the express terms of the policy, the burden of requesting continuing documentation of disability — and the consequences of failing to do so — fall squarely upon First Unum. Therefore, as an immediate consequence of the court's finding of disability, First Unum must pay full retroactive benefits through the present and prospective benefits until such time as First Unum determines that plaintiff is no longer disabled. To the extent the parties found the September 16, 2005 opinion ambiguous on this point, the court hereby clarifies that such was the intent of that opinion.
First Unum also argues that the court did not have jurisdiction to grant this relief because it did not have any information regarding Slupinski's condition after the close of the administrative record. The Second Circuit rejected precisely this argument in Locher v. UNUM Life Ins. Co. of Am., 389 F.3d 288 (2d Cir. 2004). In Locher, the plaintiff had applied for and been denied long term disability benefits by the plan administrator. After exhausting her administrative remedies, which culminated in the denial of her administrative appeal on November 15, 1995, the plaintiff filed suit. The district court conducted a de novo review of First Unum's denial and found that the plaintiff was disabled. The district court ordered First Unum to pay benefits from April 8, 1993, the date of onset of disability, through the entry of judgment in June 2003.
On appeal, First Unum argued that the district court lacked jurisdiction to award payment of benefits for any period beyond that which First Unum had an opportunity to consider, — i.e., the period before to the closing of the administrative record, and that the district court should have remanded the matter to First Unum for a determination of disability for any month after April 8, 1993. The Second Circuit rejected this argument, holding that because the plan places the burden of requesting evidence of continued disability upon First Unum, it is First Unum that must suffer the consequences for failing to request such information and reevaluating the plaintiff's eligibility:
Here . . . there is no explicit requirement in the Plan for a reevaluation after an initial finding of disability. . . . Additionally, the Plan indicates that evidence of continued disability need be provided only `upon request,' rather than prior to each monthly payment. . . . [B]y denying Locher her benefits starting in 1993, UNUM may not now challenge an award on the basis of an insufficiency of information for which it is responsible. Accordingly, UNUM's challenge to the District Court's award of benefits fails.Id. at 298.
Like the plan in Locher, the plan at issue in the present case contains no requirement that an insured who is receiving benefits be reevaluated or provide additional medical information unless requested to do so by First Unum. Therefore, as inLocher, the court has jurisdiction to order First Unum to pay benefits not just for the period encompassed by the administrative record, but for the entire period they were suspended and prospectively, and the court so intended in its September 16, 2005 opinion.
In response to Slupinski's motion to clarify the judgment, First Unum has, for the first time, submitted documents that it claims show that Slupinski was not disabled during at least some of the period for which the court has awarded benefits. These documents do appear to raise serious questions as to Slupinski's eligibility for benefits under the Plan. However, as a procedural matter, the issue may not properly be considered in the present context. First Unum is, of course, entitled to seek relief in an appropriate post-judgment motion or a new action.
Motion for Reconsideration of Denial of Attorney's Fees
Slupinski also moves for reconsideration of the court's decision to deny his request for attorney's fees. In the September 16, 2005 opinion, the court considered the question of attorney's fees under the five-factor test set forth inChambless v. Masters, Mates Pilots Pension Plan, 815 F.2d 869, 872 (2d Cir. 1987), and declined such an award, holding that:
Despite First Unum's improper termination of plaintiff's LTD benefits, the lack of bad faith and absence of a common benefit conferred upon a group of pension plan participants counsels against an award of attorney's fees in this case.Slupinski, 2005 U.S. Dist. LEXIS 21601 at *28.
Slupinski's request for reconsideration must be denied. Local Civil Rule 6.3 is "narrowly construed and strictly applied so as to avoid repetitive arguments on issues that have been considered fully by the Court." Walsh v. McGee, 918 F. Supp. 107, 110 (S.D.N.Y. 1996). Therefore, a motion for reconsideration is proper only where "the Court has overlooked controlling decisions or factual matters that were put before it on the underlying motion . . . and which, had they been considered, might have reasonably altered the result before the court." Range Rd. Music, Inc. v. Music Sales Corp., 90 F. Supp. 2d 390, 392 (S.D.N.Y. 2000); Yurman Design, Inc., 99-CV-9307, 2000 U.S. Dist. LEXIS 1747 at *1-2 (S.D.N.Y. February 22, 1999).
Here, Slupinski concedes that the five-factor Chambless test, applied by the court in its September 16, 2005 opinion, is the controlling law which governs his claim for attorney's fees. Under Chambless, the decision whether to award attorney's fees should be based upon the following factors:
(1) the degree of the offending party's culpability or bad faith, (2) the ability of the offending party to satisfy an award of attorney's fees, (3) whether an award of fees would deter other persons from acting similarly under like circumstances, (4) the relative merits of the parties' positions, and (5) whether the action conferred a common benefit on a group of pension plan participants.Chambless, 815 F.2d at 872.
In the September 16, 2005 opinion, the court determined that First Unum had not acted in bad faith. It is true, as Slupinski argues, that an ERISA plaintiff need not show actual bad faith to recover attorney's fees. Gennamore v. Buffalo Sheet Metals, Inc., 568 F. Supp. 931, 936 (S.D.N.Y. 1983). However, the offending party must at least be culpable to such a degree that its actions are "reprehensible or wrong." Algie v. RCA Global Commun., Inc., 891 F. Supp. 875, 891 (S.D.N.Y. 1994).
Here, First Unum did not act in bad faith or with a degree of culpability that would justify an award of attorney's fees. Slupinski claimed that he was disabled by severe and chronic pain resulting from injuries he sustained in an automobile accident. The court recognized that "the subjective nature of pain and its often non-objectively quantifiable nature present special credibility concerns," Slupinski, 2005 U.S. Dist. LEXIS 21601 at *19, but found Slupinski's claims credible because he had sustained an objectively verifiable physical injury and because his pain was confirmed by numerous doctors. It must be recognized, however, that the special credibility concerns inherent in claims of pain introduce a substantial element of imprecision and subjectivity into the determination of disability status, which makes it harder to find the decision-maker, here First Unum, culpable.
Other factors also weigh against a finding of culpability. One of Slupinski's doctors, Romas Sakalas, had submitted a report stating that he could work full time while another, Fernando Miranda, had equivocated on his functional capacity. Although the court found these reports not to be credible, especially in light of voluminous evidence to the contrary, First Unum's denial was not without any basis. In addition, First Unum paid benefits for more than three years before it finally determined that Slupinski was no longer eligible. Although the court determined, by de novo review of the administrative record, that Slupinski was disabled by his pain, First Unum's finding to the contrary does not constitute culpability sufficient to warrant an award of attorney's fees.
Slupinski argues that First Unum's culpability in the present case should be inferred from its history of allegedly inappropriate claims handling. In particular, Slupinski points to a settlement between state insurance regulators and various insurers, including First Unum, arising from allegations that they had inappropriately denied claims for benefits under long-term disability insurance policies. The court finds this argument to be irrelevant, as First Unum's conduct in this case may be evaluated directly based upon a complete administrative record.
The second and third factors favor Slupinski because First Unum does not deny the ability to pay an award of attorney's fees and because such an award will likely deter First Unum and other administrators from denying claims for disability benefits based upon pain.
The fourth Chambless factor asks the court to assess the relative merits of the parties' positions. The court found that Slupinski's complaints of chronic and severe pain were credible in light of the physical injuries he had sustained and his doctors' repeated confirmations that his claims were genuine. However, First Unum's position was not without any basis; First Unum relied upon the September 1995 reports of Miranda and Sakalas, each of which suggested that Slupinski was not disabled. Although the court found this evidence not credible, it was not a frivolous ground for terminating benefits. The court finds that the fourth factor weighs in Slupinski's favor, though not overwhelmingly so.
Finally, the fifth factor weighs decidedly against an award of attorney's fees. Slupinski concedes that this action does not directly benefit any group of pension plan participants. He nevertheless argues that his success in this action will "encourage First Unum to consider these applications for long-term disability with more care." However, the Second Circuit has "not yet recognized such circumstances to satisfy this fifth factor." Locher, 389 F.3d at 299. Thus, the fifth factor weighs against any award of attorney's fees.
Having reviewed these factors, the court adheres to its decision to deny Slupinski's request for attorney's fees. The important factors of culpability and common benefit not being met, an award of attorney's fees would be inappropriate.
CONCLUSION
Slupinski's motion for clarification of the court's September 16, 2005 opinion is granted. Slupinski's motion for reconsideration of his request for attorney's fees is denied.
SO ORDERED.