Jones v. UNUM Life Insur. Co., 2000 U.S. App. LEXIS 259 (2nd Cir. Jan. 11, 2000) - UNUM denied her claims for long-term disability benefits arising from on-the-job aggravation of severe back and shoulder pain, degenerative spinal disease, and inflammatory conditions. Plaintiff Jones then successfully sued UNUM under ERISA. However, the court denied her request for attorney’s fees and her desired rate of prejudgment interest. She appealed these decisions, as well as the district court’s decision to remand her claim for additional benefits back to UNUM, the plan administrator.
On the question of
attorney’s fees, this court found that because the district court had not
articulated any reason for denying attorneys' fees, it must remand the case to
the district court for appropriate and informative findings.
Ordinarily, in determining whether to make such an award, the court is to
consider "five 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
v. Masters, Mates & Pilots Pension Plan, 815 F.2d 869, 871 (2nd Cir. 1987), cert. denied, 496 U.S.
905 (1990).
The question of whether to
award prejudgment interest in a suit to enforce a right under ERISA is
ordinarily left to the discretion of the district court, as is the amount of
prejudgment interest. The district
court chose the rate of interest that is to be paid "on any money judgment
in a civil case recovered in a district court," linking that rate to the
rate of interest the government pays on money it borrows by means of Treasury
bills. See 28 U.S.C. §
1961(a). However, the
district court made no findings as to why the § 1961 rate would adequately
compensate Jones. This court found
that in the absence of such findings, meaningful review was forestalled, and a
remand to the district court was necessary.
Lastly, this court rejected Jones’ argument that the district court should have retained jurisdiction, rather than remand to UNUM. The district court addressed the issue of whether Jones is entitled to additional disability benefits beyond the 24-month period covered by the Judgment. Jones must exhaust administrative remedies on this additional claim for benefits.
