In this case, "Sam" was an associate attorney in the law firm and was covered by the firm's Long Term Disability Income Plan (the "Plan"). First Unum was the Plan's administrator and insurer. Sam was seriously injured in car crash suffering broken ribs, leg injuries, severance of the left ulnar nerve, and severe damage to other nerves and arteries in his left arm.
Sam attempted to resume working at his firm, but he was not able to do any substantial work. He had functional limitations in the use of his left arm, along with severe pain that made it impossible for him to focus or concentrate. At various times, he also reported memory loss, and he was taking pain medications that exacerbated his cognitive problems. Sam ceased to work and applied for LTD benefits under the Plan. First Unum notified Sam after paying his benefits for three years that it intended to terminate his benefits. First Unum stated that Dr. Sakalas had completed a PCE form indicating that Sam could "sit/stand/walk for 8 hours each" and that Dr. Sakalas "has released you to full-time employment." First Unum also referred to a Physical Ca-pacities Evaluation by Fernando G. Miranda, MD indicating that Sam could "sit/stand/walk for 6 hours each." First Unum further stated that Vocational Consultants found that functionally he could perform the duties of an Attorney without the use of his left arm.
Sam pursued an administrative appeal of First Unum's termination of benefits. He pointed out that the specialists he had been seeing were at such medical centers as the Mayo Clinic and Harvard Medical School, and he offered to make himself available "to be seen by UNUM physi-cians." In the ensuing months, Sam provided First Unum with the treatment notes and reports from numerous physicians at the various institutions, documenting his severe chronic pain and stating that Sam was unable to work because of the pain. (stating that pain "severely paralyzes [Sam's] concentration and clear reasoning" and is "severe enough to incapacitate him"). These documents indicated that several doctors had diagnosed Sam with, inter alia, causalgia (a persis-tent and severe burning sensation) in his left arm.
Despite ruling in favor of Sam on the merits, the district court concluded that he was not entitled to an award of attorney's fees. On appeal, the court held that the central purpose of the Employee Retirement Income Security Act of 1974 ("ERISA") is to protect beneficiaries of employee benefit plans, and "private actions by beneficiaries seeking in good faith to secure their rights under employee benefit plans are important mechanisms for furthering ERISA's remedial purpose". The statute provides that the court in an ERISA action "in its discretion may allow a reasonable attorney's fee and costs of action to either party. Congress intended the fee provisions of ERISA to encourage beneficiaries to enforce their statutory rights.
The court summarized that First Unum terminated Sam's disability benefits on the basis of two reports that the court found were not credible, and even if credible could not possibly outweigh the numerous other medical opinions that consistently and uniformly confirmed his continued disability. First Unum then refused to reinstate those benefits on the basis of the rec-ommendations of its in-house physician Dr. Day, who (a) although urged to, had not examined Sam himself, (b) had contacted only three of Sam's more than 12 treating or examining physicians before reporting that Sam could work, (c) had misdescribed the opinions of at least two of the three physicians he did contact, and (d) gave a bottom-line opinion that Sam could work as an attorney because there was no heavy lifting, an opinion that gave no apparent recognition either to an attorney's need to be able to concentrate or to the concept that pain could interfere with concentration. And First Unum, in its Termination Letter and Final Decision Letter to Sam, made statements that described three of its own experts' reports incompletely, omitting parts that were pertinent to Sam's claim that the continuing pain from his injuries impeded the concentration necessary for him to perform as an attorney. "These inconsistent treatments of the doctors' opinions [] give First Unum's decision an appearance of arbitrariness and self-service, rather than the fair and open-minded consideration of Sam's claim that ERISA required." Fi-nally, the fact that First Unum fulfilled its ERISA obligations for a while did not make it less culpable for changing course and violating ERISA by ceasing to pay Sam disability benefits in the face of "voluminous" and "overwhelming" evidence that he continued to be disabled.
Like an award of attorney's fees for a successful ERISA claim by an employee benefit plan participant, "prejudgment interest is 'an element of [the plaintiff's] complete compensa-tion.'" Factors that the court is to consider in determining whether to award prejudgment interest are "(i) the need to fully compensate the wronged party for actual damages suffered, (ii) considerations of fairness and the relative equities of the award, (iii) the remedial purpose of the statute involved, and/or (iv) such other general principles as are deemed relevant by the court." In the present case, the court found that all of those factors favored Sam and added prejudgment interest to his award.
Alan C. Olson practices disability law from his offices in New Berlin, Wisconsin, and throughout the United States. AOlson@GetMyLTDbenefits.com
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