Hart v. Unum Life Insurance Company of America, 3:15-cv-05392

Plaintiff Nancy Hart, an ERISA long-term disability beneficiary, prevailed on a merits ruling that Unum wrongfully terminated her benefits; Judge Henderson issued the merits decision and the case was reassigned for post-judgment relief.
Remaining issues: whether Unum may offset the judgment by Hart’s Social Security retirement benefits, prejudgment interest, attorney’s fees, and costs.
Hart admitted the plan permits an offset for Social Security retirement benefits but argued offset should be barred because Unum’s wrongful termination forced her to take early Social Security (reducing her benefits permanently).
Hart submitted a declaration describing severe financial harm from Unum’s termination (lost home and car, lost health insurance, reliance on family), and sought 12.4% prejudgment interest (based on Unum’s returns), attorneys’ fees, and $592.05 in costs.
The court weighed equitable considerations, declining to bar the contractual offset but finding prejudgment interest and attorneys’ fees appropriate; a companion order will set the fee amount.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Unum may offset awarded benefits by Hart’s Social Security retirement payments	Offset should be barred because Unum’s wrongful termination forced Hart to take early Social Security, causing a permanent reduction	Plan expressly allows offset; Hart admitted plan permits offset and cited no controlling authority to bar it	Denied: court refused to bar the contractual offset but recognized the resulting inequity can be addressed by prejudgment interest
Prejudgment interest and rate	Entitled to prejudgment interest to compensate for long-term harms; seeks 12.4% based on Unum’s returns	Opposes or disputes rate, argues Dishman limits using interest as penalty and challenges foundation for rate	Granted in part: awarded prejudgment interest at 10% compounded annually as compensatory relief
Entitlement to attorney’s fees under ERISA §1132(g)(1)	Hart prevailed on merits and seeks fees; argues Unum acted culpably and can pay	Unum contests bad faith findings and other Hummell factors	Granted: court found sufficient degree of success and that Hummell factors on balance support awarding fees; amount to be determined later
Litigation costs requested ($592.05)	Requests modest costs incurred	Unum did not contest the costs request	Granted: $592.05 awarded

Godfrey v. BellSouth Telecommunications, Inc., 89 F.3d 755 (11th Cir. 1996) (upholding district court’s equitable refusal to offset benefits where employer’s misconduct forced plaintiff to return to work)
McCormick v. Metropolitan Life Ins. Co., 514 F. Supp. 2d 158 (D. Mass. 2007) (claims administrator improperly calculated offset where it failed to assist timely Social Security application)
Dishman v. UNUM Life Ins. Co. of Am., 269 F.3d 974 (9th Cir. 2001) (prejudgment interest is compensatory, not punitive; district court has discretion over rate)
Blankenship v. Liberty Life Assurance Co. of Boston, 486 F.3d 620 (9th Cir. 2007) (prejudgment interest on ERISA benefits awards is discretionary and postjudgment §1961 rate is presumptively appropriate)
Shaw v. Int’l Ass’n of Machinists & Aerospace Workers Pension Plan, 750 F.2d 1458 (9th Cir. 1985) (prejudgment interest determined by balancing equities)
Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242 (2010) (some success on the merits suffices for fee awards under ERISA statutory provision)
Smith v. CMTA-IAM Pension Trust, 746 F.2d 587 (9th Cir. 1984) (absent special circumstances, prevailing ERISA plaintiff should ordinarily receive attorney’s fees)
Hummell v. S. E. Rykoff & Co., 634 F.2d 446 (9th Cir. 1980) (factors for awarding ERISA attorney’s fees)