Riley v. Sun Life and Health Insurance
8:09-cv-00303
| D. Neb. | Jan 19, 2012Background
- Riley sued Sun Life seeking to recover long-term disability benefits offset by VA benefits under the Plan, ERISA-governed.
- The Court previously granted summary judgment for Defendants in 2010; the Eighth Circuit reversed and remanded in 2011.
- Riley sought judgment to include amounts due under the Plan, attorney’s fees, and further relief; Sun Life’s offset decisions centered on SSDI benefits.
- Dispute centers on when SSDI benefits began offset and whether Riley exhausted administrative remedies for SSDI offsets.
- Plan provides offset rules for Other Income, including SSDI, with methods A and B for adjusting benefits and potential lump-sum offsets.
- Court calculated overpayment due to SSDI offset from April 2005 to March 2006 and net benefits thereafter, with prejudgment interest.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Exhaustion of administrative remedies | Riley exhausted remedies by appealing VA offset and raised SSDI issue earlier | Riley did not exhaust SSDI offset issues | Riley must exhaust SSDI offset remedies; SSDI offset not exhausted |
| Proper SSDI offset start date | SSDI benefits began December 2005 | SSDI offset began April 2005 under the Plan | Offset beginning April 2005; order to adjust accordingly |
| Calculation of overpayments and prejudgment interest | Amounts owed plus prejudgment interest should be calculated to make whole | Offets and interest as determined by the Plan and statute | Total due $35,668.68 including prejudgment interest; $15,588 overpayment deducted |
| Attorney’s fees under ERISA § 1132(g)(1) | Request reasonable fees and costs; substantial success on the merits | Challenge reasonableness of hours and rates | Award of $35,499.50 in attorney’s fees; post-judgment interest awarded |
| Modification of ongoing benefits offset | Plaintiff should receive benefits without SSDI offset going forward | Offset provisions apply until further order | Defendants must pay benefits without offset for VA while qualifying under plan terms |
Key Cases Cited
- Exxon Shipping Co. v. Baker, 554 U.S. 471 (U.S. Supreme Court 2008) (Rule 59(e) standard about not relitigating matters)
- United States v. Metro. St. Louis Sewer Dist., 440 F.3d 930 (8th Cir. 2006) (district court discretion on Rule 59(e))
- Angevine v. Anheuser-Busch Cos. Pension Plan, 646 F.3d 1034 (8th Cir. 2011) (ERISA exhaustion doctrine justification)
- Galman v. Prudential Ins. Co. of Am., 254 F.3d 768 (8th Cir. 2001) (purpose of exhaustion and dispute resolution)
- Stroh Container Co. v. Delphi Indus., Inc., 783 F.2d 743 (8th Cir. 1986) (prejudgment interest principles for ERISA benefits)
- Mansker v. TMG Life Ins. Co., 54 F.3d 1322 (8th Cir. 1995) (28 U.S.C. § 1961 prejudgment interest method for ERISA)
- Sheehan v. Guardian Life Ins. Co., 372 F.3d 962 (8th Cir. 2004) (procedure for calculating prejudgment interest under ERISA)
- Hardt v. Reliance Standard Life Co., 130 S. Ct. 2149 (U.S. Supreme Court 2010) (fee-shifting framework under ERISA § 1132(g)(1))
- Ruckelshaus v. Sierra Club, 463 U.S. 680 (U.S. Supreme Court 1983) (reasonableness of agency actions and fee considerations)
- Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974) (twelve Johnson factors for attorney's fee reasonableness)