Orrin T. SKRETVEDT, Appellant v. E.I. DUPONT DE NEMOURS, a Delaware corporation; Pension and Retirement Plan; Hospital and Medical-Surgical Plan; Dental Assistance Plan; Noncontributory Group Life Insurance Plan; Contributory Group Life Insurance Plan; Total and Permanent Disability Income Plan; Savings Investment Plan; Tax Reform Act Stock Ownership Plan; Short Term Disability Plan.
No. 02-3620, 02-4283.
United States Court of Appeals, Third Circuit.
Argued September 16, 2003. Filed June 16, 2004.
372 F.3d 193
Before ALITO, AMBRO and CHERTOFF, Circuit Judges.
Raymond M. Ripple, (Argued), Donna L. Goodman, E.I. DuPont de Nemours & Company, Legal Department, Wilmington, DE, for Appellee.
AMBRO, Circuit Judge.
Orrin T. Skretvedt seeks, inter alia, interest on the delayed payment of benefits due him under two plans governed by the Employee Retirement Income Security Act of 1974 (“ERISA“). Skretvedt received benefits from one of those plans pursuant to a court judgment, while his employer voluntarily paid him benefits under the other plan after that judgment was entered. The Magistrate Judge denied Skretvedt‘s request for interest with respect to the delayed payment of benefits under both plans in light of the Supreme Court‘s decision in
Based on Anthuis v. Colt Industries Operating Corp., 971 F.2d 999 (3d Cir.1992), we determine that an award of prejudgment interest on a judgment awarding benefits pursuant to
With respect to Skretvedt‘s request for interest on the delayed payment of a second type of benefits that his employer voluntarily paid after much delay, the Magistrate Judge acknowledged that our prior holding in Fotta v. Trustees of the United Mine Workers of America, 165 F.3d 209 (3d Cir.1998) (”Fotta I“), would allow a claimant, under some circumstances, to seek interest on the delayed payment of ERISA benefits as “appropriate equitable relief” under
While we agree that the Supreme Court has bridled the scope of relief available under
I. Background
A. Facts1
Skretvedt was employed by E.I. DuPont de Nemours and Company2 from June 28, 1974, until February 7, 1995. In early 1994, Skretvedt was working as a Senior Research Environmental Engineer when he began receiving treatments for work-related anxiety from his family physician. Skretvedt took a leave of absence from his job on November 11, 1994, and did not return to work at DuPont thereafter. DuPont began investigating during this period whether Skretvedt would qualify for disability benefits. For reasons that the parties dispute, DuPont terminated Skretvedt on February 7, 1995.
Skretvedt filed a claim with the Equal Employment Opportunity Commission alleging that DuPont violated the Americans with Disabilities Act by discriminating against him because of his anxiety disorder. The EEOC found no violation based upon the information that Skretvedt submitted, and issued a right-to-sue letter. On September 29, 1995, acting on advice of counsel, Skretvedt signed a “Settlement Agreement and Release of All Claims” with DuPont. We previously noted that this agreement “released all of [Skretvedt‘s] employment-related claims against DuPont except for his application for disability benefits, which DuPont agreed to review in a `neutral’ manner.” Skretvedt I, 268 F.3d at 171.
Following the settlement agreement, DuPont‘s three-member Board of Benefits and Pensions (“Benefits Board“) reviewed Skretvedt‘s application for disability benefits, and determined that he was ineligible because, the Board claimed, he had failed to show that he was “permanently incapable of performing the duties of [his] job with the degree of efficiency required by the Company, at the time of [his] termination.” Skretvedt I, 268 F.3d at 172. Skretvedt was also advised that, in order to succeed in appealing the Board‘s determination, he would have to submit “additional objective evidence that will indicate a total impairment of function,” such as “MRI, X-ray reports and complete medical evaluations.” Id. Skretvedt contended, and DuPont denied, that he and one of his doctors sent three letters to the Board‘s designated person for appeals, requesting clarification with respect to the types of “objective medical evidence” he would need to perfect his application on appeal in light of the fact that his claimed disability is psychological. After receiving no response, he claims, he submitted a formal appeal to the Board on May 16, 1997. Nonetheless, no further response was received.
B. Procedural Background
Skretvedt filed an eight count complaint in the United States District Court for the District of Delaware on February 4, 1998.
Count I sought benefits from the “Incapability Retirement” pension program (“incapability benefits“), and alleged that DuPont‘s Benefits Board failed to inform Skretvedt under
Count II claimed medical benefits through a DuPont benefits program known as MEDCAP and reimbursement for expenses incurred as a result of MEDCAP benefits not having been provided as of the date of his termination.
Count III asserted a right to dental benefits through a DuPont benefits program known as DAP and reimbursement for expenses incurred as a result of DAP benefits having been denied.
Count IV alleged that Skretvedt was due a $3,000 payment under a DuPont long-term life insurance plan known as the “Noncontributory Plan” as a result of his becoming disabled. Skretvedt also sought declaratory relief that would deem him eligible for participation in DuPont‘s “Contributory Plan” life insurance program, and sought life insurance benefits under its Noncontributory Plan.
Count V requested benefits from the “Total and Permanent Disability Income Plan” (“T & P benefits“).
Count VI alleged that Skretvedt was eligible to participate in a DuPont tax-deferred savings program known as SIP, and sought damages with respect to his contributions in SIP having been paid out prematurely (in light of his having been, he alleged, wrongfully denied the right to participate in the program after his termination).
Count VII claimed that Skretvedt had been wrongfully denied further participation in a DuPont stock ownership plan known as TRASOP, and sought reinstatement of TRASOP benefits and certain damages resulting from the premature termination of his participation in the plan.
Count VIII contended that Skretvedt was improperly denied benefits under DuPont‘s short term disability (“STD“) plan.
Among other things, Skretvedt also sought prejudgment interest, postjudgment interest, and reasonable attorney‘s fees with respect to each claim.
Skretvedt moved for summary judgment pursuant to
DuPont also moved for summary judgment, arguing, inter alia, that there was no evidence to support a finding that the Board acted in an arbitrary and capricious manner, thereby entitling them to summary judgment. On September 6, 2000, the Magistrate Judge granted summary judgment in favor of DuPont on all claims, and denied Skretvedt‘s motion for summary judgment. She concluded, inter alia, that “there is no genuine issue of material fact upon which plaintiff could be successful [in showing that the Board had acted in an arbitrary and capricious manner]” and that “a genuine issue does not exist as to the propriety of the Board‘s action....” Skretvedt v. E.I. DuPont de Nemours & Co., 119 F.Supp.2d 444, 453-55 (D.Del.2000).
Skretvedt appealed the grant of summary judgment in favor of DuPont and the denial of summary judgment in his favor with respect to his claims for incapability and T & P benefits only. We held that “[b]ecause the medical evidence that Skretvedt presented makes it clear that he meets the eligibility standards for incapability benefits, and the Board can point to no conflicting medical evidence, ... the Board‘s decision was arbitrary and capricious because it was `without reason’ and it was `unsupported by substantial evidence.‘” Skretvedt I, 268 F.3d at 184. Accordingly, we reversed the Magistrate Judge‘s summary judgment order “in favor of DuPont and denying summary judgment in favor of Skretvedt on the claim for incapability benefits[,]... and ... remanded to the District Court with directions to grant summary judgment in favor of Skretvedt on the claim for incapability benefits.” Id. We further “vacate[d] the District Court‘s order granting summary judgment on the count challenging the Board‘s denial of Skretvedt‘s application for T & P benefits and remand[ed] it to the District Court,” assuming “that the District Court will direct that DuPont‘s [Benefits] Board consider this claim in the first instance, since even though Skretvedt is incapable of performing the duties of his previous position at DuPont, he may nevertheless be ineligible for T & P benefits.” Id. at 185.3
In light of our opinion, on remand the Magistrate Judge entered a judgment on December 13, 2001, in favor of Skretvedt “on his claim for incapability benefits.” DuPont granted incapability benefits on March 6, 2002, in response to that judgment. On the same day, without Skretvedt‘s having to resort to further judicial proceedings, DuPont granted T & P benefits upon reevaluating Skretvedt‘s claim in light of our opinion.4
On April 1, 2002, Skretvedt submitted to the Magistrate Judge an “Opening Brief in Support of Claims for Short Term Disability Benefits, Interest on Delayed Payment of Benefits and Related Tax Reimbursement Claims (corrected)” (the “Other Claims Brief“). Although he had pursued only his claims in Counts I and V for incapability and T & P benefits in his appeal to our Court in
On August 21, 2002, the Magistrate Judge, referring to Skretvedt‘s Other Claims Brief as a “Motion for Additional Compensation,” addressed the merits of each of the requests contained in the brief. The Court concluded that Skretvedt was not entitled as a matter of law to the interest, tax-related compensation, TRASOP adjustments, and adjustments to his incapability and T & P benefits that he sought. Furthermore, STD benefits, the Court held, were not available because: (1) the relevant statute of limitations had lapsed prior to Skretvedt‘s request for those benefits; (2) the settlement agreement Skretvedt signed with DuPont waived any claim to STD benefits; and (3) employees with work-related injuries, such as Skretvedt, were not eligible for STD under the terms of the plan.
Skretvedt filed a motion for reconsideration on September 4, 2002, and then filed a notice of appeal of the August 21, 2002, order on September 20, 2002, which was docketed at No. 02-3620. The Magistrate Judge denied the motion for reconsideration on November 12, 2002. Skretvedt filed an amended notice of appeal on November 14, 2002, seeking to appeal the August 21, 2002, and November 12, 2002, orders,5 which was docketed at No. 02-4283. We consolidated both timely appeals.6
II. Jurisdiction
The Magistrate Judge had subject matter jurisdiction over this matter pursuant to
In order to examine our current jurisdiction, we first address our Court‘s decision and remand order in Skretvedt I. Prior to that decision, the Magistrate Judge granted summary judgment on all of Skretvedt‘s claims in favor of DuPont in September 2000. As noted above, we issued a limited remand with respect to the claims for incapability and T & P benefits, and directed the Magistrate Judge to consider the attorney‘s fees issue in her discretion. The Magistrate Judge entered a judgment, pursuant to our opinion and order, that completely disposed of the incapability benefits claim.8 DuPont subsequently granted T & P benefits without Skretvedt‘s having to seek a judgment. Neither party, however, sought formally to dispose of the claim for T & P benefits (e.g., by dismissing Count V voluntarily to the extent that it sought T & P benefits or moving for summary judgment on mootness grounds because the benefits had been paid voluntarily).
In disposing of Skretvedt‘s Other Claims Brief, the Magistrate Judge, as noted already, addressed on the merits Skretvedt‘s arguments with respect to various other benefits sought in other counts of his complaint (e.g., Count VII for TRASOP benefits, Count VIII for STD benefits). This had no effect on the finality of the August 21, 2002, order, but with respect to the claim for T & P benefits that remained pending, the August 21, 2002, opinion and order did not explicitly dispose of that claim. While the order did address Skretvedt‘s additional request in his complaint for interest on the delayed payment of those benefits, the claim for T & P benefits itself was not directly addressed.
Ordinarily, in the absence of a
to determine the effect of a district court‘s decision-and therefore to determine whether there is a final order-it is sometimes necessary to look beyond the pleadings. A final order is not absent just because the district court failed to adjudicate all of the claims that were at one time pleaded. Instead, an appellate court must determine whether, at the time it is examining its jurisdiction, there remain unresolved issues to be adjudicated in the district court.
With respect to Skretvedt‘s claim for the underlying award of T & P benefits, he represented to the Magistrate Judge that DuPont had paid those benefits. See Other Claims Brief at 1 (“T & P Plan benefits recently were granted by DuPont‘s claims agent, Aetna.“). Skretvedt did not argue that DuPont in any way failed to award T & P benefits or miscalculated the award of T & P benefits, except as noted infra note 14. The Magistrate Judge also recognized in her August 21, 2002, opinion that T & P benefits had been awarded. See Magis. Judge Op. at 2 (“[Subsequent to Skretvedt I,] the DuPont Board of Benefits and Pensions granted plaintiff [T & P] benefits, and [i]ncapability benefits approving a start date of February 8, 1995.“). Accordingly, we determine that the claim for T & P benefits was sufficiently resolved in the August 21, 2002, opinion and order where the Magistrate Judge recognized that payment of T & P benefits was moot. That order was therefore a final order10 within the meaning of
III. Standard of Review
“[W]e must look to the course of the proceedings in the district court and the basis for its decision to determine the standard of review.” Blasband v. Rales, 971 F.2d 1034, 1039 (3d Cir.1992). The relevant portions of the Magistrate Judge‘s August 21, 2002, decision on appeal address purely legal issues in the context of what is essentially a summary judgment determination. “Inasmuch as we are deciding this appeal by resolving questions of law, we are exercising de novo [i.e., plenary] review.” Bowers v. Nat‘l Collegiate Athletic Ass‘n, 346 F.3d 402, 410 (3d Cir.2003).
The motion for reconsideration in this case dealt with the Magistrate Judge‘s legal determinations. “The decision to deny a Motion for Reconsideration is within the discretion of the District Court, but `if the court‘s denial was based upon the interpretation and application of a legal precept, review is plenary.‘” Le v. Univ. of Pa., 321 F.3d 403, 405-06 (3d Cir.2003) (quoting Koshatka v. Pa. Newspapers, Inc., 762 F.2d 329, 333 (3d Cir.1985)); see McAlister v. Sentry Ins. Co., 958 F.2d 550, 552-53 (3d Cir.1992) (same).
IV. Claims Litigated Other Than Those Remanded by Skretvedt I
As noted, on remand from Skretvedt I, Skretvedt raised various claims regarding TRASOP benefits, medical premiums, STD benefits, and other claims asserted in various counts in his complaint (the “ancillary claims“). Skretvedt now appeals from the Magistrate Judge‘s denial of relief on remand with respect to those claims. As discussed above, however, Skretvedt did not pursue any of these claims in his prior appeal to our Court.12
We have held on numerous occasions that “[a]n issue is waived unless a party raises it in its opening brief, and for those purposes a passing reference to an issue will not suffice to bring that issue before this court.” Laborers’ Int‘l Union v. Foster Wheeler Corp., 26 F.3d 375, 398 (3d Cir.1994); see, e.g., Kopec v. Tate, 361 F.3d 772, 775 n. 5 (3d Cir.2004);
We have consistently rejected such attempts to litigate on remand issues that were not raised in a party‘s prior appeal and that were not explicitly or implicitly remanded for further proceedings. “An issue that is not addressed in an appellant‘s brief is deemed waived on appeal. Appellants’ alternative theor[ies] of recovery [were] not before this court in the earlier appeal; a fortiori, [they] could not be remanded to the district court. Consequently, we cannot consider [them] here [on appeal from the District Court‘s proceedings on remand].” Wisniewski v. Johns-Manville Corp., 812 F.2d 81, 88 (3d Cir.1987) (citations omitted); see also Frank v. Colt Indus., Inc., 910 F.2d 90, 100 (3d Cir.1990) (party “waived ... argument by its failure to present it in the proceedings prior to this appeal,” including proceedings “when the case was before us on the previous appeal“).
As we explained in Cowgill v. Raymark Industries, Inc., 832 F.2d 798 (3d Cir.1987),
[a]dherence to the rule that a party waives a “contention that could have been but was not raised on a prior appeal,” Munoz v. County of Imperial, 667 F.2d 811, 817 (9th Cir.), cert. denied, 459 U.S. 825, 103 S.Ct. 58, 74 L.Ed.2d 62 (1982), is, of course, necessary to the orderly conduct of litigation. Failure to follow this rule would lead to the bizarre result, as stated admirably by Judge Friendly, “that a party who has chosen not to argue a point on a first appeal should stand better as regards the law of the case than one who had argued and lost.” Fogel v. Chestnutt, 668 F.2d 100, 109 (2d Cir.1981), cert. denied, 459 U.S. 828, 103 S.Ct. 65, 74 L.Ed.2d 66 (1982)....
Id. at 802 n. 2 (quoting Laffey v. Northwest Airlines, Inc., 740 F.2d 1071, 1089-90 (D.C.Cir.1984)) (alterations omitted).13
Accordingly, we shall not now consider arguments with respect to the ancillary claims Skretvedt waived in his prior appeal. “The judicial system‘s interest in finality and in efficient administration dictates that, absent extraordinary circumstances, litigants should not be permitted to relitigate issues that they have already had a fair opportunity to contest.” Cowgill, 832 F.2d at 802 (quoting Todd & Co., Inc. v. S.E.C., 637 F.2d 154, 156 (3d Cir.1980)) (internal quotation marks omitted). Our limited remand in Skretvedt I granted nearly all of the relief requested. We will not now, in this second appeal, given the absence of a showing of any extraordinary circumstances, address claims that Skretvedt previously abandoned.14
Accordingly, we dismiss the portion of Skretvedt‘s current appeal addressing claims asserted in his complaint other than Counts I and V for incapability and T & P benefits, respectively, and address herein only relief requested with respect to those counts.15
V. Interest on the Delayed Payment of Benefits
Skretvedt‘s Other Claims Brief sought, inter alia, interest on the delayed payment of incapability and T & P benefits under Counts I and V, respectively.16
The Magistrate Judge analyzed Skretvedt‘s request for interest with respect to both forms of benefits under our decision in Fotta I, which held that a claimant whose ERISA benefits were delayed but ultimately paid voluntarily (without a court judgment having been entered) could, under some circumstances, assert a cause of action under
We conclude first that Great-West does not apply to Skretvedt‘s claim for prejudgment interest with respect to incapability benefits awarded pursuant to a court judgment under
A. Prejudgment Interest on a Judgment Procured Pursuant to § 502(a)(1)(B)
Skretvedt was awarded incapability benefits pursuant to
A civil action may be brought ... by a participant or beneficiary... to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan....
While it is true that Congress did not mandate prejudgment interest payments for other than delinquent contributions, we have held generally that “[i]n the absence of an explicit congressional directive, the awarding of prejudgment interest under federal law is committed to the trial court‘s broad discretion.” Ambromovage v. United Mine Workers, 726 F.2d 972, 981-82 (3d Cir.1984). Ambromovage cited Board of Commissioners of Jackson County, Kansas v. United States, 308 U.S. 343, 352, 60 S.Ct. 285, 289, 84 L.Ed. 313 (1939), in which the general federal rule was announced that prejudgment interest is to be “given in response to considerations of fairness [and] denied when its exaction would be inequitable.”
Id. at 1009 (alterations in original); see also Schake v. Colt Indus. Operating Corp. Severance Plan for Salaried, Nonunion Employees, 960 F.2d 1187, 1190, 1192 n. 4 (3d Cir.1992) (where a judgment has been entered in favor of a prevailing ERISA plaintiff, “[i]t is undisputed that prejudgment interest typically is granted to make a plaintiff whole because the defendant may wrongly benefit from use of plaintiff‘s money,” subject to the District Court‘s applying “the appropriate standards in granting prejudgment interest“).
Anthuis relied in part on the Supreme Court‘s determination in Board of Commissioners of Jackson County, Kansas v. United States, 308 U.S. 343, 352, 60 S.Ct. 285, 84 L.Ed. 313 (1939), that, where “[t]he issue is uncontrolled by any formal expression of the will of Congress,” id. at 349, 60 S.Ct. 285, “interest is not recovered according to a rigid theory of compensation for money withheld, but is given in response to considerations of fairness. It is denied when its exaction would be inequitable.” Id. at 352, 60 S.Ct. 285. The Supreme Court later explained in Rodgers v. United States, 332 U.S. 371, 373, 68 S.Ct. 5, 92 L.Ed. 3 (1947), that
the failure to mention interest in statutes which create obligations has not been interpreted by this Court as manifesting an unequivocal congressional purpose that the obligation shall not bear interest. Billings v. United States, 232 U.S. 261, 284-288, 34 S.Ct. 421, 425-427, 58 L.Ed. 596 (1914). For in the absence of an unequivocal prohibition of interest on such obligations, this Court has fashioned rules which granted or denied interest on particular statutory obligations by an appraisal of the congressional purpose in imposing them and in the light of general principles deemed relevant by the Court. See, e.g., Royal Indemnity Co. v. United States, 313 U.S. 289, 295-97, 61 S.Ct. 995, 997, 998, 85 L.Ed. 1361 (1941); Board of Com‘rs of Jackson County in State of Kansas v. United States, 308 U.S. 343, 60 S.Ct. 285, 84 L.Ed. 313 (1939).
Applying Board of Commissioners or Rodgers, we have in the past determined that prejudgment interest is available with respect to judgments obtained pursuant to several statutes that are silent as to its exaction.18 Moreover, in Anthuis, we applied Board of Commissioners in determining that a successful ERISA plaintiff could obtain prejudgment interest as part of his or her award of delayed ERISA benefits.19
Although we wrote in the context of benefits having been awarded pursuant to
Accordingly, the Supreme Court‘s decision in Great-West, interpreting the extent of “appropriate equitable relief” available under
[a]s a general rule, prejudgment interest is to be awarded when the amount of the underlying liability is reasonably capable of ascertainment and the relief granted would otherwise fall short of making the claimant whole because he or she has been denied the use of the money which was legally due. Awarding prejudgment interest is intended to serve at least two purposes: to compensate prevailing parties for the true costs of money damages incurred, and, where liability and the amount of damages are fairly certain, to promote settlement and deter attempts to benefit from the inherent delays of litigation. Thus prejudgment interest should ordinarily be granted unless exceptional or unusual circumstances exist making the award of interest inequitable.
Anthuis, 971 F.2d at 1010 (quoting Stroh Container Co. v. Delphi Indus., Inc., 783 F.2d 743, 752 (8th Cir.1986) (internal citations omitted)).
We recognize that we have “not ... offer[ed] extensive guidance for deciding what rate of interest is appropriate in a given case.” Holmes v. Pension Plan of Bethlehem Steel Corp., 213 F.3d 124, 131-32 (3d Cir.2000). Instead, we reiterate that “the awarding of prejudgment interest under federal law is committed to the trial court‘s broad discretion.” Ambromovage, 726 F.2d at 981-82; see also Sun Ship, Inc. v. Matson Navigation Co., 785 F.2d 59, 63 (3d Cir.1986) (“In federal question cases, the rate of prejudgment interest is committed to the discretion of the district court.“).
B. Interest on the Delayed Payment of Benefits Under § 502(a)(3)(B)
In Fotta I, we faced a novel question: can “a beneficiary who has been able to receive his or her benefits due under an ERISA plan only after considerable delay, but without resorting to litigation to recover that payment[, assert] a cause of action under ERISA.” Fotta I, 165 F.3d at 211. While Anthuis and Schake allowed for prejudgment interest as part of an underlying judgment awarding benefits under
We believe the distinction is unpersuasive. The principles justifying prejudgment interest also justify an award of interest where benefits are delayed but paid without the beneficiary‘s having obtained a judgment. The concerns animating our decisions in Schake and Anthuis-viz., making the claimant whole and preventing unjust enrichment-are not diminished merely because the plan has paid the overdue benefits without the claimant having resorted to litigation to secure payment. A late payment of benefits effectively deprives the beneficiary of the time value of his or her money whether or not the beneficiary secured the overdue benefits through a judgment as the result of ERISA litigation.
Unjust enrichment principles also apply with equal force in this setting. To hold that the absence of a judgment deprives the injured beneficiary of the time value of his or her money would create a financial incentive for plans to delay payment and thus retain interest that rightfully belongs to the beneficiary.
The facts of this case demonstrate the wisdom of that conclusion. Skretvedt first applied for benefits in 1995. He was awarded incapability benefits by way of a court judgment entered on remand from our decision in Skretvedt I, thereby allowing him to request that the Court exercise its discretion to award him prejudgment interest. While no judgment was entered with respect to Skretvedt‘s T & P benefits, as our Court requested that DuPont reconsider the denial of those benefits in light of our opinion in Skretvedt I, DuPont voluntarily awarded Skretvedt those benefits shortly after Skretvedt I. Fotta I wisely noted that making the claimant whole and unjust enrichment are concerns equally present with respect to both of these scenarios (i.e., where benefits have been awarded pursuant to a judgment and where benefits have been withheld but are ultimately awarded without resort to a judgment).22
While not ruling out that
1. Great-West and Equitable Versus Legal Restitution
In Great-West the Supreme Court reiterated its earlier holding in Mertens v. Hewitt Associates, 508 U.S. 248, 113 S.Ct. 2063, 124 L.Ed.2d 161 (1993), that “the term `equitable relief’ in
This distinction between legal restitution and equitable restitution turns on the following:
In cases in which the plaintiff “could not assert title or right to possession of particular property, but in which nevertheless he might be able to show just grounds for recovering money to pay for some benefit the defendant had received from him,” the plaintiff had a right to restitution at law through an action derived from the common-law writ of assumpsit. 1 [Dan B. Dobbs, Law of Remedies: Damages-Equity-Restitution] § 4.2(1), at 571 [(2d ed. 1993)].... In such cases, the plaintiff‘s claim was considered legal because he sought “to obtain a judgment imposing a merely personal liability upon the defendant to pay a sum of money.” Restatement of Restitution § 160, Comment a, pp. 641-642 (1936).
* * * * * * In contrast, a plaintiff could seek restitution in equity, ordinarily in the form of a constructive trust or an equitable lien, where money or property identified as belonging in good conscience to the plaintiff could clearly be traced to particular funds or property in the defendant‘s possession. See 1 Dobbs § 4.3(1), at 587-588; Restatement of Restitution, supra, § 160, Comment a, at 641-642; 1 G. Palmer, Law of Restitution § 1.4, p. 17; § 3.7, p. 262 (1978). A court of equity could then order a defendant to transfer title (in the case of the constructive trust) or to give a security interest (in the case of the equitable lien) to a plaintiff who was, in the eyes of equity, the true owner. But where “the property [sought to be recovered] or its proceeds have been so dissipated so that no product remains, [the plaintiff‘s] claim is only that of a general creditor,” and the plaintiff “cannot enforce a constructive trust of or an equitable lien upon other property of the [defendant].” Restatement of Restitution, supra, § 215, Comment a, at 867. Thus, for restitution to lie in equity, the action generally must seek not to impose personal liability on the defendant, but to restore to the plaintiff particular funds or property in the defendant‘s possession.
Great-West, 534 U.S. at 213-14, 122 S.Ct. 708 (emphasis and last three alterations in original). Put simply, “equitable relief” under
Restitution in equity was “ordinarily in the form of a constructive trust or an equitable lien, where money or property identified as belonging in good conscience to the plaintiff could clearly be traced to particular funds or property in the defendant‘s possession.” Great-West, 534 U.S. at 213, 122 S.Ct. 708 (citing 1 Dan B. Dobbs, Law of Remedies: Damages-Equity-Restitution § 4.3(1), at 587-88 (2d ed. 1993) (“Dobbs“); Restatement of Restitution § 160 cmt. a, at 641-42 (1936); George E. Palmer, Law of Restitution § 1.4, at 17 (1978) (“Palmer“); id. § 3.7, at 262).24
Without examining the specific forms of equitable restitution addressed in Great-West, the Magistrate Judge in this case concluded that “the [Supreme] Court clearly indicated [in Great-West] that claims for monetary damages, for the most part, will be claims for legal relief. Here, Skretvedt seeks money to compensate for the lost interest caused by DuPont‘s delayed payment. Thus, the Great-West decision compels this court to find that Skretvedt seeks legal relief.” Magis.
Our reading, however, is that Great-West did not adopt such a rule. Instead, the Supreme Court indicated that, to determine whether a specific form of underlying relief requested is available under
2. Reexamining a Restitutionary Award of Interest Under § 502(a)(3)(B)
Analyzing the propriety of an interest award under
Given the Supreme Court‘s determination in Great-West that only equitable restitution is available under
Because a constructive trust may be placed over “interest” actually earned by a plan that has wrongfully delayed paying benefits, we examine only the constructive trust remedy.26
According to Dobbs, a constructive trust can be imposed “upon any identifiable kind of property or entitlement in the defendant‘s hands if, in equity and conscience, it belongs to the plaintiff.” Dobbs § 4.3(2), at 589-90. A constructive trust is “only used when the defendant has a legally recognized right in a particular asset [, which] may even be a fund of money like a bank account.” Id. at 591. The constructive trust has what Dobbs calls the “important characteristic” of allowing a plaintiff to “obtain, not merely what he lost, but gains received by the defendant from the property‘s increase in value, from its transfer, from its use in a business operation.” Id. at 592.
Dobbs is consistent with the Restatement of Restitution, which suggests that a constructive trust arises “[w]here a person holding title to property is subject to an equitable duty to convey it to another on the ground that he would be unjustly enriched if he were permitted to retain it....” Restatement of Restitution § 160, at 640-41; see also Palmer § 1.3, at 12 (“In the cases as a whole, constructive trust is accepted as a technique to be used in working out solutions to problems of unjust enrichment....“). Generally, a constructive trust is imposed “to restore to the plaintiff property of which he has been unjustly deprived and to take from the defendant property the retention of which by him would result in a corresponding unjust enrichment of the defendant....” Restatement of Restitution § 160, cmt. d, at 643. Even where the plaintiff ... has not suffered a loss or ... has not suffered a loss as great as the benefit received by the defendant[,]... the defendant is compelled to surrender the benefit on the ground that he would be unjustly enriched if he were permitted to retain it, even though that enrichment is not at the expense or wholly at the expense of the plaintiff. Thus, if the defendant has made a profit through the violation of a duty to the plaintiff to whom he is in a fiduciary relation, he can be compelled to surrender the profit to the plaintiff, although the profit was not made at the expense of the plaintiff....
Id. at 643-44. Dobbs, Palmer, and the Restatement all make clear that the constructive trust remedy typically would allow Skretvedt, in equity, to force DuPont to disgorge the gain it received on his withheld benefits under a restitutionary theory.
3. Specific Funds Traceable to an ERISA Plan
We must still determine, however, whether the restitution Skretvedt seeks is with respect to “money or property identified as belonging in good conscience to the plaintiff [that can] clearly be traced to particular funds or property in the defendant‘s possession.” Great-West, 534 U.S. at 204, 122 S.Ct. 708; see also Palmer § 3.7, at 262 (in “most of the restitution cases the equitable relief sought by the plaintiff is with respect to specific property, usually to obtain either specific restitution or a lien on the property“).
DuPont, seizing on this aspect of Great-West, argues that Skretvedt seeks to make it and the defendant ERISA plans “personally liable” for “interest” on the delayed payment of his ERISA benefits in violation of Great-West. We disagree. Skretvedt‘s cause of action under
In explaining the degree to which a plaintiff must identify money or property that is “clearly ... trace[able] to particular funds or property in the defendant‘s possession,” Great-West, 534 U.S. at 213, 122 S.Ct. 708, the Supreme Court looked to Harris Trust and Savings Bank v. Salomon Smith Barney, Inc., 530 U.S. 238, 120 S.Ct. 2180, 147 L.Ed.2d 187 (2000). There, an ERISA pension plan fiduciary purchased interests in several motel properties for $21 million from a non-fiduciary party in interest (the “transferee” of the plan‘s assets). The transaction, the Court assumed, was prohibited by statute. The Court allowed an action under
In our case, we need not even look to a third-party transferee to find the funds Skretvedt alleges belong to him. Instead, we need look no further than the ERISA plans that withheld Skretvedt‘s benefits for several years and profited with respect to the withholding of those benefits. As did the fiduciaries in Harris Trust, Skretvedt has sufficiently identified specific funds traceable to the defendant ERISA plans that belong in good conscience to him.28
4. Proceedings on Remand
In this context, we reverse the Magistrate Judge‘s determination that as a matter of law Skretvedt cannot seek interest on the delayed payment of his T & P benefits under
C. Postjudgment Interest
With respect to Skretvedt‘s underlying incapability benefits award, there was a delay between the Magistrate Judge‘s December 13, 2001, judgment awarding incapability benefits and DuPont having paid those benefits on March 6, 2002, with further adjustments made on April 15 and 16, 2002. Several circuit courts have held that an award of postjudgment interest on benefits awarded pursuant to
However, while postjudgment interest can begin to accrue on a non-final judgment under Iron Ore, the phrase “any money judgment” in
With respect to postjudgment interest on the Magistrate Judge‘s award of any prejudgment interest for incapability benefits, postjudgment interest should be calculated based upon the underlying judgment and award of prejudgment interest. See Sun Ship, Inc. v. Matson Navigation Co., 785 F.2d 59, 63 (3d Cir. 1986); see generally Caffey v. UNUM Life Ins. Co., 302 F.3d 576, 586 (6th Cir. 2002) (“postjudgment interest should be awarded on the entire amount of the judgment, including any prejudgment interest“) (noting agreement among the Fourth, Ninth, Tenth, and Eleventh Circuit Courts). Accordingly, Skretvedt could receive postjudgment interest on any award of prejudgment interest under
There is some question, however, as to whether
Conclusion
We reverse the Magistrate Judge‘s August 21, 2002, and November 12, 2002, orders only with respect to their denial of: (1) prejudgment interest on the award of incapability benefits; (2) interest on the delayed payment of T & P benefits; and (3) postjudgment interest on both of those awards. We remand for the Magistrate Judge to reconsider in the first instance whether Skretvedt is entitled in light of this opinion to prejudgment interest on the award of incapability benefits and/or interest on the delayed payment of T & P benefits, without prejudice to Skretvedt‘s ability to file a timely motion for postjudgment interest on any resulting award of prejudgment interest (with respect to incapability benefits) or interest (with respect to T & P benefits). The appeal is dismissed otherwise to the extent it seeks to address claims raised in the complaint other than Counts I and V for incapability and T & P benefits, respectively.
Notes
In a well-reasoned opinion, the District Court in Dobson v. Hartford Financial Services, et al., 196 F.Supp.2d 152, 169-73 (D.Conn. 2002), determined that both a constructive trust and/or accounting for profits would allow for the disgorging of a fiduciary‘s ill-gotten gain obtained by wrongfully withholding disability benefits in violation of ERISA. The Court of Appeals for the Eighth Circuit very recently has determined that an award of interest is still permissible after Great-West using the accounting for profits remedy. See Parke v. First Reliance Standard Life Ins. Co., 368 F.3d 999, 1005-09, 2004 WL 1144787, at *3-*7 (8th Cir. 2004) (“an award of interest on wrongfully delayed benefits remains permissible under
With respect to the accounting for profits remedy, however, the Supreme Court in Dairy Queen, Inc. v. Wood, 369 U.S. 469, 82 S.Ct. 894, 8 L.Ed.2d 44 (1962), cautioned that
[t]he necessary prerequisite to the right to maintain a suit for an equitable accounting, like all other equitable remedies, is ... the absence of an adequate remedy at law. Consequently, in order to maintain such a suit on a cause of action cognizable at law, as this one is, the plaintiff must be able to show that the ‘accounts between the parties’ are of such a ‘complicated nature’ that only a court of equity can satisfactorily unravel them. In view of the powers given to District Courts by Federal Rule of Civil Procedure 53(b) to appoint masters to assist the jury in those exceptional cases where the legal issues are too complicated for the jury adequately to handle alone, the burden of such a showing is considerably increased and it will indeed be a rare case in which it can be met.
Id. at 478, 82 S.Ct. 894 (footnotes omitted). Dairy Queen appears to cast some doubt on the purely equitable nature of the accounting for profits remedy. We proceed with the constructive trust remedy because it is clear that this remedy would have been typically available in equity.
Our determination in Fotta II that a district court must consider whether benefits were wrongfully withheld or wrongfully delayed was based on the fact that
Of course, to the extent that Skretvedt seeks prejudgment interest on his incapability benefits, which were awarded by court judgment pursuant to
Great-West may have changed the nature of how “interest” is to be calculated in an award for the delayed payment of benefits under
To the extent that Skretvedt seeks on remand a constructive trust to disgorge the gain of his ERISA plans, it would seem, in light of Great-West, that the actual gain (if any) made on withheld benefits would be an appropriate subject of a constructive trust. See Dobbs § 4.3(2), at 592 (“The constructive trust has [an] especially important characteristic[:] ... under the rules for following property or money into its product, the plaintiff may obtain ... gains received by the defendant from the property‘s increase in value....“).
However, the Eighth Circuit in Parke, applying the accounting for profits remedy, has noted that
[a] defendant ... “gains” from the wrongful withholding of the plaintiff‘s benefits even if the plaintiff does not prove specific financial profit. In particular, the defendant receives a benefit from having control over the money. See [Dobbs] § 3.6(2), at 344 n. 22 (“[U]ntil the plaintiff is paid, the defendant has the use of funds that ought to go to the discharge of his obligation of the plaintiff. That is a benefit. The defendant may [choose] not [to] use the funds or collect interest on them. Nevertheless, he has a benefit found in his power to do so.“).
Parke, 368 F.3d at 1009, 2004 WL 1144787, at *7 (third alteration in original). Thus, while Parke suggested that it may be possible to disgorge a defendant‘s actual gain if “specific financial profit” can be shown, the Court concluded that “[i]n the particular context of withheld benefits under ERISA, ... [i]nterest is, in many respects, the only way to account for this gain and therefore is an appropriate measure of the extent to which [a defendant] was unjustly enriched.” Id. In reaching that conclusion, Parke relied on a section of Dobbs suggesting that interest, as opposed to a defendant‘s actual gain, is available as restitution where the defendant “has had the use of money ... to which the plaintiff was entitled” but “did not actually reap interest or profits.” Dobbs § 3.6(2), at 344. This treatise indicates that the “clearest case for [such interest] liability for unrealized gains occurs with fiduciaries who are under a duty to invest funds for the benefit of the plaintiff but fail[] to do so.” Id. at 345.
We need not, and cannot, address today whether interest or actual gain is to be awarded to Skretvedt under
We expressed this concern in Brock v. Richardson, 812 F.2d 121 (3d Cir. 1987):
In Perkins v. Fourniquet, 55 U.S. (14 How.) 328, 330, 14 L.Ed. 441 (1852), the Supreme Court held that the predecessor statute to
section 1961 did not apply to equitable decrees, relying on the use of the word “judgment“, as distinguished from “decree“, the equitable counterpart. Chief Justice Taney explained that, “[the statute] is confined, in plain terms, to judgments at law.” Id.
Id. at 125-26 (noting a “hesitancy” to interpret