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Werb v. Reliastar Life Insurance Co.

United States District Court, D. Minnesota

October 27, 2014

MICHAEL WERB, Plaintiff,

Mark M. Nolan, NOLAN, THOMPSON & LEIGHTON, PLC, for plaintiff.

William D. Hittler, NILAN JOHNSON LEWIS PA, for defendant.


PATRICK J. SCHILTZ, District Judge.

This is the second lawsuit that plaintiff Michael Werb has brought against defendant ReliaStar Life Insurance Company ("ReliaStar") under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1001 et seq., regarding his entitlement to disabilityinsurance benefits. During the course of the previous lawsuit, ReliaStar determined that Werb was disabled and entitled to benefits through January 31, 2007, but asked for additional medical information in order to determine Werb's entitlement to benefits after that date. That request, and ReliaStar's later denial of further benefits, eventually led to this lawsuit. The parties crossmoved for summary judgment on Werb's claim for reinstatement of his benefits, and on June 25, 2014, the Court granted Werb's motion and denied ReliaStar's.[1] ECF No. 52.

A. Benefit Amount

In moving for summary judgment, the parties did not give the Court any information regarding the amount of the monthly benefit to which Werb would be entitled if he prevailed on his claim. For that reason, the Court invited further submissions in order to calculate a final judgment and determine the amount of attorney's fees and prejudgment interest to be awarded. The Court assumed that this would be an easy task, given that Werb had already been receiving benefits and was simply seeking to reinstate them. Nevertheless, the Court anticipated the possibility that the parties' numbers might differ somewhat and accordingly gave them the opportunity to provide short explanations of their calculations.

The parties were not able to agree on a number and so filed briefs addressing their dispute. In those briefs, the parties informed the Court for the first time that ReliaStar has never actually calculated the amount of the monthly benefit to which Werb is entitled. Instead, the parties reached a lump-sum settlement as to amounts due through January 31, 2007. The parties now seek to litigate myriad legal and factual issues concerning the calculation of Werb's monthly benefit, including whether a particular summary plan description has any legal effect; whether Werb's benefits should be based on his salary alone or instead should include his 401(k) employer match and moving expenses that he received; and whether his benefits are subject to any offsets. The parties have also requested additional briefing and a hearing. Alternatively, ReliaStar argues that the Court should remand this matter so that ReliaStar can calculate the benefit amount in the first instance.

The Court agrees with ReliaStar that this case should be remanded. ERISA "affords the courts a range of remedial powers... and returning the case to a plan administrator for further consideration is often appropriate." King v. Hartford Life & Acc. Ins. Co., 414 F.3d 994, 1005 (8th Cir. 2005) (en banc). It is apparent that, until recently, the parties have not focused on the amount of the monthly benefit to which Werb is entitled. The Court was blindsided by the nature and scope of their disputes on the issue; even though Werb moved for full (not partial) summary judgment, the parties gave the Court no hint that they disagreed so profoundly about what is normally a straightforward calculation. Indeed, the nature and scope of the parties' disputes essentially present a new lawsuit that is separate from the lawsuit that was originally filed. The Court believes that these disputes would benefit from going through the administrative process, where the parties can develop a full record. Cf. id. at 1006 ("In this case, a return to the administrator has the additional salutary effect of permitting the administrator to consider in the first instance evidence received by the district court, but not presented to the administrator....").

The Court will therefore remand this issue and ask that it be addressed by ReliaStar in the first instance. If the parties are not able to resolve the issue through the administrative process, the Court will order them to attend a settlement conference before Judge Mayeron or before a private mediator of their choice before any further litigation takes place.

B. Prejudgment Interest

Werb also seeks reconsideration of the Court's earlier ruling that prejudgment interest should be calculated under 28 U.S.C. § 1961. Werb now argues that the rate of interest is within the Court's discretion and that the Court should apply a higher rate than that applicable under § 1961. Contrary to the local rules, however, Werb did not first seek the Court's permission to move for reconsideration. See D. Minn. L.R. 7.1(j). In any event, Werb cannot meet the standard for such a motion, which requires a showing of "compelling circumstances...." Id .; see Nelson v. Am. Home Assur. Co., 702 F.3d 1038, 1043 (8th Cir. 2012) (noting that motions to reconsider are treated as Fed.R.Civ.P. 60(b) motions when directed at non-final orders and require a showing of exceptional circumstances necessitating extraordinary relief).

Werb could have - but did not - address the appropriate rate by which to calculate prejudgment interest in his original summary-judgment motion. Instead, he provided the Court with a one-sentence assertion that he should be awarded prejudgment interest and a stringcite to five cases, one of which expressly approved the use of § 1961 to calculate prejudgment interest and four of which did not discuss how prejudgment interest should be calculated. See ECF No. 37 at 25. As far as the Court could tell, Werb was asking for prejudgment interest to be calculated under § 1961, and the Court believed that it was granting him what he asked for. His current desire to litigate an issue that he could and should have addressed earlier does not come anywhere close to "compelling circumstances." Cf. Nelson, 702 F.3d at 1043 (no abuse of discretion in denying motion to reconsider when plaintiffs could have submitted the "new" evidence with their original motion for summary judgment).

C. Attorney's Fees

Finally, the parties dispute the amount of attorney's fees to which Werb is entitled. Werb seeks fees of $194, 793.50 and costs in the amount of $1, 627.00, for a total of $196, 420.50. ReliaStar ...

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