Opinion
Cause No. 3:04-CV-107 CAN.
July 22, 2005
ORDER AND FINDINGS OF FACT AND CONCLUSIONS OF LAW
Plaintiffs Guy Minix and Adele Minix brought this action for recovery of long term disability ("LTD") insurance benefits against Liberty Life Assurance Company of Boston ("Liberty"), the plan provider, and Modine Manufacturing Company ("Modine"), Mr. Minix's employer, pursuant to Section 502 of the Employment Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1132(a)(1)(B). On April 1, 2004, parties consented to this Court's jurisdiction under 28 U.S.C. § 636(c). On November 15, 2004, Plaintiffs filed a motion for summary judgment and on November 17, 2004, Defendants filed a motion for judgment under Fed.R.Civ.P. 52. On April 14, 2005, this Court determined that if the parties wished to proceed on cross motions for judgment, the appropriate motion would be a Rule 52 motion for judgment.
Upon reviewing parties' cross motions for judgment, it becomes clear that this is a close case which requires this Court to choose between the medical opinions of Minix's treating physician, who concludes that Minix is totally disabled, and Liberty's physicians, who conclude that he is not. In addressing this close issue, and in accordance with Rule 52, this Court now enters into the record the following findings of fact and conclusions of law.
I. PRELIMINARY MATTERS
Defendants' motion for judgment seeks judgment on all claims asserted by Adele Minix because Adele was not a plan participant or beneficiary, and thus, lacked standing to sue under 29 U.S.C. § 1132. Defendants also moved for judgment on all claims asserted against Defendant Modine, asserting that Modine was not a proper Defendant because it lacked discretionary power to award benefits under the plan. Finally, Defendants moved for judgment on Plaintiffs' claims for breach of fiduciary duty, stating that this was not an appropriate cause of action because reinstatement of benefits was an adequate remedy.
In footnote one of their combination response/reply memorandum, Plaintiffs agree to voluntarily dismiss the claims asserted by Adele, all claims against Modine, and the claim for breach of fiduciary duty. Therefore, this Court now DISMISSES WITHOUT PREJUDICE Adele Minix as a Plaintiff, Modine Manufacturing as a Defendant, and Plaintiffs' breach of fiduciary duty claims. Consequently, Defendants' motion for judgment on these issues is DENIED AS MOOT.
II. STANDARD FOR MOTION FOR JUDGMENT UNDER RULE 52
Rule 52(a) states that "in all actions taken upon the facts without a jury . . . the court shall find the facts specially and state separately its conclusions of law thereon, and judgment shall be entered pursuant to Rule 58." A trial on the papers process offers certain advantages over cross-motions for summary judgment. It is certain to result in a decision for one party rather than present the possibility that both motions for summary judgment will be denied. Crespo v. Unum Life Ins. Co. of America, 294 F.Supp.2d 980, 991 (N.D. Ill. 2003). When the facts are undisputed, to the extent that they are stipulated to, the procedure is more akin to a bench trial than a motion for summary judgment. Hess v. Hartford Life Acc. Ins. Co., 274 F.3d 456, 461 (7th Cir. 2001). See also May v. Evansville-Vanderburgh School Corp., 787 F.2d 1105, 1115 (7th Cir. 1986) (stating that parties sometimes, in effect, ask the trial judge to decide the case as if there had been a bench trial in which the evidence was the depositions and other materials gathered in pretrial discovery).
By filing a motion for judgment under Rule 52 rather than a motion for summary judgment under Rule 56, this Court may decide this case as if there had been a bench trial by using the evidence parties submitted in their motions for judgment.
III. FINDINGS OF FACT
The relevant facts in this case are mostly undisputed. Guy Minix began working for Modine in May 1971. In February 1989, Minix was diagnosed as having ulcerative colitis. (Pl. Exh. 4). Ulcerative colitis involves "chronic inflammation and ulceration of the lining of the colon and rectum." (Pl. Exh. 5). The main symptom of ulcerative colitis is bloody diarrhea. An attack may be sudden and severe, producing violent diarrhea, high fever, abdominal pain, and peritonitis (inflammation of the lining of the abdomen). "More often, an attack begins gradually and the person has an urgency to defecate, mild cramps in the lower abdomen, and visible blood and mucus in the stool." (Pl. Exh. 5).
After experiencing increased discomfort, Minix was referred to the Mayo Clinic in 1992. (Pl. Exh. 4). After returning to the Mayo Clinic in 1994, Minix was referred to Dr. Daniel Hurwich, a physician in internal medicine and gastroenterology, who had recently completed Mayo's training program regarding treatment for Minix's condition. Hurwich then became Minix's treating physician.
Minix continued working for Modine until September 1995 when he was placed on medical leave due to his ulcerative colitis. In July 1996, Minix applied for long term disability ("LTD") benefits under Modine's insurance policy which was issued by Wausau Insurance Company ("Wausau"). In Minix's application for LTD benefits, Hurwich stated that due to Minix's condition, Minix was unable to walk a moderate distance. (Def. Exh. D). The application noted that Minix had a class five physical impairment which meant Minix had severe limitations and was unable to work sedentary jobs. It was Hurwich's opinion that Minix was totally disabled and that his condition was lifelong with the possibility of relapses occurring at any time. (Def. Exh. D). Wausau reviewed Minix's medical records and disability application and determined that he was totally disabled under the terms of the plan and approved his waiver of premium benefit claim.
Wausau continued to monitor Minix's condition. Hurwich routinely stated that Minix was totally disabled because he needed to have access to a bathroom at all times and noted that stress seemed to increase Minix's symptoms. In a functional capacity form completed in November 1997, Hurwich noted that Minix's flare-ups arrived without warning, making it difficult to predict when Minix was capable of working. (Pl. Exh. 4).
In July 1998, Wausau changed its definition of "total disability." Under the new definition, totally disabled was:
After twenty-four (24) months of benefits have been paid, the insured is unable to perform with reasonable continuity all of the material and substantial duties of the insured's own or any other occupation for which the insured is or becomes reasonably fitted by training, education, experience, age, and physical and mental capacity.
Even under this new definition, Wausau again determined that Minix was totally disabled. In 1998, the Social Security Administration also determined that Minix was disabled. Later in 1998, Wausau referred Minix's files to a board certified internalist, Dr. Robert Smith, who reviewed Minix's file and concluded that Minix remained totally disabled.
After learning that Minix lived on a horse farm, Wausau initiated surveillance on him in 1999 to determine whether he was capable of performing any other occupation. During an interview, Minix admitted that he liked to ride and show horses when he was having a good day. (Def. Exh. E). Based upon the surveillance, Wausau concluded that since Minix's involvement in the farm was minimal and because the farm was not income producing, Minix was still entitled to LTD benefits.
In January 2000, Liberty assumed administration of Minix's LTD benefits claim. Under Liberty's administration, the definition of totally disabled did not change. Questioning whether Minix was totally disabled, Liberty initiated surveillance on Minix in May 2000. The surveillance revealed Minix carrying hay and driving his truck. (Def. Exh. G). Apparently the surveillance was inconclusive as Liberty did not alter Minix's benefits at this time.
In March 2001, Hurwich began prescribing opium tinctures for Minix, which appeared to help control Minix's condition. Minix later stated that he did not like taking the opium on a daily basis because it made him dizzy, nauseous, and blurred his vision. In July 2001, Hurwich noted that Minix's condition was stable. Even though the opium appeared to reduce the severity of his symptoms, in February 2002, Hurwich still reported that Minix was indefinitely disabled because Minix required frequent trips to the bathroom. (Pl. Exh. 4).
Liberty again initiated surveillance on Minix in May 2002. The surveillance showed Minix walking and bending over to pick up sticks for approximately seven minutes. It also showed Minix sitting on the porch talking to an unidentified male for approximately forty minutes. Finally, the surveillance documented that Minix rode a horse for approximately one hour and twenty minutes, without needing to stop and use the bathroom. (Def. Exh. J).
In April 2002, Liberty referred Minix's case file to its consulting physician, Dr. Steven Miszkiewicz, for a review. Without conducting a physical exam, Miszkiewicz confirmed that Minix has ulcerative colitis which occasionally flares up and determined that Minix's condition does not preclude him from resuming his previous occupation or any similar occupation. (Pl. Exh. 13). Miszkiewicz based his conclusion on the fact that Minix was currently working on a horse farm and participated in horse shows, which Miszkiewicz assumed would increase stress.
Liberty also referred Minix's file to Vargas Vocational Consulting to conduct a transferrable skills analysis ("TSA") in July 2002. Relying upon the case manager's and Miszkiewicz's opinions that Minix's condition did not preclude him from resuming his work, the TSA concluded that based upon Minix's work history, he would qualify for the following alternative occupations: Industrial Production Manager, Production/Planning Clerk, Production Managers, or First Line Supervisor/Manager of Production and Operating Workers. (Pl. Exh. 14).
After reviewing all of this information, Liberty notified Minix on August 20, 2002, that he was no longer disabled within the meaning of the plan and that it was terminating his LTD benefits. Liberty did not dispute that Minix still suffered from ulcerative colitis, but stated that his condition was stable because with opium, Minix's symptoms were reduced. Liberty highlighted the fact that Hurwich stated that Minix had no restrictions from sitting or lifting over 10 pounds. Furthermore, Liberty justified its position by relying on the May 2002 surveillance video, Miszkiewicz's file review, and the TSA. Liberty determined that "we have concluded that although you have the diagnosis of ulcerative colitis, it is not to a degree of severity to impair you from performing gainful occupation . . ." (Pl Exh. 12).
Hurwich however, continued to maintain that Minix was totally disabled, but noted on October 31, 2002, that Minix was comfortable with the condition and that flare ups occurred every two to three months. On an attending physician's statement completed on November 6, 2002, Hurwich rated Minix a class three physical impairment-capable of light work with a good prognosis. Despite this rating, Hurwich maintained that Minix could not work an eight hour day because there would be too many interruptions when his ulcerative colitis flared up. Hurwich acknowledged that Minix was capable of all duties listed on the sheet for two to four hours unless Minix's condition worsened; then his activities would be severely interrupted. (Pl. Exh. 4).
In January 2003, Minix appealed the denial of his LTD benefits. Liberty then referred Minix's records to Dr. Richard Landres, a board certified physician in internal medicine/gastroenterology. After reviewing the records and consulting with Hurwich about Minix's condition, Landres concluded that "left sided ulcerative colitis (UC) is a very common malady in clinical gastroenterology (GI) practice, and though it is responsible for considerable distress and morbidity, it is seldom sufficiently severe enough to result in long term disability." (Def. Exh. M). In regards to Minix's complaints that the opium made him dizzy and nauseous, Landres conceded that these side effects are possible, although they are often minimal. Landres then stated that even if Minix chose not to take the opium, his condition should not preclude Minix from performing any supervisory duties, especially if certain accommodations were made. Furthermore, Landres stated that there is a dispute over whether increased stress can affect ulcerative colitis. Landres ultimately concluded that Minix was not totally disabled.
On February 10, 2003, Liberty conducted a vocational review for Minix's waiver of premium benefit. The review stated that Minix could perform full time light duty work and thus could perform the following jobs: Customer Service Representative, Account Representative, Order Clerk, and Production Clerk. (Def. Exh. G). Utilizing this report, on February 11, 2003, Liberty notified Minix that his waiver of premium benefit had been cancelled because he was no longer entitled to LTD benefits. (Pl. Exh. 18). On March 31, 2003, Liberty notified Minix that his appeal had been denied.
After exhausting the internal appeals process, on January 30, 2004, Minix and his wife, Adele, sued Liberty and Modine for violations of the Employment Retirement Income Security Act of 1974 (ERISA). Minix sought the reinstatement of his LTD benefits, as well as his waiver of premium benefit. In addition, Plaintiffs alleged that Defendants had breached their fiduciary duties. On November 15, 2004, and November 17, 2004, Plaintiffs and Defendants, respectively, moved for judgment on these issues [Doc. Nos. 28 29].
IV. CONCLUSIONS OF LAW
A. Termination of Minix's LTD Benefits
1. Standard of Review
When a participant of an ERISA employee benefits plan challenges the denial of benefits, the court must review that denial under a de novo standard unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan.Houston v. Provident Life and Accident Ins. Co., 390 F.3d 990, 995 (7th Cir. 2004). When a plan confers such discretion upon the plan administrator or fiduciary, the court shall not disturb a decision concerning eligibility for benefits unless it is arbitrary and capricious. Id. As parties agree that the plan did not confer discretionary authority on Liberty, this Court will conduct a de novo review of the decision. In applying the de novo standard of review, the appropriate question is whether Liberty was correct in deciding to terminate Minix's benefits.Wilczynski v. Kemper Nat. Ins. Companies, 178 F.3d 933, 935 (7th Cir. 1999).
2. Minix's Condition Rendered him Totally Disabled
Because parties' motions for judgment are governed by Rule 52, this Court may weigh the evidence parties submitted in support of their motions to determine whether Liberty was correct in terminating Minix's benefits under the terms of the plan.
a. Surveillance Reports
Since 1999, surveillance has been conducted on Minix on three separate occasions. The first surveillance, done in 1999, shows Minix engaged in relatively minimal activity related to the horse farm. The surveillance merely revealed that Minix enjoyed riding and showing horses on good days. It does not provide this Court with sufficient evidence that could be used to determine that Minix was not totally disabled. (See Pl. Exh. 10). Indeed, the 1999 surveillance was insufficient to change Wausau's determination that Minix was totally disabled.
The May 2000 surveillance likewise does not demonstrate that Minix was able to perform any occupation. During this surveillance, Minix was observed driving his truck, moving hay, unloading his truck, and sitting in a parking lot for two hours and forty minutes without needing to use the bathroom. (See Def. Exh. G). The relatively short period of surveillance on this one day is insufficient to conclude that Minix would be able to perform any occupation with reasonable continuity. Apparently Liberty agreed that this surveillance was inconclusive as it did not change its opinion that Minix was totally disabled.
Only after the May 2002 surveillance did Liberty change its opinion. During this surveillance, Minix was observed riding his horse for approximately one hour and twenty minutes, walking around, bending at a 90 degree angle to pick up sticks, and sitting on the porch for approximately forty minutes. Minix's ability to bend over and pick up sticks, however, is not determinative of whether he is able to perform any occupation. Simply put, ulcerative colitis does not affect these capabilities. Rather, it is Minix's sudden pain and urgent need to use the bathroom which cause interruptions of his work.
In examining the usefulness of surveillance tapes, the court inOsbun v. Auburn Foundry, Inc., 293 F.Supp.2d 863, 870 (N.D. Ind. 2003), stated that evidence that the plaintiff could perform light tasks for 1.5 hours does not demonstrate that he is capable of sustaining a job when a defendant could not provide evidence of how long the plaintiff could perform such a task, or whether he can perform them on a daily basis. See also Mullally v. Boise Cascade Corp. Long Term Disability Plan, 2005 WL 66070, *7 (N.D.Ill. January 11, 2005) (stating activities caught on tape only reveal that, for limited periods of time, a plaintiff was able to complete certain activities, but does not illustrate that she is able to work full time because it is easier for her to interrupt her activities when she is at home). The limited footage obtained by the 2002 surveillance is not conclusive that Minix is able to perform any job related activities on a daily basis or continue them for an extended period of time. As a result, the surveillance reports are not helpful in determining whether Minix is disabled.
b. Social Security Determination
Minix alleges that Liberty's decision to terminate his benefits was wrong because Liberty did not consider the fact that the Social Security Administration ("SSA") had determined that Minix was disabled. Although a court may consider a SSA determination as probative, it is certainly not binding. See e.g., Ladd v. ITT Corp., 148 F.3d 753, 754 (7th Cir. 1998) (using Social Security definitions to examine an ERISA claim); Diaz v. Prudential Ins. Co. of America, 2004 WL 1094441, *10 (N.D.Ill. 2004). The SSA determined in 1998 that Minix was disabled. Liberty's decision to terminate the benefits did not occur until 2002. Therefore, the SSA's determination of Minix's condition in 1998 bears little relevance to whether Minix continued to be totally disabled in 2002.
c. Transferrable Skills Analysis
Liberty referred Minix's case to Vargas Vocational Consulting to conduct a transferrable skills analysis ("TSA") to assess what skills Minix possessed that could be useful in obtaining employment. The TSA did not independently evaluate Minix, but relied upon the case manager and Miszkiewicz's opinions that Minix's condition did not preclude him from returning to work. Based upon Miszkiewicz's physical assessment of Minix, the TSA listed thirteen skills that Minix possessed that could be transferred to another job and found that Minix qualified for the following occupations: Industrial Production Manager, Production/Planning Clerk, Production Managers, and First Line Supervisor/Manager of Production and Operating Workers.
A TSA, properly conducted, takes a claimant's skills, experience and disability into account and produces a list of potential jobs. O'Reilly v. Hartford Life Accident Ins. Co., 272 F.3d 955, 962 (7th Cir. 2001). The TSA did not properly take into account all of Minix's disability because it heavily relies on the opinion that Minix's symptoms are controlled if he takes opium. While Minix's conditions may be less severe when he is on opium, he still remains susceptible to frequent bathroom breaks and must interrupt whatever he is doing to use the bathroom. The TSA does not appear to factor in Hurwich's diagnosis that while there may be times that Minix is able to perform work, his flare ups are unpredictable and uncontrollable, preventing continuous employment.
Furthermore, the TSA does not factor in Minix's subjective complaints of dizziness, nausea, and blurred vision that result from taking the opium. If Minix is unable to take the opium, his need to use the bathroom increases from four to five times a day to eight to ten times a day. However, if he takes the opium, he may experience undesirable side effects which interfere with his work. While the severity of the opium's side effects is subjective, the symptoms should not be discounted. See Hawkins v. First Union Corporation Long-Term Disability Plan, 326 F.3d 914, 919 (7th Cir. 2003). Though dizziness, nausea, and blurred vision are difficult to objectively document, nonetheless, the TSA should have considered those complaints. Instead, the report ignored them. Therefore, because the TSA was based upon questionable conclusions and did not take into account the full nature of Minix's condition, the TSA is not useful in determining whether Minix was totally disabled.
d. Physician's Statements
Because the brief surveillance video of 2002 and the TSA report are insufficient to determine whether Minix is disabled, this Court must now evaluate the physicians' opinions to determine whether Liberty's decision was correct. In determining how to resolve the conflict of opinion between the physicians, this Court must choose between Liberty's two physicians, neither of whom examined Minix and one of whom is not a gastroenterologist, and Minix's treating physician, a gastroenterologist who has been treating Minix for over eight years. This Court concludes that Minix's treating physician is in a much better position to have fully evaluated Minix's condition than the two physicians who merely conducted file reviews, and as a result, gives greater deference to his opinion concerning Minix's disability.
Liberty's first physician, Miskiewicz, is not a gastroenterologist, but rather a family physician. He did not personally examine Minix, but conducted a file review and determined that Minix's symptoms did not prevent Minix from returning to work or any other occupation. He based his opinion on the fact that Minix lives on a horse farm and occasionally shows horses. However, the surveillance reports did not show that Minix was able to perform substantial work on the farm. Rather, it showed Minix performing minimal work and riding his horse for only one hour and twenty minutes. Miszkiewicz fails to cite to any objective medical findings that would support his conclusion that Minix's condition does not prevent Minix from returning to work. Without more objective findings to substantiate his conclusion, Miszkiewicz's opinion based upon his file review carries very little weight that Minix is able to perform any occupation.
The remaining two physicians Hurwich, Minix's treating physician, and Landres, Liberty's second consulting physician, both specialize in the area of gastroenterology. Landres, like Miszkiewicz, did not examine Minix, but rather conducted a file review and spoke with Hurwich about Minix's condition. Landres never disputed that Minix had ulcerative colitis or that his flare ups are unpredictable. Rather, Landres concluded that ulcerative colitis is common and rarely results in a long term disability. Although Landres did concede that the dosage of opium that Minix was taking could produce side effects such as dizziness, nausea, and blurred vision, he suggested that the side effects would not be so severe that they would affect Minix's cognitive abilities. However, as the court in Hawkins suggested, some weight must be given to Minix's subjective complaints of dizziness, nausea, and blurred vision.
Landres further opined that even if Minix could not take the opium, his increased symptoms would not prevent him from engaging in gainful employment because there are reasonable accommodations, such as working near a bathroom, mandatory breaks, and not having to work overtime, that could be made. Landres also asserts that physicians dispute whether stress actually increases the flare ups associated with colitis. While it is unclear whether returning to gainful employment would actually increase Minix's stress, Landres again concluded that an employer could make reasonable accommodations to help limit the stress, if stress does in fact increase Minix's flare ups.
In Ross v. Indiana State Teacher's Ass'n Ins. Trust, 159 F.3d 1001, 1011 (7th Cir. 1998), the court held that the plan did not abuse its discretion in looking at the reasonable accommodations that an employer could make for the plaintiff in determining whether the plaintiff was totally disabled. However, the court stated that it was important to note that the employer had already agreed to implement these accommodations, and thus, the accommodations were not hypothetical possibilities of what might be done. Id. Unlike Ross, Landres' assertions that reasonable accommodations could be made, while practical, are based on hypothetical possibilities and not actual agreements that either Modine or any other potential employer have agreed to implement. Thus, relying on any accommodations that could potentially be made would be pure speculation as to whether they would actually allow Minix reasonably continuous employment.
Landres ultimately concluded that Minix should be able to return to work or engage in gainful employment. This conclusion is significantly different from Hurwich's opinion. In Hawkins, the Seventh Circuit noted that, when other factors are equal, and the superior information is likely to be possessed by the treating physician, especially in cases where the consultant does not examine the patient, a treating physician presumption may apply. Hawkins, 326 F.3d at 917. That is not to say that ERISA requires a plan administrator to give deference to the opinions of a treating physician. Black Decker Disability Plan v. Nord, 538 U.S. 822, 831 (2003). Although there is not a treating physician presumption, Hurwich's reports are more persuasive than Landres. As previously illustrated, many of Landres' opinions regarding the severity of Minix's condition and the possible accommodations are questionable in light of the applicable case law. In addition, Hurwich was Minix's treating physician for over eight years, while Landres did not personally examine Minix, but only conducted a file review. Hurwich is in a much better position to assess and appreciate Minix's condition and subjective complaints of the opium's side effects and to assess his daily physical capabilities.
While Hawkins was decided before Nord, in reviewing a benefit determination, a court still looks at whether a physician conducted a medical examination on the patient or merely a file review. See e.g., DiPietro v. Prudential Ins. Co. of America, 2004 WL 626818, *6 (N.D.Ill. 2004).
To be sure, Hurwich's records indicate that Minix's condition improved. Initially Hurwich listed Minix at a class five physical impairment (severe limitation). Later, in 2002, Hurwich listed Minix as a class four impairment (moderate limitation) and in November 2002, a class three impairment (slight limitation). Hurwich's records also indicate that Minix's condition had become stable and that the use of opium had decreased the number of Minix's bowel movements. Hurwich also noted in November 2002 that Minix was capable of all duties for two to four hours.
Although Hurwich's records indicate Minix's condition improved, it is also true that Hurwich never changed his opinion that Minix was totally disabled. While Hurwich stated that Minix was capable of all duties for two to four hours, he included a qualifying statement that Minix could not work these short hours if his condition worsened. Hurwich ultimately concluded that Minix could not work an eight hour day because Minix's flare ups were unpredictable and required that Minix have easy access to a bathroom at all times. Hurwich was the only physician who stressed the unpredictable nature of Minix's ulcerative colitis. Furthermore, as Hurwich stated, Minix's ulcerative colitis is chronic and incurable and is sometimes exacerbated by stress. While opium may help control the amount of symptoms, it does not alleviate all symptoms, nor does it prevent unexpected flare ups. Opium also comes with disrupting side effects.
As stated in Hammond v. Fidelity and Guar. Life Ins. Co., 965 F.2d 428, 431 (7th Cir. 1992), a general disability provision should not be construed so literally that an individual must be utterly helpless to be considered disabled. "Rather, the insured should be entitled to recover provided he or she is unable to perform all the substantial and material acts necessary to the prosecution of some gainful business or occupation." Id. Because Minix's ulcerative colitis requires him to immediately drop whatever he is doing due to a sudden urge to use the bathroom numerous times a day and because of the unpredictable nature of his flare ups, the persuasive evidence shows that even if Minix could occasionally perform these duties, there is nothing to suggest that he can perform them with reasonable continuity which would allow him to acquire gainful employment.
While this was undoubtedly a close case which may have been decided differently if the arbitrary and capricious standard of review had applied, after conducting a de novo review of the evidence, this Court concludes that Liberty's decision to terminate Minix's LTD benefits was incorrect. Minix's ulcerative colitis renders him totally disabled from any other occupation for which he is or becomes reasonably fitted by training, education, experience, age, and physical and mental capacity. Consequently, Minix's motion for judgment on this claim is GRANTED and Liberty's motion for judgment on this claim is DENIED. Because Minix's LTD benefits were wrongfully terminated, Minix's benefits should be reinstated.
B. Termination of the Waiver of Premium Benefit
Under the terms of the insurance policy, a participant is entitled to a waiver of the insurance premiums for the time in which they are entitled to LTD benefits under the plan. Minix received notification on February 11, 2003, that he was no longer eligible for a waiver of the premiums because he was no longer entitled to LTD benefits under the plan. However, as this Court has determined that Minix was totally disabled within the meaning of the plan, and therefore entitled to LTD benefits under the plan, Minix is likewise entitled to the waiver of premium benefit. Therefore, Minix's motion for judgment on this claim is GRANTED and Liberty's motion for judgment on this claim is DENIED. Minix's waiver of premium benefits shall be reinstated.
Liberty also referred Minix's waiver of premium benefits claim for a vocational review. This report contains many of the same defects as the TSA previously discussed. Because it is based upon incomplete data, its probative value is minimal.
C. Minix's Motion for Judgment on Attorney's Fees
Minix also requests that this Court award him his attorneys' fees associated with bringing this action. 29 U.S.C. § 1132(g)(1) states that "in any action under this subchapter . . . by a participant, beneficiary, or fiduciary, the court in its discretion may allow a reasonable attorney's fee and costs of action to either party." Such awards are subject to an exception for cases in which special circumstances make an award unjust, but there is a modest presumption that prevailing parties are entitled to a reasonable attorney's fee. Little v. Cox's Supermarkets, 71 F.3d 637, 644 (7th Cir. 1995). However, the Seventh Circuit in Lowe v. McGraw-Hill Companies, Inc., 361 F.3d 335, 339 (7th Cir. 2004), stated that because
the award will be paid out of plan assets, to the possible harm of the other participants and beneficiaries, prevailing plaintiffs in ERISA cases are not awarded attorneys' fees as a matter of course, as in civil rights litigation. Instead they must show that the plan's litigating position was not "substantially justified."
In determining whether a prevailing party is entitled to attorneys' fees in an ERISA action, the Seventh Circuit has employed two tests. Under the first test, a court looks at five factors:
1) the degree of the offending parties' culpability or bad faith;
2) the degree of the ability of the offending parties to satisfy personally an award of attorney's fees;
3) whether or not an award of attorney's fees against the offending parties would deter other persons acting under similar circumstances;
4) the amount of benefit conferred on members of the plan as a whole; and
5) the relative merits of the parties' positions.
Bowerman v. Wal-Mart Stores, Inc., 226 F.3d 574, 592-93 (7th Cir. 2000). Under the second test, a court looks to whether or not the losing party's position was substantially justified.Id. at 593. Under either test, the bottom line question to ask is whether the losing party's position was substantially justified and taken in good faith, or was that party simply out to harass its opponent?Little, 71 F.3d at 644.
Applying the five factor test, it appears that an award of attorney's fees is just. While Liberty is correct in its assertion that there is no evidence of bad faith, the other remaining factors weigh heavily in favor of the imposition of fees. First, there is no question that Liberty will be able to personally satisfy the award. In addition, there is no evidence that requiring Liberty to pay the award would deter future plaintiffs from filing actions contesting the termination of their LTD benefits. While this particular benefit is specific to this individual plaintiff, an overall benefit to all policy holders may enure if the plan administrator thoroughly reviews each case in an attempt to avoid future liability. Finally, in examining the merits of the parties' position, while this was a close case, Liberty's reliance on information which was questionable under Seventh Circuit precedent weakened the merits of its position. Therefore, because the majority of the factors tend to prove that Liberty's position was not substantially justified, Minix's motion as it relates to attorney's fees is GRANTED. Minix's counsel shall submit an itemized list of his attorney's fees to this Court by August 19, 2005. Liberty has until September 2, 2005, to file any objections to Minix's itemized list.
D. Minix's Motion for Judgment as to Prejudgment Interest on Past Due Benefits
Finally, Minix requests that this Court award him prejudgment interest on the unpaid benefits. Only benefits provided for under a plan can be recovered. Clair v. Harris Trust and Savings Bank, 190 F.3d 495, 497 (7th Cir. 1999). Liberty's plan does not include interest as a recoverable benefit. However, in Fritcher v. Health Care Serv. Corp., 301 F.3d 811, 820 (7th Cir. 2002), the court stated that "prejudgment interest should be presumptively available to victims of federal law violations. Without it, compensation of the plaintiff is incomplete and the defendant has an incentive to delay." Whether to award a plaintiff prejudgment interest is a question of fairness, lying within the court's sound discretion, to be answered by balancing the equities. Id. Bad faith is not the sole criterion when considering whether an award of prejudgment interest is appropriate. Id.
Liberty seems to suggest that prejudgment interest in not appropriate because there is no evidence of bad faith on its part. However, as suggested in Fritcher, bad faith is not the sole criterion in determining whether prejudgment interest is appropriate. While there may have been some disagreement as to the severity of Minix's condition, as discussed above, many of the reports that Liberty relied on contained significant flaws and unsupported assumptions, which ultimately resulted in the wrongful termination of Minix's benefits. As Minix's benefits were initially terminated in August 2002, Liberty has no doubt benefitted from retaining these funds for nearly three years while Minix has been forced to use his own funds to pay for his care. If this Court merely reinstated of Minix's benefits, Minix would not be wholly compensated for the wrongful termination of his benefits. Thus, in the interest of fairness, this Court GRANTS Minix's motion as it relates to prejudgment interest. Liberty shall pay Minix prejudgment interest on the amount of unpaid benefits from the date the benefits were terminated, August 20, 2002, until the date of today's order at the rate of 3.59%.
IV. CONCLUSION
For the aforementioned reasons, this Court rules as follows:
• DISMISSES WITHOUT PREJUDICE Adele Minix as a Plaintiff;
• DISMISSES WITHOUT PREJUDICE Modine Manufacturing Inc. as a Defendant;
• DISMISSES WITHOUT PREJUDICE Plaintiff's claim of Breach of Fiduciary Duty;
• DENIES IN PART AS MOOT Liberty's motion for judgment [Doc. No. 29];
• Specifically this Court DENIES AS MOOT Liberty's motion as it relates to:
• Adele Minix's claims;
• The claims against Modine Manufacturing; and
• The Breach of Fiduciary Duty claims;
• DENIES IN PART Liberty's motion for judgment [Doc. No. 29];
• Specifically this Court DENIES Liberty's motion as it relates to:
• Minix's wrongful termination of the LTD benefits claim;
• Minix's wrongful termination of the waiver of premium benefits claim;
• Minix's claim for attorney's fees; and
• Minix's claim for prejudgment interest;
• GRANTS Minix's motion for judgment [Doc. No. 28];
• Minix's Long Term Disability Benefits shall be reinstated;
• Minix's Waiver of Premium Benefit shall be reinstated;
• Minix shall recover his attorney's fees;
• Minix shall submit an itemized list of attorney's fees to this Court by August 19, 2005;
• Liberty has until September 2, 2005, to file any objections to the itemized list;
• Minix shall receive prejudgment interest on the amount of unpaid benefits at the rate of 3.59%, for the time period between August 20, 2002 and the date of this order.
Judgment shall be entered in favor of Plaintiff Guy Minix and against Defendant Liberty Mutual Life Assurance Company.
SO ORDERED.