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Thies v. Life Ins. Co. of North America

United States District Court, W.D. Kentucky, Paducah Division

February 19, 2013

Elizabeth THIES and Matthew Thies, Plaintiffs
v.
LIFE INSURANCE COMPANY OF NORTH AMERICA, Defendant.

Page 815

Michael D. Grabhorn, Grabhorn Law Office, PLLC, Louisville, KY, William K. Shannon, Bryant Law Center, PSC, Paducah, KY, for Plaintiffs.

Mitzi Denise Wyrick, Walter M. Jones, Wyatt, Tarrant & Combs LLP, Louisville, KY, for Defendant.

MEMORANDUM OPINION AND ORDER

THOMAS B. RUSSELL, Senior District Judge.

This matter is before the Court on the Plaintiffs' motion to reopen the case and establish a scheduling order. (Pls.' Mot., Docket Number (" DN" ) 89.) The Defendant has responded. (Def.'s Resp., DN 91.) The Plaintiffs have replied. (Pls.' Reply, DN 94.) Having considered the matter and being fully advised, the Plaintiffs' motion is DENIED.

I.

In this action arising under the Employee Retirement Income Security Act of 1974 (" ERISA" ) the Court must determine whether a plaintiff may reopen a case and seek prejudgment interest and disgorgement of profits when, on remand, the plaintiff received payment of benefits under the policy. The Court holds that where benefits have been paid on remand there is no " eligibility determination" within the meaning of Bowers v. Sheet Metal Workers' Nat'l Pension Fund, 365 F.3d 535 (6th Cir.2004), for the plaintiff to challenge in front of the remanding court. This does not mean, however, that the plaintiff is barred from seeking interest on the delayed award of benefits. Where benefits have been paid on remand, and a plaintiff seeks interest or disgorgement of profits on that award, the plaintiff should, like the Plaintiffs in this action, bring a new case under ERISA's equitable remedy statute, 29 U.S.C. ยง 1132(a)(3).

II.

In Thies v. Life Ins. Co. of N. Am., 804 F.Supp.2d 560 (W.D.Ky.2011), this Court held that the Defendant's denial of the Plaintiffs' claim for benefits was arbitrary and capricious. As a result, the Court remanded the benefits determination to the plan administrator for a full and fair review. See id. at 573-75. Because the Court remanded the matter instead of directly awarding benefits to the Plaintiffs, it determined that an award of prejudgment interest on past due benefits was inappropriate. Id. at 575. This was not to say that the Plaintiffs were forever precluded from seeking prejudgment interest in subsequent proceedings. Rather, the Court declined to award prejudgment interest at that stage because no judgment had been entered.

On remand, and after consideration of additional materials submitted by the Plaintiffs, the Defendant awarded benefits. (Def.'s Resp., DN 91, p. 2.) The Defendant admits that the award of benefits did not include payment of prejudgment interest. ( Id. ) The Plaintiffs now seek to reopen this action and recover prejudgment interest on the delayed award of benefits.

III.

Both parties rely on

Page 816

Bowers v. Sheet Metal Workers' Nat'l Pension Fund, 365 F.3d 535 (6th Cir.2004), as authority for their arguments in favor of or against reopening this case. In Bowers, the plaintiff challenged a denial of benefits by the defendant. Id. at 536. The district court ultimately remanded the benefits determination to the plan administrator for further review, and the defendant sought to appeal the remand order. Id. The Sixth Circuit determined that it lacked jurisdiction to hear the appeal because " an order remanding a claim to a plan administrator for a determination of the merits of the claim does not constitute a final decision." Id. In coming to this conclusion, the court also held that the ...


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