RADFORD TRUST v. FIRST UNUM LIFE INSURANCE COMPANY OF AMERICA

321 F.Supp.2d 226 (2004) | Cited 16 times | D. Massachusetts | June 15, 2004

MEMORANDUM AND ORDER

This is an action under the Employment Retirement Security Actof 1974, codified as amended at 29 U.S.C. § 1001-1461(ERISA).1 The plaintiff, Radford Trust ("Radford"),alleged that the defendant, First Unum Life Insurance Company ofAmerica ("First Unum"), had wrongfully denied benefits owed toRadford's beneficiary, John Doe ("Doe") (who assigned his claimto Radford), under a group long term disability policy (the"Policy") that First Unum managed for Doe's former employer, NewYork City law firm Hawkins, Delafield & Wood ("Hawkins").Radford's action sought damages, costs, and attorney's fees.First Unum maintained that its denial of benefits was proper, arguing that Doe had failed to establish that he was disabledbefore his coverage under the Policy was terminated. The companyfurther argued that when Doe released all claims against Hawkins,he also released any claims against First Unum. Because Radfordcould only recover to the extent of Doe's rights, First Unum'sarguments would require summary judgment in its favor. Finally,First Unum urged that should the Court hold that First Unumreached its decision incorrectly, the proper course would beremand to First Unum for further proceedings. The parties filedcross motions for summary judgment, and then stipulated that thiscase might be treated as a case stated. See Pl.'s Stip. [Doc.No. 34]; Def.'s Stip. [Doc. No. 33].2 This is a helpfulprocedure wherein the parties agree that the summary judgmentrecord constitutes the entire case and the Court may draw such inferences therefrom as are reasonable. Where facts are indispute, the Court notes each party's contentions, and whennecessary makes a determination as would an ordinary factfinder,without presumptively drawing inferences in either party's favor.See Boston Five Cents Sav. Bank v. Secretary of Dep't Hous.& Urban Dev., 768 F.2d 5, 11-12 (1st Cir. 1985). This Court hasused the technique to good effect.3

The Court issued an order and judgment on March 31, 2004,finding facts, declaring the respective rights of the parties inlight of these findings, and entering judgment for Radford. TheCourt further held that Radford was entitled to costs, attorney'sfees, and prejudgment and postjudgment interest. This opinionexplains the Court's reasoning, amends its holding with regard tothe date of accrual for prejudgment interest, and addressesRadford's Motion to Amend Judgment [Doc. No. 39]. I. INTRODUCTION

A. Factual Background

The facts in this case can be found in several documents: (i)First Unum's Statement of Undisputed Material Facts of Record[Doc. No. 14] ("Def.'s 56.1 Stmt."); (ii) Doe's response thereto[Doc. No. 19] ("Pl.'s 56.1 Stmt."); (iii) First Unum's Responseto Doe's Undisputed Statement of Material Facts [Doc. No. 22]("Def.'s Resp."); and (iv) written documents that speak forthemselves, as compiled in First Unum's administrative record[Doc. No. 14] ("R."). Because Doe, not Radford, is the real partyin interest here, the Court does not distinguish between Doe'scontentions and Radford's, and refers to all contentions made byeither as Doe's contentions.

1. The Policy

The Policy provided benefits for "disabled" employees. Def.'s56.1 Stmt. ¶ 1; R. at FULCL00687-63 (copy of the Policy). ThePolicy stated: "Disability" and "disabled" mean that because of injury or sickness: 1. the insured cannot perform each of the material duties of his regular occupation; or 2. the insured, while unable to perform all of the material duties of his regular occupation on a full-time basis, is: a. performing at least one of the material duties of his regular occupation or another occupation on a part-time or full-time basis; and b. earning currently at least 20% less per month than his indexed predisability earnings due to that same injury or sickness. Note: For attorneys, "regular occupation" means the specialty in the practice of law which the insured was practicing just prior to the date disability started.R. at FULCL00677.4

With respect to payments made for disability, the Policyprovided: When [First Unum] receives proof that an insured is disabled due to sickness or injury and requires the regular attendance of a physician, [First Unum] will pay the insured a monthly benefit after the end of the elimination period. The benefit will be paid for the period of disability if the insured gives to [First Unum] proof of continued: 1. disability; and 2. regular attendance of a physician.Id. at FULCL00675.

The "elimination period" was "a period of [180] consecutivedays of disability for which no benefit is payable . . . andbegins on the first day of disability." Id. at FULCL00681;id. at FULCL00685 (specifying 180 days). "If disability stopsduring the elimination period for any 14 (or less) days, then thedisability will be treated as continuous." Id. at FULCL00681. "Benefits for disability due to mental illness will not exceed 24months of monthly benefit payments," except in circumstances notrelevant here. See id. at FULCL00670. "`Mental illness' meansmental, nervous or emotional diseases or disorders of any type."Id.

The Policy provided that an "employee will cease to be insuredon the earliest of the following dates" (other possible cessationevents are not relevant here): 2. the date the employee is no longer in an eligible class; . . . 5. the date employment terminates. Cessation of active employment will be deemed termination of employment, except: a. the insurance will be continued for a disabled employee during: i. the elimination period; and ii. while benefits are being paid.Id. at FULCL00669. "Active employment" was defined to mean that"the employee must be working . . . for the employer on afull-time basis and paid regular earnings (temporary or seasonalemployees are excluded) [and] at least [30] hours [per week]."Id. at FULCL00681; id. at FULCL00685 (specifying 30 hours perweek).

2. Doe's Schizophrenia In 1993 and 1994, Doe was under treatment for schizophrenia,and was hospitalized twice for that condition. Pl.'s 56.1 Stmt. ¶115. In 1995, after his schizophrenia was no longer acute, hetook the Law School Aptitude Test, with accommodations based onhis mental illness. See R. at FULCL00354.5 Doe beganworking as a full-time associate for Hawkins on September 8,1998, and First Unum's coverage of Doe under the Policy becameeffective on October 1, 1998. Pl.'s 56.1 Stmt. ¶ 117.6

According to Doe, his symptoms returned over the course of thenext year, eventually making him unable to perform his workduties satisfactorily. Both parties acknowledged the content ofthe progress notes written by Dr. Sarita Singh (whom Doe saw onJune 22, 1999), which stated:

During the year [Doe] worked, he gradually became increasingly fearful of being sexually assaulted. It got to the point that he feared getting on the elevator to get to his office. His concentration worsened. His sleep became irregular, his appetite worsened to the point that all he could eat was bread. He has auditory hallucinations about 1x/wk. . . . He says he has no contact with his family and has very few friends. R. at FULCL00129.7 First Unum claimed that the medicalrecords attached to Dr. Singh's report, which showed that Doe hadreceived no treatment since 1994, demonstrated that Doe"apparently had been treatment free and fully functioning insociety since that time." Def.'s Resp. ¶ 124. On his First Unumclaim form, dated October 1, 1999, Doe listed April 20, 1999 asthe "[l]ast day [he] worked before [his] disability," and listedApril 21, 1999 as the "date [he] was first unable to work." Pl.'s56.1 Stmt. ¶ 20.8

3. Hawkins's Termination of Doe

The parties disagreed as to the nature and significance of thefacts surrounding the precise timing and circumstances of Doe'stermination. According to the Record, Hawkins and Pettina Plevan("Plevan"), outside counsel for Hawkins, reported to First Unumon several occasions that Doe's last day of work was April 26,1999. See R. at FULCL00047 (Long Term Disability ClaimEmployer's Statement); id. at FULCL00277 (First Unum's log of acall from Plevan to First Unum, which has her stating that "[Doe] was told on 4/26/99 that his services were no longer required andthat he should look for another position"); id. at FULCL00283(First Unum's log of a phone call from Plevan to First Unum,which has her reconfirming that April 26, 1999 was Doe's last dayof work).

The Record also contained evidence that Doe's employmentcontinued beyond that date, however. Both parties agreed that Doecontinued to receive weekly paychecks until June 30, 1999. SeePl.'s 56.1 Stmt. ¶ 122; Def.'s Resp. ¶ 122. Doe interpreted thisas meaning that he was actively employed through June 30, 1999,an understanding he affirmed in a release he signed with Hawkinsafter settling a disability discrimination suit he broughtagainst the firm. Def.'s 56.1 Stmt. ¶ 52; R. at FULCL00237. FirstUnum pointed to statements by Plevan that payment after April 26,1999 was part of a "severance package." Def.'s Resp. at 122(citing R. at FULCL00277 and FULCL00283). Doe noted, however,that Hawkins continued to pay First Unum premiums for long termdisability coverage though June 30, 1999, premiums were based on"total covered payroll" (defined as "basic monthly earnings"),Doe received weekly paychecks through June 30, 1999, the paystubs (except one check for unused vacation) showed Hawkins asdeducting SUI/SDI taxes through that date, and New York state lawmade those taxes deductible "on all wages paid." Pl.'s 56.1 Stmt.¶ 122 (citing N.Y. Labor Law § 570 (McKinney 2003), and R. atFULCL00258-64, FULCL00283, and FULCL00682). First Unum admitted all this, except that itcharacterized the weekly pay as "severance pay," and it "den[ied]that deduction of SUI/SDI taxes equates with active employment asdefined in the Policy." Def.'s Resp. ¶ 122. First Unum argued atthe November 3, 2003 summary judgment hearing (although not inany of its filings) that it was "not clear" whether Hawkins hadpaid premiums for Doe through June 30, 1999, and that if it had,and First Unum had failed to reimburse Hawkins, such failure wasdue to "inadvertence and neglect," and thus did not constitute anadmission that Doe was an employee through that date. 11/03/03Hr'g Tr. Doe obviously views Hawkins's continuing tax andinsurance payments as evidence that Hawkins considered him to bean active employee through June 30, 1999, and believes FirstUnum's receipt and continued retention of those premium paymentsconstituted an acknowledgment and admission that Doe was activelyemployed through that date. See id.

Doe's time sheets, provided to First Unum by Hawkins, gavefurther evidence of his employment beyond April 26, 1999. Bothparties acknowledged that Doe's time sheets for Hawkins recordedhim as working: 28 hours on "non-billable office matters" and 0.3billable hours the week beginning April 26, 1999; 35 nonbillableand 0.5 billable hours the week beginning May 3, 1999; 35nonbillable hours the week beginning May 10, 1999; and 27.8nonbillable and 7.2 billable hours the week beginning May 17,1999. Def.'s 56.1 Stmt. ¶ 85 (citing R. at FULCL00362-65); Pl.'s 56.1 Stmt. ¶ 85. There was no evidence in the Record of any workafter May 21, 1999. Def.'s 56.1 Stmt. ¶ 86; Pl.'s 56.1 Stmt. ¶86.

A December 5, 2000 letter from Plevan to First Unum stated that"it is likely that [Doe] continued to come to the office untilearly June," and that it was "ambiguous" when he ceased working.R. at FULCL00326. A July 12, 2001 letter from Plevan to Doereiterated this, and also conveyed that Hawkins's earlierstatement that April 26, 1999 was Doe's "last day `actuallyworked' . . . was based on our understanding of the facts,i.e., that you stopped doing work before you ceased being anemployee." Id. at FULCL00539. In a June 18, 2001 memorandum,Doe informed Hawkins and First Unum that he did not recallHawkins giving him a specific date to vacate his office. R. atFULCL00484.

A May 28, 1999 memorandum from Samuel Hellman ("Hellman"), apartner at Hawkins, to Doe stated: [I]t is apparent that you have not needed the services of the firm during the past month. Thus, after additional consideration, it is suggested that the firm merely pay you until the end of June and that we forward any personal items still in the office to you at your apartment address or such other location as you request. We will be happy to continue to answer any phone calls directed to you and take messages on your behalf. This will allow you to focus on your job hunting.R. at FULCL00349. In addition, the memo made reference topayments that would be deducted from Doe's "severance pay," but it did not specify the nature of that severance pay. Id. atFULCL00349-50.

Doe argued that this evidence showed that he had worked atleast through May 21, 1999. First Unum, however, characterizedthe logged hours as "mechanically record[ed]," Def.'s Opp'n [Doc.No. 21] at 11, and as "mostly non-billable time" with "minimal"billable hours, Def.'s 56.1 Stmt. ¶ 89 (quoting R. atFULCL00389). In First Unum's view, under the circumstances, theactivities recorded in the time sheets did not qualify as "activeemployment" under the terms of the Policy.

The Court found that Doe was actively employed through May 21,1999. It was undisputed that he was working until at least April20, 1999, and his time sheets revealed that he was in the officedoing work, some of it billable, until May 21, 1999. There couldbe little doubt that Doe would have been treated as a Hawkinsemployee had any of the clients for whom he did billable worksued for, say, malpractice. There was no evidence that he was notengaged in work-related activities during that time.

Hellman's May 28, 1999 memorandum is consistent with thisfinding. It made clear that Hawkins did not want Doe to come intowork anymore after it issued, but it suggested that he had beenworking before then, although perhaps not very productively. Thememorandum stated that "after additional consideration, it issuggested that the firm merely pay you until the end of June." R.at FULCL00349. This suggested a change in policy: i.e., it would be better if Doe henceforth ceased active employment. Thestatement "it is apparent that you have not needed the servicesof the firm during the past month" may have suggested that thework he was doing was of little importance or of low quality, butit did not deny that he was in fact doing work-related activitiesin the office.

3. Impact of Doe's Schizophrenia on His Job

As has already been suggested, there was also dispute as towhether, when, and to what extent Doe's schizophrenia became moreacute in the first half of 1999, and whether, under the terms ofthe Policy, he was "disabled" at a time when the Policy coveredhim. The parties agreed as to what Doe's doctors had stated, butdisagreed as to the significance and evidentiary weight of thosestatements.

On May 21, 1999, Doe met with Dr. Julian Klapowitz ("Dr.Klapowitz") for the purpose of completing some immunizationforms, and he mentioned his schizophrenia to Dr. Klapowitz. Pl.'s56.1 Stmt. ¶ 123 (citing R. at FULCL00092-93); see Def.'s Resp.¶ 123 (admitting that Doe mentioned his schizophrenia during thevisit, but emphasizing that the visit's only purpose was "for[Doe] to fill out his immunization records for his admission tothe Massachusetts Institute of Technology"). At that time, Dr.Klapowitz wrote in his notes that he would "assist getting [Doe] plugged in to Medicaid psych." Pl.'s 56.1 Stmt. at123 (quoting R. at FULCL00093).

On June 22, 1999, Doe consulted Dr. Sarita Singh ("Dr. Singh")about his schizophrenia. Pl.'s 56.1 Stmt. ¶ 118; Def.'s 56.1Stmt. ¶ 118; R. at FULCL00129. A year later, Doe would explainhis delay in seeking treatment to First Unum's customer carerepresentative as resulting from a dislike of treatment and afear of being "branded." See Def.'s 56.1 Stmt. ¶ 40 (citing R.at FULCL00056); id. ¶ 41 (citing R. at FULCL00054). Doe'sfather also attributed the delay to the debilitation caused byDoe's schizophrenia and depression. Def.'s 56.1 Stmt. ¶ 76(citing R. at FULCL00315). Dr. Singh's progress notes, quoted atlength above, described acute symptoms, so the explanation thatDoe and his father gave was more than credible. Dr. Singhprescribed medications and met with Doe again on June 29, andJuly 12, 1999. Pl.'s 56.1 Stmt. ¶ 118; Def.'s 56.1 Stmt. ¶ 118;R. at FULCL00128-29. Subsequently, on August 30, 1999, Doe sawDr. David Henderson ("Dr. Henderson"), a psychiatrist at theMassachusetts Institute of Technology. Def.'s 56.1 Stmt. ¶ 32.Dr. Henderson made a diagnosis commensurate with that of Dr.Singh, see id. ¶¶ 33-34, and stated that Doe "has a chronicillness that is not responding to treatment. He is unable to workas a lawyer." Id. ¶ 34 (quoting R. at FULCL00023).

Doe claimed that his symptoms had become sufficiently acute byApril 1999 that they made him unable to perform his duties satisfactorily, and that his schizophrenia was in fact the reasonthat Hawkins fired him. The claim for long term disabilitybenefits that Doe filed with First Unum stated that he firstbegan to notice symptoms of concentration difficulty and paranoiaon or about March 1, 1999. Pl.'s 56.1 Stmt. ¶ 125; R. atFULCL00045. Doe claimed that his growing difficulties withschizophrenia ultimately led to the termination of his employmentwith Hawkins.

Doe sent a memo to Hellman, dated May 25, 1999, in which heinformed Hawkins that he had been "accommodated on the LSAT afterproducing a diagnosis of schizophrenia" and asked "whether anydissatisfaction" with his job performance "can be traced to suchcondition." Def.'s 56.1 Stmt. ¶ 6; R. at FULCL00355. The closestHawkins came to answering that question was in Hellman's May 28,1999 memo, which stated that "we believe that your abilities maybe better used in an area of the law other than public finance."R. at FULCL00350. Doe notified Hawkins by memorandum addressed toHellman and dated July 7, 1999 (the "July 7, 1999 Memo") that heintended to file a disability discrimination lawsuit againstHawkins. Def.'s 56.1 Stmt. ¶¶ 8-9; R. at FULCL00341-46. Attachedto the July 7, 1999 Memo was a draft EEOC complaint in which Doestated: "I have been diagnosed with schizophrenia. My employer,Hawkins, Delafield and Wood ended employment either forschizophrenia or manifestations of it." Def.'s 56.1 Stmt. ¶ 10(quoting R. at FULCL00344). On January 18, 2000, Doe settled his claims against Hawkins for$10,000. Def.'s 56.1 Stmt. ¶ 13; Pl's 56.1 Stmt. ¶ 13. In thesettlement agreement, Doe "acknowledge[d] and confirm[ed] that[Doe's] employment with the firm ended effective as of June 30,1999." Def.'s 56.1 Stmt. ¶ 14 (quoting R. at FULCL00267); seePl.'s 56.1 Stmt. ¶ 14 (admitting to the release's text, butemphasizing that under the release both Hawkins and Doe agreedthat Doe "acknowledges and confirms" his effective terminationdate). The release also stated: "This Agreement does notconstitute an admission that [Hawkins] has violated any law orcommitted any wrong whatsoever." R. at FULCL00266.

First Unum's own file review, dated October 11, 2000, statedthat "[Doe] was terminated due to inability to handle theworkload, poor attention, poor concentration and diminishedsocial interactions." Pl.'s 56.1 Stmt. ¶ 120 (quoting R. atFULCL00231) (internal quotation marks omitted); Def.'s Resp. ¶120.

First Unum consistently maintained both before and during thislitigation that Doe could not be regarded as having been disabledbefore his June 22, 1999 visit to Dr. Singh, and that hiscoverage had ceased on April 26, 1999, when, according to FirstUnum, Doe's active employment ended. Doe argued that the evidencedemonstrated that he was disabled before April 26, 1999, andtherefore covered when he became disabled, and moreover that hehad been actively employed until June 30, 1999 (or at least until May 21, 1999), thus making it even clearer that he had beencovered at whatever time he became disabled.

The Court found that Doe became sufficiently disabled that hecould no longer perform his job duties by April 20, 1999. First,the medical diagnoses in the record confirmed that Doe becamedisabled some time in the first six months of 1999. Dr. Singh'snotes from Doe's June 22, 1999 visit indicated that he wassufficiently mentally ill that he was unable to "perform each ofthe material duties of his regular occupation." That diagnosiswas reconfirmed on subsequent visits to Dr. Singh and Dr.Henderson. As early as May 21, 1999, Dr. Klapowitz thought thatDoe should be "plugged in to Medicaid psych." Pl.'s 56.1 Stmt. at123. There was no evidence in the Record to controvert thesediagnoses.

Second, Doe's work record suggested April 20, 1999 as theactual date of "disability." Doe consistently maintained beforeand during this litigation that this was the last day before hisdisability made him unable to work, and there was no evidence tothe contrary. Shortly thereafter, on April 26, 1999, Hawkins toldDoe to start looking for another job. First Unum's owninvestigation found that Doe was terminated due to "inability tohandle the workload, poor attention, poor concentration anddiminished social interactions," a list of failings that bore astriking resemblance to the outward manifestations ofschizophrenia. The Court found that Doe's termination was caused by the onset of his disability, and that he was thereforenecessarily disabled before his employment terminated. The Courtdid not in any way base this finding on the settlement betweenHawkins and Doe, nor could it. See Fed.R.Evid. 408; McInnisv. A.M.F., Inc., 765 F.2d 240, 247 (1st Cir. 1985).

4. Doe's Claim for Benefits under the Policy

On October 1, 1999, several months after Doe's employment withHawkins ended, Doe filed his claim for long term disabilitybenefits, and stated that he first began to notice symptoms ofconcentration difficulty and paranoia on or about March 1, 1999.Pl.'s 56.1 Stmt. ¶ 125; R. at FULCL00045. In his claim statement,Doe reported that the first medical attention he received for hiscondition was from Dr. Singh, Def.'s 56.1 Stmt. ¶ 18 (citing R.at FULCL00044), and the only other doctor Doe reported seeing wasDr. Henderson, id. ¶ 19 (citing R. at FULCL00044). As statedabove, Doe noted in the report that his "last day worked beforethe disability" was "04/20/99." Pl.'s 56.1 Stmt. ¶ 20.

Plevan submitted the employer's statement on Hawkins's behalfand indicated that Doe's last day of work was April 26, 1999, atwhich point he had been "terminated based on job performance."Def.'s 56.1 Stmt. ¶ 25 (quoting R. at FULCL00047) (internalquotation marks omitted). Dr. Singh filled out a long termdisability claim physician's statement, dated June 30, 1999 and submitted by Doe, which indicated that Doe was first unableto work on April 20, 1999. Id. ¶ 27 (citing FULCL00013).

On June 22, 2000, First Unum's customer care representativecalled Doe to discuss his alleged disability. Id. ¶ 40 (citingR. at FULCL00056). As the Court has already noted, when Doe wasasked why he failed to seek treatment prior to June 22, 1999, heresponded that he "doesn't like" being treated by doctors, andfears being "branded." Id. ¶ 41 (quoting R. at FULCL00054). OnJuly 28, 2000, First Unum called Plevan, who again stated thatDoe's last day of work was April 26, 1999. Id. ¶ 42 (citingFULCL00075). But see Pl.'s 56.1 Stmt. ¶ 42 (admitting thatPlevan made that statement, but pointing out that she later"corrected it to state that time sheets showed he worked forclients through May 21 and that he came to the office throughearly or mid-June").

On October 11, 2000, Theresa Sullivan ("Sullivan") conducted amedical review of Doe's claim for First Unum. Def.'s 56.1 Stmt. ¶46 (citing R. at FULCL00229-31). Sullivan noted that the medicaldata did "validate" a diagnosis of schizophrenia and also notedthat Doe was undergoing biweekly meetings with Dr. Henderson.Id. ¶¶ 47, 49 (citing R. at FULCL00229 and FULCL00231). Sheconcluded, however, that Doe was "not under care of a physician"between April 21, 1999 and June 22, 1999 and thus that"[i]mpairments [were] not supported" for that time period. Id. ¶ 50 (quoting R. at FULCL00229) (alteration inoriginal).

First Unum called Plevan on October 30, 2000 to clarify Doe's"last day worked." Id. ¶ 54 (citing R. at FULCL00274). Plevanresponded that Doe "was told on 4/26/99 that his services were nolonger needed & that he should look for another position." Id.¶ 55 (quoting R. at FULCL00277) (internal quotation marksomitted). She explained that he was paid through June 30, 1999,as part of a "severance package." Id. (quoting R. atFULCL00277) (internal quotation marks omitted). Finally, Plevanstated that Doe "may [have] come into the office [after April 26,1999] for a short period of time but was not working or assignedany work." Id. ¶ 56 (quoting R. at FULCL00277) (internalquotation marks omitted).

Sullivan conducted another medical review on behalf of FirstUnum on October 31, 2000 that reiterated her initial findings.Id. ¶¶ 58-59 (citing R. at FULCL00280). Glenn Higgins, aclinical neuropsychologist, conducted an additional medicalreview of Doe's claim file for First Unum on November 1, 2000,and agreed with Sullivan's assessment. Id. ¶¶ 61-62.Specifically, he said "[Dr. Singh's notes] provide the onlymedical evidence of recent medical status [but] do not offerevidence of work impairing restrictions and limitations on thedate of disability (4/27/99)." Id. ¶ 61 (quoting R. atFULCL00281) (alteration in original) (internal quotation marks omitted). On November 3, 2000, Plevan reiterated that Doe "wasterminated [and] not an active employee" as of April 26, 1999.Id. ¶ 62 (quoting R. at FULCL00283) (internal quotation marksomitted).

On November 6, 2000, First Unum informed Doe that his claim fordisability benefits was being denied. Id. ¶¶ 63-64 (citing R.at FULCL00285-87 and FULCL00296). First, it told him that an"employee will cease to be insured on . . . the date employmentterminates," as mandated by the Policy. Id. a ¶ 65 (quoting R.at FULCL00286) (internal quotation marks omitted). First Unumacknowledged that Doe was "diagnosed with schizophrenia," id. ¶66 (quoting R. at FULCL00286) (internal quotation marks omitted),but stated: [W]e do not have any objective medical evidence to suggest that this medical condition restricts or limits you from performing the material duties of your occupation from your last day worked, April 26, 1999, to the date of your June 22, 1999 office visit with Dr. Singh. In addition, since your employment terminated on April 26, 1999, which is prior to your treatment, you were no longer in an eligible insurance class, as defined by your Policy. Therefore, it is our conclusion [that] benefits are not payable under your Policy.Id. ¶ 67 (quoting R. at FULCL00286) (alteration in original)(internal quotation marks omitted).

Doe appealed First Unum's denial of benefits and his father,Bernard Doe, also submitted a letter, id. ¶ 74 (citing R. atFULCL00314-16), arguing that "neither did [Doe's] disabilitybegin on June 22, 1999, nor his employment end on April 26, 1999." Id. ¶ 75 (quoting R. at FULCL00316) (internal quotationmarks omitted). First Unum conducted another review of allpertinent information, including Doe's billing records, andconcluded that Doe was "not in active employment as of April 27,1999." Id. ¶ 91 (quoting R. at FULCL00387) (internal quotationmarks omitted). First Unum therefore affirmed its denial ofbenefits. Id. ¶ 93 (citing R. at FULCL00386).

Doe went on to make three additional appeals, all of which weredenied. Doe's second appeal was by letter dated April 5, 2000.Id. at 94 (citing R. at FULCL00393). On the same date, BernardDoe submitted a letter to First Unum, id. at 95 (citing R. atFULCL00397-98), urging that Doe worked more time than the Hawkinstime records suggested "because `[Doe] billed for a tiny fractionof the time worked. To do otherwise would have been not onlyunethical, but for some matters pointless,' due to allegedbilling caps." Id. ¶ 96 (quoting R. at FULCL00397). First Unumnoted that "[Doe] did not provide any additional medical recordsor evidence that he satisfied the definition of disabilitycontained in the Policy as of April 1999." Id. ¶ 97. By letterdated June 14, 2001, First Unum again affirmed its denial ofbenefits. Id. ¶ 98 (citing R. at FULCL00477). In that letter,First Unum stated: [S]ubsequent to April 26, 1999, you were not in active employment as required by the Policy. Further, the medical documentation in the file does not show that you were under the regular attendance of a physician as of April 26, 1999 and the medical evidence does not support restrictions or limitations at that time. Thus, you do not meet the definition of disability as defined by the Policy provisions and you are not entitled to disability benefits.Id. ¶ 101 (quoting R. at FULCL00475) (internal quotation marksomitted). Doe's third appeal, by memorandum dated June 18, 2001,was denied by letter dated July 13, 2001. Id. ¶¶ 102, 105(citing R. at FULCL00481-87 and FULCL00534). Doe made a fourthappeal, by memorandum dated July 19, 2001, but in a letter datedthe next day, First Unum refused to conduct a fourth appellatereview. Id. ¶¶ 105, 108 (citing R. at FULCL00540 andFULCL00548).

II. DISCUSSION

A. Standard of Review

Courts review a denial of benefits under an ERISA-governedbenefits plan de novo, unless the plan "gives the administratoror fiduciary discretionary authority to determine eligibility forbenefits or to construe the terms of the plan," in which case thequestion is whether the denial was arbitrary and capricious.See Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101,114-15 (1989); Recupero v. New England Tel. & Tel. Co.,118 F.3d 820, 826-27 (1st Cir. 1997). The Court agrees with theparties that the Policy gives First Unum no such discretionaryauthority, so a de novo standard applies.

Recupero further clarifies the terminology. Under Recupero,even in cases where the arbitrary and capricious standard of judicial review applies, review of decisions by planadministrators or fiduciaries "is also to be `de novo review'to assure compliance of the out-of-court decisionmakers withstandards of conduct analogous to those applied to trustees underjudicially developed law." 118 F.3d at 827. Thus, Recuperorecognizes that there are two elements of judicial review in thiscontext: the depth of the inquiry into the factual and legalbases for the decision under review, and the standard thatdecision must meet. In all ERISA cases, the inquiry should besearching, that is "de novo," but in cases where anERISAgoverned plan gives the administrator or fiduciarydiscretion, the question is whether the decision under review wasreasonable, whereas in cases where no such discretion is vested,the question is whether the decision was correct.

The Court dwells on Recupero in part because it is easy totake statements made in that case out of context. For example,when the Recupero court stated that the phrase "`de novoreview,' as used in the context of judicial review ofout-of-court decisions of ERISA-regulated plan administrators orfiduciaries does not mean that a district court has `plenary'jurisdiction to decide on the merits, anew, a benefits claim," itwas apparently referring to cases where an administrator orfiduciary has discretion. Id. at 827. "Plenary" jurisdictionrefers to a court's power to "disregard completely" the findingsof an administrator or fiduciary and to "decide anew allquestions of fact bearing on the merits of the benefits claim." Id. at 828.It appears that the Recupero court was simply clarifying that,even though courts examine the factual and legal bases of anadministrator's or fiduciary's determination de novo, they arenot empowered to overturn an incorrect but reasonable decision incases where the plan vests the administrator or fiduciary withdiscretion. See id. at 827-28.

B. Summary Judgment and Treatment as a Case Stated

Cases challenging denial of benefits under an ERISA-governedplan frequently reach a stage where the parties file crossmotions for summary judgment. In many instances, however,resolution of the case rests primarily or exclusively onevaluation of the administrator's or fiduciary's decision inlight of the record it had before it, a record that is typicallyalready before the court at the summary judgment stage. Shouldsuch cases proceed past the summary judgment stage, the "trial"may well consist of nothing more than presentation of theadministrative record to the same judge who considered it at thesummary judgment stage, because neither party is likely to have aright to a jury trial. See Liston v. Unum Corp. OfficerSeverance Plan, 330 F.3d 19, 24 & n. 4 (1st Cir. 2003). Althoughthe First Circuit has largely reserved questions regarding the availability of jury trials in ERISA cases, it has specificallyheld that jury trials are unavailable in cases where decision isbased entirely on an agreed administrative record and anarbitrary and capricious standard applies. Recupero, 118 F.3dat 831-32.

ERISA cases based solely or even primarily on theadministrative record are thus uniquely fit for pre-trialresolution. In fact, when an arbitrary and capricious standard ofreview applies and review is based solely on an agreedadministrative record, summary judgment "is merely a mechanismfor tendering the issues and no special inferences are to bedrawn in favor of a plaintiff resisting in summary judgment."Liston, 330 F.3d at 24. In cases where a de novo standard ofreview applies, however, the ordinary summary judgment standardapplies. See Hughes v. Boston Mut. Life Ins. Co.,26 F.3d 264, 268 (1st Cir. 1994); see also Golden Rule Ins. Co. v.Atallah, 45 F.3d 512, 517 n. 6 (1st Cir. 1995) (noting thatHughes applied the summary judgment standard in such a case).Under that standard, the Court would have to view the evidence inthe light most favorable to the non-moving party and draw allreasonable inferences in its favor. Eastman Kodak Co. v. ImageTechnical Servs., Inc., 504 U.S. 451, 490 (1992).

Often a court will encounter a situation where it could resolvethe case if acting as a "neutral factfinder," but cannot resolvethe case if it evaluates each of the cross motions for summary judgment under the ordinary standard. There is thus atemptation to "cheat" a little — to apply the summary judgmentstandard more loosely than is appropriate in order to resolvethese cases. Professor Arthur R. Miller has made a persuasiveargument that federal courts in general have gotten tooaggressive in using summary judgment and dismissal to dispose ofcases, at the expense of litigants' right to their day in courtand to a jury trial. See Arthur R. Miller, The Pretrial Rushto Judgment: Are the "Litigation Explosion," "Liability Crisis,"and Efficiency Cliches Eroding Our Day in Court and Jury TrialCommitments?, 78 N.Y.U.L. Rev. 982 (2003). This Court sharesProfessor Miller's concerns.

Rather than risk creating bad summary judgment precedent thatmight bleed into other areas of the law, courts should urge theparties in ERISA benefits cases to agree to treat their case as acase stated. See Boston Five Cents, 768 F.2d at 11-12. Thispermits a court to decide a case based on a stipulated record,without applying the summary judgment standard. The court simplydraws such inferences as are reasonable from the facts. Even inthis case, where the parties did not agree about the scope of therecord, they were able to agree that the summary judgmentstandard would not apply.

C. The Public Responsibility of ERISA Plan Administrators andFiduciaries, and the Role of the Courts Before delving into the merits, some general comments aboutERISA cases are in order. The decisions whether and how to ensurethat disability does not lead to poverty are obviously of greatsocietal importance. In this country, although we provide limiteddisability insurance through Social Security, we rely primarilyon private insurance, typically in the form of disabilitybenefits plans administered by insurance companies under contractwith employers. A number of current trends suggest that ifanything, the role of Social Security may diminish in the comingyears, perhaps ultimately ceding the field entirely to privateinsurance.

The benefits of relying on private insurers to carry out thisessential public function may be considerable, and Congress hasobviously decided that they outweigh the costs. The profit motivemay well drive private insurers to tailor plans to beneficiaries'needs, evaluate risk, and cut waste and inefficiency moreeffectively than a government bureaucracy would. The governmentcan in many cases accomplish public purposes effectively throughreliance on choice and competition.

There are also obvious drawbacks to relying on privateinsurers, however. Although the profit motive drives companiestoward efficiency, it creates a substantial risk that they willcut costs by denying valid claims. The market is somewhat inaptto punish insurers for engaging in such practices, particularlyif the denials are not too flagrant, because the complexity of the insurance market and the imperfect information available toconsumers make it difficult to determine whether an insurer iskeeping its costs down through legitimate or illegitimate means.An individual claimant who encounters an insurance company thatis disposed to deny valid claims must struggle to vindicate hisrights at a time when he is at his most vulnerable. Often a newlydisabled person will simultaneously confront increased medicalbills and either termination of employment or diminished pay.

The judiciary provides a check on these potential abuses; underERISA, aggrieved claimants can seek redress in the courts ofjustice. Congress and the courts have made two decisions,however, that limit this checking effect. The first is to placelimitations on judicial review of plan administrators' andfiduciaries' decisions similar to the ones placed on judicialreview of governmental agency action, even though, unlikeofficials in governmental agencies, administrators andfiduciaries are not answerable to the public or to electedofficials. Second, and perhaps more troubling, the courts haveinterpreted ERISA to restrict or eliminate the role of juries indeciding disputes between claimants and insurers. See Liston,330 F.3d at 24 & n. 4; Andrews-Clarke v. Travelers Ins. Co.,984 F. Supp. 49, 63 & n. 74 (D. Mass. 1997). In the process, theyhave removed one of the most important guarantees of fairness inthe judicial process. It is the jury to which the founders of this nation turned tofill the role of impartial fact finder. Its primacy is guaranteedby the Constitution,9 and the American jury system is ourmost vital day-to-day expression of direct democracy.10There is no other routine aspect of our civic existence todaywhere citizens themselves are the government. Moreover, beyondinvolving citizens directly in one of the most fundamentalprocesses of government, the jury system "injects communityvalues into judicial decisions" and "allows equitable resolutionof hard cases without setting a legal precedent."11Moreover, jurors' "very inexperience is an asset because itsecures a fresh perception of each trial, avoiding thestereotypes said to infect the judicial eye."12 InMassachusetts, Mme. Justice Abrams has summed up the jury'senormous contribution as follows: [T]he jury system provides the most important means by which laymen can participate in and understand the legal system. "It makes them feel that they owe duties to society, and that they have a share in its government. . . . The jury system has for some hundreds of years been constantly bringing the rules of law to the touchstone of contemporary common sense."13

Without juries, the pursuit of justice becomes increasinglyarchaic, with elite professionals talking to others, equallyelite, in jargon the eloquence of which is in direct proportionto its unreality. Juries are the great leveling and democratizingelement in the law. They give it its authority and generalizedacceptance in ways that imposing buildings and sonorous openingscannot hope to match. Every step away from juries is a step whichultimately weakens the judiciary as the third branch ofgovernment.14

Juries take their charge seriously, and strive to apply the lawhonestly and fairly to the facts of the case before them,infusing practical knowledge of ordinary life and theexpectations of ordinary people into the administration ofjustice. In the federal courts, of course, all judges arelawyers. A judge can thus draw only on that rather more narrowand unrepresentative life experience in determining what is "fair" or "reasonable," whereas juries can draw on the variedexperiences of several people from different walks of life. Thismultitude of perspectives is much more apt to produce a justresult in most cases. Therefore, to the extent that a judgedecides an ERISA case differently than would a jury from thecommunity, he may well be producing a factually erroneous result,likely to the detriment both of individual claimants particularlyand of the integrity of the private disability insurance systemgenerally.

The Court's observations about disability benefits plans andthe legal regime governing them lead to two conclusions. First,administrators and fiduciaries have important publicresponsibilities. While they have a duty to shareholders to seekprofit, they must do so with an awareness of the essentialfunction that they perform in society, and of the comparativelylimited oversight they receive from public institutions. Theymust avoid the temptation to improve their bottom line by denyingvalid claims. Second, the courts must decide these cases with anawareness of the social policies at stake, the failures in theparticular market in question, and the possibility that judges,who lack the ordinary life experience of juries, maysystematically err in their evaluations of what is reasonable andfair. With this background understanding in mind, the Court turnsto the merits. D. Doe's Release of Claims against Hawkins Does Not Apply toClaims against First Unum

First Unum belatedly filed a Supplemental Motion for SummaryJudgment [Doc. No. 30], which it provided to the Court and toRadford at the November 3, 2003 summary judgment hearing. FirstUnum explained that Doe had entered into an Agreement and GeneralRelease with Hawkins, in which he released Hawkins and its agentsfrom future claims, and then argued that First Unum, as an agentof Hawkins, was released as well. See Def.'s Supp. Mot. & Mem.at 1.

Because First Unum failed to raise this defense in its Answer,see Answer [Doc. No. 3], it could not raise it at the summaryjudgment stage. Release is an affirmative defense, enumeratedunder Federal Rule of Civil Procedure 8(c), and in general,failure to raise an affirmative defense in the original pleadingsconstitutes a waiver of the defense. See Fed.R.Civ.P. 8(c);Knapp Shoes, Inc. v. Sylvania Shoe Mfg. Corp., 15 F.3d 1222,1226 (1st Cir. 1994); Federal Deposit Ins. Corp. v.Ramirez-Rivera, 869 F.2d 624, 626 (1st Cir. 1989). None of theexceptions to this general rule applied here. For example,although the First Circuit excuses noncompliance with Rule 8(c)where a defense "has been fully tried under the express orimplied consent of the parties, as if it had been raised in theoriginal responsive pleading," Ramirez-Rivera, 869 F.2d at626-27, here Radford had insufficient opportunity to "try" theissue at the November 3, 2003 summary judgment hearing, and explicitlyobjected to First Unum's belated raising of the defense. SeePl.'s Opp'n to Def.'s Supp. Mot. [Doc. No. 31] at 2. Similarly,"when there is no prejudice and when fairness dictates, thestrictures of [Rule 8(c)] may be relaxed," Jakobsen v.Massachusetts Port Auth., 520 F.2d 810, 813 (1st Cir.1975),15 but here Radford did not receive adequatenotice, and was also prejudiced insofar as it had insufficientopportunity to do any necessary factual investigation or toaddress the defense in oral argument.

In any case, First Unum's argument was utterly without merit.It is hornbook law that "the distinction between the servant oragent relationship and that of independent contractor turn[s] onthe absence of authority in the principal to control the physicalconduct of the contractor in performance of the contract."Logue v. United States, 412 U.S. 521, 527 (1973); seealso Restatement (Second) of Agency § 1 & cmt. b (1958).Hawkins had no power to control First Unum's actions inadministering the Plan, so First Unum was not Hawkins's agent.

Like any litigant, First Unum is of course free to defend itsconduct with good faith arguments when its actions are challengedin court. This right does not, however, extend to the advancement of frivolous arguments that can only result in addedexpense and delay, and such conduct is particularly inconsistentwith an ERISA plan administrator's or fiduciary's publicresponsibilities.

E. Doe's Coverage under the Policy16

1. Application of the Contra Proferentum Rule

At the outset, the Court notes that the contra proferentumrule requires that ambiguous terms in the Policy be construedagainst First Unum. Although First Unum claimed at oral argumentthat the rule does not apply to ERISA-governed plans, the FirstCircuit has explicitly held otherwise, at least in cases wherethe plan does not vest the administrator or fiduciary withdiscretionary authority. See Hughes, 26 F.3d at268.17 The Court merely notes the contra proferentum rule's applicabilityfor the sake of completeness, however, because nothing in theCourt's analysis or holdings would change if the rule did notapply.

2. Doe's Eligibility for Benefits under the Policy

Under the Policy, "disability" and "disabled" were defined tomean that "the insured cannot perform each of the material dutiesof his regular occupation." R. at FULCL00677. Under a separateprovision governing payment of benefits: "When [First Unum]receives proof that an insured is disabled due to sickness orinjury and requires the regular attendance of a physician, [FirstUnum] will pay the insured a monthly benefit after the end of theelimination period." Id. at FULCL00675. Coverage terminated,inter alia, when active employment ended or when the insuredceased to be a member of an insured class, except that if anemployee became disabled before one of those things happened,coverage extended through the elimination period and for as longas benefits were paid under the Policy. Id. at FULCL00669. From the date of First Unum's initial denial of benefits, thecompany consistently maintained that these provisions, readtogether, meant that Doe's failure to submit proof that he hadseen a physician before his active employment ended meant that hewas ineligible for benefits. See, e.g., Def.'s 56.1 Stmt. ¶ 67.In other words, First Unum maintained that an insured was not"disabled" under the Policy until he submitted proof of regularattendance of a physician, so failure to submit such proof beforebeing fired meant that coverage terminated before the insuredbecame disabled. This was also the primary position it maintainedin filings with the Court. See Def.'s Opp'n at 5-9; Def.'s Mot.for Summ. J. & Mem. [Doc. No. 13] at 14-15. At the November 3,2003 summary judgment hearing, the Court pressed First Unum onthis point, noting that under the company's interpretation, itcould easily happen that an employee could be fired fordisability before ever having a chance to see a doctor. 11/03/03Hr'g Tr. First Unum revised its position then, suggesting thatthe company would be required to pay benefits if proof ofattendance by a physician were provided within a "reasonable"period of time after termination. Id. First Unum had alsooffered this as an alternative reading in its papers, suggestingthat even if its interpretation of the Policy were incorrect, ithad been justified in treating as probative the fact that Doe"sought absolutely no medical attention for his condition until months after he actually stopped working." Def.'sOpp'n at 7.

The record made plain that the interpretation First Unumproffered at the hearing and as an alternative argument in itsfilings was not the one it applied to Doe's claim. First Unum'soriginal denial of benefits stated that Doe was "not under careof a physician" between April 21, 1999 and June 22, 1999 (thedate when he visited Dr. Singh), and thus that "[i]mpairments[were] not supported" for that time period. Id. ¶ 50 (quotingR. at FULCL00229) (alteration in original). Thus, in First Unum'sview, Doe could not prove disability before the date of his firstvisit to a physician. If First Unum had merely been treatingattendance of a physician as probative of disability, rather thanas a prerequisite for finding disability, then it at least wouldhave considered the possibility that Doe was "disabled" as of thedate he made his appointment with Dr. Singh, or as of someearlier date. First Unum did not consider that possibility, nordid it even consider Dr. Singh's evaluation of when Doe'sschizophrenia began to become more acute; all that mattered wasthe date on which she made her diagnosis.

First Unum's interpretation defied the Policy's plain language.Regular attendance of a physician was in no way built into thedefinition of "disability" or "disabled." Even the provisionrelating to proof that regular attendance of a physician wasrequired distinguished between that requirement and proof of disability; it stated that First Unum would providebenefits when it "receives proof that an insured is disabled . . .and requires the regular attendance of a physician." R. atFULCL00675 (emphasis added). It is worth noting that theprovision did not even require proof that a physician visit hadoccurred, but simply a demonstration that the condition wassevere enough to "require" such visits. Obviously, a doctor'sdiagnosis of schizophrenia would be highly probative thatdisability began at least on the date of diagnosis, but there wasnothing in the Policy to suggest that it was impossible to provedisability before the date of diagnosis, or that unless a visitto a physician occurred before active employment terminated, anemployee was ineligible for benefits.

The Policy also stated that "[t]he benefit will pe paid for theperiod of disability if the insured gives to the Company proof ofcontinued: 1. disability; and 2. regular attendance of aphysician." R. at FULCL00675. The obvious meaning of thisprovision was that once a claimant had established disability andeligibility for receipt of benefits, to continue to receivebenefits she had to continue to see a doctor and to submit proofof her visits to the Company, in order to show that she remainedeligible. First Unum could not rely on this provision to arguethat failure to visit a doctor before active employment endedrendered an employee ineligible for benefits. First Unum's approach was not even coherent. The companyalternated between separating and conflating the provisionsgoverning eligibility for benefits and the administrativerequirements for receipt of benefits. First Unum did notinterpret the provision mandating proof of a disability requiringregular attendance of a physician to mean that if proof weresubmitted after employment ceased, there would be no coverage. Aslong as the proof submitted showed that disability began whilethe claimant was employed, the claimant could receive benefits.In this regard, First Unum was treating the eligibility andreceipt provisions as separate. Then, however, First Unumimported the idea of regular attendance of a physician into thedefinition of "disabled," thus conflating the two provisions.

Moreover, as the Court suggested at oral argument, First Unum'sinterpretation would lead to obviously absurd results. Coverageunder the Policy terminated when active employment ceased. It isnot uncommon for a disability to lead to the cessation of activeemployment, and unfortunately, it is far from unheard of for acompany, in good faith or otherwise, to fire an employee when hebecomes disabled. The availability of benefits under the Policycannot turn on the accident of whether the insured was fortunateenough to get to see a doctor before employment terminated. Inmany cases, even if an insured sought a doctor's appointmentimmediately upon becoming disabled, there is no guarantee thatthe doctor could schedule him promptly. Moreover, given that employment termination is more likely tooccur swiftly after the onset of a major disability than afterthe onset of a minor one, First Unum's interpretation would makethe most severely disabled the least likely to receive coverage.These are precisely the people whom the Policy was most designedto protect, and often their impairments are the easiest toverify.

The more reasonable interpretation closely resembled the onethat Radford proposed. See Pl.'s Mem. Opp'n at 7-8. To qualifyfor coverage, an insured had to have become "disabled" in someobjectively verifiable way before the date that coverageterminated. A claimant had to submit proof of that disability andthat regular attendance of a physician was required in order tobegin receiving benefits, and periodically had to submit proof ofcontinuing attendance by a physician to continue receivingbenefits. Proof of actual attendance by a physician was aprerequisite for continuing receipt of benefits once a claimantqualified, not for establishing the date when disabilitybegan.18

After interpreting the Policy's terms, the Court then had todetermine when Doe became "disabled," as the Policy defines thatterm. It was clear from the record that Doe became disabledbefore his active employment ceased, and that he was therefore entitled to receive benefits under the Policy (assuming hecomplied with relevant requirements).

More specifically, the record showed that Hawkins fired Doebecause his schizophrenia had rendered him unable to "performeach of the material duties of his regular occupation," so Doewas necessarily "disabled" before Hawkins made its decision toterminate him, and that decision was made no later than April 26,1999. Doe consistently maintained that April 20, 1999 was the dayon which his schizophrenia became sufficiently acute that hecould not perform his job, and this was consistent with thetermination that followed only days later. As has already beenstated, the Court found that Doe was actively employed until May21, 1999, and that Hawkins's April 26, 1999 decision to terminateDoe's employment was based on increasing manifestations of Doe'sschizophrenia. First Unum itself conceded that Doe's activeemployment did not end before April 26, 1999. See, e.g., Def.'sMot. for Summ. J. & Mem. at 12-13.

There could be little doubt that as of April 20, 1999, Doe wasunable to perform the "material duties of his regularoccupation." Of the "material duties" of a lawyer's "regularoccupation," this Court could not imagine a single one that doesnot require some combination of ability to handle the requiredworkload, attention, concentration, and social interaction.Research, writing, and the other analytical tasks that any lawyerperforms involve the first three, and consultation with clients and colleagues involves the last three. Public finance lawyersare no different from other members of the bar in these respects.First Unum conceded that "[Doe] was terminated due to inabilityto handle the workload, poor attention, poor concentration anddiminished social interactions," Pl.'s 56.1 Stmt. ¶ 120 (quotingR. at FULCL00231) (internal quotation marks omitted); Def.'sResp. ¶ 120, and the record demonstrates that these failuresresulted from Doe's increasingly acute schizophrenia. Thus,Hawkins decided that Doe no longer possessed the qualities thatwere necessary for him to perform the material aspects of hisjob.

First Unum tried to trap Doe in a Catch-22, arguing thatbecause Doe maintained that he continued to work full timethrough at least May 21, 1999, he could not have been "disabled"during that period. Def.'s Opp'n at 3-4. This was pure sophistry.Of course, if First Unum had accepted the premise that Doe workedfull time until May 21, 1999, it would have had to accept that heremained eligible under the Policy until that date, and it wouldthen have had to argue that Doe's schizophrenia suddenly appearedbetween that date and June 22, 1999, when Doe visited Dr. Singh.More to the point, First Unum conflated the definitions of"disability" and "active employment." "Active employment" merelyrequired that the employee work full-time at regular pay, or atleast thirty hours per week at Hawkins's office or any placeHawkins required an employee to travel. The definition in no way required that workdone during this time be satisfactory, or that the employee beproductive. "Disability," on the other hand, related to thequality of an employee's work. Presumably, a "material duty"included a requirement that the relevant tasks be performedsatisfactorily. Thus, if Doe spent a full forty-hour weekproducing a research memorandum that the average associate wouldbe expected to finish in ten hours, he would be "activelyemployed," even though he could not perform that material duty.If the speed and quality of Doe's work in all material areas werelow enough, he would be "disabled," even if he were "activelyemployed."

Under First Unum's argument, a schizophrenic employee could notbecome "disabled" until the moment he stopped working. Of course,if he had not yet seen a doctor regarding his condition, FirstUnum believed that he would become forever ineligible forbenefits the moment he stopped working. This could not possiblybe the correct interpretation of the Policy.

Thus, the evidence in the record showed that Doe became"disabled" under the terms of the Policy as of April 20, 1999(certainly no later than April 26, 1999), and that he ceasedactive employment on May 21, 1999 (certainly no earlier thanApril 26, 1999). The nexus between the end of Doe's employmentand the onset of "disability," as defined under the Policy, wassuch that no reasonable interpretation of the record could place Doe's date of disability after the date his active employmentended.

First Unum's conduct in denying Doe's claim was entirelyinconsistent with the company's public responsibilities and withits obligations under the Policy. This is not the first time thatFirst Unum has sought to avoid its contractual responsibilities,and an examination of cases involving First Unum and Unum LifeInsurance Company of America, which like First Unum is aninsuring subsidiary of Unum Provident Corporation,19reveals a disturbing pattern of erroneous and arbitrary benefitsdenials, bad faith contract misinterpretations, and otherunscrupulous tactics.20 These cases suggest that segments [EDITORS' NOTE: THIS PAGE CONTAINED FOOTNOTES.] that have run in recent years on "60 Minutes" and "Dateline,"alleging that Unum Provident "regularly declines disabilityclaims as a way of boosting profits," may have been accurate.See Edward D. Murphy, Unum Corp. Retirees Feeling a "Sense ofLoss," Portland Press Herald, Apr. 29, 2003, at 1C. This Courtcannot tell whether First Unum and other Unum Provident companiesare considered pariahs in the industry, or whether their abilityto retain customers is a result of low prices, market inefficiency, or other factors. In either case, employers have aduty to select insurers for their employees with care, and toavoid hiring insurers with reputations for shoddy and hostileclaims administration, although it may well be that suits basedon violation of this duty are preempted under ERISA.

F. Other Grounds for Denying Doe's Claim

Beyond what the Court has discussed here, First Unum failed topreserve any other argument for denying Doe's claim. Whileevaluating Doe's claim and subsequent appeals, First Unum reliedexclusively on its assertion that Doe had not become disabledbefore his coverage terminated. In proceedings before this Court,First Unum did not argue any grounds for its position other thanthose which the Court has discussed. Thus, any alternativearguments have been waived. See Fed.R.Civ.P. 8(c); KnappShoes, 15 F.3d at 1226; Ramirez-Rivera, 869 F.2d at 626.

G. Remand Would Be Inappropriate

First Unum argued that to the extent that the Court decidedthat the company had erred in denying Doe's benefits claim, theappropriate course would be to remand to First Unum for adetermination whether Doe's disability had rendered him unable to"perform each of the material duties of his regular occupation,"and whether, if eligible for benefits at the end of theElimination Period, he had remained eligible during the months thereafter. Def.'s Opp'n at 18 n. 5. First Unum never reached theformer issue, because it determined that when Doe's allegeddisability commenced, he was no longer in an eligible class ofemployees because his active employment had terminated. Seeid. Doe considered remand inappropriate. Pl.'s Supp. Resp.[Doc. No. 26] at 8-9.

According to the First Circuit, "[o]nce a court finds that anadministrator has acted arbitrarily and capriciously in denying aclaim for benefits, the court can either remand the case to theadministrator for a renewed evaluation of the claimant's case, orit can award a retroactive reinstatement of benefits." Cook v.Liberty Life Assurance Co., 320 F.3d 11, 24 (1st Cir. 2003).There is no reason to believe that district courts should be morereluctant retroactively to award benefits in cases of de novoreview than in cases that involve arbitrary and capriciousreview. If anything, the opposite should be true; the lessdiscretion a non-judicial decisionmaker has in reaching adecision, the less intrusive it is for a reviewing court to awardrelief to a claimant directly. A useful analogy can be found inmandamus, which most commonly lies to compel performance of "aclear nondiscretionary duty." See, e.g., Heckler v. Ringer,466 U.S. 602, 616 (1984) (exemplifying this more "orthodox"view). Although the appropriate use of mandamus is contested,see 4 Kenneth C. Davis, Administrative Law Treatise § 23.12at 169, § 23.7 at 155 (1983) (discussing the "orthodox" view of mandamus and the broader view that some Supreme Courtcases have taken), there can be little doubt that the lessdiscretion the official in question has, the more appropriate ismandamus relief.

Cook also makes clear that district courts have remedialdiscretion regardless of whether the case involves denial ortermination of benefits. The First Circuit laid out the relevantprinciples through quotations from cases in other circuits,although it "acknowledge[d] that several of these quotations mayoverstate the matter": "[R]etroactive reinstatement of benefitsis appropriate in ERISA cases where, as here, but for [theinsurer's] arbitrary and capricious conduct, [the insured] wouldhave continued to receive the benefits or where there [was] noevidence in the record to support a termination or denial ofbenefits." 320 F.3d at 24 (alterations in original) (quotingGrosz-Salomon v. Paul Revere Life Ins. Co., 237 F.3d 1154,1163 (9th Cir. 2001) (quoting Quinn v. Blue Cross & BlueShield Ass'n, 161 F.3d 472, 477 (7th Cir. 1998))) (internalquotation marks omitted). Moreover, "a remand of an ERISA actionseeking benefits is inappropriate where the difficulty is notthat the administrative record was incomplete but that a denialof benefits based on the record was unreasonable." Zervos v.Verizon N.Y., Inc., 277 F.3d 635, 648 (2d Cir. 2002) (internalquotation marks omitted) (quoted with approval in Cook, 320F.3d at 24). "We do not agree, however, that a remand to the plan administrator is appropriate in every case." Levinson v.Reliance Standard Life Ins. Co., 245 F.3d 1321, 1330 (11th Cir.2001) (quoted with approval in Cook, 320 F.3d at 24). Finally,"a plan administrator will not get a second bite at the applewhen its first decision was simply contrary to the facts."Grosz-Salomon, 237 F.3d at 1163 (quoted with approval inCook, 320 F.3d at 24).

The Cook court emphasized the "considerable discretion" thatdistrict courts have, even if "in some situations a districtcourt, after finding a mistake in the denial of benefits, couldconclude that the question of entitlement to benefits for a pastperiod should be subject to further proceedings before the ERISAplan administrator." 320 F.3d at 24. It suggested that remand isless appropriate where a denial was particularly flagrant orwhere it is likely that once the plan administrator corrects theerrors in its decision, the proper result will be again to denybenefits for some or all of the relevant period. Id.

In this case, First Unum's denial was flagrant. The companyadopted a patently unreasonable interpretation of the Policy andreached a decision that was plainly contrary to the facts in therecord before it. First Unum's conduct also resulted in years ofdelay in distribution of Doe's benefits, and it is by no meansclear that First Unum can be trusted fairly to adjudicate Doe'sclaim on remand Even if the Court could trust First Unum, and even if the company had acted in good faith, further delay wouldmerely have added to the injustice that Doe has already suffered.

The specific facts and holding of Cook provided furtherguidance to the Court. In that case, a plan administrator hadterminated benefits for a claimant who allegedly suffered fromchronic fatigue syndrome. See Cook, 320 F.3d at 13. Inaffirming the district court's decision both to reverse theadministrator's decision and to retroactively award benefits,despite the fact that the claimant had provided no evidence ofdisability in the period following the termination, the FirstCircuit emphasized the unfairness of requiring the claimant togather such information "on the off chance that she might prevailin her lawsuit." Id. at 25. The First Circuit also approved ofthe district judge's reasoning that the hardships created bywrongful termination of a claimant's benefits might makereconstruction of evidence of disability during the relevantperiod difficult. Id.

As with chronic fatigue syndrome, mental illness and its impacton capacity to work typically present more difficult proofproblems than physical injuries. Had First Unum acted responsiblyin the first instance, it could have further investigated theimpact of Doe's schizophrenia on his ability to perform hisduties while the evidence was more easily obtainable, and upondetermining that Doe was eligible to receive benefits, First Unumwould have received continuing proof of disability and regular attendance of a physician. Were the Court to remand toFirst Unum now, when the original events are five years distant,Doe would face possibly insurmountable difficulties of proof.First Unum should not be given the opportunity to profit from itswrongdoing, and Doe should not have to do without needed benefitsany longer. Even if First Unum had acted reasonably and in goodfaith, the long delay and difficulties of proof would favorretroactive reinstatement, rather than remand

The Court therefore held that Doe was entitled to receivebenefits under the Policy as of October 17, 1999, and for thetwenty-four months thereafter, and that Radford was entitled tocollect on Doe's behalf. October 17, 1999 was 180 days (thelength of the Policy's Elimination Period) after April 20, 1999,the date this Court fixed for the beginning of Doe's disability.Twenty-four months was the maximum period for receipt of benefitsfor disability due to a "mental illness," with certain exceptionsrelating to confinement in a hospital or institution after thatperiod. To the extent that Doe might have considered hisschizophrenia a physical disability rather than a mental illness,or to the extent that he might have had claims for confinementafter the twenty-four months, neither issue had been presented toFirst Unum, and no record was before the Court. Even in caseswhere an administrator or fiduciary has violated its obligationsas flagrantly as has First Unum, there are limits on a districtcourt's remedial discretion, and reaching those questions in this case would have exceeded the bounds of that discretion. SeeJones v. Unum Life Ins. Co. of America, 223 F.3d 130, 140-41(2d Cir. 2000).

The Court further held that for purposes of paying Doe'sbenefits, First Unum had to treat Doe as having been continuallydisabled between that date and the current date, and as havingcomplied with any requirements under the Policy for continuedreceipt of benefits. To the extent that Doe remained qualifiedfor continuing receipt of disability benefits after March 31,2004 (the date of the Court's Order and Judgment), the Court heldthat he had to comply with such requirements as the Policyimposed to receive benefits from that date forward. This was thesame approach that the Cook court took. 320 F.3d at 24-25.

Similarly, although any decision whether Doe's disability was a"mental" or a "physical" one was for First Unum to make in thefirst instance, the Court held that should First Unum or anycourt or other entity with the power to pass on such mattersdetermine that Doe's disability is a "physical" one, entitlinghim to receive benefits for the length of his disability, hewould have to be treated as if that determination had been madebefore his eligibility for receipt of benefits for "mental"disability expired. This was simply a logical extension of theCourt's presumption that Doe was disabled from April 20, 1999until March 31, 2004. Had First Unum acted responsibly, it couldhave determined how to characterize Doe's disability during the twenty-four months of coverage. Had First Unum decided thedisability was "physical," benefits would have continued withouta break, and had First Unum decided it was "mental," Doe wouldhave had an opportunity promptly to appeal and, if he prevailed,to receive benefits with little or no interruption.

H. Prejudgment Interest

Prejudgment interest is available but not obligatory in ERISAcases. See Cottrill v. Sparrow, Johnson & Ursillo, Inc.,100 F.3d 220, 223 (1st Cir. 1996) (citing Quesinberry v. LifeInsurance Co. of North America, 987 F.2d 1017, 1030 (4th Cir.1993) (en banc)). District courts have considerable discretion indetermining whether to award interest, as well as in determiningthe appropriate period and rate. Cottrill, 100 F.3d at 223. Inexercising that discretion, courts should consider the generalpurposes of prejudgment interest, as well as ERISA's twin goalsof making claimants whole and preventing unjust enrichment byadministrators or fiduciaries who wrongfully withhold benefits.See id. at 224; see also West Virginia v. UnitedStates, 479 U.S. 305, 310 n. 2 (1987) ("Prejudgment interestserves to compensate for the loss of use of money due as damagesfrom the time the claim accrues until judgment is entered,thereby achieving full compensation. . . ."). It is important tonote that the First Circuit nowhere suggests that courts shouldconsider a party's bad faith in making the decision on prejudgment interest; the concern is with making the aggrievedparty whole and with preventing unjust enrichment. SeeCottrill, 100 F.3d at 223.

1. Availability

The Court held that Radford was entitled to prejudgmentinterest. This Court has noted on an earlier occasion thatdistrict courts rarely have discretion altogether to denyprejudgment interest to a prevailing party, because "by the timeERISA was enacted in 1974, the federal common law had recognizedfor over forty years that prejudgment interest is necessary tomake a plaintiff whole." Laurenzano v. Blue Cross & BlueShield of Mass., Inc. Ret. Income Fund, 191 F. Supp.2d 223, 234(D. Mass. 2002) (citing Kansas v. Colorado, 533 U.S. 1, 10(2001)). In this case, there are no special circumstances tojustify denial of prejudgment interest, and the long delay inDoe's receipt of benefits strongly favors awarding interest.

2. Date of Accrual

As for accrual, the Court further held that prejudgmentinterest should run from October 17, 1999, the date on which Doebecame eligible for benefits.21 This decision requiressome explanation, because "[o]rdinarily, a cause of action underERISA and prejudgment interest on a plan participant's claim both accrue when a fiduciary denies a participant benefits."Cottrill, 100 F.3d at 223. Doe's claim for benefits was notdenied until November 6, 2000. Def.'s 56.1 Stmt. ¶¶ 63-64.

When the First Circuit states that prejudgment interest"ordinarily" accrues from the date when the administrator orfiduciary denies a claim for benefits, it necessarily impliesthat there are exceptions to the rule. In deciding when such anexception is justified, a court must consider the purposes ofprejudgment interest: making the claimant whole and preventingunjust enrichment.

The Court first looked to Doe's entitlements under the Policy.The Policy stated that "[w]hen [First Unum] receives proof thatan insured is disabled due to sickness or injury and requires theregular attendance of a physician, [First Unum] will pay theinsured a monthly benefit after the end of the eliminationperiod." R. at FULCL00675. Thus, assuming that the eliminationperiod has passed, a claimant becomes entitled to receivebenefits when First Unum receives the required proof, not whenFirst Unum decides that the submitted proof is adequate. Underthe plain language of the Policy, had First Unum decided onNovember 6, 2000 to award Doe benefits, that determination wouldhave meant that he was entitled to benefits as of the end of theelimination period or the date when First Unum receivedsufficient proof that he was disabled and required the regularattendance of a physician, whichever was later. The Court found that the information that First Unum received in Doe's initialclaim application was sufficient to support such a determination,and thus held that Doe was entitled to receipt of benefits as ofOctober 17, 1999.

Upon closer examination of the record, the Court has foundinformation to which neither party pointed, showing that Doe didnot submit an Employer's Statement and Job Analysis until June13, 2000. See R. at FULCL00015-22. The information therein wasimportant and arguably necessary for First Unum to reach adecision on Doe's benefits, so the Court revises its earlierfinding and holding to reflect that Doe was eligible for benefitsas of June 13, 2000. This change of date does not, however,change the analysis.

If Doe was entitled to receipt of benefits as of June 13, 2000,it stands to reason that he was entitled to interest if he didnot receive payment before then. "Every one who contracts to paymoney on a certain day knows that, if he fails to fulfill hiscontract, he must pay the established rate of interest as damagesfor his nonperformance. Hence it may correctly be said that suchis the implied contract of the parties." Spalding v. Mason,161 U.S. 375, 396 (1896) (citation and internal quotation marksomitted). If benefits are dispensed some time after they are due,the beneficiary has not received the full value of hisentitlement under the plan. Given that ERISA seeks to make claimants whole and to preventunjust enrichment, it also makes sense that when anadministrator's or fiduciary's breach of the plan leads tobelated payment of benefits owed thereunder, equity requirespayment of sufficient interest on those benefits to realizeERISA's twin goals. In Fotta v. Trustees of the United MineWorkers, Health & Retirement Fund of 1974, 165 F.3d 209 (3d Cir.1998), the Third Circuit relied on precisely this reasoning inholding that a claimant under an ERISA-governed benefits plan isentitled to interest "where benefits are delayed but paid withoutthe beneficiary's having obtained a judgment," and can sue torecover such interest as an equitable remedy under29 U.S.C. § 1132(a)(3)(B). Id. at 212-14. Although the Supreme Court hasheld that ERISA does not permit consequential damages, punitivedamages, or other "extracontractual" forms of relief under29 U.S.C. § 1109(a), it has expressly reserved the question whetherextracontractual damages may be sought under Section1132(a)(3)(B). Massachusetts Mut. Life Ins. Co. v. Russell,473 U.S. 134, 139 n. 5, 144 (1985). The First Circuit has heldthat extracontractual damages are not available under Section1132(a)(3)(B). Drinkwater v. Metropolitan Life Ins. Co.,846 F.2d 821, 825 (1st Cir. 1988). In any case, absent a contractualprovision to the contrary, interest for delayed payment ofbenefits is not even "extracontractual." Interest for latepayment has long been understood to be implied in a contractual obligation to pay money. Spalding, 161 U.S. at 396; Fotta,154 F.3d at 213.

Other courts have followed Fotta. See Dunnigan v.Metropolitan Life Ins. Co., 277 F.3d 223, 229 (2d Cir. 2002);Clair v. Harris Trust & Sav. Bank, 190 F.3d 495, 497-99 (7thCir. 1999); Anderson v. Business Men's Assurance Co., No.Civ. A. 02-2212, 2003 WL 21305335, at *4-5 (E.D. La. June 5,2003). The Eighth Circuit has followed Fotta to the extent thatit permits recovery of interest to prevent unjust enrichment.See Kerr v. Charles F. Vatterott & Co., 184 F.3d 938, 945(8th Cir. 1999) (disagreeing with Fotta "[t]o the extent that[it] may be read to allow recovery of interest asextracontractual or consequential damages," rather than toprevent unjust enrichment).22

Paradoxically, although the recent case of Great-West Life &Annuity Insurance Co. v. Knudson, 534 U.S. 204 (2002), took arestrictive view of equitable relief in ERISA cases, it appearsto support the Fotta line of cases.23 The Knudsoncase involved an action for specific performance of the reimbursement provisionof an ERISA plan, to compel a plan beneficiary who had recoveredfrom an alleged third-party tortfeasor to make restitution to theplan for benefits it had paid. See id. at 207-08. The SupremeCourt held that the action would not lie under29 U.S.C. § 1132(a)(3)(B), which authorizes plan beneficiaries andfiduciaries to bring actions for "appropriate equitable relief."Knudson, 534 U.S. at 221. Justice Scalia's majority opinionbegan by noting that courts have been "reluctant to tamper with[the] enforcement scheme embodied in [ERISA] by extendingremedies not specifically authorized by its text." Id. at 209(quoting Russell, 473 U.S. at 147) (internal quotation marksomitted). Justice Scalia also reiterated that the term "equitablerelief" in Section 1132(a)(3)(B) refers to "those categories ofrelief that were typically available in equity." Id. at 210(quoting Mertens v. Hewitt Associates, 508 U.S. 248, 256(1993)) (internal quotation marks omitted). He went on to explainthat the remedy sought was in effect restitution, and thatrestitution was a legal remedy in an action at law, and anequitable remedy in an action in equity. Id. at 212-13. Incases like the one before the Knudson Court, where the"restitution" sought was essentially money damages for breach ofa contract provision, the remedy was legal in nature and did notfall under Section 1132(a)(3)(B). Id. at 213-14. By contrast,in cases where the relief sought was in the nature of a constructive trust or an equitable lien, the remedy sought wouldbe "restitution in equity," and would lie under Section1132(a)(3)(B). Id.

The Court characterizes Knudson as supporting Fotta,because Justice Scalia's analysis of legal and equitablerestitution mirrors and cites with approval the analysis inopinions by Judge Posner of the Seventh Circuit, and Judge Posnerused precisely that analysis in the opinion where the SeventhCircuit decided to follow Fotta. See Knudson, 534 U.S. at713 (quoting Wal-Mart Stores, Inc. v. Wells, 213 F.3d 398,401 (7th Cir. 2000) (Posner, J.)); id. at 213 (quoting Reichv. Continental Casualty Co., 33 F.3d 754, 756 (7th Cir. 1994)(Posner, C.J.)); Clair, 190 F.3d at 497-99 (Posner, C.J.)(holding that a plan participant could bring the sort of actionauthorized in Fotta under Section 1132(a)(3)(B), because theremedy sought was in the nature of a constructive trust).

The courts that follow Fotta agree that a statutory violationor breach of the plan is a necessary condition for recovery ofinterest. See, e.g., Jackson v. Fortis Benefits Ins. Co.,245 F.3d 748, 750 (8th Cir. 2001) (holding that there must be "ashowing that the plan was breached before interest on backpayments may be awarded under ERISA"); Clair, 190 F.3d at497-99 (similar); Fotta, 165 F.3d at 213 (similar). This doesnot mean that the plan administrator or fiduciary must have actedin bad faith, however. Dunnigan, 277 F.3d at 229-30. Thequestion is whether the administrator or fiduciary paid out the benefits atsome date after the claimant became entitled to them. Id.(citing Clair, 190 F.3d at 498-99, and Fotta, 165 F.3d at213).

Although this Court follows Fotta fully, and the EighthCircuit's approach to this issue is more restrictive than theThird Circuit's, Jackson is particularly instructive in thiscase. The plan at issue in Jackson was apparently similar tothe Policy in this case: it required Fortis (who administered theplan) "to pay disability benefits upon receipt of `proof that[the claimant] is totally disabled due to sickness or injury andrequires the regular care of a physician.'" 245 F.3d at 748(alteration in original) (citation omitted).24 Theclaimant in Jackson submitted her claim, which was initiallydenied, in January 1996, but only provided sufficientdocumentation to justify award of benefits in December 1998,during the appeal process. Id. at 749. The insurance companyallowed her claim three weeks later, finding that she hadestablished a disability date of July 5, 1995, and made a lumpsum payment that did not include interest for the period betweenthe disability onset date and the claim payment. Id.

The Eighth Circuit affirmed the district court's award ofsummary judgment to the insurer on grounds that there was no violation of ERISA or of the plan's terms. Id. at 850. It isclear from reading the Jackson opinion that the Eighth Circuitappropriately focused on the date of eligibility for benefits,not the date of disability or the date the claim was filed.Because the plan only entitled a recipient to benefits uponreceipt of proof of disability, the claimant only became entitledto benefits in December 1998, the first date on which adequateproof was submitted. Fortis paid out a lump sum almostimmediately after receiving such proof, so it could not be saidthat it had violated the plan's terms.

By contrast, in this case, Doe submitted sufficient proof onJune 13, 2000, and became eligible for receipt of benefits onthat date. Under the terms of the Policy, then, interest fromthat date would have been appropriate, particularly as the delayin receipt of benefits became significant. Had First Unum awardedDoe benefits on November 6, 2000, roughly five months later,despite having access to most of the relevant medical informationfor over a year, the delay would have been sufficient thatpayment of interest would be required, and Doe could seek suchinterest in an action for equitable relief under Section1132(a)(3)(B).

Even if such an action were not available, that would notnecessarily preclude prejudgment interest for the period betweeneligibility of benefits and the denial of benefits, as part ofthe relief in an action to overturn a denial of benefits. See Senese v. Chicago Area I.B. of T. Pension Fund, 237 F.3d 819,825 (7th Cir. 2001) (noting the "plausible argument" for a"distinction . . . between an award of prejudgment interest ondenied benefits and an independent action solely to recoverinterest on delayed benefits," and collecting cases). If, on theone hand, the refusal to permit such an action were grounded inthe absence of an express provision in ERISA, it is clear thatprejudgment interest, though not specifically authorized in thestatute, is permissible. Thus, even if an independent cause ofaction falls too far afield of ERISA's express provisions, reliefin the form of prejudgment interest is much less controversial.If, on the other hand, the refusal were grounded in a policyjudgment that such actions would so multiply litigation as tointrude more into the administration of benefits plans thanCongress wished, that concern is absent when courts are decidingwhat relief to award in cases that are legitimately before them.

Thus, several factors suggest departing from the FirstCircuit's default rule that prejudgment interest runs from thedenial of the claim. First, the terms of the Policy entitleclaimants to benefits as of the date First Unum receivessufficient proof, not as of the date that First Unum passes onthe adequacy of that proof. Second, First Unum's delay inreaching a decision would likely be sufficient to justify anindependent action for interest during the period of delay.Third, Doe became eligible for benefits almost four years ago, so the profit from use of Doe's money during the five months betweeneligibility and denial has likely compounded substantially, suchthat fixing the date for prejudgment interest at the date ofdenial would result in First Unum receiving an unusually largeamount of unjust enrichment. Moreover, the Court's departure isconsistent with the First Circuit's rationale for the generalrule: "making a participant whole for the period during which thefiduciary withholds money legally due." Cottrill, 100 F.3d at223.

In considering what to do when departure from the ordinary ruleappears justified, it is worth noting that other circuits haveheld that prejudgment interest should ordinarily accrue from thedate on which a claimant first filed her claim, rather than fromthe date on which the claim was denied. See, e.g., Caldwellv. Life Ins. Co. of America, 287 F.3d 1276, 1287 (10th Cir.2002); Lutheran Med. Ctr. v. Contractors, Laborers, Teamsters& Eng'rs Health & Welfare Plan, 25 F.3d 616, 623 (8th Cir.1994), abrogated on other grounds, Martin v. Arkansas BlueCross & Blue Shield, 299 F.3d 966, 969, 971-72 (8th Cir. 2002)(en banc). In other words, when the filing of a claim renders anindividual eligible for benefits, the date of filing becomes thedate from which prejudgment interest should run. If at least twocircuits consider it reasonable to make the date of claim filingthe ordinary date of accrual for prejudgment interest, it iscertainly reasonable to use that date in exceptional cases in the First Circuit, at least where, as here, that date is also thedate on which the claimant becomes eligible for benefits.

The Court reiterates that it is departing from the ordinaryrule both to make Radford whole and to prevent unjust enrichment.Even if the First Circuit were to follow the Eighth Circuit inholding that only prevention of unjust enrichment justifiesinterest for the period of delay, however, the Court would stillreach the same result.

3. Rate

ERISA is silent on the appropriate rate of prejudgmentinterest, and First Circuit law affords "broad discretion" todistrict courts in setting the rate in particular cases.Cottrill, 100 F.3d at 225. The exercise of this discretionshould be guided by equitable considerations, and both relianceon a state law rate and the federal postjudgment interest rateare reasonable possibilities. See id.; Colon Velez v.Puerto Rico Marine Mgmt., Inc., 957 F.2d 933, 941 (1st Cir.1992) (affirming the district court's use of Puerto Rico's legalrate).

In Rybarczyk v. TRW, Inc., 235 F.3d 975 (6th Cir. 2000),the district court awarded prejudgment interest to the claimantsin accordance with the following formula: [T]he greater of (a) interest at a rate equal to the coupon issue yield equivalent (as determined by the Secretary of the Treasury) of the average accepted auction price for the last auction of fifty-two week United States Treasury bills settled immediately prior to the date of the initial lump sum distribution to the class member, compounded annually, or (b) interest equal to the rate of return actually earned on the principal amount of the underpayment during the prejudgment period.Id. at 981 (alteration in original) (quoting the decisionbelow). The Sixth Circuit affirmed, holding that such an awarddid not constitute an abuse of the district court's discretion,and noting that "[u]sing the interest rate actually realized byTRW on the relevant funds seems an appropriate way of avoidingunjust enrichment." Id. at 985-87. The First Circuit has notspoken on the appropriateness of this method, but it has statedthat use of the federal rate (based on Treasury bill rates) was"especially appropriate" in a case where the plan's funds wereinitially invested in Treasury bills. Cottrill, 100 F.3d at225; see also Laurenzano, 191 F. Supp.2d at 236 (citingRybarczyk, 235 F.3d at 985-87). The First Circuit has thussuggested that adoption of an interest rate closely tailored tomatch an administrator's or fiduciary's actual rate of investmentreturn is well within a district court's discretion.

Adopting an approach similar to the one in Rybarczyk, thisCourt awarded prejudgment interest at the Massachusetts statutoryrate of twelve percent per annum, calculated simply from October17, 1999 (now revised to June 13, 2000), to March 31,2004,25 or at the average rate of return for First Unum's investments duringthat period, calculated in a compound manner, whichever ishigher.26 The Massachusetts statutory rate is focusedmore closely on making Radford whole, and compound interest basedon First Unum's rate of investment return focuses more closely onpreventing unjust enrichment, because it closely tracks theprofit First Unum actually made from use of Doe's money. Applyingthe higher of the two effective interest rates ensures that bothgoals of prejudgment interest are accomplished.

As between the available legislatively determined interestrates, the Court has chosen the Massachusetts rate over thefederal postjudgment interest rate articulated in28 U.S.C. § 1961(a). At least one other judge in this district has held theMassachusetts statutory rate to be appropriate. See Gallagherv. Park W. Bank & Trust Co., 951 F. Supp. 10, 14 (D. Mass. 1997)(Ponsor, J.) ("This court will adopt the 12 percent rate of Mass.Gen. L. ch. 231, § 6C. As plaintiffs have argued, it would beinequitable for a breach of an obligation to pay funds owed undera pension contract in Massachusetts to generate less interestthan a breach of a simple contract."). The state rate reflectsthe Massachusetts legislature's considered view of the likelyrate of return on invested capital and the cost of borrowingmoney, under the particular economic conditions of this state.Both may well approximate First Unum's rate of return,particularly because interest is not compounded, and thereforeprevent unjust enrichment. To the extent the denial of benefitsdenied Doe an opportunity to invest, or compelled him to borrowmoney, the Massachusetts statutory rate tends to make Radfordwhole.

Other courts have used the less-generous federal rate forpostjudgment interest to fix a rate for prejudgment interest.See, e.g., Cottrill, 100 F.3d at 224-25 (affirming the use ofthe federal rate in a Rhode Island case); Vickers v. PrincipalMut. Life Ins. Co., 993 F. Supp. 19, 21 (D. Mass. 1998) (Gorton,J.); Celi v. Trustees of Pipefitters Local 537 Pension Plan,975 F. Supp. 23, 29 & n. 4 (D. Mass. 1997) (O'Toole, J.).Although a uniform national rule may be desirable in some ways,see Cottrill, 100 F.3d at 225, it is difficult to see whythis would be more true than in other cases where federal lawdoes not provide a rate for prejudgment interest. Admittedly, ERISApreempts state law more broadly than most federal statutes, andit may seem that Congress therefore particularly desireduniformity. Still, Congress could easily have provided an expressrule of decision for prejudgment interest, so its failure to doso may also suggest a desire for state law to provide the rule ofdecision.

The best answer is probably that Congress either did notconsider this issue or decided that it should be left to courts'discretion, consistent with ERISA's purposes. The Court thereforeheld that, at least in this case, application of theMassachusetts statutory rate better served ERISA's goals ofmaking claimants whole and preventing unjust enrichment.

I. Attorney's Fees

Attorney's fees are available but not obligatory in ERISAcases, and district courts have significant discretion in makingthe relevant determinations. 29 U.S.C. § 1132(g)(1); Cottrill,100 F.3d at 223. A flexible five-factor test governs the exerciseof the Court's discretion: (1) the degree of culpability or bad faith attributable to the losing party; (2) the depth of the losing party's pocket, i.e., his or her capacity to pay an award; (3) the extent (if at all) to which such an award would deter other persons acting under similar circumstances; (4) the benefit (if any) that the successful suit confers on plan participants or beneficiaries generally; and (5) the relative merits of the parties' positions. Cottrill, 100 F.3d at 225. These factors are "exemplary rather than exclusive." Id. There is no presumption of attorney's fees to the prevailing party. Id. at 226.

As this Court has described, First Unum acted in bad faith indenying benefits to Doe, and while First Unum's position wasentirely without merit, Radford's was essentially correct. Thecompany can well afford to pay a fee award, and the awarding offees against insurers acting in bad faith would deter similarconduct by other insurers in the future. The Court has noinformation before it as to whether the Policy is still in effectfor Hawkins employees, but to the extent that other participantsand beneficiaries exist, the decision that has resulted from thebringing of this case ought certainly change First Unum'spractice of denying valid claims based on an erroneous and highlyrestrictive interpretation of the Policy. Moreover, participantsand beneficiaries in other plans, particularly those administeredby First Unum, will tend to benefit in a similar manner from thislawsuit. The Court therefore held that attorney's fees wereappropriate, and ordered the parties to submit papers regardingthe appropriate amount.

J. Costs

The analysis for costs is essentially the same as forattorney's fees, as the two are both governed by29 U.S.C. § 1132(g)(1), so the Court's analysis of the attorney's fees question led it to award costs to Radford and to order theparties to file papers regarding the appropriate amount.

K. Postjudgment Interest

The Court further held that Radford was entitled topostjudgment interest at the federal statutory rate. See28 U.S.C. § 1961(a); Federal Reserve Statistical Release,http://www.federalreserve.gov/releases/h15/Current/ (last visitedMar. 31, 2004).

L. Radford's Motion to Amend the Judgment

Since the Court issued its judgment in this case, Radford fileda Motion to Amend Judgment. Radford urges that the Court shouldapply prejudgment interest, under the formula discussed above, toany additional benefits Doe may ultimately procure byestablishing that his disability does not fall within the MentalIllness provision in the Policy. Id. The Court deliberatelyavoided doing this in its original judgment, however, and Radfordhas not persuaded the Court to change its mind.

It was appropriate to hold that Doe was "disabled" for purposesof the Policy from the date of disability until March 31, 2004,to ensure that First Unum could not avoid payment of benefits bypointing to lack of proof. The First Circuit has endorsed thisform of remedy. See Cook, 320 F.3d at 25. By so holding, andby making any determination that Doe falls outside the confinesof the Mental Illness provision apply retroactively, the Court also ensured that Radford and First Unum would beplaced in the position they would have occupied had First Unumnot wrongfully denied Doe's claim in the first place. The Courtcan reasonably hold that Doe would have submitted the requiredcontinuing proof, had First Unum acted properly, and that hewould have sought to avoid application of the Mental Illnessprovision in a sufficiently timely manner to avoid any disruptionin receipt of benefits, because such holdings are necessary toremedy the effects of misconduct in which First Unum has alreadyengaged.

A determination regarding prejudgment interest for First Unum'sfuture conduct would exceed the Court's powers, however; it wouldbe too speculative at this point in time, and any controversy inthat regard simply is not ripe. The Court has not spoken as towhether application of the Mental Illness provision would becorrect or even reasonable, and there is no way to know how thatcontroversy will be resolved, how promptly any decision will bereached, whether First Unum or a court will reach it, whether thelaws governing prejudgment interest will be the same when anydecision is reached, and whether the factors the Court hasdiscussed in this opinion will apply in the same way to FirstUnum's future conduct. See Jones, 223 F.3d at 140-41.

III. CONCLUSION For the reasons stated, the Court DENIED First Unum's Motionsfor Summary Judgment [Doc. Nos. 13, 30], ALLOWED Radford's Motionfor Partial Summary Judgment [Doc. No. 16], and entered Judgmentfor Radford as to Count I of Radford's Complaint [Doc. No. 1].Radford's Motion to Amend Judgment [Doc. No. 39] is DENIED. TheCourt will issue an Amended Judgment clarifying the appropriatecalculation of prejudgment interest forthwith.

SO ORDERED.

1. Radford has agreed to drop its claim in Count II of theComplaint for relief under Mass. Gen. Laws ch. 93A. See Pl.'sMem. Opp'n [Doc. No. 17] at 1.

2. First Unum signed the stipulation but added a footnote,preserving its objection to Radford's motions to supplement theadministrative record compiled by First Unum [Doc. Nos. 18, 23].See Def.'s Stip. Radford filed its signed stipulation afterFirst Unum filed its signed stipulation, without commenting onthis reservation, although it is unclear whether Radford had anopportunity to see First Unum's reservation before submitting itsown signed stipulation. See Pl.'s Stip. The Court holds thatthe footnote does not change the meaning of the stipulation orotherwise render the stipulation unenforceable. No reasonableperson would have interpreted the document's text as waiving anyright to challenge the Court's resolution of the case or anyaspect thereof, including any decision to supplement the record.The parties were merely agreeing that the Court should not applythe summary judgment standard. In any case, although the Courtallowed Radford's two motions to supplement the administrativerecord [Doc. Nos. 18, 23] on October 23, 2003, the Court has inno way relied on those supplemental materials in reaching itsdecision.

3. See, e.g., Cosme v. Salvation Army, 284 F. Supp.2d 229(D. Mass. 2003); Rhymes Heating Oils, Inc. v. SpringfieldTerminal Ry., Inc., 265 F. Supp.2d 147 (D. Mass. 2003);Laurenzano v. Blue Cross & Blue Shield of Mass., Inc.,191 F. Supp.2d 223 (D. Mass. 2002); Watson v. Deaconess WalthamHosp., 141 F. Supp.2d 145 (D. Mass. 2001); Stein v. UnitedStates, 135 F. Supp.2d 265 (D. Mass. 2001); Cabral v. St.Paul Fire & Marine Ins. Co., 59 F. Supp.2d 190 (D. Mass. 1999);United Cos. Lending Corp. v. Sargeant, 20 F. Supp.2d 192 (D.Mass. 1998); Williams v. Hanover Hous. Auth., 871 F. Supp. 527(D. Mass. 1994); Rossi v. Boston Gas Co., Civ. A. No.88-0079-WGY, 1994 WL 548101 (D. Mass. July 7, 1994); Rubin v.Brooks/Cole Publ'g Co., 836 F. Supp. 909 (D. Mass. 1993);Zappia v. NYNEX Info. Resources Co., Civ. A. No. 90-11366-Y,1993 WL 437676 (D. Mass. Oct. 22, 1993); Skinner v. BostonHous. Auth., 690 F. Supp. 109 (D. Mass. 1988), rev'd on othergrounds, 873 F.2d 1433 (1st Cir. 1989) (unpublished tabledecision).

4. Doe does not assert that section 2, regarding part-timestatus, is applicable in this case. The Court notes thatassociates like Doe are "Class 2" employees under the Policy. R.at FULCL00685.

5. Although the parties characterized the accommodationdifferently, both agreed that Doe was given accommodations andboth referred to the same record document, a confirmatory letterfrom Kirsten C. Schneller of the Law School Admission Council.See Pl.'s 56.1 Stmt. ¶ 116; Def.'s Resp. ¶ 116.

6. First Unum stated that Hawkins also employed Doe part-timefrom January 26, 1998 until June 5, 1998. Def.'s Resp. ¶ 117; R.at FULCL00047. Doe had no opportunity to confirm or deny this. Ifanything, this showed that after having an opportunity toevaluate Doe's work, at a time when his schizophrenia did notimpact his performance, Hawkins considered him sufficientlycapable that they hired him.

7. Radford actually misquoted Dr. Singh's notes, and FirstUnum admitted that this (misquoted) text was in her notes, butthe mistakes are not material. See Pl.'s 56.1 Stmt. ¶ 118;Def.'s Resp. ¶ 118. The Court quotes Dr. Singh's notes directly.

8. First Unum characterized Doe' statements differently("[Doe] reported in his employee's statement that his last day ofwork was April 20, 1999, and that he was first unable to work onApril 21, 1999."), but cited the same form that Doe did. Def.'s56.1 Stmt. ¶ 20; see R. at FULCL00045. First Unum disputedneither the accuracy of Doe's quotation nor the authenticity ofthe employee statement.

9. U.S. Const. art. III, § 2, cl. 3; id. amends. VI, VII.

10. See Powers v. Ohio, 499 U.S. 400, 406-07 (1991)(quoting passages from 1 Alexis de Tocqueville, Democracy inAmerica 334-37 (Schocken 1st ed. 1961)).

11. Note, The Right to a Jury Trial in Complex CivilLitigation, 92 Harv. L. Rev. 898, 898 (1979).

12. Parklane Hosiery Co., Inc. v. Shore, 439 U.S. 322, 355(1979) (Rehnquist, J., dissenting) (quoting H. Kalven & H.Zeisel, The American Jury (1966)) (internal quotation marksomitted).

13. Commonwealth v. Canon, 373 Mass. 494, 516 (1977)(Abrams, J., dissenting) (alteration and emphasis in original)(quoting 1 W. Holdsworth, A History of English Law 348-49 (3ded. 1922)) (internal quotation marks omitted), cert. denied,435 U.S. 933 (1978).

14. Hennessey, Clay & Marvell, Complex and Protracted Casesin State Courts (National Center for State Courts, 1981).Indeed, it may be argued that the moral force of judicialdecisions — and the inherent strength of the third branch ofgovernment itself — depends in no small measure on the sharedperception that democratically selected juries have the final sayover actual fact finding.

15. Some courts relax the strictures of Rule 8(c) under thesecircumstances, but the First Circuit has yet to decide whether toadopt this approach. Knapp Shoes, 15 F.3d at 1226.

16. Doe has not argued that First Unum waived any defenses tocoverage based on failure to consider an element of his claim, sothe Court need not address the availability of any waiverargument. See Lauder v. First Unum Life Ins. Co.,284 F.3d 375, 381-82 (2d Cir. 2002) (holding that waiver can sometimesapply in ERISA cases); Pitts v. American Sec. Life Ins. Co.,931 F.2d 351, 357 (5th Cir. 1991) (similar); Russo v. AbingtonMem'l Hosp., No. Civ. A. 94-195, 2002 WL 1906963, at *12 (E.D.Pa. Aug. 1, 2002) (similar). But see White v. Provident Life& Accident Ins. Co., 114 F.3d 26, 29 (4th Cir. 1997).

17. Dicta in a later First Circuit decision could be read tosuggest that Hughes only applied the contra proferentum rulebecause the summary judgment standard required the Hughes courtto view the facts favorably to the plaintiff. See GoldenRule, 45 F.3d at 517 n. 6. That would at best be a strainedreading of Hughes, however, and the Golden Rule court'slanguage is better understood as merely noting that Hughes wasin a summary judgment posture. Hughes nowhere suggests thatcontra proferentum only applies in the summary judgmentcontext; rather, it describes the rule as one that appliesgenerally. See Hughes, 26 F.3d at 268. Even if Golden Ruleis read to express a desire on the First Circuit's part tooverrule Hughes, "`the law of the circuit doctrine' . . . holdsa prior panel decision inviolate absent either the occurrence ofa controlling intervening event (e.g., a Supreme Court opinion onthe point; a ruling of the circuit, sitting en banc; or astatutory overruling) or, in extremely rare circumstances, wherenon-controlling but persuasive case law suggests such a course."United States v. Chhien, 266 F.3d 1, 11 (1st Cir. 2001)(noting that newly constituted panels in the First Circuit mustadhere to decisions of prior panels).

18. Again, this interpretation was based on the Policy's plainlanguage. Even if there had been any ambiguity in the Policy'smeaning, the contra proferentum rule would have requiredadoption of the Court's interpretation.

19. UnumProvident Companies, athttp://www.unum.com/aboutus/ourcompanies/upbrandedcompanies.aspx(last visited June 10, 2004). Other subsidiaries includeProvident Life and Accident Insurance Company, The Paul RevereLife Insurance Company, and Provident Life and Casualty InsuranceCompany. Id.

20. Courts have often commented unfavorably on thesecompanies' conduct. See, e.g., Hedley-Whyte v. Unum LifeIns. Co. of America, No. Civ. A. 94-11731-GAO, 1996 WL 208492,at *3 (D. Mass. Mar. 6, 1996) (O'Toole, J.) (noting thatattorney's fees were particularly appropriate because Unum Life'sconstruction of its policy was so clearly at odds with its plainlanguage); Keller v. Unum Life Ins. Co. of America, No. 90Civ. 5718 (VLB), 1992 WL 346343, at *2 (S.D.N.Y. Sept. 30, 1992)(describing Unum's behavior as "culpably abusive"). Numerous courts have reversed these companies' denials ofbenefits under a de novo standard, many times criticizing theirpractices. See Lauder v. First Unum Life Ins. Co., Nos.02-9152, 02-9232, 76 Fed. Appx. 348, 350, 2003 WL 21910757, at *2(2d Cir. Aug. 8, 2003) (unpublished opinion) ("There was ampledemonstration of bad faith on First Unum's part, including . . .the frivolous nature of virtually every position it has advocatedin the litigation."); Curtin v. Unum Life Ins. Co. ofAmerica, 298 F. Supp.2d 149, 159 (D. Me. 2004) ("[T]his Courtfinds that Defendants exhibited a low level of care to avoidimproper denial of claims at great human expense."); Locher v.Unum Life Ins. Co. of America, No. 96 Civ. 3828(LTS)(HPB), 2002WL 362769, at *9-10 (S.D.N.Y. Mar. 7, 2002) (overturning Unum'sdenial of benefits, despite Unum's argument that the claimant wasnot disabled because she worked a full day the day she left herjob); Barone v. Unum Life Ins. Co. of America, 186 F. Supp.2d 777,787 (E.D. Mich. 2002); Wilkes v. Unum Life Ins. Co. ofAmerica, No. 01-C-182-C, 2002 WL 926279, at *10 (W.D. Wis. Jan.29, 2002) (finding "that the defendant's position was notsubstantially justified or taken in good faith"); Hall v. UnumLife Ins. Co. of America, No. 97-CV-1828, 1999 WL 33485551, at*8 (D. Colo. Nov. 1, 1999) vacated in part on other grounds,300 F.3d 1197 (10th Cir. 2002); Leva v. First Unum Ins. Co.,No. 96 CIV 8590(DC), 1999 WL 294802, at *1-2 (S.D.N.Y. May 11,1999) (noting that "Unum is `culpable' in the sense that it didnot consider [the plaintiff's] application with the care that shedeserved," and that the only medical review of the claim was doneby a registered nurse, who happened to be the claims examiner'smother); Jones v. Unum Life Ins. Co. of America, No. 99-7173,1998 WL 778366, at *6 (S.D.N.Y. Nov. 6, 1998), vacated in parton other grounds, 223 F.3d 130 (2d Cir. 2000); Ragsdale v.Unum Life Ins. Co. of America, 999 F. Supp. 1016, 1026 (N.D.Ohio 1998); Dishman v. Unum Life Ins. Co. of America, No.96-0015-JSL, 1997 WL 906146, at *11-13 (C.D. Cal. May 9, 1997)(noting that the court would have reached the same decision underan arbitrary and capricious standard, and describing Unum Life's"unscrupulous conduct" in engaging in "bad faith denial of largeclaims as a strategy for settling them for substantially lessthan the amount owed"); Hamner v. Unum Life Ins. Co. ofAmerica, No. C 96-1973 TEH, 1997 WL 257515, at *6 (N.D. Cal. May6, 1997); Mays v. Unum Life Ins. Co. of America, No. 95 C1168, 1995 WL 631807, at *9 (N.D. Ill. Oct. 24, 1995). Similar comment on the companies' practices can be found indecisions reversing denials of benefits under an arbitrary andcapricious or abuse of discretion standard. See Morgan v.Unum Life Ins. Co. of America, 346 F.3d 1173, 1178 (8th Cir.2003); Lain v. Unum Life Ins. Co. of America, 279 F.3d 337,346-47 (5th Cir. 2002) (basing the decision in part on Unum'smisinterpretation of its own policy); Shutts v. First UnumLife Ins. Co., No. 1:01-cv-1993, 2004 WL 615134, at *7-8(N.D.N.Y. Mar. 24, 2004); Crespo v. Unum Life Ins. Co. ofAmerica, 294 F. Supp.2d 980, 994, 996-97 (N.D. Ill. 2003)(reversing in part because Unum based its denial on failure toprove "disability" before or near the last day of work);Mennenoh v. Unum Life Ins. Co. of America, 302 F. Supp.2d 982,989-90 (W.D. Wis. 2003); Cheng v. Unum Life Ins. Co. ofAmerica, 291 F. Supp.2d 717, 721 (N.D. Ill. 2003); Pelchat v.Unum Life Ins. Co. of America, No. 3:02CV7282, 2003 WL21479170, at *3 (N.D. Ohio June 25, 2003) ("UNUM's decision wastherefore not based on a good faith interpretation of its policylanguage or an honest mistake."); Dirnberger v. Unum Life Ins.Co. of America, 246 F. Supp.2d 927, 935 (W.D. Tenn. 2002);Henar v. First Unum Life Ins. Co., No. 02 Civ. 1570(LBS),2002 WL 31098495, at *5 (S.D.N.Y. Sept. 19, 2002); Holzschuh v.Unum Life Ins. Co. of America, No. Civ. A. 02-1035, 2002 WL1609983, at *9 (E.D. Pa. July 18, 2002); Winters v. Unum LifeIns. Co. of America, 232 F. Supp.2d 918, 932-33 (W.D. Wis.2002); Heffernan v. Unum Life Ins. Co. of America, No.C-1-97-545, 2001 WL 1842465, at *6 (S.D. Ohio Mar. 21, 2001);Newman v. Unum Life Ins. Co. of America, No. 99 C 7420, 2000WL 1593443, at *6-7 (N.D. Ill. Oct. 23, 2000) (finding, in a casewhere Unum maintained a policy interpretation similar to FirstUnum's interpretation of the Policy in this case, that the"defendant contorted the meaning of its own policy in order todeny plaintiff's claim on a nonexistent technicality"); Hinesv. Unum Life Ins. Co. of America, 110 F. Supp.2d 458, 460-61(W.D. Va. 2000) (noting the "scathing failure by Unum Insuranceto impartially administer the disability plan"); Lake v. UnumLife Ins. Co. of America, 50 F. Supp.2d 1243, 1257 (M.D. Ala.1999); Russell v. Unum Life Ins. Co. of America, 40 F. Supp.2d 747,751 (D.S.C. 1999); Riley v. Unum Life Ins. Co. ofAmerica, 28 F. Supp.2d 639, 643-44 (D. Kan. 1998); see alsoDandurand v. Unum Life Ins. Co. of America, 284 F.3d 331,336-38 (1st Cir. 2002) (overturning an arbitrary and capriciouscalculation of benefits); Wyatt v. Unum Life Ins. Co. ofAmerica, No. 97 C 8228, 1999 WL 116213, at *7 (N.D. Ill. Mar. 2,1999) (overturning a decision to offset a claimant's benefitsbecause of an alleged eligibility for benefits from the FederalInsurance Company).

21. As is discussed below, the Court will amend its judgmentso that prejudgment interest should run from June 13, 2000. Thischange does not fundamentally alter the analysis.

22. The Eleventh Circuit has expressly reserved the questionwhether to follow Fotta. See Flint v. ABB, Inc.,337 F.3d 1326, 1330-31 (11th Cir. 2003). The court did suggest that theSupreme Court's decision in Great-West Life & Annuity InsuranceCo. v. Knudson, 534 U.S. 204 (2002), may have underminedFotta, insofar as it adopted a narrower interpretation of"appropriate equitable relief" than earlier court of appealsdecisions had used. See Flint, 337 F.3d at 1330-31.Respectfully, this Court disagrees.

23. The First Circuit has taken note of Knudson, but has notdetermined what effect the case has on prior case law governingthe availability of particular kinds of relief under Section1132(a)(3)(B). Watson v. Deaconess Waltham Hosp.,298 F.3d 102, 110 n. 8 (1st Cir. 2002).

24. Similar to the Policy in this case, the plan in Jacksondefined disability as "an injury or sickness which . . . preventsthe insured from doing each of the main duties of his or herregular job." Jackson, 245 F.3d at 748.

25. See Mass. Gen. Laws ch. 231 § 6C. The statute applies a"rate of twelve percent per annum from the date of the breach ordemand" See id. Massachusetts cases generally presume that aprovision for interest in a statute or contract means simple, notcompound interest, absent a clear expression of contrary intent,and equate "per annum" interest with simple interest. SeeCoupounas v. Madden, 401 Mass. 125, 132 (1987) (contract);Inhabitants of Tisbury v. Vineyard Haven Water Co.,193 Mass. 196, 198 (1906) (statute); Jordan L. Shapiro, Marc G. Perlin &John M. Connors, Collection Law, Massachusetts PracticeSeries, § 7:27 (2004); see also Coupounas, 401 Mass. at 132(citing Tisbury as authority for a presumption against compoundinterest). But see Ellis v. Sullivan, 241 Mass. 60, 64(1922) (permitting compounding of interest on a note in an equitycase, despite the absence of any express provision for compoundinterest, where it was "necessary for the purpose of affording ajust and equitable accounting"). Given that prejudgment interestis an equitable determination in ERISA cases, Massachusetts lawsuggests that in some cases it would be consistent withMassachusetts statutory policy for a federal court to apply atwelve percent compound rate, even though simple interest is therule in actions at law.

26. To the extent this was not clear from the judgment theCourt will make it clearer in the amended judgment.

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