Sandoval v. UNUM Life Insurance Company of America
Filing
132
ORDER Granting 119 Motion for Declaratory Judgment. Entered by Judge William J. Martinez on 1/14/2019. (lrobe)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 17-cv-0644-WJM-KMT
BRENDA SANDOVAL,
Plaintiff,
v.
UNUM LIFE INSURANCE COMPANY OF AMERICA, a/k/a UNUM,
Defendant.
ORDER GRANTING MOTION FOR DECLARATORY JUDGMENT
Plaintiff Brenda Sandoval (“Plaintiff” or “Sandoval”) sued her insurance provider
Defendant Unum Life Insurance Company of America (“Defendant” or “Unum”) after
Unum terminated the benefits that she received under a long-term disability policy (the
“Policy”). The case proceeded to trial in September 2018. On September 28, 2018, a
jury returned a verdict for Sandoval finding that she had proved by a preponderance of
the evidence that Unum breached its contract with her, and awarded her damages of
$81,244.85. (ECF No. 115.)
Post-trial, the Court ordered the parties to address Sandoval’s request for
declaratory relief regarding her eligibility for future long-term disability benefits. (ECF
No. 5 at 2–3; ECF No. 118.) Sandoval filed a Motion for Declaratory Judgment (the
“Motion”) (ECF No. 119), which Unum opposes (ECF No. 120). The Court then ordered
supplemental briefing on the appropriateness of injunctive relief under Rule 65. (ECF
Nos. 122, 123 & 126.) Sandoval’s Motion is now before the Court.
For the reasons discussed below, the Court grants in part Sandoval’s request for
declaratory and injunctive relief, and directs the Clerk of Court to enter judgment in
favor of Sandoval.
I. ANALYSIS
Sandoval seeks both a declaration and a permanent injunction. (ECF Nos. 119
& 123.) Specifically, Sandoval asks the Court to enter an order (1) finding that
Sandoval is disabled under the terms of the Policy; and (2) requiring Unum to place
Sandoval back on her Policy and pay all benefits to which Sandoval is entitled as long
as she complies with the terms of the Policy. (Id. at 3–4.) Unum objects.1 (ECF Nos.
120 & 126.)
A.
Declaratory Relief
The Declaratory Judgment Act allows a court to “declare the rights and other
legal relations of any interested party seeking such a declaration.” 28 U.S.C. § 2201.
Sandoval seeks a declaration that she is disabled under the terms of the
contract. (ECF No. 119.) Unum argues that a declaration is imprudent for two reasons,
both of which are easily dispatched. (ECF No. 120 at 1–2.) First, Unum argues that
declaratory judgment is inappropriate pending appeal. Regardless of the legal merits of
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Unum’s arguments, particularly those related to the request for a permanent injunction,
arise from the procedural posture of the case. At the conclusion of the trial, the Court stated
that it would not enter judgment on the verdict until ruling on the equitable relief portion of the
case, and set forth a briefing schedule as to requested equitable relief. (See ECF No. 118.)
Some of Unum’s arguments against the equitable relief Sandoval now seeks rest on the fact
that judgment has not yet been entered, and thus Unum’s obligation to pay the jury verdict has
not yet been triggered. (ECF No. 120 at 3.) Others stem from the lack of clarity about what will
happen once the Court enters judgment on the jury verdict. (ECF No. 126 at 4–5.) Were the
Court to fully credit Unum’s arguments, Sandoval would be in a catch-22: judgment will not
enter until the Court resolves the request for equitable relief, and Unum’s arguments against
equitable relief in large part depend on the fact that judgment has not yet been entered.
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this position, no appeal has been filed and thus there is no need to wait for resolution of
a hypothetical appeal to enter declaratory judgment. Unum’s second argument—that
Sandoval’s request for benefits into the future is not supported by the plain terms of the
Policy—addresses the appropriateness of injunctive relief, not declaratory relief.2
“Under well settled principles, when a plaintiff brings both legal and equitable
claims in the same action, the Seventh Amendment right to jury trial on the legal claims
must be preserved by trying those claims first (or at least simultaneously with the
equitable claims), and the jury’s findings on any common questions of fact must be
applied when the court decides the equitable claims.” Colo. Visionary Acad. v.
Medtronic, Inc., 397 F.3d 867, 875 (10th Cir. 2005). The Court must “giv[e] due effect
to any findings necessarily implicit in a general verdict.” Id.
The Court thus reviews the jury verdict to determine what factual findings made
by the jury bear on Sandoval’s request for declaratory relief. The jury verdict form
specifically asked if Sandoval proved “by a preponderance of the evidence, that
Defendant Unum Life Insurance Company breached its contract with Ms. Sandoval for
long term disability benefits.” (ECF No. 115 at 1.) In her closing argument, Sandoval
requested $81,153.46 in damages for breach of contract through the date of the closing
argument. Jury deliberations continued into the following day, and the jury sent a note
to the Court asking “if we award the full amount, do we add something above the
2
Unum is not responsible for the confusion here. Sandoval’s Motion stated that it
sought only declaratory relief, but asked for a declaration “[d]irecting Defendant, Unum, to place
the Plaintiff, Ms. Sandoval, back on the long term disability benefit’s contract and receive all the
benefits she is entitled to.” (ECF No. 119 at 3–4.) Thus, in all but name, Sandoval requested
an injunction, but failed to articulate the grounds therefor. This necessitated the Court’s order
for supplemental briefing on the issue of injunctive relief. (ECF No. 118.)
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$81,153.46 to account for today?” (ECF No. 111.) Before the Court could respond, the
jury notified the Court that it had reached a verdict. The jury awarded Sandoval
$81,244.85, slightly more than the amount requested by Sandoval in her closing
argument. (ECF No. 115 at 2.)
The jury appears to have resolved factual disputes relevant here in Sandoval’s
favor. As Sandoval suggests, to reach its verdict, the jury would have had to find that
Sandoval was disabled under the Policy when Unum terminated benefits; that Unum
thus improperly terminated benefits and breached its contract with Sandoval; and,
presumably answering its own question and awarding additional damages, that
Sandoval continued to be disabled under the Policy as of the date of the verdict. (ECF
No. 119 at 3.)
The Court agrees, and Unum does not suggest a contrary interpretation. See
Colo. Visionary Acad., 397 F.3d at 875. Consistent with the factual conclusions implicit
in the jury verdict, the Court finds that Sandoval was disabled within the meaning of the
Policy when Unum terminated benefits and continued to be disabled within the meaning
of the Policy through September 28, 2018, the date of the jury verdict, and Sandoval is
thus entitled to a declaratory judgment stating the same. See 28 U.S.C. § 2201.
B.
Injunctive Relief
Sandoval also seeks injunctive relief directing Unum to place her back on her
Policy and receive the benefits to which the Policy entitles her. (ECF No. 119 at 3–4.)
1.
Entitlement to Injunctive Relief
A party seeking a permanent injunction must prove four elements: (1) actual
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success on the merits; (2) irreparable harm absent an injunction; (3) that threatened
injury outweighs the harm to the opposing party; and (4) that the injunction will not
adversely affect the public interest. Sw. Stainless, LP v. Sappington, 582 F.3d 1176,
1191 (10th Cir. 2009).
The jury verdict demonstrates Sandoval’s actual success on the merits. (See
ECF 115.) As discussed above, the jury credited Sandoval’s arguments and awarded
her damages that suggested Sandoval was still disabled as of the date of the verdict.
As for irreparable harm, Sandoval claims that failure to place her back on the
Policy “would leave her in the position of having to file another Complaint with the
Court.” (ECF No. 119 at 3; see ECF No. 121 at 3–4.) The need to repeatedly sue for
money damages can support a finding of irreparable harm and lack of an adequate
remedy at law. See JEG Powersports, LLC v. M&N Dealership VI, LLC, 2017 WL
3976296, at *3 (W.D. Okla. Sept. 8, 2017). In her supplemental brief, Sandoval cites
Unum’s delay as support for her contention that she may be repeatedly forced to sue
for money damages absent an injunction. (ECF No. 123 at 2.)
Unum resists this characterization, stating that no judgment has yet entered
against it, and there is nothing to suggest that it will refuse to pay Sandoval benefits
“once judgment is entered and appeals exhausted.” (ECF No. 126 at 4–5.) However,
absent an injunction, Sandoval would be required to sit by and abide Unum’s continued
breach of contract “until such time as plaintiff decided to sue again for money damages
as compensation for the past injury incurred.” See JEG Powersports, 2017 WL
3976296, at *3. The Court finds that, under the circumstances, the prospect of
repetitious litigation (or even pre-litigation negotiation) to hold Unum repeatedly
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accountable for its breach of contract would cause Sandoval irreparable harm.
Any potential harm to Unum resulting from a permanent injunction does not
outweigh the threatened injury to Sandoval. Unum contends that an injunction would
“fundamentally interfere with the parties[’] agreed rights under the . . . policy” because
Sandoval does not propose a durational limit on the proposed injunction. (ECF No. 126
at 2.) As discussed in greater detail below, Unum’s argument against the injunction is
more directed at the scope than the appropriateness of a properly-defined injunction.
Unum also argues that the burden of having to apply to the Court for relief from
an injunction with regard to determination of Sandoval’s future benefits outweighs the
harm to Sandoval of having to repeatedly file litigation. (Id. at 3–4.) Sandoval contends
that, as a private individual with limited resources, she faces far greater difficulty filing
successive lawsuits than Unum, a corporation with greater economic resources, would
face in order to comply with a permanent injunction. (ECF No. 123 at 2.) On balance,
the Court agrees with Sandoval and finds that the threatened injury to Sandoval
outweighs the potential harm to Unum of complying with a sufficiently limited permanent
injunction.
Finally, Sandoval contends that a permanent injunction is in the public interest
because it would prevent the need to file successive litigation on the alreadyadjudicated merits of the case. (ECF No. 123 at 3.) Unum disagrees. It argues that a
permanent injunction would require the Court to retain jurisdiction and, presumably,
require judicial resources to monitor Unum’s compliance with the terms of the Policy.
(ECF No. 126 at 5.) On balance, the Court finds it is far more efficient for the
undersigned, already intimately familiar with Sandoval’s health concerns and the terms
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of the Policy, to retain jurisdiction to the limited extent discussed below through
issuance of a permanent injunction, rather than force Sandoval to file new litigation and
occupy the time and attention of, potentially, another judicial officer of this Court. Thus,
the Court finds that a permanent injunction will not adversely impact the public interest.
Sandoval has satisfied her burden to show that a permanent injunction is
warranted and the Court finds that a permanent injunction is appropriate.
2.
Scope of Requested Injunction
Next, the Court must determine the proper scope of the permanent injunction. In
her Motion, Sandoval suggests that, under the terms of the Policy, she “would have
coverage until March 4, 2032, when she reached age 67.” (ECF No. 119 at 3.) Unum
rightly objects to such an expansive injunction. (ECF No. 120 at 2–3.) The Court
rejected this argument at trial and did not allow Sandoval to present it to the jury.
Elsewhere in her Motion, Sandoval limits her request for injunctive relief to
receipt of “all benefits she is entitled to under the terms and conditions of the contract
as long as [Sandoval] is in compliance with the contractual requirements to receive
these benefits.” (ECF No. 119 at 3–4 (emphasis added).) Sandoval’s supplemental
brief confirms the more limited request. (ECF No. 123 at 3.) Ultimately, Sandoval asks
to be put in the position she would have been absent Unum’s breach of contract:
considered disabled and covered by the long-term disability Policy.
The part of Sandoval’s Motion seeking an injunction is granted to the following
limited extent:
•
Unum is ordered to reinstate Sandoval to her Policy as of
September 29, 2018 (the day after the jury rendered its verdict),
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and to pay future monthly benefits to Sandoval consistent with the
terms of the Policy as long as Sandoval qualifies under the terms of
the Policy to receive those benefits.
•
Unum is enjoined from terminating Sandoval’s benefits under the
Policy based on any fact or circumstances in existence as of
September 28, 2018, the date of the verdict. Unum may terminate
benefits in the future consistent with the terms of the Policy, or if
Sandoval fails to comply with the terms of the Policy, but any such
future termination must be based on facts or circumstances that
post-date the date of the verdict in this case.
Any relief Sandoval seeks beyond the foregoing is denied. The Court will not
entertain a contempt motion unless it is based on a violation of this limited permanent
injunction.
II. CONCLUSION
For the reasons set forth above, the Court ORDERS as follows:
1.
The Court GRANTS IN PART Plaintiff Sandoval’s Motion for Declaratory
Judgment (ECF No. 119) to the extent detailed below;
2.
The Court hereby DECLARES that Plaintiff Sandoval was disabled within the
meaning of the Policy when Unum terminated her benefits and continued to be
disabled within the meaning of the Policy through September 28, 2018, the date
of the jury verdict;
3.
Unum is PERMANENTLY ENJOINED as follows:
i.
Unum is ordered to reinstate Sandoval to her Policy as of
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September 29, 2018, and to pay future monthly benefits to
Sandoval consistent with the terms of the Policy as long as
Sandoval qualifies under the terms of the Policy to receive those
benefits.
ii.
Unum is enjoined from terminating Sandoval’s benefits under the
Policy based on any fact or circumstance in existence as of
September 28, 2018, the date of the verdict. Unum may terminate
benefits in the future consistent with the terms of the Policy, or if
Sandoval fails to comply with the terms of the Policy, but any such
future termination must be based on facts or circumstances that
post-date the date of the verdict in this case;
4.
The Clerk of the Court shall enter judgment on the jury verdict (ECF No. 115) in
favor of Plaintiff and against Defendant Unum in the principal amount of
$81,244.85, with postjudgment interest at the federal statutory rate. The Clerk
shall also enter judgment on the Court’s Order of today granting declaratory and
injunctive relief;
5.
Plaintiff shall have her costs upon compliance with D.C.COLO.LCivR 54.1; and
6.
The Clerk shall terminate this case.
Dated this 14th day of January, 2019.
BY THE COURT:
William J. Martínez
United States District Judge
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