Tassone v. United of Omaha Life Insurance Company et al

Filing 63

MOTION by Plaintiff Gina Tassone for judgment sum certain (Attachments: # 1 Exhibit 1 SSA Notice of Award, # 2 Exhibit 2 SSA Release of Funds, # 3 Exhibit 3 Interest Calculation on Net Benefit, # 4 Exhibit 4 Interest Calculation Based on Payments Made by Each Party)(Bartolic, Michael)

IN THE UNITED STATES DISTRICT
COURT NORTHERN DISTRICT OF
ILLINOIS EASTERN DIVISION
)
) Case No. 1:15-cv-08557
)
Plaintiff,
) Judge Robert W. Gettleman
)
vs.
) Magistrate Judge Susan E. Cox
)
UNITED OF OMAHA LIFE INSURANCE
)
COMPANY; and MIRAMED GLOBAL
)
SERVICES, INC. LONG-TERM DISABILITY )
PLAN,
)
)
Defendants.
)
)
PLAINTIFF’S MOTION FOR ENTRY OF JUDGMENT IN SUM CERTAIN
GINA TASSONE,

Pursuant to this Court’s Orders (ECF #s 60, 62), Plaintiff files this motion for entry of a
judgment in an amount sum certain, and submits a proposed order to the Court’s inbox. On
August 30, the Court held Defendant United of Omaha Life Insurance Company wrongly
terminated Plaintiff’s long-term disability (“LTD”) benefits. Defendant United of Omaha last
paid Plaintiff disability insurance benefits for the period August 1–31, 2014. (ECF #61 at 10;
ECF #51, AR 1820–36). Plaintiff’s gross LTD benefit was $3,650.01 per month. (ECF #45,
Plaintiff’s Proposed Findings of Fact ¶ 89; ECF #51 at AR 3717). In November 2016, the Social
Security Administration awarded Tassone disability benefits dating back to December 2012, with
an initial entitlement of $1808.10 per month. (Ex. 1, SSA Notice of Award). In December 2016,
the Social Security Administration released those benefits, but withheld $6,000 for payment to
Tassone’s legal representative for assistance in obtaining those benefits. (Ex. 2, SSA Release of
Benefits).

The insurance policy provides that it offsets receipts of Social Security Disability
benefits, but does not offset the cost of living adjustments. (ECF #51 at AR 0025). Therefore,
from December 2012 and on, Plaintiff’s net monthly benefit was $1841.91 ($3650.01-$1808.10).
For the time period of September 2014 through August 2017, the past due benefit is thus
$66,308.76 (36 months x $1841.91). But for the time period December 1, 2012 through August
31, 2014, Defendant had paid Plaintiff the gross disability benefit sans offset, and thus overpaid
Plaintiff by $37,970.10 (21 months x $1808.10). Plaintiff, however, had $6,000 of her SSA
benefit withheld to satisfy attorney’s fees. (Ex. 2). Because the SSA benefit reduces dollar-fordollar United of Omaha’s liability to Plaintiff, under the common fund doctrine United of Omaha
should bear the cost of obtaining those benefits, thus reducing the overpayment to $31,970.10.
See US Airways, Inc. v. McCutchen, 569 U.S. 88, 103–05 (2013) (holding in absence of ERISA
plan providing otherwise, the common fund rule is imported into ERISA plans and requires the
party benefitting from a recovery to bear the proportional cost of legal fees to obtain the benefit).
Subtracting what United of Omaha overpaid Plaintiff from what United of Omaha owes Plaintiff
results in a total past due liability of $34,338.66.
The Court awarded pre-judgment interest at the prime rate. (ECF #61 at 18). The prime
rate has steadily increased from 3.25% in September 2014 to 4.25% presently. Because there is
a liability from United of Omaha to Plaintiff, as well as an overpayment by United of Omaha to
Plaintiff, there are two ways of calculating the interest.

United of Omaha typically made

payments in arrears on about the 6th day of the month (meaning the August 2017 payment would
have been made on September 6, 2017). The first method of calculating pre-judgment interest
would be to simply apply the then existing prime rate to the net payment United of Omaha

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retroactive owes to Plaintiff, as performed in Exhibit 3, which results in total pre-judgment
interest of $3,906.68.
The alternative method is to apply the interest to the payments each party should have
made to one another at the time the actual payment by each party would have been made. This
accounts for the fact that United of Omaha would have paid the gross benefit of $3650.01 to
Plaintiff each month until December 2016, and paid the net thereafter. Also, Plaintiff would have
returned the overpayment to Defendant made upon receiving the Social Security benefits by
early January 2017. Exhibit 4 thus reflects the interest accrued as if United of Omaha made the
required payments until Plaintiff received her Social Security Award, and then Plaintiff
immediately repaid Defendant (thus reducing the principal accrued past due benefit).

The

resulting pre-judgment interest owed by Defendants to Plaintiff under this method is $4,931.75.
The latter calculation more accurately reflects the economic realities of the position each party
would have been in had United of Omaha not breached its insurance contract with Plaintiff.
Thus, the Court should award Plaintiff $4,931.75 in pre-judgment interest.
WHEREFORE, Plaintiff prays that judgment be entered on her behalf awarding:
1. $34,338.66 in net past due benefits under the insurance policy
2. $4,931.75 in pre-judgment interest.

/s/ Michael Bartolic
Michael Bartolic
Roberts Bartolic LLP
208 South LaSalle Street
Suite 1420
Chicago, Illinois 60604
Phone: [phone]
Email: [e-mail]

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CERTIFICATE OF SERVICE
The undersigned, an attorney, hereby certifies that on September 18, 2017 a copy of the
foregoing was served by operation of the Court’s electronic filing systems upon the following
counsel of record:

Edna S. Kersting
WILSON, ELSER, MOSKOWITZ,
EDELMAN & DICKER LLP
55 West Monroe Street, Suite 3800
Chicago, IL 60603
Tel: [phone]
Fax: [phone]
[e-mail]
/s/ Michael Bartolic
Michael Bartolic

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