Cerentano v. United Mine Workers of America 1974 Pension Plan

Filing 40

ORDER denying Defendant's 23 Motion for Summary Judgment; granting Plaintiff's 27 Motion for Summary Judgment. See Order for specifics. Signed by Magistrate Judge Stephen C. Williams on 12/7/2016. (anj)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
TONY CERENTANO,

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Plaintiff,
vs.
UNITED MAINE WORKERS OF
AMERICA 1974 PENSION PLAN,

Case No. 15-cv-874-SCW

Defendant.
MEMORANDUM AND ORDER
WILLIAMS, Magistrate Judge:
INTRODUCTION
This matter is before the Court on dueling motions for summary judgment.
Defendant the Plan filed a motion for summary judgment (Docs. 23 and 26) which
Plaintiff has responded to (Doc. 30). Defendant filed a reply to its motion (Doc. 31).
Plaintiff has also filed a summary judgment motion (Docs. 27 and 28) and Defendant
responded to that motion (Doc. 29).

The Court held a hearing on the motion on

November 7, 2016. Based on the motion, the Court GRANTS Plaintiff’s motion for
summary judgment and DENIES Defendant’s motion for summary judgment.
FACTUAL BACKGROUND
Plaintiff’s claims stem from a previous suit in this district seeking disability
pension benefits under the United Mine Workers of America 1974 Pension Trust Plan. 1

1

The facts of this case are taken from the Seventh Circuit’s opinion in that underlying suit, Cerentano v.

Plaintiff worked for Monterey Coal Company from 1978 until 2000.

Cerentano v.

UMWA Health and Retirement Funds, 735 F.3d 976 (7th Cir. 2013). During the course
of his employment, Plaintiff suffered various injuries on the job including a sprained
right back in 1986, an injury to his left elbow in 1989, an injury to his left knee in 1994,
and a sprained muscle in 1999. Cerentano, 738 F.3d at 978-79. His last injury on the job
occurred on July 27, 2000 when Plaintiff inhaled fumes and later fell out of a moving cart,
injuring his shoulders, left ankle, and left knee.

Id. at 979.

Although Plaintiff

ultimately returned to work after that injury, Plaintiff was later wrongfully discharged
from the mine on July 28, 2000 after he received a false positive on a drug test. Id.
Plaintiff was later diagnosed by Dr. Cantrell with depression due to his firing. Id.
In February 2005, Plaintiff was involved in a rear-ended car accident and was
diagnosed with neck and lumbar pain. Id. One month later, his MRI showed a slight
disc bulge and Plaintiff later complained of left knee pain from a small fracture
stemming from the car accident. Id. In September 2005, Plaintiff was diagnosed with
diabetes, left arm neuropathy, lumbar pain, depression, and left knee pain. Id. at 980.
In December of that year he was examined for headaches with neck pain, pain between
his shoulder blades, left arm pain, right arm pain, back pain, and left leg pain
attributable to his automobile accident. Id.
Plaintiff subsequently sought Social Security Disability Insurance (SSDI) benefits
starting from February 16, 2005, the date of the car accident. Cerentano, 735 F.3d at 980.

UMWA Health and Retirement Funds, 735 F.3d 976 (2013).
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The Administrative Law Judge reviewing Plaintiff’s application found that Plaintiff
could not work because he was disabled and thus entitled to benefits. Id. The ALJ
noted nine severe impairments but ultimately did not find Plaintiff disabled under these
impairments. Instead, the ALJ found that Plaintiff was unable to “perform his past
work because of his residual functioning capacity, which was limited due to asthma;
diabetes; obesity; back and neck pain due to his 2005 car accident; degenerative disc
disease of the lumbar, thoracic, and cervical spine; degenerative joint disease of the
acromioclavicular joint; rotator cuff/subacromial bursitis; chronic back strain; ‘flexion
contracture of the left elbow’; ‘internal derangement of the left knee’; anxiety,
depression, and mood swings; severe headaches and pain running down the neck into
the arms and hands; and ‘knee pain attributable to a prior knee injury.’” Id.
After being awarded his SSDI benefits, Plaintiff then sought disability pension
benefits from the United Mine Workers of America 1974 Pension Trust Plan (hereinafter
“the Plan”). The Trustees of the Plan (hereinafter “the Trustees”) denied his application
and his appeal. Cerentano, 735 F.3d at 980-81. Plaintiff then filed suit and the Trustees
agreed to review Plaintiff’s application for a third time. Id. The Trustees again denied
Plaintiff’s application. Id. The district court ultimately granted summary judgment in
favor of the Trustees and Plaintiff appealed to the Seventh Circuit.
In Cerentano, the Seventh Circuit found that the Trustees’ decision regarding
Plaintiff’s application for benefits from the Plan was arbitrary and capricious.
Cerentano, 735 F.3d at 981. While the Trustees considered each of the nine severe
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impairments noted by the ALJ, finding that none were the result of a former mine
accident, the Seventh Circuit noted that the Trustees should have examined all injuries,
including the non-severe injuries, which the ALJ relied on in determining Plaintiff’s
disability. “The [Trustees] also should have determined which of those injuries were
caused by mine accidents and whether, in combination, those mine related injuries
comprised a ‘casual link’ in the ALJ’s aware of disability benefits.” Id. at 982. The
Seventh Circuit remanded the case directly to the Trustees in order to conduct a new
review based on the Seventh Circuit’s guidelines.2
While on remand to the Trustees, Plaintiff offered to submit additional evidence
in support of his claim.

This report from Dr. Arthur Sippo was based on his

examination of Plaintiff and review of previous medical records (Doc. 28-3, p. 3). Sippo
also found, from a review of the documents and Plaintiff, that Plaintiff’s depression and
anxiety were caused by the multiple injuries Plaintiff received on the job (Id. at p. 4).
Prior to the submission by Sippo, the Plan’s medical director reviewed Plaintiff’s
existing medical records and determined, in a memo to the Trustees, that there was
inconclusive evidence connecting Plaintiff’s disability with his mine accidents (Doc.
24-7, pp. 33-3).

The medical director ultimately recommended obtaining an

independent medical examination (Id. at pp. 33-34). Upon receipt of Dr. Sippo’s report,
the Trustees awarded Plaintiff a disability pension based on a causal link between

2

The Seventh Circuit noted that some of the non-severe injuries the ALJ considered could have been the
result of mine accidents including Plaintiff’s injuries to this left elbow, left knee, and pain the AJG noted
was from a prior injury.
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Plaintiff’s depression and anxiety and his mine accident of July 28, 2000 (Doc. 24-7, pp.
13-14).
Plaintiff subsequently filed this suit seeking prejudgment interest and attorney’s
fees associated with the award of a disability pension under the Plan.
LEGAL STANDARDS
Summary Judgment is proper only “if the admissible evidence considered as a
whole shows there is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Dynegy Mktg. & Trade v. Multi Corp., 648
F.3d 506, 517 (7th Cir. 2011) (internal quotation marks omitted) (citing FED. R. CIV. P.
56(a)). See also Ruffin-Thompkins v. Experian Info. Solutions, Inc., 422 F.3d 603, 607
(7th Cir. 2005).

The party seeking summary judgment bears the initial burden of

demonstrating—based on the pleadings, affidavits, and/or information obtained via
discovery—the lack of any genuine issue of material fact. Celotex Corp. v. Catrett, 477
U.S. 317, 323 (1986).
After a properly supported motion for summary judgment is made, the adverse
party “must set forth specific facts showing that there is a genuine issue for trial.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986) (quoting FED. R. CIV. P.
56(e)(2)).

A fact is material if it is outcome determinative under applicable law.

Anderson, 477 U.S. at 248; Ballance v. City of Springfield, Ill. Police Dep’t, 424 F.3d 614,
616 (7th Cir. 2005); Hottenroth v. Vill. of Slinger, 388 F.3d 1015, 1027 (7th Cir. 2004). A
genuine issue of material fact exists if “the evidence is such that a reasonable jury could
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return a verdict for the nonmoving party.”

Anderson, 477 U.S. at 248.

“A mere

scintilla of evidence in support of the nonmovant’s petition is insufficient; a party will be
successful in opposing summary judgment only when it presents definite, competent
evidence to rebut the motion.” Albiero v. City of Kankakee, 246 F.3d 927, 931–32 (7th
Cir. 2001) (citations and quotations omitted).
On summary judgment, the Court considers the facts in the light most favorable
to the non-movant. Srail v. Vill. of Lisle, 588 F.3d 940, 948 (7th Cir. 2009). The Court
adopts reasonable inferences and resolves doubts in the nonmovant’s favor. Id.; Nat’l
Athletic Sportswear, Inc. v. Westfield Ins. Co., 528 F.3d 508, 512 (7th Cir. 2008).

Even

if the facts are not in dispute, summary judgment is inappropriate when the information
before the court reveals that “alternate inferences can be drawn from the available
evidence.”

Spiegla v. Hull, 371 F.3d 928, 935 (7th Cir. 2004), abrogated on other

grounds by Spiegla II, 481 F.3d at 966 (7th Cir. 2007). See also Anderer v. Jones, 385
F.3d 1043, 1064 (7th Cir. 2004).
ANALYSIS
A. Prejudgment Interest
The Plan first argues that Plaintiff cannot bring a stand-alone suit for
prejudgment interest, but at oral arguments acknowledged that it could not point to any
case law which prohibits a suit like Plaintiff’s for prejudgment interest. Instead, the
Plan argued that it did not improperly delay Plaintiff’s benefits.
In ERISA cases there is a presumption in favor of prejudgment interest awards.
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Fritcher v. Health Care Serv. Corp., 301 F.3d 811, 820 (7th Cir. 2002). Without such an
award, plaintiff’s compensation “is incomplete and the defendant has an incentive to
delay.” Id. (citing Gorenstein Enters., Inc. v. Quality Care-USA, Inc., 874 F.2d 431, 436
(7th Cir. 1989)); 29 U.S.C. § 1132(a)(3)(B) (“A civil action may be brought….to obtain
other equitable relief”). Whether to award prejudgment interest is “a question of
fairness, lying within the court’s sound discretion, to be answered by balancing the
equities.” Id. (quoting Trustmark Life Ins. Co. v. University of Chicago Hospitals, 207
F.3d 876, 885 (7th Cir. 2000)(internal quotations omitted)).

Such an award of

prejudgment interest can be awarded when benefits to a plaintiff were delayed. Fotta
v. Trustees of United Mine Workers of Am., Health & Ret. Fund of 1974, 165 F.3d 209,
212 (3rd Cir. 1998).
Here, the Court finds that Plaintiff is entitled to prejudgment interest to put him
in the position that he would have been had the Trustees properly analyzed his
application for a disability pension. The Trustees initially denied Plaintiff’s application
but the Seventh Circuit rejected that analysis, finding it to be arbitrary and capricious.
The Seventh Circuit instructed the Trustees to examine all of Plaintiff’s injuries, both
severe and non-severe, and to determine whether any of those injuries were caused by
mine accidents and whether, in combination, all of those mine related injuries had “a
casual link” in the award by the ALJ. See Cerentano, 735 F.3d at 982. While the Plan
argues that Plaintiff’s benefits were not wrongfully withheld, clearly the Seventh Circuit
found that their initial assessment was “arbitrary and capricious” and sent the case back
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to the Trustees to analysis under the method instructed by the Seventh Circuit,
specifically noting that there were injuries in the record, specifically Plaintiff’s elbow,
could have a casual link with the ALJ’s decision to award benefits.
The Plan argues that benefits were still not wrongfully withheld on remand
because it did not approve Plaintiff’s benefits until he provided additional medical
information, in the form of a report from Dr. Sippo. Plaintiff argues that the Trustees
decision to award Plaintiff benefits upon “new evidence” from Sippo is pretextual as the
evidence Sippo used to make his recommendation was already in the record before the
Trustees. However, the Court need not decide whether the Trustees’ decision was
pretextual and, for purposes of these motions only, will presume that the decision was
not pretextual.
Here, the initial decision of the Trustees, when Plaintiff’s application was
reviewed under the rubric provided by the Seventh Circuit, was that it did not have
enough information to make a determination. A memo from the Trustees’ medical
director indicates that the records before the Trustees were inclusive and recommended
an independent medical examination (Doc. 24-7, p. 34). This conclusion would have,
presumably, occurred in 2010 had the Trustees used the standard outlined by the
Seventh Circuit, instead of employing the wrong standard they used to deny Plaintiff’s
application.

Thus, at that time, an independent examination would have been

performed or more information would have been asked of Plaintiff, as was later
provided by Plaintiff in the form of the report from Dr. Sippo, and Plaintiff would have
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been granted his disability pension, as he was after the remand from the Seventh Circuit.
Accordingly, the Court finds that Plaintiff is entitled to prejudgment interest as the
Trustees’ decision was arbitrary and capricious and, at the very least, the Trustees would
have requested additional information leading to the approval of Plaintiff’s application
had they applied the right standard in 2010, as set forth by the Seventh Circuit.
However, while Plaintiff originally sought prejudgment interest stemming from
the date of the ALJ’s decision to award disability to Plaintiff, Plaintiff conceded at the
hearing that the proper date for calculating interest would be the date that the Trustees
initially denied his disability benefits under the Plan, April 1, 2010. Plaintiff indicated
in his reply brief that had he been awarded disability benefits on April 1, 2010, he would
have received a lump sum payment of $65,019 (Doc. 28-6). Plaintiff calculated the
prejudgment interest on that amount at the rate of 3.25%, the average prime rate for the
period. The Plan does not dispute Plaintiff’s calculations or the average prime rate used
for the calculations and thus the Court adopts Plaintiff’s calculations. Plaintiff notes
that 3.25% was the prime rate for the entire period of April 2010 to December 2014 (Doc.
28-7, p. 38-39). Interest on the amount totals $10,837.69. Plaintiff notes that he was also
underpaid $1,039 per month for the months April 2010 to October 2012. Total interest
on that amount totals $2,346.52.

Plaintiff was underpaid $208.33 per month from

November 2012 to December 2014. Interest on those monthly payments totals $202.86.
Plaintiff also notes that he was underpaid a pension bonus in 2010 of $445.00. Interest
on that amount from January 2011 to 2014 totals $61.69. Plaintiff was also underpaid a
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$445.00 pension bonus in 2011. Interest on that amount from January 2012 to December
2014 totals $45.51. Thus, the total interest due as of December 2014 was $13,494.28.
Interest on that amount from January 2015 to July 2016 was $712.54 for a total amount of
interest due as of July 31, 2016 of $14,206.81. Thus, the Court finds that Plaintiff is
entitled to prejudgment interest in the amount of $14,206.81, plus per diem simple
interest to be awarded at the time of final judgment. The per diem simple interest
amount is $1.36/day.
B. Attorney’s Fees
Turning to the request for attorney’s fees, the Plan first argued that Plaintiff could
not pursue a stand-alone claim for attorney’s fees. The Plan argued that there was no
case or controversy in which to award attorney’s fees because the request for fees, itself,
did not state a cause of action. At the hearing, however, the Plan conceded that it could
not point to any case law which prevented Plaintiff from seeking attorney’s fees after
being awarded benefits after a remand from the Seventh Circuit.
Turning to the merits of Plaintiff’s claim for attorney’s fees, “[f]ees may be
awarded under ERISA to a party who achieves ‘some degree of success on the merits.’”
Temme v. Demis Co., Inc., 762 F.3d 544, 549 (7th Cir. 2014) (quoting Hardt v. Reliance
Standard Life Ins. Co., 560 U.S. 242, 255, 130 S.Ct. 2149, 176 L.Ed.2d 998 (2010)). The
Seventh Circuit has noted that there are two approaches to analyzing an award of
attorney fees after Hardt.

One approach views Hardt’s “degree of success” as a

threshold inquiry and then seeks to determine whether an award of fees is appropriate
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based on the five factor test employed by courts prior to Hardt. Id. at 549.

The second

view holds that “assessing whether a party achieved some degree of success on the
merits of its claim is the only factor a district court must account for, though a district
court may still consider the other factors, as before.” Temme, 762 F.3d at 550. The
Seventh Circuit has affirmed the use of both tests and the decision whether to award
attorney fees is in the discretion of the district court. Id. (citing Leimkuehler v. Am.
United Life Ins. Co., 713 F.3d 905, 915 (7th Cir. 2013); Raybourne v. Cigna Life Ins. Co. of
New York, 700 F.3d 1076, 1090-91 (7th Cir. 2012)). Those five factors include: “1) the
degree of the offending parties’ culpability; 2) the degree of the ability of the offending
parties to satisfy an award of attorneys’ fees; 3) whether or not an award of attorneys’
fees against the offending parties would deter other persons acting under similar
circumstances; 4) the amount of benefit conferred on members of the pension plan as a
whole; and 5) the relative merits of the parties’ positions.” Temme, 762 F.3d at 547.
Defendant conceded during oral arguments that Plaintiff achieved some degree
of success on the merits. The Seventh Circuit found that the Trustees’ analysis under
the plan guidelines was arbitrary and capricious and remanded the matter back to the
Trustees for further analysis. As a result of that remand, Plaintiff ultimately received
disability benefits from the Plan. Without the Seventh Circuit’s finding, Plaintiff would
not have been awarded his disability benefits. Thus, Plaintiff clearly achieved some
degree of success on the merits in obtaining a remand and reconsideration of his
application for disability benefits in light of the Trustees’ arbitrary and capricious
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analysis.
Having found that Plaintiff achieved some degree of success on the merits, the
Court could end its analysis there as the Seventh Circuit has found that test to be the
only required test for awarding attorney’s fees. However, the Court finds that Plaintiff
would be entitled to attorney’s fees even under the five factor test and thus will conduct
the analysis under those factors as well.
Turning to the five factor test, the Court finds that those factors also weigh in
favor of awarding attorney’s fees. While the Plan argues that attorney’s fees should not
be awarded because their position was substantially justified, that argument does not
hold up when considering the Seventh Circuit’s holding in Cerentano.

Defendant

argues that Plaintiff’s pension application was complicated and that the Plan each time
reviewed Plaintiff’s application and thoroughly and reasonably considered the
documents submitting in support of his claim, ultimately denying Plaintiff benefits on
three occasions. The Plan also points to the fact that Judge Reagan agreed that the Plan
Trustees had acted reasonably in denying Plaintiff’s claim.

However, the Seventh

Circuit found Trustees’ analysis under the Plan to be arbitrary and capricious; thus the
Defendant could be said to be highly culpable as even under the most stringent standard
of “arbitrary and capricious”, Defendant’s analysis was considered “insufficient”.
Further, even when the matter was remanded back to the Plan from the Seventh Circuit,
Defendant never did conduct the analysis that the Seventh Circuit directed it to conduct.
Instead, the Plan focused its decision on the findings of anxiety and depression, focusing
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its analysis on the severe injuries it had previously reviewed rather than looking at all of
the injuries as the Seventh Circuit directed. Thus, the Court finds that the first and fifth
factors weigh in Plaintiff’s favor.
Turning to the second factor, the Plan argues that its financial difficulties are well
known and that an award of attorney’s fees in this case will limit the amount that can be
awarded to other individuals in the future if the fund is depleted. While an award of
attorney’s fees would certainly take money from the fund, there is no evidence that it
would completely deplete the fund. While it might not completely deplete the fun,
however, certainly the award would diminish the Plan to some extent which could affect
future benefits being awarded. Thus, the Court finds that this factor weighs toward not
awarding attorney’s fees.
But the Court finds that an award would deter the Plan from denying coverage in
the future under the improper analysis which Defendant admitted it had been using
prior to the Seventh Circuit’s decision in Cerantano. Now, Defendant may be more
likely to consider all injuries, both severe and non-severe, and whether there is a causal
link to the award of benefits by the ALJ, as the Seventh Circuit ordered. This may lead
to more members receiving benefits under a proper analysis of the Plan. Prior to this
case, Defendant admittedly was not using this analysis and the Seventh Circuit has now
deemed it improper for it to deny benefits without this type of analysis. Thus, the
Court finds that the third factor weighs in Plaintiff’s factor.
The fourth factor is a wash, benefiting neither side due to both the detriment and
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benefit conveyed by an award of attorney’s fees for the members of the plan. As the
Court previously noted, while more members may now be qualified for disability under
the Plan due to the analysis that the Defendant should be conducting in light of the
Seventh Circuit’s ruling, an award of attorney’s fees will limit the funds in the Plan,
which may limit the amount of awards to be given in the future.
Balancing the five factors, the Court finds that while not all of the factors weigh in
favor of Plaintiff, the Court finds that most of the factors favor Plaintiff’s award of
attorney’s fees. Thus, the Court GRANTS Plaintiff’s motion for summary judgment on
the issue of attorney’s fees. The Court noted at the hearing that the parties had not
briefed the proper amount of attorney’s fees and ORDERED further briefing.
Accordingly, while the Court GRANTS the request for attorney’s fees, it will await
further briefing before determining the appropriate amount of attorney’s fees that
Plaintiff should receive.

CONCLUSION
Accordingly, the Court GRANTS summary judgment for Plaintiff and DENIES
Defendants’ summary judgment motion. The Court finds that Plaintiff is entitled to
both a prejudgment interest award and attorney’s fees. The Court finds that Plaintiff is
entitled to $14.206.81 in prejudgment interest, plus simple interest to be awarded at the
time of final judgment. The Court will await further briefing on the attorney’s fees
computation before determining the proper amount of attorney’s fees to be awarded.
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The Court will enter final judgment at that time.
IT IS SO ORDERED.
DATED: December 7, 2016.
/s/ Stephen C. Williams
STEPHEN C. WILLIAMS
United States Magistrate Judge

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