E v. ANTHEM BLUE CROSS AND BLUE SHIELD

Filing 49

ORDER ON BENEFITS OWED TO THE PLAINTIFF AND INTEREST - By JUDGE D. BROCK HORNBY. (mnw)

UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
ADELE E.,
PLAINTIFF
V.

ANTHEM BLUE CROSS AND BLUE
SHIELD,
DEFENDANT

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CIVIL NO. 2:15-CV-01-DBH

ORDER ON BENEFITS OWED TO THE PLAINTIFF AND INTEREST
On April 28, 2016, I granted the plaintiff Adele E.’s motion for judgment
on the administrative record and ordered the parties to submit briefing regarding
the calculation of benefits owed to the plaintiff, whether to award prejudgment
interest, and, if awarded, the rate to be applied. Both parties have submitted
two briefs on these issues. After considering the parties’ positions, I conclude
that the plaintiff is entitled to judgment in the amount of $188,500.00, with
prejudgment interest in the amount of $16,163.54, and postjudgment interest
as provided by statute, accruing from the entry of judgment, June 30, 2016. See
28 U.S.C.A. § 1961(a) (2006 & Supp. 2015); Radford Trust v. First Unum Life
Ins. Co. of Am., 491 F.3d 21, 24 (1st Cir. 2007).
A. Calculation of Benefits Owed

The plaintiff paid RainRock for 130 days of residential treatment that, I
have concluded, Anthem should have provided. She paid $1,450 per day. As a
result, she is entitled to judgment in the amount of $188,500.00. See Pl.’s Resp.

to June 1, 2016 Proc. Order & Attached Exs. (ECF No. 48). Anthem argues that
I should calculate benefits using a discounted rate that RainRock provides to
Anthem. But RainRock is not a party here, and therefore I have no occasion to
determine what the contract between Anthem and RainRock requires; any
disagreement regarding an applicable discount is between Anthem and
RainRock. The plaintiff is entitled to recover what Anthem’s wrongful denial of
benefits cost her to continue her medically necessary treatment at RainRock,
namely, $188,500.00.
B. Prejudgment Interest

“In ERISA cases, the district court has broad discretion both to determine
whether to award prejudgment interest and to determine the parameters of such
an award.”

Radford Trust, 491 F.3d at 23-24.

“The essential rationale for

awarding prejudgment interest is to ensure that an injured party is fully
compensated for its loss.” City of Milwaukee v. Cement Div., Nat’l Gypsum Co.,
515 U.S. 189, 195 (1995). Based on Anthem’s erroneous denial of benefits owed
to the plaintiff, see Decision & Order on Cross-Mots. for J. on the Admin. R. at
18-19 (ECF No. 40), and the plaintiff’s significant out-of-pocket expenses for
continuing her medically necessary treatment at RainRock, see Pl.’s Resp. to
June 1, 2016 Proc. Order at 2, I conclude that prejudgment interest shall be
awarded to the plaintiff.
1. Accrual Date

The rule in this District is that prejudgment interest accrues from the
denial of the plaintiff’s administrative appeal. Giroux v. Fortis Benefits Ins. Co.,
353 F. Supp. 2d 45, 54 (D. Me. 2005). After two internal appeal levels, Anthem
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finally upheld the denial of benefits rightfully owed to the plaintiff on
November 26, 2013. See R. at 1025-1027. Prejudgment interest shall therefore
run from November 26, 2013, until the date of entry of judgment in this case,
June 30, 2016. See also Black v. Unum Life Ins. Co. of Am., 324 F. Supp. 2d
206, 219 (D. Me. 2004); Curtin v. Unum Life Ins. Co. of Am., 298 F. Supp. 2d
149, 158-59 (D. Me. 2004).
2. Rate of Prejudgment Interest

The court “has broad discretion to choose the rate of prejudgment
interest.” Black, 324 F. Supp. 2d at 219 (citing Cottrill v. Sparrow, Johnson &
Ursillo, Inc., 100 F.3d 220, 225 (1st Cir. 1996), abrogated on other grounds by
Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242 (2010)). Following the
precedents from this District, see Giroux, 353 F. Supp. 2d at 54; Black, 324 F.
Supp. 2d at 219; Curtin, 298 F. Supp. 2d at 159, which have been deemed
reasonable by the First Circuit, see Marcial Ucin, S.A. v. SS Galicia, 558 F. Supp.
299, 303 (D. Mass.), aff’d, 723 F.2d 994 (1st Cir. 1983); see also Pimentel v.
Jacobsen Fishing Co., Inc., 102 F.3d 638, 640 (1st Cir. 1996); City of Boston v.
S.S. Texaco Tex., 773 F.2d 1396, 1401 (1st Cir. 1985), and guided by equitable
considerations, I calculate the plaintiff’s prejudgment interest award using the
relevant federal bank prime loan rates for each day of the period in question.1

See Board of Governors of the Federal Reserve System, Selected Interest Rates—H.15, Historical
Data, available at http://www.federalreserve.gov/releases/h15/data.htm (last visited June 30,
2016). The daily federal bank prime loan rate from November 26, 2013, through December 16,
2015, remained at 3.25%, and therefore the prejudgment interest rate to be applied from the
date of accrual, November 26, 2013, through December 16, 2015, is 3.25%. The daily federal
bank prime loan rate from December 17, 2015, through the entry of judgment, June 30, 2016,
remained at 3.5%, and therefore the prejudgment interest rate to be applied from December 17,
2015, through June 30, 2016, is 3.5%.
1

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Therefore, the per diem rate of prejudgment interest between November 26,
2013, and December 16, 2015, which is 751 days, is $16.78, and the per diem
rate between December 17, 2015, and June 30, 2016, which is 197 days, is
$18.08, for a total of $16,163.54 in prejudgment interest.2
CONCLUSION
Judgment shall be entered in favor of the plaintiff Adele E. in the amount
of One Hundred Eighty-eight Thousand Five Hundred Dollars ($188,500.00),
along with prejudgment interest at the federal bank prime loan rate from
November 26, 2013, until June 30, 2016, in the amount of Sixteen Thousand
One

Hundred

Sixty-three

Dollars

and

Fifty-four

Cents

($16,163.54).

Postjudgment interest will be awarded as provided by statute, accruing from the
entry of judgment, June 30, 2016.
SO ORDERED.
DATED THIS 30TH DAY OF JUNE, 2016
/S/D. BROCK HORNBY
D. BROCK HORNBY
UNITED STATES DISTRICT JUDGE

There were a total of 948 days between November 26, 2013, and June 30, 2016, including the
end date. The federal prime interest rate for 751 days was 3.25%, see supra note 1, and the
federal prime interest rate for 197 days was 3.5%, see id. The per diem rate of prejudgment
interest from November 26, 2013, through December 16, 2015, is $16.78: ($188,500 x
3.25%)/365 = $16.78. The per diem rate for December 17, 2015, through June 30, 2016, is
$18.08: ($188,500 x 3.5%)/365 = $18.08. Therefore, the net prejudgment interest figure is
$16,163.54: ($16.78 x 751) + ($18.08 x 197) = $16,163.54.
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