Culp v. Metropolitan Life Insurance Company
Filing
55
ORDER: Adopting as Modified Findings and Recommendation 49 ; Granting Plaintiff's Motion for Summary Judgment 30 ; Denying as Moot Defendant's Cross-Motion for Summary Judgment 31 ; Granting Defendant's Motion for Summary Judgment 32 . Directing the parties to confer and submit a form of Judgment no later than 1/25/2016. Signed on 1/8/2016 by Judge Anna J. Brown. (sm)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
JAMES K. CULP,
Plaintiff,
3:14-CV-01133-PK
ORDER
v.
METROPOLITAN LIFE INSURANCE
COMPANY,
Defendant.
BROWN, Judge.
Magistrate Judge Paul Papak issued Findings and
Recommendation (#49) on September 28, 2015, in which he
recommends the Court grant Plaintiff's Motion (#30) for Summary
Judgment, deny as moot Defendant's Cross-Motion (#31) for Summary
Judgment on Plaintiff's Benefit Claim, and grant Defendant's
Motion (#32) for Summary Judgment on Defendant's Counterclaim.
Defendant filed timely Objections to the Findings and
1 - ORDER
Recommendation.
The matter is now before this Court pursuant to
28 U.S.C. § 636(b) (1) and Federal Rule of Civil Procedure 72(b).
When any party objects to any portion of the Magistrate
Judge's Findings and Recommendation, the district court must make
a de nova determination of that portion of the Magistrate Judge's
report.
28 U.S.C. § 636(b) (1).
F.3d 930,
See also Dawson v. Marshall,
561
932 (9'" Cir. 2009); United States v. Reyna-Tapia, 328
F.3d 1114, 1121 (9t" Cir. 2003) (en bane).
Defendant objects only to the Magistrate Judge's finding
that Plaintiff is entitled to prejudgment interest at the Oregon
statutory rate.
I.
Plaintiff is entitled to prejudgment interest.
Defendant objects to the Magistrate Judge's finding that
Plaintiff is entitled to prejudgment interest on his ERISA
benefits claim.
In its Objections Defendant reiterates the
arguments contained in its Motion for Summary Judgment on
Plaintiff's Benefit Claim, its Reply in support of its Motion for
Summary Judgment, its response to Plaintiff's Motion for Summary
Judgment, and its statements at oral argument.
This Court has
carefully considered Defendant's Objections and concludes they do
not provide a basis to modify the Findings and Recommendation.
The Court also has reviewed the pertinent portions of the record
de nova and does not find any error in the Magistrate Judge's
Findings and Recommendation.
2 - ORDER
II.
Plaintiff is entitled to prejudgment interest at the rate
set out in 28 U.S.C. § 1961.
Defendant also objects to the Magistrate Judge's finding
that Plaintiff should receive prejudgment interest at Oregon's
statutory rate rather than at the rate set out in 28 U.S.C.
§ 1961.
The Ninth Circuit has held in ERISA benefits cases that
"[g)enerally 'the interest rate prescribed for post-judgment
interest under 28 U.S.C. § 1961 1 is appropriate for fixing the
rate of pre-judgment interest unless the trial judge finds, on
substantial evidence, that the equities of that particular case
require a different rate.'"
Blankenship v. Liberty Life Assur.
Co. of Boston, 486 F.3d 620, 628 (9th Cir. 2007) (quoting Grosz-
Salomon v. Paul Revere Life Ins. Co., 237 F.3d 1154, 1164 (9th
Cir. 2001)).
"Substantial evidence" is "such relevant evidence
as a reasonable mind might accept as adequate to support a
conclusion."
Blanton v. Anzalone, 813 F.2d 1574, 1576 (9th Cir.
1987).
In Blankenship the plaintiff prevailed on his ERISA benefit
claim and the district court awarded the plaintiff prejudgment
interest at 10.01% rather than at the T-bill rate set out in 28
1
28 U.S.C.§ 1961(a) provides:
"[I]nterest shall be
calculated from the date of the entry of the judgment, at a rate
equal to the weekly average 1-year constant maturity Treasury
yield, as published by the Board of Governors of the Federal
Reserve System, for the calendar week preceding the date of the
judgment."
3 - ORDER
u.s.c.
§
1961.
486 F.3d at 622, 628.
The Ninth Circuit held the
district court did not err when it awarded the plaintiff a rate
higher than the rate set out in § 1961 because the district court
made the necessary factual findings to establish there was
substantial evidence that the equities of that case required a
different rate.
Id. at 628.
Specifically, the district court
relied on the plaintiff's declaration in which he testified:
[A)s a result of Liberty Life's nonpayment of
benefits, Blankenship was forced to replace the
$6,093.82 per month he would have received with
his own personal funds.
Those funds would
otherwise have been invested in a Vanguard mutual
fund in which he had already invested over one
half million dollars, and which had a
10.01-percent return since its inception in June
2000.
Based on this factual record, the court
concluded that ftin order for Blankenship to be
adequately compensated for Liberty's wrongful
nonpayment of benefits," it was awarding
prejudgment interest at a rate of 10.01 percent,
compounded monthly.
Id.
were
The Ninth Circuit held the district court's factual findings
ftsupported by the record, and .
the 'substantial evidence' requirement."
adequate to satisfy
Id.
Here Plaintiff does not point to any evidence similar to
that in Blankenship to suggest the equities of this case require
the Court to award prejudgment interest at a rate higher than
that permitted in § 1961.
Instead Plaintiff relies on two cases
from the Tenth Circuit and cases from district courts in the
Tenth Circuit in which the courts awarded prejudgment interest in
ERISA benefit cases at the state's statutory rate rather than the
4 - ORDER
rate set in
§
1961.
The Tenth Circuit, however, applies a
different analysis than the Ninth Circuit as to whether interest
should be awarded at the rate set in
§
1961 or the state rate.
The Tenth Circuit cases, therefore, are not pertinent.
Plaintiff also relies on a case from the Western District of
Tennessee (Warden v. Metropolitan Life Insurance Company) in
which the court concluded:
~The
rate of prejudgment interest
will be determined under Tennessee law unless MetLife can
demonstrate that this state law overcompensates Plaintiff.n
F. Supp. 2d 838, 850 (M.D. Tenn. 2008).
574
Warden relies on Ford v.
Uniroyal Pension Plan, a Sixth Circuit case that does not support
an award of prejudgment interest at the state's rate of interest
rather than the interest rate set in
§
1961 nor does it indicate
a defendant must establish the state rate would overcompensate a
plaintiff.
The court in Ford stated:
Although a district court may look to state law
for guidance in determining the appropriate
prejudgment interest rate, we have held previously
that the statutory postjudgment framework set
forth in 28 U.S.C. § 1961 is a reasonable method
for calculating prejudgment interest awards.
The
magistrate judge determined that the average
52-week U.S. Treasury bill rate over the relevant
period was 8.68%.
He then selected the flat rate
of 9% per annum, ~to avoid the complexities of
compounding interest.n J.A. at 166 (Magis. J. R &
R) . The district court adopted the recommended 9%
annual rate.
Because the 9% rate was based on the
average 52-week United States Treasury bill rate
over the relevant time period, we conclude that
the district court did not abuse its discretion in
utilizing a 9% prejudgment interest rate.
5 - ORDER
154 F.3d 613, 619 (6th Cir. 1998) (citations omitted).
Although
the Ford court noted a district court may look to state law for
guidance, the court did not apply the state interest rate.
Ford,
therefore, does not support the Warden court's use of the
Tennessee state rate, and it does not support Plaintiff's request
for this Court to apply the Oregon rate of interest.
In Stone v. Bayer Corporation Long Term Disability Plan this
Court declined to award prejudgment interest in an ERISA benefit
case at the Oregon statutory rate:
Plaintiff has not produced any evidence to
establish she suffered the loss of an ability to
invest money in funds at a rate of return higher
than that earned on T-Bills or that she had to
borrow money at a higher rate to compensate for
lost benefits.
Plaintiff merely states the rate
under § 1961 "will not adequately compensate [her)
for the denial of benefits over the five year
period." Absent any authority to support a rate
other than that proscribed in § 1961, the Court
awards Plaintiff prejudgment interest at the
one-year T-Bill rate found at
http://www.federalreserve.gov/releases/Hl5/current/.
No. 08-CV-356-BR, 2010 WL 2595675, at *4 (D. Or. June 21, 2010).
Other courts in this district also have declined to award
prejudgment interest in ERISA benefits cases at the Oregon
statutory rate or at rates different from the one set out in
§
1961.
See, e.g., Rabbat v. Standard Ins. Co., 894 F. Supp. 2d
1311, 1323-24 (D. Or. 2012) (an ERISA plaintiff was not entitled
to prejudgment interest at Oregon's statutory rate of nine
percent because he did not "set forth any evidence demonstrating
6 - ORDER
that the equities require this court to deviate from the rate
prescribed in 28 U.S.C. § 1961."); Topits v. Life Ins. Co. of N.
Am., No. 3:12-CV-00661-ST, 2013 WL 5524129, at *12 (D. Or.
Apr. 11, 2013), adopted 2013 WL 5524131 (D. Or. Sept. 30, 2013)
(plaintiff was not entitled to prejudgment interest at Oregon's
statutory rate of nine percent because the plaintiff had not
submitted evidence justifying a deviation from the rate
prescribed in 29 U.S.C. § 1961).
As noted, Plaintiff does not point to any evidence in the
record to establish that he suffered the loss of his ability to
invest money in funds at a rate of return higher than that earned
on T-Bills or that he had to borrow money at a higher rate to
compensate for lost benefits.
The Court, therefore, concludes on
this record that Plaintiff should be awarded prejudgment interest
at the rate set out in 28 U.S.C. § 1961 rather than the Oregon
statutory rate.
Accordingly, the Court declines to adopt that
portion of the Findings and Recommendation in which the
Magistrate Judge found Plaintiff should be awarded prejudgment
interest at the Oregon statutory rate.
CONCLUSION
The Court ADOPTS AS MODIFIED Magistrate Judge Papak's
Findings and Recommendation (#49), and, accordingly, GRANTS
Plaintiff's Motion (#30) for Summary Judgment, DENIES as moot
7 - ORDER
Defendant's Cross-Motion (#31) for Summary Judgment on
Plaintiff's Benefit Claim, and GRANTS Defendant's Motion (#32)
for Summary Judgment on Defendant's Counterclaim.
The Court DIRECTS the parties to confer and to submit a form
of Judgment to this Court consistent with this Order no later
than January 25, 2016.
IT IS SO ORDERED.
DATED this
gth
day of January, 2016.
ANNA J. BROWN
United States District Judge
8 - ORDER
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?