Fine v. Sun Life Assurance Company of Canada
Filing
76
MEMORANDUM OPINION. Signed by District Judge Leonie M. Brinkema on 4/6/15. (gwalk, )
IN THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF VIRGINIA
Alexandria Division
JEFFREY P. FINE,
Plaintiff / Counterclaim Defendant,
I:14cv551 (LMB/TCB)
V.
SUN LIFE ASSURANCE COMPANY OF CANADA,
Defendant / Counterclaimant.
MEMORANDUM OPINION
This action under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29
U.S.C. ยง 1001,et seq.. arises from defendant Sun Life Assurance Companyof Canada's ("Sun
Life" or "defendant") termination of plaintiff Jeffrey P. Fine's ("Fine" or "plaintifP') long-term
disability ("LTD") benefits. The parties disagree as to whether Fine ceased being eligible to
receive LTD benefits under the terms of an employee benefit plan administered and insured by
Sun Life. Specifically, Fine argues that he never ceased being eligible for LTD benefits and has
filed suit to recover the benefits that have accrued since Sun Life terminated his benefits (the
"ERISA claim"). In contrast, Sun Life argues that Fine has been ineligible for LTD benefits
since January 1,2012, and has counterclaimed against Fine to recover payments made after that
date. The parties' filed cross-motions for summary judgment on both the ERISA claim and the
counterclaim, on which the Court heard oral argument. For the reasons discussed in open court
and those that follow, the Court finds that Sun Life did not abuse its discretion in terminating
Fine's benefits but that equitable considerations now prevent Sun Life from recouping most of
the amount previously paid in error.
derivation from, rather than out of a source." Sun Life contends thatunder the language of the
2011 NEC Agreement, the bonus arose, flowed, emanated, and was "derived" from the work
Fine agreed to perform underthe agreement. Essentially, Sun Life argues that but for Fine's
employment with CIBT, he would not have received the bonus and therefore the bonus was
derived from work performed in that it was derived from Fine's emplojmient.
The structure of the 2011 NEC Agreement supports Sun Life's position. Despite the
2011 NEC Agreement's re-characterization of the annual bonus as a "profit sharing bonus,"
which Sun Life argueswas an attemptto bringthe bonus outside of the Policy's definition of
Disability Earnings, the bonus remained housed in the section labeled "Compensation," just as it
had been in the 2010 NEC Agreement. This sectiondescribes "Compensation"as consisting of
two main components, the annual $50,000 salary and the annual profit sharing bonus:
(b) Compensation.
(i) During the Term, the Executive: (A) shall be entitled to (1) an annual
fee of $50,000 per year, payable by the Company paid in ratable installments in
accordance wiA the Company's payroll practices, (2) reimbursements for
Executive's cell phone, blackberry (or similar devices^ and one home office
telephone line payable in accordance with the Company's reimbursement policies,
and (3) participation in the Company's welfare, employee benefit and fringe
benefit programs on the same terms as are applicable to senior executives of the
Company; provided that during the Term the Company shall pay the frill premium
cost for the participation of the Executive and his eligible dependents in the
Company's healthcare programs; and (B) shall be eligible to receive from the
Company a profit sharing bonus in such amount, if any, as may be determined by
the Holdco Board, in its sole and absolute discretion, if the Company's
performance is sufficient (as determined by the Holdco Board in its sole and
absolute discretion) to warrant such bonus (it being understood that if the Holdco
Board determines in its sole and absolute discretion that any such bonus shall be
paid to Executive, such bonus payment shall be paid in cash in the calendar year
following the calendar year to which such bonus relates at the same time annual
bonuses are paid to senior executives of the Company).
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