Flosdorf v. Reliance Standard Life Insurance Company

Background

This order followed the court’s earlier judgment on the pleadings for Andrew J. Flosdorf. The court had directed Flosdorf to submit the benefits, interest, attorney-fee, and cost amounts he sought, and allowed Reliance Standard Life Insurance Company to respond.

The disability policy used two standards. During the first 36 months for which benefits were payable, “Total Disability” meant that the insured could not perform the material duties of his regular occupation. After benefits had been paid for 36 months, the policy required that the insured be unable to perform the material duties of any occupation for which he was reasonably suited based on education, training, or experience.

Benefits and remand

Flosdorf requested $609,094.99, representing a $6,000 monthly benefit from July 6, 2020, through December 11, 2036, after deductions for other income and benefits. Reliance Standard argued that benefits should be awarded only through September 20, 2021, followed by a remand for a determination under the any-occupation standard. It calculated that Flosdorf was entitled to $29,088.88.

The court rejected Flosdorf’s argument that Reliance Standard had waived its challenge to future benefits. It explained that the earlier ruling focused on Flosdorf’s ability to perform his regular occupation and did not decide whether he was disabled under the any-occupation standard. Reliance Standard had denied the claim under the regular-occupation standard and had never made an any-occupation determination. The administrative record also lacked evidence concerning the any-occupation period, including a vocational assessment.

The court therefore remanded the case to Reliance Standard to determine Flosdorf’s eligibility under the policy’s any-occupation standard. At the same time, it awarded past-due benefits through May 31, 2023, the date of the earlier order. The court awarded $88,865.32 in net disability benefits.

Prejudgment interest

The court found that prejudgment interest was appropriate equitable relief under the Employee Retirement Income Security Act. The parties agreed that the applicable interest rate was 4.91%. Using daily calculation and annual compounding, the court awarded $6,030.61 in prejudgment interest, for a combined benefits-and-interest award of $94,895.93.

The court stated that if the parties disagreed with its interest calculation, they had to submit declarations within ten days explaining their positions in detail.

Attorney fees and costs

Flosdorf’s counsel requested $22,578.25 in attorney fees for 79.85 hours of work and $708.08 in costs. Reliance Standard did not contest those amounts. In the discussion, the court awarded $22,578.25 in fees and $708.08 in costs. However, conclusion item 3 states the fee award as $22,578.08, creating an inconsistency within the order.

Disposition

Judge Nelson ordered four things: an award of $88,865.32 in disability benefits and $6,030.61 in prejudgment interest; a remand to Reliance Standard for an any-occupation eligibility determination; an award of attorney fees and costs; and supplemental declarations within ten days if the parties disagreed about the interest calculation.