United States Court of Appeals
For the First Circuit
No. 06-1992
RADFORD TRUST,
Plaintiff, Appellant,
v.
FIRST UNUM LIFE INSURANCE COMPANY OF AMERICA,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. William G. Young, U.S. District Judge]
Before
Torruella, Lynch, and Lipez,
Circuit Judges.
Warren H. Pyle, with whom Pyle, Rome, Lichten, Ehrenberg &
Liss-Riordan, P.C. was on brief, for appellant.
Mark E. Porada, with whom Geraldine G. Sanchez and Pierce
Atwood LLP were on brief, for appellee.
June 27, 2007
LYNCH, Circuit Judge. In this case under the Employee
Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001-
1461, the sole remaining issue concerns the district court's
determination of the date on which postjudgment interest on an
award of benefits would begin, and the effect of this determination
on the court's discretionary decision to award prejudgment
interest. We find that the district court incorrectly held that
postjudgment interest began to accrue on a date prior to the
resolution of a disputed issue of damages. In light of this, we
remand to the district court to decide the matter of prejudgment
interest and any other matters raised in the aftermath of the
parties' settlement of an additional issue on appeal.
We recite only those facts relevant to the issue on
appeal. Additional background can be found in the district court's
opinions in this case. See Radford Trust v. First Unum Life Ins.
Co. of Am. (Radford Trust I), 321 F. Supp. 2d 226 (D. Mass. 2004);
Radford Trust v. First Unum Life Ins. Co. of Am. (Radford Trust
II), 399 F. Supp. 2d 3 (D. Mass. 2005).
Radford Trust is the assignee of a claim by a John Doe
for benefits under a group long-term disability policy issued by
First Unum Life Insurance Company to Doe's former employer. After
First Unum denied Doe's claim and Doe exhausted his administrative
appeals, Radford Trust filed this suit under ERISA seeking damages
for the allegedly wrongful denial of benefits.
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On March 31, 2004, the district court granted Radford
Trust's motion for "partial summary judgment on the issue of
liability." The court held that Radford Trust was entitled to
collect twenty-four months of benefits, plus costs, prejudgment
interest, and postjudgment interest. The court determined that
prejudgment interest would run from October 17, 1999, the beginning
of the period for which the court found Doe was entitled to
benefits. The court then required First Unum to submit a
calculation of the benefits owed and gave Radford Trust the
opportunity to challenge that calculation.
On April 14, 2004, First Unum submitted its calculation
of benefits. On April 28, Radford Trust filed a response in which,
inter alia, it challenged the applicability of an offset for Social
Security benefits received by Doe.
On June 15, 2004, the district court issued an opinion
explaining the reasoning behind its March 31 order. See Radford
Trust I, 321 F. Supp. 2d at 230. In the June 15 opinion, the court
sua sponte revised the accrual date for prejudgment interest to
June 13, 2000, the date on which Doe submitted an Employer's
Statement and Job Analysis as part of the proof of disability
required under the policy. Id. at 253. The court made no mention
of the Social Security offset issue.
On November 15, 2005, the court issued another opinion in
which it resolved a number of pending motions, mostly relating to
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an award of attorneys' fees. Radford Trust II, 399 F. Supp. 2d at
8. At this point, the court granted Radford Trust's motion for
First Unum to make an initial determination of whether the Social
Security offset applied, and the court ordered First Unum to
incorporate its determination into an updated calculation of the
amount owed Radford Trust. Id. at 21.
At this point, the court also denied a motion by Radford
Trust to amend the June 2004 order "by ruling that the prejudgment
interest continues until the date the Court quantifies damages."
Citing Mogilevsky v. Bally Total Fitness Corp., 311 F. Supp. 2d 212
(D. Mass. 2004), the court explained that it was of the view that
"interest on the awarded attorney's fees and costs shall accrue as
of the date of the underlying merits judgments." Radford Trust II,
399 F. Supp. 2d at 24.
First Unum included a Social Security offset in its
calculation submitted on November 29, 2005. Radford Trust
continued to challenge the applicability of the offset in its
response. On December 22, 2005, the district court ruled that the
offset did apply. The court also held that "the appropriate date
to begin accrual of post-judgment interest on the benefits award is
the date upon which the merits were decided, not the date on which
sum-certain was known" and that "[p]rejudgment interest ceased to
accrue" on that date, March 31, 2004.
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On appeal, Radford Trust challenges the district court's
determination that prejudgment interest ceased to accrue as of the
date of the initial March 2004 order. 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. Cottrill v. Sparrow, Johnson & Ursillo, Inc., 100 F.3d 220,
223 (1st Cir. 1996). Our review of such determinations is only for
abuse of discretion. Id. Here, however, the district court
appears not to have set the March 2004 end date as a matter of
discretion, but rather set the date based on its determination as
to when postjudgment interest should begin. This raises a legal
issue, which we review de novo. See Fratus v. Republic W. Ins.
Co., 147 F.3d 25, 30 (1st Cir. 1998); see also Westinghouse Credit
Corp. v. D'Urso, 371 F.3d 96, 100 (2d Cir. 2004).
28 U.S.C. § 1961(a) provides that "[i]nterest shall be
allowed on any money judgment in a civil case recovered in a
district court." The existence of a "money judgment" requires
damages to have been ascertained in a "meaningful way." Kaiser
Aluminum & Chem. Corp. v. Bonjorno, 494 U.S. 827, 836 (1990). In
Kaiser, the district court granted a new trial as to damages only,
after finding the evidence insufficient to support the jury's
damages award. Id. at 830. The Supreme Court held that in such a
situation, postjudgment interest on a later damages award did not
begin to accrue when the initial judgment entered. Id. at 836.
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Implicit in this holding is the principle that a finding of
liability alone without a corresponding determination on damages
does not suffice to start the clock on postjudgment interest.1 See
Happy Chef Sys., Inc. v. John Hancock Mut. Life Ins. Co., 933 F.2d
1433, 1435, 1437 (8th Cir. 1991).
In this case, the district court's March 2004 order
amounted to only a finding of liability for benefits. Indeed, this
was the only finding requested by Radford Trust in its motion for
"partial summary judgment." The court's March 2004 order left open
the possibility that the parties would dispute the amount of
damages, inviting the parties to brief any such dispute.
Accordingly, Radford Trust raised the issue of the applicability of
the Social Security offset. That issue was disputed between the
parties until the district court ruled on the issue in its December
2005 order. Thus, there was no "money judgment" until December
2005.
In ruling to the contrary, the district court relied on
cases relating to whether postjudgment interest on attorneys' fees
accrues when the entitlement to fees is established or when the
amount of the fees is quantified. See Mogilevsky, 311 F. Supp. 2d
at 224-26. This court has never ruled on this issue, see Foley v.
1
In a similar vein, we have previously held that, in the
absence of a determination under Federal Rule of Civil Procedure
54(b), a judgment as to some claims or some parties does not begin
to accrue postjudgment interest while another claim is still
pending. See Fratus, 147 F.3d at 30.
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City of Lowell, 948 F.2d 10, 22 n.16 (1st Cir. 1991), and we need
not do so here. While some courts have held that attorneys' fees
should be treated as simply a form of damages award, and thus
accrue interest only when quantified, see Eaves v. County of Cape
May, 239 F.3d 527, 535 (3d Cir. 2001), the rule as to damages
awards does not depend on the rule as to attorneys' fees. Compare
Happy Chef, 933 F.2d at 1437 (damages awards accrue interest when
quantified), with Jenkins v. Missouri, 931 F.2d 1273, 1276 (8th
Cir. 1991) (attorneys' fees accrue interest when the right to fees
is established).
Nor does this case fall within the rule that damages are
considered to have been ascertained when all that remains is a
"mechanical task of computing" the exact sum based on the court's
orders. EEOC v. Gurnee Inns, Inc., 956 F.2d 146, 149 (7th Cir.
1992). While computing the Social Security offset might have been
a "mechanical task," determining whether it applied was not.
Because an award of prejudgment interest in ERISA cases
is discretionary, we leave to the district court on remand the
decision in the first instance whether to award prejudgment
interest for the period from March 2004 to December 2005, during
which it erroneously granted postjudgment interest. The district
court can thus address First Unum's argument that it would be
inequitable to award prejudgment interest for this period because
Radford Trust was responsible for much of the delay.
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Radford Trust initially also appealed the district
court's decision to award benefits starting from June 2000, rather
than October 1999. The parties have now settled this issue, and
the appeal on this issue is accordingly dismissed. On remand, the
district court can address Radford Trust's contention that it is
entitled to additional relief flowing from the settlement.
The appeal on the benefits accrual issue is dismissed.
The award of postjudgment interest from March 31, 2004 to December
22, 2005 is reversed and the case is remanded to the district court
to determine whether to award prejudgment interest for the same
period and for further proceedings consistent with this opinion.
No costs are awarded.
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