Appeals from so much of a judgment and postjudgment order of the United States District Court for the Southern District of New York, Thomas P. Griesa, Judge, as denied plaintiff's requests for attorney's fees and prejudgment interest in connection with his successful claim under the Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seq., for reinstatement of long-term disability income benefits.
The opinion of the court was delivered by: Kearse, Circuit Judge
Before: KEARSE, CALABRESI, and KATZMANN, Circuit Judges.
Plaintiff Zbigniew Slupinski appeals from so much of a judgment and postjudgment order of the United States District Court for the Southern District of New York, Thomas P. Griesa, Judge, as denied his requests for attorney's fees and prejudgment interest in connection with his successful claim under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et sec., against defendants First Unum Life Insurance Co. ("First Unum") and Weil, Gotshal & Manges Long Term Disability Income Plan for reinstatement of long-term disability income benefits ("disability benefits"). The district court denied attorney's fees on the ground that First Unum, administrator of that plan, had not acted in bad faith or with the requisite degree of culpability and that Slupinski's lawsuit did not provide a common benefit to a group of beneficiaries. The court denied prejudgment interest on the ground that Slupinski had delayed in commencing suit and in litigating the suit once it was commenced. On appeal, Slupinski contends that the court erred in applying the factors that are pertinent to both attorney's fee awards and prejudgment interest. For the reasons that follow, we reverse the denial of attorney's fees and prejudgment interest and remand for determinations of the appropriate amounts due Slupinski.
The following description of the events is drawn largely from the district court's opinion dated September 16, 2005, and docketed as of September 27, 2005, see Slupinski v. First Unum Life Insurance Co., No. 99 Civ. 0616, 2005 WL 2385852 (S.D.N.Y. Sept. 27, 2005) ("Slupinski I"), ruling in favor of Slupinski on the merits of his claim that First Unum had improperly terminated his long-term disability benefits. Familiarity with Slupinski I is assumed.
A. Slupinski's Employment and Disability Benefits
In August 1991, Slupinski was an associate attorney in the law firm of Weil, Gotshal & Manges LLP ("Weil Gotshal") and was covered by the firm's Long Term Disability Income Plan (the "Plan"). First Unum was the Plan's administrator and insurer. The Plan provided that employees who became disabled for a significant period of time, due to injury or sickness for which they required the regular attendance of a physician, would receive monthly long-term disability ("LTD") payments during the period of disability. The Plan defined the terms "disabled" and "disability" in pertinent part to mean
that because of injury or sickness:
1. the insured cannot perform each of the material duties of his regular occupation; and
2. after benefits have been paid for 24 months, the insured cannot perform each of the material duties of any gainful occupation for which he is reasonably fitted, taking into consideration training, education or experience, as well as prior earnings.(Plan § II.)
On August 4, 1991, Slupinski was seriously injured in an automobile accident while on business in Poland. As a result of a collision, he was thrown from the taxi in which he was a passenger and was run over by another car. His injuries included broken ribs, leg injuries, severance of the left ulnar nerve, and severe damage to other nerves and arteries in his left arm. Slupinski was immediately hospitalized and was soon flown to London for additional hospitalization and treatment. After undergoing several surgeries on his left arm, Slupinski left London in September 1991 for the United States, where he continued to receive medical treatment.
Upon his return to the United States, Slupinski attempted to resume working at Weil Gotshal, but he was not able to do any substantial work. He had functional limitations in the use of his left arm, along with severe pain that made it impossible for him to focus or concentrate. At various times, he also reported memory loss, and he was taking pain medications that exacerbated his cognitive problems.
Slupinski ceased to work at Weil Gotshal in December 1991. He continued to experience functional limitations and pain in his left arm, and he underwent additional surgeries on that arm in subsequent years in an attempt to regain greater function. In February 1992, he applied for LTD benefits under the Plan. First Unum approved the application in August 1992. It paid Slupinski for LTD benefits that had accrued to that point and thereafter made monthly benefits payments to him until 1996.
By letter dated December 1, 1995, First Unum notified Slupinski that it intended to terminate his benefits. (See Letter from First Unum to Slupinski dated December 1, 1995 ("Termination Letter" or "First Unum Termination Letter"), at 2.) The letter stated that First Unum had recently received Physical Capacities Evaluation ("PCE") forms from two physicians--Dr. Romas Sakalas and Dr. Fernando Miranda--from whom Slupinski had previously submitted letters stating that Slupinski was disabled. The First Unum letter stated that Dr. Sakalas had completed a PCE form indicating that Slupinski could "sit/stand/walk for 8 hours each" and that Dr. Sakalas "has released you to full-time employment." (Id. at 1.) The letter continued:
We have also received recent information from Fernando G. Miranda, MD including a Physical Capacities Evaluation form dated September 11, 1995 indicating that you can sit/stand/walk for 6 hours each. Since this information conflicted with Dr. Sakalas, our On-Site Physician spoke with Dr. Miranda. He has declined to make an assessment of your work capacity, however he reported there is no contraindication as to your returning to work.
We have had your file reviewed by our Vocational Consultants and find that functionally you could perform the duties of your occupation as an Attorney without the use of your left arm. Your occupation is considered sedentary. . . .
Based on the information we have on your current medical condition and the vocational review, you no longer meet the [Plan's] definition of total disability.(Id. at 2.) The Termination Letter stated that if Slupinski did not submit "medical certification within 30 days of the date of this letter" that he continued to meet the Plan's definition of disability, First Unum would deny further liability on his claim. (Id.)
Slupinski telephoned First Unum on December 5, stating--as he had both before and after First Unum's granting of his claim for disability benefits--that he suffered severe pain from his arm injury, which inhibited his ability to perform his daily activities and to work. Slupinski stated that he was scheduled to have several doctors evaluate his medical condition and that he would submit their evaluations as soon as possible. Nonetheless, in a letter dated December 29, 1995--28 days after the date of its previous letter which had given Slupinski 30 days to respond--First Unum informed Slupinski that it "ha[d] completed [its] review of [Slupinski's] UNUM disability claim"; that Slupinski "must be totally disabled any [sic] occupation for [his] benefits to continue"; and that First Unum's "review ha[d] concluded that [First Unum was] unable to continue benefits beyond January 1, 1996." (Letter from First Unum to Slupinski dated December 29, 1995, at 1.)
Slupinski pursued an administrative appeal of First Unum's termination of benefits. He pointed out that the specialists he had been seeing were at such medical centers as the Mayo Clinic in Rochester, Minnesota, Harvard Medical School, Mass. General Hospital, LSU Medical Center in New Orleans, and Columbia Presbyterian Medical Center in New York (see Letter from Slupinski to First Unum dated January 1, 1996, at 1, 3), and he offered to make himself available "to be seen by UNUM physician[s]" (id. at 2). In the ensuing months, Slupinski provided First Unum with the treatment notes and reports from numerous physicians at the various institutions, documenting his severe chronic pain and stating that Slupinski was unable to work because of the pain. (See, e.g., Letter from Dr. David G. Kline, Chairman, Neurosurgery Department at Louisiana State University Medical Center to To Whom It May Concern dated February 21, 1996 (stating that pain "severely paralyzes [Slupinski's] concentration and clear reasoning" and is "severe enough to incapacitate him").) These documents indicated that several doctors had diagnosed Slupinski with, inter alia, causalgia--a persistent and severe burning sensation--in his left arm. (See, e.g., Treatment Notes of Dr. John E. Carey, Mayo Clinic Jacksonville, dated June 7, 1996, at 2 (noting that "the severe burning pain of the entire upper extremity began several weeks after the automobile accident," decreased somewhat over time, but increased for periods of 5-12 months in the wake of each of Slupinski's multiple surgeries undertaken in an effort to "regraft [ ] the nerve function"); see also id. at 4 (indicating that Slupinski had inquired whether he could free himself of the pain if he had his arm amputated).)
In July 1996, First Unum assigned an in-house physician, Dr. Richard Day, to assess Slupinski's medical condition and work capacity. Prior to making his assessment, Dr. Day did not examine Slupinski, and he contacted only three of the more than a dozen physicians who had recently treated or examined Slupinski. To those three physicians, Day sent memoranda dated July 30, 1996, setting out his view that those physicians believed Slupinski could work, or would be able to work after January 1, 1997, and requested confirmation of his view. The record is silent as to the response, if any, from the physician whom Day described as stating that Slupinski would be able to work after January 1, 1997; the other two physicians disagreed with Dr. Day's view of their opinions. For example, whereas Day's memorandum to Dr. Charleen Wilson attributed to her the opinion that Slupinski could work but "has chosen not to work" (Memorandum from Dr. Day to Dr. Wilson dated July 30, 1996), Dr. Wilson responded that
Mr. Slupinski understands that he will not be permanently and totally disabled based upon his injury, and has plans to return to full time work once his surgeries are complete. I feel that it is reasonable that his disability continue until the first of 1997, which will allow him time for corrective surgery if he chooses.(Letter from Dr. Charleen Wilson to Dr. Richard Day dated August 26, 1996 ("August 1996 Wilson Letter"), at 1.) Wilson stated that, in light of her opinion from February to May 1996 that Slupinski was "permanently impaired and at maximum medical improvement" and in view of Slupinski's planned additional surgeries in the hope of avoiding total and permanent disability, "it would be quite difficult for him" before the beginning of 1997 "to return to any type of work, not only for himself, but for his employer." (Id.)
Dr. Day's memorandum to Dr. Barry Garcia stated that Garcia "felt [Slupinski] will return to work once all the procedures were completed." (Memorandum from Dr. Day to Dr. Garcia dated July 30, 1996.) Dr. Garcia responded:
I feel that your letter has left out some of the salient points of our conversation. . . .
We discussed at this time I do not feel it is appropriate for him to be working, secondary to the multiple surgical procedures he will be undergoing during the next several months, and the fact that he is on possible mind-altering medications. We also discussed that the patient is in a rapidly changing area of law that requires a significant amount of reading and staying abreast of current events. Because of his numerous surgeries, prolonged recovery, and use of narcotic analgesics and their mind[-]altering effects, he has been unable to stay current, and therefore, perform appropriately in his job. We also discussed at this time that I feel it is appropriate for him to be on Disability . . . .(Letter from Dr. Barry Garcia to Dr. Richard Day dated August 7, 1996 ("August 1996 Garcia Letter"), at 1-2.)
In a memorandum dated July 30, 1996 (the date on which Dr. Day sent memoranda to Drs. Wilson and Garcia requesting confirmation of his descriptions of their views, and before he received their responses), Dr. Day informed First Unum Senior Benefit Analyst Arthur Hackett that Day's conclusion was that Slupinski was able to work. (See Memorandum from Dr. Day to Arthur Hackett dated July 30, 1996, at 3.) Day opined that Slupinski's only restrictions and limitations "would be based on the functional use of the left upper extremity," and that Slupinski could work as an attorney because that job would "not require heavy lifting." (Id.) In a memorandum to Hackett shortly thereafter, Dr. Day stated that Slupinski had "sensory abnormalities with the left arm" and "Carpal tunnel syndrome . . . to the right upper extremity"; Day recommended that First Unum consult an "expert in traumatic brain injury." (Memorandum from Dr. Day to Arthur Hackett ...