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Murphy v. First Reliance Standard Life Insurance Co.

June 1, 2010

THOMAS MURPHY, PLAINTIFF,
v.
FIRST RELIANCE STANDARD LIFE INSURANCE COMPANY, DEFENDANT.



The opinion of the court was delivered by: Hurley, Senior District Judge

MEMORANDUM AND ORDER

Plaintiff Thomas Murphy ("Plaintiff") filed this action pursuant to the Employee Retirement Income Security Act ("ERISA"), as amended, 29 U.S.C. §§1132(a)(1)(B), 1132(g)(1), and 1140 seeking enforcement of cost of living adjustment ("COLA") benefits allegedly owed by Defendant First Reliance Standard Life Insurance Company ("Defendant" or "First Reliance") pursuant to a long-term disability insurance policy. Plaintiff also sought to enforce a settlement agreement with Defendant and to recover damages for Defendant's alleged interference with the exercise of Plaintiff's rights under ERISA. By Memorandum and Order dated December 15, 2009, the Court granted Defendant's motion to dismiss Plaintiff's (1) claims for the recovery of cost of living benefits due and owing from December 1, 2004 through December 31, 2006; and (2) claim for retaliatory interference with statutory rights in violation of 29 U.S.C. § 1140, and the Court denied Defendant's motion to dismiss Plaintiff's claim for the continuation of the cost of living benefits after January 2007. Plaintiff now moves for reconsideration of the December 15, 2009 Memorandum and Order. For the reasons that follow, Plaintiff's motion is denied.

BACKGROUND

The background of this case is set forth in the December 15, 2009 Memorandum and Order, familiarity with which is assumed. Thus, the Court will only state the facts necessary for the disposition of the instant motion.

In July 1994, Plaintiff's employer Tullet & Tokyo entered into a Group Long-Term Disability Insurance Program with First Reliance to provide disability insurance benefits for its employees, including Plaintiff, which was funded by an insurance policy issued by First Reliance (the "Policy"). On October 15,1996, Plaintiff applied for long-term disability insurance benefits under the Policy. First Reliance approved Plaintiff's application for long-term disability benefits from October 1996 through December 31, 1996 in the gross monthly benefit amount of $6,884.93, and later notified Plaintiff that it had approved the continuation of his monthly disability benefits beyond December 31, 1996. For each month from January 31, 1997 through and including September 30, 2000, Defendant paid monthly disability income benefits to Plaintiff.

Under the terms of the Policy, Plaintiff became eligible to receive an additional cost of living benefit as of January 1997. First Reliance paid cost of living benefits to Plaintiff under the Policy for the calendar years 1997, 1998, 1999, and through September 30, 2000. On March 30, 2000, First Reliance notified Plaintiff that his long-term disability benefits would be terminated effective September 30, 2000. At the time Defendant terminated Plaintiff's disability benefits, Plaintiff was receiving a monthly benefit amount of $7,518.32, which included an additional cost of living benefit as provided by the Policy.

On November 7, 2000, Plaintiff commenced an action in this Court against First Reliance, captioned as Murphy v. First Reliance Standard Life Ins. Co., Civil Action No. 00-CV-6647 (DRH) (WDW) ("Murphy I"), challenging Defendant's decision to terminate his long-term disability insurance benefits and seeking a declaratory judgment that he was entitled to the continued payment of monthly disability insurance benefits by First Reliance under the terms of the Policy. Following a bench trial, this Court issued a Memorandum & Order, dated May 20, 2004, finding that Plaintiff was totally disabled during the relevant period and holding that First Reliance had erred by ceasing payment of long-term disability benefits under the Policy.

Thereafter, in November 2004, the parties entered into a Settlement Agreement and Release (the "Settlement Agreement") wherein First Reliance would pay Plaintiff the accumulated unpaid past benefits from October 1, 2000 through November 30, 2004, including a cost of living benefit for that same time period, and would reinstate Plaintiff's long-term disability benefits, effective December 1, 2004, to be calculated in accordance with the terms of the Policy. Upon reinstatement, First Reliance issued a monthly disability benefit payment to Plaintiff in December 2004 and in January 2005 in the amount of $7,518.32. According to Plaintiff, these amounts did not include the proper cost of living benefit owed to him.*fn1

In February 2005, First Reliance notified Plaintiff that the prior years' cost of living benefits had been erroneously calculated in that it had computed the prior years' cost of living benefits using a compound cost of living adjustment rather than using a simple cost of living adjustment. First Reliance did not seek recovery of the monies it had overpaid; rather as of February 2005, and continuing through December 2006, Defendant adjusted the monthly disability benefit payments paid to Plaintiff to reflect a simple cost of living adjustment. From February 2005 through December 2005, Defendant made payments in the amount of $7,105.24 per month which Plaintiff maintains was improper and in breach of the Settlement Agreement.*fn2

For the calendar year 2006, First Reliance made monthly payments in the amount of $7,160.33, which Plaintiff again asserts was improper and in breach of the Settlement Agreement.*fn3 In January 2007, First Reliance terminated the payment of cost of living benefit adjustments, and since January 2007 and continuing to date, has made monthly disability benefit payments in the amount of $6,884.92 per month, which Plaintiff maintains is contrary to the terms of the Policy.*fn4

On May 21, 2007, Plaintiff requested a conference before the Court to discuss the post-settlement issue regarding the calculation of the COLA benefit owed to Plaintiff under the Policy. By Memorandum and Order, dated April 17, 2008, this Court held that it lacked jurisdiction over the dispute.

On September 4, 2008, Plaintiff commenced the instant action under ERISA against First Reliance (i) challenging the methodology Defendant used to calculate COLA benefits owed to Plaintiff under the Policy from December 1, 2004 through December 31, 2006 which had resulted in a reduction of benefits, and seeking recovery of the COLA benefits due and owing to him for that time period, (ii) seeking the continuation of COLA benefits after January 1, 2007 and for as long as he remains eligible to receive monthly disability benefits under the Policy, (iii) seeking a declaratory judgment as to (i) and (ii), and (iv) seeking compensatory and consequential damages for Defendant's alleged interference with his statutory ERISA rights. Defendant moved to dismiss the complaint pursuant to Fed. R. Civ. P. 12(b)(6).

By Memorandum and Order dated December 15, 2009, Defendant's motion to dismiss was granted in part and denied in part. Specifically, this Court (i) declined to convert Defendant's Rule 12(b)(6) motion into a motion for summary judgment pursuant to Rule 56 and/or consider Plaintiff's opposition papers as a cross-motion for summary judgment; (ii) granted Defendant's motion with respect to Plaintiff's claims for the recovery of cost of living benefits due and owing to him from December 1, 2004 through December 31, 2006 and claim for retaliatory interference with his statutory rights in violation of 29 U.S.C. § 1140; and (iii) denied Defendant's motion as to Plaintiff's claim for the continuation of the cost of living benefits after January 2007. In the Decision, with respect to the insurance Policy at issue, the Court found that "the language in the Policy is unambiguous as it relates to calculating the cost of living benefits," but found that "the language in the Policy is ambiguous as it relates to the continuation of the COLA benefits" after January 2007. (Memorandum and Order, dated December 15, 2009, at 16, 18.)

Plaintiff now moves for reconsideration requesting that the Court (i) reconsider the additional materials proffered with his opposition papers to the motion to dismiss, and (ii) convert the underlying motion to dismiss to a motion for summary judgment and consider Plaintiff's additional evidence and opposition submissions to the original motion as a cross-motion for summary judgment pursuant to Fed. R. Civ. P. 56, or in the alternative (iii) consider the additional evidence in the context of a dismissal motion. Plaintiff maintains that by failing to consider the additional evidence, the Court (i) erroneously found that the language in the Policy as it relates to calculating the cost of living benefits was unambiguous; (ii) improperly granted Defendant's motion with respect to Plaintiff's claims for the recovery of cost of living benefits due and owing to him from December 1, 2004 through December 31, 2006; and (iii) improperly granted Defendant's motion with respect to Plaintiff's claim for retaliatory interference with his statutory rights in violation of 29 U.S.C. § 1140. In addition, Plaintiff requests that the ambiguity in the language of the Policy that the Court found relating to the continuation of cost of living benefits to Plaintiff after January 2007 be construed against First Reliance and that judgment be entered in Plaintiff's favor. For the reasons stated below, Plaintiff's motion is denied in its entirety.

DISCUSSION

I. Applicable Legal Standard

The decision to grant or deny a motion for reconsideration lies squarely within the discretion of the district court. See Devlin v. Transp. Comm'ns Union, 175 F.3d 121, 132 (2d Cir. 1999). The standard for a motion for reconsideration "is strict, and reconsideration will generally be denied unless the moving party can point to controlling decisions or [factual] data that the court overlooked -- matters, in other words, that might reasonably be expected to alter the conclusion reached by the court." Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir. 1995) (finding district court properly exercised its discretion to reconsider earlier ruling in light of the introduction of additional relevant case law and substantial legislative history); see Medoy v. Warnaco Employees Long Term Disability Ins. Plan, No. 97 Civ. 6612 (SJ), 2006 WL 355137 (E.D.N.Y. Feb. 14, 2006) ( "The standard for reconsideration is strict in order to dissuade repetitive arguments on issues that have already been considered fully by the Court"); see also Arum v. Miller, 304 F. Supp. 2d 344, 347 (E.D.N.Y. 2003) ("To grant such a motion the Court must find that it overlooked matters or controlling decisions which, if considered by the Court, would have mandated a different result.") (citation and internal quotation marks omitted). "The major grounds justifying reconsideration are 'an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice.'" Virgin Atl. Airways, Ltd. v. National Mediation Bd., 956 F.2d 1245, ...


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