good morning your honour's my name is susan handelman i'm appearing on behalf of the k p m g a long term disability plan and liberty life its administrator and for you sherry and where i'd like to begin your honour's is with dispute liberty life as the thought you cheri will go ahead and pay those what is not in dispute is that there was an offset to the benefits that the court awarded the court awarded two hundred seventy seven thousand two hundred thousand dollars and forty eight cents for the benefit and it was undisputed between the parties in the trial court that social security benefits and says d i is an offset to that and so the total amount awarded on the benefits was reduced to two hundred twenty seven thousand and seventy two dollars that's undisputed also undisputed is attorneys fees at the end of the day the plaintiff asked for what he wanted in attorney's fees raising the point and they're and they're important to the outcome one of the points is prejudgment interest rate at which the judgment interest was awarded here and the other point is another office and office for retirement benefits i'm going to start with interest because it's more confined of the two points and i want to go back to a case we began first of all the court awarded ten point one percent pre judgment interest compounded monthly so on a two hundred thousand dollars benefit to slightly over that the court awarded seventy four thousand dollars in prejudgment interest and that was all it is it is annually but here is where i'd like to go back to and that is to the plant in case there are a few arista cases where prejudgment interest has been awarded the blanton case is a case in which judge can be participated in a long time ago in one nine hundred eighty seven and in blanton the court of appeals this court said that a seven percent pre judgment interest had to be sent back to the trial court because the pre judgment interest that should be applied to early is the same interest rate as is applied by statute post judgment which is the section policy in favor of applying the the post judgment interest rate unless the trial judge articulate a reason why in equity some greater amount is required and in the case of of nelson versus e g energy in which judge noonan participated in one nine hundred ninety four the court there said that they should have solomon the interest rate was awarded at the fifty two week t bill right that the claimant there said i think i should get ten percent and the court said no that that was not the appropriate r there is no case that we have found and no case cited in briefing here what a court order or the ninth circuit court of appeals has used prejudgment interest as a penalty no case where the court has allowed without some equitable reasoning to apply a greater interest rate than the teagle rate and here the difference is dramatic if both offset trial and it's interesting how the briefing has gone here there has been very careful denunciation in the respondents briefing that he in fact did deposit because you know he was paid benefits for two years and then the benefits thought there was never any evidence that this claimant put his benefits that he did receive over the two years into this particular ten point one percent interest bearing account and if you look at the declaration that supports that ten point one percent account and this is this has been repeated in briefing that account was said to have again ten point one percent in its existence since two thousand and at the time of think it was two thousand and four well if you look at the one month rate of interest it was point nine nine percent the most recent month what's what was attached to the declaration not ten percent per month so even though the court said he had a reason for saying ten point one it wasn't as if you picked it out of the year he had a reason for saying ten point one there was no reason stated in equity why and risk does not allow a claimant to have compensation in that manner it risks is a special statute i would agree your honor if it were a different type of case where we were looking for damages and looking to compensate the defendant or the plaintiff rather for his losses i receive is a special animal and the risk that does not permit an award of damages interest or you're just trying to do equity and no case has awarded prejudgment no case we could point anywhere has awarded prejudgment interest based on a claim by the claimant that he could have gotten a better interest rate had he invested the funds privately in fact what they look at is making sure that the plan hasn't unjustly been enriched by not having paid out the funds so there is one case where on the one hand they claim and said i know that's insurance company and there was substantial evidence that the insurance company made more money than the federal team on the funds that were withheld not paid to the claimant and the court said i don't sent back for that but on the other hand it could be sent out simply to apply the federal rate because had in richmond of the insurance company and something that the plaintiffs were trying to pursue that evidence could have been developed and i respectfully disagree with that statement because as we progress through this trial all of the issues in the case were briefed the issues in the case were is this gentleman deserving of benefits when the benefits never briefs those issues and when the trial was over requested an opportunity or when the case was submitted to the court asked for an opportunity to brief those things so by that time it was quite late in the game and the issues were before the court so whether what he was claiming post trial as far as what games he made in his account on on other money was was not the point what the point was is that the case is the public policy of the state faber strongly in the words of this very court strongly favors the imposition if there's going to be prejudgment interest at all in a risk case and there are as i say a few cases where it has been awarded if there's going to be prejudgment interest at all the court has to make a finding on substantial evidence on the equities why a greater bill rate should be applied and here the court didn't find anything on the equities as to why a greater some should be applied it found a means an explanation as to what the ten point point one percent right represented and we opposed that and to this day it does not it is not and continents with other california cases other circuit cases other  suggesting here that the court should not award interest we're just adjusting if the court is one two or three judgement interest which the trial court said it was going to be at the federal right that's all on the dress the issue on the offset issue you're running out of time on the opposite issue the question is whether or not mr blankenship received his his retirement benefits the plan requires well first of all on  the he received an october thirty first letter or seventy four which says you are eligible to receive your retirement benefits on december third after he made an election as over seven hundred fifty thousand it was seven hundred sixty one thousand into a retirement account and i are at his vanguard operation the question is whether he received those retirement funds and then the operative part of the plan which tells how a lump sum has to be set off against benefits that are we see for disability that that vision of the plan says that you just have you pretend as you have those that lump sum is going to be distributed to him over his lifetime and for so long as he receives disability if the ira is considered the trustee for those funds even though those funds were rolled into his trust mr blankenship is fifty nine and a half years old x in excess of that he has exclusive right to choose how and when he wants to use those funds now i admit i agree he hadn't spent the funds to the best of our knowledge they were rolled straight into that ira and he could spend them keep them or or do as he will with them he could will go those funds to has his family members but the but the point is that those funds while at one point they were in the hands of k p m g and were not usable directly by mr blankenship the minute those funds rolled into the moment he received a distribution of those funds whether he chose them into an ira whether he chose them to go into his bank are so and that in that stance what we have is an individual who has received he has been distributed funds and those funds should be set off against and the math  that is set off in the it is explained in the briefing i'm going to reserve i just have a ton of time left and i'm going to reserve what's left for  that's exactly what happened in this case in other words what liberty saying here is if we owe you a dollar and we three years to pay you and then give the issue of office yet i think the thing to keep in mind here is with the with respect to the issue every seat and whether or not mr blankenship was a double dip being  the fact is that not one cent of the monies that we're talking about in his pocket they were basically moved from one state kerry liberty's analysis to the extreme he also well i know other words he can send he can send a wire to vanguard today and say to president two hundred thousand hours in my account yes you can and my own bank account so i've got her i'm sorry so i believe that the proper inquiry is to look at how those funds would be treated under the internal revenue code and they were not actually distributed because they were transferred from point a to point b never touched mr blankenship's hands if you will and so that's that's that's the way i think the case should be looked at because there was like i say there was a third option here or another option where he could have left the fines exactly where they were they'd be able to make the same argument so that if that means that anybody who has a retirement account and becomes disabled and that that stage in your life automatically lose that point offset were to occur well no because the if they were well receiving payments from well if they were still receiving payments right if the payments year only go till he was sixty eight because he became disabled after the age of sixty sixty two actually i believe he became disabled so that wouldn't work in this particular case but in principle yes you're correct is an abuse of discretion pre judgment interest cannot be used as a penalty although a defendant's bad face conduct may influence whether a court or wards pre judgment interest it cannot or should not influence the rate of interest interest as far as nelson supporting the other side's view nelson says we have held that the interest rate prescribed for post judgment interest is appropriate for fixing pre judgment interest unless the trial judge finds one substantial evidence that the equities of that particular case require a different rate as far as the claimants options he could have allowed the money to stay and he could not have taken the money there could have been no distribution if he had left the money stay at just as was pointed out k p m g in its account raise because nowhere in the plan does the plans just that whether monies are received and how benefits are figured are in any way connected with the tax code and in fact i  a's and i are a rollovers are all of hoarded special treatment under the tax code and nowhere in the arista plan does it even suggest that the tax code is relevant to any analysis of planned benefits