Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_01-cv-00927/USCOURTS-azd-2_01-cv-00927-1/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Insurance Contract

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Nancy Perryman,

 Plaintiff,

vs.

Provident Life and Accident 

Insurance Company,

 Defendant.

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No. CV-01-0927-PHX-PGR

 

 ORDER

In its Opinion and Order (doc. #113), the Court, in the exercise of its

discretion, determined that the plaintiff was entitled to an award of pre-judgment

interest at the rate prescribed by 28 U.S.C. § 1961. See Blankenship v. Liberty

Life Assurance Co. of Boston, 486 F.3d 620, 628 (9th Cir. 2007) (Generally, the

interest rate prescribed for post-judgment interest by 28 U.S.C. § 1961 is the

proper rate for pre-judgment interest unless the court finds by substantial

evidence that the equities of the action require a different rate.) In making that

determination, the Court specifically rejected the plaintiff’s argument that the prejudgment interest rate should instead be at Arizona’s statutory rate of 10%

pursuant to A.R.S. § 20-462. 

Pending before the Court is Plaintiff’s Supplemental Request for

Case 2:01-cv-00927-PGR Document 121 Filed 03/30/10 Page 1 of 6
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1

 While the Court’s Opinion and Order stated the parties could file a

memorandum of points and authorities setting forth the party’s position regarding

the “pre-judgment interest issue” if they could not agree on the “appropriate prejudgment interest rate and start date,” the Court was obviously referring to the

appropriate rate under 28 U.S.C. § 1961.

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Prejudgment Interest (doc. #120), wherein the plaintiff again seeks pre-judgment

interest at the Arizona statutory rate on the ground that § 20-462 is a law that

regulates insurance and is therefore is “saved” from ERISA preemption by

ERISA’s savings clause, 29 U.S.C. § 1144(b)(2)(A); the plaintiff alternatively

argues that the appropriate interest rate should be the rate that the defendant

earned during the time it withheld disability benefits from the plaintiff. While the

Clerk of the Court has docketed the plaintiff’s supplemental request as a motion

for pre-judgment interest, the Court construes it as motion for partial

reconsideration of the Court’s Order and Opinion and will treat it as such. Having

reviewed the motion, the Court finds that it should be summarily denied.

First, a motion for reconsideration should be granted only in rare

circumstances such as where the Court (1) is presented with newly discovered

evidence, (2) committed clear error or the initial decision was manifestly unjust, or

(3) there has been a intervening change in the controlling law. School Dist. No.

1J, Multnomah County, Or, v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir.1993). 

Such a motion is not to be used, as the plaintiff improperly does here, to ask the

Court “to rethink what the Court had already thought through - rightly or wrongly.”

Above the Belt, Inc. v. Mel Bohannan Roofing, Inc., 99 F.R.D. 99, 101 (E.D.Vir.

1983). While the plaintiff’s motion fleshes out her previous argument, the

additional discussion does not contain anything that could not have been

previously presented to the Court.1

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Second, the plaintiff’s motion does not cite to any case law from within the

Ninth Circuit showing that the Court should adopt Arizona’s statutory rate instead

of § 1961's rate. The Court is not persuaded by the plaintiff’s argument because

the large majority of such courts have routinely rejected arguments that the forum

state’s statutory pre-judgment rate should control in ERISA disability cases. See

e.g., Schwartz v. Metropolitan Life Ins. Co., 2007 WL 2023476, at *1-2 (D.Ariz.

July 12, 2007) (Court rejected plaintiff’s argument that he was entitled to prejudgment interest on his award of ERISA disability benefits at Arizona’s statutory

rate pursuant to A.R.S. § 20-462.); Smyrni v. US Investigations Services LLP,

2010 WL 807445, at *3 (N.D.Cal. March 5, 2010) (In rejecting plaintiff’s argument

that the pre-judgment interest rate on ERISA disability benefits should be the

10% rate set forth in California’s Insurance Code, the court noted that of the

judges of the Northern District of California who “have considered similar

arguments in the ERISA context, all have declined to award pre-judgment interest

under [the California statutory rate].” See also, Sheehan v. Guardian Life Ins. Co.,

372 F.3d 962, 968-69 (8th Cir.2004) (In determining that the § 1961 rate was the

applicable pre-judgment interest rate on plaintiff’s ERISA benefits rather than

Michigan’s statutory rate of 12% that the plaintiff wanted, the court noted that “[i]f

a requirement to pay interest on past-due [ERISA] benefits was implied onto all

insurance contracts [by Michigan law], then courts would have no need to

examine equitable principles when considering whether to award prejudgment

interest in ERISA cases[.]”)

Third, the Ninth Circuit has permitted deviation from § 1961's pre-judgment

interest rate only when the plaintiff has submitted substantial evidence

establishing that the equities of the case require a different rate. See e.g.,

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2

 The Court is unpersuaded that the defendant should be punished by a

higher pre-judgment interest rate merely because the plaintiff has been deprived

of her benefits for over ten years. See Dishman v. UNUM Life Ins. Co. of

America, 269 F.3d 974, 988 (9th Cir.2001) (“Prejudgment interest is an element of

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Blankenship v. Liberty Life Assurance Co. of Boston, 486 F.3d at 628 (Court

approved a deviation from the standard Treasury bill pre-judgment interest rate to

a 10.01% rate because the plaintiff had submitted substantial evidence showing

that the non-payment of over $6,000 in monthly ERISA disability benefits forced

him to replace the benefits with his own personal funds that would otherwise have

been invested in a mutual fund which had a 10.01 return rate during the relevant

time period.); see also, Langston v. North American Asset Development Corp.

Group Disability Plan, 2010 WL 330085, at *9 (N.D.Cal. Jan. 20, 2010) (In

requesting a pre-judgment interest rate higher than the presumptive federal

Treasury-bill rate under § 1961 based on the financial strain placed on her by the

loss of ERISA disability benefits, the plaintiff submitted a declaration that

described the interest rates on her six credit cards and her home mortgage and

stated that her family was unable to do needed home repairs and upkeep. In

rejecting that evidence as insufficient, the court stated: “The Court is sympathetic

to plaintiff’s financial troubles and recognizes that interest on plaintiff’s back

benefits is warranted as an element of compensation. However, most, if not all,

ERISA plan participants whose benefits are terminated suffer financial setbacks

as a result, and plaintiff has not demonstrated that the equities of her situation

warrant departing from the ‘norm’ of awarding interest at the T-bill rate.”) The

Court will not deviate from the § 1961 rate here because the plaintiff has not 

submitted the required substantial evidence establishing that the equities of her

situation mandate a higher rate.2

 

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compensation, not a penalty.”) A significant portion of the delay in the resolution

of this case was caused by the Court, not the defendant.

3

 The plaintiff’s motion was filed prior to the Court’s deadline of March

31, 2010 for the parties to file a joint proposed judgment. While the Court noted

in its Opinion and Order (doc. #113) that the parties could file memoranda by

March 31st as to certain issues if they could not come to an agreement as to

those issues, in footnote 20 of its Opinion and Order, the Court specifically stated

that “[i]f the parties cannot agree as to the amount of attorney’s fees and nontaxable expenses due Perryman, the matter will be resolved post-judgment

pursuant to the procedure set forth in LRCiv 54.2.” The Court did not mean for

the plaintiff to file an attorney’s fees motion prior to entry of judgment, and, in any

case, the plaintiff’s memorandum does not sufficiently comply with all of the

requirements of LRCiv 54.2(c).

 The Court’s requirement in its Opinion and Order that the parties “make

every reasonable effort” to resolve the attorney’s fees issue prior to the

submission of a joint proposed judgment obviously was not complied with given

the defendant’s contention in the parties’ Stipulation to Entry of Briefing Schedule

(doc. #115), filed on March 25, 2010, that it needs additional time to respond to

the plaintiff’s request that her counsel be awarded fees at his current rate rather

than his historical rate because it had not yet seen the plaintiff’s argument or case

authority.

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The plaintiff has not, for example, provided any evidence of what interest rate she

would have earned had she had her disability benefits to invest. Therefore,

IT IS ORDERED that Plaintiff’s Supplemental Request for Prejudgment

Interest (doc. #120), construed as a motion for partial reconsideration of the

Court’s Opinion and Order (doc. #113), is denied.

IT IS FURTHER ORDERED that Plaintiff’s Supplemental Request for

Attorney’s Fees (doc. #119), docketed by the Clerk of the Court as a motion for

attorney’s fees, is denied without prejudice as premature.3

IT IS FURTHER ORDERED that the parties’ Stipulation to Entry of Briefing

Schedule (doc. #115) is accepted solely to the extent that the parties shall jointly

submit a proposed form of judgment no later than April 14, 2010. If the parties

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cannot agree, after their counsel have made all reasonable and sincere efforts to

do, as to the amount of past-due disability benefits owed to the plaintiff, the prejudgment interest rate applicable to the past-due benefits pursuant to 28 U.S.C.

§ 1961 and the amount and start date of such pre-judgment interest, the parties

may separately file no later than April 16, 2010 a memorandum of points and

authorities that sets forth the party’s position regarding such issues.

IT IS FURTHER ORDERED that any disagreement between the parties

regarding the reasonable attorney’s fees and non-taxable expenses to be paid by

the defendant to the plaintiff shall be resolved post-judgment pursuant the

provisions of LRCIV 54.2.

DATED this 30th day of March, 2010.

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