Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_04-cv-00493/USCOURTS-azd-2_04-cv-00493-5/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1001 E.R.I.S.A.: Employee Retirement

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NOT FOR PUBLICATION

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

David L. Mazet, 

Plaintiff, 

vs.

Halliburton Company Long-Term

Disability Plan, et al., 

Defendants. 

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No. CV-04-0493-PHX-FJM

ORDER

On September 16, 2010, we issued an order concluding that plaintiff is entitled to

long-term disability (“LTD”) benefits during the “any occupation” period and directing

Hartford to perform “an immediate calculation and payment of benefits” (doc. 113). The

order did not address the question of prejudgment interest. On October 29, 2010, plaintiff

filed a motion to enforce the order and judgment (doc. 116). On November 9, 2010, Hartford

issued a check to plaintiff in the amount of $224,443.42 for LTD benefits. Although it had

not been ordered to do so, Hartford also issued a check to plaintiff in the amount of

$13,120.72 for prejudgment interest at a rate of 1.67% per year pursuant to 28 U.S.C. § 1961.

Plaintiff rejected the interest payment, contending that the appropriate rate of prejudgment

interest is 10% under Arizona state law. See A.R.S. § 20-462. The parties agree that the

only issue remaining relative to this motion is whether prejudgment interest should be

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calculated by using the federal or the state rate. 

We first reject plaintiff’s contention that Hartford should be found in contempt for

failing to timely comply with our September 16, 2010 order. Plaintiff has not met his burden

of establishing that Hartford violated a “specific and definite court order.” See Reno Air

Racing Ass’n v. McCord, 452 F.3d 1126, 1130 (9th Cir. 2006). Hartford had 28 days after

entry of our September 16 order to file a motion to alter or amend the judgment. Fed. R. Civ.

P. 59(e). It chose not to file the motion and instead calculated and paid plaintiff’s LTD

benefits less than 4 weeks after that deadline expired. This constitutes reasonable

compliance with our order.

We also reject plaintiff’s claim that he is entitled to an enhanced rate of prejudgment

interest under Arizona law rather than the rate set by federal law. Whether to grant or deny

prejudgment interest on an award of ERISA benefits is within the discretion of the district

court. See Blankenship v. Liberty Life Assur. Co., 486 F.3d 620, 627 (9th Cir. 2007).

Generally, “the interest rate prescribed for post-judgment interest under 28 U.S.C. § 1961 is

appropriate for fixing the rate of pre-judgment interest unless the trial judge finds, on

substantial evidence, that the equities of that particular case require a different rate.” Id. at

628 (quoting Grosz-Salomon v. Paul Revere Life Ins. Co., 237 F.3d 1154, 1164 (9th Cir.

2001)). 

Having considered the equities in this case, we conclude that prejudgment interest is

appropriate to fully compensate plaintiff for the denial of LTD benefits. We cannot

conclude, however, that the equities dictate that we deviate from the generally prescribed

federal rate in favor of an enhanced rate under Arizona state law. There is no showing, for

example, that Hartford acted in bad faith in denying plaintiff’s LTD benefits. The ongoing

and alternating history of this litigation demonstrates Hartford’s reasonably debatable

benefits eligibility decision. Moreover, Hartford’s voluntary calculation of interest in other

contexts does not control our balancing of the equities at this stage of the proceedings.

Because there is no evidence that this case warrants a departure, we grant prejudgment

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Because we conclude that the equities in this case do not warrant an enhanced

prejudgment interest award, we need not reach the question of whether A.R.S. § 20-462 is

“saved” from ERISA preemption under 29 U.S.C. § 1144(a).

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interest in accordance with 28 U.S.C. § 1961.1 Pursuant to Blanton v. Anzalone, 760 F.2d

989, 992-93 (9th Cir. 1985), the applicable interest rate is the one in effect immediately prior

to the date of the wrongful conduct, which in this case is Hartford’s failure to pay LTD

benefits. Therefore, pursuant to 28 U.S.C. § 1961, the amount of prejudgment interest will

be determined by reference to the 52-week U.S. Treasury bill rate paid for the period

immediately prior to each unpaid benefit. 

IT IS ORDERED GRANTING IN PART AND DENYING IN PART the motion

to enforce judgment (doc. 116). Plaintiff is awarded prejudgment interest at the rate

prescribed by 28 U.S.C. § 1961. The parties shall work cooperatively in order to properly

calculate the amount of prejudgment interest.

DATED this 18th day of January, 2011.

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