Oregon Court Orders Standard to Pay Plaintiff Prejudgment Interest

The current case of Robertson v. Standard Life Insurance Company concerns the proper calculation of prejudgment interest based on the court’s previous ruling that Standard had abused its discretion in terminating plaintiff’s long term disability benefits. The original order was based on Standard’s denial of benefits under the “own occupation” definition of disability under its policy. To date, Standard has made no decision on whether the plaintiff is disabled from working at “any occupation.” The court ordered “retroactive reinstatement of Plaintiff’s Own Occupation benefits from the time they were terminated to the time that they would have expired.” It remanded to Standard to consider her claim that she was disabled from “any occupation.”

Original Order Reinstating Benefits

In the earlier substantive case, the court found in favor of the plaintiff, a cytogenetic technologist, who suffered from chronic neck and back pain despite multiple medical treatments and surgical intervention. The court found numerous flaws in Standard’s reasoning for its denial and, instead of remanding, ordered benefits to be reinstated. The court also ordered the plaintiff to “prepare an appropriate Judgment consistent with this Opinion and, after conferring with Defendant, shall submit it to the Court for signature…”. The parties disagreed on how the judgment should be worded which led to the court subsequently clarifying its original order.

District Court Clarification of Original Order

The plaintiff interpreted the court’s original order as reinstating her benefits under any definition of disability. Standard argued that it had not determined whether or not she was disabled from “any occupation” and the only issue in the previous case had been her disability from working at her “own occupation.” The court agreed with Standard. Relying on Ninth Circuit precedent, the Oregon court noted that “when a plan administrator abuses its discretion by terminating disability benefits under a specific disability standard, the reviewing court may only reinstate those benefits under the same standard.”

In fashioning its order for prejudgment interest, the court reiterated its original opinion that Standard “fell far short in fulfilling its fiduciary duty to plaintiff” and acted in “bad faith.” The court ordered prejudgment interest for the appropriate length of time according to the provisions of 28 U.S.C. § 1961 which is based on the current T-Bill rate. The court also commented that, “Plaintiff may seek her attorney’s fees and costs in accordance with the Federal Rules and Local Rules of Civil Procedure.” It remanded the case to Standard for administrative determination of plaintiff’s claim that she was disabled from “Any Occupation.”

This case was not handled by our office, but it may provide claimants guidance in the calculation of prejudgment interest when ordered by a court. If you need assistance with a similar matter, or have any questions concerning a disability claim, please contact any of our lawyers for a free consultation.

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