United States District Court, District of Columbia
BERMAN JACKSON, United States District Judge
2010, plaintiff Jill Marcin has been engaged in litigation
under the Employee Retirement Income Security Act
(“ERISA”), 29 U.S.C. § 1001, et
seq., with defendants Reliance Standard Life Insurance
Company (“Reliance”) and Mitre Corporation Long
Term Disability Insurance Program (“Mitre”).
Reliance denied plaintiff’s claim for disability
benefits under the Mitre plan on three previous occasions,
but after each denial, the Court found that the denial was
not adequately justified, and it remanded the matter to the
insurer for further consideration. See Marcin v. Reliance
Standard Life Ins. Co. (Marcin I), 895
F.Supp.2d 105 (D.D.C. 2012); Mem. Op. & Order (Apr. 14,
2015) [Dkt. # 43] (“Marcin II”);
Marcin v. Reliance Standard Life Ins. Co.
(Marcin III), 138 F.Supp.3d 14 (D.D.C.
Marcin III, the Court found that because the
insurer’s decision to deny benefits to plaintiff could
not stand, judgment would be entered in favor of plaintiff.
138 F.Supp.3d at 30.
Order, the Court directed the parties to address the sole
remaining issue of damages in supplemental filings due on
October 26, 2015. Order (Oct. 14, 2015) [Dkt. # 47].
Plaintiff responded to the Court’s Order with a motion.
Pl.’s Mot. to Determine Damages & Att’y Fees
[Dkt. # 49] (“Pl.’s Mot.”); Mem. of P.
& A. in Supp. of Pl.’s Mot. [Dkt. # 49-1]
(“Pl.’s Mem.”). Defendants responded with a
memorandum of law in support of their position, Defs.’
Position as to Damages [Dkt. # 50] (“Defs.’
Mem.”), and they also separately opposed
plaintiff’s motion. Defs.’ Mem. of Law in Resp.
& Opp. to Pl.’s Mot. [Dkt. # 52]
(“Defs.’ Opp.”). Plaintiff replied in
support of her motion, Pl.’s Reply to Defs.’ Opp.
[Dkt. # 53] (“Pl.’s Reply”), and also
responded to defendants’ memorandum of law. Pl.’s
Resp. to Defs.’ Mem. [Dkt. # 51] (“Pl.’s
light of the parties’ disagreement on the amount of
damages that should be awarded, the Court referred the matter
to a Magistrate Judge for a Report and Recommendation. Order
(Nov. 10, 2015) [Dkt. # 54]. The Magistrate Judge issued a
Report and Recommendation on March 18, 2016. R. & R.
[Dkt. # 56]. The Magistrate Judge found that
plaintiff’s “Covered Monthly Earnings, ”
should be based, as plaintiff argued, on an annual salary of
$90, 000 per year. R. & R. at 7-8. But the Magistrate
Judge agreed with defendants that plaintiff was entitled to
only 24 months of benefits under the policy at this time.
Id. at 9-10. And the Magistrate Judge found that
plaintiff was entitled to some attorneys’ fees, but not
the full amount that her counsel requested. Id. at
10-22. In total, the Magistrate Judge recommended that
plaintiff should receive $57, 840 in damages, and $108, 360
in attorneys’ fees, for a total award of $166, 200. R.
& R. at 22.
objected to the recommended calculation of the benefits due
based on the “Covered Monthly Earnings” of $7,
500 per month, or $90, 000 per year, the award of
attorneys’ fees and costs, and the award of
post-judgment interest at the rate of 6 percent. Defs.’
Partial Objs. to R. & R. [Dkt. # 57] (“Defs.’
Objs.”) at 1. Defendants did not object to the part of
the Report and Recommendation that found plaintiff entitled
to only 24 months of benefits. Id. Plaintiff did not
file any objections to the Magistrate Judge’s decision,
but she did respond to defendants’ objections.
Pl.’s Resp. to Defs.’ Objs. [Dkt. # 58].
Defendants also supplemented their exhibits with a more
legible version of one of plaintiff’s pay stubs. Suppl.
to Defs.’ Objs. [Dkt. # 61] (“Defs.
as here, a matter is referred to a magistrate judge for a
report and recommendation, the court must review de
novo those portions of the findings and recommendations
to which an objection has been filed. LCvR 72.3(c); see
also Fed. R. Civ. P. 72(b)(3) (“The district judge
must determine de novo any part of the magistrate
judge’s disposition that has been properly objected
to.”). The court “may make a determination based
solely on the record developed before the magistrate judge,
or may conduct a new hearing, receive further evidence, and
recall witnesses.” Id. The court “may
accept, reject, or modify, in whole or in part, the findings
and recommendations of the magistrate judge, or may recommit
the matter to the magistrate judge with instructions.”
Id.; see also Fed. R. Civ. P. 72(b)(3).
Court reviews the Covered Monthly Earnings question de
novo, in light of defendants’ objection. Based on
its review of the record, it concludes that plaintiff’s
salary was approximately $90, 000 per year, or about $43 per
hour, and that the first 24 months of benefits should be
calculated on that basis. And given plaintiff’s lack of
objection to this recommended procedure, the Court will
remand the matter to Reliance yet again to determine whether
plaintiff is entitled to benefits beyond 24 months. As to
attorneys’ fees, the Court will apply a larger discount
to plaintiff’s counsel’s hours in light of
counsel’s insufficient billing practices. The Court
also concludes that the post-judgment interest rate should be
The Court finds that plaintiff’s salary was equivalent
to $90, 000 per year.
to the terms of the Reliance life insurance policy in
question, the benefit amount payable is calculated by
multiplying the insured’s “Covered Monthly
Earnings” by a percentage that is set forth in the
policy. Ex. C to Aff. of Karen McGill [Dkt. # 50-1]
(“Policy”) at 2.0. Plaintiff contends that her
benefits should be based on an annual salary of $90, 000 per
year. Pl.’s Mem. at 2-3. Defendants, relying on the
affidavit of Karen McGill, an employee of Reliance, take the
position that plaintiff’s annual salary at the time
that she became disabled was $72, 000 per year, or $6, 000
per month, because she was working a reduced schedule at that
time. Defs.’ Mem. at 3; see Aff. of Karen
McGill [Dkt. # 50-1] (“McGill Aff.”) ¶¶
4, 6. Although there appears to be no dispute that
plaintiff’s annual salary was $90, 000, defendants
point out that the annual figure was based on a 40-hour work
week. Defs.’ Mem. at 3. According to defendants, since
plaintiff did not work 40 hours per week for “quite a
while before she claimed disability, ” and she had
reduced her hours to 32 hours per week, “there was a
corresponding drop in her salary to $72, 000.”
Id.; McGill Aff. ¶ 15.
definitions section of the Policy provides that:
“Covered Monthly Earnings” means the
Insured’s monthly salary received from [the employer]
on the day just before the date of Total Disability, prior to
any deductions to a 401(k) or Section 125 plan. Covered
Monthly Earnings does not include commissions, overtime pay,
bonuses or any other special compensation not received as
Covered Monthly Earnings.
If hourly paid employees are insured, the number of hours
worked during a regular work week, not to exceed forty (40)
hours per week, times 4.333, will be used to determine
Covered Monthly Earnings. If an employee is paid on an annual
basis, then the Covered Monthly Earnings will be determined
by dividing the basic annual salary by 12.
at 2.0. And the “Monthly Benefit” is calculated
as “60% of Covered Monthly Earnings.”
Id. at 1.0.
calculate her monthly earnings, plaintiff points to an
undated memorandum, addressed “To Whom It May
Concern” from Mitre payroll supervisor Debra A. Deeb,
which explains that “[t]he MITRE annual salary for Jill
M. Marcin effective August 2007 was $90, 000.00 and at that
time she was scheduled to work 32 hours per week.” Ex.
1 to Pl.’s Mot. [Dkt. # 49-2]. Plaintiff also points to
the Personnel Action Notification - which has more
evidentiary value than the undated memorandum, as it appears
to be a business record - which reflects the raise plaintiff
received effective March 19, 2007 from $85, 000 per year to
$90, 000 per year. Ex. 2 to Pl.’s Mot. [Dkt. # 49-3].
The document identifies plaintiff as a
“Full-Time” employee, explains that the
“official pay rate for all employees is the bi-weekly
salary, ” and it explains how that number is
point to a different business record, “a payroll record
printout from near the time Ms. Marcin stopped
working.” McGill Aff. ¶ 5; Ex. B to McGill Aff. [Dkt. #
50-1]. The payroll record is a screenshot of
plaintiff’s pay stub dated September 21, 2007, for the
two-week pay period from September 3, 2007 to September 16,
2007, for which plaintiff was paid $2, 769.23. McGill Aff.
¶ 6; Ex. B. to McGill Aff. McGill also offers the following
information in her affidavit:
Plaintiff claims that her monthly benefit should be based on
a yearly salary of $96, 000 instead of $72, 000. I spoke with
The Mitre Group and was told that when Plaintiff was working
40 hours per week, her salary was $96, 000; however, prior to
and including August 20, 2007, Plaintiff reduced her hours to
32 per week and continued to work 32 hours or less until she
stopped working on February 17, 2008. As a result, The Mitre
Group reduced her salary to $72, 000.
McGill Aff. ¶ 15.
do not dispute that plaintiff’s annual salary for
full-time work was supposed to be $90, 000 (indeed, McGill
states it was $96, 000), and that figure seems to be amply
supported by the Personnel Action Notification. Defendants
argue that plaintiff’s “salary was reduced”
when she reduced her hours, but what the record shows is that
her regular hourly rate was simply applied to a reduced
number of hours. Defendants’ exhibit, the Mitre payroll
stub, states that plaintiff’s “hourly rate”
was $43.27. Defs.’ Suppl. at 1. Since she worked 64
hours during the two-week pay period reflected in the
document (which is the only pay period for which the Court
has been provided information, although it is not the pay
period immediately before the date of disability), the
employer multiplied the hourly rate by 64, and plaintiff made
$2, 769.23. So while she may have made less for that two week
period than she would have made if she worked the full 40
hours per week, the document reflects that plaintiff was paid
the hourly rate that would have yielded $90, 000 per year if
she did work 40 hours per week. This raises the question: if
the reduced number of hours reduced plaintiff’s total
earnings, did it reduce her “salary”?
problem that arises in this case is that there is a
disconnect between the definition of “Covered Monthly
Earnings” in the Policy, which speaks in terms of
“monthly salary received, ” and Mitre’s
payroll records, which reflect a bi-weekly payroll system. So
must the Court calculate the monthly earnings as of August 19
based on full-time work, or based on just the 32 hours per
week? Defendants offer hearsay presented through McGill that
someone at Mitre stated that prior to August 21, plaintiff
was working only 32 hours a week. McGill Aff. ¶ 15. But
McGill’s affidavit is consistent with plaintiff’s
own exhibit, the Deeb memorandum, which raises its own
hearsay issues but states, “at that time [August 2007]
she was scheduled to work 32 hours per week, ” Ex. 1 to
Pl.’s Mot., and the payroll record that reflects that
“[f]rom 4/2/07 - 11/4/07 J. Marcin worked 32 hours per
week.” Ex. 4 to Pl.’s Mot. [Dkt. # 49-5] at
those difficulties, the Court will turn to the language in
the Policy that applies to hourly employees. Plaintiff and
defendants both seem to be treating plaintiff as someone who
was paid on an annual, and not an hourly basis, but the
record produced by defendants suggests that the Court can
appropriately utilize the approach set out in the Policy for
an hourly employee: after all, it says “Pay Rate:
$43.27000 Hourly.” Defs.’ Suppl. If the Court
were to treat plaintiff as an hourly employee, all it would
have to do is multiply the hourly rate by the hours worked
during a “regular work week” and no one, not even
Reliance, is claiming that 32 hours was plaintiff’s
“regular” work week - defendants describe it as