Sun Life to Pay $168K in Fees in Long-Running Benefit Case

Sun Life & Health Insurance Co. must pay $168,012 in attorneys’ fees to a plan participant who won a $188,936 award against the insurer because she was wrongfully denied long-term disability benefits.

The participant had sought $515,716 in attorneys’ fees after a decade of litigation in the case. Federal Magistrate Judge Anne Y. Shield reduced the paralegals’ hourly rates, eliminated excessive billing, and recommended that the participant’s request be granted in part.

The case is noteworthy because the Labor Department filed a brief in the U.S. Court of Appeals for the Second Circuit in support of a district court decision against the company’s request for dismissal. Sun Life had said the lawsuit should be dismissed because the participant failed to exhaust administrative remedies. Last year, the U.S. Supreme Court declined to review the Second Circuit ruling affirming the $188,936 award.

If the magistrate judge’s Feb. 28 recommendation is approved by the federal judge, Sun Life will also have to pay $659 in costs, pre-judgment interest at a 4 percent rate, and post-judgment interest on the November 2015 $188,936 award.

Plan participants who successfully challenge benefit denials in court are entitled to recover attorneys’ fees and costs under the Employee Retirement Income Security Act. These fee awards can add hundreds of thousands of dollars to the tab of employers and insurers that are found to violate federal benefits law.

Earlier this week, Bristol-Myers Squibb Co.'s disability benefit plan was ordered to pay $114,055 in fees and costs to a former employee who became disabled due to anxiety and depression. In January, MetLife was ordered to pay $293,115 in fees to the attorneys of a Morgan Stanley financial adviser whose long-term disability benefits were reinstated as part of a court settlement after two years of litigation. Other major insurers have also been hit recently with similar judgments, including Liberty Life Assurance Co. of Boston, Aetna Life Insurance Co., and Unum Life Insurance Co.

Turley Redmond Rosasco & Rosasco LLP and Riemer & Associates LLC represent the participant. Wilson Elser Moskowitz Edelman & Dicker LLP represent Sun Life.

The case is Solnin v. Sun Life & Health Ins. Co., 2018 BL 70581, E.D.N.Y., No. 2:08-cv-02759-DRH-AYS, report and recommendation to grant in part plaintiff’s motion for attorneys’ fees 2/28/18.