California Insurance Litigation Blog

Last month, the U.S. Supreme Court handed ERISA plan participants a big victory when they decided the important ERISA disability case of Hardt v. Reliance Standard Life Insurance, __ U.S. __ (Decided May 24, 2010)(see our blog discussion here) holding that an ERISA plan participant may be able to collect attorneys’ fees from a plan or claim administrator without obtaining a judgment in the action.  It did not take long for the Ninth Circuit Court of Appeals to apply Hardt.  In Simonia v. Glendale Nissan/Infiniti Disability Plan, __ F.3d __ (9th Cir. June 24, 2010), the court rejected a plan participant’s claim for attorney’s fees.

In Simonia, Aleck Simonia became physically disabled due to a herniated disc.  He had disability insurance under his employer's group insurance plan, which was ultimately insured by the Hartford Insurance Co.  Hartford concluded that Simonia was no longer physically disabled but had a mental disorder subject to his ERISA plan's twelve-month payment limit.  Hartford also learned that Simonia had been awarded $1,551 per month in Social Security Disability Insurance (“SSDI”) benefits retroactively, which should have been offset against his payments from Hartford.  Thus, Hartford informed Simonia he would be receiving payments subject to the plan's twelve-month mental disorder limit and that he owed Hartford $22,310.

Simonia sued Hartford for improperly reclassifying his disability as a mental disorder.  Hartford filed a  counterclaim to recover its overpayment.  Simonia informed Hartford that the Social Security Administration had retroactively reduced his SSDI award, and he requested that Hartford recalculate the alleged overpayment.  The parties later settled the counterclaim and stipulated to its dismissal. Simonia did not prevail in his claims against Hartford for continuing benefits.  Simonia thereafter filed a motion seeking $63,745 in attorney’s fees because he “was successful as a counter-defendant in that the defendant dismissed its counterclaim.”