05-5849 | Omnilex

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05-5849 (L), 06-4178 -CV
Slupinski v. First
Unum Life Insurance Co.

# UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

August Term, 2007

(Argued: February 19, 2008
Decided: January 23, 2009)
Docket Nos. 05-5849 (L) , 06-4178 -CV

ZBIGNIEW SLUPINSKI,

Plaintiff-Appellant,

\- V. -
FIRST UNUM LIFE INSURANCE COMPANY and WEIL, GOTSHAL &
MANGES LONG TERM DISABILITY INCOME PLAN,

Defendants-Appellees.

Before: KEARSE, CALABRESI, and KATZMANN, Circuit Judges.

Appeals from so much of a judgment and postjudgment order
of the United States District Court for the Southern District of
New York, Thomas P. Griesa, Judge, as denied plaintiff's requests
for attorney's fees and prejudgment interest in connection with
his successful claim under the Employee Retirement Income Security
Act, 29 U.S.C. § 1001 et seq., for reinstatement of long-term
disability income benefits.

Reversed and remanded.

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DAVID S. PREMINGER, New York, New York (Rosen
Preminger & Bloom, New York, New York, on
the brief) , for Plaintiff-Appellant .

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LOUIS M. LAGALANTE, New York, New York
(Gallagher, Harnett & Lagalante, New York,
New York, on the brief) , for Defendants-
Appellees.

KEARSE, Circuit Judge:

Plaintiff Zbigniew Slupinski appeals from so much of a
judgment and postjudgment order of the United States District
Court for the Southern District of New York, Thomas P. Griesa,
Judge, as denied his requests for attorney's fees and prejudgment
interest in connection with his successful claim under the
Employee Retirement Income Security Act ( "ERISA"), 29 U.S.C.
§ 1001 et seq., against defendants First Unum Life Insurance Co.
("First Unum") and Weil, Gotshal & Manges Long Term Disability
Income Plan for reinstatement of long-term disability income
benefits ("disability benefits"). The district court denied
attorney's fees on the ground that First Unum, administrator of
that plan, had not acted in bad faith or with the requisite degree
of culpability and that Slupinski's lawsuit did not provide a
common benefit to a group of beneficiaries. The court denied
prejudgment interest on the ground that Slupinski had delayed in
commencing suit and in litigating the suit once it was commenced.
On appeal, Slupinski contends that the court erred in applying the
factors that are pertinent to both attorney's fee awards and
prejudgment interest. For the reasons that follow, we reverse the
denial of attorney's fees and prejudgment interest and remand for
determinations of the appropriate amounts due Slupinski.

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The following description of the events is drawn largely
from the district court's opinion dated September 16, 2005, and
docketed as of September 27, 2005, see Slupinski v. First Unum
Life Insurance Co., No. 99 Civ. 0616, 2005 WL 2385852 (S.D.N.Y.

Sept. 27, 2005) ("Slupinski I"), ruling in favor of Slupinski on
the merits of his claim that First Unum had improperly terminated
his long-term disability benefits. Familiarity with Slupinski I
9 is assumed.

## A. Slupinski's Employment and Disability Benefits

In August 1991, Slupinski was an associate attorney in the
law firm of Weil, Gotshal & Manges LLP ( "Weil Gotshal") and was
covered by the firm's Long Term Disability Income Plan (the
"Plan") . First Unum was the Plan's administrator and insurer.
The Plan provided that employees who became disabled for a
significant period of time, due to injury or sickness for which
they required the regular attendance of a physician, would receive
monthly long-term disability ("LTD") payments during the period of
disability. The Plan defined the terms "disabled" and
"disability" in pertinent part to mean

that because of injury or sickness:

1\. the insured cannot perform each of
the material duties of his regular
occupation; and

2\. after benefits have been paid for
24 months, the insured cannot perform each

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of the material duties of any gainful
occupation for which he is reasonably
fitted, taking into consideration
training, education or experience, as well
as prior earnings.

On August 4, 1991, Slupinski was seriously injured in an
automobile accident while on business in Poland. As a result of a
collision, he was thrown from the taxi in which he was a passenger
and was run over by another car. His injuries included broken
ribs, leg injuries, severance of the left ulnar nerve, and severe
damage to other nerves and arteries in his left arm. Slupinski
was immediately hospitalized and was soon flown to London for
additional hospitalization and treatment. After undergoing
several surgeries on his left arm, Slupinski left London in
September 1991 for the United States, where he continued to
receive medical treatment.

Upon his return to the United States, Slupinski attempted
to resume working at Weil Gotshal, but he was not able to do any
substantial work. He had functional limitations in the use of his
left arm, along with severe pain that made it impossible for him
to focus or concentrate. At various times, he also reported
memory loss, and he was taking pain medications that exacerbated
his cognitive problems.

Slupinski ceased to work at Weil Gotshal in December 1991.
He continued to experience functional limitations and pain in his
left arm, and he underwent additional surgeries on that arm in
subsequent years in an attempt to regain greater function. In

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February 1992, he applied for LTD benefits under the Plan. First
Unum approved the application in August 1992. It paid Slupinski
for LTD benefits that had accrued to that point and thereafter
made monthly benefits payments to him until 1996.

By letter dated December 1, 1995, First Unum notified
Slupinski that it intended to terminate his benefits. (See Letter
from First Unum to Slupinski dated December 1, 1995 ("Termination
8 Letter" or "First Unum Termination Letter"), at 2.) The letter
stated that First Unum had recently received Physical Capacities
Evaluation ("PCE") forms from two physicians -- Dr. Romas Sakalas
and Dr. Fernando Miranda -- from whom Slupinski had previously
submitted letters stating that Slupinski was disabled. The First
Unum letter stated that Dr. Sakalas had completed a PCE form
indicating that Slupinski could "sit/stand/walk for 8 hours each"
and that Dr. Sakalas "has released you to full-time employment. "
(Id. at 1.) The letter continued:

We have also received recent information from
Fernando G. Miranda, MD including a Physical
Capacities Evaluation form dated September 11, 1995
indicating that you can sit/stand/walk for 6 hours
each. Since this information conflicted with Dr.
Sakalas, our On-Site Physician spoke with Dr.
Miranda. He has declined to make an assessment of
your work capacity, however he reported there is no
contraindication as to your returning to work.

We have had your file reviewed by our Vocational
Consultants and find that functionally you could
perform the duties of your occupation as an Attorney
without the use of your left arm. Your occupation is
considered sedentary.

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Based on the information we have on your current
medical condition and the vocational review, you no
longer meet the [Plan's] definition of total
disability.

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(Id. at 2.) The Termination Letter stated that if Slupinski did
not submit "medical certification within 30 days of the date of
this letter" that he continued to meet the Plan's definition of
disability, First Unum would deny further liability on his claim.
(Id.)

Slupinski telephoned First Unum on December 5, stating -- as
he had both before and after First Unum's granting of his claim
for disability benefits -- that he suffered severe pain from his arm
injury, which inhibited his ability to perform his daily
activities and to work. Slupinski stated that he was scheduled to
have several doctors evaluate his medical condition and that he
would submit their evaluations as soon as possible. Nonetheless,
in a letter dated December 29, 1995 -- 28 days after the date of its
previous letter which had given Slupinski 30 days to respond --
First Unum informed Slupinski that it "ha [d] completed [its]
review of [Slupinski's] UNUM disability claim"; that Slupinski
"must be totally disabled any [sic] occupation for [his] benefits
to continue"; and that First Unum's "review ha [d] concluded that
[First Unum was] unable to continue benefits beyond January 1,
1996." (Letter from First Unum to Slupinski dated December 29,
1995, at 1.)

Slupinski pursued an administrative appeal of First Unum's
termination of benefits. He pointed out that the specialists he
had been seeing were at such medical centers as the Mayo Clinic in
Rochester, Minnesota, Harvard Medical School, Mass. General
Hospital, LSU Medical Center in New Orleans, and Columbia

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Presbyterian Medical Center in New York (see Letter from Slupinski
to First Unum dated January 1, 1996, at 1, 3), and he offered to
make himself available "to be seen by UNUM physician [s]" (id.
at 2) . In the ensuing months, Slupinski provided First Unum with
the treatment notes and reports from numerous physicians at the
various institutions, documenting his severe chronic pain and
stating that Slupinski was unable to work because of the pain.
(See, e.g., Letter from Dr. David G. Kline, Chairman, Neurosurgery
Department at Louisiana State University Medical Center to To Whom
It May Concern dated February 21, 1996 (stating that pain
"severely paralyzes [Slupinski's] concentration and clear
reasoning" and is "severe enough to incapacitate him") .) These
documents indicated that several doctors had diagnosed Slupinski
with, inter alia, causalgia -- a persistent and severe burning
sensation -- in his left arm. (See, e.g., Treatment Notes of Dr.
John E. Carey, Mayo Clinic Jacksonville, dated June 7, 1996, at 2
(noting that "the severe burning pain of the entire upper
extremity began several weeks after the automobile accident, "
decreased somewhat over time, but increased for periods of 5-12
months in the wake of each of Slupinski's multiple surgeries
undertaken in an effort to "regraft [] the nerve function"); see
also id. at 4 (indicating that Slupinski had inquired whether he
could free himself of the pain if he had his arm amputated) . )

In July 1996, First Unum assigned an in-house physician,
Dr. Richard Day, to assess Slupinski's medical condition and work
capacity. Prior to making his assessment, Dr. Day did not examine

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Slupinski, and he contacted only three of the more than a dozen
physicians who had recently treated or examined Slupinski. To
those three physicians, Day sent memoranda dated July 30, 1996,
setting out his view that those physicians believed Slupinski
could work, or would be able to work after January 1, 1997, and
requested confirmation of his view. The record is silent as to
the response, if any, from the physician whom Day described as
stating that Slupinski would be able to work after January 1,
1997; the other two physicians disagreed with Dr. Day's view of
their opinions. For example, whereas Day's memorandum to Dr.
Charleen Wilson attributed to her the opinion that Slupinski could
work but "has chosen not to work" (Memorandum from Dr. Day to Dr.
Wilson dated July 30, 1996), Dr. Wilson responded that

Mr. Slupinski understands that he will not be
permanently and totally disabled based upon his
injury, and has plans to return to full time work
once his surgeries are complete. I feel that it is
reasonable that his disability continue until the
first of 1997, which will allow him time for
corrective surgery if he chooses.

(Letter from Dr. Charleen Wilson to Dr. Richard Day dated August
26, 1996 ("August 1996 Wilson Letter"), at 1.) Wilson stated
that, in light of her opinion from February to May 1996 that
Slupinski was "permanently impaired and at maximum medical
improvement" and in view of Slupinski's planned additional
surgeries in the hope of avoiding total and permanent disability,
"it would be quite difficult for him" before the beginning of 1997
"to return to any type of work, not only for himself, but for his
employer." (Id.)

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Dr. Day's memorandum to Dr. Barry Garcia stated that
Garcia "felt [Slupinski] will return to work once all the
procedures were completed." (Memorandum from Dr. Day to Dr.
Garcia dated July 30, 1996.) Dr. Garcia responded:

I feel that your letter has left out some of the
salient points of our conversation.

We discussed at this time I do not feel it is
appropriate for him to be working, secondary to the
multiple surgical procedures he will be undergoing
during the next several months, and the fact that he
is on possible mind-altering medications. We also
discussed that the patient is in a rapidly changing
area of law that requires a significant amount of
reading and staying abreast of current events.
Because of his numerous surgeries, prolonged
recovery, and use of narcotic analgesics and their
mind [-]altering effects, he has been unable to stay
current, and therefore, perform appropriately in his
job. We also discussed at this time that I feel it
is appropriate for him to be on Disability

(Letter from Dr. Barry Garcia to Dr. Richard Day dated August 7,
1996 ("August 1996 Garcia Letter"), at 1-2.)

In a memorandum dated July 30, 1996 (the date on which Dr.
Day sent memoranda to Drs. Wilson and Garcia requesting
confirmation of his descriptions of their views, and before he
received their responses), Dr. Day informed First Unum Senior
Benefit Analyst Arthur Hackett that Day's conclusion was that
Slupinski was able to work. (See Memorandum from Dr. Day to
Arthur Hackett dated July 30, 1996, at 3.) Day opined that
Slupinski's only restrictions and limitations "would be based on
the functional use of the left upper extremity, " and that
Slupinski could work as an attorney because that job would "not
require heavy lifting. " (Id. ) In a memorandum to Hackett shortly

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thereafter, Dr. Day stated that Slupinski had "sensory
abnormalities with the left arm" and "Carpal tunnel syndrome
to the right upper extremity"; Day recommended that First Unum
consult an "expert in traumatic brain injury." (Memorandum from
Dr. Day to Arthur Hackett dated August 15, 1996.) And in a
subsequent brief handwritten note, Day stated his "opinion [that
Slupinski] has work capacity since January 11, 1996." (Note from
Day to Hackett dated November 18, 1996 ("Day November 18 Note to
Hackett") .)

In a letter dated March 26, 1997, First Unum rejected
Slupinski's appeal, notifying him that its decision to deny his
claim for further LTD benefits was final ("Final Decision
Letter") .

B. The Proceedings in the District Court

On January 28, 1999, Slupinski commenced the present
action under ERISA, see 29 U.S.C. § 1132 (a) (1) (B), asserting that
First Unum's determination that he was no longer disabled was
erroneous and seeking judgment ordering First Unum to pay LTD
benefits retroactive to January 1, 1996, and prospectively. He
also sought, inter alia, prejudgment interest and reasonable
attorney's fees. The action lay dormant for some three years, as
Slupinski's initial attorney soon withdrew and no new attorney
appeared until March 2002. Eventually, First Unum moved for
judgment dismissing the complaint on the basis of the

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administrative record, and Slupinski cross-moved for summary

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judgment in his favor.

## 1. The Decisions in Slupinski I

The district court treated both sides' motions as "motions
for a bench trial 'on the papers' as authorized by [Fed. R.
Civ. P.] 52," Slupinski I, 2005 WL 2385852, at *5, and denied
First Unum's motion and granted that of Slupinski, see id. at *10.
Finding that First Unum had not been given special discretionary
authority as Plan administrator to determine eligibility for
benefits or to construe the terms of the Plan, the court reviewed
the administrative record de novo. See id. at \*5 -\* 6; see
generally Firestone Tire & Rubber Co. v. Bruch, 489 U. S. 101, 115
(1989) ; Kinstler v. First Reliance Standard Life Insurance Co.,
181 F.3d 243, 245 (2d Cir. 1999) .

The court quickly rejected First Unum's contention that
Slupinski's claim of inability to work based on severe pain was a
creative afterthought that emerged only after First Unum informed
him of the impending termination of his benefits. The court
found, based on First Unum internal documents, that Slupinski had
informed First Unum that he was unable to work because of pain
even before First Unum granted his initial application for LTD
benefits, and that prior to the termination he had continued to
complain of nerve pain. See Slupinski I, 2005 WL 2385852, at *2;
see also id. at *7.

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The district court also rejected First Unum's contention
that there was insufficient objective evidence to support
Slupinski's claim of disabling pain. Noting that assessments of
claims of pain depend heavily on whether the claimant had a
"verifiable physical injury to which [his] pain may reasonably be
attributed, " id. at *6, and whether the "claimant's complaints of
pain [were] accepted and confirmed by physicians who have examined
him, " id. at *7, the court found that

[i]n the present case, each of these two
factors, as well as the large volume of other
evidence in the record, overwhelmingly supports
plaintiff's claim that his severe and chronic pain
prevents him from engaging in "any gainful occupation
for which he is reasonably fitted, "

id. (emphases added). The court found that

[f]irst, plaintiff's complaints of pain relate
to a serious and objectively proven injury, namely
the severe nerve damage to plaintiff's left arm. It
is undisputed that plaintiff suffered severe and
objectively determined nerve damage leaving him with
serious functional limitations. Thus, there is an
objective component to his injury that tends to lend
greater credibility to his complaints of pain.
Plaintiff's doctors have . . . consistently and
uniformly stated that these objective physical
injuries can and do explain his severe pain.

Second, the doctors['] reports contained in the
administrative record consistently confirm
plaintiff's repeated statements that he is unable to
work due to his constant pain. Most persuasive are
the letters by [Drs. ] Kline and Lovelace, each of
whom examined plaintiff in December 1995 and found
him unable to return to work. With one or two
questionable exceptions, each of the many doctors who
evaluated plaintiff found his complaints of pain to
be credible in light of the physical injuries he
sustained. Aside from Kline and Lovelace,
plaintiff's inability to return to work due to pain
was documented by Doctors Carey, Cheshire, Shiavitz,
Daube, Zuniga, and Link. The consistency and
uniformity with which the doctors who have evaluated

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plaintiff concur strongly support plaintiff's claims
that his pain prevents him from returning to work.

Id. (emphases added) .

As to the "questionable exceptions" to the otherwise
"uniform[]" view that Slupinski's constant pain prevented him from
working, id., the court found that First Unum's determination that
Slupinski was no longer disabled was based on statements of three
doctors, none of which the court found credible, see id. at *8.
The first such statement was the September 1995 PCE form filled
out by Dr. Sakalas, on which he checked boxes indicating that
Slupinski could work. But "Sakalas had not seen [Slupinski] since
January 12, 1995 at which time he stated that [Slupinski] was
prevent [ed] from gainful employment, " id. (internal quotation
marks omitted) ; First Unum did not point to anything in the record
that justified Dr. Sakalas's change of view. The second
"questionable" statement was the September 1995 PCE form received
from Dr. Miranda, which made "numerous contradictory and equivocal
statements." Id .; see id. at *2 (describing the boxes checked on
that PCE form indicating that Slupinski "was unable to work even
part time, " but that he "could sit, stand, and walk for six hours
with rests and, in what is clearly factually incorrect, that
[Slupinski] had 'functional capacity in both hands'" (quoting
form) ) . After reading the PCE form received from Miranda, Dr.
Sharon H. Hogan, a First Unum in-house physician, had contacted
Dr. Miranda to discuss the functional-capacity-in-both-hands
evaluation and other inconsistencies in his statements. Hogan
summarized their telephone conversation in a follow-up letter to

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Miranda stating, inter alia, "You could not find a copy of the PCE
Form in Mr. Slupinski's chart, but you suspect that your nurse
completed it." (Letter from Dr. Sharon Hogan to Dr. Fernando
Miranda dated October 18, 1995 ( "Hogan Letter") . ) The court found
that the Sakalas and Miranda PCE form indications that Slupinski
could work were not credible.

The court also concluded that "even if" the "questionable
statements" on the Sakalas and Miranda PCE forms "were credible
they could not possibly outweigh the numerous other medical
opinions confirming plaintiff's pain and inability to work."
Slupinski I, 2005 WL 2385852, at *8.

The third doctor on whom First Unum relied was its
in-house physician Dr. Day, who, the district court noted, "never
physically examined [Slupinski]" and "contacted only very few of
the many physicians [who] had treated [Slupinski]," id. at *4.
The court found that "Day's report, too, provides little support
for First Unum's position." Id. at *8. Rather, the report
described the notes of at least five physicians, over a two-year
period, which stated that Slupinski suffered a "fairly severe"
burning feeling in the hand, or "causalgia, " or "pain of the
entire hand, and distal forearm dorsal, " or "memory and
concentration problems." Id. The court stated that

[s]omehow, despite this overwhelming evidence of
conclude that plaintiff "has work capacity." Day's
failure to credit plaintiff's complaints of pain and
the "many letters from multiple neurologists,
physiatrists, and neurosurgeons" that he reviewed,
undermines the significance and credibility of his
report. When evaluated side by side with the

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overwhelming evidence of plaintiff's pain and
consequent inability to return to work, the report is
of little value.

Id. (emphases added) .
See Merriam-Webster's Collegiate
Dictionary (11th ed. 2008) (defining "physiatrist" as a physician
who specializes in physical medicine and rehabilitation) .

Accordingly, the district court concluded that First
Unum's termination of Slupinski's LTD benefits was improper.

Despite ruling in favor of Slupinski on the merits, the
district court concluded that he was not entitled to an award of
attorney's fees. The court noted the five Chambless factors, see
Chambless v. Masters, Mates & Pilots Pension Plan, 815 F.2d 869,
871 (2d Cir. 1987) ("Chambless"), that this Court has adopted to
guide the determination of whether to award fees in connection
with a claim under ERISA, i.e., (1) the degree of the offending
party's culpability or bad faith, (2) that party's ability to
satisfy a fee award, (3) the likely effect of the fee award to
deter others from acting similarly under like circumstances, (4)
the relative merits of the parties' positions, and (5) the
conferral vel non of a common benefit on a group of pension plan
participants. See Slupinski I, 2005 WL 2385852, at *9. The
court concluded that "the lack of bad faith and absence of a
common benefit conferred upon a group of pension plan participants
counsel [] against an award of attorney's fees in this case." Id.
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The court also denied Slupinski's request for prejudgment
interest. It noted that in deciding whether to exercise its

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discretion to award such interest, a court is to consider "' (i)
the need to fully compensate the wronged party for actual damages
suffered, (ii) considerations of fairness and the relative
equities of the award, (iii) the remedial purpose of the statute
involved, and/or (iv) such other general principles as are deemed
relevant by the court. '" Id. at *9 (quoting Jones v. UNUM Life
Insurance Co. of America, 223 F.3d 130, 139 (2d Cir. 2000) ("Jones
V. UNUM") ) . The court concluded that the interests of fairness
did not require such an award because Slupinski had failed to
commence the action until nearly two years after First Unum
terminated his benefits and had failed to take any action for
another three years after bringing suit. Slupinski I, 2005 WL
2385852, at *9.

Judgment was entered on September 30, 2005. First Unum
did not appeal. Slupinski appealed, contending that the judgment
did not clearly award him benefits for the entire period to which
he was entitled to them and that the district court erred in
denying him attorney's fees and prejudgment interest. The appeal
was withdrawn without prejudice, and Slupinski moved in the
district court for, inter alia, clarification of the judgment.

## 2. The Decisions in Slupinski II

Following the entry of judgment, First Unum took the
position that it was required to pay Slupinski LTD benefits only
for the period from January 1996, when it ceased payments, through
March 26, 1997, when the administrative record closed. Slupinski

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moved for clarification that the judgment entitled him to full
retroactive payment of past benefits through the date of the
judgment, as well as reinstatement of his LTD benefits
prospectively.

In an opinion dated August 4, 2006, and docketed as of
August 7, 2006, see Slupinski v. First Unum Life Insurance Co.,
No. 99 Civ. 0616, 2006 WL 2266569 (S.D.N.Y. Aug. 7, 2006)
("Slupinski II"), the district court granted Slupinski's motion
for clarification. The court found that First Unum's view of its
adjudicated obligations was contrary to both the court's intent
and the "plain meaning" of Slupinski I. Slupinski II, 2006 WL
2266569, at *2. It ruled that the judgment required First Unum to
pay "full retroactive benefits through the present and prospective
benefits until such time as First Unum determines that plaintiff
is no longer disabled." Id.

Slupinski also moved for reconsideration of the denial of
his request for attorney's fees. The district court denied this
motion. Although expanding somewhat on its discussion of the
five Chambless factors and finding that three of those factors, to
varying degrees, favored Slupinski, the court adhered to its view
that " [t]he important factors of culpability and common benefit
not being met, an award of attorney's fees would be
inappropriate." Slupinski II, 2006 WL 2266569, at \*4 -\* 5.

Slupinski appealed from so much of Slupinski II as denied
reconsideration of his request for attorney's fees. His original

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appeal was reinstated, and the two have been consolidated. First
Unum has not appealed from the order clarifying its obligations.

## II. DISCUSSION

### A. Attorney's Fees

On appeal, Slupinski argues principally that the district
court erred in denying attorney's fees based on lack of
culpability on the part of First Unum and lack of a common benefit
to Plan participants; he argues that all five Chambless factors
weigh in his favor and that an award of attorney's fees was thus
required as a matter of law. Alternatively, he argues that we
should hold that an award of fees was required as a matter of law
even if only the first four factors weigh in his favor. First
Unum, while disputing some of the court's findings that favored
Slupinski, argues that the district court's ultimate ruling on
fees was correct. For the reasons that follow, we conclude that
the district court's view of First Unum's rejection of Slupinski's
claim of continued disabling pain as "not constitut [ing]
culpability sufficient to warrant an award of attorney's fees, "
Slupinski II, 2006 WL 2266569, at *5, is not supported by the
record and that Slupinski is entitled to an award of attorney's
fees notwithstanding the absence of a common benefit to Plan
participants.

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The central purpose of ERISA is to protect beneficiaries
of employee benefit plans, see, e.g., 29 U.S.C. § 1001 (b) ;

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Salovaara v. Eckert, 222 F.3d 19, 31 (2d Cir. 2000), and "private
actions by beneficiaries seeking in good faith to secure their
rights under employee benefit plans are important mechanisms for
furthering ERISA's remedial purpose," id. at 28 (internal
quotation marks omitted). With exceptions not pertinent here, the
statute provides that the court in an ERISA action "in its
discretion may allow a reasonable attorney's fee and costs of
action to either party," 29 U.S.C. § 1132 (g) (1). Congress
intended the fee provisions of ERISA to encourage beneficiaries to
enforce their statutory rights. See, e.g., Seitzman v. Sun Life
Assurance Co. of Canada, Inc., 311 F. 3d 477, 486 (2d Cir. 2002)
( "Seitzman") .

In this Circuit, as the district court recognized, the
decision whether to award such a fee is ordinarily based on the
five Chambless factors, to wit:

(1) the degree of the offending party's culpability
or bad faith, (2) the ability of the offending party
to satisfy an award of attorney's fees, (3) whether
an award of fees would deter other persons from
acting similarly under like circumstances, (4) the
relative merits of the parties' positions, and (5)
whether the action conferred a common benefit on a
group of pension plan participants.

Chambless, 815 F.2d at 871. "ERISA's attorney's fee provisions
must be liberally construed to protect the statutory purpose of
vindicating" employee benefits rights, e.g., id. at 872 (dealing
with retirement benefits) ; Locher v. UNUM Life Insurance Co. of
America, 389 F.3d 288, 298 (2d Cir. 2004) ( "Locher v. UNUM")
(dealing with long-term disability benefits), and a "failure to
satisfy the fifth Chambless factor does not preclude an award of

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attorneys' fees," id. at 299; see, e.g., Mendez v. Teachers
Insurance & Annuity Ass'n & College Retirement Equities Fund, 982
F.2d 783, 789 (2d Cir. 1992) ; Ford v. New York Central Teamsters
Pension Fund, 642 F.2d 664, 665 (2d Cir. 1981) .

We review the district court's decision to grant or deny
attorney's fees for abuse of discretion. See, e.g., Paese v.
Hartford Life & Accident Insurance Co. , 449 F. 3d 435, 450 (2d Cir.
2006) ("Paese") ; Jones v. UNUM, 223 F.3d at 138. A court abuses
its discretion "when (1) its decision rests on an error of law
(such as application of the wrong legal principle) or a clearly
erroneous factual finding, or (2) its decision -- though not
necessarily the product of a legal error or a clearly erroneous
factual finding -- cannot be located within the range of permissible
decisions." Zervos v. Verizon New York, Inc., 252 F.3d 163, 169
(2d Cir. 2001) (footnote omitted) .

In the present case, we have no difficulty with the
district court's assessment in Slupinski II of the second, third,
and fifth Chambless factors. The court found that " [t]he second
and third factors, " i.e., First Unum's ability to pay and the
likelihood that an award of fees would have a deterrent effect,

favor Slupinski because First Unum does not deny the
ability to pay an award of attorney's fees and
because such an award will likely deter First Unum
and other administrators from denying claims for
disability benefits based upon pain.

2006 WL 2266569, at *5. First Unum presents no persuasive
argument for overturning these findings. We also are not
persuaded by the contention of Slupinski that the district court

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erred in finding that the fifth factor, i.e., whether the lawsuit
conferred a common benefit on a group of Plan participants, rather
than a benefit solely to Slupinski, favored First Unum. Slupinski
has not pointed to any common benefit beyond the deterrent effect
that is taken into account in the third Chambless factor.

We do, however, have considerable difficulty with the
district court's rulings on the first and fourth Chambless
factors, i.e., the degree of culpability -- or of bad faith, if
any -- on the part of First Unum and the relative merits of the
parties' positions. And while the degree of culpability and the
relative merits "are not dispositive under the [Chambless] five-
factor test, " they do "weigh heavily." Anita Foundations, Inc. v.
ILGWU National Retirement Fund, 902 F.2d 185, 189 (2d Cir. 1990)
14 ( "Anita") .

As to the first Chambless factor, we note that
" 'culpability' and 'bad faith' are distinct standards." Paese,
449 F.3d at 450. Thus, to win an award of attorney's fees under
ERISA a party need not prove that the offending party acted in bad
faith. See, e.g., id. at 450-51; Locher v. UNUM, 389 F.3d at 299.
" ' [C] ulpable conduct is commonly understood to mean
conduct that is "blameable; censurable; . . . at fault; involving
the breach of a legal duty or the commission of a fault
Id. (quoting McPherson v. Employees' Pension Plan of American Re-
Insurance Co., Inc., 33 F.3d 253, 256-57 (3d Cir. 1994) (quoting
Black's Law Dictionary (6th ed. 1990) ) ). For example, without
consideration of whether a plan administrator's denial of a

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meritorious disability benefits claim was an act in bad faith, the
administrator may properly be found culpable if it "failed to
engage in a fair and open-minded consideration of [the] claim. "
Paese, 449 F.3d at 451 (internal quotation marks omitted) .
Similarly, we have held that when an ERISA plan administrator
denies a meritorious disability benefits claim on the basis of
findings by its in-house physician, who did not base his findings
on scientific analysis of the medical evidence and who

rejected medical conclusions without properly
following up with the evaluators, [without] seeking
independent evaluations from persons with comparable
qualifications, [and without] examining [the
claimant] himself when troubled by the perceived
inconsistencies between the medical office files and
documents submitted in support of the benefit
application,

Locher v. UNUM, 389 F.3d at 298-99, the administrator is properly
found to be "culpable" within the meaning of the first Chambless
factor, id .; see also Salovaara v. Eckert, 222 F.3d at 28
(suggesting that any defendant found to have "violated ERISA,
thereby depriving plaintiffs of rights under a[n employee
benefit] plan and violating a Congressional mandate" is "culpable"
within the meaning of the first Chambless factor (internal
quotation marks omitted) ). The first-factor question for the
district court is the "degree" of the defendant's culpability.
Chambless, 815 F.2d at 871.

The degree-of-culpability and relative-merits factors are
closely related. Indeed, we have found it useful in some
circumstances to consider them together, see, e.g., Anita, 902

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F.2d at 189; Seitzman, 311 F.3d at 483, and we find those factors
intertwined here.

The district court in Slupinski II, in elaborating on why
it concluded that First Unum's refusal to continue paying
Slupinski disability benefits was not sufficiently culpable to
weigh in favor of an award of attorney's fees to Slupinski, stated
rationales that we conclude either reflected erroneous legal
standards or were contrary to findings that the court had made in
ruling in Slupinski's favor on the merits in Slupinski I, which
First Unum did not appeal. First, in Slupinski II, the district

court found that "First Unum's denial was not without any basis"
because Dr. Sakalas had submitted a report stating that Slupinski
could work full time, and " [Dr. ] Miranda [] had equivocated on
[Slupinski's] functional capacity." 2006 WL 2266569, at *5. But
these were statements in September 1995 PCE forms that the court
had found were "not . . . credible, " Slupinski I, 2005 WL 2385852,
at *8. For example, Dr. Sakalas had opined in January 1995 that

Slupinski was "prevent [ed] from gainful employment, " id. (internal
quotation marks omitted) (emphasis added), and "First Unum d[id]
not dispute" that Sakalas had not seen Slupinski again before
making the contrary PCE form statement in September 1995 -- on which
First Unum relied -- that Slupinski could work, id. Not having seen
Slupinski since January when in Sakalas's opinion Slupinski was
disabled, Sakalas had no apparent basis for stating in September

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1995 that Slupinski could work.

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Moreover, the PCE form received from Dr. Miranda in
September 1995 was incredible on its face, as it stated that
Slupinski had "functional capacity in both hands," id. at *2
(internal quotation marks omitted), a statement that the court
noted was "clearly factually incorrect, " id. Indeed, we note that
this had impelled First Unum's Dr. Hogan to make inquiry of Dr.
Miranda by telephone, whereupon First Unum learned that the PCE
form had probably been filled out not by Dr. Miranda but by his
nurse (see Hogan Letter). Despite this information, First Unum,
in both its Termination Letter and its Final Decision Letter,
described Dr. Miranda as having stated in the PCE form that
Slupinski could work. In addition, even assuming that the PCE
form had been filled out by Dr. Miranda, First Unum's use of that
form was unreasonably selective. Disregarding the clearly
incorrect statement that Slupinski had full use of his left arm,
First Unum relied on boxes that were checked to say that Slupinski
could sit/stand/walk for six hours each. But it refused to credit
the checked boxes that said Slupinski could not work full time or
even part time. Given that a person's ability to sit/stand/walk
for a given period says nothing about his ability to concentrate,
and given the uniform and consistent view of Slupinski's doctors
that his pain was disabling because it prevented him from
concentrating, First Unum could not reasonably rely on the
sit/stand/walk evaluation to override the explicit statement that

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Slupinski was unable to work.

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We note that in discussing First Unum's culpability in
Slupinski II, the district court did not state that First Unum's
reliance on the PCE reports of Drs. Sakalas and Miranda was
reasonable. It merely stated that, in light of those reports,
First Unum's decision was not without "any" basis. Slupinski II,
2006 WL 2266569, at *5. To the extent that the court meant to
imply that a plan administrator's conduct is not sufficiently
culpable to weigh in favor of an award of attorney's fees even if
its decision rests on a basis that is not reasonable, that
conclusion would constitute an error of law. To the extent that
the district court instead meant to imply that First Unum's
termination of Slupinski's disability benefits on the basis of the
PCE reports from Drs. Sakalas and Miranda was reasonable, that
finding is contradicted by the court's observation in
Slupinski II that the medical evidence contrary to those reports
was "voluminous, " id., and by its findings in Slupinski I that
those PCE reports were not credible and, "even if these two
questionable statements [by Dr. Sakalas and, probably, Dr.
Miranda's nurse] were credible they could not possibly outweigh
the numerous other medical opinions confirming [Slupinski's] pain
and inability to work, " 2005 WL 2385852, at *8 (emphasis added) .

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These findings -- (a) that the reports relied on by First
Unum were not credible and (b) that those reports, even if they
had been credible, "could not possibly outweigh" the numerous
other medical opinions confirming Slupinski's disabling pain -- also
reveal the flaw in the district court's finding in Slupinski II

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that the fourth Chambless factor, the relative merits of the
parties' positions, did "not [weigh] overwhelmingly" in
Slupinski's favor, 2006 WL 2266569, at *5. In the section of
Slupinski I devoted to the merits, the district court stated that
Slupinski's "objectively verifiable physical injury to which [his]
pain may reasonably be attributed" and the fact that his
"complaints of pain [had been] accepted and confirmed by
physicians who ha [d] examined him, " along with "the large volume
of other evidence in the record, overwhelmingly supports
plaintiff's claim that his severe and chronic pain prevents him
from engaging in 'any gainful occupation for which he is
reasonably fitted. '" 2005 WL 2385852, at \*6 -\* 7 (quoting the Plan)
(emphasis ours) . Further, after describing the reports of a
number of Slupinski's treating physicians, the district court
stated that Dr. Day, in July 1996, " [s]omehow . . . managed to
conclude" that Slupinski could work despite the "overwhelming
evidence of plaintiff's painful condition." Id. at *8 (emphasis
added) . The court found that Dr. Day's opinion, on which First
Unum relied in rejecting Slupinski's appeal from the decision to
terminate his benefits, was "of little value" " [w] hen evaluated
side by side with the overwhelming evidence of plaintiff's pain
and consequent inability to return to work. " Id. (emphasis
added) . In light of its findings on the merits that Slupinski's
proof of his continuing disability was "overwhelming" and that the
reports on which First Unum relied had "little value" or were "not
credible," the court's finding in Slupinski II that the

relative-merits factor did not overwhelmingly favor Slupinski was
clearly erroneous and beyond the range of permissible decisions.

We note that, in finding that the relative-merits factor
did not favor Slupinski "overwhelmingly, " the district court
stated in Slupinski II that First Unum's position was "not . . .
frivolous." 2006 WL 2266569, at *5. But the frivolousness
standard is more pertinent to a fee award that is meant as a
sanction than to an award to a plan participant who has prevailed
on his claim under ERISA, whose provision for awards of attorney's
LO fees is designed to be remedial. The position taken by a
defendant in violation of ERISA need not descend to the level of
frivolity in order to be sufficiently culpable to weigh in favor
of awarding fees to the ERISA claimant.

In addition to the fact that as a matter of substance the
evidence in Slupinski's favor was overwhelming, our view of the
degree of First Unum's culpability is influenced by certain
aspects of the administrative record that reveal that First Unum's
procedures were less than reasonable. For example, as noted by
the district court, when Dr. Day was assigned the responsibility
of assessing Slupinski's physical limitations and his ability to
return to work, he "contacted only very few of the many
physicians [who] had treated [Slupinski]." Slupinski I, 2005 WL
2385852, at *4. And although one of the physicians whom Dr. Day
did contact recommended that Day himself should examine Slupinski
(see August 1996 Garcia Letter at 2), neither Day nor any other
First Unum physician sought to examine or contact Slupinski.

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Further, as indicated in Part I.A. above, with respect to
the three physicians whom Dr. Day did contact in July 1996, Day
misdescribed the opinions of at least two. For example, Dr.
Garcia, who had unsuccessfully urged Dr. Day to examine Slupinski,
responded that Day's memorandum to Garcia "left out some of the
salient points of our conversation, " including "discuss [ion] " that
Dr. Garcia "d[id] not feel it
appropriate for [Slupinski] to
be working" and discussion that "at this time" Garcia "fe[lt] it
[was] appropriate for [Slupinski] to be on Disability." (August
1996 Garcia Letter at 1-2.) Dr. Garcia referred in particular to
the fact that Slupinski was being treated with "possible mind-
altering medications" and that the "use of narcotic analgesics and
their mind [-]altering effects" would not allow Slupinski to work
appropriately. (Id.)

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added) .) Dr. Day's response, in toto, was as follows:

In October 1996, Hackett asked Dr. Day to review the
additional information that First Unum had received since Day's
July review and inquired, "What is the consensus of opinion among
his multit [u]de of treating physicians as to his capacity? Please
comment on this specifically as there does not appear to be
agreement." (Hackett Memorandum to Dr. Day dated October 30,
1996 ( "Hackett Memorandum") (emphasis added) .) Hackett also noted
that Slupinski "is taking a lot of medication. Please comment on
how this will impact on his ability to concentrate as I would
expect that [a] high level of functioning is necessary to perform
his occ [upation] or a gainful occ [upation]." (Id. (emphasis

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I have reviewed the file, and spoken w/ Dr.
Podrizki. From my review my opinion is the claimant
has work capacity since January 11, 1996. It was not
until the tissue expanders were placed that according
to the file information the pain from the tissue
expanders was intolerable. Dr. Wilson noted this is
the final procedure which would be reasonable.

Dr. Podrizki notes after reconstructive surgery
the claimant will have work capacity, but will need
assistance to get there.

(Day November 18 Note to Hackett; see generally Treatment Notes of
Dr. John B. Harris, Mayo Clinic Jacksonville, dated June 26, 1996
(referring to impending surgery to implant tissue expanders into
Slupinski's left shoulder muscle in an effort to close extensive
scar tissue at the site of a prior skin graft) . ) Both the
contents and the brevity of Day's response to Hackett's inquiry
are remarkable. Day's conclusion that Slupinski had been able to
work "since January 11, 1996," squarely contradicted, inter alia,
Dr. Wilson's opinion that Slupinski had been totally disabled at
least from February 1996, when Dr. Wilson first saw him, until May
1996 and that Slupinski's disability should reasonably continue
until January 1, 1997. (See August 1996 Wilson Letter at 1.) Nor
was Day's conclusion that Slupinski had been able to work since
January 1996 supported by the record as to Dr. Podrizki. That
doctor had seen Slupinski only once (see Letter from Dr. Richard
Day to Dr. Serge Podrizki dated November 8, 1996), and that was in
August 1996. And in his November 18 note, Day made no response
whatever to Hackett's request for a description of the "consensus"
among Slupinski's "multit [u]de of treating physicians" (Hackett
Memorandum) or to Hackett's inquiry as to the effect of

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Slupinski's medication on his ability to concentrate. First
Unum's reliance on Dr. Day's conclusion as to Slupinski's work
capacity, which followed his partial investigation and incomplete
responses, could not be termed reasonable.

Moreover, First Unum proceeded to mischaracterize Dr.
Day's response to so much of the Hackett Memorandum as requested
information relating to Slupinski's pain, by giving an incomplete
description of Day's view. In its Final Decision Letter, First
Unum stated that "Dr. Day note [d] that it was not until the tissue
expanders were placed on June 26, 1996 that Mr. Slupinski's pain
became intolerable." (Final Decision Letter at 2 (emphasis
added) .) As revealed above, however, what Day actually said was
that "[i]t was not until the tissue expanders were placed that
according to the file information the pain from the tissue
expanders was intolerable." (Day November 18 Note to Hackett
(emphasis added) .)

This was not the first time First Unum had omitted
material language from its descriptions of reports of in-house
experts on which it relied to explain the termination of
disability benefit payments to Slupinski. In the December 1, 1995
Termination Letter, First Unum stated that its vocational expert
had reported that Slupinski "could perform the duties of [his]
occupation as an Attorney without the use of [his] left arm. "
(First Unum Termination Letter at 2.) The November 21, 1995
report of the vocational expert, however, stated that Slupinski
could perform manual functions with his right hand, his dominant

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hand, and could function as an attorney "[u]nless issues exist to
impair or diminish cognitive attention and focus." ( "Voc. Review"
at 2 (emphasis added) .) First Unum omitted mention of the
vocational expert's caveat for the possibility of disabling pain.
And along similar lines, First Unum's Termination Letter
to Slupinski stated that Dr. Miranda in conversation with First
7 Unum's in-house physician -- a reference to the October 18, 1995
conversation described in the Hogan Letter -- had "reported there is
no contraindication as to your returning to work." (First Unum
Termination Letter at 2.) What the Hogan Letter actually said,
however, was that Dr. Miranda had stated "there would be no
medical contraindication to [Slupinski's] returning to work if he
specifically asked to do so" (Hogan Letter (emphasis added) ). As
qualified by the if-he-specifically-asked-to-do-so clause, the
view that Slupinski could return to work was entirely consistent
with the medical opinions that Slupinski suffered disabling pain:
presumably if Slupinski asked to go back to work it would mean
that his pain had abated to such an extent that it no longer
interfered with his ability to concentrate. Indeed, Dr. Hogan's
notes with respect to that conversation reveal that that was the
meaning of that clause. They stated that Slupinski "has mild
[left upper extremity] reflex sympathetic distrophy [sic]" (one
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impact work cap [ability]" (Handwritten notes of Dr. Hogan dated
October 18, 1995), and that when she spoke with Dr. Miranda on
October 18, 1995, limitations based on pain "remained in question

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in [Dr. Miranda's] mind" (Medical Review by Dr. Hogan dated March
8, 1996) . The Termination Letter's omission of the Hogan
Letter's if-Slupinski-asked-to-work clause materially changed the
view that Dr. Hogan reported Dr. Miranda had expressed.

In that October 1995 conversation with Dr. Hogan, Dr.
Miranda also said he wanted to "defer making an assessment of
[Slupinski's] work capacity." (Hogan Letter. ) In February 1996,
Dr. Miranda sent a letter stating that Slupinski remained unable
to work. First Unum refused to credit this letter, stating that
its "credibility" was "limited" because Miranda had not seen
Slupinski since August 1995. (Final Decision Letter at 2.) This
rationale is noteworthy because, in contrast, First Unum chose to
credit the September 1995 PCE form filled out by Dr. Sakalas
stating that Slupinski could work, despite the fact that Dr.
Sakalas had not seen Slupinski since January 1995, when Sakalas's
opinion was that he could not work. These inconsistent treatments
of the opinions of Drs. Sakalas and Miranda, in such similar
circumstances, give First Unum's decision an appearance of
arbitrariness and self-service, rather than the fair and open-
minded consideration of Slupinski's claim that ERISA required.

In sum, First Unum terminated Slupinski's disability
benefits on the basis of two reports that the court found were not
credible, and even if credible could not possibly outweigh the
numerous other medical opinions that consistently and uniformly
confirmed his continued disability. First Unum then refused to
reinstate those benefits on the basis of the recommendations of

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its in-house physician Dr. Day, who (a) although urged to, had not
examined Slupinski himself, (b) had contacted only three of
Slupinski's more than 12 treating or examining physicians before
reporting that Slupinski could work, (c) had misdescribed the
opinions of at least two of the three physicians he did contact,
and (d) gave a bottom-line opinion that Slupinski could work as an
attorney because there was no heavy lifting, an opinion that gave
no apparent recognition either to an attorney's need to be able to
concentrate or to the concept that pain could interfere with
concentration. And First Unum, in its Termination Letter and
Final Decision Letter to Slupinski, made statements that
described three of its own experts' reports incompletely, omitting
parts that were pertinent to Slupinski's claim that the continuing
pain from his injuries impeded the concentration necessary for him
to perform as an attorney. We conclude that the district court's
findings (a) that there was not a serious disparity between the
merits of the parties' respective positions, and (b) that First
Unum's conduct in these circumstances did not evince sufficient
culpability to weigh in favor of an award of attorney's fees to
Slupinski, were not within the range of permissible decisions.

Finally, we note our disagreement with the district
court's suggestion that the denial of fees to Slupinski was
warranted by the fact that "First Unum paid benefits for more than
three years before it finally determined that Slupinski was no
longer eligible." Slupinski II, 2006 WL 2266569, at *5. The fact
that First Unum fulfilled its ERISA obligations for a while did

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not make it less culpable for changing course and violating ERISA
by ceasing to pay Slupinski disability benefits in the face of
"voluminous" and "overwhelming" evidence that he continued to be
disabled.

### B. Prejudgment Interest

Slupinski also contends that the district court erred in
denying prejudgment interest on the basis of the length of the
periods between the accrual of his ERISA claim and the
commencement of this action and between the filing of suit and his
obtaining a replacement attorney. We agree.

We have interpreted ERISA as authorizing the district
court to award prejudgment interest to a successful ERISA
claimant, and that decision, like the decision to award attorney's
fees, is committed to the sound discretion of the district court.
See, e.g., Jones v. UNUM, 223 F.3d at 139. Like an award of
attorney's fees for a successful ERISA claim by an employee
benefit plan participant, "prejudgment interest is 'an element of
[the plaintiff's] complete compensation. '" Id. (quoting Osterneck
v. Ernst & Whinney, 489 U. S. 169, 175 (1989) ) (other internal
quotation marks omitted) . As the Supreme Court has explained, "a
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monetary award does not fully compensate for an injury unless it
includes an interest component." Kansas v. Colorado, 533 U.S. 1,
10 (2001) (emphases added) ; see also, e.g., City of Milwaukee v.
Cement Division, National Gypsum Co., 515 U.S. 189, 195 (1995)
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("The essential rationale for awarding prejudgment interest is to
ensure that an injured party is fully compensated for its loss. ") .
Thus, in employment-related cases, "we have consistently stated
that ' [t]o the extent . . . that the damages awarded to the
plaintiff represent compensation for lost wages, it is ordinarily
an abuse of discretion not to include pre-judgment interest. '"
Sharkey v. Lasmo (AUL Ltd.), 214 F.3d 371, 375 (2d Cir. 2000)
(quoting Gierlinger v. Gleason, 160 F.3d 858, 873 (2d Cir. 1998)
(emphasis in Gierlinger) ) ; see generally Donovan v. Sovereign
Securities, Ltd., 726 F.2d 55, 58 (2d Cir. 1984) .

In addition, an award of prejudgment interest may be
needed in order to ensure that the defendant not enjoy a windfall
as a result of its wrongdoing. See, e.g., Skretvedt v. E. I.
DuPont De Nemours, 372 F.3d 193, 206 (3d Cir. 2004) (it "is
undisputed that prejudgment interest typically is granted to make
a plaintiff whole because the defendant may wrongly benefit from
use of plaintiff's money" (internal quotation marks omitted) ) ;
Algie v. RCA Global Communications, Inc., 891 F. Supp. 875, 899
(S.D.N. Y. 1994) ("Algie I") ("an award [of prejudgment interest]
is particularly appropriate as a means of ensuring that plaintiffs
are made whole and that defendants do not profit by their failure
to comply with their ERISA obligations" (emphasis added) ) , aff'd,
60 F.3d 956, 960 (2d Cir. 1995) ("Algie II") (affirming, and
adopting the reasoning of Algie I); see generally Donovan v.
Sovereign Securities, Ltd., 726 F.2d at 58 ("Failure to award
interest would create an incentive to violate [federal law],

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because violators in effect would enjoy an interest-free loan for
as long as they could delay paying out . . . . ") .

There may be circumstances in which an award of
prejudgment interest should not be made, such as where the funds
at issue have been placed in an interest-bearing account and the
judgment orders that the entire account be paid to the plaintiff,
see, e.g., Mendez v. Teachers Insurance & Annuity Association &
College Retirement Equities Fund, 982 F.2d at 790, or where the
funds have been deposited with the court and the plaintiff could
have, but did not, seek a court order requiring that they be held
in an interest-bearing account, see id. And if the record
revealed that the plaintiff had engaged in tactics that were
dilatory, i.e., "for the purpose of gaining time or deferring
decision or action, " Oxford English Dictionary (2d ed. 1989), with
the hope of obtaining an award of court-ordered interest at a rate
higher than he could obtain in the financial marketplace, the
court would plainly have discretion either to deny interest for
the specific years of delay attributable to the plaintiff's
dilatory tactics, see, e.g., Saulpaugh v. Monroe Community
Hospital, 4 F.3d 134, 145 (2d Cir. 1993), cert. denied, 510 U.S.
1164 (1994), or to deny it altogether, see, e.g., Sands v. Runyon,
28 F.3d 1323, 1328 (2d Cir. 1994), or to set an interest rate that
does not result in a windfall to the plaintiff, see, e.g., Jones
V. UNUM, 223 F.3d at 139 (" [T]he aim . . . is to make the
plaintiffs whole, but not to give them a windfall." (internal
quotation marks omitted) ) .

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In light of these considerations, we have generally stated
that the factors that the district court is to consider in
determining whether to award prejudgment interest are " (i) the
need to fully compensate the wronged party for actual damages
suffered, (ii) considerations of fairness and the relative
equities of the award, (iii) the remedial purpose of the statute
involved, and/or (iv) such other general principles as are deemed
relevant by the court." Id. (internal quotation marks omitted) .
In the present case, the district court did not discuss the first
and third factors and gave scant attention to the second. All of
those factors favored Slupinski.

First, as reflected by its title, i.e., "Long Term
Disability Income Plan" (emphasis added), and by its provisions
generally linking a Plan participant's disability benefit level to
specified percentages of his "basic monthly earnings" (e.g., Plan
§ I.2.), Weil Gotschal's Plan is designed to alleviate a disabled
employee's loss of income. Given the district court's finding
that Slupinski was unable to work, he should have been receiving
disability benefits throughout the period of his inability to
earn his income. By the time judgment was entered in this case in
September 2005, Slupinski had been unable to work for nearly 10
years after First Unum ceased paying him disability benefits. In
light of ERISA's purpose of protecting employees' rights to
receive the benefits they are due, both the first and third
factors, i.e., the need to fully compensate the wronged party for

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actual damages suffered and the remedial purpose of ERISA, plainly
favored Slupinski.

The second factor, considerations of fairness and the
relative equities of the award, also favored Slupinski in light of
the fact that the evidence of his continued disability was
overwhelming. Yet First Unum refused to continue to pay him,
basing its refusal on medical statements that were not credible,
in-house investigations and reports that were incomplete, and
proffered explanations that were half-truths. As a result, First
Unum unfairly had the use of the money that it should have paid
to Slupinski during that nearly 10-year period.

The district court denied prejudgment interest to
Slupinski solely on the ground that he had not brought suit until
nearly two years after First Unum's decision denying his
administrative appeal and that, after commencing suit and seeing
his first attorney withdraw a few months thereafter, Slupinski did
17 not obtain new counsel for nearly three years. The court did not
find that Slupinski sought any advantage, monetary or otherwise,
from these delays, and the record does not suggest that he had
such a purpose. Given the absence of any such evidence and given
the fact that Slupinski commenced his action more than four years
before the end of the statute-of-limitations period for ERISA
claims, see, e.g., Miles v. New York State Teamsters Conference
Pension & Retirement Fund Employee Pension Benefit Plan, 698 F. 2d
593, 598 (2d Cir. 1983) (the judicially inferred limitations
period for ERISA actions in New York State is six years), we

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question the propriety of denying prejudgment interest for the
period prior to the commencement of suit. Further, as to the
period of delay after Slupinski commenced suit, the record gives
no indication that First Unum filed a motion to dismiss for
failure to prosecute pursuant to Fed. R. Civ. P. 41 (b) or ever
complained about the delay. Indeed, as discussed above, the
delay, allowing First Unum to use the funds so long as there was
no judgment, was to First Unum's advantage, because the evidence
of Slupinski's continued disability was "overwhelming, "
Slupinski I, 2005 WL 2385852, at *8. (See also report dated July
29, 1994, of First Unum investigator who had been sent to see
Slupinski ("Bottom line, this guy is really in bad shape, you
wouldn't believe it,
keep paying this guy for life, he
deserves the money. ") . )

In sum, the district court's conclusion that "there has
been no showing here of the sort of 'fairness considerations' that
would warrant an award of pre-judgment interest, " Slupinski I,
2005 WL 2385852, at *9, was clearly erroneous, and the denial of
prejudgment interest was an abuse of discretion.

Finally, we note that First Unum has argued on this appeal
that Slupinski was in fact able to work during at least part of
the period in which his disability benefits were being denied. In
support of this argument, First Unum has speculated that
Slupinski's first counsel withdrew because of concerns about the
legitimacy of Slupinski's claim (see First Unum brief on appeal
at 5) and has attempted to argue alleged facts that are not in the

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record (see, e.g., id. at 3-4) . Facts that are not in the record
are not properly brought to our attention, and we do not consider
them. See, e.g., Galabya v. New York City Board of Education, 202
F.3d 636, 640 n.1 (2d Cir. 2000). We note that First Unum made a
similar attempt in opposing Slupinski's postjudgment motions in
the district court, proffering documents that were not in the
record. The district court noted that the documents did appear to
raise some serious questions as to Slupinski's eligibility for
disability benefits under the Plan and stated that "First Unum is,
of course, entitled to seek relief in an appropriate post-judgment
motion or a new action." Slupinski II, 2006 WL 2266569, at *3.
Our review of the district court docket reveals that, in the years
since the district court made that suggestion, First Unum has done
neither. Its choice instead to persist in proffering evidence
that is not in the record, despite being expressly informed of the
inappropriateness of such conduct, tends to cast doubt both on the
substantive validity of its proffers and on its claim that the
equities in this case weigh in its favor.

## CONCLUSION

We have considered all of the parties' arguments in
support of their respective positions on these appeals -- to the
extent that those arguments are properly before us -- and have
concluded that First Unum's contentions that attorney's fees and
prejudgment interest were properly denied are without merit. The

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judgment and order of the district court are reversed to the
extent that they denied attorney's fees and prejudgment interest,
and the matter is remanded for the district court to determine the
amounts due Slupinski in each category.

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Costs, including a reasonable attorney's fee for this
appeal, are awarded to Slupinski; the amounts are to be determined
by the district court.

(L), 06-4178 -CV Slupinski v. First Unum Life Insurance Co. #

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