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Prejudgment Interest: S.D. Miss.

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  • Prejudgment Interest: S.D. Miss.

    In a recent case from Mississippi, the court denies a motion for Payment of Interest, Attorneys' Fees, and Costs. In a contested claim for life insurance and AD&D benefits, Guardian Life filed an interpleader to bring in both parties claiming rights to the proceeds. Months later, after the parties had reached an agreement as to how benefits would be divided, Guardian paid the life insurance benefits plus interest. As they had yet to determine if AD&D benefits were payable, they did not pay the parties pending the toxicology and medical examiner's report. Through no fault of the insurance company, this process drug on for a significant period of time, after which Guardian paid the parties the AD&D benefits without interest. The beneficiaries commenced this action, and the court reasoned:

    Nevertheless, the Court finds that an award of prejudgment interest is inappropriate here. This is not a case where the payment of benefits was unreasonably denied or delayed. See, e.g., Roig v. Ltd. Long Term Disability Program, No. A-99-2460, 2000 WL 1146522, at *15 (E.D. La. Aug. 4, 2000) (awarding prejudgment interest where plaintiff was “denied access to funds owed her” for nearly two years); Dunnigan v. Metro. Life Ins. Co., 277 F.3d 223, 230 (2d Cir. 2002) (vacating dismissal of plaintiff’s claim for interest where payments were unjustly delayed for almost five years).
    Under this plan, Defendants were entitled to AD&D benefits once they showed that death was the “direct result of the accident, independent of all other causes.” Guardian repeatedly notified Defendants of this requirement. Although Guardian missed the initial 90-day deadline to determine AD&D benefits, it notified Defendants only five days later that it would avail itself of the 90-day extension. And after the additional 90 days passed, defense counsel consented to an extension beyond the 180 days permitted under ERISA. Two months later, the Magistrate Judge stayed all deadlines pending the release of the medical examiner’s report. Once the medical examiner released the report providing adequate proof of loss, Guardian issued AD&D benefits to Defendants 23 days later. In light of these facts, the Court finds that the delay was reasonably justified.
    The opinion is attached below.
    Attached Files