CIGNA Ordered To Pay For Its Actions

Friday, April 3rd, 2009

I recently blogged about Alfano v. CIGNA, where District Court Judge Gerard Lynch, who President Obama has selected to move up to the Second Circuit, reversed CIGNA’s termination of my client’s long term disability (“LTD”) benefits. The decision required CIGNA to pay $89,837.29 in past due benefits. Today, Judge Lynch ordered CIGNA to pay attorney fees, interest, and costs.

In awarding attorney fees, Judge Lynch said that “there was no sound basis for CIGNA’s termination of [LTD] benefits,” and the award was needed to deter “an incentive for potential defendants to deny even meritorious claims.” Judge Lynch added that the ABC News’ “Good Morning America” News expose, which can be seen on the internet at http://abcnews.go.com/GMA/story?id=5257491&page=1, is a reminder “that abuse exists and needs to be deterred.” Judge Lynch noted that my client showed “a clear entitlement to long-term disability benefits under the Plan,” and that “CIGNA attempted to defend a denial of benefits that, in the end, simply was not justified.” Consequently, Judge Lynch found that I was entitled to charge $450 an hour for my legal services, for a total of $105, 840.00.

Judge Lynch also awarded interest on the $89,837.29 in past due LTD benefits, holding that it was necessary to compensate the claimant adequately. The decision explained that: “as CIGNA had no sound basis for concluding that plaintiff’s condition – which it once recognized as sufficiently disabling to give rise to long-term disability benefits – had improved. CIGNA’s baseless conclusion
that its termination of plaintiff’s benefits was justified permitted it the unfair use of money that should have been paid to plaintiff long ago.” Therefore, Judge Lynch ruled that my client was entitled to 9% interest from October 27, 2005 when CIGNA stopped paying LTD benefits through January 30, 2009, when judgment was entered. The interest amounts to $26,749.05.

Finally, Judge Lynch also awarded costs for service and filing fees, travel, postage and copying disbursements, and deposition costs, for a total of $1,576,76.

The good news from the client’s perspective is that after I receive the attorney fee award, the claimant will be reimbursed the contingency legal fee.

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