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Forbes v. Broadspire Services

October 13, 2006


The opinion of the court was delivered by: J. Ronnie Greer United States District Judge


This is an action for long-term disability benefits under the Employee Retirement Income Security Act of 1974 [ERISA], 29 U.S.C. § 1001 et seq., brought by Sonny Forbes, a former employee of Air Products, Inc., against Broadspire Services, Inc. [Broadspire], which has been identified as the plan administrator. On January 30, 2006, this Court granted Broadspire's motion to dismiss the case for failure to state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure and found the parties' cross-motions for summary judgment, therefore, to be MOOT. [Doc. 27].*fn1 This Court found that Mr. Forbes' 2005 ERISA complaint sought to relitigate the same matters in controversy as his 2003 ERISA complaint*fn2 , a complaint which was dismissed in July 2004. The 2003 complaint dealt with whether Mr. Forbes was entitled to both short- and long-term disability from the defendant's predecessor. The July 2004 dismissal found that "all matters in controversy as among them [Mr. Forbes and the defendants] have been compromised and settled and that the action of the Plaintiff, Sonny A. Forbes, should be dismissed with full prejudice." [Doc. 28 of 2:03-CV-165].*fn3

On February 20, 2006, Mr. Forbes filed a motion for relief from judgment pursuant to Rule 60 of the Federal Rules of Civil Procedure. [Doc. 28]. According to Mr. Forbes, Broadspire "mistakenly or inadvertently misrepresented to this Court [in the 2005 case] that the plaintiff's claim for long-term disability has already been adjudicated" by the 2003 case.*fn4 This Court denied that motion, finding that Mr. Forbes' true complaint should be with this Court's July 2004 order which stated that all matters in controversy between the two parties were settled. If the order--approved by the plaintiff and the defendant--was incorrect by not mentioning the long-term disability exception, the mistake should have been addressed back in July 2004.

On March 20, 2006, this Court sua sponte set aside its order denying Mr. Forbes' motion for relief from judgment and reopened the case. [Doc. 33]. This Court then referred the case to Magistrate Judge Dennis H. Inman for a Report and Recommendation [R&R] on the question of whether the defendant had perpetrated a fraud on the court when it argued that Mr. Forbes' claim for long-term disability benefits had already been adjudicated. On March 29, 2006, Judge Inman recommended that this Court hear such evidence and argument as necessary to determine if Mr. Forbes' prior suit was for both long- and short-term disability benefits and whether it was the parties' collective intent to settle all claims Mr. Forbes may have had at that time. [Doc. 34]. On April 12, 2006, this Court adopted Judge Inman's R&R and then referred the case to him for a second R&R concerning the above-identified issues. [Doc. 36].

On June 8, 2006, this Court adopted the May 2, 2006, R&R of Judge Inman. [Docs. 41, 42]. In that adopted R&R, Judge Inman indicated it was not the intent of the parties in the first suit brought by Mr. Forbes that his claim for long-term disability benefits be precluded by the settlement of that suit. Judge Inman also noted that "Whether the settlement of that first suit nevertheless effectively bars plaintiff's current suit for long-term disability benefits because it precludes him from establishing the pre-requisite six-month period of continuous disability remains a viable issue." This Court indicated it would "address the viable issue identified by Judge Inman in a separate memorandum opinion" and will now do so.

Broadspire argues that the 2003 dismissal with prejudice of Mr. Forbes' complaint seeking both long- and sort-term disability benefits precludes him from being able to prevail in his 2005 case for long-term disability benefits. Broadspire also claims that because Mr. Forbes' short-term disability denial was never overturned, he cannot now establish that he satisfied the Benefit Qualifying Period [BQP], meaning that he must first establish that he met the short-term disability plan's definition of disability. And, Broadspire further argues, because he cannot establish the BQP, he cannot establish his right to long-term disability benefits.

Pursuant to the long-term disability plan, Mr. Forbes had to first satisfy the applicable BQP by showing six months of continuous disability. [Long-term Disability Administrative Record 463, 469] [hereinafter LTDAR]. Only after that six month period expired would long-term disability benefits accrue. [LTDAR 469]. As mentioned above, Mr. Forbes' 2003 case in front of this Court concerned whether he was entitled to both short- and long-term disability from the defendant's predecessor. Broadspire's predecessor found in February 2002 and April 2003 that Mr. Forbes had not satisfied the applicable BQP. [Short-term Disability Administrative Record 107-08, 389-90]. The Settlement Agreement entered into by the parties in mid 2004 stipulated that the defendants would pay Mr. Forbes and his attorneys a sum of money "[i]n full consideration of Mr. Forbes' execution of this Agreement, and his agreement to be legally bound by all of its terms." [Doc. 44]. One of the terms was that Mr Forbes remised, released, and forever discharged the defendants and it successors "from any and all manner of actions and causes of action, suits, debts, claims and demands whatsoever, in law or in equity, known or unknown, which Mr. Forbes ever had, now has, or hereafter may have . . . ." [Id.]. When this Court dismissed the case in July 2004 following notification of the settlement, it dismissed all matters in controversy between the parties with full prejudice. As indicated above, however, the dismissal was not intended by the parties to affect Mr. Forbes' claim for long-term disability.

"A voluntary dismissal with prejudice operates as a final adjudication on the merits and has a res judicata effect." Warfield v. Alliedsignal TBS Holdings, Inc., 267 F.3d 538, 542 (6th Cir. 2001), citing Harrison v. Edison Bros. Apparel Stores, Inc., 924 F.2d 530, 534 (4th Cir. 1991). Because the question of whether Mr. Forbes met the BQP was a part of the 2003 suit that was dismissed with prejudice, that particular issue has already been adjudicated on the merits and cannot be relitigated. And, because this Court cannot revisit the issue of whether Mr. Forbes met the requirements for the BQP, it cannot then consider whether he met the requirements for long-term disability as the former is a prerequisite of the latter. Likewise, the Court's order of dismissal, stipulated to by the parties, dismissed all matters in controversy between the parties. Mr. Forbes' claim for both long-term and short-term disability were clearly "in controversy" after the filing of the 2003 complaint. Thus, this claim may not now be relitigated.

Although not necessary to the resolution of this matter in view of this Court's holding that plaintiff's claim for long-term disability benefits cannot be relitigated, this Court will, however, consider his claim on the merits. This Court's review of the record leads to the conclusion that the claim would still fail. This Court notes that the policy language gives Broadspire, the plan administrator, discretionary authority to determine eligibility for benefits and to interpret the terms and provisions of the policy. [LTDAR 476]. Accordingly, the facts of this case will be reviewed on an abuse of discretion standard.*fn5 In order to prevail under this standard, Mr. Forbes must prove not only that the company's benefit determination was incorrect but that its decision was arbitrary and capricious. Univ. Hospitals of Cleveland v. South Lorain Merchants Assoc. Health and Welfare Benefit Plan and Trust, 441 F.3d 430, 433 (6th Cir. 2006).

Under Broadspire's long-term disability policy, disability is defined as: A significant change in your physical or mental condition due to:

1. Accidental injury;

2. Sickness;

3. Mental illness; or

4. Pregnancy began on or after your Coverage Effective Date and prevents you from performing, during the Benefit Qualifying Period and the following 24 months, the Essential Functions of your Regular Occupation or of a Reasonable ...

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