MAPCO Coal Inc. v. Godwin

Decision Date17 April 2003
Docket NumberNo. 65A05-0204-CV-172.,65A05-0204-CV-172.
Citation786 N.E.2d 769
PartiesMAPCO COAL INC., and White County Coal Corp., Appellants-Plaintiffs, v. Steven J. GODWIN, Appellee-Defendant.
CourtIndiana Appellate Court

Elizabeth F. Bird, Stoll Keenon & Park LLP, Henderson, KY, Attorney for Appellants.

Beth Ann Folz, McFadin Higgins & Folz, Mt. Vernon, IN, Attorney for Appellee.

OPINION

FRIEDLANDER, Judge.

MAPCO Coal, Inc. and White County Coal Corporation (referred to collectively as MAPCO) filed a complaint against Steven J. Godwin to recover a long-term disability overpayment made to Godwin in the amount of $24,243.44. MAPCO appeals following the trial court's entry of judgment, pursuant to a jury verdict, that assessed MAPCO's damages to be zero. MAPCO presents the following consolidated and restated issues for review:

1. Did the trial court abuse its discretion by denying MAPCO's Motion to Amend Complaint filed approximately three weeks before trial?

2. Did the trial court abuse its discretion when it denied MAPCO's motion to correct error, finding that the jury verdict was within the scope of the evidence?

We affirm in part, reverse in part, and remand.

The undisputed facts reveal the following.1 MAPCO is in the business of operating a coal mine in White County, Illinois. Godwin was a coal miner employed by MAPCO from November 1984 until June 1996. On or about March 13, 1996, Godwin suffered a heart attack. Due to his heart condition, he was no longer able to work and his last day of employment was June 10, 1996.

On August 5, 1996, Godwin applied for benefits under the MAPCO Coal Inc.'s Subsidiaries Disability Benefit Plan (the Plan). As part of his application for long-term disability benefits, Godwin completed and signed an Employee's Statement and signed a Reimbursement Agreement. The Reimbursement Agreement provided:

In consideration of the MAPCO Inc. Long Term Disability Plan ("Plan") making monthly advances, if it is ultimately determined that I am entitled to receive Social Security benefits, Worker's Compensation benefits or Black Lung benefits for the disability for which reduction was not made under the non-duplication provision of the MAPCO Inc. Long Term Disability Plan, or if I receive any overpayment from the Plan by a mistake of fact, I agree to repay such overpayment to the Plan and I authorize the Plan to withhold and apply such overpayment to any benefits which may hereafter become payable by my Employer to me, including wages.

I understand that after 3 monthly LTD payments have been made, the Plan will estimate my Social Security Award and/or Worker's Compensation award and commence applying the non-duplication provisions of the the (sic) Plan. I understand that I must apply for a Social Security Disability Award. If I am denied such benefit by the Social Security Administration, I agree to appeal immediately and pursue my appeal until I receive a second denial (or award). I understand that both letters of denial from the Social Security Administration must be furnished to the Plan Administrator in order to avoid the estimated offset.
If I receive a Social Security disability award, Worker's Compensation award or Black Lung award, upon my initial application or as a result of my appeal, I agree to inform the Plan Administrator immediately.

Appellants' Appendix at 82.

By letter dated September 17, 1996, the Plan's administrator advised Godwin that he had been approved for long-term disability benefits. Effective September 11, 1996, Godwin began receiving disability benefits in the amount of $1,470.73 per month, which represented fifty percent of Godwin's basic monthly earnings at the time of his disability.

Thereafter, Godwin applied for Social Security Disability Benefits and received a denial. As required under the Plan, Godwin appealed. He then received a second denial. Although he was no longer required under the Plan to seek Social Security benefits, Godwin hired an attorney and proceeded with a second appeal. Following this third attempt, Godwin was advised on January 10, 1998 that he had been awarded Social Security Disability benefits retroactive to September 1996. As stated in the Notice of Award, the total amount of past-due benefits was $19,713 for September 1996 through December 1997. Godwin, however, received two payments for past-due benefits totaling only $15,713, because the Social Security Administration withheld $4000 to pay Godwin's attorney directly.2 At this time, Godwin also began receiving monthly disability benefits from Social Security. Godwin's initial Social Security benefit was $1202 per month.3

An application for Social Security Dependent Benefits was also made on behalf of Godwin's two children, Zachary S. Godwin and Andrea J. Godwin. By separate notices, dated February 8, 1998, Social Security Dependent Benefits were awarded to Zachary and Andrea. Each award included future monthly payments of $315 and a $5,238 payment for past-due benefits. For the majority of the relevant time period, Zachary and Andrea did not reside with Godwin. Rather, they resided with Godwin's ex-wife, Perry Huddleston, and dependent benefits were sent directly to her home. From August 1999 through April 2001, however, Zachary resided with Godwin, and Godwin received the monthly dependent benefits for Zachary during this time.

Godwin stopped receiving payments under the Plan following his award of Social Security benefits in January 1998. MAPCO then sought reimbursement from Godwin for overpayment of benefits. Godwin made one payment to MAPCO in the amount of $268.73 on December 8, 1998. Thereafter, on February 18, 1999, MAPCO initiated the present action to recover overpayment in the amount of $24,243.44.4

Following a failed attempt at mediation and the denial of each party's motion for summary judgment, the cause was on course to proceed to jury trial on December 4, 2001 (nearly three years after the initial complaint). Less than three weeks before trial,5 MAPCO filed a motion to amend the complaint so as to include reference to a worker's compensation settlement that Godwin had received from White County Coal (i.e., MAPCO) in January 1998 as the result of an unrelated foot injury that occurred in 1994. Godwin objected to the amendment. Following a hearing on November 28, 2001, the trial court denied the motion, finding that amendment at this time would place an unreasonable burden upon Godwin.

The jury trial commenced on December 4, 2001. At trial, the parties stipulated that the Plan and the Summary Plan Description governed the respective liability of the parties. The parties presented relatively brief testimony as to their respective interpretation of certain provisions of the Plan. The key provisions of the Plan discussed at trial are Sections 6.3 and 6.4(A). Section 6.3 defines the amount of monthly disability payments that a plan participant is entitled to receive. Section 6.3 provides that monthly payments "shall be equal to 50% of the Participant's Basic Monthly Earnings less the aggregate of any `Other Monthly Income Benefits', as defined in Section 6.4, received by the Participant in that month." Appellants' Appendix at 45 (emphasis supplied). Section 6.4(A) in turn defines Other Monthly Income Benefits to include:

(a) any amount of replacement income paid to the Participant under any plan or program of an Employer other than the Plan;

(b) any amount payable to the Participant for loss of time under any present or future law of the United States, or any political subdivision thereof, pertaining to any occupational disease, worker's compensation (including compromise or redemption settlements), unemployment compensation, cash sickness benefits or similar benefits payable for loss of time on account of disability,. . .;

(c) any Social Security Benefit payable to, or with respect to, the Participant on account of his disability under the Federal Social Security Act, including additional benefits payable on account of the presence of dependents. . .;

* * *

(h) 50% of the total amount, exclusive of reimbursements for medical services or supplies and exclusive of costs of the recovery, the Participant shall receive from any third party in connection with an illness or injury which shall have contributed to his Total Disability.

Appellants' Appendix at 46-47 (emphases supplied).

The Summary Plan Description, which is provided to all employees, sets forth the following questions and answers:

III-1. If I qualify for long term disability payments, how will the amount of my monthly payment be determined?

Your monthly income benefit under the long term disability part is designed to provide you, in conjunction with certain other income you may receive, with 50% of your basic monthly earnings. . . .

III-9. Will my long term disability payments be reduced by other payments or benefits?

Your payments under the Plan are reduced by any of the following kinds of payments you receive:

• worker's compensation payments attributable to lost wages, to the extent those payments are not used to reduce your pension benefits;

• Social Security disability payments (excluding cost of living increases made effective after your payments under the Plan commenced) and other disability payments; other Social Security benefits (excluding cost of living increases. . .) including dependents' benefits;

* * *

Appellants' Appendix at 70, 74.6

At trial, Godwin testified on his own behalf, and the manager of human resources, Ben Spears, testified for MAPCO. While Godwin did not dispute that an overpayment had occurred, he contended that, at the time of trial, he only owed MAPCO $8,188.56. The discrepancy between the amount claimed by MAPCO and the amount claimed by Godwin is based upon Godwin's contention that the attorney fees deducted directly from his Social Security award and the dependent benefits sent to his ex-wife's address were not subject to reimbursement under the Plan because he did...

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