223 F.3d 543 (7th Cir. 2000)
Paul J. Wyatt, Plaintiff-Appellee,v.UNUM Life Insurance Company of America, Defendant-Appellant.
No. 00-1127
In the  United States Court of Appeals  For the Seventh Circuit
Argued May 30, 2000
Decided August 7, 2000

Appeal from the United States District Court  for the Northern District of Illinois, Eastern Division.  No. 97 C 8228--David H. Coar, Judge.
Before Posner, Coffey and Kanne, Circuit Judges.
Kanne, Circuit Judge.


1
An insurance dispute  arising out of a tragic incident that left Paul  J. Wyatt unable to work requires that we decide  whether UNUM Life Insurance Co. of America  wrongly withheld benefits from Wyatt in violation  of federal law. The district court held that UNUM  was not entitled to offset the benefits it owed  Wyatt against benefits he had been receiving from  another insurance policy and issued summary  judgment in Wyatt's favor. UNUM, believing that  its contract with Wyatt permitted such an offset,  appealed. Because the dispute concerns an  employee-benefit plan governed by the Employee  Retirement Income Security Act, 29 U.S.C. sec.  1001 et seq., jurisdiction rested in the district  court as a federal question under 28 U.S.C. sec.  1331. Agreeing that Wyatt's policy with UNUM did  not permit the offset UNUM claimed, we affirm the  district court's order.

I.  History

2
The facts of this case are simple. Paul Wyatt  worked for many years for William Blair & Co.,  holding the position of partner in the firm. In  December 1992, while on a business trip, Wyatt  was robbed and beaten, leaving him permanently  disabled. At the time, Wyatt was covered by two  insurance policies, both of which were voluntary  and purchased by Wyatt. The UNUM policy provided  long-term disability benefits calculated at 60  percent of the insured's monthly earnings, less  "other income benefits" received from other  sources. The UNUM policy defined "other income  benefits" as

1.

3
The amount for which the insured is eligible  under


4
a.  Workers' or Workmen's Compensation Laws;


5
. . .


6
3. The amount of any disability income benefits  for which the insured is eligible under


7
a. any group insurance plan.


8
. . .


9
Wyatt also chose to purchase coverage under a  Workers Compensation and Employers Liability  Policy issued by Federal Insurance. This policy  provided "voluntary compensation insurance"  identical to benefits under the workers  compensation law, although Wyatt was not subject  to the Illinois Workers' Compensation Act, 820  Ill. Comp. Stat. 305/1 et seq. After his injury,  Wyatt applied for benefits under both policies.  He began receiving benefits from Federal in the  amount of $670 per week. Later, UNUM approved his  application for benefits under its policy,  subject to an offset of $670 per week that he was  getting from Federal.


10
On March 19, 1996, Wyatt reached a settlement  with third parties for his injuries in the amount  of $4 million. The Federal policy provided that  any recovery from a third party would offset the  amount of benefits Federal would pay.  Specifically, the Federal plan provided that  "[i]f the persons entitled to the benefits of  this insurance make a recovery from others, they  must reimburse us for the benefits we paid them."  Therefore, the parties agree that Federal did not  owe Wyatt anything under his policy until the $4  million is exhausted. Pursuant to this condition,  Wyatt reimbursed Federal for the amount of the  benefits Federal had paid to him between 1992 and  1996. Furthermore, Federal notified Wyatt that  future payments were "suspended until exhaustion  of Mr. Wyatt's [$4 million] settlement."


11
Wyatt requested UNUM discontinue the $670 offset  against his benefits because he was no longer  eligible for benefits under the Federal policy.  UNUM responded that the offset remained  appropriate because Wyatt was still eligible for  the Federal benefits. The parties then disagreed  as to whether Federal's benefits were properly  considered workers compensation benefits as  defined by the UNUM policy. Wyatt contended that  the Federal benefits were not paid under  "Workers' or Workmen's Compensation Laws," since  those laws did not encompass Wyatt as a partner  in the firm. UNUM countered that, even so, the  Federal plan qualified as "any group insurance  plan," for which Wyatt was still eligible.


12
Wyatt filed a one-count complaint for  declaratory relief in the Circuit Court of Cook  County, Illinois, and UNUM removed the case to  federal district court. After cross-motions for  summary judgment, the district court held that  Wyatt was not eligible for benefits under the  Federal policy and ordered UNUM to pay Wyatt  $116,133.20 in retroactive benefits, prejudgment  interest and attorneys' fees.

II.  Analysis

13
On appeal, UNUM challenges the district court's  finding that Wyatt was not eligible for benefits  under the Federal policy and the award of  attorneys' fees. We review a district court's  grant of summary judgment de novo. See Quinn v.  Blue Cross and Blue Shield Ass'n, 161 F.3d 472,  475 (7th Cir. 1998). Summary judgment is proper  when "the pleadings, depositions, answers to  interrogatories, and admissions on file, together  with the affidavits, if any, show that there is  no genuine issue as to any material fact and that  the moving party is entitled to a judgment as a  matter of law." Fed. R. Civ. P. 56(c); see also  Celotex Corp. v. Catrett, 477 U.S. 317, 322  (1986); Anderson v. Liberty Lobby, Inc., 477 U.S.  242, 247-48 (1986).


14
The district court, relying on Firestone Tire &  Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989),  correctly ascertained its standard of review over  UNUM's decision to deny benefits as de novo.  Firestone provides de novo review for all cases  related to the denial of benefits under ERISA,  "unless the benefit plan gives the administrator  or fiduciary discretionary authority to determine  eligibility for benefits or to construe the terms  of the plan." Id. at 115. In cases where the  administrator has discretionary authority, the  district court must review their decision under  the more deferential "arbitrary and capricious"  standard. See Cozzie v. Metropolitan Life Ins.  Co., 140 F.3d 1104, 1107 (7th Cir. 1998). The  issue presented here centers on whether Wyatt  remains eligible under the Federal plan, over  which UNUM has no discretionary authority.  Therefore, the district court correctly found  that de novo review was appropriate.


15
A.  Wyatt's Eligibility Under the Federal  Policy


16
The question presented is whether Wyatt remained  "eligible" for benefits under the Federal plan  after he received the third-party settlement. It  is uncontested that Wyatt will not receive any  monetary payments from Federal until he exhausts  the $4 million settlement, which would take  roughly 5,970 weeks, or 115 years, from December  1992. In Federal's terms, the payments are  "suspended" until that time.


17
UNUM contests strongly that one can still be  "eligible" for benefits that one will,  undisputedly, never receive, and that the  cessation of payments to Wyatt by Federal is  merely a "fiction" that we should disregard. In  this view, Federal is still making payments to  Wyatt, but Wyatt is immediately paying them back  the same amount. Rather than engage in this  routine every week, Federal and Wyatt agreed that  Federal would stop making payments at all. UNUM  asks us to look past this arrangement of  convenience, this "fiction," to the reality that  Wyatt is still eligible for payments from  Federal.


18
We think this is a strange understanding of the  word "eligible." We agree that Wyatt is still  covered by the policy, in that the policy has not  been cancelled or voided. This is a far cry from  saying he is eligible to receive payments.  According to one definition, eligible means  "entitled to something." Webster's Third New  International Dictionary 736 (3d ed. 1986). The  Federal plan indicates that Wyatt must pay  Federal back for any money he received from third  parties. He therefore is not entitled to anything  from Federal since he must immediately give back  anything they paid him. The UNUM policy directs  us to the "amount of any disability income  benefits for which the insured is eligible."  (Emphasis added.) Reading "eligible" as  "entitled," it becomes obvious that the amount to  which Wyatt is entitled is zero. UNUM's  interpretation that one can be eligible to  receive something that one has no right to  possess in any sense, is clearly wrong.


19
Federal's use of the term "suspend" might  reflect Federal's view that Wyatt remained  eligible, but only as to future payments.  Sometime, perhaps in the 22nd century, Wyatt  would again be entitled to a weekly benefit, so  it could not be said simply that Wyatt was, in  all circumstances, "ineligible" under the Federal  plan. Thus Federal suspended payments until he  again would be due to receive a payment that he  would not be bound to immediately give back,  rather than declare with finality that Wyatt is  ineligible for benefits, either presently or in  the future.


20
UNUM points to three cases from other courts  that purportedly hold that, in the interest of  preventing double recoveries, insured parties  remain "eligible" for benefits they are required  to reimburse. See Sampson v. Mutual Benefit Life  Ins. Co., 863 F.2d 108 (1st Cir. 1988); Zeller v.  UNUM Life Ins. Co., 1997 WL 732420 (E.D. La.  1997); Snead v. UNUM Life Ins. Co., 824 F.Supp.  69 (E.D. Va. 1993), aff'd in part, remanded on  other grounds, 35 F.3d 556 (4th Cir. 1994).


21
Sampson involved facts similar to those of the  case at bar. 863 F.2d at 108-09. The plaintiff in  Sampson was covered by two policies: a workers  compensation policy and a long-term disability  policy. The long-term disability plan required an  offset of benefits paid by a workers compensation  plan, and the workers compensation policy  required reimbursement from third-party  settlements. After receiving a third-party  settlement and reimbursing the workers  compensation carrier, the plaintiff sued to  prevent the disability carrier from withholding  the offset amounts related to the period before  the third-party settlement. The First Circuit  held that to prevent the disability carrier from  withholding the offset would "violate the  principle underlying both the [disability]  policy's offset provision and the reimbursement  provisions of the Massachusetts workers  compensation law, for it would allow Sampson to  recover twice for the same loss." Id. at 111.


22
In Snead, the injured worker retained the  workers compensation benefits, but also wanted to  keep the disability benefits despite UNUM's  offset provision which required a reduction in  benefits for "any amount payable under any  Workmen's Compensation Law, Occupational Disease  Law, or any other legislation of similar purpose  . . . ." 824 F.Supp. at 72. The court held that  public policy against double recoveries, as  expressed in the state's workers compensation law  and the disability insurer's offset provision,  counseled against allowing the injured worker to  recover from both the workers compensation and  disability insurance providers for the same  injury. 824 F.Supp. at 73 (quoting Sampson, 863  F.2d at 110-11).


23
These cases are distinguishable. First, Sampson,  and Snead in part, involved the disability  insurer's right to an offset for benefits paid  before the third-party settlement. Wyatt does not  contest that UNUM is entitled to the $670 offset  for this period. Second, both involved workers  compensation benefits under state law, in which  the expressed policy was to prevent double  recoveries. In such situations, workers  compensation carriers are entitled to liens  against any third-party settlements so that where  possible, the burden of payment would be borne by  tortfeasors rather than insurance carriers, which  helps to keep rates down for state-mandated  workers compensation insurance. By virtue of his  partnership status in the firm, Wyatt was exempt  from the state-required workers compensation  insurance. His insurance was voluntary and not  subject to the state requirements. Therefore, the  state's policy interest is inapplicable.


24
Instead, the matter is simply one of contract  interpretation, and on this ground, UNUM's policy  in this case differs significantly from UNUM's  policy in Snead. In Snead, the relevant offset  provision looked to "amounts payable under any  Workmen's Compensation Law," id. at 72, and the  court determined that UNUM should receive an  offset for the amounts the worker actually was  paid and retained. The court's language makes  this clear


25
The Court finds, as did the court in Sampson,  that the plain language of the policy provision  permits the insurance company to offset  disability benefits against workmen's  compensation benefits previously paid to the  disabled employee. Thus, UNUM is entitled to  offset workmen's compensation benefits paid to  Snead by Fireman's Fund against disability  payments UNUM must pay to Snead.


26
824 F.Supp. at 73 (emphasis added). The court  focused on payments actually made to the injured  worker and allowed an offset for that amount. The  case did not involve offsets for payments that  would never be made. Even if we were to find that  a public policy against double recoveries applied  here, UNUM could show no double payments similar  to those in Snead or Sampson, and thus the policy  interest is not implicated by requiring UNUM to  make payments to Wyatt notwithstanding the third-  party settlement.1


27
Absent state or other law on the matter,  employees such as Wyatt are free to purchase on  the open market insurance coverage of their  choosing, including policies to protect them from  long-term disability. They may even purchase more  than one policy for the purpose of guaranteeing  higher recoveries. Those employees and the  insurance companies must agree to the terms of  those policies and are free to include provisions  preventing double recoveries involving third-  party settlements. UNUM can point to no provision  in its own policy regarding third-party  settlements, but instead attempts to piggyback on  the provision in Federal's policy and the  principle expressed by state legislatures to  prevent a double recovery. The plain language of  the policy does not allow for this result, nor do  any cases cited by the UNUM compel it. The offset  provision in UNUM's contract does require a  reduction for payments under other group benefit  plans, but only to the extent that the insured is  actually entitled to those payments. In this  case, the employee, Wyatt, is entitled to no  payments from Federal, and therefore the offset  provision does not apply.


28
The district court here made an additional  point we find persuasive. Under UNUM's reading of  its policy, Wyatt actually would be worse off for  purchasing the Federal policy then if he had not.  Had Wyatt not purchased insurance from Federal,  he would have received the $4 million settlement,  against which UNUM had no claim because its  policy did not contain a third-party settlement  clause. He would continue to receive the full  benefit under the UNUM policy, and there would be  no talk of a $670 per week offset. By purchasing  the Federal policy, UNUM argues that Wyatt cost  himself $670 per week. Wyatt would have been very  foolish to agree to this, and as the plain  language of the policies indicates otherwise, we  see no need to reach this irrational result.

B.  Attorneys' Fees

29
Finally, UNUM contests the district court's  discretionary award of attorneys' fees to Wyatt  as allowed by 29 U.S.C. sec. 1132(g)(1). The  district court found that UNUM's position in  opposing Wyatt's claim for benefits was not  "substantially justified." See Bittner v. Sadoff  & Rudoy Indus., 728 F.2d 820, 830 (7th Cir.  1984). We review for abuse of discretion a  district court's award of attorneys' fees. See  Filipowicz v. American Stores Benefit Plans  Comm., 56 F.3d 807, 816 (7th Cir. 1995).


30
In awarding attorneys' fees to the prevailing  party, we ask "was the losing party's position  substantially justified and taken in good faith,  or was that party simply out to harass its  opponent?" Hooper v. Demco, Inc., 37 F.3d 287,  294 (7th Cir. 1994) (quoting Meredith v. Navistar  Int'l Transp. Corp., 935 F.2d 124, 128 (7th Cir.  1991)). The district court held that the facts of  this case were so easily distinguishable from the  case law cited to support UNUM's decision, and  the legal claim it made sufficiently weak, that  UNUM was unreasonable in opposing Wyatt's claim.  Furthermore, UNUM could without difficulty  satisfy the award of $32,000 in attorneys' fees,  which would serve to deter other companies from  opposing similar meritorious claims in the  future. Both are factors this Court considers in  awarding fees under ERISA. See Quinn, 161 F.3d at  478. We find that the district court did not  abuse its discretion in awarding fees and costs  to Wyatt.

III.  Conclusion

31
For the foregoing reasons, the district court's  grant of summary judgment in favor of Wyatt is  Affirmed, and UNUM is ordered to pay the attorneys'  fees and costs associated with this case.



Note:


1
 Zeller, 1997 WL 732420, in addition to being  inapplicable for the same reasons as Sampson and  Snead, is an unpublished district court order and  should not have been cited in briefs or at oral  argument. See Circuit Rule 53(b)(2)(4). We  therefore will disregard it.


