Opinion
No. CV-18-02191-PHX-SMB
2021-10-08
Larry LEWIS, Plaintiff, v. UNUM LIFE INSURANCE COMPANY OF AMERICA, Defendant.
Scott Edward Davis, Scott E. Davis PC, Scott M. Harris, Scott M. Harris PC, Scottsdale, AZ, for Plaintiff. Stephen M. Bressler, Nicole Marie True, Lewis Roca Rothgerber Christie LLP, Phoenix, AZ, for Defendant.
Scott Edward Davis, Scott E. Davis PC, Scott M. Harris, Scott M. Harris PC, Scottsdale, AZ, for Plaintiff.
Stephen M. Bressler, Nicole Marie True, Lewis Roca Rothgerber Christie LLP, Phoenix, AZ, for Defendant.
ORDER
Susan M. Brnovich, United States District Judge
Pending before the Court is Plaintiff Larry Lewis's Motion for Attorneys’ Fees and Related Taxable Costs. (Doc. 98, "Motion".) Defendant Unum Life Insurance Company of America responded, (Doc. 102), and Plaintiff replied, (Doc. 105). The Court has considered the Motion and its supporting memorandum and enters the following Order:
I. BACKGROUND
The relevant factual background for Plaintiff's motion relates to this Court's assessment of Plaintiff's earlier motion for summary judgment. (See Doc. 96.) That motion, (Doc. 79), concerned Plaintiff's denial of long-term disability ("LTD") benefits. In ruling on that motion, the Court rejected eleven of the twelve arguments surrounding procedural irregularities but ultimately ordered the case remanded for consideration of Plaintiff's conditions in the aggregate.
II. LEGAL STANDARD
The Employee Retirement Income Security Act of 1974 ("ERISA") permits district courts discretion to award reasonable attorney's fees and costs to either party. See 29 U.S.C. § 1132(g)(1). "A[n] [ERISA] plan recipient who prevails in an action to enforce rights under the plan is ordinarily entitled to a reasonable attorney's fee if the participant ‘succeed[s] on any significant issue of litigation which achieves some of the benefit ... sought in bringing the suit’ and if no special circumstances make an award unjust." Barnes v. Independent Auto. Dealers Ass'n of Cal. Health & Welfare Benefit Plan , 64 F.3d 1389, 1397 (9th Cir. 1995) (quoting Losada v. Golden Gate Disposal Co. , 950 F.2d 1395, 1401 (9th Cir. 1991) ). Thus, a district court may exercise its discretion and grant attorneys’ fees pursuant to § 1132(g)(1) only when a fees claimant shows "some degree of success on the merits." Hardt v. Reliance Standard Life Ins. Co. , 560 U.S. 242, 255, 130 S.Ct. 2149, 176 L.Ed.2d 998 (2010). In Hardt , the Supreme Court explained this standard more fully: "A claimant does not satisfy that requirement by achieving ‘trivial success on the merits’ or a ‘purely procedural victory,’ but does satisfy it if the court can fairly call the outcome of the litigation some success on the merits without conducting a ‘lengthy inquiry into the question whether a particular party's success was substantial or occurred on a central issue.’ " 560 U.S. at 255, 130 S.Ct. 2149 (citing Ruckelshaus v. Sierra Club , 463 U.S. 680, 688 n.9, 103 S.Ct. 3274, 77 L.Ed.2d 938 (1983) (internal citations omitted)).
In addition to meeting § 1132(g)(1) ’s eligibility requirements, a party seeking attorneys’ fees must also satisfy local rules. LRCiv. 54.2 outlines this Court's analysis in considering an attorney's fee award. Specifically, a court considers a party's eligibility, entitlement, and the reasonableness of the award. LR.Civ. 54.2(c)(1)-(3). A party may also submit, among other things, supporting documentation and a task-based itemized statement of fees and non-taxable expenses for the court's consideration.
Plaintiff satisfies LRCiv. 54.2’s baseline requirement to "specify the judgment and cite the applicable statutory ... authority upon which the movant seeks an award." LRCiv. 54.2(c)(1).
III. DISCUSSION
A. Entitlement
The threshold question is whether Plaintiff is entitled to fees. To be eligible for an award of attorneys’ fees under § 1132(g)(1), a party must achieve "some degree of success on the merits." Hardt , 560 U.S. at 255, 130 S.Ct. 2149. "Only after passing through the ‘some degree of success on the merits’ door is a claimant entitled to the district court's discretionary grant of fees under § 1132(g)(1)." Simonia v. Glendale Nissan/Infiniti Dis. Plan , 608 F.3d 1118, 1121 (9th Cir. 2010) (citation omitted).
Plaintiff argues that remand is enough to prevail on his request for an award of attorney fees. Plaintiff mainly relies on non-binding precedent to support his argument. See, e.g. , Flom v. Holly Corp. , 276 Fed.Appx. 615, 616 (9th Cir. 2008) (unpublished) (attorney fees awarded after remand was granted and the plaintiff ultimately awarded benefits on remand); Barnes v. AT&T Pension Benefit Plan–Nonbargained Program , 963 F. Supp. 2d 950, 962–63 (N.D. Cal. 2013) (remand order alone adequately established some success on the merits); Gross v. Sun Life Assur. Co. of Canada , 763 F.3d 73, 74–86 (1st Cir. 2014) (finding sufficient success on the merits after the court remanded to the plan administrator and expressly refraining from expressing any view on the ultimate merits of plaintiff's claim); McKay v. Reliance Standard Life Ins. Co. , 428 Fed.Appx. 537, 539–547 (6th Cir. 2011) (unpublished) (finding plaintiff achieved some degree of success after plaintiff received "another shot" by remanding for further consideration). Defendant argues that remand is not enough to prevail and primarily relies on this Court's earlier ruling in Woolsey v. Aetna Life Ins. Co. , 457 F.Supp. 3d. 757 (D. Ariz. 2020), where an award of attorney fees was denied upon remand. Woolsey is factually distinct and not binding on this Court. In Woolsey , the Court remanded the case for the carrier to review excluded medical records, allow plaintiff to seek psychological or functional testing as directed by the carrier, and consider the aggregate effect of his claimed conditions. Nevertheless, the Court found that the carrier's "denial of Plaintiff's LTD [was] well supported as the medical record supporting Plaintiff's LTD claim was ‘shockingly thin’ ".
Here, although Plaintiff failed on most claims, it is significant that Plaintiff succeeded on getting a remand and also on his motion to supplement the record. Defendant failed to disclose a reviewing physician's report to the claimant when requested, an obligation that has been clear since the Ninth Circuit ruling in Salomaa v. Honda Long Term Disability Plan , 642 F.3d 666, 680 (9th Cir. 2011). The Court finds that, on the facts of this case, Plaintiff is entitled to an award of fees.
The next step is to consider the five factors set forth in Hummell v. S.E. Rykoff & Co. , 634 F.2d 446, 452-53 (9th Cir. 1980). These factors are:
(1) the degree of the opposing parties’ culpability or bad faith; (2) the ability of the opposing parties to satisfy an award of fees; (3) whether an award of fees against the opposing parties would deter others from acting under similar circumstances; (4) whether the parties requesting fees sought to benefit all participants and beneficiaries of an ERISA plan or to
resolve a significant legal question regarding ERISA; and (5) the relative merits of the parties’ positions. Id. at 452–453.
As applied to this case, the Court finds as follows:
1. The Court finds that Unum Life did not act in bad faith. Defendant argues that Plaintiff spent a lot of effort condemning Unum Life for practices that occurred years ago rather than focusing on the issues specific to this case. While Plaintiff may have gone off on tangents, that would be an issue to consider in evaluating the reasonableness of the fees;
2. Unum Life can satisfy a fee award;
3. An award of fees may deter Unum Life from failing to provide physician reports when requested. Unum Life argues that denial of a fee award would deter Plaintiff's counsel from engaging in unnecessary discovery. While that may be true, that should be and will be considered in evaluating the reasonableness of the fees;
4. Plaintiff did not seek to resolve a significant legal question regarding ERISA, and this litigation was very fact specific and did not address an issue to benefit all participants and beneficiaries;
5. As stated above, all but two issues were resolved in favor of Defendant. However, the two issues resolved in favor of Plaintiff were significant. Finding fault in Defendant's failure to provided physician reports as required by Salomaa and the failure to consider Plaintiff's conditions in the aggregate.
In short, the Court finds that the Hummell factors favor an award of fees.
B. Reasonableness
Finally, the Court must determine if the fees requested are reasonable. Here, three factors contribute to the Court finding the fees are unreasonable. First, Counsel seeks hourly rates higher than those cited in the contract with Plaintiff. Counsel seeks to be awarded an hourly rate of $550, yet his contract with the client said his rate would be $450 per hour if the client had not chosen to proceed on a contingency basis. The same contract also states Ms. Martinez's hourly rate was $100, and he seeks to have her paid at an hourly rate of $175. The Court finds that the rates agreed to in the fee agreement should apply, and, thus, the fee award will be reduced by $44,721.00. Secondly, the fees requested are excessive in light of the maximum benefits due in the case. Defendant states that the fees requested are 95% of the maximum payout, and Plaintiff does not dispute that percentage. Plaintiff's counsel also seems to admit that the amount of fees is excessive by suggesting a reduction of approximately $50,000. Finally, Plaintiff was overly aggressive while litigating some issues in this case. For example, he was overly aggressive in discovery which resulted in a discovery conference during which his discovery requests were limited. Next, Plaintiff sought discovery based on an abuse of discretion review and yet argued for de novo review in his briefing. Based on Plaintiff counsel's extensive experience in this field, creating an argument over standard of review is unexpected. Finally, Plaintiff attached new evidence and included new arguments in his reply brief that caused additional expense when Defendant had to file a motion to strike, which was fully briefed. As the Court ruled earlier, the actions taken by Plaintiff in his reply brief were in clear violation of the Case Management Order. For the unreasonable need for briefing on a motion to strike, the expenses related to that will be deducted ($3,861).
In the Reply, Plaintiff's counsel states he does not concede that the fees are too high.
Defendant also seeks reductions for clerical tasks. In this case, the clerical tasks were not billed by the attorney, but they were billed by the paralegal. However, clerical tasks such as filing and organization should be "subsumed in firm overhead rather than billed at paralegal rates". Nadarajah v. Holder , 569 F.3d 906, 921 (9th Cir. 2009). Therefore, a reduction is appropriate. Defendant suggests that the tasks they highlighted are all clerical and $18,831.50 should be deducted. After review of the billing, the Court finds that only $3,412.50 is truly clerical work and will deduct that amount.
IV. Conclusion
Plaintiff Larry Lewis's Motion for Attorneys’ Fees and Related Taxable Costs, (Doc. 98), is granted in part and denied in part. Plaintiff is awarded attorneys’ fees in the amount of $259,276.50. The clerk of court shall amend the judgment accordingly.