Osbun v. Auburn Foundry, Inc. (N.D.Ind. 2004)

Full title: RONALD J. OSBUN, Plaintiff, v. AUBURN FOUNDRY, INC. and AUBURN FOUNDRY…

Court: United States District Court, N.D. Indiana, Fort Wayne Division

Date published: Oct 29, 2004

CAUSE NO. 1:03-CV-063 (N.D. Ind. Oct. 29, 2004)

Opinion

CAUSE NO. 1:03-CV-063.

October 29, 2004

MEMORANDUM OF DECISION AND ORDER

ROGER COSBEY, Magistrate Judge

Plaintiff Ronald J. Osbun ("Osbun") brought this suit against Defendants Auburn Foundry, Inc. ("Auburn") and Auburn Foundry, Inc. Retirement Income Plan ("the Plan") to recover lost benefits under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq. After the Court found that Defendants wrongfully terminated Osbun's disability pension (Docket #34), Osbun secured a final judgment against the Plan awarding him $15,428 and ordering reinstatement of his pension (Docket #54).¹ Osbun now seeks to recover $28,753.21 in attorney fees and costs from the Plan. (Docket #55, 62, 63.) For the reasons given below, Osbun's motion for attorney fees will be DENIED.

1 Due to Auburn's pending bankruptcy petition and the resulting automatic stay, the Court has not yet determined whether Osbun is entitled to any remedies from Auburn. ( See Docket #53 at 10.)

At the outset, the Plan argues that the issue of attorney fees was foreclosed by a previous Order of this Court, or in the alternative that Osbun waived his right to seek attorney fees. ( See Def.'s Resp. to Pl.'s Mot. for Attorney's Fees and Costs.) However, the Court need not consider these arguments because even assuming arguendo that the issue of attorney fees is properly before the Court, Osbun is not entitled to recover them.

In ERISA cases, "the court in its discretion may allow a reasonable attorney's fee and costs of action to either party." 29 U.S.C. § 1132(g)(1). However, because any fee awarded to a plaintiff "will be paid out of plan assets, to the possible harm of the other participants and beneficiaries," courts do not award fees to prevailing plaintiffs as a matter of course. Lowe v. McGraw-Hill Co., 361 F.3d 335, 339 (7^th Cir. 2004). Instead, there is only "a modest presumption" that prevailing parties are entitled to fees, Bowerman v. Wal-Mart Stores, Inc., 226 F.3d 574, 592 (7^th Cir. 2000), and the losing side can rebut the presumption by showing that its "litigating position was . . . substantially justified," Lowe, 361 F.3d at 339 (internal quote marks omitted). Some cases use a more elaborate five-factor test instead of the "substantially justified" test, but both tests "essentially ask the same question: `was the losing party's position substantially justified and taken in good faith, or was that party simply out to harass its opponent?'" Quinn v. Blue Cross and Blue Shield Ass'n, 161 F.3d 472, 478 (7^th Cir. 1998).

Osbun argues that because this Court previously found the Plan's termination of his pension to be arbitrary and capricious, the Plan cannot possibly show that its position was substantially justified. As he sees it, the Court's finding of an "abuse of discretion" by the Plan "speaks for itself." (Pl.'s Reply at 2.) However, Osbun does not frame the issue correctly. The question is not whether the Plan's actions before the litigation (terminating Osbun's pension) were substantially justified; rather, the question is whether the Plan's "litigating position" (that its termination of Osbun's pension was not arbitrary and capricious) was substantially justified. Lowe, 361 F.3d at 339; see Quinn, 161 F.3d at 479 (holding that an award of fees "does not necessarily follow" from a finding of arbitrary and capricious action).

The answer to that question is "yes." The Plan's position that its actions were not arbitrary and capricious, although ultimately unsuccessful, was colorable and competently argued. The Plan cited several cases which arguably supported its position, and the Court had to distinguish those cases in order to rule in Osbun's favor. ( See Docket #34 at 10-11.) The Plan also urged the Court to adopt a novel legal theory supporting its position, citing dicta from a Seventh Circuit case. Though the Court rejected this argument ( see id. at 12-14), it was clearly made "in good faith" and not "simply . . . to harass" Osbun, Quinn, 161 F.3d at 478.

The Seventh Circuit has described a substantially justified position as one that is "something more than nonfrivolous, but something less than meritorious." Stark v. PPM America, Inc., 354 F.3d 666, 673 (7^th Cir. 2004). That is an apt description of the Plan's position in this case. Accordingly, Osbun's motion for attorney fees (Docket #55) is DENIED.²

2 Because the Court does not reach the Plan's argument that a previous Order foreclosed the issue of attorney fees, Osbun's motion to alter or amend that Order (Docket #64) is moot and therefore DENIED.