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denying motion for attorney's fees filed by plaintiff who secured court-ordered remand, holding that plaintiff was not a prevailing party because she "had not yet achieved `some of the benefit' she sought nor has she yet `directly benefit[ed]" (quoting Hensley, 461 U.S. at 433 and citing Quinn)
Summary of this case from Colby v. Assurant Employee BenefitsOpinion
Civil Action No. 97-N-1315.
July 6, 1999
RECOMMENDATION OF MAGISTRATE JUDGE
I. Background
Plaintiff claimed that defendants improperly administered her long term disability benefits under a group insurance plan in violation of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq.; terminated her employment in violation of the Americans with Disabilities Act, 42 U.S.C. § 12101, et seq. and Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq.; and, violated state law prohibiting fraudulent inducement of out of state workers.
A review of the record and the file in this matter reveals that the complaint was filed June 24, 1997. The case proceeded through discovery and the final pretrial order entered on July 2, 1998. Cross motions for summary judgment were filed. Plaintiff moved for summary judgment on her ERISA claim and defendants moved for dismissal of all of plaintiff's claims.
The case did not proceed to trial. By Order of July 30, 1998, the court granted plaintiffs motion for summary judgment on her ERISA claim of deprivation of long term disability benefits, and granted defendants' motion for summary judgment on plaintiff's claims for discrimination and retaliation under the ADA. Plaintiff voluntarily dismissed her Title VII and state law claims.
Rekstad then moved for entry of final judgment for the full amount of benefits due from February 1, 1996 through the date of the motion. Defendants opposed plaintiffs motion and moved for an order remanding the matter to the long term disability plan administrator to determine plaintiffs eligibility for benefits. On March 10, 1999, the court denied plaintiffs motion, granted defendants' motion and remanded to the plan administrator for a determination of benefits eligibility after February 1, 1996. On March 16, 1999, judgment was entered in favor of defendants on plaintiffs claims for discrimination and retaliation under the ADA, and in favor of plaintiff on her ERISA claim. The court did not award attorney fees or costs to either party. Plaintiff's attorneys filed bills of costs, but costs were not taxed by the Clerk of the Court. The case was closed subject to reopening to obtain review of the administrator's decision on remand. The matter is now on appeal to the Court of Appeals for the Tenth Circuit.
Pursuant to an April 9, 1999 Order of Reference under 28 U.S.C. § 636 (b)(1)(B) and D.C. Cob. L.R. 72.4, Plaintiffs Motion for Attorney's Fees Under ERISA [filed March 30, 1999] was deferred to the undersigned magistrate judge for the purpose of conducting a hearing and issuing a recommendation. Plaintiffs affidavits of attorney fees ware submitted on April 30, 1999. A hearing on the motion was held on May 19, 1999 and the final briefing was deferred to the magistrate judge as of May 27, 1999.
II. Analysis
1. Attorney fees
Plaintiff moves for reimbursement of her attorney fees and costs incurred in connection with the ERISA claim. Defendant argues that a remand for a determination of benefits does not make Rekstad a "prevailing party" for purposes of a fee award under ERISA, and that, even if she is a prevailing party, Rekstad should only be reimbursed for the time spent on ERISA claims; that any time spent on the ERISA claims should be reduced due to plaintiffs limited success on her claim; that any fees awarded must be reduced for duplicative work by plaintiff's attorneys; and, that plaintiff is not entitled to any costs.
ERISA provides that in any action brought by an ERISA plan participant, "the court in its discretion may allow a reasonable attorney's fee and costs of action to either party." ERISA, § 502(g)(1), § 29 U.S.C. § 1132 (g)(1). Although the statute is not express on this point, most courts, including this one, have interpreted ERISA to allow an award of attorneys fees only to "prevailing parties." See, e.g., Kaiser Steel Corp. v. Mullins, 455 U.S. 72, 89 n. 14, (1982); Phelps v. US West, Inc., 141 F.3d 1185 (10th Cir. 1998); Arfsten v. Frontier Airlines, Inc. Retirement Plan for Pilots, 967 F.2d 438, 442 n. 3 (10th Cir. 1992); Martin v. Blue Cross Blue Shield of Virginia, Inc., 115 F.3d 1201, 1210 (4th Cir.) (collecting cases), cert. denied, ___ U.S. ___, 118 S.Ct. 629 (1997).
The first issue is whether Rekstad is a "prevailing party." Analyzed under the same standard set forth in 42 U.S.C. § 1988, Rekstad may be a prevailing party if she "`succeed[s] on any significant issue in litigation which achieves some of the benefit the part[y] [sought in bringing suit.'" Hensley, 461 U.S. at 433. "Whatever relief the plaintiff secures must directly benefit h[er] at the time of the judgment or settlement." Farrar v. Hobby, 506 U.S. 103, 111 (1992).
Plaintiff argues that Rekstad is a prevailing party because the court determined that her benefits had been wrongfully terminated and remanded the matter back to the plan administrator, relying upon Perlman v. Swiss Bank Corporation comprehensive Disabilty Protection Plan, 990 F. Supp. 1039 (N.D. Ill. 1998). In Perlman, the court awarded a portion of the attorney fees requested following remand to the plan administrator, based upon a finding that the administrator's position was not substantially justified.
Defendant responds that the order remanding this case for a determination of benefits after February 1, 1996 may result in no monetary award to plaintiff. Defendant contends that the court has merely determined that a remand to the plan is appropriate, which is a "technical victory" which does not entitle plaintiff to attorney fees and costs, relying upon Quinn v. Blue Cross and Blue Shield Association, 161 F.3d 472 (7th Cir. 1998).
In Quinn, the court awarded costs, but found that a remand for a determination of benefits in an uncomplicated case did not render the plaintiff a prevailing party for purposes of an award of attorney fees because the plan administrator did not have a conflict of interest, and because Blue Cross's position was not totally lacking in justification nor made in bad faith. Quinn, 161 F.3d at 478-79. The Quinn court expressly distinguished Perlman, finding that, in Perlman, the insurance company's decision to deny benefits may have been clouded by a conflict of interest, and that the claims administrator admitted the case was one of the more complicated ones he had ever seen, but he neglected to have an IME performed. Quinn, 161 F.R.D. at 478.
In its March 10, 1999 order, the court did not find it necessary to make any findings on the conflict of interest argument Rekstad raised. The court further did not make any finding that the administrator acted in bad faith or that he breached any fiduciary duty. The court found instead that the plan administrator's decision was arbitrary and capricious, unreasonable and not supported by the record before the administrator. Further, although the Rekstad's medical condition was arguably somewhat complex, the administrator did seek an IME, although the court eventually found the IME to be insufficient and an inadequate basis for the decision to terminate benefits. Based on a review of the court's order, the circumstances here are more like those in Quinn, in that the order to remand does not render the plaintiff a prevailing party who may be awarded fees in the court's discretion under the Gordon standard. Plaintiff has not yet achieved "some of the benefit" she sought nor has she yet "directly benefit[ed]." Accordingly, the request for attorney fees should be denied as premature.
An award of attorney fees to a successful plaintiff in an ERISA case is not automatic. There are five nonexclusive factors to guide the district court's decision in the exercise of its discretion to award fees. These factors are: (1) the degree of the opposing parties' culpability or bad faith; (2) the ability of the opposing parties to personally satisfy an award of attorney's fees; (3) whether an award of attorney's 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. Smith v. Rogers Galvanizing Co., 128 F.3d 1380, 1386 (10th Cir. 1998 citing Gordon v. united States Steel Corp., 724 F.2d 106, 108 (10th Cir. 1983)).
2. Costs
Plaintiff seeks $5937.23 in costs under ERISA, § 502(g)(1). The parties agree that the "costs of action" are the types of costs permitted under 28 U.S.C. § 1920. Agredano v. Mutual of Omaha Cos., 75 F.3d 541, 544 (9th Cir. 1995). The statute reads:
§ 1920. Taxation of costs
A judge or clerk of any court of the United States may tax as costs the following:
(1) Fees of the clerk and marshal;
(2) Fees of the court reporter for all or any part of the stenographic transcript necessarily obtained for use in the case;
(3) Fees and disbursements for printing and witnesses;
(4) Fees for exemplification and copies of papers necessarily obtained for use in the case;
(5) Docket fees under section 1923 of this title;
(6) Compensation of court appointed experts, compensation of interpreters, and salaries, fees, expenses, and costs of special interpretation services under section 1828 of this title.28 U.S.C. § 1920.
Danielson submitted a request for reimbursement of the filing fee of $150; the service of process fee of $18; $2614.56 for transcripts used in the court proceedings; $194.40 for deposition witness fees; $807.98 in copy costs for summary judgment briefs; and $115 for service of process for ten depositions. Liebross requests $341.23 for transcripts used in the court proceedings; $123.29 for printing fees; $90.00 for witness fees; and $41.00 for costs incident to the taking of depositions. See March 26, 1999 Bills of Costs; Affidavit of Robert Liebross.
Quinn provides the rationale for the denial of fees at this time. In Quinn, however, the court reversed the lower court's award of attorney fees and affirmed its award of costs. 28 U.S.C. § 1920 authorizes the prevailing party to recover the costs of taking and transcribing depositions necessary for the litigation. See Callicrate v. Farmland Industries, Inc., 139 F.3d 1336, 1339 (10th Cir. 1998); Tilton v. Capital Cities/ABC, Inc., 115 F.3d 1471, 1473 (10th Cir. 1997) (costs for depositions used in connection with summary judgment motions reimbursable as costs under § 1920); U.S. Industries, Inc. v. Touche Ross Co., 854 F.2d 1223, 1245 (10th Cir. 1988) (court has the power to tax costs for materials necessarily obtained for use in the case); Case v. Unified School District #233, 157 F.3d 1243, 1258 (10th Cir. 1998) (copying costs other than for copies used at trial not recoverable). It is appropriate for the clerk to set plaintiffs bills of costs for taxing in accordance with Tenth Circuit precedent as cited herein.
III. Recommendation
For the reasons stated in this recommendation, it is
RECOMMENDED Plaintiff's Motion for Attorneys Fees Under ERISA [filed March 30, 1999] [docket #138] be denied without prejudice with respect to the attorney fees sought, with leave to renew the request for attorney fees if and when benefits are awarded to Rekstad. It is further
RECOMMENDED that plaintiffs requests for costs reimbursement be granted in part and denied in part as set forth in this recommendation and that plaintiffs bills of costs be set for taxing by the Clerk of the Court.
Within ten days after being served with a copy of the proposed findings and recommendation, any party may serve and file written objections to the proposed findings and recommendation as provided by Rules of court. The district court judge shall make a de novo determination of those portions of the proposed findings or specified recommendation to which objection is made. The district court judge may accept, reject, or modify, in whole or in part, the proposed findings or recommendations made by the magistrate judge. The judge may also receive further evidence or recommit the matter to the magistrate judge with instructions.
Failure to make timely objections to the magistrate judge's recommendation may result in a waiver of the right to appeal from a judgment of the district court based on the findings and recommendations of the magistrate judge.