United States District Court, D. Nebraska
MEMORANDUM AND ORDER
JOSEPH
F. BATAILLON SENIOR UNITED STATES DISTRICT JUDGE
This
matter is before the court on the plaintiff's motion for
attorney fees and costs Filing No. 75.
I.
BACKGROUND
This
court found in favor of Sepulveda-Rodriguez on her claims
under the Employee Retirement Income Security Act
(“ERISA”), 29 U.S.C. § 1101 et seq.
The court held that Metropolitan Life Insurance Company
(“Metropolitan”) abused its discretion in denying
supplemental life insurance coverage under a policy provided
by plaintiff's late husband's employer. The court
found Metropolitan's denial was not supported by
sufficient evidence and was not a reasonable interpretation
of the terms of the Plan. Further, the court found that
Metropolitan and defendant Ford Motor Company
(“Ford”), the plaintiff's decedent's
employer, breached fiduciary duties to the beneficiary. The
court also found Ford failed to timely provide Plan documents
to the beneficiary and was liable for statutory damages under
the statute.
The
plaintiff has submitted timesheets and affidavits showing the
qualifications of counsel.[1] Sepulveda-Rodriguez seeks attorney fees
in the amount of $27, 045 and costs of $420. That amount
represents 38.1 hours of work by Thomas Monaghan at the rate
of $350.00 per hour, for a total of $13, 335; 47.4 hours of
work by Rodney C. Dahlquist at the rate of $250.00 per hour,
for a total of $11, 850; and 15.5 hours of work by paralegal
Lucy Bower at the rate of $120.00 per hour, for a total of
$1, 860.
Defendant
Metropolitan renews its position on the merits of the
plaintiff's right to recover under ERISA, contending that
the plaintiff is not entitled to fees under a proper
resolution of this action. Metropolitan has also filed a
notice of appeal. It does not challenge the amount of fees
requested by the plaintiff. Ford reserves the positions it
previously expressed in briefing on the summary judgment
motions and its right to appeal, but does not dispute the
reasonableness of the total amount of plaintiff's
attorney's fees for handling this entire litigation. It
does, however, dispute the imposition of an award of
attorney's fees in the amount sought by the plaintiff
against Ford, contending that fees should be denied as to
Ford, or, in the alternative, that the court should award
fees in a lesser amount against Ford, commensurate with its
degree of culpability.
II. LAW
Under
ERISA, a court is authorized, in its discretion, to award a
reasonable attorney fee and costs to either party. 29 U.S.C.
§ 1132 (g)(1). A plaintiff is required to achieve
“some degree of success on the merits” to recover
attorney fees under ERISA. Hardt v. Reliance Standard
Life Ins. Co., 560 U.S. 242, 255 (2010) (clarifying that
a party need not attain “prevailing party” status
to receive such an award). The standard is satisfied 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. Thole v.
U.S. Bank, Nat'l Ass'n, 873 F.3d 617, 630 (8th
Cir. 2017).
Once
the threshold is met, a court in exercising its discretion
may then consider factors such as: (1) degree of culpability
or bad faith, (2) ability to satisfy an award of
attorney's fees, (3) potential for deterring other
persons acting under similar circumstances, (4) whether the
party requesting fees sought to benefit all participants and
beneficiaries of an ERISA plan or to resolve a significant
legal question regarding ERISA itself, and (5) the relative
merits of the parties' positions. See
Hardt, 560 U.S. at 255 n. 8; In re Interstate
Bakeries Corp., 704 F.3d 528, 537-38 (8th Cir. 2013);
Eisenrich v. Minneapolis Retail Meat Cutters and Food
Handlers Pension Plan, 574 F.3d 644, 651 (8th Cir.
2009). This list of factors is not exclusive or to be
mechanically applied, however, and “district courts
should use the factors and other relevant considerations as
general guidelines for determining when a fee is
appropriate.” Martin v. Ark. Blue Cross & Blue
Shield, 299 F.3d 966, 972 (8th Cir. 2002) (en
banc)). Although there is no presumption in favor of
attorney fees in an ERISA action, a prevailing plaintiff
rarely fails to receive fees. Starr v. Metro Sys.,
Inc., 461 F.3d 1036, 1041 (8th Cir. 2006).
The
court uses the lodestar method of multiplying the number of
hours billed by the reasonable hourly rate to determine the
fee amount. Fish v. St. Cloud State Univ., 295 F.3d
849, 851 (8th Cir. 2002); see also Brown v.
Aventis Pharms., Inc., 341 F.3d 822, 829 (8th Cir. 2003)
(approving the use of the lodestar method). The court may use
its own knowledge of the prevailing market rates to determine
a reasonable hourly rate. Hanig v. Lee, 415 F.3d
822, 825 (8th Cir. 2005). "A reasonable hourly rate is
usually the ordinary rate for similar work in the community
where the case has been litigated." Id.
Co-fiduciary
liability is joint and several under ERISA. 29 U.S.C. §
1105(a); see Donovan v. Robbins, 752 F.2d 1170,
1185-86 (7th Cir. 1985) (concurring opinion) (noting that the
accepted law of trusts is that if several trustees unite in a
breach of trust, they are jointly and severally liable, and
the entire claim . . . may be satisfied from the property of
one trustee); see also Travelers Cas. & Sur.
Co. of Am. v. IADA Servs. Inc., 497 F.3d 862, 864-66
(8th Cir. 2007) (ERISA does not permit contribution or
indemnity between co-fiduciaries); Chesemore v.
Fenkell, 829 F.3d 803, 813 (7th Cir. 2016) (noting split
in the circuits on the question of contribution and
indemnification).
III.
DISCUSSION
The
court finds Sepulveda-Rodriguez has achieved a degree of
success that makes her eligible for an award of fees. She has
obtained all the relief she sought.
In
analyzing the factors set forth above, the court finds a
degree of culpability on the part of the defendants that
weighs in favor of an award of fees. Metropolitan's
decision to deny coverage was not supported by sufficient
evidence. The file was generally mismanaged in that there was
no record of the questions the plaintiff's decedent had
been asked or what he answered. Metropolitan's claims
examiners gave conflicting responses, created delay, ignored
medical evidence, and concluded that the decedent had been
untruthful without evidence to back up that conclusion.
Further, Metropolitan was unable to show it would have denied
coverage even if the decedent had been asked coverage
questions concerning his heart disease history and had
replied affirmatively to those questions. Also, the coverage
provisions of Metropolitan's policy ...