Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-4_04-cv-00368/USCOURTS-azd-4_04-cv-00368-1/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1441 Petition for Removal- Insurance Contract

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WO

UNITED STATES DISTRICT COURT

DISTRICT OF ARIZONA

Priscilla S. Kuhn, 

Plaintiff,

v.

UNUMProvident Corporation and Provident Life

and Accident Insurance, 

Defendant. _______________________________________

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CV 04-368 TUC DCB

ORDER

On September 26, 2006, this Court granted summary judgment for Plaintiff on her

ERISA claim. (Amended Order (document 48)). Judgment was entered accordingly.

(Judgment (document 49)). As the prevailing party, the Plaintiff seeks an award of

$43,575.00 for her attorneys fees and non-taxable costs. Plaintiff was represented by Gregg

H. Temple.

Plaintiff prevailed on her claim for benefits under ERISA and, therefore, may

recover costs and reasonable attorney fees. 29 U.S.C. § 11329(g)(1). There is a presumption

that fees will be awarded when the prevailing party is a plan participant or beneficiary,

unless there are special circumstances that would make an award of fees unjust. Consenco

v. Construction Laborers Pension Trust, 93 F.3d 600, 609 (9th Cir. 1996); Smith v. CMTA

IAM Pension Trust, 746 F.2d 587, 589 (9th Cir. 1984). To recover attorney fees, a successful

plan participant does not have to prevail on her claims; the general rule under ERISA is to

award reasonable attorney fees, if an employee plaintiff succeeds on any significant issue in

the litigation to achieve some of the benefit she sought in bringing the suit. Smith, 746 F.2d

at 589 (citing Hensley v. Eckerhart, 461 U.S. 424, 433 (1983)).

Case 4:04-cv-00368-DCB Document 69 Filed 02/07/07 Page 1 of 6
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Defendant does not challenge Plaintiff's entitlement to attorney fees, but submits that

under the circumstances of this case each party should bear their own fees and costs.

Alternatively, the Defendant argues that the attorney fees requested by the Plaintiff are

unreasonable and should be reduced as follows: 1) fees incurred during Plaintiff's

administrative appeal; 2) fees incurred litigating the preemption issue, and 3) the hourly rate

of $300.00 should be $200.00.

The Court rejects Defendant's arguments and finds the attorney fee award requested

by the Plaintiff is reasonable. 

Reasonable Attorney Fees

To determine the propriety of awarding fees in an ERISA case under 28 U.S.C. §

1132(g)(1), the Court considers the following: 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. Hummell v. S.E. Rykoff

& Co., 634 F.2d 446, 453 (9th Cir. 1980). The Court must bear in mind the remedial

purposes of ERISA to protect the interests of participants in employee benefit plans. Smith,

746 F.2d at 589.

The amount of attorney fees is determined on the facts of each case. Hensley v.

Eckerhart, 461 U.S. 424, 429-430 (1983). In Hensley, the Supreme Court explained that

generally courts consider twelve factors first set forth in Johnson v. Georgia Highway

Express, Inc., 488 F.2d 714 (5th Cir. 1974): (1) the time and labor required; (2) the novelty

and difficulty of the questions; (3) the skill requisite to perform the legal service properly;

(4) the preclusion of employment by the attorney due to acceptance of the case; (5) the

customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the

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client or the circumstances; (8) the amount involved and the results obtained; (9) the

experience, reputation, and ability of the attorneys; (10) the "undesirability" of the case; (11)

the nature and length of the professional relationship with the client, and (12) awards in

similar cases. Hensley, 461 U.S. at 430 n. 3 (citing Johnson, 488 F.2d at 717-719).

In Hensley, the Supreme Court explained that the starting point for determining an

attorney fee award is the number of hours reasonably expended on the litigation multiplied

by a reasonable hourly rate. Hensley, 461 U.S. at 432. The district court should exclude

from this initial fee calculation hours that were not "reasonably expended" because cases can

be overstaffed, and the skill and experience of lawyers vary widely. Id. at 434. Counsel for

the prevailing party should make a good faith effort to exclude from his or her fee request

hours that are excessive, redundant, or otherwise unnecessary, just as a lawyer in private

practice ethically is obligated to exclude such hours from his or her fee submission to a

client. Id. In other words, hours that are not properly billed to one's client are not properly

billed to one's adversary pursuant to a fee shifting statute. Id.

Once the Court determines the product of reasonable hours times a reasonable rate,

the loadstar amount, it must decide whether any other considerations warrant an adjustment

of fees upward or downward. Id. It is at this point, the Court must consider the important

factor of the results obtained by Plaintiff's counsel. Id. It is not enough that Plaintiff is

entitled to attorney fees as the prevailing party, two questions must be asked: "First did the

plaintiff fail to prevail on claims that were unrelated to the claims on which he succeeded?

Second, did the plaintiff achieve a level of success that makes the hours reasonably expended

a satisfactory basis for making a fee award?" Id.

Whether the prevailing Plaintiff should bear her own fees and costs?

Defendant argues that under Hummell fairness requires the Court to order both

parties to bear their own fees and costs. Williams v. Caterpillar, Inc., 944 F.2d 658, 668 (9th

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Cir. 1991) (declining to award fees where there was no proven allegation of bad faith, no

illicit conduct to deter, and both parties' positions were reasonably supported).

Defendant argues that Plaintiff lost on her assertion that this was NOT an ERISA

case. Defendant argues that Plaintiff's argument against preemption was without merit, and

Defendant comes close to suggesting that it was perhaps taken in bad faith.

The Court reminds the Defendant that after the Court's ruling that ERISA applied,

it argued that it was not the proper defendant because it is a third-party insurer and not the

plan or the plan administrator. As this Court explained in its Order granting summary

judgment for Plaintiff, filed on June 29, 2006, this would have undermined this Court's ruling

that ERISA applies because "how could an ERISA plan exist where an employer has no

administrative duties, unless plan administrative duties are provided by the insurer."

(Amended Order (document 48) at 2.) It was the parties' concession that the employer was

NOT the plan administrator and Defendant's persuasive legal argument that plan

administrative duties may fall on a defendant insurer that supported this Court's finding

ERISA preempted Plaintiff's state law claims. Id. at 1-2. This being the apex of the Court's

holding that ERISA applied, the slippery-slope of Defendant's argument that it was not the

plan administrator is apparent. On such slippery turf, the Plaintiff cannot be faulted for

claiming breach of contract instead of ERISA violations. The Court will neither deny her

fees nor apportion her fees based on the ERISA preemption argument.

Whether the request for $43,575.00 is reasonable?

Defendant argues that this Court may not grant fees for work done during the

administrative appeal. Cann v. Carpenters' Pension Trust Fund for N. Calif., 989 F.2d 313,

315-16 (9th 1993); Dishman v. UNUM Life Insur. Co., 269 F.3d 974, 987 (9th Cir. 2001).

Defendant objects to 12.8 hours of work performed by Plaintiff's attorney in April through

June of 2003 because the administrative appeal was not final until November 2003, and the

Complaint was not filed until March of 2004. As Defendant notes the Plaintiff's attorney

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reduced the claim for attorney fees for work he performed in August through October

because it was related to the administrative appeal. Defendant argues that the fee request

must be further reduced, even if the 12.8 hours of work was useful and necessary to

Plaintiff's case. Cann, 989 F.3d 315.

Plaintiff attests that the 12.8 hours were spent in due diligence investigating and

analyzing the medical record and claim correspondence that was necessary to justify the

filing of the Complaint, if the administrative appeal failed. Attorney fees for such pre-filing

work is recoverable, Dishman, 269 F.3d at 987 n. 51; see also Cann, 989 F.2d at 315, and

12.8 hours are a reasonable amount of hours spent in such preparation.

As Defendant concedes, Plaintiff won a major part of the case when she prevailed

on her ERISA claim. (Response at 5.) Plaintiff is entitled to her reasonable attorney fees

for the entire case at a reasonable hourly rate. Plaintiff seeks attorney fees at the hourly rate

of $300.00.

Defendant argues that the Retainer and Contingency Fee Agreement between

Plaintiff and her attorney provided for an hourly rate of $200.00. The parties' agreement

provided for a 40 percent contingency fee in the event of recovery. In the event the Plaintiff

terminated her attorney's services, she agreed to pay an hourly rate of $200.00 plus the

possibility of payment from any recovery. Plaintiff's attorney explains that the hourly rate

provision was added to the contingency agreement to account for the possibility that Plaintiff

might prevail on the administrative appeal, in which event she did not want to pay the 40

percent contingency fee. Plaintiff's attorney agreed that in the event her benefits were

reinstated, he would accept a reduced hourly rate for his review and limited assistance on the

administrative appeal. Plaintiff's attorney argues that since his services were not terminated,

his claim for compensation is based solely on the contingency fee agreement.

Defendant does not dispute that $300.00 is a reasonable hourly rate for litigating an

ERISA case.

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The Court finds that Plaintiff's attorney was skilled and qualified to under take this

case, that the hours he expended on this case were reasonable in light of the legal issues

involved in its litigation. Given the amount involved in the law suit and the results obtained

by the Plaintiff's attorney, the attorney fee request is reasonable and in keeping with the

contingency fee arrangement between the Plaintiff and her attorney and awards in similar

cases. The Court finds that the request for $43,575.00 is a reasonable attorney fee award.

The Defendant can clearly satisfy an award of fees. The Court finds that an award

of attorney fees is appropriate under 28 U.S.C. § 1132(g)(1), given the merits of Plaintiff's

disability claim. (See P's Memorandum for Attorney Fees at 3-4 (citing Amended Order

(document 48) (granting summary judgment for Plaintiff))). 

Accordingly, 

IT IS ORDERED that the Plaintiff's motion for attorney fees and non-taxable costs

in the amount of $43,575.00 (document 51) is GRANTED.

IT IS FURTHER ORDERED that the Clerk of the Court shall amend the Judgment

accordingly.

DATED this 7th day of February, 2007.

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