Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_18-cv-00166/USCOURTS-casd-3_18-cv-00166-3/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1001 E.R.I.S.A.: Employee Retirement

---

1

18cv166-MMA (JLB)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

KEITH MCBEAN,

Plaintiff,

v.

UNITED OF OMAHA LIFE 

INSURANCE COMPANY; and BY 

REFERRAL ONLY, INC.,

Defendants.

Case No.: 18cv166-MMA (JLB)

ORDER GRANTING IN PART AND 

DENYING IN PART PLAINTIFF'S 

MOTION FOR ATTORNEYS' FEES 

AND PREJUDGMENT INTEREST

[Doc. No. 59]

Plaintiff Keith McBean, Trustee of the Teresa McGee Living Trust dated January 

4, 2012 (“Plaintiff”), filed a motion for attorneys’ fees and prejudgment interest shortly 

after judgment was entered in this case. Doc. No. 59 (“Mtn.”). Defendant By Referral 

Only, Inc. (“Referral”) filed a response in opposition [Doc. No. 62 (“Oppo.”)], to which 

Plaintiff replied [Doc. No. 66 (“Reply”)]. The Court found the matter suitable for 

determination on the papers and without oral argument pursuant to Civil Local Rule 

7.1.d.1. Doc. No. 67. For the reasons stated herein, the Court GRANTS IN PART AND 

DENIES IN PART Plaintiff’s motion.

//

//

Case 3:18-cv-00166-MMA-JLB Document 69 Filed 06/24/19 PageID.<pageID> Page 1 of 13
2

18cv166-MMA (JLB)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

RELEVANT BACKGROUND

Plaintiff filed this action for relief under the Employee Retirement Income Security 

Act of 1974, as amended (“ERISA”), 29 U.S.C. § 1001 et seq., against Defendants 

United of Omaha Life Insurance Company (“United”) and Referral alleging causes of 

action for benefits pursuant to 29 U.S.C. § 1132(a)(1)(B), and for breach of fiduciary 

duties pursuant to 29 U.S.C. § 1132(a)(3). Doc. No. 14 (“FAC”). The Court previously 

entered summary judgment in favor of Plaintiff and against Referral on Plaintiff’s second 

cause of action for equitable surcharge for the face value of the Policies, or $143,550.00, 

and against Plaintiff on all other claims. Doc. No. 46 (“Order”).

MOTION FOR ATTORNEYS’ FEES

Plaintiff requests an award of attorneys’ fees in the amount of $98,640.00 pursuant 

to 29 U.S.C. § 1132(g)(1) because he achieved success on his claim for equitable relief

and the factors set forth by the Ninth Circuit in Hummell v. S. E. Rykoff & Co., 634 F.2d 

446, 453 (9th Cir. 1980) support a fee award. See Mtn at 6-9. Plaintiff further contends 

the amount of fees requested is reasonable under the lodestar analysis. Id. at 9-16. 

Referral opposes an award of attorneys’ fees, arguing the factors set forth by Hummell do 

not support a fee award and if an award is warranted, the fees should be reduced to

$40,590.00. Oppo. at 3-8.

A. Entitlement to Attorneys’ Fees

ERISA authorizes a court, in its discretion, to award “a reasonable attorney’s fee

and costs of action to either party.” 29 U.S.C. § 1132(g)(1). Analyzing whether a fee 

award is appropriate in a particular case is a two-step process. First, the Court must 

decide whether the litigant “has achieved some degree of success on the merits” that is 

more than “trivial” or “procedural.” Simonia v. Glendale Nissan/Infiniti Disability Plan, 

608 F.3d 1118, 1119 (9th Cir. 2010) (quoting Hardt v. Reliance Standard Life Ins. Co., 

560 U.S. 242, 255 (2010)). Second, if the litigant has achieved some degree of success 

on the merits, the Court considers the Hummell factors: (1) the degree of the opposing 

party’s culpability or bad faith; (2) the ability of the opposing party to satisfy an award of 

Case 3:18-cv-00166-MMA-JLB Document 69 Filed 06/24/19 PageID.<pageID> Page 2 of 13
3

18cv166-MMA (JLB)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

fees; (3) whether an award of fees against the opposing party 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, 

634 F.2d at 453. 

The Hummell factors “are intended to guide the court’s exercise of its discretion,” 

but, “none is necessarily decisive; various permutations and combinations can support an 

award of attorney fees.” Credit Managers Ass’n of S. Cal. v. Kennesaw Life & Accident 

Ins. Co., 25 F.3d 743, 749 (9th Cir. 1994) (citations and quotation marks omitted). 

Additionally, courts in the Ninth Circuit “ordinarily grant a prevailing beneficiary in an 

ERISA action reasonable attorneys’ fees and costs, absent special circumstances 

cautioning against it.” Boston Mut. Ins. v. Murphree, 242 F.3d 899, 904 (9th Cir. 2001).

1. Some Degree of Success on the Merits

“[T]he court can fairly call the outcome of the litigation some success on the merits 

without conducting a lengthy inquir[y] into the question whether a particular party’s 

success was substantial or occurred on a central issue.” Hardt, 560 U.S. at 255 (internal 

quotation marks omitted). Here, judgment was entered on the second cause of action in 

favor of Plaintiff and against Referral. Order. The parties do not dispute that Plaintiff 

achieved some degree of success on the merits. See Oppo. Thus, the Court finds that it

has the statutory discretion to award Plaintiff attorneys’ fees and turns to weighing the 

Hummell factors. See Hardt, 560 U.S. at 255; see also Simonia, 608 F.3d at 1121. 

2. Referral’s Culpability or Bad Faith

Plaintiff argues this factor is met because the Court found Referral breached its 

fiduciary duty by “wrongly advising decedent that she need not do anything other than to 

continue to pay premiums to maintain her life insurance after she became too ill to 

continue full-time employment.” Mtn. at 3. Referral essentially argues it did not act in 

bad faith. See Oppo. at 3-4. “Although bad faith is a factor that would always justify an 

award, it is not required.” Smith v. CMTA-IAM Pension Trust, 746 F.2d 587, 590 (9th 

Case 3:18-cv-00166-MMA-JLB Document 69 Filed 06/24/19 PageID.<pageID> Page 3 of 13
4

18cv166-MMA (JLB)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Cir. 1984). Here, the Court did not specifically find that Referral acted in bad faith. See

Order at 17-18 (explaining that a statement is a misrepresentation even when the person 

misinforms by saying that something is true when they do not know whether it is true or 

not). However, “from a legal perspective, [Referral is] ‘culpable’ in that [it was] found to 

owe Plaintiff a legal duty that [it was] not fulfilling.” See Caplan v. CNA Fin. Corp., 573 

F. Supp. 2d 1244, 1248 (N.D. Cal. 2008). Accordingly, this factor weighs in favor of 

awarding fees.

3. Referral’s Ability to Satisfy an Award of Fees

Referral contends it does not have the ability to satisfy an award of fees. Oppo. at 

4. “The relative ability of the parties to satisfy an award of fees is . . . relevant. 

Generally, when an employee participant brings suit under ERISA, whether it is against 

the trustees or the employer, the resources available to the pensioner are limited.” Smith, 

746 F.2d at 590. Thus, “while the opposing party’s inability to satisfy an award weighs 

against awarding fees, evidence that the opposing party is able to pay does not 

affirmatively weigh in favor of awarding fees.” Mull v. Motion Picture Indus. Health 

Plan, No. LA CV 12-06693-VBF, 2017 U.S. Dist. LEXIS 135347, at *19 (C.D. Cal. Feb. 

27, 2017).

Here, Jeff Robbins, the managing director of Referral, declares that Referral “is in 

financial straits and . . . reports a loss of approximately $45,000.00 in 2017, a loss of 

approximately $53,000.00 in 2018, and for Q1 of the current year, a loss of 

approximately $49,000.00.” Doc. No. 62-1 (“Robbins Decl.”) ¶ 4. Robbins further 

declares Referral cannot afford the judgment entered against it, does not have the ability 

to raise the money, and “is struggling to stay in business as it is” because “any debt will 

threaten the continued viability of the company.” Id. Plaintiff avers that this is 

insufficient evidence of Referral’s inability to pay because it does not provide a “clear 

Case 3:18-cv-00166-MMA-JLB Document 69 Filed 06/24/19 PageID.<pageID> Page 4 of 13
5

18cv166-MMA (JLB)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

picture of its financial status.”1 Reply at 4. For example, Plaintiff asserts that Referral 

“failed to provide more concrete information such as a financial statement, profit and loss 

statements or a company balance sheet.” Id. at 4. While Referral’s evidence is not 

overwhelming, Plaintiff presented the Court with no contrary evidence. Thus, the Court 

finds this factor weighs slightly in favor of Referral.2

4. Deterrence of Others in Similar Circumstances

This factor requires the Court to consider whether an award of fees against Referral 

would deter others from similar conduct in the future. Plaintiff argues that because the 

Court clarified “the duties and obligations as the administrator of the Plan, [Referral] 

most likely will not be as careless in the future in carrying out those duties.” Mtn. at 9. 

Referral appears to argue awarding fees would not deter others from similar conduct 

because the information Referral provided to Decedent was mistaken, not made in bad 

faith and not purposefully incorrect. See Oppo. at 4 (explaining that Referral is “guilty of 

committing an honest mistake”). “ERISA does not authorize an award of compensatory 

or punitive damages for bad faith behavior.” Oster v. Standard Ins. Co., 768 F. Supp. 2d 

1026, 1033 (N.D. Cal. 2011). “As a result, courts acknowledge that an award of 

attorneys’ fees and costs is a way of deterring violations of ERISA.” Id.; see also 

 

1 Plaintiff also argues that Referral may ultimately be able to pay the fee award if the Ninth Circuit 

reverses this Court’s decision in a separate case that Referral’s insurance company owed no duty to 

defend Referral in the instant lawsuit. Reply at 5. The Court declines to address this argument, as it is 

speculative.

2

If the Court finds Referral unable to pay his attorneys’ fees, Plaintiff requests he be afforded an 

opportunity to perform post-judgment discovery. Reply at 6-7. Federal Rule of Civil Procedure 69 

provides that “[i]n aid of the judgment or execution, the judgment creditor or a successor in interest 

whose interest appears of record may obtain discovery from any person—including the judgment 

debtor—as provided in these rules or by the procedure of the state where the court is located.” Fed. R. 

Civ. P. 69(a)(2). However, this rule is used “to enforce the judgment by way of the supplemental 

proceedings.” Danning v. Lavine, 572 F.2d 1386, 1390 (9th Cir. 1978). Plaintiff does “not provide any 

authority for permitting this kind of discovery before the Court has entered a money judgment (here, by 

way of an award of attorneys’ fees), and such discovery would not be appropriate in this situation. See 

Black v. Greater Bay Bancorp Exec. Supplemental Comp. Benefits Plan, No. 16-cv-00486-EDL, 2018 

WL 1510084, at *5 (N.D. Cal. 2018).

Case 3:18-cv-00166-MMA-JLB Document 69 Filed 06/24/19 PageID.<pageID> Page 5 of 13
6

18cv166-MMA (JLB)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Carpenters S. Cal. Admin. Corp. v. Russell, 726 F.2d 1410, 1416 (“If defendant 

employers face the prospect of paying attorney’s fees for successful plaintiffs, they will 

have added incentive to comply with ERISA.”). Here, “an award of fees would not act as 

a deterrence against bad faith conduct, but it would deter [Referral] and other plan 

administrators from making representations to participants without ensuring the accuracy 

of the information provided.” O’Rourke v. Farmers Grp., Inc., No. SACV 17-00279 JVS 

(JCGx), 2018 U.S. Dist. LEXIS 220967, at *5-6 (C.D. Cal. Aug. 14, 2018). Thus, this 

factor weighs in favor of a fee award.

5. Benefit of Other Participants or Resolution of a Significant Legal Issue

Plaintiff does not argue that he sought to benefit other plan participants and, 

instead, argues the Court resolved a significant legal issue—whether advising employees 

how to retain coverage constitutes a breach of fiduciary duty. Mtn. at 9; Reply at 6. 

Referral contends this factor weighs against a fee award because “[n]o other participants 

and beneficiaries . . . are or will be affected” and “this matter [does not] resolve a 

significant legal question regarding ERISA.” Oppo. at 4. The Court finds that whether 

Referral’s misrepresentation regarding Decedent’s eligibility for coverage is not a 

significant legal question regarding ERISA. See O’Rourke, 2018 U.S. Dist. LEXIS 

220967, at *6 (finding whether willful misconduct or bad faith was an essential element 

of the breach of fiduciary duty for misrepresentation not a significant legal question); see 

also Wayne v. Pac. Bell, 238 F.3d 1048, 1055 (9th Cir. 1999) (finding an employer 

breached its fiduciary duty under ERISA by actively misinforming its employees, which 

includes “saying that something is true when the person does not know whether it is true 

or not”). As such, this factor weighs against a fee award.

6. The Relative Merits of the Parties’ Positions

“The relative merits of the parties’ positions, is, in the final analysis, the results 

obtained by the plaintiff.” Smith, 746 F.2d at 590. Here, judgment was entered in favor 

of Plaintiff and against Referral on the second cause of action. See Order. Accordingly, 

this factor weighs in favor of a fee award.

Case 3:18-cv-00166-MMA-JLB Document 69 Filed 06/24/19 PageID.<pageID> Page 6 of 13
7

18cv166-MMA (JLB)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

7. Conclusion

Although the Court is aware that Referral may be of limited financial resources and 

thus may be unable to pay Plaintiff’s attorneys’ fees, the Court finds that the Hummell 

factors, taken as a whole, militate in favor of an award to Plaintiff.

B. Amount of Fee Award

The Court next turns to the appropriate amount of fees to be awarded in this case. 

Reasonable attorneys’ fees under ERISA are calculated using a hybrid lodestar/multiplier 

approach. McElwaine v. US West, Inc., 176 F.3d 1167, 1173 (9th Cir. 1999). First, “the 

court calculates the ‘lodestar figure’ by taking the number of hours reasonably expended 

on the litigation and multiplying [it] by a reasonable hourly rate.” Fischer v. SJB-P.D., 

Inc., 214 F.3d 1115, 1119 (9th Cir. 2000) (citing Hensley v. Eckerhart, 461 U.S. 424, 433 

(1983)). “Second, a court may adjust the lodestar upward or downward using a 

‘multiplier’ based on factors not subsumed in the initial calculation of the lodestar.” Van 

Gerwen v. Guarantee Mutual Life Co., 214 F.3d 1041, 1045 (9th Cir. 2000). “A ‘strong 

presumption’ exists that the lodestar figure represents a ‘reasonable fee,’ and therefore, it 

should only be enhanced or reduced in ‘rare and exceptional cases.’” Fischer, 214 F.3d 

at 1119 n.4 (citation omitted).

1. Lodestar Figure

Plaintiff calculates his lodestar amount at $98,640.00 by multiplying the number of 

hours his attorneys, Mr. Stennett and Ms. Casino, spent on this action (164.4 hours) by

their hourly rate ($600 per hour). See Mtn. at 11-16.

a. Reasonable Hours

Generally, the Court should defer to the winning lawyer’s professional judgment as 

to how much time the case required. Costa v. Comm’r of Social Sec. Admin., 690 F.3d 

1132, 1136 (9th Cir. 2012). Counsel should exclude hours that are “excessive, redundant,

or otherwise unnecessary” and the Court should decrease the hours that were not 

“reasonably expended.” Hensley, 461 U.S. at 434. A district court “may not uncritically 

accept a fee request,” and is obligated to review the time billed and assess whether it is 

Case 3:18-cv-00166-MMA-JLB Document 69 Filed 06/24/19 PageID.<pageID> Page 7 of 13
8

18cv166-MMA (JLB)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

reasonable in light of the work performed and the context of the case. Common Cause v. 

Jones, 235 F. Supp. 2d 1076, 1079 (C.D. Cal. 2002).

Counsel submitted a four-page chart showing that Mr. Stennett and Ms. Casino 

spent 164.4 hours working on the case. Doc. No. 59-4 (“Fee Chart”). These hours were 

spent on tasks such as communicating with Plaintiff, reviewing the administrative records 

and insurance policies, and briefing various motions. See id. The administrative record 

in this case was over 500 pages and the long-term disability record was over 120 pages. 

See Doc. Nos. 32-7—32-16. The briefing on Plaintiff’s motion for summary judgment 

and response to United’s cross-motion for summary judgment exceeded 60 pages. Doc. 

Nos. 32, 39, 40, 42; see also Fee Chart. Counsel for Plaintiff also briefed a motion for 

reconsideration and the instant motion. See Doc. Nos. 59, 66; see also Fee Chart at 3-4. 

Referral does not contend the hours expended are unreasonable. See Oppo. Upon 

review of the fee chart, the hours expended are not excessive, redundant, or otherwise 

unnecessary. Moreover, it appears that the hours expended in this case are comparable to 

other similar ERISA cases. See Dmuchowsky v. Sky Chefs, Inc., No. 18-cv-01559-HSG 

(DMR), 2019 U.S. Dist. LEXIS 73752, at *40 (N.D. Cal. May 1, 2019) (finding 167.4 

hours reasonable in an ERISA action resolved on summary judgment); Bergman v. Fed. 

Express Corp. Long Term Disability Plan, No. 16-cv-1179-BAS (KSC), 2018 U.S. Dist. 

LEXIS 106879, at *15 (S.D. Cal. June 25, 2018) (finding 121.85 hours reasonable where 

there were cross motions for summary judgment); Barboza v. Cal. Ass’n of Prof’l 

Firefighters, No. 2:08-cv-0519-KJM-EFB, 2016 U.S. Dist. LEXIS 73529 at *33-34, 

(E.D. Cal. June 2, 2016) (finding 157.3 hours reasonable in an ERISA action resolved on 

summary judgment). Accordingly, Plaintiff’s counsel reasonably expended 164.4 hours 

on this action.

b. Reasonable Hourly Rate

Determination of a reasonable hourly rate requires consideration of market rates 

for attorneys with “the experience, skill, and reputation of the attorney requesting fees.” 

Welch v. Metro. Life Ins. Co., 480 F.3d 942, 946 (9th Cir. 2007) (quotation marks and 

Case 3:18-cv-00166-MMA-JLB Document 69 Filed 06/24/19 PageID.<pageID> Page 8 of 13
9

18cv166-MMA (JLB)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

citation omitted). “Affidavits of the plaintiff[’s] attorney and other attorneys regarding 

prevailing fees in the community . . . are satisfactory evidence of the prevailing market 

rate.” United Steelworkers of Am. v. Phelps Dodge Corp., 896 F.2d 403, 407 (9th Cir. 

1990). Absent opposing evidence, the proposed rates are presumed reasonable. Id. 

Here, counsel have submitted persuasive evidence showing that the market 

supports the requested hourly rate. Mr. Stennett, a partner at his firm, has practiced law 

for 42 years and spent most of his career representing clients in ERISA governed claims. 

Doc. No. 59-2 (“Stennett Decl.”) ¶¶ 3-4. Ms. Casino, a principal in the firm, has 

practiced law for 39 years and has 13 years of experience litigating ERISA cases. Doc. 

No. 59-3 (“Casino Decl.”) ¶¶ 3-6. Additionally, counsel submitted declaration testimony 

from Glenn Kantor, a respected ERISA litigator with 30 years of experience. Doc. No. 

59-5 (“Kantor Decl.”) ¶¶ 2-5. Mr. Kantor declares that in 2018 partners in his firm 

charged $750 per hour. Kantor Decl. ¶ 8. Mr. Kantor also declares that he believes the 

hourly rates requested by Mr. Stennett and Ms. Casino are reasonable and supported by 

the market. Kantor Decl. ¶¶ 11-12. Counsel also submitted declaration testimony from 

Russell Petti, an attorney with over 30 years of experience. Doc. No. 59-6 (“Petti Decl.”) 

¶ 4. Mr. Petti has roughly 23 years of experience litigating ERISA cases. Petti Decl. ¶ 6. 

Mr. Petti’s current hourly rate in ERISA cases is $700 per hour. Petti Decl. ¶ 10. He 

declares that Mr. Stennett and Ms. Casino’s requested hourly rates are reasonable and 

supported by the market. Petti Decl. ¶ 15.

As such, Counsel have submitted evidence showing that hourly paying clients will 

pay higher than their requested rate for comparable representation. See Stennett Decl, 

Casino Decl, Kantor Decl., Petti Decl. Moreover, Referral does not argue the hourly rate 

is unreasonable. See Oppo. Accordingly, the Court finds the requested rate of $600 per 

hour is reasonable. 

2. Lodestar Adjustment

Having determined the reasonable hourly rate and hours expended, the Court next 

determines whether it should adjust the lodestar based on factors not subsumed in its 

Case 3:18-cv-00166-MMA-JLB Document 69 Filed 06/24/19 PageID.<pageID> Page 9 of 13
10

18cv166-MMA (JLB)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

initial calculation. Reyes v. Bakery & Confectionery Union & Indus. Int’l Pension Fund, 

281 F. Supp. 36d 833, 857 (N.D. Cal. 2017). Referral contends Plaintiff’s hours should 

be reduced due to Plaintiff’s partial success. Oppo. at 6. In particular, Referral requests 

the Court reduce Plaintiff’s hours by the number of hours expended “toward the litigation 

with United,” including reducing hours for work directed at both Referral and United by 

one half. Id. at 7-8. Plaintiff replies that the claims against United and Referral were so 

intertwined to his ultimately successful claim against Referral that the time spent on 

claims against United should not be separated out. See Reply.

To determine whether to reduce a fee award for limited success, courts ask two 

questions. See Hensley, 461 U.S. at 434. “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. “The district court may attempt to identify specific hours 

that should be eliminated, or it may simply reduce the award to account for the limited 

success. The court necessarily has discretion in making this equitable judgment . . . .” 

Id. at 436-37.

In the instant case, Referral does not contend that the unsuccessful claims were 

unrelated to the successful claim. See Oppo. Instead, its only argument is that the fees 

requested are not justified in light of the partial success achieved. See id. at 7-8. Because 

Referral does not argue that the unsuccessful claims are unrelated to the successful claim, 

the Court considers only the second question of the limited success analysis. With 

respect to this question, the Court agrees that there should be a reduction of fees due to 

limited success. 

There is no dispute that Plaintiff achieved only limited success because, although 

he prevailed on his second cause of action against Referral, he did not prevail on his first 

cause of action against either defendant or his second cause of action against United. See 

Order. The hours spent on the litigation, particularly with respect to the hours spent 

litigating claims against and defenses raised by United, were not “reasonably necessary to 

Case 3:18-cv-00166-MMA-JLB Document 69 Filed 06/24/19 PageID.<pageID> Page 10 of

 13
11

18cv166-MMA (JLB)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

obtain the relief that was ultimately obtained” by Plaintiff—i.e., Plaintiff was not entitled 

to recovery of benefits and United did not breach a fiduciary duty. 

Specifically, the Court notes that United filed a cross-motion for summary 

judgment against Plaintiff, which focused exclusively on the claims against United. 

United’s motion for summary judgment was granted. As such, Plaintiff was not 

successful with respect to those claims. Thus, the Court will reduce the hours spent 

solely on litigating United’s cross-motion for summary judgment and Plaintiff’s motion 

for reconsideration, which involves only the claims against United. See Echague v. 

Metro. Life Ins. Co., 69 F. Supp. 3d 990, 997 (9th Cir. 2014) (suggesting that if there 

were a separate motion for summary judgment against a separate defendant, the court 

would reduce the number of hours reasonably expended due to limited success). This 

amounts to 30 hours (28.8 hours related to United’s cross-motion for summary judgment 

and 1.2 hours relating to Plaintiff’s motion for reconsideration).

3. Conclusion

In summation, the Court finds counsel’s hourly rate of $600 reasonable and 

reduces the hours expended to 134.4 for hours expended solely on United’s cross-motion 

for summary judgment and Plaintiff’s motion for reconsideration regarding claims 

against United.

C. Conclusion

Based on the foregoing, the Court GRANTS IN PART Plaintiff’s motion for 

attorneys’ fees in the amount of $80,640.00.

MOTION FOR PREJUDGMENT INTEREST

Plaintiff also moves the Court for an award of prejudgment interest of 7.5% 

compounded monthly, totaling $19,050.20. Mtn. at 19-20. Referral counters that any 

“interest due should be calculated as though the plaintiff had invested the withheld funds 

at the 52-week Treasury Bill rate and then reinvested the proceeds annually at the new 

rate.” Oppo. at 10.

Case 3:18-cv-00166-MMA-JLB Document 69 Filed 06/24/19 PageID.<pageID> Page 11 of

 13
12

18cv166-MMA (JLB)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

In ERISA cases, district courts have the discretion to award prejudgment interest. 

Blankenship v. Liberty Life Assurance Co. of Boston, 486 F.3d 620, 627 (9th Cir. 2007). 

The award of prejudgment interest is intended to compensate the plaintiff for losses 

incurred as a result of the defendant’s nonpayment of benefits. See Dishman v. UNUM 

Life Ins. Co. of Am., 269 F.3d 974, 988 (9th Cir. 2001). “Whether interest will be 

awarded is a question of fairness, lying within the court’s sound discretion, to be 

answered by balancing the equities.” Shaw v. Int’l Ass’n of Machinists & Aerospace 

Workers Pension Plan, 750 F.2d 1458, 1465 (9th Cir. 1985) (quotation marks and 

citation omitted). Appropriate considerations include whether the “financial strain” of 

paying prejudgment interest would injure other plan beneficiaries, and whether the 

defendants acted in bad faith. See Shaw v. Int’l Ass’n of Machinists, 750 F.2d at 1465; 

see also Dishman, 269 F.3d at 988.

Plaintiff declares that he is the trustee of the Teresa McGee Living Trust dated 

January 4, 2012 and that he and his three siblings are beneficiaries of the trust. Doc. No. 

59-7 (“McBean Decl.”) ¶¶ 1-2. He declares that after his mother, Teresa McGee, passed 

away and trust expenses were paid, Plaintiff “was able to distribute approximately 

$10,000.00 to each of the 4 children.” McBean Decl. ¶ 4. He further explains that each 

of the children are in debt or trying “to make ends meet.” McBean Decl. ¶¶ 5-6. Plaintiff 

has credit card debt, his brother “holds down four jobs,” his sister Rita is “impoverished,” 

and his sister Therese has business related debt “in excess of $90,000.00.” Id. Thus, 

Plaintiff requests prejudgment interest be awarded at a rate of 7.5% compounded monthly 

because “Plaintiff’s loss of the insurance benefits when due has resulted in the inability to 

pay off credit card debt that has resulted in a loss equal to the interest paid on that debt.” 3 

Mtn. at 18. Referral counters that this does not support Plaintiff’s request and “[t]here 

are no special circumstances warranting a higher interest rate award.” See Oppo. at 9-11.

 

3 The Court notes that Plaintiff did not bring this action in his individual capacity, but rather brought it 

as the Trustee of the Teresa McGee Living Trust dated January 4, 2012. See FAC.

Case 3:18-cv-00166-MMA-JLB Document 69 Filed 06/24/19 PageID.<pageID> Page 12 of

 13
13

18cv166-MMA (JLB)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Based on Plaintiff’s declaration, no losses were incurred as a result of Referral’s 

nonpayment of benefits to the trust. See McBean Decl. The trust was able to pay all its 

expenses and distribute $10,000.00 to each of Decedent’s four children. McBean Decl. ¶ 

4. Rather, Plaintiff seeks to use the life insurance proceeds and any interest “to alleviate 

some of the financial strain” incurred from credit card debt, business debt, and general 

financial needs unrelated to the trust. See McBean Decl. ¶¶ 5-6. Further, as noted above, 

Referral did not act in bad faith. Accordingly, the Court, in its discretion, declines to 

award prejudgment interest. See Dishman, 269 F.3d at 988 (noting that the court may 

compensate a plaintiff for “the losses he incurred as a result of [the defendant’s] 

nonpayment of benefits”); Landwehr v. Dupree, 72 F.3d 726, 739 (9th Cir. 1995) 

(affirming the district court’s decision to deny prejudgment interest to the plaintiffs 

because “there was no evidence of bad faith”).

CONCLUSION

Based on the foregoing, the Court GRANTS IN PART Plaintiff’s motion and 

AWARDS Plaintiff attorneys’ fees of $80,640.00.

4

 Additionally, the Court DENIES

Plaintiff’s request for prejudgment interest.

IT IS SO ORDERED.

 

4 Plaintiff’s total requested amount of $98,640.00 is reduced by $18,000.00.

Dated: June 24, 2019

Case 3:18-cv-00166-MMA-JLB Document 69 Filed 06/24/19 PageID.<pageID> Page 13 of

 13