Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-09-02363/USCOURTS-ca8-09-02363-0/pdf.json

Parties Involved:
Liberty Life Assurance Company of Boston
Appellee
Theresa Willcox
Appellant

Document Text:

1

The Honorable Paul A. Magnuson, United States District Judge for the District

of Minnesota.

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 09-2363

___________

Theresa Willcox, *

*

Plaintiff - Appellant, *

* Appeal from the United States

v. * District Court for the District

* of Minnesota.

Liberty Life Assurance Company *

of Boston, * [UNPUBLISHED]

*

Defendant - Appellee. *

___________

Submitted: March 10, 2010

Filed: March 25, 2010

___________

Before MURPHY, JOHN R. GIBSON, and RILEY, Circuit Judges.

___________

PER CURIAM.

Before the court is the appeal of Theresa Willcox from the denial of her

application for attorney fees in her action against Liberty Life Assurance Company

of Boston (Liberty Life) under the Employee Retirement Income Security Act of 1974

(ERISA), 29 U.S.C. § 1132. In that action she sought long term partial disability

benefits. Following a remand to the plan administrator, the district court1

 granted

Willcox's motion for summary judgment, and we affirmed. See Willcox v. Liberty

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Life Assur. Co. of Boston, 552 F.3d 693 (8th Cir. 2009). Willcox appeals from the

order denying fees. We affirm.

Willcox brought her ERISA action against Liberty Life after the insurer denied

her claim for partial disability benefits. After the parties filed motions for summary

judgment, the district court remanded the matter to Liberty Life for further

administrative review of her claim. The district court instructed Liberty Life to

consider evidence which Willcox had submitted with her summary judgment motion

but which had not been included in the administrative record. Liberty Life again

denied Willcox's claim, and both parties then submitted supplements to their existing

motions for summary judgment.

The district court granted summary judgment to Willcox after concluding that

Liberty Life had abused its discretion by failing to "evaluate Plaintiff's medical

records in their totality." Liberty Life appealed, challenging both the merits of the

district court's judgment and its decision to remand the case for further administrative

review. We affirmed. 

Willcox subsequently moved for attorney fees and costs. The district court

denied her motion. The court explained that although it had determined that Liberty

Life had abused its discretion by conducting an incomplete initial review of Willcox's

benefits claim, there was evidence in the record to support its position that Willcox

was not disabled. The court also observed that Willcox's counsel was seeking a

"clearly excessive" amount of fees and had engaged in a "pattern of inflammatory and

vitriolic arguments." Willcox appeals, asserting that the district court erred in its

assessment of the relevant factors. 

ERISA provides that the district court may in its discretion "allow a reasonable

attorney's fee and costs of action to either party." 29 U.S.C. § 1132(g)(1). We will

not overturn a district court's determination regarding an attorney fees award absent

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an abuse of discretion. Sheehan v. Guardian Life Ins. Co., 372 F.3d 962, 968 (8th Cir.

2004). 

In deciding whether to award attorney fees, the district court should consider

a number of factors, including: 

(1) the degree of the opposing parties' culpability or bad faith; (2) the

ability of the opposing parties to pay attorneys' fees; (3) whether an

award of attorneys' fees against the opposing parties could deter other

persons acting under similar circumstances; (4) whether the parties

requesting attorneys' 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.

Lawrence v. Westerhaus, 749 F.2d 494, 496 (8th Cir. 1984) (per curiam). An abuse

of discretion occurs "when the district court commits a clear error of judgment in

weighing the relevant factors." Parke v. First Reliance Standard Life Ins. Co., 368

F.3d 999, 1012 (8th Cir. 2004). 

The district court specifically considered each of the five Westerhaus factors

when deciding whether Willcox should be awarded attorney fees. The court

determined that only one of the factors clearly weighed in favor of an attorney fees

award and that was Liberty Life's ability to pay. The court further concluded that

although the final Westerhaus factor—the relative merits of the parties'

positions—tipped slightly in favor of an award, the remaining factors weighed against

one. 

Willcox first contends that the district court erred in finding a lack of culpability

or bad faith on Liberty Life's part. She asserts that Liberty Life's culpability is evident

from the district court's conclusion that the administrator had abused its discretion by

conducting a cursory review of her claim for benefits. The district court disagreed

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with that contention. It reasoned that even though Willcox ultimately prevailed on her

claim, Liberty Life's decision to deny benefits did not amount to culpable conduct

since substantial evidence existed in the record to support its conclusion that Willcox

was not disabled. We have previously recognized that a plan administrator's decision

to deny benefits is not culpable conduct if it was supported by substantial evidence.

Fletcher-Merrit v. NorAm Energy Corp., 250 F.3d 1174, 1181 (8th Cir. 2006); see

also Eisenrich v. Minneapolis Retail Meat Cutters & Food Handlers Pension Plan, 574

F.3d 644, 651 (8th Cir. 2009) (declining to label as culpable an insurer whose position

was "mistaken" but not "egregiously so"). 

Willcox also claims the district court made a clear error of judgment with

respect to whether a fees award in this case would have a significant deterrent effect.

She argues that an award would deter Liberty Life and other insurers from conducting

cursory claim reviews. The district court acknowledged Willcox's argument, but also

considered the effect the denial of fees could have in discouraging unnecessarily

prolonged ERISA litigation. The court determined that the deterrence factor weighed

against a fees award, noting that the actions of Willcox's counsel "did more to

unreasonably multiply these proceedings than any litigating position Liberty Life

took." While Willcox lays blame on Liberty Life for the time and resources expended

in this lawsuit, "the district court was in the best position to evaluate the relative roles

of the parties in extending the litigation." Parke, 368 F.3d at 1013; Griffin v. Jim

Jamison, Inc., 188 F.3d 996, 997 (8th Cir. 1999) ("District courts are necessarily more

familiar than we are with the members of their own bar and with the course of

litigation before them, including what lawyers may have done that was unnecessary

and what may have taken up more time than it needed to."). We give great deference

to that decision. Griffin, 188 F.3d at 997. 

Willcox also challenges the district court's finding on the fourth Westerhaus

factor, common benefit to plan participants. She contends that her claim will in fact

benefit all plan participants indirectly because it will motivate Liberty Life to conduct

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a more thorough evaluation of future claims for benefits. The Eighth Circuit common

benefit factor involves a subjective element, however. The claimant must have

“sought to benefit” all plan participants. Lawrence, 749 F.2d at 496. Willcox does

not contend that she “sought to benefit all participants and beneficiaries” by bringing

her claim for benefits. The district court did not abuse its discretion by finding that

this factor weighed against an attorney fees award. 

Finally, Willcox argues that the merits of the case were strongly on her side.

Although she ultimately prevailed, Liberty Life's position nevertheless had merit. See

Eisenrich, 574 F.3d at 651 (finding that where both party's positions were "relatively

evenly balanced," the relative merits factor does not weigh heavily in favor of the

prevailing employee). 

We conclude that the district court did not make a "clear error of judgment" in

weighing the relevant factors. The only factor the court found to weigh clearly in

favor of an award of attorney fees was Liberty Life's ability to pay, and this factor

alone does not justify an award where other factors weigh against one. See

Continental Assur. Co. v. Cedar Rapids Pediatric Clinic, 957 F.2d 588, 595 (8th Cir.

1992). Although Willcox asserts that a prevailing party in an ERISA action ordinarily

receives attorney fees, we cannot conclude that the district court abused its discretion

by denying fees in this case. 

Accordingly, we affirm the order of the district court.

______________________________

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