UNTIED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

SANDRA MCCANDLESS,

Plaintiff, 

v.

STANDARD INSURANCE COMPANY,

Defendant.

_______________________ __________/

CASE NO. 2:08-cv-14195

HON. MARIANNE O. BATTANI

OPINION AND ORDER DENYING PLAINTIFF’S MOTION TO ASSESS 

ATTORNEY FEES AND TAX COSTS, DENYING PLAINTIFF’S 

MOTION FOR SUMMARY JUDGMENT, AND DISMISSING THE ACTION

I. INTRODUCTION

This matter is before the Court on Plaintiff Sandra McCandless’ Motion to Assess

Attorney Fees and Tax Costs relating to her ERISA claim. (Doc. 169.) She argues that

having been awarded remand three times classifies as some success on the merits,

thereby authorizing collection of attorney fees pursuant to 29 U.S.C. § 1132(g)(1). 

Accordingly, Plaintiff’s counsel requests the award of $139,170.00 in attorney fees and

$850 in taxable costs. Defendant maintains that the Court has already decided the

matter of attorney fees for a portion of the period covered; that Plaintiff fails to meet the

criteria necessary for an award of fees; and that Plaintiff’s counsel’s fees and hours are

inflated. (Doc. 173.) Additionally, Plaintiff has filed a motion for summary judgment,

arguing that Defendant’s recent award of benefits constitutes a concession of liability. 

(Doc. 172.) For the reasons that follow, the Court DENIES both of Plaintiff’s motions

and DISMISSES the present action.

II. FACTUAL BACKGROUND

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Due to the complex history of the present claim, a timeline is included at the

conclusion of the factual background section. Plaintiff Sandra McCandless worked for

Countrywide Home Loans as a manager. Countrywide provided a Group Long Term

Disability Insurance Policy (“the Policy”) for its employees pursuant to Employee

Retirement Income Security Act (“ERISA”). Defendant administered the Policy, both

determining eligibility for benefits and paying benefits. In February 2005, Plaintiff went

on medical leave for major depression. In April 2005, Plaintiff applied for and received

disability benefits for the period covering February 2, 2005, to July 31, 2007, the

maximum time period allowed under the Policy for mental health claims. 

Defendant notified Plaintiff in January 2006 that her long-term disability (“LTD”)

benefits for her mental disorder would expire on July 31, 2007, and encouraged her to

submit a claim for disability by a physical condition. In response, Plaintiff requested that

Defendant consider a LTD claim based on her ankylosing spondylitis (“AS”), an

inflammatory disease that causes back pain, progressive stiffness of the spine, arthritis,

and fusing of certain joints. Plaintiff submitted supporting records from her treating

physician, as well as MRI and x-ray reports. After multiple reviews of the medical

documentation, including reviews by a neurologist and a rheumatologist, Defendant

denied Plaintiff continuation of LTD benefits on March 7, 2008. (AR 00126.) In the

denial letter, Defendant emphasized that Plaintiff’s failure to see a rheumatologist

significantly contributed to her failure to satisfy the Policy’s “Care of a Physician”

provision, which mandates that claimants receive care from a medical specialist. (Id.)

After exhausting her administrative remedies, Plaintiff filed the present suit on

September 30, 2008. After a protracted discovery period and attempted settlement, the

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parties filed cross-motions for judgment on the administrative record in June 2010. On

February 15, 2011, this Court granted Defendant’s motion, affirming the denial of LTD

benefits. Plaintiff appealed to the Sixth Circuit, which reversed and remanded the

matter on December 20, 2012, in order for Defendant to have Plaintiff evaluated by a

rheumatologist. The Sixth Circuit found that Defendant “never told McCandless that she

would be ineligible for benefits if she did not see a rheumatologist.” McCandless v.

Standard Ins. Co., 509 F. App’x 443, 448 (6th Cir. 2012). In addition, Defendant “did

not exercise its authority under the Policy to have a rheumatologist conduct an

independent medical evaluation of McCandless.” Id. Thus, the decision was arbitrary

and capricious because although Defendant knew Plaintiff suffered from AS, it failed to

base its decision on an IME from a rheumatologist. Id. Finally, the Sixth Circuit

instructed that the case be remanded to “the plan administrator for a full and fair review

of Plaintiff’s claim, which presumably will include a rheumatology evaluation.” Id. at

449. Accordingly, this Court remanded the case to the plan administrator for the first

time on February 22, 2013. (Doc. 127.)

On March 25, 2013, Plaintiff requested an appointment with a rheumatologist at

University of Michigan Health System, but the earliest available appointment was not

until August of that year. (Doc. 144, p. 14, n.3.) Given the need for an expedited

examination, Plaintiff self-referred to rheumatologist Bernard Rubin, D.O., and

scheduled an appointment for July. (Id.) On April 10, 2013, Plaintiff was evaluated by

Lewis Rosenbaum, M.D., a rheumatologist hired on behalf of Defendant. (AR 00993.) 

Defendant received the IME report on May 9, 2013. Plaintiff’s counsel avers that

sometime after Dr. Rosenbaum’s examination, he demanded that Defendant produce

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the report, a request that Defendant reportedly ignored. On June 10, 2013, Defendant

issued a second decision denying benefits, along with a copy of the IME report. (AR

00955.) Shortly thereafter, on July 16, 2013, Plaintiff consulted with Dr. Rubin, as well

as other medical specialists such as a pulmonologist and cardiologist. (See AR

0001438-66.) She then filed a motion on September 13, 2013, to open the

administrative record in order to submit this evidence in rebuttal of Dr. Rosenbaum’s

IME. (Doc. 144.) The Court granted this motion on October 28, 2013, and remanded

the case for a second time for further consideration by the plan administrator. (Doc.

148.) 

On March 3, 2014, after receiving 75 pages of new evidence from Plaintiff,

Defendant issued a third denial, stating that these records largely post-dated the

expiration of Plaintiff’s benefits on July 31, 2007. (AR 0001389.) In May 2014, the

parties again filed cross-motions for judgment on the administrative record, seeking

review of this latest denial of benefits. On September 19, 2014, the Court entered an

amended order remanding the claim for a third time. (Doc. 168.) This opinion found

that Defendant’s review of the newly-submitted medical evidence was cursory, as the

denial letter provided no rationale resolving inconsistencies between Dr. Rubin’s and Dr.

Rosenbaum’s findings or explaining why it found one report more credible than the

other. (Id.) Nor did Defendant submit this new evidence for review by another medical

expert. (Id.)

Since this most recent remand, Defendant submitted the administrative record for

review by rheumatologist Joji Kappes, M.D., who opined that Plaintiff’s AS symptoms

likely limited her ability to perform full-time sedentary work as of July 31, 2007. Based

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on Dr. Kappes’ opinion, Defendant has approved Plaintiff’s claim for long term disability

benefits retroactive to the closure of Plaintiff’s claim on July 31, 2007, and will issue

payment in the approximate amount of $655,000.00. Accordingly, Plaintiff moves the

Court to enter summary judgment in her favor and has submitted a proposed order

directing Defendant to pay Plaintiff accrued benefits as well as to provide details

regarding calculation of these accrued benefits. (Doc. 172.) Further, Plaintiff seeks the

assessment of attorney fees and costs. (Doc. 169.)

Date Event

February 2005 Plaintiff goes on medical leave for depression.

April 2005 Plaintiff applies for and receives disability

benefits, covering period February 2, 2005,

through July 31, 2007.

March 7, 2008 Defendant issues first denial of Plaintiff’s

application for LTD benefits based on AS.

September 30, 2008 Plaintiff files complaint.

February 15, 2011 District Court awards judgment on the

administrative record in favor of Defendant.

December 20, 2012 Sixth Circuit reverses District Court’s decision

dated February 15, 2011.

January 3, 2013 Plaintiff’s counsel files motion for attorney fees

and costs.

February 22, 2013 District Court denies Plaintiff’s motion for

attorney fees and costs.

District Court remands case to the plan

administrator for the first time.

March 25, 2013 Plaintiff requests rheumatology appointment at

University of Michigan Health System.

April 10, 2013 IME examination performed by Dr. Rosenbaum.

April 20, 2013 Dr. Rosenbaum writes IME report.

May 9, 2013 Defendant receives IME report.

June 10, 2013 Defendant issues second denial of benefits.

July 16, 2013 Plaintiff consults with rheumatologist Dr. Rubin.

Date (Cont’d) Event (Cont’d)

September 13, 2013 Plaintiff files motion to supplement the

administrative record.

October 28, 2013 District Court grants Plaintiff’s motion to

supplement and remands case to plan

administrator for the second time.

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March 3, 2014 Defendant issues third denial of benefits.

September 19, 2014 District Court remands case to the plan

administrator for a third time.

December 19, 2014 District Court informed that Defendant has

approved Plaintiff for LTD benefits, retroactive to

application.

III. Discussion

The Sixth Circuit “recognizes no presumption as to whether attorney fees will be

awarded” to a prevailing party in an ERISA action. Foltice v. Guardsman Prods., 98

F.3d 933, 936 (6th Cir. 1996). Rather, 29 U.S.C. § 1132(g)(1) authorizes courts to

award reasonable attorney fees and costs to either party at its discretion. A party need

not be a prevailing party to receive an award of attorney fees – instead, a party seeking

fees must show “some degree of success on the merits.” Hardt v. Reliance Standard

Life Ins., 560 U.S. 242, 255 (2010). Hardt provides the following guidance: 

A claimant does not satisfy that requirement by achieving “trivial success

on the merits” or a “purely procedural victor[y],” but does satisfy it if the

court can fairly call the outcome of the litigation some success on the

particular party's success was “substantial” or occurred on a “central

issue.” 

Id. (quoting Ruckelshaus v. Sierra Club, 463 U.S. 680, 688 n.9 (1983). Moreover, when

exercising the discretion vested in district courts by 29 U.S.C. § 1132(g)(1), the Sixth

Circuit has instructed that courts must consider the following five King factors:

(1) [T]he degree of the opposing party's culpability or bad faith; (2) the

opposing party's ability to satisfy an award of attorney's fees; (3) the

deterrent effect of an award on other persons under similar circumstances;

(4) whether the party requesting fees sought to confer a common benefit

on all participants and beneficiaries of an ERISA plan or resolve significant

legal questions regarding ERISA; and (5) the relative merits of the parties'

positions.

Sec. of Dept. of Labor v. King, 775 F.2d 666, 669 (6th Cir. 1985).

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Plaintiff has previously filed a motion for attorney fees and costs incurred during

the period extending from the filing of the claim on September 30, 2008, through

January 2, 2013, after the Sixth Circuit directed the case be remanded. (Doc. 119, Ex.

3.) The Court heard oral argument on this matter and on February 22, 2013, issued an

order denying the motion for the reasons stated on the record. (Doc. 126.) Plaintiff has

not requested reconsideration of this decision either within the fourteen-day deadline set

forth by Local Rule 7.1(h)(1) or since the expiration of that deadline. Furthermore,

Plaintiff has not argued that there existed a palpable defect in the Court’s order or that

correcting such defect would result in a different disposition. See L.R. 7.1(h)(3). For

these reasons, the Court denies attorney fees for the period covering the inception of

the case through January 2, 2013.

Turning to the matter of attorney fees incurred since January 2, 2013, the Court

may assume without deciding that the subsequent remands classify as some success

on the merits, as Defendant does not contest this point. Firstly, there is no evidence

whatsoever of culpability or bad faith on the part of Defendant. Plaintiff makes much of

the fact that Defendant allegedly withheld Dr. Rosenbaum’s IME report until after it had

issued its second decision denying benefits, which necessitated an additional remand

for consideration of evidence rebutting Dr. Rosenbaum’s report. Defendant received

the IME report on May 9, 2013, and issued its decision to Plaintiff, along with a copy of

the IME report, approximately one month later on June 10. A four-week delay in

providing the report is not suggestive of bad faith. Further, although Plaintiff

presumably had an appointment scheduled with Dr. Rubin prior to receiving notification

of this denial, her counsel never informed Defendant that additional evidence might be

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forthcoming. Therefore, Defendant was not on notice that it should delay issuing a

decision. As such, there is nothing in the record implicating bad faith or anything

beyond mere poor communication between the parties.

Next, Plaintiff argues that Defendant’s failure adequately to address the new

evidence submitted by Plaintiff, in addition to other procedural irregularities, is indicative

of bad faith. To the contrary, case law demonstrates that “[a]n arbitrary and capricious

denial of benefits does not necessarily indicate culpability or bad faith.” Heffernan v.

Unum Life Ins. Co. of Am., 101 F. App’x 99, 109 (6th Cir. 2004); see also Geiger v.

Pfizer, Inc., 549 F. App’x 335, 338-39 (6th Cir. 2013) (upholding denial of fees despite

finding a denial of benefits arbitrary and capricious) (collecting cases). Here, the first

King factor weighs against an award of attorney fees, as there is no evidence beyond

an arbitrary and capricious denial suggesting a high degree of culpability on the part of

Defendant.

Defendant is correct in asserting that the second King factor – ability to pay an

award of fees – is considered “more for exclusionary than for inclusionary purposes”

and should be given little weight. See Warner v. DSM Pharma Chems. N. Am., Inc.,

452 F. App’x 677, 682 (6th Cir. 2011). Although Defendant is certainly able to pay

attorney fees, this factor has no impact on the Court’s ultimate determination.

An award of attorney fees is likely to have the greatest deterrent effect where a

defendant is “highly culpable” or where “deliberate misconduct is in the offing.” Geiger,

549 F. App’x at 339 (quoting Foltice, 98 F.3d at 937). In the present case, there would

be no such deterrent effect because, as discussed above, there is no evidence of bad

faith or culpability on the part of Defendant.

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A plaintiff who seeks LTD benefits only for herself does not seek to confer a

common benefit on all participants in an ERISA plan. See Gaeth v. Hartford Life Ins.,

538 F.3d 524, 533 (6th Cir. 1999). The relief sought in the present action would confer

LTD benefits only upon Plaintiff; her success in the litigation did not result in

redeterminations by the plan administrator of other similarly adverse benefits decisions. 

See id. In Gaeth, the court rejected the plaintiff’s contention that a common benefit

would result from the deterrence of arbitrary and capricious reviews. See id. Plaintiff

argues that her challenge of the ubiquitous “Care of a Physician” language in the policy

would have resolved a significant legal question regarding ERISA, resulting in

heightened judicial review for other claimants. However, neither this Court nor the Sixth

Circuit ever engaged in contractual interpretation of this policy language, instead

remanding the case because of Defendant’s arbitrary and capricious reasoning and

application of this provision. These decisions are tailored to the particulars of Plaintiff’s

claim and have no impact on other ERISA claimants. Moreover, it is dubious that

Plaintiff set out with the intention of challenging the terms of the policy, as the complaint

makes no reference to the “Care of a Physician” provision or any general challenges to

the terms of the policy. (See Doc. 1.)

Lastly, it cannot be said that Defendant’s position throughout the litigation has

lacked merit. A court’s decision that an insurer’s denial of LTD benefits was arbitrary

and capricious does not signify that the insurer’s position was meritless or frivolous. 

See O’Callaghan v. SPX Corp., 442 F. App’x 180, 186 (6th Cir. 2011) (upholding district

court’s denial of attorney fees where, although the defendant’s position was not

persuasive enough to avert a finding of an arbitrary and capricious denial of benefits,

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the defendant’s position was not frivolous). Indeed, in its last opinion, the Court

specifically noted, “[T]he evidence is not so one-sided as to entitle McCandless

undoubtedly to benefits.” Defendant is correct in arguing that some of the conflicting

medical evidence in the record lends support to its position. Plaintiff has therefore failed

to demonstrate that she is entitled to attorney fees in accordance with the King factors. 

Additionally the Court denies Plaintiff’s motion for summary judgment for the reasons

stated on the record at the hearing held on January 7, 2015.

IV. Conclusion

For the foregoing reasons, the Court DENIES Plaintiff’s motion for attorney fees and

taxable costs and DENIES Plaintiff’s motion for summary judgment. Further, the Court

DISMISSES this action, as there are no further issues presented.

IT IS SO ORDERED.

Date: February 27, 2015 s/Marianne O. Battani 

MARIANNE O. BATTANI

United States District Judge

CERTIFICATE OF SERVICE

The undersigned certifies that the foregoing Order was served upon counsel of record via the Court's ECF System to

their respective email addresses or First Class U.S. mail to the non-ECF participants on February 27, 2015.

s/ Kay Doaks 

Case Manager

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