Opinion ID: 768141
Heading Depth: 2
Heading Rank: 4

Heading: Attorney's Fees, Costs, and Prejudgment Interest

Text: 26 Trustmark maintains that it is entitled to attorney's fees under sec. 502(g)(1) of ERISA. See 29 U.S.C. sec. 1132 (g)(1). Section 502(g)(1) provides, [i]n any action under this subchapter... by a participant, beneficiary, or fiduciary, the court in its discretion may allow a reasonable attorney's fee and costs of action to either party. Our decision to reverse the district court's judgment means that Trustmark is no longer a prevailing party, and, therefore, is no longer entitled to an award of attorney's fees. Even had Trustmark remained the prevailing party, we agree with the district court's denial of attorney's fees, costs, and prejudgment interest. We have chosen to review the merits of this issue because we conclude that each party should bear their own attorney's fees and costs on appeal. 27 An award of attorney's fees is reviewed for an abuse of discretion. Filipowicz v. American Stores Benefit Plans Comm., 56 F.3d 807, 816 (7th Cir. 1995). [A] district court's determination will not be disturbed if it has a basis in reason. Little v. Lux's Supermarkets, 71 F.3d 637, 644 (7th Cir. 1995) (citations omitted). 28 The general test for analyzing whether attorney's fees should be awarded to a party in an ERISA case after it has attained prevailing party status is: [W]as the losing party's position substantially justified and taken in good faith, or was that party merely out to harass its opponent? Quinn v. Blue Cross and Blue Shield Assoc., 161 F.3d 472, 478 (7th Cir. 1998) (citations omitted). In determining whether the losing party's position was substantially justified, the Supreme Court has stated that a party's position is justified to a degree that could satisfy a reasonable person. Pierce v. Underwood, 487 U.S. 552, 565 (1988). 29 The district court determined that UCH had pursued its position in good faith, given the fact that this was not a typical ERISA misrepresentation. UCH knew Trustmark was under court order to provide coverage and was expressly told by Trustmark that it would pay for Mrs. Fuja's HDC/ABMT treatments. The district court found that when the order given Trustmark to pay for the coverage was reversed, UCH was substantially justified in asserting it was not required to reimburse the money for the treatments incurred. As the district court stated, such litigation was not in any way designed to harass Trustmark. 30 Trustmark also acted in good faith. It was substantially justified in pursuing this action, given this court's reversal of the injunction. Trustmark was not merely harassing UCH. As we noted earlier, this was an unusual case. Both parties had legitimate claims, with no clear winner or loser. 31 Prejudgment interest may be appropriate in ERISA cases. Lorenzen v. Employees Retirement Plan of Sperry & Hutchinson Co., 896 F.2d 228, 236-37 (7th Cir. 1990). Prejudgment interest is designed not only to fully compensate the victim, but also to prevent unjust enrichment. Id. at 236. Whether to award prejudgment interest to an ERISA plaintiff is a question of fairness, lying within the court's sound discretion, to be answered by balancing the equities. Landwehr v. DuPree, 72 F.3d 726, 739 (7th Cir. 1995) (citations omitted). One of the factors considered in determining whether to award prejudgment interest is the presence of bad faith or good will. Id. (internal quotations & citations omitted). 32 UCH received Trustmark's money as payment for medical services rendered. The district court found that UCH was not unjustly enriched by receiving payment for the treatments it provided to Mrs. Fuja. Nor did the fact that the appellate court determined the Plan did not cover the treatments indicate that UCH was guilty of wrongdoing or bad faith. We believe the district court acted within its discretion in denying Trustmark prejudgment interest. However, in this case, there is no evidence of bad faith on the part of either party. 33 For these reasons, we find that each party should bear its own attorney's fees and costs.