Court Opinion

ID: 6959502
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:43:07.567955+00
Date Added: 2024-06-11T16:08:22.595288
License: Public Domain

NOONAN, Circuit Judge,
concurring and dissenting:
I concur in the judgment that the Estate was not entitled to benefits but dissent as to the award of attorney’s fees.
According to the Plan, if an application for benefits is denied, the Retirement Committee has certain duties including notifying the claimant, offering the claimant a reasonable opportunity for review and putting in the notice a reference to the pertinent provisions of the Plan. The record indicates that the Shockley estate claim was first denied on June 19, 1992 by letter of Betty Metz, Assistant Annuitant Affairs Associate; she repeated the denial by letter of August 10, 1992. On May 26, 1993, L.R. Trotter, senior attorney for the company, denied the claim. These three denials were not denials by the Retirement Committee.
The Shockley estate then wrote the chairman of the Retirement Committee. By letter of October 3, 1993 he replied that the Committee had reviewed the decision to deny the claim and had decided “to uphold the earlier decision.” The letter referred to the summary plan description which was attached with the relevant portion “marked,” but there was no reference to the Plan itself.
A fiduciary is properly held to punctiliousness in the discharge of its duties—a fortiori when the fiduciary is also the employer. Here, for over a year Alyeska stalled, fading to follow the Plan and in the end not making an independent decision but affirming the *409staff decisions. Failing to follow proper procedure, Alyeska should not be awarded attorney’s fees for litigation to which its own sloppy methods contributed. It is foreign to the concepts of trust law that the trustee should be able to mulct a putative beneficiary whose claim it improperly processed.
The factors set out in our leading case, Hummell v. S.E. Rykoff & Co., 634 F.2d 446, 453 (9th Cir.1980), disfavor the award of attorney’s fees against plaintiff-participants. See, e.g., Corder v. Howard Johnson & Co., 53 F.3d 225 (9th Cir.1994). The district court found that there was no culpability or bad faith on the part of the Estate. I can find no case in which an assessment of attorney’s fees against a plaintiff-participant was upheld when the plaintiff-participant did not engage in culpable conduct. It is, moreover, unreasonable to conclude that plaintiffs with meritorious claims will not be deterred by an award of fees against a plaintiff-participant when in this case the court found that the suit did have some merit and yet the defendant fiduciary is awarded fees. A minor miscarriage of justice is still a miscarriage and should be corrected here.