Court Opinion

ID: 4455510
Source: CourtListenerOpinion
Date Created: 2019-11-13 21:00:27.920967+00
Date Added: 2024-06-11T14:45:19.787667
License: Public Domain

NOT FOR PUBLICATION                         FILED
                    UNITED STATES COURT OF APPEALS                       NOV 13 2019
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                             FOR THE NINTH CIRCUIT

METROPOLITAN LIFE INSURANCE                     No.    18-55785
COMPANY,
                                                D.C. No.
                Plaintiff,                      2:16-cv-08317-RSWL-RAO

BAMBI GICANA
                                                MEMORANDUM*
      Defendant-cross-claimant-
      Appellee.

 v.

ARACELI MALONEY

      Defendant-cross-defendant-
      Appellant,

METROPOLITAN LIFE INSURANCE                     No.    18-55989
COMPANY,                                               18-56174

                Plaintiff,                      D.C. No.
                                                2:16-cv-08317-RSWL-RAO
and

ARACELI MALONEY,

      Defendant-cross-defendant-
      Appellant,

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
 v.

BAMBI GICANA,

      Defendant-cross-claimant-
      Appellee.

                     Appeal from the United States District Court
                        for the Central District of California
                     Ronald S.W. Lew, District Judge, Presiding

                      Argued and Submitted November 4, 2019
                               Pasadena, California

Before: FARRIS, McKEOWN, and PARKER,** Circuit Judges.

      Appellant Araceli Maloney appeals three orders of the United States District

Court for the Central District of California. The first order imposed an equitable

lien on behalf of the Efren Molina Martinez Living Trust (“Trust”). The second

order awarded attorneys’ fees to Appellee Bambi Gicana, and the third order

awarded her costs.

      This case was initiated as an interpleader action by Metropolitan Life to

determine the beneficiary of life insurance proceeds of Efren Molina Martinez,

who died on March 16, 2016. Maloney, his sister, and Gicana, his widow, were

both named as Defendants-in-Interpleader, and the parties stipulated to the

      **
             The Honorable Barrington D. Parker, Jr., United States Circuit Judge
for the U.S. Court of Appeals for the Second Circuit, sitting by designation.

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dismissal of Metropolitan Life. In the course of reviewing Gicana’s claims that

Maloney had breached her fiduciary duty to the Trust, additional funds that were in

the Decedent’s 401(k) entered the dispute before the District Court. The parties

agreed that these funds were assets of the Trust. However, they dispute the

identities of the beneficiaries of the Trust. That dispute is the subject of a separate

state court probate proceeding.

      The District Court concluded that Maloney had violated her fiduciary duties

by diverting Trust assets—the 401(k) funds—into her own retirement account. The

evidence also established that Maloney had used those funds for unauthorized

personal expenditures. Accordingly, the District Court imposed an equitable lien in

favor of the Trust on Maloney’s personal IRA and required her to provide the Trust

with an accounting and to restore improperly disbursed funds.

      On appeal, Maloney argues that she is the sole beneficiary of the Trust, and

that, in any event, her IRA is an exempt asset that cannot be the subject of an

equitable lien. We see no merit to these contentions. It is not disputed that both the

insurance proceeds and the 401(k) funds are governed by ERISA. A court may

hold a fiduciary personally responsible for a breach of fiduciary duty under ERISA

and impose appropriate equitable remedies. Mertens v. Hewitt Assocs., 508 U.S.
248, 252 (1993) (citing 29 U.S.C. § 1109(a)). Because Gicana traced the 401(k)

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funds to Maloney’s personal IRA, the District Court correctly imposed the lien

against that account.

      Maloney argues that her personal IRA is an exempt asset. She contends this

result is compelled by Rousey v. Jacoway, 544 U.S. 320, 326 (2005), and Cal.

Code Civ. Proc. Section 704.115. We disagree. Rousey involved exemptions from

bankruptcy estates, and the statute Maloney cites concerns exemptions from money

judgments, not immunity from equitable liens. Maloney also misreads the District

Court’s summary judgment order, incorrectly arguing that the order named her as

the sole beneficiary of the Trust. The District Court made no such finding. It

explicitly noted it made no determinations as to the validity of the Trust’s

amendments.

      Maloney also appeals the District Court’s grant of attorneys’ fees and costs

to Gicana. She contends that because the equitable lien was granted on behalf of

the Trust, Gicana did not prevail before the District Court and therefore is not

entitled to fees and costs. Again, we disagree. In an ERISA action, the District

Court has the discretion to award attorneys’ fees and costs to either party. Elliot v.

Benefits Ins. Co., 337 F.3d 1138, 1148 (9th Cir. 2003); 29 U.S.C. § 1132(g)(1).

This Court reviews the District Court’s award of attorneys’ fees and costs for abuse

of discretion. Micha v. Sun Life Assurance of Can., Inc., 874 F.3d 1052, 1057 (9th

                                           4
Cir. 2017); Van Gerwen v. Guarantee Mut. Life Co., 214 F.3d 1041, 1045 (9th Cir.

2000).

      To be awarded attorneys’ fees, the movant need only show “some degree of

success on the merits.” Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 255

(2010). In the District Court, Gicana obtained an equitable lien that halted

Maloney’s violation of the terms of the trust—in particular her misuse of Trust

assets for personal benefit. In addition, Maloney was required to furnish an

accounting and to return funds improperly taken from the Trust. We agree with the

District Court that this relief satisfies the “some degree of success” standard. This

Court has required, as a condition of awarding attorneys’ fees, that district courts

consider the factors outlined in Hummel v. S.E. Rykoff & Co., 634 F.2d 446, 453

(9th Cir. 1980). The court below considered each of those factors and determined

that, on balance, they supported Gicana’s request for attorneys’ fees. That analysis

was appropriate, and we see no abuse of discretion in either the award of attorneys’

fees and costs, or in the amounts granted.

      We have considered the remainder of Maloney’s arguments and find them to

be without merit. Thus, the judgment and orders of the District Court are

AFFIRMED.

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