Prather v. Sun Life Financial Insurance Co., No. 16-1861 (7th Cir. 2017)
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Prather, age 31, tore his Achilles tendon. His surgery to repair the injury was uneventful. He returned to work. Four days later he collapsed, went into cardiopulmonary arrest, and died as a result of a blood clot in the injured leg that had traveled to a lung. Prather’s widow applied for benefits under his Sun Life group insurance policy (29 U.S.C. 1132(a)(1)), which limited coverage to “bodily injuries ... that result directly from an accident and independently of all other causes.” Sun Life refused to pay. The Seventh Circuit ruled in favor of Prather’s widow, noting that deep vein thrombosis and pulmonary embolism are risks of surgery, but that even with conservative treatment, such as immobilization of the affected limb, the insured had an enhanced risk of a blood clot. The forensic pathologist who conducted a post-mortem examination of Prather did not attribute his death to the surgery. Prather’s widow then sought attorneys’ fees of $37,170 under ERISA, 29 U.S.C. 1132(g)(1). The Seventh Circuit awarded $30,380, stating that there is no doubt of Sun Life’s culpability or of its ability to pay without jeopardizing its existence; the award of attorneys’ fees is likely to give other insurance companies in comparable cases pause; and a comparison of the relative merits of the contending parties clearly favors the plaintiff.
This opinion or order relates to an opinion or order originally issued on December 13, 2016.
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In the United States Court of Appeals For the Seventh Circuit ____________________ No. 16 1861 LEE ANN PRATHER, Plaintiff Appellant, v. SUN LIFE AND HEALTH INSURANCE COMPANY (U.S.), Defendant Appellee. ____________________ Appellant’s Petition for Award of Attorneys’ Fees ____________________ MARCH 30, 2017 ____________________ Before WOOD, Chief Judge, and POSNER and WILLIAMS, Circuit Judges. POSNER, Circuit Judge. The plaintiff’s decedent, Jeremy Prather, was employed by a company that had obtained a Group Insurance Policy from Sun Life which provided acci dental death and dismemberment coverage for the compa ny’s employees, in the amount of $92,000 for Prather. The policy limited coverage to “bodily injuries … that result di rectly from an accident and independently of all other causes.” The clause we’ve italicized was the focus of an appeal from the district court, which had granted summary judgment for 2 No. 16 1861 Sun Life, which had invoked the clause to deny the payment of death and dismemberment coverage to Prather’s survivor on the ground that Prather’s death had not been the exclu sive result of an accident—it had also been the result of “complications from surgical treatment.” Prather’s widow brought suit “to recover benefits due to [her]” under the plan. 29 U.S.C. § 1132(a)(1). On July 16, 2013, Prather, age 31, had torn his left Achil les tendon playing basketball. He was operated on to repair the torn tendon six days later. The surgery was uneventful and he was discharged from the hospital the same day. He returned to work and was reported as doing well in a fol low up visit to his surgeon on August 2, but four days later he collapsed at work, went into cardiopulmonary arrest, and died the same day as a result of a deep vein thrombosis (blood clot) in the injured leg that had broken loose and traveled through the bloodstream to a lung, thus becoming a blood clot in the lung—that is, a pulmonary embolism— which caused cardiac arrest and sudden death. Sun Life’s position was and is that the pulmonary embo lism and ensuing death were consequences not of—at least not entirely of—the accident to Prather’s Achilles tendon, but of the surgery, and therefore was not covered by the in surance policy, which as we said covered only “bodily inju ries … that result directly from an accident and independently of all other causes.” The district court granted summary judgment in favor of Sun Life, Prather’s widow appealed, and we reversed, see Prather v. Sun Life & Health Ins. Co., 843 F.3d 733 (7th Cir. 2016). We reasoned that Sun Life had failed to make any plausible showing that the surgery on Prather’s ankle, rather than the accident that necessitated the surgery, No. 16 1861 3 had caused his death. We instructed the district court to en ter judgment in favor of the plaintiff, as in Senkier v. Hartford Life & Accident Ins. Co., 948 F.2d 1050, 1052 (7th Cir. 1991). Prather’s widow has now moved us to award her the at torneys’ fees (that is, to order Sun Life to reimburse her for those fees), amounting to $37,170, that she incurred in her successful suit against the insurance company. The suit had been based on the Employee Retirement Income Security Act of 1974 (ERISA), the federal law that sets minimum stand ards for certain private pension and health plans, in order to provide financial protection for individuals enrolled in these plans (as Jeremy Prather had been) and their survivors (Pra ther’s widow, in this case). See 29 U.S.C. § 1132(a)(1). Specif ically, she seeks the fees under section 1132(g)(1), which au thorizes a court in its discretion to “allow a reasonable attor ney’s fee and costs of action to either party,” provided the party awarded the fee and costs had (the Supreme Court said in Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 245 (2010)), “achieved some success on the merits.” The plaintiff, Prather’s widow, achieved not some, but complete, success on the merits of her suit. That makes it an easy case for us to exercise discretion favorably to her, and thus award her her attorneys’ fees and costs. We are mindful that a number of judicial opinions em brace a “five factor” test for whether to award attorneys’ fees and costs in cases such as this. They are “(1) the degree of the offending parties’ culpability; (2) the degree of the ability of the offending parties to satisfy an award of attorneys’ fees; (3) whether or not an award of attorneys’ fees against the of fending parties would deter other persons acting under simi lar circumstances; (4) the amount of benefit conferred on 4 No. 16 1861 members of the pension plan as a whole; and (5) the relative merits of the parties’ positions. Raybourne v. CIGNA Life Ins. Co. of New York, 700 F.3d 1076, 1090 (7th Cir. 2012); see also Jackman Financial Corp. v. Humana Ins. Co., 641 F.3d 860, 866 (7th Cir. 2011). We have no information about factor 4, so let’s forget it. All the other factors (four in number) favor the plaintiff in this case: there is no doubt of Sun Life’s culpability (factor 1), or of its ability to pay without jeopardizing its existence (it is a multibillion dollar company) (factor 2); the award of attor neys’ fees against it is likely to give other insurance compa nies in comparable cases pause (factor 3); and a comparison of the relative merits of the contending parties clearly favors the plaintiff (factor 5). The score is 4 to 0 in favor of the plaintiff. Prather’s widow doesn’t have the big pockets of the insurance company and would have to pay her lawyer out of whatever money she recovered from it. Even though she had a meritorious claim, the insurance company denied it without medical evidence and then put her through all the hoops of litigation. Fee shifting under ERISA is entirely ap propriate for situations like this. It remains to consider Sun Life’s challenge to the amount of the award of attorneys’ fees ($37,170). We are persuaded by its argument that 3.6 hours of the attorney’s work should be subtracted because they were hours devoted to simple administrative tasks such as preparing the table of contents and appendix of the brief, and formatting the brief; 4.4 hours incurred by failing to delegate portions of the research, drafting, and editing of the brief to a more junior attorney; and 2 hours for preparation for oral argument, which was too much time given the lawyer’s experience in arguing in No. 16 1861 5 the courts of appeals. The result of these adjustments is to reduce the number of hours on which the $37,170 fee award is based from 59 to 49, yielding (with a further adjustment, reducing the attorney’s billing rate from $630 to $620, on the ground that the $630 rate reflected an excessive rate increase of 5 percent from his hourly rate of $600 in 2015) a total fee award of $30,380—which is the amount we award the plain tiff. So ordered.
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