Columbus Life Insurance v. Hill, et al, No. 2:2009cv00947 - Document 27 (E.D. Cal. 2010)

Court Description: ORDER signed by Judge Frank C. Damrell, Jr on 9/16/10 ORDERING in sum, plaintiff is entitled to the recovery of documented costs, which totals $698.05. Plaintiff is also entitled to the recovery of $1875 in attorneys' fees (($250/ hr x 15 hrs.) 2 = 1875). As such, plaintiff is awarded $2,573.05 in fees and costs to be awarded from the interpleaded fund. CONCLUSION For the foregoing reasons, plaintiff's 16 motion for order granting discharge is GRANTED, and plaintiff's motion for attorneys' fees and costs is GRANTED in part and DENIED in part. (Becknal, R)
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Columbus Life Insurance v. Hill, et al Doc. 27 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 COLUMBUS LIFE INSURANCE COMPANY, 13 NO. CIV. 2:09-cv-0947 FCD DAD Plaintiff, 14 v. MEMORANDUM AND ORDER 15 16 17 18 19 20 GAVIN HILL, an individual, KRISTAN HILL-LOVE, aka “Kristan L. Love,” an individual, HOLLY LOOMAN, an individual, KYLE HILL, an individual, KATRINA CLEMONS, an individual, and DOES 1-20, inclusive, Defendants. ____________________________/ 21 22 23 ----oo0oo---This matter is before the court on plaintiff Columbus Life 24 Insurance Company’s (“plaintiff” or “Columbus”) motions for order 25 granting discharge in interpleader and for attorneys’ fees and 26 costs. 27 discharge. 28 Katrina Clemons do not oppose plaintiff’s motion for attorneys’ None of the defendants oppose plaintiff’s motion for Defendants Gavin Hill, Holly Looman, Kyle Hill, and 1 Dockets.Justia.com 1 fees and costs, but defendant Kristan Hill-Love (“Hill-Love”) 2 objects to the award of any attorneys’ fees or costs from the 3 interpleaded funds. 4 below,1 plaintiff’s motion for order granting discharge is 5 GRANTED, and plaintiff’s motion for attorneys’ fees and costs is 6 GRANTED in part and DENIED in part. 7 8 9 Accordingly, and for the reasons set forth BACKGROUND Plaintiff issued a life insurance policy (the “Policy”) to the late Garla Quarnberg (“Quarnberg”), dated November 16, 1994, 10 with a death benefit of $50,000. 11 (“Compl.”), filed Apr. 6, 2009, ¶ 9.) 12 beneficiary of the Policy was Quarnberg’s husband, Max Quarnberg, 13 who died on or about October 12, 2005, and the original 14 contingent beneficiaries were “all surviving children equally.” 15 (Id. ¶¶ 10-11.) 16 beneficiary form, dated November 3, 2005, which listed “Kristan 17 L. Love” as the sole beneficiary and “Myranda & Savannah Love” as 18 the sole contingent beneficiaries. 19 on or about June 30, 2008, and the death benefits became payable 20 under the Policy. 21 (Compl. In Interpleader The original named Subsequently, plaintiff received a change of (Id. ¶ 12.) Quarnberg died (Id. ¶ 13.) By telephone call made on July 16, 2008, and fax sent on 22 July 17, 2008, defendant Gavin Hill made a claim to plaintiff for 23 the death benefit proceeds of the Policy. 24 Specifically, he contended that defendant Hill-Love had committed 25 “personal credit, medical, and life insurance” fraud. (Id. ¶ 14.) (Id.) 26 27 28 1 Because oral argument will not be of material assistance, the court orders these matters submitted on the briefs. E.D. Cal. L.R. 230(g). 2 On 1 or about August 21, 2008, defendant Hill-Love also made a claim 2 to the death benefit proceeds of the Policy as the primary 3 beneficiary. 4 (Id. ¶ 15.) On April 6, 2009, because of the potentially conflicting 5 claims to the death benefit proceeds under the Policy, plaintiff 6 filed a Complaint in Interpleader pursuant to 28 U.S.C. § 7 1335(a). 8 the amount due under the Policy plus interest, with the Clerk of 9 the United States District Court for the Eastern District of 10 Plaintiff deposited the sum of $51,517.81, representing California. (Id. ¶ 16.) 11 12 ANALYSIS “Generally, courts have discretion to award attorney fees to 13 a disinterested stakeholder in an interpleader action.” 14 Corp. v. Ski’s Enter., Inc., 748 F.2d 513, 516 (9th Cir. 1984) 15 (citing Gelfgren v. Republic Nat’l Life Ins. Co., 680 F.2d 79, 81 16 (9th Cir. 1982)). 17 interpleader action is committed to the sound discretion of the 18 district court.” 19 Pension Benefits Plan v. Tise, 234 F.3d 415, 426 (9th Cir. 2000). 20 The availability of such fees “recognizes that by bringing the 21 action, the plaintiff benefits all parties ‘by promoting early 22 litigation on the ownership of the fund, thus preventing 23 dissipation.’” 24 Stevedoring Corp., 306 F.2d 188, 194 (9th Cir. 1962)). Abex “The amount of fees to be awarded in an Trustees of the Directors Guild of Am.-Producer Id. (quoting Schirmer Stevedoring Co. v. Seaboard 25 “Because the interpleader plaintiff is supposed to be 26 disinterested in the ultimate disposition of the fund, attorneys’ 27 fee awards are properly limited to those fees that are incurred 28 in filing the action and pursuing the plan’s release from 3 1 liability.” 2 ‘distinterested interpleader plaintiff are typically modest.” 3 Id. 4 that the fee award does not deplete the fund at the expense of 5 the party who is ultimately deemed entitled to it.” 6 Id. Due to this limitation, “attorneys’ fees to the Indeed, “there is an important policy interest in seeing Id. In this case, plaintiff seeks attorneys’ fees in the amount 7 of approximately $14,918.00 from the interpleaded fund of 8 $51,517.81. 9 unreasonable, both with respect to the rate charged and the hours 10 expended, and well exceeds the “modest” amount of attorneys’ fees 11 contemplated in an interpleader action. The court concludes that this amount is 12 1. 13 In order to decide what rate is “reasonable,” courts look at Reasonable Rate 14 “prevailing market rates in the relevant community.” 15 Stenson, 465 U.S. 886, 895 (1984); Davis v. City of San 16 Francisco, 976 F.2d 1536, 1545 (9th Cir. 1992) (a reasonable 17 hourly rate should be determined “by reference to the fees that 18 private attorneys of an ability and reputation comparable to that 19 of prevailing counsel charge their paying clients for legal work 20 of similar complexity”). 21 rate is not made merely by reference to rates actually charged by 22 the prevailing party. 23 1205, 1210 (9th Cir. 1986). 24 on the prevailing rate in the relevant community for similar 25 work. 26 Blum v. Determination of a reasonable hourly Chalmers v. City of Los Angeles, 796 F.2d Rather, the rate assessed is based Id. at 1211; Blum, 465 U.S. at 895 n. 11. Generally, the relevant community is the forum in which the 27 district court sits. 28 (9th Cir. 1991). Davis v. Mason County, 927 F.2d 1473, 1488 However, rates outside the forum may be used 4 1 “if local counsel was unavailable, either because they are 2 unwilling or unable to perform because they lack the degree of 3 experience, expertise, or specialization required to handle 4 properly the case.” 5 (9th Cir. 1992). 6 Gates v. Deukmejian, 987 F.2d 1392, 1405 In this case, plaintiff’s primary counsel seeks the court’s 7 approval of a rate of $450.00 per hour.2 8 established that $450 is a reasonable hourly rate for the filing 9 of an interpleader complaint in Sacramento, nor that this action Plaintiff has neither 10 required unique expertise that could not be obtained locally. 11 Further, plaintiff has failed to present evidence that $450 is 12 even the prevailing rate for this work in San Francisco, where 13 plaintiff’s law firm is located. 14 that a reasonable hourly rate for plaintiff’s counsel is $250 per 15 hour billed. 16 similar work in the relevant community of Sacramento in the 17 Eastern District of California, which is the venue of this 18 action. 19 2. 20 In determining the reasonable hours expended, the party Rather, the court concludes This figure represents the prevailing rate for Reasonable Hours Expended 21 seeking attorneys’ fees bears the burden of submitting detailed 22 time records which justify the hours spent working on the claims. 23 Hensley v. Eckerhart, 461 U.S. 424, 434 (1983) (district court 24 25 26 27 28 2 Plaintiff’s billing sheets include charges for hours billed by L.J. Hightower, at the rate of $140/hr., and by J. Lee, at the rate of $145/hr. Because plaintiff does not include information regarding who these individuals are, in what capacity they worked on the case, or what the reasonable rates for such work would be in Sacramento, the court cannot account for such fees in its order. 5 1 should exclude hours not “reasonably expended”). 2 documentation of hours is inadequate, the district court may 3 reduce the award accordingly.” 4 1210. “Where the Id. at 433; Chalmers, 796 F.2d at 5 After a review of the parties’ submissions, plaintiff’s 6 billing records, and the docket in this case, the court concludes 7 that the hours expended on this matter are excessive. 8 Plaintiff’s counsel has documented 30.1 hours of work in 9 connection with this case. However, the court concludes that 10 only the expenditure of 15 hours is reasonable under the 11 circumstances. 12 3. 13 “The award of attorney fees is fundamentally a matter of Equitable Concerns 14 discretion of the trial court.” 15 at 194. 16 interpleader action involves the proceeds of insurance policies, 17 courts have considered that “[s]uch disputes are part of the 18 ordinary course of business for an insurance company” and that to 19 award an insurance company fees and costs would be to permit that 20 company “to shift some of its ordinary business expenses to the 21 claimants.” 22 517 (E.D. Pa. 1982) (citing Companion Life Ins. Co. v. Schaffer, 23 442 F. Supp. 826, 830 (S.D.N.Y. 1977); Travelers Indem. Co. v. 24 Israel, 354 F.2d 488, 490 (2d Cir. 1965) (“We are not impressed 25 with the notion that whenever a minor problem arises in the 26 payment of insurance policies, insurers may, as a matter of 27 course, transfer a part of their ordinary cost of doing business 28 to their insureds by bringing an action for interpleader.”). Schirmer Stevedoring, 306 F.2d Where the nature of the underlying dispute in a Mutual of Omaha Ins. Co. v. Dolby, 531 F. Supp. 511, 6 1 The court concludes that based upon the nature of the 2 underlying litigation, plaintiff’s request for attorneys’ fees 3 should be reduced. 4 because plaintiff’s role in this litigation was prolonged, at 5 least in part, due to defendant Hill-Love’s conduct,3 the award 6 of some attorneys’ fees is appropriate. 7 concludes that equity requires plaintiffs’ request for attorneys’ 8 fees to be reduced by half. 9 However, the court also concludes that As such, the court In sum, plaintiff is entitled to the recovery of documented 10 costs, which totals $698.05. 11 recovery of $1875 in attorneys’ fees (($250/hr x 15 hrs.) ÷ 2 = 12 $1875). 13 costs to be awarded from the interpleaded fund.4 Plaintiff is also entitled to the As such, plaintiff is awarded $2,573.05 in fees and 14 CONCLUSION 15 For the foregoing reasons, plaintiff’s motion for order 16 granting discharge is GRANTED, and plaintiff’s motion for 17 attorneys’ fees and costs is GRANTED in part and DENIED in part. 18 ///// 19 ///// 20 ///// 21 22 23 24 25 3 Plaintiff presents evidence that defendant Hill-Love refused to stipulate to a discharge. While the court acknowledges that defendant Hill-Love also objected to the amount of attorneys’ fees, defendant Hill-Love could have significantly narrowed the issues at an earlier stage in the litigation, before plaintiff’s counsel had to file this motion. 4 26 27 28 After a review of the submissions of the parties, the court denies defendant Hill-Love’s request that any award be postponed until the merits of the underlying dispute are resolved. The court also denies defendant Hill-Love’s request that the other defendants bear responsibility for any award of fees and costs. 7 1 2 IT IS SO ORDERED. DATED: September 16 , 2010 3 4 FRANK C. DAMRELL, JR. UNITED STATES DISTRICT JUDGE 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8