Peggy Renee Cockrell v. Hartford Life and Accident Insurance Companies, No. 2:2011cv02149 - Document 36 (W.D. Tenn. 2013)
Court Description: ORDER granting 33 Motion for Attorney Fees. Signed by Judge Samuel H. Mays, Jr on 05/15/2013.
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Peggy Renee Cockrell v. Hartford Life and Accident Insurance Companies Doc. 36 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TENNESSEE WESTERN DIVISION PEGGY RENEE COCKRELL, Plaintiff, v. HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY, Defendant ) ) ) ) ) ) ) ) ) Case No. 11-2149 ORDER GRANTING PLAINTIFF’S MOTION FOR ATTORNEY’S FEES Before the (“Cockrell”) (“Mot.”) Court October and is 17, accompanying Motion (“Cockrell Mem.”). Plaintiff 2012 Peggy Motion Memorandum Renee for of Law Cockrell’s Attorney’s Supporting (See ECF Nos. 33 and 34.) Fees the Defendant Hartford Life and Accident Insurance Company (“Hartford”) filed a Brief in Opposition to Plaintiff’s Motion for Attorney’s Fees (“Resp.”) on November 5, 2012. (See ECF No. 35.) For the reasons below, the Court GRANTS Plaintiff’s Motion. I. Facts and Procedural History Plaintiff Cockrell brought suit against Defendant Hartford to recover long-term disability benefits under 29 U.S.C. § 1332(a), §502 of the Employee Retirement Income Security Act of Dockets.Justia.com 1974 (“ERISA”). (See ECF assertion of disability discussed in the No. and Court’s 1 the (“Compl.”).) grounds September 30, for 2012 Cockrell’s her suit order are granting Cockrell’s Motion for Judgment as a Matter of Law and remanding the case to Hartford for further consideration. 31.) (See ECF No. Shortly after entry of that order, Plaintiff moved for attorney’s fees in the U.S.C. § 1132(g)(1). amount of $23,725.00 (Mot. ¶ 6.) pursuant to 29 Plaintiff’s counsel waives all expenses incurred in this matter and seeks no reimbursement for them under § 1132. (Waggoner Aff., ECF No. 33-2.) Cockrell invokes the five-factor test adopted by the Sixth Circuit in Secretary of Department of Labor v. King to support an award of attorney’s fees. 669 (6th Cir. 1985) (Cockrell Mem. 4-5); 775 F.2d 666, (establishing the five-factor test). Hartford argues that Cockrell is not entitled to attorney’s fees under the neutral five-factor or weigh test against because an award the of relevant fees. factors (Resp. are 3-4.) Hartford asserts that, if Cockrell is awarded fees, the amount should be adjusted downward to reflect a reasonable proportional to Cockrell’s success on the merits. II. amount (Resp. 5-7.) Standard of Review Section 1132(g) of Title 29 provides that a district court has discretion to award attorney’s fees in an ERISA action: 2 In any action under this title . . . 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. 29 U.S.C. § 1132(g)(1). In Hardt v. Reliance Std. Life Ins. Co., the Supreme Court established a threshold for recovery under §1132(g)(1): [A] fees claimant must show "some degree of success on the merits" before a court may award attorney's fees under § 1132(g)(1). A claimant does not satisfy that requirement by achieving "trivial success on the merits" or a "purely procedural victor[y]," but does satisfy it if the court can fairly call the outcome of the litigation some success on the merits without conducting a "lengthy inquir[y] into the question whether a particular party's success was 'substantial' or occurred on a 'central issue.'" 130 S. Ct. 2149, 2158 (2010) (quoting Ruckelshaus v. Sierra Club, 463 U.S. 680, 694 (1983)) (internal citations omitted). Before Hardt, courts in the Sixth Circuit applied the fivefactor test established in King (known as the “King Factors”) when deciding whether to award fees. Heath v. Metro. Life Ins. Co., 2011 U.S. Dist. Lexis 101504, at *6-8 (M.D. Tenn. Sept. 6, 2011). The King Factors are: (1) the degree of the opposing party's culpability or bad faith; (2) the opposing party's ability to satisfy an award of attorney's fees; (3) the deterrent effect of an award on other persons under similar circumstances; (4) whether the party requesting fees sought to confer a common benefit on all participants and beneficiaries of an ERISA plan or resolve significant legal questions regarding ERISA; and (5) the relative merits of the parties' positions. King, 775 F.2d at 669. The Supreme Court in Hardt analyzed a five-factor test used by the Fourth Circuit that was identical 3 to the test in King and held that the Fourth Circuit test was not required. The court said, however, that it “do[es] not foreclose the possibility that once a claimant has satisfied [the threshold] requirement, and thus becomes eligible for a fees award under ERISA § 1132(g)(1), a court may consider the five factors." Hardt, 130 S. Ct. at 2158 n.8. Since Hardt, courts in the Sixth Circuit have continued to consider the fivefactor test when deciding whether to award attorney’s fees, and this Court will apply the test as a guide in exercising its discretion. See, e.g., Heath, 2011 U.S. Dist. LEXIS 101504, at *9; Reese v. CNH Global N.V., No. 04-70592, 2011 U.S. Dist. LEXIS 70607, at *9-11 (E.D. Mich. June 30, 2011); Loan v. Prudential Ins. Co. of Am., 788 F. Supp. 2d 558, 562-65 (E.D. Ky. 2011). III. Analysis A. Degree of Success on the Merits To earn a fee award, Cockrell must have had “some degree of success on the merits.” Hardt, 130 S. Ct. at 2158. fails to address this threshold requirement. Cockrell Post-Hardt case law from the Sixth Circuit informs the Court’s discretion. In McKay v. Reliance Std. Life Ins. Co., the Sixth Circuit decided that the Hardt threshold requirement of “some degree of success” had been met by a plaintiff who had not yet won his benefits claim, but had received “another shot” at benefits by winning a 4 remand. 428 Fed. Appx. 537, 546-47 (6th Cir. 2011) aff’g McKay v. Reliance Std. Life Ins. Co., 654 F. Supp. 2d 731, 733-36 (E.D. Tenn. 2009). Circuit have Since McKay, other district courts in the reached the same conclusion. E.g., Hayden v. Martin Marietta Materials, Inc., 2012 U.S. Dist. LEXIS 156880, at *9 (W.D. Ky. Oct. 30, 2012) (“[I]n the Sixth Circuit, a remand constitutes ‘some success on the merits’ thereby making an award of attorneys' fees and costs available under § 1132(g)(1).”); Mullins v. Prudential Ins. Co. of Am., 2012 U.S. Dist. LEXIS 43723, at *8 (W.D. Ky. March 28, 2012) (“We conclude under the facts of this case that the remand ordered by this court constituted ‘some degree of success on the merits,’ thus rendering the plaintiff eligible for an award of attorneys fees.”); Bio-Med. Applications of Ky., Inc. v. Coal Exclusive Co., LLC, 2011 U.S. Dist. LEXIS 91187, at *7 (E.D. Ky. Aug. 15, 2011) ("The [McKay] court determined that the remand satisfied Hardt's standard for 'success.'"). than trivial success on the Cockrell “achieved far more merits or purely a procedural victory” when she persuaded this Court that Hartford’s decision was arbitrary and capricious and that it should not be upheld under ERISA. omitted). Hardt, 130 S. Ct. 2149 at 2159 (internal citations She has met the threshold requirement and is eligible for attorney’s fees under §1132(g)(1). B. Five-factor Test 5 The King Factors guide the exercise of judicial discretion when awarding attorney’s fees. “Because no single factor is determinative, consider the court must exercising its discretion.” each factor before Schwartz v. Gregori, 160 F.3d 1116, 1119 (6th Cir. 1998). 1. Culpability or bad faith This Court questioned Hartford’s review process in its opinion remanding for further review of Cockrell’s eligibility for long-term opinions of disability physicians benefits. who Hartford conducted only relied paper on the reviews of Cockrell’s case rather than the opinions of Cockrell’s treating physicians, Hartford failed disability determination to take made adequate by the account Social of the Security Administration, and Hartford failed to explain its rejection of that determination adequately. (ECF No. 31.) The Court concluded that “Hartford’s benefits determination was not the product of a deliberate, substantial evidence.” whether Hartford’s because Hartford Cockrell’s claim. (Id. 30.) actions is principled rise culpable 461 F.3d based on It is not necessary to decide to the for its level of cursory bad faith review of The Sixth Circuit has concluded that this level of culpability is significant. Corp., reasoning 639, 643-44 (6th See Moon v. Unum Provident Cir. 2006) (reversing the district court and weighing the culpability factor in favor of 6 awarding attorney’s fees where the administrator's physician was employed by the defendant and conducted only a paper review that failed to take into account treating physicians' opinions); see also Heffernan v. Unum Life Ins. Co. of Am., 101 Fed. Appx. 99, *109 (6th Cir. June 11, 2004) (unpublished opinion) (“An arbitrary and capricious denial of benefits does not necessarily indicate culpability [Defendant] ignored or bad faith. overwhelming However, evidence in of this case, [Plaintiff's] disability, and, instead denied her claim based on a theory that lacked legitimate culpability, the foundation.”). first factor Because favors an of award Hartford’s of attorney’s fees. 2. Ability to satisfy award Hartford does not dispute that it has the ability to pay an award of fees. been used by (Resp. 3.) Hartford notes that this factor has courts in the Sixth Circuit for exclusionary purposes. (Id., citing Warner v. DSM Pharma Chems. N. Am., Inc., 452 F. App’x 677, 681-82 (6th Cir. 2011)). The factor “is clearly not dispositive by itself and must be weighed alongside the remaining King factors in determining the merits of a fee award.” Elliott v. Metro. Life Ins. Co., 2007 U.S. Dist. LEXIS 38893, at *9 (E.D. Ky. May 29, 2007); see Firestone Tire & Rubber Co. v. Neusser, 810 F.2d 550, 557-58 (6th Cir. 1987). 7 Although Hartford’s ability to pay in a case of this nature may not carry the greatest weight, this factor favors a fee award. 3. Deterrent effect The deterrent effect of a fee award in a case of this kind is likely to be significant because the Court finds Hartford culpable. Cockrell argues that an award of attorney’s fees will “deter ERISA claims fiduciaries from performing investigations that lead to denial of benefits.” Mem. 5.) cursory (Cockrell’s It is clear that awarding attorney’s fees in this case would deter future arbitrary and capricious conduct. See McKay, 654 F. Supp. 2d at 738 (finding specific and general deterrence due to defendant's arbitrary and capricious conduct). Such an award would favorably affect the process by which fiduciaries conduct reviews of long-term disability claims by encouraging them to provide full and fair reviews of all claims or suffer the consequences of paying more than the amount of benefits originally denied. This factor favors the award of fees. 4. Common benefit Although there is no evidence that Cockrell brought this ERISA action in an attempt to confer a benefit on other participants or to resolve a significant legal question regarding ERISA, she contends that “it would benefit all future participants of the ERISA plan to have Hartford’s benefits determination made on deliberate, principled reasoning as 8 opposed to cursory investigation.” (Cockrell’s Mem. 5.) Hartford argues that Cockrell’s contention is insufficient because she filed the action to recover disability benefits denied her and because “any benefit conferred on future claimants was merely ‘incidental’” to her claims. (Resp. 4 (quoting Thies v. Life Ins. Co. of N. Am., 839 F. Supp. 2d 886, 893 (W.D. Ky. 2012)).) Courts in the Sixth Circuit have concluded that, when a plaintiff brings suit solely for personal benefit, she does not seek to confer a common benefit on all plan participants. (See, e.g., Gaeth v. Hartford Life Ins. Co., 538 F.3d 524, 533 (6th Cir. 2008) (noting that the effect of discouraging plan administrators from “making similarly unreasonable decisions in the future” is a deterrent effect and does not constitute a “common benefit” for purposes of the King analysis); Shelby County Health Care Corp. v. Majestic Star Casino, LLC Group Health Benefit Plan, 581 F.3d 355, 378 (6th Cir. 2009) (“Where a claimant seeks benefits only for himself, we generally have found the common-benefit factor to weigh against an attorney-fee award.”); Hayden, 2012 U.S. Dist. LEXIS 156880, at *16-17 (“Although the Court's findings in its decision to remand might be useful to plaintiffs in future cases, there is no indication that Plaintiff sought to bring her case for that purpose. That is, any points of law resulting from this case that might 9 benefit other beneficiaries are merely incidental to Plaintiff's ultimate goal of obtaining the benefits of her policy for herself.”) Cockrell does not claim she brought suit to resolve significant legal questions regarding ERISA, nor would such a claim have merit given prior decisions in this Circuit. (See Gaeth, 538 F.3d at 533 (finding that a case in which the dispute is whether the insurer’s decision to terminate benefits was arbitrary and capricious does not turn on the resolution of a difficult ERISA question); Mullins, 2012 U.S. Dist. LEXIS 43723, at *12 (“[Plaintiff’s] suit was filed and litigated for his personal benefit. No new legal ground was broken here.”). This factor weighs against awarding attorney’s fees. 5. Merits of the case Cockrell’s position is stronger than Hartford’s because Hartford acted arbitrarily and capriciously in its decision to deny Cockrell benefits and did so in a culpable manner. (See Moon, 461 F.3d at 646 (finding that the merits factor favored a plaintiff whose long-term disability benefits were terminated arbitrarily and capriciously by a culpable party)). Hartford argues that the merits factor weighs against an attorney’s fee award because this Court found there was no bias or conflict of interest in Hartford’s review and that it was unclear whether Cockrell was entitled to benefits. 10 (Resp. 4.) Hartford cites a district court decision in which the court weighed this factor against an attorney’s fee award because it found that the merits of the claimant’s position were questionable and that there was a possibility that the plan administrator could ultimately prevail. Bowers v. Hartford Life & Accident Ins. Co., No. 2:09- CV-290, 2010 U.S. Dist. LEXIS 114663, at *13-14 (S.D. Ohio Oct. 19, 2010) (citing Gaeth, 538 F.3d at 534). In Gaeth, the Sixth Circuit found that a district court could have weighed the merits factor against an award of attorney’s fees in a case in which the insurer ultimately could have prevailed. 538 F.3d at 534. The court “noted, significantly, that the record contained minimal objective medical evidence of [the plaintiff’s] continued disability." Id. (internal quotations omitted). This Court, although finding that Cockrell’s entitlement to benefits was unclear and questioning the full extent of Cockrell’s injuries, did not, in its remand, find that there was minimal medical evidence to support Cockrell’s claim. The Court remanded the case because there was medical evidence that Hartford failed to consider adequately in its review. Cockrell’s position is stronger than Hartford’s and guides the Court in weighing this factor in favor of an award of attorney’s fees. The totality of the King analysis under the circumstances of this case favors an attorney’s fee award to Cockrell. 11 C. Fees to Which Plaintiff Is Entitled Cockrell seeks a total fee of $23,725.00, representing the lodestar (hourly rate multiplied by the number of hours worked). (Mot. 2.) Cockrell’s fee request is supported by an Exhibit containing the detailed invoice she received from her attorney (“Exhibit A”). (ECF No. 33-1.) Cockrell has also submitted an Affidavit of her attorney, Gerald D. Waggoner, confirming the invoice and stating his customary fee (“Exhibit B”), and an Affidavit of John L. Dolan, a Memphis-area attorney, supporting the fee award requested (“Exhibit C”). (ECF Nos. 33-2 and 33- 3.) Hartford has contested the reasonableness of the fee requested based on the allegedly excessive number of hours spent litigating the matter and the degree of Cockrell’s success on the merits. (Resp. 5-7.) 1. Reasonableness of lodestar figure In determining a reasonable attorney’s fee, it is well established that the “lodestar” approach is the proper method for calculating the award. Building Serv. Local 47 Cleaning Contractors Pension Plan v. Grandview Raceway, 46 F.3d 1392, 1401 (6th Cir. 1995). When using the lodestar approach, “in which ‘the number of hours reasonably expended on litigation [is] multiplied by a reasonable hourly rate,’ . . . ‘[t]here is a strong presumption’ that this lodestar figure represents a 12 reasonable fee.” Heath, 2011 U.S. Dist. LEXIS 101504, at *23-24 (internal citations omitted). Hartford Cockrell’s submitted does not attorney, for challenge but specific the claims tasks is hourly that the rate charged number by hours (Resp. unreasonable. of 5-7.) Cockrell, the party seeking an award of attorney’s fees, “has the burden of demonstrating the reasonableness of hours,” and Hartford “has the burden of producing evidence against this reasonableness.” Elec. Energy, Inc. v. Lambert, 2011 U.S. Dist. LEXIS 53018, at *12 (W.D. Tenn. May 17, 2011). court may reduce the award accordingly” if presents inadequate documentation of hours. 461 U.S. 424, reasonableness, 433 a (1983). court should In exclude “[T]he district a fee applicant Hensley v. Eckhart, reviewing from its claims for calculation hours that are “excessive, redundant, or otherwise unnecessary.” Id. Based on a review of the affidavits and the invoice submitted by Cockrell, a majority of the time documented in this case is reasonable. In all but a few instances, Cockrell has met her burden of demonstrating that the fee requested and hours spent are not excessive. Some time submitted was unnecessary. Counsel for Cockrell submitted two entries of two hours each to prepare a motion to appear in forma pauperis, a summons, an application to proceed without prepaying, and the complaint. 13 (Exhibit A, Entries dated 02/24/2011 and 02/25/2011.) Four hours is not a reasonable time to prepare those documents. The paperwork for a motion to appear in forma pauperis and a summons is minimal, and counsel has separately reported spending 5.5 hours preparing a dated 02/24/2011 three-page and written 02/25/2011 complaint. are The redundant. entries The fee requested is reduced by $500.00, representing the elimination of one two-hour time entry. The Court also finds that the time submitted for reviewing three surveillance videos is not reasonable. Cockrell’s counsel recorded period thirteen hours over a three-day to review surveillance videos that contained a total of approximately one hour and ten minutes of video footage. (Exhibit A, Entries dated 01/03/2012, 01/04/2012, and 01/05/2012; Resp. 6.) The Court finds that excessive and concludes that five hours is a reasonable time videos. The to view requested and fee make is notes on reduced the by surveillance an additional $2,000.00, representing the elimination of eight hours. 2. Reduction of fees due to plaintiff's "limited success" The appropriate lodestar figure in this case is $21,225.00. Hartford asserts that Cockrell should be awarded half the requested attorney’s fee because obtaining a remand represents only partial success. (Resp. 6.) 14 Hartford cites two unreported cases from the Eastern District of Michigan in which courts reduced attorney’s fee awards by fifty percent on finding that a plaintiff who seeks disability benefits but whose case is remanded for review has obtained only partial success and is entitled to a partial award of attorney’s fees. See Weaver v. Dow Corning Corp., No. 07-CV-10984, 2009 U.S. Dist. LEXIS 75430, at *10-12 (E.D. Mich. Aug. 25, 2009); Blajei v. Sedgwick Claims Mgmt. Services, Inc., No. 09-13232, 2010 U.S. 102793, at *37-38 (E.D. Mich. Sept. 28, 2010). Dist. LEXIS Both of these cases were decided before Mckay, 428 F. App’x at 546-47. Here, the Court granted judgment as a matter of law in Cockrell’s favor. Although remand may not have been the relief initially sought, it was a form of relief in Cockrell’s favor. This case is similar to Heath, in which a district court declined to award benefits, but remanded the case for further review. In its decision to grant the plaintiff full attorney’s fees, the court noted that it remanded the case because factual issues were unresolved “limited success” company’s failure and because to that it analyze remand was, the in did part, plaintiff’s not the constitute insurance medical record adequately during its initial review that required the remand. The court reasoned that: It would seem absurd to classify the a [sic] decision to remand the case back to Defendant for further review as "limited success" in this situation: this would allow 15 Defendant to benefit from a reduction in attorney fees when it was Defendant's failure to consider and adequately analyze the Plaintiff's medical record that made judgment in Plaintiff's favor impossible. It cannot be that an inadequate review that produces an insufficient basis for a benefits decision by the insurer or the court can result in a fee reduction due to the plaintiff's limited success in court. Heath, 2011 U.S. Dist. LEXIS 101504, at *35-36. Although this Court did not grant Cockrell’s request for disability benefits, it did find that Hartford’s benefits was arbitrary and capricious. (ECF No. 31.) questioned Hartford’s deficiencies decision in determination Hartford’s inadequate. disability benefits review The because and that did several grant factual not issues of The Court cited practices Court denial made its Cockrell needed to be clarified and Hartford’s cursory review did not provide a proper basis for a benefits determination. Hartford may not benefit from fee a reduction Hartford’s in inadequate an attorney’s and cursory review award that when it prompted was this litigation. Cockrell, like the plaintiff in Heath, has achieved a level of success in securing a remand of her case that entitles her to an undiluted award of attorney’s fees. IV. Conclusion For the foregoing reasons, Cockrell’s Motion is GRANTED. Cockrell is awarded a reasonable attorney’s fee of $21,225.00. 16 So ordered this 15th day of May, 2013. s/ Samuel H. Mays, Jr.___ SAMUEL H. MAYS, JR. UNITED STATES DISTRICT JUDGE 17
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