ROBIN L. ROSENBERG, District Judge.
This cause is before the Court upon Defendant's Motion for Attorney's Fees [DE 71], Plaintiff's Motion for Attorney's Fees [DE 48], and Defendant's Motion for Appellate Attorney's Fees [DE 86].
Plaintiff initiated this action in March of 2017. Plaintiff alleged that she was totally disabled, that she had an insurance policy with Defendant, that the policy contained a waiver-of-premium-benefit for insureds who were totally disabled, and that Defendant had wrongfully denied Plaintiff that benefit. DE 1.
In July of 2017, Plaintiff filed a motion for summary judgment seeking a determination that she was entitled to her waiver-of-premium-benefit. On August 2, 2017, Defendant responded to Plaintiff's motion by informing the Court that it had voluntarily reinstated Plaintiff's requested benefit and that it had done so retroactively so that Plaintiff would have no gap in coverage. When Defendant reinstated Plaintiff's benefit, Defendant also offered to pay Plaintiff's counsel a reasonable attorney fee so that the case could be closed and Defendant could avoid additional litigation costs. See DE 86 at 3. Defendant contended that because of its reinstatement of Plaintiff's benefit, the case had become moot. DE 21 at 3.
When the Court received notification from Defendant that Plaintiff had received the relief sought in her Complaint retroactively, the Court could see no reason to disagree with Defendant that the case had become moot. Accordingly, the Court issued an order to show cause, to Plaintiff, seeking an explanation why the case should not be closed:
DE 22. Plaintiff responded to the Court's order to show cause, but Plaintiff's response was difficult to understand. By way of example, the response included the following block paragraph:
DE 23 at 3-4.
Motion practice continued. Plaintiff eventually conceded that her waiver of premium benefit had been reinstated by Defendant and, as a result, the Court denied Plaintiff's motion for summary judgment as moot. DE 40. Plaintiff contended that the mootness of her motion for summary judgment did not mean that her entire case was moot, but the Court could not discern how this was so. Plaintiff's Complaint did contain certain references to events in the future and a desire for the Court to adjudicate something about those events, but the Court could see no legal basis (and Plaintiff provided none) for the Court to adjudicate hypothetical future events. The Court's confusion was sufficiently great that the Court employed a case management procedure that it had never employed before—the Court ordered Plaintiff to file a statement of the remaining issues in the case that needed adjudication. DE 41. Plaintiff's response to the Court's order again was difficult for the Court to comprehend. Plaintiff's response included the following:
DE 45 at 3. In a detailed order, the Court attempted to analyze Plaintiff's remaining issues for trial. DE 46. The Court divided Plaintiff's remaining issues into three broad categories. First, Plaintiff sought relief on issues that were moot. For example, Plaintiff stated that she wanted a determination that she was disabled in the present, but the Court had already denied Plaintiff's motion for summary judgment on that very issue as moot. DE 46 at 2. Second, Plaintiff stated that she wanted the Court to adjudicate her disability status in the future. The Court ruled as follows: "The Court also fails to see, and Plaintiff fails to provide any cogent legal argument, how the Court may adjudicate Plaintiff's disability status in the future." Third and finally, Plaintiff sought relief as follows: "In clarification of Peer's future benefits, what time frames apply to the dates beginning the anniversaries upon which Liberty is allowed to review Peer's entitlement to benefits in the future" and "If the Court must make such [disability] determination independent of Liberty's reinstatement of Peer's benefits, do Liberty's procedural violations require that the Court apply the de novo standard of review, regardless of any discretionary provision in the Liberty policy." Id. at 3-4. With respect to this final category, the Court ruled that if Plaintiff felt that her case was not moot, she was required to file an amended complaint that clearly explained the factual and legal basis entitling her to that relief. Id.
Plaintiff accepted the Court's offer to amend her Complaint. Her amended complaint, however, was filed in violation of the Local Rules of this District. Plaintiff's amended complaint incorporated forty-six paragraphs from her original complaint, a practice that was prohibited by Local Rule 15.1. The Court struck Plaintiff's amended complaint and ordered Plaintiff to file a new amended complaint. DE 49. Plaintiff's second amended complaint, however, instead of incorporating her original complaint, block quoted her original complaint, even though the original complaint contained claims that had been held by the Court to be moot. DE 50.
Plaintiff's second amended complaint continued to confuse the Court as the Court still could not discern the relief that Plaintiff was seeking and how the Court could provide that relief. As a result, for the second time the Court utilized an unusual case management procedure and issued interrogatories directly to Plaintiff's counsel:
DE 52. Plaintiff responded to the Court's order by stating that there were no factual issues for the Court to decide, but that there were legal issues that remained to be decided. The Court therefore set a status conference for Plaintiff's counsel to explain to the Court, in person, what relief needed adjudication. Before the status conference, however, Defendant filed a motion to dismiss, arguing, inter alia, that the second amended complaint should be dismissed because it mirrored the original complaint which the Court had held to be moot. DE 59.
At the status conference, the Court heard argument on the motion to dismiss. Because the second amended complaint quoted the original complaint's claims that the Court ruled were moot, the Court granted the motion to dismiss as to those claims. On whatever remained, however, the Court reasoned that the best vehicle to resolve those claims (which Plaintiff contended were purely legal issues) was a motion for judgment on the pleadings. The Court therefore ordered Defendant to file a motion for judgment on the pleadings and denied the remainder of the motion to dismiss in the interim. Defendant complied, arguing in its motion for judgment on the pleadings that (just as the Court had previously ruled) the Court could not adjudicate the future disability of the Plaintiff and that without an adverse benefits determination for Plaintiff to contest there was no case or controversy between the parties. DE 66.
In contrast to the targeted legal argument raised in the Defendant's motion, Plaintiff's response cited inapplicable case law and did not respond to the motion in a cogent way, including the following:
DE 67 at 5-6.
The Court granted Defendant's motion for judgment on the pleadings, ruling once again that Plaintiff's claims in the present were moot and that her claims targeted towards future hypothetical controversies could not be adjudicated. DE 69. In response, Plaintiff filed a notice of appeal. The Eleventh Circuit affirmed this Court's decision, holding:
DE 77. In response to the Eleventh Circuit's affirmance, Plaintiff filed a petition for rehearing en banc. The petition was denied. Both parties filed motions for appellate attorney's fees. The Eleventh Circuit denied Plaintiff's motion and transferred Defendant's motion to this Court.
Subject to certain lodestar objections, Defendant concedes that Plaintiff is entitled to attorney's fees up and through August 2, 2017. That date is the date Plaintiff's claims became moot. DE 71 at 11. Under ERISA, a court may award fees to either party, provided the party achieves some success on the merits. 29 U.S.C. § 1132(g); Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 245 (2010). As Defendant correctly admits, Plaintiff's initiation of this litigation is the reason Defendant decided to retroactively award Plaintiff her insurance benefit. Defendant also argues, however, that Plaintiff should not receive any award of attorney's fees after August 2, 2017, because Plaintiff achieved no success on the merits after that date. The Court agrees. Fees are awardable pursuant to this Court's sole discretion. 29 U.S.C. § 1132(g). The Court's discretion is to be guided by a party's success on the central issues of the case. Hardt, 560 U.S. at 255. Here, Plaintiff's case was over on August 2nd. After that date, the central issues in the case (from Plaintiff's perspective) was that her case was not moot and that she wanted an adjudication on future, hypothetical determinations. Plaintiff achieved no success on these issues. The Court therefore grants Plaintiff's motion for fees as to entitlement, but only for fees up to and including August 2, 2017.
This Court may award attorney's fees under ERISA to either party. Hardt, 560 U.S. at 245. Defendant argues that it should be awarded fees because (1) Defendant obtained success on the merits after August 2, 2017, (2) Plaintiff's case was frivolous after August 2, 2017, and (3) the manner in which Plaintiff's counsel litigated the case. The Court agrees with Defendant that Defendant achieved some success on the merits subsequent to August 2nd because after that date the case was no longer about Plaintiff obtaining a waiver of premium benefit. Instead, the case was about whether Plaintiff was entitled to some other kind of relief. Even so, in an abundance of caution, the Court deems it prudent to consider more than just Defendant's success on the merits. In considering whether Plaintiff's case was frivolous and the content of Plaintiff's counsel's filings, the Court is not required to use a specific factor-test, but it is a common practice for the following factors to aid a court in such a decision:
Freeman v. Cont'l Ins. Co., 996 F.2d 1116, 1119 (11th Cir.1993). These factors may guide, but not control, the Court's decision. Nachwalter v. Christie, 805 F.2d 956, 961-62 (11th Cir. 1986). None of the factors are necessarily decisive; various permutations and combinations can support an award of attorney fees. Maes v. Standard Ins. Co., No. 99-17463, 2001 WL 427277, at *2 (9th Cir. Feb. 12, 2001) (citing Paddock v. Morris, 783 F.2d 844, 846 (9th Cir. 1986)).
A party may be adjudicated culpable and in bad faith for persisting in litigation after the party should have recognized a claim as frivolous. Marquardt v. N. Am. Car Corp., 652 F.2d 715, 718 (7th Cir. 1981); Cowden v. Montgomery Cnty., 653 F.Supp. 1072, 1074 (S.D. Oh. 1986). Here, Plaintiff should have known that her case was moot and that there was no basis to continue litigation without an adverse benefits determination. Similarly, Plaintiff should have known that she could not seek adjudication of hypothetical future events, particularly when Plaintiff's counsel attests to having litigated ERISA issues for over thirty years. DE 71 at 15. Nonetheless, Plaintiff's refusal to concede the mootness of her case resulted in motion practice for two summary judgment motions, one motion for judgment on the pleadings, multiple orders to show cause, interrogatories from the Court, hearing time, an appeal, and a motion for rehearing en banc. Plaintiff's litigation continued despite her being on notice of the lack of a legal basis for her case for almost an entire year. These factors warrant an award of fees.
Although the Court agrees with Defendant that there is some basis in the record to infer that Plaintiff has the ability to pay a fee award, DE 81 at 16-17, the Court concludes for the reasons set forth below that the fee award should be against Plaintiff's counsel only. As a result, this factor is neutral at best.
Here, Plaintiff had many opportunities to discontinue her case because the Court and Defendant kept putting Plaintiff on notice of the weaknesses of her arguments. Because Plaintiff persisted and because Plaintiff's counsel's filings were very difficult to comprehend, the Court used case management procedures it had never used in before. Ultimately, the Court's efforts at case management and the Court's caution in affording Plaintiff the benefit of the doubt were wasted—many judicial resources were wasted on this case. The purpose of fee awards under ERISA is to "deter conduct that does not fulfill the purpose of ERISA." Loving v. Pirelli Cable Corp., 11 F.Supp.2d 480, 498 (D. Del. 1998). Plaintiff's conduct in this case should be deterred. This factor favors an award.
This factor is closely related to the deterrent value contemplated in the previous prong. When plans have to defend frivolous claims or pay "nuisance value" settlements on frivolous claims, there is a detrimental effect on the plan participants and beneficiaries as a class. For plans that are funded by trusts, which have limited assets, the defense costs and settlement payments deplete the funds available for administration and payment of legitimate claims. For plans that are funded by insurance policies, such as the plan at issue in the instant case, greater expenditures on defense of frivolous claims and payment of "nuisance value" settlements result in premium increases. Some plans are wholly or partially funded by the participants/employees, thereby directly impacting their cost of coverage. Where the premiums are wholly funded by the plan sponsor/employer, increases in premium often result in the decision to limit ever-rising premium expenses by diminishing and sometimes eliminating the available coverage. Benefit amounts may be decreased. Eligibility periods (the time before qualifying for coverage) and elimination periods (the time after a disabling condition before qualifying for benefits) may be lengthened. All of these changes would save the plan sponsor premiums, but would reduce the quality of coverage available to the plan participants and beneficiaries. Thus, by deterring frivolous claims and lawsuits, and the attendant costs of litigation and settlements, the courts may help to maintain lower insurance premiums, and in turn, increased benefits to plan participants as a class. The Defendant's plan participants should not have to bear the cost of Plaintiff's litigation. This factor favors an award.
In summary, all of the relevant factors favor an award of fees to Defendant. This was an extraordinary case. Plaintiff and her counsel persisted in pressing a moot claim for almost an entire year, without legal support, in such a way that the Court struggled to bring the case to any sort of closure. Plaintiff then sought an appeal and a petition for rehearing en banc. After Plaintiff lost her appeal, Plaintiff increased her fee demand by ten thousand dollars. The success on the merits in this case, once Plaintiff's case was mooted, was Defendant's. This is not a case where Plaintiff had a colorable legal theory that ultimately proved to be unsuccessful—there was no legal basis for Plaintiff to continue to litigate her claims after August 2, 2017. For all of the foregoing reasons, Defendant is entitled to a reasonable attorney's fee for all of the fees it incurred subsequent to August 2, 2017.
Defendant's counsel seeks compensation at the rate of $200 per hour. Defendant's request is supported by a legally sufficient affidavit, and Plaintiff's rate is more than reasonable as counsel has been practicing in Florida for 25 years, is a partner at his firm, and focuses his practice on insurance defense litigation. DE 71-1.
Turning to the number of hours sought, Defendant seeks compensation for 130.7 hours beginning on August 3, 2017 and running through the conclusion of this case on July 25, 2018. The Court has reviewed Defendant's billings records and the docket in this case, and the requested amount is reasonable given the significant motion practice over the course of almost an entire year. Furthermore, the Court notes that Defendant's billing records exhibit a certain level of restraint, as exemplified by the fact that Plaintiff's counsel's billing records, over the course of a similar period of time, are a factor of 128% greater than Defendant's own billable records. See id. at 23-24. The Court therefore awards Defendant its full requested amount of $200 per hour times 130.7 hours for a total award of $26,140.
Defendant also seeks compensation for 50.5 hours litigating Plaintiff's appeal. Given that Plaintiff's appeal was fully briefed, and included a petition for re hearing en banc, the Court agrees with Defendant that 50.5 hours (and the total amount sought) is a reasonable amount
This Court has discretion to award attorney's fees against a party, an attorney, or both. E.g., Frank v. Liberty Life Assurance Co., 149 F.Supp.3d 566, 575 (D. Md. 2015) ("An award of attorney's fees [under ERISA] may be assessed against either a party or an attorney.").
Baker v. Greater Kan. City Laborers, 716 F.Supp. 1231, 1229 (W.D. Miss. 1989). Here, the Court gave a detailed accounting of the history of this case as well as the content of Plaintiff's counsel's filings. If Plaintiff's counsel had brought Plaintiff's claims with cogent clarity, this case would have ended soon after August 2, 2017. But this case persisted for almost a year, the Court was in a systemic state of confusion, and Defendant expended considerable resources solely because of the manner in which Plaintiff's counsel litigated this case. Furthermore, Plaintiff's counsel, with his thirty years of ERISA experience, should have known that Plaintiff's case was moot and that there was no further justiciable controversy between the parties. Accordingly, the Court concludes that it would be unjust to award fees against Plaintiff when the source of the costs and delay in this case was primarily Plaintiff's counsel. The Court therefore exercises its discretion to award Defendant its fees against Plaintiff's counsel, but not Plaintiff.
Plaintiff seeks a total fee award of $53,923.25 for all hours expended in this case, including appeal and Plaintiff's petition for rehearing en banc. This request utilizes an hourly rate of $ per hour. In support of the claimed $400 hourly rate, Plaintiff submitted his own affidavit. DE 48-4. That affidavit provides a statement of counsel's experience and the conclusory opinion that $400 is a reasonable rate. Id. It does not state that counsel has been awarded $400 per hour by any court or that counsel has collected $400 from any client. The affidavit is therefore insufficient as a matter of law. Norman, 836 F.2d at 1299.
Plaintiff also submits the affidavit of attorney Steven P. Krafchick. DE 48-3. Mr. Krafchick attests that he is licensed in the states of Washington and Oregon. Id. He states that he has handled one ERISA case in the state of Florida, without indicating which district the case was in or how recently the case was decided, and attests that $400 per hour is a reasonable rate. Id. The Court finds this affidavit to be unpersuasive.
The Court may rely on its own expertise for establishment of an appropriate rate. Norman, 836 F.2d at 1303. Here, based upon the history of this case and the content of Plaintiff's filings, the Court concludes that Plaintiff's counsel should be compensated at a rate equal to fifty percent greater than the rate the Court has awarded to counsel for the defense (also an experienced ERISA attorney) of $300 per hour (Defendant concedes that $300 would be appropriate compensation for Plaintiff in this case).
Turning to the number of billed hours, the Court has ruled that Plaintiff shall only be compensated for the number of hours running through August 2, 2017. Using that date, Plaintiff seeks compensation for approximately 64.3 hours. Pursuant to cases such as Norman v. Housing Authority, the Court has reviewed Plaintiff's billing records hour-by-hour. 836 F.2d at 1304. The Court is required to exclude billed hours that are excessive, or redundant, or otherwise unnecessary. Id. at 1301.
Before filing suit on March 7, 2017, Mr. Sullivan spent 15.5 hours preparing the Complaint. DE 48-5. This was excessive in light of Plaintiff's counsel's experience level and the fact that only the waiver of premium claim was justiciable. Courts in the Eleventh Circuit have routinely reduced fee claims based on excessive time spent by experienced litigators in preparing the Complaint. See, e.g., Campbell v. United of Omaha Life Ins. Co., 283 F.Supp.3d 1138, 1150 (N.D. Ala. 2017) (reducing time spent preparing ERISA complaint from 8.8 hours to 6.8); Duncan v. Golden Rod Broilers, Inc., No. 06-S-1076, 2008 WL 11422446, at *5 (N.D. Ala. July 22, 2008) (finding it "unreasonable to devote more than 5 hours to drafting the original complaint"). A straight-forward claim for the waiver of premium benefit should not have taken more than 5 hours to prepare for an attorney who has handled ERISA claims for 30 years. The Court adjusts Plaintiff's billed hours accordingly, a reduction of 10.5 hours.
Plaintiff's counsel spent 8.8 hours researching and drafting a response to a simple Rule 8 motion to dismiss, where the only issue was the failure to provide short and concise allegations. DE 48-5. He then spent 36.5 hours on researching and drafting a motion for summary judgment from May 10, 2017 through July 18, 2017. Id. The statement of facts for that motion was mostly cut and pasted from the Complaint. Much of the research was duplicative of that which was done for the Complaint. The arguments and authorities focused on regulatory issues that were never adjudicated. In short, these hours were mostly unnecessary. The Court concludes that Plaintiff's response to the Rule 8 motion and Plaintiff's motion for summary judgment should be reduced to 15 hours, a reduction of 30.3 hours.
For the foregoing reasons, the Court reduces the number of hours awardable to Plaintiff (for time billed through August 2, 2017) by (30.3 + 10.5) 40.8 hours. Plaintiff's 64.3 billed hours are therefore reduced to 23.5 hours.
For the foregoing reasons, the Court awards Plaintiff fees at $300 per hour times 23.5 hours for a total award of $7,050.00. The Court also awards Plaintiff her requested amount of costs ($1,253.25) without comment.
For the reasons set forth above, it is
