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Schofield v. Metropolitan Life Insurance Co.

April 16, 2009

SUSAN SCHOFIELD, PLAINTIFF,
v.
METROPOLITAN LIFE INSURANCE COMPANY, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Garland E. Burrell, Jr. United States District Judge

ORDER*fn1

Plaintiff moves for attorney's fees under Section 502(g) of the Employee Retirement Income Security Act ("ERISA"), arguing she is "entitled to a reasonable attorney's fee [since she] succeed[ed] on [a] significant issue in litigation which achieves some of the benefit [she] sought in bringing suit," quoting Smith v. CMTA-IAM Pension Trust, 746 F.2d 587, 589 (9th Cir. 1984). Plaintiff prevailed in the Ninth Circuit on the issue that Defendant Metropolitan Life Insurance Co. ("MetLife")] "failed to follow the Plan definition of 'Own Occupation'" when it did not award her benefits under this plan provision. (Dkt. No. 55, Ninth Circuit Remand Order, at 4.) The Ninth Circuit reversed the district court's contrary ruling and remanded the case for the district court to determine the amount of retroactive benefits to which Plaintiff was entitled. After the remand, the issue was briefed and argued at a hearing following which the district court awarded Plaintiff retroactive benefits for the "Own Occupation" period under the plan, and remanded to MetLife Plaintiff's claim for retroactive benefits for the "Any Occupation" period under the plan.

Five factors are considered when assessing whether to award attorney's fees in ERISA cases:

(1) the degree of the opposing parties' culpability or bad faith; (2) the ability of the opposing parties to satisfy an award of fees; (3) whether an award of fees against the opposing parties would deter others from acting in similar circumstances; (4) whether the parties requesting fees sought to benefit all participants and beneficiaries of an ERISA plan or to resolve a significant legal question regarding ERISA; and (5) the relative merits of the parties positions.

Smith, 746 F.2d at 589-90 (citing Hummell v. S.E. Rykoff & Co., 634 F.2d 446, 453 (9th Cir. 1980)).

Here, the first factor weighs in favor of awarding attorney's fees since the Ninth Circuit found MetLife abused its discretion when it erroneously applied the terms of the plan to Plaintiff's claim. See Fontana v. Guardian Life Ins., No. C 08-01231, 2009 WL 585811, at *1 (N.D. Cal. Mar. 4, 2009) (stating "while the Court does not find that defendant acted in bad faith, defendant's abuse of discretion was apparent" and thus this factor weighs in favor of awarding fees).

MetLife concedes the second factor weighs in favor of awarding attorney's fees since it is able to satisfy a fee award. (Opp'n at 9:25.) The third factor also weighs in favor of awarding fees since "a fee award would likely deter defendant and other disability benefit plan administrators from misinterpreting policy language or eligibility, or would at least make them more careful in their interpretation and application in disability benefits cases." Lowe v. Unum Life Ins. Co. of Am., No. CIV. S-05-00368, 2007 WL 4374020, at *2 (E.D. Cal. Dec. 14, 2007) (citation omitted)). The fourth factor also weighs in favor of awarding fees since even though "[P]laintiff's motivation in bringing [this action] was rooted in her desire to recover her own benefits, others subject to . . . denials similar to the one at issue in this case will likely benefit" from a favorable decision for Plaintiff because the decision perhaps provides employers with an incentive to carefully read each plan provision. Lowe, 2007 WL 4374020, at *2. Finally, the fifth factor weighs in favor of awarding fees since Plaintiff received retroactive benefits for the "Own Occupation" period. Smith, 746 F.2d at 591 (stating the plaintiff "received a portion of what he brought suit to recover, and so crossed the 'statutory threshold' entitling him to recover fees from the defendant" (citing Hensley v. Eckerhart, 461 U.S. 424, 433 (1983))). Since all factors favor Plaintiff, she is entitled to an award of reasonable attorney's fees.

"[T]he proper method for determining the amount of attorney's fees in ERISA actions" in the Ninth Circuit is "the hybrid lodestar/multiplier approach." Van Gerwen v. Guarantee Mut. Life Co., 214 F.3d 1041, 1045 (9th Cir.2000).

[This] approach has two parts. First, a court determines the "lodestar" amount by multiplying the number of hours reasonably expended on the litigation by a reasonable hourly rate. The party seeking an award of fees must submit evidence supporting the hours worked and the rates claimed.

A district court should exclude from the lodestar amount hours that are not reasonably expended because they are "excessive, redundant, or otherwise unnecessary."

Second, a court may adjust the lodestar upward or downward using a "multiplier" based on factors not subsumed in the initial calculation of the lodestar. The lodestar amount is presumptively the reasonable fee amount, and thus a multiplier may be used to adjust the lodestar amount upward or downward only in "rare" and "exceptional" cases, supported by both "specific evidence" on the record and detailed findings by the lower courts that the lodestar amount is unreasonably low or unreasonably high.

Id. (internal quotations and citations omitted).

"[T]he established standard when determining a reasonable hourly rate is the rate prevailing in the community for similar work performed by attorneys of comparable skill, experience, and reputation." Camacho v. Bridgeport Financial, Inc., 523 F.3d 973, 979 (9th Cir. 2008) (quotation and citation omitted). "Generally, when determining a reasonable hourly rate, the relevant community is the forum in which the district court sits." Id.

[T]he burden is on the fee applicant to produce satisfactory evidence - in addition to the attorney's own affidavits - that the requested rates are in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience and reputation. . . . [A]ffidavits of the plaintiffs' attorney[s] and other attorneys regarding prevailing fees in the community, ...


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