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Monique Pomerleau v. Health Net of California

November 15, 2012

MONIQUE POMERLEAU, PLAINTIFF,
v.
HEALTH NET OF CALIFORNIA, INC. DEFENDANT.



The opinion of the court was delivered by: Dean D. Pregerson United States District Judge

O

ORDER GRANTING PLAINTIFF'S MOTION FOR ENTRY OF JUDGMENT AND FOR ATTORNEY'S FEES AND COSTS [Dkt. No. 36]

Presently before the court is Plaintiff's Motion for Entry of Judgment and for Attorney's Fees and Costs. Having considered the submissions of the parties and heard oral argument, the court grants the motion.

I. Background

Monique Pomerleau ("Plaintiff") had health insurance provided under a welfare benefit plan. This plan was governed by the Employment Retirement Income Security Act of 1974 ("ERISA"). Health Net of California ("Defendant") issued the insurance to Plaintiff under the benefit plan. (Stipulated Facts ("SF") ¶¶ 1-2.)

During a car accident in February 2010, Plaintiff was ejected from her vehicle. After she was airlifted to Arrowhead Regional Medical Center, it was determined that she had sustained many serious injuries including a subdural hematoma and several fractured bones. (SF ¶ 3.) Throughout the next five months, Plaintiff suffered many complications such as respiratory failure, pneumonia, an altered mental status, and the re-fracturing of her right clavicle. Plaintiff underwent several surgeries during this time. (SF ¶¶ 3-5.) Up until July 2010, "Defendant had paid for all benefits due under the plan for these admissions." (SF ¶¶ 3-5.)

From July to December 2010, Plaintiff was evaluated three separate times by a brain injury rehabilitation facility, Centre for Neuroskills ("CNS"), and it concluded that Plaintiff was a good candidate for post-acute brain injury programming. (SF ¶ 6.) In December of 2010, Defendant denied the request for coverage for treatment at CNS because CNS was an out-of-network facility and Plaintiff did not meet the criteria for coverage. (SF ¶¶ 7-8.) After Plaintiff made an appeal supported by Plaintiff's primary care physician, Defendant partially overturned the denial and offered Plaintiff coverage at two other rehabilitation facilities -Northridge Hospital and Rancho Los Amigos. (SF ¶¶ 10-11.)

Plaintiff spent several weeks at Rancho Los Amigos. On February 22, 2011, Rancho Los Amigos recommended a transfer to CNS and Plaintiff's primary care physician submitted a request for referral to Defendant. (SF ¶¶ 13, 15.) Plaintiff then filed a complaint in this action and served the Defendant on March 2, 2011. Two weeks later, on March 16, 2011, Defendant agreed to pay for Plaintiff's treatment at CNS.(SF ¶¶ 17-22.) The total amount Defendant has paid is in excess of $650,000 (SF ¶ 23.)

Plaintiff asks that she be awarded attorney's fees and costs. (Mot. at 1.) Additionally, she asks that the court enter a judgment in her favor if needed to support such an award. (Mot. at 1.) Defendant argues that attorney's fees and costs are not appropriate because once it had agreed to provide the benefits, no further legal services were required and the action was moot. (Opp'n at 1-2.)

II. LEGAL STANDARD

In an action brought under ERISA, "the court in its discretion may allow a reasonable attorney's fee and costs of the action to either party." 29 U.S.C. § 1132(g)(1). The Ninth Circuit has held that "this section should be read broadly to mean that a plan participant or beneficiary, if he prevails in his suit under § 1132 to enforce his rights under his plan, should ordinarily recover an attorney's fee unless special circumstances would render such an award unjust." Carpenters Health and Welfare Trust for S. Cal. v. Vonderharr, 384 F.3d 667, 674 (9th Cir. 2004) (internal quotation marks and alterations omitted); see also Smith v. CMTA-IAM Pension Trust, 746 F.2d 587, 589 (9th Cir. 1984).

Further, the Supreme Court has held that either party can be awarded fees and costs as long the party requesting the fees "has achieved some degree of success on the merits." Hardt v. Reliance Standard Life Ins. Co., 130 S. Ct. 2149, 2152 (2010) (citations and internal quotations omitted); see also Ruckelshaus v. Sierra Club, 463 U.S. 680 (1983)(holding that attorney's fees are not appropriate unless the claimant shows some degree of success on the merits in an action under the Clean Air Act). However, a "lengthy inquiry into the question whether a particular party's success was substantial or occurred on a central issue" is not needed for courts to determine whether some success on the merits resulted from the outcome of the litigation. Hardt, 130 S. Ct. at 2158 (citations and internal quotations omitted).

Once courts determine whether a party has achieved success on the merits to some degree, courts must consider the Hummell factors. Simonia v. Glendale Nissan/Infiniti Disability Plan, 608 F.3d 1118, 1119 (9th Cir. 2010). Under Hummell v. S.E. Rykoff & Co., 634 F.2d 446, 453 (9th Cir. 1980), some of the factors to consider include:

(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 under 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.

III. DISCUSSION

A. Success on the Merits As discussed above, the party seeking an award of attorney's fees need not prevail on the merits, but merely "achiev[e] some success, even if not major success." Hardt, 130 S. Ct. at 2157-58. In her Complaint, Plaintiff alleged that Defendant was obligated to pay for the treatment at CNS and requested that Defendant do so. (Compl. at 4:6-17, 6:1-3.) The Complaint was served on March 2, 2011. (SF ¶ 16.) Two weeks later, on March 16, 2011, Defendant agreed to pay for Plaintiff's treatment at CNS. (SF ¶¶ 17-22.) Plaintiff received the relief she sought in her Complaint, and thus the litigation process had "some success."

B. Hummell Factors Courts use the Hummell factors to determine whether a party has a right to fees, but no single Hummell factor "is necessarily decisive, and some may not be pertinent in a given case." Carpenters S. Cal. Admin. Corp. V. Russell, 726 F.2d 1410, 1416 (9th Cir. 1984). "When [courts] apply the Hummell factors, [courts] must keep at the forefront ERISA's remedial purposes that should be liberally construed in favor of protecting participants in employee benefit plans." McElwaine v. US West, Inc., 176 F.3d 1167, 1172 (9th Cir. 1999) (citations and internal quotations omitted).

1. Culpability or Bad Faith Defendant argues that it had already agreed to pay the benefits before appearing in this action. (Opp'n at 10:2-3.) If this were true, it would constitute good faith and weigh against awarding attorney's fees. See Simonia, 608 F.3d at 1121. In Simonia, the insurer filed a counterclaim against the insured because the insurer believed it overpaid benefits by $22,309.51. Id. Later, after the insurer was given new, relevant information about the insured's benefits, the insurer ...


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