Hollingshead v. Stanley Works, The et al

Filing 79

ORDER granting in part and denying in part 76 Plaintiff's Motion for Attorney Fees, Costs, and Prejudgment Interest. Plaintiffs Motion for Attorneys fees and costs is GRANTED, and Plaintiff is awarded a total of $28,976.44 in attorneys fees and costs; Defendants shall pay the sum awarded to Plaintiff on or before January 11, 2013; and Plaintiffs Motion for Prejudgment Interest is DENIED, by Judge William J. Martinez on 12/11/2012.(ervsl, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 10-cv-03124-WJM-CBS
JOHN S. HOLLINGSHEAD,
Plaintiff,
v.
THE STANLEY WORKS LONG TERM DISABILITY PLAN and
AETNA LIFE INSURANCE COMPANY,
Defendants.

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION FOR
ATTORNEY’S FEES, COSTS, AND PREJUDGMENT INTEREST

In this action involving long term disability benefits, Plaintiff John S. Hollingshead
brought claims for benefits due under Section 502(a)(1)(B) of the Employee Retirement
Income Security Act (“ERISA”), 29 U.S.C. § 1132(a)(1)(B), and related claims against
Defendants the Stanley Works Long Term Disability Plan (“Stanley”) and Aetna Life
Insurance Company (“Aetna”). (ECF No. 1.) Before the Court is Plaintiff’s Motion for
Attorney’s Fees, Costs, and Prejudgment Interest (“Motion”). (ECF No. 76). For the
reasons set forth below, Plaintiff’s Motion is granted in part and denied in part.
I. BACKGROUND
Plaintiff filed his Complaint on December 23, 2010. (ECF No. 1.) Plaintiff
brought ERISA and related claims against both Defendants, and brought a claim for
civil theft under Colo. Rev. Stat. § 18-4-405 against Defendant Aetna.1 (Id.) Plaintiff
1

On August 29, 2011, Plaintiff dismissed with prejudice all claims against former
Defendant The Stanley Works. (ECF No. 56.)

alleged that he was entitled to long term disability benefits under the Stanley Works
Long Term Disability Plan (the “Plan”), but that Defendant Aetna did not provide those
benefits or make a final decision regarding Plaintiff’s claim. (Id.)
On October 20, 2011, Aetna reversed its denial of Plaintiff’s claim, finding that
Plaintiff was eligible for benefits under the Plan. (ECF No. 76, Ex. B.) On December 2,
2011, Aetna issued an award letter calculating Plaintiff’s benefits and making payment
of benefits under Plaintiff’s policy. (Id., Ex. C.) Pursuant to the terms of Aetna’s award
letter, Aetna has continued to pay benefits to Plaintiff to the present time. (ECF No. 76
at 5.)
On March 21, 2012, the Court granted in part and denied in part Defendants’
Motions to Dismiss. (ECF No. 68.) Specifically, the Court dismissed Plaintiff’s claim for
violation Colo. Rev. Stat. § 10-3-1116, but denied Defendants’ Motion to Dismiss
Plaintiff’s civil theft claims against Aetna. (Id.) Plaintiff’s civil theft claims were
subsequently dismissed without prejudice. (ECF No. 73.)
On May 18, 2012, Plaintiff filed a Motion for Attorney’s Fees, Costs, and
Prejudgment Interest. (ECF No. 76.) Plaintiff seeks a total of $30,501.51 in fees and
costs, and an unspecified amount of prejudgment interest on his award of disability
benefits. (ECF No. 76-4.) Defendants filed their Response to Plaintiff’s Motion on June
8, 2012 (ECF No. 77), and Plaintiff filed his Reply in Support of his Motion on June 19,
2012 (ECF No. 78).
The Motion is now ripe for resolution.
II. LEGAL STANDARD
Pursuant to 29 U.S.C. § 1132(g)(1), in an ERISA action, courts have the
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discretion to allow reasonable attorneys’ fees and costs to either party. A party need
not be a “prevailing party” under 29 U.S.C. § 1132(g)(1) in order for the court to properly
award fees. Hardt v. Reliance Standard Insurance Company, 130 S.Ct. 2149 (2010).
Rather, courts consider the following factors in exercising their discretion to award fees
and costs: (1) the degree of the offending party’s culpability or bad faith; (2) the degree
of the ability of the offending party to satisfy an award of attorneys’ fees; (3) whether or
not an award of attorneys’ fees against the offending party would deter other persons
acting under similar circumstances; (4) the amount of benefit conferred on members of
the plan as a whole; and (5) the relative merits of the parties’ positions. Id. at 2157-58.
A district court need not consider each factor, and no single factor is dispositive.
Deboard v. Sunshine Mining and Refining Co., 208 F.3d 1228, 1244 (10th Cir. 2000). If
the factors support an award of attorneys’ fees, a district court must limit the amount of
fees and costs to a reasonable amount. Hensley v. Eckerhart, 461 U.S. 424, 433
(1983).
III. ANALYSIS
A. Attorney’s Fees and Costs
Plaintiff argues that he is entitled to his attorney’s fees and costs because he
achieved success on the merits of his claim, and because the five factors described
above favor an award. (ECF No. 76 at 7-11.) In response, Defendants contend that
Plaintiff is not entitled to his fees and costs because he did not obtain a judgment to
support such a finding, and because the factors do not support an award in this case.
(ECF No. 77 at 8-14.) Defendants also argue that if fees and costs are awarded, they

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should be substantially reduced. (Id. at 14-19.)
Based upon a thorough analysis of the briefs and the legal standards described
above, the Court finds that Plaintiff did achieve some success on the merits and as a
consequence is entitled to an award of attorney’s fees and costs.
Only after Plaintiff filed this lawsuit and engaged in extensive litigation and
motion practice did Defendant Aetna ultimately reverse its finding and award Plaintiff
benefits under the Plan. Indeed, Plaintiff endured a nearly two-year fight to obtain
benefits that were originally paid to him, but later taken away. On June 24, 2010,
Defendant Aetna’s appeal specialist reversed the denial of Plaintiff’s claim and sent the
claim back to an “operations team.” (ECF No. 76 at 2-6.) However, Aetna
representatives then reversed their own appeal specialist, denying Plaintiff’s claim on
March 15, 2011. (Id.) More than six months later, Aetna reversed itself yet again,
determining that Plaintiff was entitled to benefits. (Id.)
On these facts, under the first factor described above, Defendants’ actions
support an award of fees and costs to Plaintiff. See Hardt, 130 S.Ct. at 2157-58.
Despite Defendants’ argument, a plaintiff is not required to first obtain a judgment on
the merits in order to recovery reasonable attorneys’ fees and costs in an ERISA action,
and the Court will not impose such a hurdle. Id.; see also Schneider v. Wis. UFCW
Unions and Employers Health Plan, 13 F. Supp. 2d 837, 840 (E.D. Wis. 1998) (finding
no evidence of actual bad faith, but noting that the plan’s “hard-nosed approach” leaned
“inappropriately far towards protecting its assets to the detriment of a beneficiary”). As
such, the first factor supports an award of fees.

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Under the second factor, Plaintiff alleged the Defendant Aetna has the ability to
satisfy an award of attorneys’ fees, and Defendant Aetna has not denied that
allegation.2 Under the third factor, an award of fees will likely lead Defendants to
properly award benefits in a more efficient and timely manner in the future, without the
need for extensive and costly litigation. Factors four and five described above are not
particularly relevant to the facts of this case, and have little to no impact on the Court’s
decision.
Based on the factors described above, the Court concludes that Plaintiff’s
benefits will be unjustly diminished if he is not awarded the reasonable attorney’s fees
and costs he incurred in the litigation of the instant action. Therefore, the Court finds
that an award of attorney’s fees and costs is proper in this case.
B. Amount of Award
The Court next turns to an analysis of the amount of reasonable attorney’s fees
and costs to be awarded. Plaintiff seeks a total of $30,501.51 in fees and costs.3 (ECF
No. 76-4.) Defendants argue that Plaintiff’s claim for fees is unreasonable, includes
noncompensable fees and costs, and must be substantially reduced. (ECF No. 77 at
14-19.) Defendants seek a reduction of $20,835.00 in attorney’s fees and a reduction
in costs of $1,849.91. (Id.) Defendants further assert that, at most, Plaintiff should be

2

Aetna’s 2011 Annual Report states that the company achieved “full-year
operating earnings of $1.97 billion . . .” Aetna 2011 Annual Report, available at
http://www.aetna.com/2011annualreport/financial-highlights.html.
3

Plaintiff’s counsel has detailed Plaintiff’s fees and costs incurred in connection
with the handling of his claims in two separate affidavits attached to Plaintiff’s Motion. (ECF No.
76, Exs. D, E.)

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awarded $6,975.00 in attorney’s fees for prosecution of Plaintiff’s claims over the
course of the last two and one-half years. (Id.)
An award of fees and costs by a District Court must be reasonable. Hensley,
461 U.S. at 433; see also Thompson v. Union Sec. Ins. Co., 07-cv-1062, 2011 WL
346467, at *4 (D. Kan. Feb. 02, 2011). However, “[t]he amount of the award [ ] remains
within the district court’s discretion.” Thompson, 2011 WL 346467, at *4 (citing Carter
v. Sedgwick County, 36 F.3d 952, 956 (10th Cir. 1994); see also Harris Mkt. Research
v. Marshall Mktg. & Commc’ns, Inc., 948 F.2d 1518, 1527-28 (10th Cir. 1991) (applying
an abuse of discretion standard and noting “an appellate court plays a ‘limited role’ in
reviewing a district court’s award of attorneys’ fees and costs, and deference is given to
a district court’s judgment on the matter”) (internal citation omitted).
The Court finds that the requested amount of attorney’s fees and costs is for the
most part reasonable.4 However, in its discretion, the Court will reduce the total
amount of attorney’s fees and costs awarded to Plaintiff by five percent. Such a
reduction is appropriate as some of the time entries by Plaintiff’s counsel appear to be
slightly excessive for the nature of the task involved. See Thompson, 2011 WL
346467, at *4-8. Accordingly, Plaintiff is awarded a total of $28,976.44 in fees and
costs.

4

While Defendants argue that a number of Plaintiff’s counsel’s time entries are
improper, Plaintiff’s counsel has affirmed that any entries cited by him do not include time for
clerical work actually performed by the paralegal, a clerk, or by an administrative assistant, and
do not include any time not directly related to this litigation. (ECF No. 78 at 9-13.) As Plaintiff’s
counsel is a longstanding attorney and officer of the Court, the Court is satisfied regarding his
representations on the disputed billing entries.

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C. Prejudgment Interest
Plaintiff also requests an unspecified award of prejudgment interest for the
withholding of his benefits. (ECF No. 76 at 10.) An award of prejudgment interest in an
ERISA case is within the Court’s discretion. LaAsmar v. Phelps Dodge Corp., 605 F.3d
789 (10th Cir. 2010); Kellogg v. Metro. Life Ins. Co., 549 F.3d 818, 825 (10th Cir. 2008).
However, there has been no judgment in this case. Plaintiff has not provided any legal
authority, and the Court has not found authority, that would support an award of
prejudgment interest in the absence of a judgment. Because there is no judgment upon
which a prejudgment interest award could be based, Plaintiff’s request for prejudgment
interest is denied.
IV. CONCLUSION
For the reasons set forth above, the Court ORDERS as follows:
1.

Plaintiff’s Motion for Attorney’s Fees, Costs, and Prejudgment Interest (ECF No.
76) is GRANTED IN PART and DENIED IN PART;

2.

Plaintiff’s Motion for Attorney’s fees and costs is GRANTED, and Plaintiff is
awarded a total of $28,976.44 in attorney’s fees and costs;

3.

Defendants shall pay the sum awarded to Plaintiff on or before January 11, 2013;
and

4.

Plaintiff’s Motion for Prejudgment Interest is DENIED.

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Dated this 11th day of December, 2012.
BY THE COURT:

_______________________
William J. Martínez
United States District Judge

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