Aflac Inc v. Diaz-Verson et al

Filing 134

ORDER denying 105 Motion for Attorney Fees. Ordered by Judge Clay D. Land on 09/11/2012.(aaf)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
COLUMBUS DIVISION
AFLAC
INCORPORATED,
in
its
capacity as Plan Sponsor and
Administrator
of
AMERICAN
FAMILY CORPORATION RETIREMENT
PLAN FOR SENIOR OFFICERS, and
AMERICAN
FAMILY
CORPORATION
RETIREMENT
PLAN
FOR
SENIOR
OFFICERS,

*
*
*
CASE NO. 4:11-CV-81 (CDL)
*
*

Plaintiffs,
*
vs.
*
SALVADOR DIAZ-VERSON, JR., and
PORTER BRIDGE LOAN COMPANY, *
INC.,
*
Defendants.
O R D E R
After entry of final judgment in this declaratory judgment
and interpleader action, AFLAC Incorporated (“AFLAC”) filed a
Motion

for

reimbursed

Attorneys’
$83,898.00

Fees
from

(ECF
the

No.

105),

interpleaded

seeking
funds.

asserts two separate bases for the recovery of its fees.
it

maintains

interpleader
litigation

that
action

expenses

a

disinterested
is

generally

incurred

in

party

that

entitled
the

to

to

be

AFLAC
First,

initiates

an

recover

its

interpleader

action.

Alternatively, it argues that as a “prevailing party,” it is
entitled to recover its litigation expenses under the Employee

Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §
1132(g)(1).
I.

For the following reasons, the motion is denied.

Recovery of Litigation Expenses in Interpleader Actions
In the Eleventh Circuit, “costs and attorneys’ fees are

generally

awarded,

in

the

discretion

of

the

court,

to

the

plaintiff who initiates the interpleader as a mere disinterested
stake holder.”

Prudential Ins. Co. of Am. v. Boyd, 781 F.2d

1494, 1497 (11th Cir. 1986); see also Kawasaki Kisen Kaisha,
Ltd. v. All City Used Auto Parts, Inc., 306 F. App'x 480, 482
(11th Cir. 2009) (per curiam) (applying the prevailing rule that
“attorney's

fees

generally

are

actions.”).

“The usual practice is to tax the costs and fees

against the interpleader fund[.]”
Court,

however,

award of fees.

ultimately

has

justified

in

interpleader

Boyd, 781 F.2d at 1498.
complete

discretion

over

The
the

Gulf Oil Corp. v. Olivier, 412 F.2d 938, 946

(5th Cir. 1969).1

The justifications

for generally awarding

attorney's fees to parties who initiate an interpleader action
are as follows:
First, an interpleader action often yields a costefficient resolution of a dispute in a single forum,
rather than multiplicitous, piecemeal litigation.
Second, the stakeholder in the asset often comes by
the asset innocently and in no way provokes the
dispute among the claimants.
Third, fees for the
1

In Bonner v. City of Prichard, 661 F.2d 1206, 1207 (11th Cir. 1981)
(en banc), the Eleventh Circuit adopted as binding precedent all
decisions of the former Fifth Circuit handed down prior to the close
of business on September 30, 1981.

2

stakeholder typically are quite minor and therefore do
not greatly diminish the value of the asset.
Chase Manhattan Bank v. Mandalay Shores Coop. Hous. Ass’n, Inc.
(In re Mandalay Shores Coop. Hous. Ass'n, Inc.), 21 F.3d 380,
383 (11th Cir. 1994).
In this interpleader action, however, AFLAC’s conduct was
not

consistent

stakeholder.

with

that

of

an

entirely

disinterested

While AFLAC certainly had the right to engage in

that conduct, it does not have the right to be paid for it from
the interpleaded funds.

A simple review of the legal work for

which AFLAC seeks reimbursement demonstrates that it actively
litigated the legal issues that were ultimately resolved by the
Court.

It did more, much more, than simply pay the funds into

Court, and then maintain an independent, disinterested posture.
The Court need not speculate as to AFLAC’s motives for taking
such a keen interest in the resolution of the claims between the
other parties; it is sufficient that most of AFLAC’s legal fees
are attributable to its conduct not as a mere disinterested
stakeholder but as an interested party to the litigation.

For

this reason, the Court finds that AFLAC should not be awarded
its expenses of litigation from the interpleaded funds.2

2

The Court further finds that it cannot ascertain from AFLAC’s
submissions what lesser amount it may be due for legal work that was
done solely in its capacity as a disinterested stakeholder.

3

II.

Recovery of Litigation Expenses Under ERISA
AFLAC alternatively contends that it is entitled to fees

under

ERISA,

reasonable

29

U.S.C.

attorneys’

§

1132(g)(1),

fees

in

the

which

Court’s

authorizes
discretion.

Confirming the Court’s observation that it behaved more like an
active litigant than a disinterested stakeholder in this action,
AFLAC argues that it should be awarded its litigation expenses
because it in fact “prevailed” in the action.

The standard for

the recovery of litigation expenses by a “prevailing party” in
an ERISA action was explained by the Supreme Court in Hardt v.
Reliance Standard Life Insurance Co.:
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) (internal citations and quotation
marks omitted).

In this interpleader action, AFLAC’s position

on the substantive legal issues ultimately prevailed.
however,

was

not

actually

a

claimant

to

those

funds.

AFLAC,
The

controversy was between the Defendants in the action, who took
different positions as to how the payments from AFLAC should be
treated and who had strong interests in the resolution of this

4

issue.

Under these circumstances, the Court finds that AFLAC

was not a “prevailing party” for purposes of awarding litigation
expenses under ERISA.
CONCLUSION
For the reasons explained above, the Court denies AFLAC’s
Motion for Attorneys’ Fees (ECF No. 105).
IT IS SO ORDERED, this 11th day of September, 2012.
S/Clay D. Land
CLAY D. LAND
UNITED STATES DISTRICT JUDGE

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