Sharp v. United Mine Workers of America Health & Retirement Funds, an Association

Filing 42

OPINION: Plaintiff's Petition for Attorney's Fees and Costs (d/e 33 ) is GRANTED. Plaintiff is awarded attorney's fees in the amount of $67,750.00. Plaintiff is also awarded costs totaling $400.00 and prejudgment interest totaling $25,148.78. (SEE WRITTEN OPINION.) Entered by Judge Sue E. Myerscough on 3/3/2021. (GL)

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E-FILED

Thursday, 04 March, 2021 08:21:08 AM
Clerk, U.S. District Court, ILCD

IN THE UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF ILLINOIS
SPRINGFIELD DIVISION
WILLIAM R. SHARP,
Plaintiff,
v.
TRUSTEES OF THE UMWA 1974
PENSION TRUST,
Defendants.

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Case No. 18-cv-03056

OPINION
SUE E. MYERSCOUGH, U.S. District Judge:
This cause is before the Court on Plaintiff William R. Sharp’s
Petition for Attorney’s Fees and Costs (d/e 33). For the reasons
discussed below, Plaintiff’s Petition is GRANTED. Plaintiff is
awarded attorney’s fees in the amount of $64,750.00, costs totaling
$400.00, and prejudgment interest totaling $25,148.78.
I.

BACKGROUND

In March 2018, Plaintiff filed a Complaint (d/e 1) against the
Trustees of the United Mine Workers of America 1974 Pension Trust
seeking to recover disability benefits under a pension plan governed
by the provisions of the Employee Retirement Income Security Act

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of 1974 (“ERISA”). Plaintiff filed an Amended Complaint (d/e 16) in
August 2018, and in October 2018 the parties filed opposing
motions for summary judgment (d/e 19, 21). Plaintiff alleged that
he had injured his low back in a workplace accident that occurred
while he was employed by a signatory company to the United Mine
Workers of America 1974 Pension Plan (“Plan”), that he was entitled
to disability benefits under the Plan as a result of this injury, and
that Defendants’ denial of his 2015 application for disability
benefits was therefore arbitrary and capricious. Defendants argued
that Plaintiff had not proven that the mine accident in question was
substantially responsible for his disability and that Defendants’
decision to deny Plaintiff disability benefits had therefore not been
arbitrary and capricious. In February 2020, this Court issued an
Opinion (d/e 31) finding that Plaintiff’s 2003 mine injury had
aggravated a preexisting back condition and thereby rendered him
disabled. The Court rejected Defendants’ argument that Plaintiff
was not eligible for disability benefits under the Plan unless the
2003 injury was “substantially responsible” for Plaintiff’s disability.
The Court also held that Defendants’ interpretation of the Plan
during the administrative proceedings that followed Defendants’
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2016 denial of Plaintiff’s application for disability benefits was
arbitrary and capricious. The Court granted summary judgment in
Plaintiff’s favor and awarded Plaintiff disability benefits under the
Plan.
In March 2020, Plaintiff filed the pending Motion for Attorney’s
Fees and Costs (d/e 33). Plaintiff initially sought $70,065.00 in
attorney’s fees, as well as $400.00 in costs and $44,898.76 in
prejudgment interest. See d/e 34, pp. 1, 6, 8. Plaintiff has since
revised his initial request and now seeks $64,750.00 in attorney’s
fees, $400.00 in costs, and $25,148.78 in prejudgment interest.
See d/e 41. Plaintiff’s requested attorney’s fee award represents a
total of 185 billable hours at a rate of $350.00 per hour. See d/e
41–2. Plaintiff supports the request with an affidavit filed by Grady
E. Holley, one of Plaintiff’s attorneys (d/e 33–1), a sworn declaration
of attorney John A. Baker regarding the market value of the services
rendered by Plaintiff’s counsel (d/e 33–5), and a detailed invoice
listing the hours expended on this litigation by Plaintiff’s attorneys
(d/e 41–2).
Defendants have filed a Response (d/e 36) arguing that
attorney’s fees should not be awarded because Defendants’
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position, though ultimately unsuccessful, was substantially
justified and taken in good faith. Defendants also argue that if
attorney’s fees are awarded the hourly rate should be set at between
$210 and $250 per hour and that prejudgment interest should not
be awarded in this case.
II.
A.

ANALYSIS

Plaintiff is Entitled to Reasonable Attorney’s Fees
In ERISA litigation, a plaintiff who achieves “some degree of

success on the merits” is eligible for an award of attorney’s fees.
Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 255 (2010).
Once eligibility is established, the Seventh Circuit “has recognized
two tests for analyzing whether attorney’s fees should be awarded to
a party in an ERISA case.” Kolbe & Kolbe Health & Welfare Benefit
Plan v. Med. Coll. of Wisconsin, Inc., 657 F.3d 496, 505 (7th Cir.
2011). The first of these is a five-factor test in which a district court
evaluates: (1) the degree of the losing parties’ culpability; (2) the
degree of the losing parties’ ability to satisfy an award of attorney’s
fees; (3) whether or not an award of attorney’s fees against the
losing parties would deter other persons acting under similar
circumstances; (4) the amount of benefit conferred on members of
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the pension plan as a whole; and (5) the relative merits of the
parties’ positions. Raybourne v. Cigna Life Ins. Co. of New York,
700 F.3d 1076, 1090 (7th Cir. 2012). The second test “looks to
whether or not the losing party’s position was substantially
justified.” Kolbe, 657 F. 4d at 506 (quoting Quinn v. Blue Cross &
Blue Shield Ass'n, 161 F.3d 472, 478 (7th Cir. 1998)). The Seventh
Circuit has observed that the five-factor test is used to “structure or
implement” the substantial justification test. Raybourne, 700 F.3d
at 1090 (citing Kolbe, 657 F.3d at 506).
Here, Defendants do not dispute that Plaintiff has achieved
some degree of success on the merits for purposes of attorney’s fee
award eligibility. The parties agree that the Court should
implement the five-factor test and/or the substantial justification
test to determine whether Plaintiff is entitled to reasonable
attorney’s fees. See d/e 34, pp. 2–5; d/e 36, p. 2. Because both
tests weigh in favor of an award, the Court finds that Plaintiff is
entitled to reasonable attorney’s fees.
Defendants’ position was not substantially justified. As this
Court stated in its February 2020 Opinion (d/e 31), Defendants’
decision to deny Plaintiff disability benefits was arbitrary and
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capricious. Defendants’ position that Plaintiff was entitled to
disability benefits under the Plan only if the 2003 injury was
“substantially responsible” for his disability was inconsistent with
the plain and unambiguous language of the Plan. See d/e 31, pp.
42–51 (Discussing the arbitrary and capricious standard in the
ERISA context and finding Defendants’ interpretation of the Plan to
be arbitrary and capricious); see also Young v. Verizon's Bell Atl.
Cash Balance Plan, 748 F. Supp. 2d 903, 913 (N.D. Ill. 2010)
(holding that ERISA plan administrator’s interpretation of plan was
not substantially justified where interpretation was inconsistent
with plain language of plan).
The five-factor test also weighs in favor of awarding attorney’s
fees. The first factor, Defendants’ culpability, is neutral. While
there is little cause to believe that Defendants acted in bad faith, a
finding of bad faith is not necessary to support an award of
attorney’s fees. See Raybourne, 700 F.3d at 1090 n.6. While a
finding that a plan administrator made an arbitrary and capricious
decision does not necessarily mean that the decision was “wholly
unjustified,” see Quinn, 161 F.3d at 479, culpability analysis under
the first factor favors the plaintiff when a plan administrator
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“negligently or ignorantly construes unambiguous plan terms.”
Young, 748 F. Supp. 2d at 913.
With respect to the second factor, the losing parties’ ability to
pay, Defendants concede that the UMWA 1974 Pension Trust
(“Trust”) “unquestionably has assets to cover an award of attorney’s
fees to Mr. Sharp.” D/e 36, p. 5. District courts in the Seventh
Circuit have uniformly held that the second factor weighs in favor of
the individual Plaintiff who seeks attorney’s fees from a multibilliondollar entity with ample ability to pay. See, e.g., Holmstrom v.
Metro. Life Ins., Co., No. 07-CV-6044, 2011 WL 2149353, at *3
(N.D. Ill. May 31, 2011); Young, 748 F.Supp.2d at 915 (“ERISA
defendants will almost always have the ability to pay attorney's
fees”). Defendants argue that the Trust is underfunded and that an
award of attorney’s fees to Plaintiff would therefore harm other Plan
participants, but any harm that might result from a future shortfall
in funding is too abstract and contingent a prospect to justify the
denial of an attorney’s fee award that Plaintiff is presently entitled
to. See Sullivan v. William A. Randolph, Inc., 504 F.3d 665, 671
(7th Cir. 2007) (“[S]ince an award of attorneys' fees will rarely be big
enough to affect a pension plan's solvency, rarely will there be
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cause for concern that an award of attorneys' fees may reduce the
benefits of the innocent participants and beneficiaries of the plan.”).
Therefore, the second factor weighs in favor of a fee award.
The third factor, whether an award of attorney’s fees would
deter other persons acting under similar circumstances, weighs in
favor of an award as well. Fee awards in cases like the case at bar
provide an additional disincentive against arbitrary and capricious
denials of disability benefits by plan administrators. See Egert v.
Connecticut Gen. Life Ins. Co., 768 F. Supp. 216, 218 (N.D. Ill.
1991) (“Fees are justified in this case because the possibility of
paying attorney's fees may well deter plan administrators from
developing unreasonable interpretations of ERISA plans as a means
of wrongfully denying coverage to plan participants.”)
The fourth factor, benefit to other members of the pension
plan, is “largely irrelevant” in individual disputes like the one at
bar. Raybourne v. Cigna Life Ins. Co. of New York, No. 07 C 3205,
2011 WL 528864, at *2 (N.D. Ill. Feb. 8, 2011), aff'd, 700 F.3d 1076
(7th Cir. 2012). Therefore, the fourth factor does not favor either
party.

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The fifth factor, the relative merits of the parties’ positions,
weighs in favor of an award. See Pennsylvania Chiropractic Ass'n v.
Blue Cross Blue Shield Ass'n, 188 F. Supp. 3d 776, 786 (N.D. Ill.
2016) (holding that the fifth factor favors the winning party).
Furthermore, for the reasons discussed above in connection with
the “substantially justified” test and Defendants’ culpability, the
difference between the merits of the parties’ positions in this case
was significant. While Defendants’ position was not frivolous or in
bad faith, it was based on an arbitrary and capricious
misinterpretation of an unambiguous Plan provision. See Young,
748 Supp.2d at 914 (“Defendants' attempt to unilaterally rewrite
the Plan's plain language lacked merit.”)
In summation, the first factor is neutral, the fourth factor is
irrelevant, and the remaining three factors weigh in favor of a fee
award. Therefore, the “modest presumption” in favor of awarding
fees to the prevailing party in ERISA cases has not been rebutted
here. See Stark v. PPM Am., Inc., 354 F.3d 666, 673 (7th Cir.
2004). On balance, Defendants’ position was not substantially
justified and an award of reasonable attorney’s fees is appropriate.

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B.

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A Reasonable Market Rate for Services Rendered by
Plaintiff’s Attorney is $350.00 per hour
When calculating an ERISA attorney’s fees award, courts

generally begin by calculating the “lodestar” amount. The lodestar
is equal to the number of hours reasonably expended on the
litigation multiplied by a reasonable hourly rate. See Stark, 354
F.3d at 674. Here, the parties have agreed that the 185 billable
hours asserted in the revised invoice submitted by Plaintiff (d/e 41–
2) reflect the hours reasonably expended by Plaintiff’s counsel on
this case. See d/e 41, ¶ 2. The lodestar in this case will therefore
be equal to 185 multiplied by a reasonable hourly rate for the
services of Plaintiff’s attorneys in this case.
The party seeking fees bears the burden of proving the
reasonableness of the hourly rate charged. Spegon v. Catholic
Bishop of Chicago, 175 F.3d 544, 550 (7th Cir. 1999). The
reasonableness of an hourly rate is determined with reference to the
market rate for the services rendered. Id. at 555. If the party
seeking fees meets his burden, the burden shifts to the opposing
party to demonstrate why a lower rate should be awarded. Id.
(citing People Who Care v. Rockford Bd. of Educ., Sch. Dist. No.

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205, 90 F.3d 1307, 1313 (7th Cir. 1996)). If the party seeking fees
does not meet his burden, then the Court "has the authority to
make its own determination of a reasonable rate." Pickett v.
Sheridan Health Care Center, 664 F.3d 632, 640 (7th Cir. 2011)
(citing Uphoff v. Elegant Bath, Ltd., 176 F. 3d 399, 409 (7th Cir.
1999)).
Here, Attorney Grady E. Holley has submitted an affidavit
stating, in relevant part, that: (1) he is not aware of any attorneys in
the Springfield area who regularly represent plaintiffs in ERISA
disability claims litigation; (2) that his law firm “typically average[s]
in excess of $350.00 per hour in contingency fee personal injury
litigation in central Illinois”; and (3) that he believes the rate of
$350.00 to be reasonable “given the hourly rates . . . for general
litigation in central Illinois.” Plaintiff has also submitted an
affidavit sworn by Attorney John A. Baker, who states that he is
qualified to opine as to the reasonable hourly rate for attorneys
working on “employment and civil rights matters” in central Illinois
by virtue of his experience and knowledge of the local legal market.
Attorney Baker states that, in his opinion, $350.00 is a reasonable
hourly rate for the services rendered by Plaintiff’s attorneys.
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Plaintiff also points towards the fee award in Boxell v. Plan for Grp.
Ins. of Verizon Commc'ns, Inc., where a district court in the Fort
Wayne Division of the Northern District of Indiana found that a
reasonable hourly rate for ERISA litigation in that area was
$450.00. No. 1:13-CV-089 JD, 2015 WL 4464147, at *8 (N.D. Ind.
July 21, 2015)
The Court finds that Plaintiff’s attorneys have carried their
burden and proved that their requested rate is reasonable. While
Plaintiff’s attorneys have not produced actual evidence of the hourly
rates charged by or awarded to comparable local attorneys for work
on ERISA cases, Defendant has not produced such evidence either.
Given the apparent rarity of ERISA litigation in the Springfield,
Illinois area, the absence of direct evidence of the market value of
Plaintiff’s attorneys’ legal services is understandable.
Defendants argue that Boxell is an inappropriate point of
comparison because the Fort Wayne Division of the Northern
District of Indiana is approximately 300 miles away from
Springfield. See d/e 36, pp. 7–8. However, the court in Boxell
noted that ERISA litigation is a “specialized and national practice
area,” and that in such practice areas the market rate should be
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determined with reference to the rates charged by the national
community of practitioners in the subject area rather than with
reference to the rates charged by local attorneys generally. Boxell,
2015 WWL 4464147, at *9 (citing Jeffboat, LLC v. Director, Office of
Workers' Compensation Programs, 553 F.3d 487, 490 (7th
Cir.2009). In Boxell, Plaintiff had hired out-of-state counsel from
Chicago and California who specialized in ERISA cases, and here
Plaintiff’s attorneys do not run a specialized national ERISA
litigation practice. This difference justifies a downwards departure
from the hourly rate awarded in Boxell. Therefore, where the court
in Boxell awarded an hourly rate of $450.00 in 2015 dollars,
Plaintiff’s attorneys have requested and will receive an hourly rate
of $350.00.
After considering the national and local points of comparison
raised by counsel, the legally complex nature of ERISA litigation
generally and the issues raised in the case at bar, and the Court’s
own experience and judgment regarding the prevailing local rates
for the kinds of legal services provided, the Court finds that a
reasonable hourly rate for the services of Plaintiff’s attorneys in this
case is $350.00 per hour. See Lynch v. City of Milwaukee, 747 F.2d
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423, 428 (7th Cir. 1984) (observing that district court may properly
use its “knowledge of the prevailing rates charged in the area” to
determine reasonable hourly rate). The lodestar amount in this
case is therefore 185 multiplied by $350.00, or $64,750.00.
Having determined the lodestar, this Court may adjust the fees
based on the following factors:
(1) the time and labor required; (2) the novelty
and difficulty of the questions; (3) the skill
requisite to perform the legal service properly;
(4) the preclusion of employment by the
attorney due to acceptance of the case; (5) the
customary fee; (6) whether the fee is fixed or
contingent; (7) time limitations imposed by the
client or the circumstances; (8) the amount
involved and the results obtained; (9) the
experience, reputation, and ability of the
attorneys; (10) the "undesirability" of the case;
(11) the nature and length of the professional
relationship with the client; and (12) awards in
similar cases.
Hensley v. Eckerhart, 461 U.S. 424, 430 n.3 (1983).
The Court has taken these factors into account in determining
the appropriate hourly rate. Given the rate applied, the lodestar
amount is a reasonable fee award in this case. Therefore, no further
adjustment is necessary.

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C.

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Plaintiff is Entitled to Prejudgment Interest in the Amount
of $25,148.78.
In the Seventh Circuit, “a presumption in favor of prejudgment

interest awards is specifically applicable to ERISA cases.” Rivera v.
Benefit Trust Life Ins. Co., 921 F.2d 692, 696 (7th Cir. 1991). The
purpose of awarding prejudgment interest is to ensure that a
plaintiff is fully compensated for his loss by placing him in the
position he would have been in if he had been paid immediately
upon accrual of his claim. Am. Nat. Fire Ins. Co. ex rel. Tabacalera
Contreras Cigar Co. v. Yellow Freight Sys., Inc., 325 F.3d 924, 935
(7th Cir. 2003). Here, there is no equitable reason to depart from
the default assumption that prejudgment interest is appropriate.
Defendants’ legal arguments as to the applicable causation
standard were not so meritorious that it would be inequitable to
award prejudgment interest.
The amount of prejudgment interest to which Plaintiff is
entitled depends on the period during which prejudgment interest
accrued. Prejudgment interest is generally calculated “from the
time the payment should have been made,” i.e., from “a reasonable
time after plaintiff notified defendants of [plaintiff’s] claim.” See

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Hizer v. General Motors Corp. et al., 888 F. Supp. 1453, 1465 (S.D.
Ind. 1995). Plaintiff filed his application for disability pension
benefits with Defendants on March 27, 2015, and Defendants
denied his request on July 26, 2016. See id.
Plaintiff’s counsel sent a copy of the decision of the Social
Security Administration granting Plaintiff disability benefits to
Defendants on May 21, 2015. In the Court’s view, this date—May
21, 2015—is the earliest time at which Defendants should have
known that Defendant was entitled to disability benefits, and the
date on which Plaintiff might reasonably have expected to begin
receiving disability benefits. Therefore, Plaintiff is entitled to
compounding interest at the prime rates agreed to by the parties on
the principal amounts agreed to by the parties for the period from
May 21, 2015 to February 20, 2020. See d/e 36–6. Therefore, the
total amount of prejudgment interest to which Plaintiff is entitled is
$25,148.78. See d/e 41–1.
III.

CONCLUSION

For the reasons stated, Plaintiff’s Petition for Attorney’s Fees and
Costs (d/e 33) is GRANTED. Plaintiff is awarded attorney’s fees in

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the amount of $67,750.00. Plaintiff is also awarded costs totaling
$400.00 and prejudgment interest totaling $25,148.78.

ENTER: March 3, 2021
/s/ Sue E. Myerscough
SUE E. MYERSCOUGH
UNITED STATES DISTRICT JUDGE

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