Hines v. Hartford Life Insurance Company

Filing 62

ORDER awarding plaintiff $118,555.03 in back payments; $13,058.49 in prejudment interest; $46,316.00 in attorney's fees and $405.00 in costs. See Order for details. Signed by Chief Judge David R. Herndon on 11/30/12. (klh, )

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
GARY S. HINES,
Plaintiff,
v.
HARTFORD LIFE INSURANCE
COMPANY,
Defendant.

No. 10-0265-DRH
MEMORANDUM and ORDER

HERNDON, Chief Judge:
I. Introduction
Now before the Court is the issue of back payments, prejudgment interest,
attorney’s fees and costs. On March 29, 2012, the Court granted the plaintiff’s
motion for summary judgment awarding plaintiff back payments under the long term
disability plan, plus prejudgment interest, attorney’s fees and costs (Doc. 58). The
Court directed plaintiff to brief the issues with supporting documentation. Plaintiff
did so (Doc. 59). Plaintiff maintains that as of April 30, 2012 he is entitled to back
payments of $101,492.88, pre-judgment interest of $11,345.64, attorney’s fees of
$46,316.00 and costs of $405.00.1 Defendant objects to all of plaintiff’s calculations
with the exception of the $405.00 in costs (Doc. 60). After reviewing the submissions

1

As final judgment has not been entered, plaintiff calculated his costs using April 30,
2012 as that was the due date of the briefs. Thus, additional figures for back payments and prejudgment interest need to be determined up to the date that Judgment is entered.

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and applicable law, the Court awards the following to plaintiff.
II. Analysis
Back payments
As to back payments due, Hines argues that as of April 30, 2012 he is entitled
to $101,492.88 in back payments.

Defendant counters that Hines incorrectly

calculates his past due benefits because he improperly extends the period of time for
which payments are payable. The Court rejects this argument. In awarding Hines
back payments, the Court found: “an outright award of back benefits and
reinstatement is proper in this case. Here, the ‘status quo prior to the defective
procedure was the continuation of benefits. Remedying the defective procedures
requires reinstatement of benefits.’ Id. At 776.” (Doc. 58, p. 21). As judgment will be
entered today, November 30, 2012 and employing Hines’ methodology for calculating
back payments, the Court determines that Hines is entitled to $118,555.03 in back
payments.
Pre-Judgment Interest
Whether to award an ERISA claimant prejudgment interest is “a question of
fairness, lying within the court's sound discretion, to be answered by balancing the
equities.” Fritcher v. Health Care Service Corp., 301 F.3d 811, 820 (7th Cir.2002).
“Prejudgment interest must make the victim whole.” First National Bank of Chicago
v. Standard Bank and Trust, 172 F.3d 472, 480 (7th Cir. 1999). The Seventh
Circuit recognizes using the prime rate for fixing prejudgment interest where there

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is not statutory interest. Fritcher, 301 F.3d at 820; Gorenstein Enters., Inc. v.
Quality Care-USA, Inc., 874 F.2d 431, 436 (7th Cir. 1989). In granting summary
judgment in favor of plaintiff, the Court found that an award of prejudgment interest
is proper in this matter (Doc. 58, p. 22).
Plaintiff moves the Court to use 6.3% as the interest rate. According to
plaintiff, Moody’s credit rating agency assigned defendant’s corporate bonds a rating
of “BAA” and that since the initial denial of plaintiff’s claim and during this time
period the average monthly yield for “BAA” corporate bonds was 6.30025%. Plaintiff
argues that this rate takes into account the risk of default by defendant along with a
variety of factors that determine the riskiness of an asset including the prime rate and
the rate of default. Defendant contends that the proper interest rate is the prime rate
which was 3.26% from December 2008 to April 2010 and 3.25% from April 2010 to
the present. Looking at the circumstances of this case, the prime rate and the case
law, the Court finds that the prime rate of 3.25% is the proper rate.2
Based on the Court’s calculations utilizing 3.25% as the interest rate, the Court
finds that plaintiff is entitled to a total of $13,058.49 in compounded prejudgment
interest. Compounded interest of $166.89 on the December 2008 back payment of
$1,222.88 back payment; compounded interest of $12,090.95 on the back payments
of 90,520.20 from January 2009 to December 2011; and compounded interest of
$800.65 on the back payments of $26,811.95 from January 2012 to November 2012.

2

From December 16, 2008 to the present the prime rate has been 3.25%.

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Attorney’s fees
In a beneficiary's ERISA action, “the court in its discretion may allow a
reasonable attorney's fee and costs of action to either party.” 29 U.S.C. § 1132(g)(1).
In the Court’s Order awarding plaintiff attorney’s fees, the Court found that
“Hartford’s position was not substantially justified and was not taken in good faith
....” (Doc. 58, p. 22). Thus, the Court needs to determine a reasonable fee. The
district court must make that assessment, at least initially, based on a calculation of
the “lodestar”—the hours reasonably expended multiplied by the reasonable hourly
rate—and nothing else. See Pickett v. Sheridan Health Care, 664 F.3d 632, 640–43
(7th Cir. 2011). In limited circumstances, once calculated, the lodestar amount may
be adjusted. See Perdue v. Kenny A. ex rel. Winn, ––– U.S. ––––, 130 S.Ct. 1662,
1673–74, 176 L.Ed.2d 494 (2010); Hensley v. Eckerhart, 461 U.S 424, 430, 436,
103 S.Ct. 1933, 76 L.Ed.2d 40 (1983); Robinson v. City of Harvey, 489 F.3d 864,
871–72 (7th Cir. 2007).
In setting a reasonable billing rate, courts are directed to consider the
attorney's regular rates as well as the rate “prevailing in the community for similar
services by lawyers of reasonably comparable skill, experience, and reputation.”
Blum v. Stenson, 465 U.S. 886, 896 n. 11, 104 S.Ct. 1541, 79 L.Ed.2d 891 (1984).
Evidence of reasonableness of a proposed hourly rate must include an affidavit or
declaration of the attorney performing the work and information about rates actually
billed and paid in similar lawsuits. Id. at 896, 104 S.Ct. 1541. Appropriate rates can
be determined through direct or opinion evidence about what local attorneys charge
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under similar circumstances. Id. at 896 n. 11, 104 S.Ct. 1541.
Once the lodestar figure is determined, the court may adjust the figure upward
or downward as necessary to make the award of attorney's fees reasonable, while
ensuring the fee award does not provide a windfall to the movant. See Hensley, 461
U.S. at 429, 103 S.Ct. 1933. Although courts have “broad discretion in setting the
appropriate award of attorney's fees,” there is a strong presumption that the lodestar
amount is reasonable and should be modified only in exceptional cases. City of
Burlington v. Dague, 505 U.S. 557, 562, 112 S.Ct. 2638, 120 L.Ed.2d 449 (1992).
In order to determine a reasonable hourly rate, courts should look at the “the
market rate for the services rendered.” Pickett, 664 F.3d at 640. The market rate
is the “rate that lawyers of similar ability and experience in their community normally
charge their paying clients for the type of work in question.” Spegon v. Catholic
Bishop of Chicago, 175 F.3d 544, 555 (7th Cir. 1999). The attorney’s billing rate for
comparable work is “presumptively appropriate” to use as the market rate. Pickett,
664 F.3d at 640; Denius v. Dunlap, 330 F.3d 919, 930 (7th Cir. 2003). “The best
evidence of the value of the lawyer's services is what the client agreed to pay him.”
Assess. Tech. of WI, LLC v. WIREdata, Inc., 361 F.3d 434, 438 (7th Cir. 2004). Thus,
the attorney's actual billing rate paid by his client is “presumptively appropriate” to
use as the market rate. People Who Care v. Rockford Bd. of Educ.,
90 F.3d 1307, 1311 (7th Cir. 1996). The “next best evidence” of a reasonable market
rate is “evidence of rates similarly experienced attorneys in the community charge
paying clients for similar work and evidence of fee awards the attorney has received
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in similar cases.” Id. (quoting Spegon, 175 F.3d at 555). The party seeking fees bears
the burden of “produc[ing] satisfactory evidence—in addition to the attorney's own
affidavits—that the requested rates are in line with those prevailing in the
community.” Id. (quoting Blum v. Stenson, 465 U.S. 886, 895 n. 11 (1984)). Once
the fee applicant satisfies this burden, the other party must provide “a good reason
why a lower rate is essential.” Id. (quoting People Who Care, 90 F.3d at 1313).
Here, plaintiff seeks $46,316.00 in attorney’s fees, not including the attorney’s
fees for the appeal of the initial finding of disability. In his fee petition, plaintiff lists
seven attorneys who worked on this case. The attorneys listed have many years of
experience ranging from 29 years of experience to 2 years of experience of practicing
law. The lead partner on the case has 29 years of experience and the primary
attorney on the case has 7 years of experience. The hourly billing rates for the
attorneys range from $150.00 to $260.00 an hour.

The attorneys’ fees total

$46,316.00.
Based on the documentation submitted, plaintiff has established to this Court's
satisfaction that the hourly rates submitted by his legal team are the actual billing
rates and are reasonable for this type of ERISA case. Here, while defendant generally
objects to the Court’s ruling that plaintiff is entitled to attorney’s fees, it does not
challenge the hourly rates of any of plaintiff’s attorneys. Given the experience and
expertise of the plaintiff’s lawyers the Court finds the rates for the attorneys to be
entirely reasonably. Accordingly, the Court will award the plaintiff fees at these rates
and moves on to the remaining issue of whether the time expended was reasonable.
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Specifically, defendant argues that the Court should decrease the amount of
fees sought by plaintiff by a total of $13,286.50 for pursuing dubious discovery
claims and a meritless argument regarding the standard of review. By virtue of its
familiarity with the litigation, the Court is in the best position to determine the
number of hours reasonably expended in the litigation. Uphoff v. Elegant Bath, Ltd.,
176 F.3d 399, 409 (7th Cir. 1999); McNabola v. Chicago Transit Auth., 10 F.3d 501,
519 (7th Cir. 1993). The Court should exclude from the fee petition time spent that
was “excessive, redundant, or otherwise unnecessary.” Stark v. PPM Am., Inc., 354
F.3d 666, 674 (7th Cir. 2004).
As to defendant’s objections, the Court finds them without merit. The Court
concludes that plaintiff’s attorney’s fee award should not be reduced to reflect her
“unsuccessful” arguments. A fee award “should not be reduced simply because the
plaintiff failed to prevail on every contention raised in the lawsuit.” Hensley, 461 U.S.
at 435. (“Litigants in good faith may raise alternative legal grounds for a desired
outcome, and the court’s rejection of or failure to reach a certain ground is not a
sufficient reason for reducing a fee.”). It is appropriate to consider the litigation as
a whole, rather than viewing the specific claims atomistically. “The plaintiff’s claims
of relief ... involve a common core of facts or [are] based on related legal theories,”
such that “much of counsel’s time will be devoted generally to the litigation as a
whole, making it difficult to divide the hours expended on a claim-by-claim basis.”
Ustrak v. Fairman, 851 F.2d 983, 988 (7th Cir. 1988); see also Dunning v. Simmons
Airlines, Inc., 62 F.3d 863, 873 (7th Cir. 1995). Further, the Court cannot second
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guess how much time plaintiff’s lawyers should have spent on the discovery issues
or the standard of review issue in this matter.

The issues, figures and hours

submitted by plaintiff’s attorneys do not seem excessive, redundant or unnecessary.
In fact, a review of the billing statements reveals that the hours spent are appropriate
billable hours.
Costs
Plaintiff requests costs in the amount of $405.00 and defendant does not object
to these costs. Thus, the Court awards plaintiff $405.00 in costs.
III. Conclusion
Accordingly, the Court AWARDS Hines $118,555.03 in back payments,
$ 13,058.49 in compounded prejudgment interest, $46,316.00 in attorney’s fees and
$405.00 in costs. The Court DIRECTS the Clerk of the Court to enter judgment
based on this Order and the Court’s March 29, 2012 Order (Doc. 58) in favor of Gary
Hines and against Hartford Life Insurance Company.
IT IS SO ORDERED.
Signed this 30th day of November, 2012.

David R.
Herndon
2012.11.30
10:53:54 -06'00'

Chief Judge
United States District Court

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