Kapaun v. Commissioner of Social Security

Filing 33

OPINION AND ORDER granting 31 Motion for an Award of Attorney Fees. The Court GRANTS Counsel's petition for Section 206(b) fees in the amount of $11,093.50. The Court ORDERS that payment by the Commissioner in the amount of $11,093.50 be paid directly to Steven Parkman in accordance with the agreement signed by Plaintiff. Signed by Judge Philip P Simon on 4/4/18. (nal)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
SOUTH BEND DIVISION
DAVID KAPAUN,
Plaintiff,
v.
NANCY A. BERRYHILL, Acting
Commissioner of Social Security
Administration,
Defendant.

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) CAUSE NO. 3:16CV213-PPS/MGG
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OPINION AND ORDER
This matter is before me on Plaintiff’s counsel’s Motion for Authorization of
Attorney’s Fees Pursuant to 42 U.S.C. § 406(b), which seeks an award of attorney’s fees
in the amount of $11,093.50, a percentage of the past-due Social Security Disability
Insurance Benefits awarded by the Commissioner of Social Security to Plaintiff. For the
reasons explained in detail below, I find the request reasonable and the motion is
GRANTED.
Background
After being denied Disability Insurance benefits under the provisions of the
Social Security Act, Plaintiff appealed his case to this Court on April 6, 2016. [DE 1.] On
January 26, the parties agreed to remand the case for further proceedings and a new
decision by the ALJ. [DE 24.] On March 30, 2017, I granted the Parties’ Joint Stipulation

to an Award of Attorney Fees Under the Equal Access to Justice Act, awarding
Attorney Steven Parkman $5,682.10. [DE 30.]
On remand from this Court, an ALJ issued a favorable decision on December 15,
2017, finding the Plaintiff disabled as of January 15, 2013. Plaintiff then received a
Notice of Award (“NOA”) from the Commissioner finding that the Plaintiff was due at
least $44,374.00 in total past-due benefits. [DE 31-1.] Plaintiff’s counsel seeks 25% of that
amount in the form of attorney’s fees, which he correctly calculates to be $11,093.50.
This comports with the fee contract signed by the Plaintiff, which calls for Plaintiff’s
counsel to receive 25% of the retroactive benefits due to Plaintiff and his family. [DE 312.]
Discussion
Section 206(b) of the Social Security Act provides: “Whenever a court renders a
judgment favorable to a claimant under this subchapter who was represented before the
court by an attorney, the court may determine and allow as part of its judgment a
reasonable fee for such representation, not in excess of 25 percent of the total of the
past-due benefits to which the claimant is entitled by reason of such judgment.” 42
U.S.C. § 406(b)(1)(A). Section 206(b) is intended to control, but not displace, contingent
fee arrangements. Gisbrecht v. Barnhart, 535 U.S. 789, 793 (2002). The district court is to
review the amount set by the fee agreement for reasonableness based on “the character
of the representation and the results the representative achieved.” Id. at 807. The
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Supreme Court described three situations in which courts have appropriately reduced
fees as unreasonable: (1) the representation is substandard, (2) counsel’s delay caused
past-due benefits to accumulate during the pendency of the case in court, and (3) pastdue benefits are large in comparison to the amount of time counsel spent on the case.
Id. at 808.
Here, Plaintiff entered into a 25% contingency fee agreement with his attorney.
[DE 31-2] Plaintiff was awarded past due benefits in the amount of $44,374.00. His
attorney now seeks 25% of that amount, totaling $11,093.50. This amount is reasonable.
Attorney Parkman and his associate’s representation was not substandard. On the
contrary, counsel secured a remand and reversal of the original administrative decision
resulting in the Plaintiff receiving a favorable decision and an award of retroactive
benefits.
In addition, counsel worked on contingent fee basis, so the risk that he won’t
recover for his client, and thus won’t be paid at all, has to be priced in to the
computation of a reasonable fee. See Bastic v. Bowen, 691 F. Supp. 1176, 1177 (N.D. Ill.
1988) (“[A] universe in which lawyers go wholly unpaid in cases they lose, but are paid
for the cases they win at rates that fail to reflect the risk of loss, is a distorted
universe.”). The risk of no recovery is high in a Social Security case. See Martinez v.
Astrue, 630 F.3d 693, (7th Cir. 2011) (discussing a study finding 65.05% of Social Security
appeals resulted in an affirmance of the denial of benefits). In this context, then, an
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award of ** is not unreasonable. And awards of larger size have been approved in this
district. See, e.g. Soptich v. Colvin, No. 3:15-CV-109, 2017 WL 711021, at *2 (N.D. Ind.
2017) (approving award of $18,646); Denune v. Colvin, No. 1:11-CV-64, 2014 WL 3899308,
at *4 (N.D. Ind. 2014) (approving award of $24,830); Sparrow v. Astrue, No. 3:07-CV-506TLS, 2010 WL 2195276, at *1 (N.D. Ind. 2010) (approving award of $17,322.10).
Plaintiff’s counsel achieved the result his client sought in filing the suit and should be
properly compensated for his work. The Defendant Commissioner of Social Security
does not object to this fee request. [DE 32.]
There is one issue remaining. Attorney Parkman already has received $5,682.10
in EAJA fees. While fee awards may be made under both Section 206 and the EAJA, the
attorney must refund to the claimant the amount of the smaller fee. Gisbrecht, 535 U.S.
at 796. Therefore, upon receipt of the an award of fees under Section 206, Attorney
Parkman shall promptly remit the smaller of the Section 206 award and the EAJA fee
award.
Conclusion
Plaintiff’s counsel’s Motion for an Award of Attorney Fees Under 42 U.S.C. §
406(b), DE 31, is GRANTED. The Court GRANTS Counsel’s petition for Section 206(b)
fees in the amount of $11,093.50. The Court ORDERS that payment by the
Commissioner in the amount of $11,093.50 be paid directly to Steven Parkman in
accordance with the agreement signed by Plaintiff.
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Upon receipt of this award of fees, Attorney Steven Parkman is ordered to
promptly remit the smaller of either the award of Section 206 fees or the previously
awarded EAJA fees.
SO ORDERED.
ENTERED: April 4, 2018.
s/ Philip P. Simon
PHILIP P. SIMON, JUDGE
UNITED STATES DISTRICT COURT

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