Martin v. The Guardian Life Insurance Company of America
MEMORANDUM OPINION & ORDER: It is ORDERED that the defendant's 73 MOTION for Attorneys' Fees is DENIED. Signed by Judge Danny C. Reeves on 11/18/2021.(KM)cc: COR
Case: 5:20-cv-00507-DCR Doc #: 78 Filed: 11/18/21 Page: 1 of 5 - Page ID#: 5279
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
WILLIAM W. MARTIN,
THE GUARDIAN LIFE INSURANCE
COMPANY OF AMERICA,
Civil Action No. 5: 20-507-DCR
This matter came before the Court when Plaintiff William W. Martin filed an appeal of
Guardian’s denial of long-term disability benefits under a plan governed by the Employee
Retirement Income Security Act (“ERISA”). The parties filed cross-motions for judgment and
the Court ruled in favor of Guardian, finding that its decision to deny benefits was neither
arbitrary nor capricious. [Record No. 69] Guardian has now filed a motion for attorneys’ fees
pursuant to 29 U.S.C. § 1132(g)(1), 28 U.S.C. § 1927, and Local Rule 54.4. [Record No. 73]
Having reviewed the applicable considerations, Guardian’s motion for attorneys’ fees will be
ERISA provides that, in any action brought under § 1132, “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). The Court may award fees and costs “as long as the fee claimant has achieved
‘some degree of success on the merits.’” Hardt v. Reliance Standard Ins. Co., 560 U.S. 242,
245 (2010). While Guardian has achieved success on the merits, the Court’s inquiry does not
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end there. The Court also considers the following factors in determining whether attorneys’
fees should be granted under ERISA:
(1) the degree of the opposing party’s culpability or bad faith; (2) the opposing
party’s ability to satisfy an award of attorney’s fees; (3) the deterrent effect of
an award on other persons under similar circumstances; (4) whether the party
requesting fees sought to confer a common benefit on all participants and
beneficiaries of an ERISA plan or resolve significant legal questions regarding
ERISA; and (5) the relative merits of the parties’ positions.
Sec’y of Dep’t of Labor v. King, 775 F.2d 666, 669 (6th Cir. 1985). These factors are flexible
and none is necessarily dispositive. See Moon v. Unum Provident Corp., 461 F.3d 639, 64243 (6th Cir. 2006) (citing Schwartz v. Gregori, 160 F.3d 1116, 1119 (6th Cir. 1998)).
Guardian contends that the first factor is satisfied based on Martin’s “clear lack of
disability,” as evidenced by his treating physicians’ reports, surveillance footage, and an
adverse ruling with respect to his application for Social Security disability. However, while
the Court determined that Guardian’s denial of benefits was supported by substantial evidence,
Martin’s position was not entirely without support. Dr. Frank Burke and physical therapists
Hagan Ray and Stephanie Turner opined that Martin was unable to perform even sedentary
work on a full-time basis. And although surgery was not recommended, MRI imaging revealed
that Martin had some degree of spinal degeneration.
Guardian also relies on Moore v. Lafayette Life Insurance Co., 458 F.3d 416, 445 (6th
Cir. 2006), in which the Sixth Circuit affirmed the district court’s award of attorneys’ fees to
the defendant. While the plaintiff presented a colorable claim for benefits, he also asserted a
number of “near frivolous” claims and refused to dismiss claims even after it became clear that
a particular defendant was not the proper defendant. Moore also unnecessarily prolonged
litigation by filing unreliable briefs, pursuing arguments that had been rejected by the court,
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and “improperly took quotations out of context and made strained arguments based upon such
misinterpreted citations.” Id.
Unlike the plaintiff in Moore, there is no indication that any of Martin’s motions in this
case were filed in bad faith. Although the Court ultimately denied the motion, Martin
presented a non-frivolous argument for striking portions of the administrative record based on
Guardian’s failure to issue a timely decision under ERISA. See Soltysiak v. UNUM Provident
Corp., 531 F. Supp. 2d 816, 819-20 (W.D. Mich. 2008) (citing 29 U.S.C. § 2560.5031(i)(3)(4)). Likewise, Martin reasonably (but incorrectly) argued that this Court should apply
de novo review following the March 2021 decision in Bustetter v. Standard Ins. Co., 529 F.
Supp. 3d 693 (E.D. Ky. 2021).
Contrary to Guardian’s assertion, there is insufficient information to conclude that
Martin’s failure to participate in an independent medical examination (“IME”) at Guardian’s
request was in bad faith. As stated in the Memorandum Opinion and Order affirming denial
of benefits, “Martin expressed hesitation about attending an examination at an unknown
location during the COVID-19 pandemic.” [Record No. 69, p. 10] Guardian construed this as
Martin’s refusal to attend an IME and proceeded with an independent peer review based on a
paper review of the medical evidence.
Additionally, the Court does not find support for Guardian’s assertion that Martin
granted it an extension during the administrative appeal but then attempted to “cut Guardian’s
extension short and gain an advantage in litigation by doing so.” The portions of the record
cited by Guardian indicate simply that Martin declined to grant an additional extension of the
period for review of the benefits determination. [See Record No. 73, p. 4 n.3.] The Court also
notes that Martin was forced to file a motion to compel when Guardian refused to provide
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discovery materials to which he was clearly entitled under established case law. [See Record
No. 43.] Accordingly, this factor weighs against awarding attorneys’ fees.
The second factor also weighs against granting the defendant’s motion. The plaintiff
does not have the ability to pay the $137,949.94 in requested attorneys’ fees. He has provided
an affidavit stating that he: (1) has not worked since August 1, 2017; (2) is the father of a minor
child; (3) has no other income besides a monthly Veteran Affairs benefit of $756.77; and (4)
has less than $1,500.00 in his bank accounts.
Guardian suggests requiring Martin’s attorney to bear the cost of its attorneys’ fees, at
least in part, as a sanction under 28 U.S.C. § 1927. While the Sixth Circuit approved this
practice in Moore, 458 F.3d 416 (6th Cir. 2006), the district court in that case had determined
that the plaintiff, through counsel, had multiplied the proceedings unreasonably and
vexatiously. This included mischaracterizing the record and relentlessly pursuing arguments
the court had already rejected. While Martin’s attorney pursued arguments that ultimately
were unsuccessful, his conduct was not similar to that of the plaintiff’s attorney in Moore and
Guardian has not demonstrated that there is a basis for imposing fees under § 1927.
The Court also considers the deterrent effect of an award on other persons under similar
circumstances. Although the Court found that Martin’s claim could not survive Guardian’s
motion for judgment, awarding attorneys’ fees would tend to create a chilling effect on other
plaintiffs seeking redress under ERISA. See, e.g. Palagyi v. Pittsburgh & Conneaut Dock Co.,
2014 WL 1238517, at *1 (N.D. Ohio Mar. 25, 2014). Further, losing an appeal and facing the
potential prospect of paying one’s own attorney fees is a deterrent in itself. Accordingly, this
factor weighs against granting attorneys’ fees.
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The fourth consideration, whether the party requesting fees sought to confer a common
benefit on all participants and beneficiaries of an ERISA plan or resolve significant legal
questions regarding ERISA, does not apply when the defendant seeks attorneys’ fees. See
Dublin Eye Assocs., P.C. v. Mass. Mut. Life Ins. Co., 2014 WL 1217664, at *7 (E.D. Ky. Mar.
24, 2014) (citing Moore, 458 F.3d at 446). Accordingly, this factor is neutral.
Finally, the Court considers the relative merits of the parties’ positions, which is
intertwined with the first factor of culpability or bad faith. See Greene v. Drobocky, 2015 WL
1737772, at *6 (W.D. Ky. Apr. 16, 2015) (citing Foltice v. Guardsman Prods., Inc., 98 F.3d
933, 937 (6th Cir. 1996)). Although the defendant prevailed, the undersigned does not
conclude that the plaintiff’s claim was frivolous or obviously without merit. See, e.g., Warner
v. DSM Pharma Chems. N.A., Inc., 452 F. App’x 677, 681 (6th Cir. 2011) (denying an award
of fees when the merits of plaintiff’s claim “appear no more devoid of merit than that of any
other losing litigant.”).
In summary, while the defendant’s success on the merits weighs in favor of granting
attorneys’ fees, it does not outweigh the remaining factors which strongly support denying the
motion. Accordingly, it is hereby
ORDERED that the defendant’s motion for attorneys’ fees [Record No. 73] is
Dated: November 18, 2021.
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