Host v. First Unum Life Insurance Company et al

Filing 108

Judge George A. O'Toole, Jr: ORDER entered granting in part and denying in part 76 Motion for Attorney Fees. (Halley, Taylor)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
CIVIL ACTION NO. 13-11578-GAO
BRIAN HOST,
Plaintiff,
v.
FIRST UNUM LIFE INSURANCE COMPANY and UNUM GROUP,
Defendants.

ORDER REGARDING ATTORNEY’S FEES
January 28, 2019
O’TOOLE, D.J.
Previously in this case, I denied the defendant’s motion for summary judgment and granted
the plaintiff’s motion to remand, directing Unum to conduct “a more thorough inquiry into the
relationship between Host’s injury and his income loss.” (Op. & Order 4 (dkt. no. 64).) In that
Order, I concluded that “Unum had the ability under the disability policy to compel Deutsche Bank
to provide any information reasonably required to resolve a benefits claim. Proceeding to deny the
claim without pursuing additional . . . information from the bank when there were disputed factual
issues was not reasonable.” (Id.) The plaintiff now seeks an award of attorney’s fees and costs
from the defendants under the Employee Retirement Income Security Act of 1974 (“ERISA”).
Host requests an award of $58,548.88 for attorney’s fees and an additional $684.88 in expenses.
(Pl.’s Reply Br. in Resp. to Unum’s Opp’n to Pl.’s Mot. for Att’y Fees & Costs 2 (dkt. no. 99).)
Unum has opposed Host’s motion for fees, but has not objected to the costs Host seeks.
During the hearing on the motion, the parties informed the Court that, as instructed, Unum
had reviewed Host’s claim for benefits again and again determined that Host was not eligible for
the disability benefits he claimed. In a separate pending action, Host is appealing that decision.

Under ERISA, a court has the discretion to award “a reasonable attorney’s fee and costs of
action to either party.” 29 U.S.C. § 1132(g)(1). However, a “claimant must show ‘some degree of
success on the merits’ before a court may award attorney’s fees under § 1132(g)(1),” but this
success must be more than “trivial success on the merits” or “purely procedural.” Hardt v. Reliance
Standard Life Ins., 560 U.S. 242, 255 (2010) (quoting Ruckelshaus v. Sierra Club, 463 U.S. 680,
694 (1983)). In order for a court to find the requisite level of “success” there must be “some
meaningful benefit for the fee-seeker.” Gross v. Sun Life Assurance Co. of Can., 763 F.3d 73, 77
(1st Cir. 2014) (quoting Gastronomical Workers Union Local 610 & Metro. Hotel Ass’n Pension
Fund v. Dorado Beach Hotel Corp., 617 F.3d 54, 66 (1st Cir. 2010)).
In the present case, the Court granted Host’s motion for remand so that Unum could
conduct a more thorough review of his application for benefits. Host asserts that achieving the
remand entitles him to an award of attorney’s fees; Unum argues that a remand does not amount
to the “success” required in order to be awarded such fees. Unum’s position is unpersuasive.
In Gross, the Court of Appeals noted:
Most courts considering the question left unanswered in Hardt have held that a
remand to the plan administrator for review of a claimant's entitlement to benefits,
even without guidance favoring an award of benefits or an actual grant of benefits,
is sufficient success on the merits to establish eligibility for fees under section
1132(g)(1).
763 F.3d at 77 (collecting cases). The court surmised that remand for further administrative
proceedings is regarded as “success” because such a decision is inherently based on a finding of
some deficiency in the initial administrative review which entitles the claimant to a “renewed
opportunity to obtain benefits or compensation.” Id. at 78 (citations omitted). Additionally, the
court noted “a remand for a second look at the merits of [the claimant’s] benefits application is
often the best outcome that a claimant can reasonably hope to achieve from the courts. To classify
such success as a minimal or ‘purely procedural victory’ mistakes its importance.” Id. at 78–79.
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Unum argues that because Host’s complaint only sought recovery of payment of disability
benefits, which was not provided by the Court’s remand order, Host was therefore unsuccessful in
his suit and ineligible for attorney’s fees. Unum ignores the fact that Host’s complaint also contains
a prayer for relief requesting that this Court “[a]ward such other relief as the court deems just and
reasonable,” (Compl. 10 (dkt. no. 1)), which “easily incorporates the court-ordered remand granted
by the Court,” see Colby v. Assurant Employee Benefits, 635 F. Supp. 2d 88, 96–97 (D. Mass.
2009).
Additionally, Unum’s subsequent determination on remand that Host was not eligible for
disability benefits does not disqualify him from receiving attorney’s fees for his success in
obtaining the remand. See Gross, 763 F.3d at 80–81. Although Unum’s ultimate denial of benefits
on remand may be relevant to the Court’s calculation of attorney’s fees, that fact should not prevent
Host from recovering fees for getting a second chance at making his case. See id. Regardless of
what occurred after the remand order, Host successfully demonstrated that Unum’s initial decision
was defective, and he is eligible to recover reasonable attorney’s fee as a result of that success. See
Petrone v. Long Term Disability Income Plan for Choices Eligible Emps. of Johnson & Johnson
& Affiliated Cos., Civil Action No. 11-10720-DPW, 2014 WL 1323751, at *3, n.1 (D. Mass. Mar.
31, 2014) (citing Richards v. Johnson & Johnson, Civil Action No. 08-279, 2010 WL 3219133
(E.D. Tenn., Aug. 12, 2010)).
Having determined that Host is eligible to receive attorney’s fees under § 1132(g)(1), the
Court must consider whether an award is appropriate using the five-factor test articulated in Cottrill
v. Sparrow, Johnson & Ursillo, Inc., 100 F.3d 220, 225 (1st Cir. 1996) (abrogated on other grounds
by Hardt, 560 U.S. 242). No single factor is outcome determinative. Gross, 763 F.3d at 83.

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The first factor, the degree of culpability or bad faith attributable to Unum, weighs slightly
in favor of Host. Although there is no evidence of bad faith by Unum, “[i]n finding a need for a
remand, [the Court] [has] implicitly found culpability.” See Hatfield v. Blue Cross & Blue Shield
of Mass., Inc., 162 F. Supp. 3d 24, 44–45 (D. Mass. 2016) (citing Cannon v. Aetna Life Ins., Civil
Action No. 12-10512-DJC, 2014 WL 5487703, at *4 (D. Mass. May 28, 2014)). The remand order
in this case identified a deficiency in the review process conducted and controlled by Unum,
making it sufficiently culpable in the relevant sense. See Janeiro v. Urological Surgery Prof’l
Ass’n, 457 F.3d 130, 143 (1st Cir. 2006).
The second factor directs the Court to examine Unum’s ability to pay an award. Unum does
not dispute that it has the financial resources to pay, and so this factor also weighs in Host’s favor.
However, Unum’s ability to pay, alone, “does not justify an award.” See Hatfield, 162 F. Supp. 3d
at 45 (quoting Cottrill, 100 F.3d at 226–27).
The next factor, the extent to which an award would deter others in similar circumstances,
also weighs in Host’s favor. “The First Circuit has recognized the value of motivating fiduciaries
to comply more attentively with the procedural obligations imposed by ERISA, including through
the development of complete administrative records.” Hatfield, 162 F. Supp. 3d at 45 (citing Gross,
763 F.3d at 84–85). Awarding attorney’s fees in this case could encourage Unum, and potentially
others, to be diligent and proactive in sufficiently developing the administrative record prior to
denying a claim.
The fourth factor focuses on the benefit that a successful lawsuit generates in favor of other
plan participants generally. This factor weighs in favor of Host because this Court’s decision to
remand demonstrates that each plan participant is entitled “full and fair review of their claims.”
See Cannon, 2014 WL 5487703, at *4; see also Hatfield, 162 F. Supp. 3d at 45.

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Finally, the fifth factor is based on the merits of each party’s position. As previously
discussed, Unum again denied Host disability benefits after the remand. However, the lack of
success by Host does not by itself preclude his recovery of attorney’s fees for his success in
achieving the remand and reconsideration of his application. See Hatfield, 162 F. Supp. 3d at 45.
After considering all five factors together, Host is entitled to reasonable attorney’s fees.
What is reasonable, however, may be colored by subsequent events. Host’s application was
reconsidered after remand and again denied by Unum. His appeal from that second denial has yet
to be decided. Assessing the value to him of the remand opportunity may well be affected by his
success or not in obtaining benefits as a result of his appeal.
Accordingly, Host’s present motion (dkt. no. 76) is GRANTED to the extent that his right
to an award of fees in some amount for his success in obtaining the remand is recognized. It is
DENIED WITHOUT PREJUDICE as to the determination of what a reasonable award should be,
pending the outcome of his appeal from the second denial of benefits.
It is SO ORDERED.
/s/ George A. O’Toole, Jr.
United States District Judge

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