White et al v. Chase, Jr.
Filing
81
District Judge Timothy S. Hillman: ORDER AND MEMORANDUM OF DECISION entered denying 77 Motion for Attorney Fees. (Castles, Martin)
UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
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EUGENE J. WHITE and SHAWN M. ROY,
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Individually and on Behalf of all Others Simarly Situated,
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Plaintiffs,
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v.
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JEROME K. CHASE, JR., as he is the Trustee of
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Framingham Ford Defined Benefit Pension Plan Trust
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Agreement, Adopted in 2002 and again in 2004,
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Defendant.
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______________________________________________________)
CIVIL ACTION
NO. 15-40013-TSH
ORDER AND MEMORANDUM OF DECISION ON DEFENDANT’S MOTION FOR
ATTORNEYS’ FEES
October 4, 2018
HILLMAN, D.J.
Background
The Plaintiffs, Eugene J. White (“White”) and Shawn M. Roy (“Roy”), on behalf on
themselves and other similarly situated employees of Framingham Ford Auto Sales, Inc. d/b/a
Framingham Ford Lincoln (“Framingham Ford”), filed suit against Jerome K. Chase, Jr. , as
Trustee/Plan Administrator (“Defendant”) of the Framingham Ford Defined Pension Plan ( the
“Plan”) alleging claims for violation of the notice requirements set forth in Section 204(h) of the
Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §1054(h), and ERISA
§402, 29 U.S.C. §§1102 and 1104 (governing the establishment of benefit plans). Plaintiffs, who
were participants in the Plan, sought money damages on the grounds that the Plan was frozen
effective April 1, 2007 without proper notice, and subsequently terminated. On March 30, 2018,
I granted Defendant’s motion for summary judgment after finding that the record evidence
established that notice of the Plan freeze was timely mailed to Plan participants and therefore,
Plaintiffs’ claims failed on the merits.
This Memorandum of Decision and Order addresses Defendant’s Motion for an Award of
Attorney’s Fees Pursuant to ERISA §502(g) And F.R.C.P. 54(d)(2)(Docket No. 77) pursuant to
which Defendant requests an award of attorneys’ fees of $252,5611. For the reasons set forth
below, that motion is denied.
Discussion
Having prevailed on summary judgment, Defendant asserts that he is entitled to recover
reasonable attorneys’ fees under ERISA, which permits the court to make such an award to a
party that has achieved “some degree of success on the merits.”2 Gross v. Sun Life Assur. Co. of
Canada, 763 F.3d 73, 76–77 (1st Cir. 2014). “The favorable result must be more than a ‘trivial
success’ or ‘a purely procedural victory,’ but it is enough if the court can fairly call the outcome
of the litigation some success on the merits without conducting a lengthy inquiry into the
question whether a particular party’s success was substantial or occurred on a central issue…
such success [has been described] as a merits outcome [that] produces some meaningful benefit
for the fee-seeker.”Id. (internal quotations, citations and citations to quoted cases omitted). There
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Defendant has not provided the Court with supporting documentation to verify the amount of alleged
attorneys’ fees incurred. Instead, citing Fed.R.Civ.P. 54(d)(2)(C), Defendant has requested that the Court first make
a finding that Plaintiffs are liable for an award of attorneys’ fees before requiring evidentiary support for the award.
See Id. (The court may decide issues of liability for fees before receiving submissions on the value of services).
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“ ‘ERISA does not provide for a virtually automatic award of attorney’s fees to prevailing plaintiffs.
Instead, fee awards under ERISA are wholly discretionary.’” Cook v. Liberty Life Assur. Co. of Boston, 334 F.3d
122, 124 (1st Cir. 2003).
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is no question that Defendant achieved a “degree of success on the merits” which makes him
eligible for attorneys’ fees under Section 1132(g). However,
[e]ligibility for attorney’s fees is not sufficient to entitle a party actually to receive
attorney’s fees … and in the First Circuit, a five-factor test is used to review fee
requests under ERISA. The factors are:
(1) the degree of culpability or bad faith attributable to the losing
party; (2) the depth of the losing party’s pocket, i.e., his or her
capacity to pay an award; (3) the extent (if at all) to which such an
award would deter other persons acting under similar
circumstances; (4) the benefit (if any) that the successful suit
confers on plan participants or beneficiaries generally; and (5) the
relative merit of the parties’ positions.
This test is only a guide. No single factor is determinative, not every factor must
be considered in every case, and additional factors should be considered where
relevant.
Hatfield v. Blue Cross & Blue Shield of Massachusetts, Inc., 162 F. Supp. 3d 24, 44 (D. Mass.
2016)(internal citations and citations to quoted case omitted).
Although they ultimately lost on the merits, I do not find that the Plaintiffs acted in bad
faith. Through the limited discovery permitted by the Court, Defendant was able to definitively
establish that appropriate notice of the Plan freeze was mailed to Plan participants. However,
Plaintiffs have no recollection of ever receiving the notice and the Court has no reason to doubt
that they are sincere in their belief that they did not receive the notice. As to the second factor,
Plaintiffs simply state that as former employees of a car dealership, they do not have the means
to pay an award, particularly as high as the one that the Defendant is seeking. While it would
have been preferable for the Plaintiffs to file a sworn affidavit detailing their inability to pay a
significant award, the circumstances of this case suggest that Plaintiffs would not have the
resources to pay the amount of money requested by Defendant. The next factor is somewhat
neutral. I agree with the Plaintiffs that an award in favor of Defendant would deter a plaintiff
who has a good faith belief that his/her right to ERISA benefits has been violated. On the other
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hand, Plaintiffs arguably pursued this matter long after the Court had made it clear that their case
was paper thin and after the record evidence produced by the Defendant and that obtained in the
limited discovery permitted by the Court established beyond doubt that their claims were
doomed to fail. An award in Defendant’s favor could deter a plaintiff from continuing to
prosecute his/her suit once it becomes clear it has no merit. Plaintiffs failure to “give up the ship”
when it became increasingly clear that their claims were baseless is also relevant to the last
relevant factor—the merits of the parties’ positions. However, I again find it compelling that the
Plaintiffs had a good faith belief that the Defendant did not properly amend the Plan, which led
to them being deprived of expected retirement benefits. After limited discovery and production
of documentation by the Defendant, the Court ultimately found that the Defendant had not acted
improperly. While the Defendant ultimately prevailed, I am not willing to find that Plaintiffs’
claims were totally devoid of merit, and I most certainly do not find that they engaged in
frivolous or vexatious litigation.
Bearing in mind that the court is not limited to considering the previously enumerated
factors, the Plaintiffs have also argued that the motion for attorneys’ fees should be denied because
the requested award of over $250,000 is “grossly excessive.” I will note that this matter was
resolved at the summary judgment stage. There was some wrangling which required multiple
rounds of briefing of other dispositive motions (none of which was terribly complex), and some
limited discovery. Given these circumstances, I agree that the amount of attorneys’ fees requested
seems to be on the high end of what would be expected. However, Defendant’s counsel has not
provided any substantive detail regarding the hours spent by attorneys who worked on the case,
their rates charged, or the expenses incurred. Under these circumstances, it would be unfair and
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inappropriate for me to pass judgment on the propriety of the amount of attorneys’ fees charged
by Defendant’s counsel.
I agree with the Defendant that the Plaintiffs pursued their case beyond the point that it
became clear that their claims lacked merit. While that fact makes it a close call, balancing the
recited factors and the equities as a whole, I do not find that an award of attorneys’ fees is warranted
in this case.
Conclusion
Defendant’s Motion for an Award of Attorney’s Fees Pursuant to ERISA §502(g) And
F.R.C.P. 54(d)(2)(Docket No. 77) is denied.
SO ORDERED.
/s/ Timothy S. Hillman
TIMOTHY S. HILLMAN
DISTRICT JUDGE
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