Guschausky v. American Family Life Assurance Company of Columbus et al
Filing
128
ORDER granting 107 Motion for relief from judgment. Signed by Judge Donald W. Molloy on 10/11/2012. (dle)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
HELENA DIVISION
PAMELA K. GUSCHAUSKY,
individually and on behalf of all other
similarly situated,
)
)
)
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Plaintiffs,
)
)
vs.
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AMERICAN FAMILY LIFE
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ASSURANCE COMPANY OF
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COLUMBUS, AFLAC INCORPORATED, )
AND DOES 1-10,
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Defendants.
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___________________________________ )
CV 10-59-H-DWM
ORDER
On April 2, 2012, this Court issued findings of fact and conclusions of law
awarding Guschausky $1,650,408.25 in attorney’s fees, as well as the class’s
reasonable costs and expenses. (Doc. 94). AFLAC filed a motion under Federal
Rule of Civil Procedure 60, challenging that award. The Court grants AFLAC’s
motion and modifies the award of attorney’s fees. The Court’s previously issued
findings of fact and conclusions of law are incorporated into this order to the
extent that they are consistent with this order.
The Court based its previous award of attorney’s fees on the parties’
stipulation as to the potential value of the settlement in this case. The class
stipulated that the minimum settlement value is $6,601,633.00, and AFLAC
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stipulated that this figure represented the “maximum reasonable monetary value.”
(Doc. 82). Given these representations, the Court determined that the $6.6 million
figure was a reasonable estimation of the settlement value. Neither of the parties
provided viable, convincing alternatives that were based on any reliable data. At
the hearing on the class’s motion to determine attorney’s fees, AFLAC, for the
first time, asked for additional time to analyze the settlement value, but the Court
denied that request.
AFLAC’s motion for relief from the attorney’s-fees judgment is based on
Rule 60(b)(2), which permits a court to grant relief based on “newly discovered
evidence that, with reasonable diligence, could not have been discovered in time
to move for a new trial under Rule 59(b).” Fed. R. Civ. P. 60(b)(2). Here, AFLAC
claims that “newly discovered evidence from the claims review process
demonstrates that the potential value of claims is far less than the $6.6 million
class benefit figure . . . .”
Instead of the $6.6 million figure, AFLAC now claims that the monetary
settlement value is $1,539,736.46. The class does not dispute this figure.1 This
Instead of disputing the figure, the class argues that the data upon which
this figure is based is summary data that should be excluded under Federal Rule of
Civil Procedure 1006. The class’s argument fails.
AFLAC’s data is in the form of spreadsheets that identify claims that
AFLAC paid out. The class argues that it did not receive this “summary data” until
May 4, 2012, and that it has not examined the underlying data. (See doc. 119 at 4.)
Rule 1006 does not require a party to produce underlying data. A party must
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value is based on data that was available to AFLAC prior to the attorney’s-fees
hearing but was fully analyzed only after the hearing. AFLAC’s new analysis is
not “newly discovered evidence.” The new analysis simply offers a clearer picture
of old, existing evidence. Rule 60(b)(2) therefore does not apply.
Relief from the attorney’s-fees award is warranted, though, under Rule
60(b)(6), which permits a Court to grant relief for “any reason that justifies relief.”
A party qualifies for relief under Rule 60(b)(6) if he demonstrates “extraordinary
circumstances which prevented or rendered him unable to prosecute his case.”
Community Dental Servs. v. Tani, 282 F. 3d 1164, 1168 (9th Cir. 2002) (citations
and internal quotation marks omitted). “The party must demonstrate both injury
and circumstances beyond his control that prevented him from proceeding with the
prosecution or defense of the action in a proper fashion.” Id. (citations and internal
quotation marks omitted). Those circumstances exist here.
The Court expects parties to move for necessary continuances before the
eleventh hour, if possible. Here, nothing prevented AFLAC from asking for more
time to analyze the data prior to the hearing. AFLAC, though, waited until the
simply make that underlying data available to the opposing party. The hearing for
AFLAC’s Rule 60 motion was held on September 24, 2012. The class therefore
had more than four months to examine any underlying data if it wanted to do so. It
apparently did not. And it has not come forward with any evidence showing that
AFLAC refused to provide access to the data. Even assuming that the spreadsheets
are summary data, the class has not come forward with a legitimate reason for
excluding it.
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hearing to ask for the continuance. Nevertheless, had the Court granted the
continuance, the parties would have had a better opportunity to determine a
“mathematically ascertainable” settlement value. Boeing Co. v. Van Gemert, 444
U.S. 472, 473 (1980); Staton v. Boeing, 327 F.3d 938, 973 (9th Cir. 2003). Given
the importance of the settlement value in determining the appropriate attorney’sfees award in this case, the new analysis—which AFLAC was not able to perform
prior to the hearing—creates extraordinary circumstances that warrant relief.
AFLAC’s new analysis shows that the monetary settlement value for this
case is no greater than $1,539,736.46. The Court incorporates by reference into
this order its conclusion that this sum represents a common fund. (Doc. 94 at ¶¶
29–31, 34–35.) This sum, though, does not represent the entire value of the
settlement. There is non-monetary value, as well—e.g., the future money that
insurers will save as the result of AFLAC’s changed policies. Morris v. Eversley,
343 F. Supp. 2d 234, 246–47 (S.D.N.Y. 2004) (stating that “the degree of
monetary success (or lack thereof) is only one factor to be considered. Courts must
also consider whether the plaintiff has achieved some other measure of success”
and refusing to reduce attorneys’ fees based on “limited monetary value” of
recovery, where a “significant victory” with “non-monetary value” was obtained);
see also Vizcaino v. Microsoft Corp., 142 F. Supp. 2d 1299, 1305 (“[T]he
‘benchmark’ percentage of recovery fee is 25% of the recovery obtained, including
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future benefits, with 20 to 30% as the usual range of common fund fees.”).
The class’s expert valued the future benefits at no less than $21,295,629
over eight years. (DeWees Aff., doc. 65 at ¶ 16.) This number, like the stipulated
potential settlement value, appears to be inflated, based on AFLAC’s new
analysis. There is, however, a way to estimate the future value of the settlement in
light of the new analysis.
The settlement defines, in part, the monetary relief settlement subclass as:
All policyholders who are residents of the United States, its Territories,
and the District of Columbia, who purchased a “One-Parent Family” or
“Two-Parent Family” coverage insurance policy from Defendant, who
had their dependent claims denied during the time period from
December 16, 2002 to present for “Claimant Excluded from Coverage”
or “Dependent Not Covered” (Denial Codes 3 and 12), and for whom
Defendant retained the premiums paid for coverage for dependent
children when such policyholder had and currently has no children
eligible for dependent coverage under the terms of the policy.
(Settlement, doc. 52 at 3.1(A).) The subclass, then, covers roughly 10 years of
retained premiums. Ten years of retained premiums resulted in a monetary
settlement value of $1,539,736.46. Thus, all other factors being equal, the value of
the settlement over the next eight years (i.e., the class’s time frame for estimating
future value) is $1,231,789.17. The total value of the settlement, then, is
$2,771,525.63.
The Court incorporates its conclusion that the appropriate method for
determining the attorney’s fees in this case is the percentage-of-recovery method.
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(Id. at ¶¶ 32–33, 37.) Using the “benchmark” 25% figure, the attorney’s fees
award is $692,881.41. The Court makes this award against the backdrop of the
parties’ agreement that the “award of attorneys’ fees and reimbursement of
expenses . . . shall be determined solely and exclusively by the Court . . . .”
(Settlement, doc. 52 at ¶ 8.1) (emphasis added).
IT IS ORDERED that AFLAC’s motion for relief from judgment (doc. 107)
is GRANTED. The Court’s previous attorney’s fees award of $1,650,408.25 in
favor of the class is VACATED. AFLAC shall pay the class’s attorney’s fees in
the amount of $692,881.41.
Dated this 11th day of October 2012.
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