Cohen v. Life Insurance Company of North America

Filing 31

OPINION AND ORDER: re: 21 MOTION for Attorney Fees . filed by Andrew Cohen. For the foregoing reasons, Cohen's motion for attorney's fees, costs, and prejudgment interest is GRANTED in part and DENIED in part. The Clerk of C ourt is directed to close the motion at Docket Number 21 and to enter an award for Cohen in the amount of $710.49 in costs, $46,146.25 in attorney's fees, and $5,198.63 in prejudgment interest, for a total of $52,055.37. SO ORDERED. (Signed by Judge J. Paul Oetken on 4/24/2019) (js)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
ANDREW COHEN,
Plaintiff,
17-CV-9270 (JPO)
-vOPINION AND ORDER
LIFE INSURANCE COMPANY OF
NORTH AMERICA,
Defendant.

J. PAUL OETKEN, District Judge:
Plaintiff Andrew Cohen brought this lawsuit under the Employee Retirement Income
Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq., to press a claim that Defendant Life
Insurance Company of North America (“LINA”) had improperly refused to pay him long-term
disability benefits under a policy LINA had issued to Cohen’s employer. (See Dkt. No. 1.) After
discovery had begun (see Dkt. No. 12), the parties settled Cohen’s claim (see Dkt. Nos. 17–18).
Cohen now moves for an award of attorney’s fees, costs, and prejudgment interest. (Dkt. No.
21.) For the reasons that follow, Cohen’s motion is granted in part and denied in part.
I.

Background
Plaintiff Andrew Cohen worked as a financial executive until he suffered an April 29,

2016 spinal injury that disabled him from continuing in that position. (Dkt. No. 24 ¶¶ 4–6.)
Following the injury, Cohen filed for long-term disability benefits pursuant to a group insurance
policy LINA had issued Cohen’s employer. (Dkt. No. 24 ¶ 9.) LINA denied Cohen’s claim on
April 14, 2017, and on November 27, 2017, after LINA failed to resolve Cohen’s administrative
appeal within the required timeframe, Cohen filed suit against LINA in this Court. (Dkt. No. 24
¶¶ 11, 13–15; see also Dkt. No. 1.) Cohen’s one-count complaint alleged that LINA’s refusal to

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pay disability benefits breached the terms of the insurance policy LINA had issued Cohen’s
employer and that Cohen was entitled to relief under ERISA. (Dkt. No. 1 ¶¶ 24–29.)
LINA answered Cohen’s complaint on February 5, 2018 (Dkt. No. 10), and discovery
began soon afterward (see Dkt. No. 12). Following an exchange of initial discovery, Cohen and
LINA held a June 19, 2018 mediation session before a privately retained mediator. (Dkt. No. 24
¶¶ 17–18; see also Dkt. No. 13.) A few months later, LINA advised Cohen that it had decided to
“overturn [its] prior decision” and to retroactively approve his benefits application. (Dkt. No.
24-2.) On August 17, 2018, the parties reported to the Court that they had reached a settlement
in principle (Dkt. No. 17), and the Court accordingly dismissed the case a few days later, without
prejudice to restoring the action to the Court’s calendar upon timely motion (Dkt. No. 18).
On September 21, 2018, Cohen moved for attorney’s fees, costs, and prejudgment
interest. (Dkt. No. 21.) Specifically, Cohen requested $47,278.75 in attorney’s fees, $710.49 in
litigation costs, and $9,357.53 in prejudgment interest on the benefits LINA had withheld prior
to the settlement. (Dkt. No. 24-3; Dkt. No. 24-6 at 13, 15; Dkt. No. 24-7.) LINA thereafter filed
a partial opposition to Cohen’s motion, raising no objection to Cohen’s request that he be
awarded attorney’s fees and costs, but contending that the dollar amount of Cohen’s requested
fee award was excessive and that Cohen was not entitled to prejudgment interest. (Dkt. No. 26 at
9.) Cohen filed a reply on October 9, 2018, reaffirming his initial request and making a further
request for an additional $10,631.25 in attorney’s fees that had accrued in connection with the
litigation over the motion for fees, costs, and prejudgment interest. (Dkt. No. 27.)
The Court now turns to the merits of Cohen’s motion.
II.

Legal Standard
In an ERISA action, “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 Second Circuit has made clear that
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“granting a prevailing [ERISA] plaintiff’s request for fees is appropriate absent ‘some particular
justification for not doing so.’” Donachie v. Liberty Life Assurance Co. of Bos., 745 F.3d 41, 47
(2d Cir. 2014) (quoting Birmingham v. SoGen-Swiss Int’l Corp. Ret. Plan, 718 F.2d 515, 523 (2d
Cir. 1983)). Likewise, a successful plaintiff “may recover ‘reasonable out-of-pocket’ expenses
incurred during litigation as part of [an] attorneys’ fee award.” Capitol Records, Inc. v.
MP3tunes, LLC, No. 07 Civ. 9931, 2015 WL 7271565, at *6 (S.D.N.Y. Nov. 12, 2015) (quoting
Berry v. Deutsche Bank Tr. Co. Ams., 632 F. Supp. 2d 300, 306 (S.D.N.Y. 2009)). Finally, the
Second Circuit has acknowledged that ERISA also authorizes the district court, in its discretion,
“to award prejudgment interest to a successful ERISA claimant.” Slupinski v. First Unum Life
Ins. Co., 554 F.3d 38, 53–54 (2d Cir. 2009).
III.

Discussion
As noted, Cohen seeks an award of attorney’s fees, costs, and prejudgment interest. The

Court addresses each component of the requested award in turn.
A.

Attorney’s Fees

Cohen first seeks a total of $57,910 in attorney’s fees, with $47,278.75 made up of fees
accrued in litigating the underlying action and the remaining $10,631.25 made up of fees accrued
in litigating the instant motion for fees, costs, and prejudgment interest. (Dkt. No. 27 at 4.)
LINA never disputes that Cohen “obtained ‘some degree of success on the merits’” and
so is eligible for an award of attorney’s fees under ERISA. Donachie, 745 F.3d at 46 (quoting
Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 254 (2010)). Nor does LINA suggest
any other consideration that might cause this Court to exercise its discretion to deny an award
despite Cohen’s success in the underlying litigation. The Court therefore concludes that ERISA
entitles Cohen to “a reasonable attorney’s fee,” 29 U.S.C. § 1132(g)(1), including “attorneys’
fees for preparing the fee application” itself, Pig Newton, Inc. v. Bds. of Dirs. of the Motion
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Picture Indus. Pension Plan, No. 13 Civ. 7312, 2016 WL 796840, at *9 (S.D.N.Y. Feb. 24,
2016).
The question of what dollar amount represents a reasonable award, however, is subject to
greater contention. Typically, “[c]ourts calculate the presumptively reasonable fee by
multiplying the reasonable number hours that the case required by the reasonable hourly rates” of
the legal professionals involved. Id. at *3. Cohen has submitted affidavits attesting to the
reasonableness of the rates charged by the attorneys and paralegals who worked on his case (see
Dkt. No. 24-4 ¶ 17; Dkt. No. 24-5 ¶ 14), along with timesheets accounting for the number of
hours expended on the case (Dkt. No. 24-6; Dkt. No. 28-1). LINA never disputes the
reasonableness of the hourly rates underlying Cohen’s fee request, but it argues that the
timesheets submitted fail to establish the reasonableness of the number of hours spent on this
case. (Dkt. No. 26 at 3–7.)
The Court agrees with LINA that, in many instances, the timesheets submitted by
Cohen’s attorneys reflect an unreasonable amount of time devoted to basic ministerial tasks.
Part of the problem, no doubt, lies with counsel’s “practice of billing in quarter-hour segments,”
which “tends substantially to overstate the amount of time spent when many tasks require only a
short time span to complete, and . . . adds an upward bias” to the number of hours claimed.
Nimkoff Rosenfeld & Schechter, LLP v. RKO Props., Ltd., No. 07 Civ. 7983, 2011 WL 8955840,
at *8 (S.D.N.Y. Apr. 7, 2011) (report and recommendation) (second quoting Lucky Brand
Dungarees, Inc. v. Ally Apparel Res., LLC, No. 05 Civ. 6757, 2009 WL 466136, at *4 (S.D.N.Y.
Feb. 25, 2009)), adopted, 2012 WL 3871394 (S.D.N.Y. Sept. 6, 2012). For example, an entry
dated November 28, 2017, reflects fifteen minutes spent “[r]eview[ing] [Electronic Case File]
Notices regarding case opening changes and Judges assigned.” (Dkt. No. 24-6 at 2.) And an

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entry dated February 5, 2018, reflects fifteen minutes spent “[r]eceiv[ing] Answer and Corporate
Disclosure Statement from Court and sav[ing] to system.” (Dkt. No. 24-6 at 3.) Such
straightforward tasks need not have taken more than a minute or two.
In other instances, redactions or vagueness make it difficult for the Court to assess
whether certain timesheet entries reflect a reasonable use of attorney and paralegal time. For
example, an entry dated February 8, 2018, shows fifteen minutes spent “[a]ddress[ing] various
issues related to litigation” without any elaboration. (Id.) And a heavily redacted entry from
February 27, 2018, that led to a requested $1,237.50 in fees, reads, “In anticipation of telephone
conversation with client later in day, [REDACTED]. Additionally, review of client’s
[REDACTED], reviewed [REDACTED]. Drafted email to client regarding same.” (Dkt. No.
24-6 at 5.) While the Court acknowledges that limited redaction may be necessary to protect the
confidentiality of attorney-client communications, excessive redaction can “complicate efforts to
comprehensively assess the reasonableness of the fees” where it leaves the Court without a basis
for gaining even a general sense of how an attorney’s time was spent. Protoons Inc. v. Reach
Music Publ’g, Inc., No. 09 Civ. 5580, 2016 WL 680543, at *13 (S.D.N.Y. Feb. 19, 2016).
With these deficiencies in mind, the Court has reviewed the submitted timesheets and has
identified forty-six entries, totaling $11,763.75, that are too vague or incomplete to allow the
Court to assess their reasonableness or that reflect hours that are excessive in relation to the work
performed. While the Court has no doubt that these entries do correspond to some amount of
compensable work, the Court will disallow in full the requested fees associated with these entries
in order to compensate for the fact that many other timesheet entries (albeit less drastically)
evidence the same sort of imprecision, inflation, and vagueness that afflict the disallowed entries.
And although the Court has not adopted the approach of making an across-the-board reduction of

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the requested award, the Court notes that $11,763.75 represents just over 20% of the requested
$57,910 and thus is in line with the amount the Court might have deducted had it taken an
across-the-board approach. See, e.g., Ass’n of Holocaust Victims for Restitution of Artwork and
Masterpieces v. Bank Austria Creditanstalt AG, No. 04 Civ. 3600, 2005 WL 3099592, at *7
(S.D.N.Y. Nov. 17, 2005) (reducing a requested award by 25% due to “instances of block billing,
vagueness, and excess”); Trs. of Bricklayers & Allied Craftworkers Local 5 N.Y. Ret. v. HelmerCronin Constr., Inc., No. 03 Civ. 0748, 2005 WL 3789085, at *5 (S.D.N.Y. Oct. 24, 2005)
(reducing the hours billed by 20% where the “record [was] replete with vague entries”). 1
The Court therefore concludes that Cohen is entitled to an award of attorney’s fees in the
amount of $46,146.25.
B.

Costs

Cohen next seeks to recover $710.49 in litigation expenses that consist of filing fees,
costs related to the service of process, and research costs. (Dkt. No. 24-7; see also Dkt. No. 25 at
12–13.) LINA has made no objection to Cohen’s requested costs (see Dkt. No. 27 at 4), and the
Court concludes that the costs Cohen seeks are properly recoverable, see James v. Nat’l R.R.
Passenger Corp., No. 02 Civ. 3915, 2005 WL 6182322, at *22 (S.D.N.Y. Mar. 28, 2005)
(“Legal research costs are recoverable in an application for attorneys’ fees.”); Arnone v. CA, Inc.,
No. 08 Civ. 4458, 2009 WL 585841, at *2 (S.D.N.Y. Mar. 6, 2009) (including “docket fees” and
“service costs” among those costs that are appropriately awarded to a prevailing party).
Cohen is therefore entitled to an award of costs in the amount of $710.49.

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In a footnote, LINA suggests that the Court should further discount “[a]ll time devoted
to preparing discover[y]” because the discovery Cohen sought “was entirely inappropriate for an
ERISA matter.” (Dkt. No. 26 at 3 n.1.) This unelaborated argument, however, gives the Court
no basis for concluding that the fees Cohen’s counsel incurred in connection with discovery
matters were particularly unreasonable.

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C.

Prejudgment Interest

Finally, Cohen seeks an award of prejudgment interest in the amount of $9,357.53 to
account for the period during which LINA withheld his benefits payments. (Dkt. No. 24-3; see
also Dkt. No. 25 at 13–14.)
The Second Circuit has noted that “prejudgment interest is an element of [the plaintiff’s]
complete compensation.” Slupinski, 554 F.3d at 54 (alteration in original) (internal quotation
marks omitted) (quoting Jones v. UNUM Life Ins. Co. of Am., 223 F.3d 130, 139 (2d Cir. 2000)).
In deciding whether to award interest, and at what rate, the Court weighs “(i) the need to fully
compensate the wronged party for actual damages suffered, (ii) considerations of fairness and the
relative equities of the award, (iii) the remedial purpose of the statute involved, and/or (iv) such
other general principles as are deemed relevant.” Id. at 55 (quoting Jones, 223 F.3d at 139).
To begin with, LINA appears to suggest that Cohen is not entitled to any prejudgment
interest at all. (Dkt. No. 26 at 9.) However, LINA makes no argument as to why this Court
should “ignore the time value of money, and the benefit that [Cohen] could have derived from”
his disability payments “had the funds been issued at the appropriate time and invested during
the pendency of his proceedings.” Alfano v. CIGNA Life Ins. Co. of N.Y., No. 07 Civ. 9661,
2009 WL 890626, at *6 (S.D.N.Y. Apr. 2, 2009). In the usual case, “a monetary award does not
fully compensate for an injury unless it includes an interest component,” Slupinski, 554 F.3d at
54 (quoting Kansas v. Colorado, 533 U.S. 1, 10 (2001)), and there is no reason to doubt that such
is true here. The Court therefore concludes that Cohen is entitled to prejudgment interest.
The Court next turns to the question of the appropriate interest rate. Although Cohen
urges this Court to adopt the 9% interest rate that applies in New York’s state courts, see N.Y.
C.P.L.R. § 5004, LINA contends that a 9% interest rate results in an “excessive” award that is
impermissibly punitive (compare Dkt. No. 25 at 13–14, with Dkt. No. 26 at 8). In resolving this
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question, the Court is mindful that “[t]here is no federal statute that purports to control the rate of
prejudgment interest” associated with federal claims pursued in federal court. Jones, 223 F.3d at
139 (emphasis added). Instead, as noted above, a district court enjoys discretion in determining
the appropriate rate, upon the consideration of factors that include the need to provide adequate
compensation, the need to promote fairness and equity, and ERISA’s remedial purposes. See id.
As for the need to compensate Cohen for his damages, the federal prime interest rate at
all times relevant to his claim hovered between 3.5% and 5%. Cohen has offered no particular
reason why New York’s statutory rate of 9%, which was adopted in 1982—“a period of high
inflation that differed dramatically from our current interest rate environment,” Barrett v.
Hartford Life & Accident Ins. Co., No. 10 Civ. 4600, 2012 WL 6929143, at *2 (S.D.N.Y. Nov. 9,
2012)—better reflects his actual damages than does the federal prime rate. As for considerations
of fairness, the present record gives the Court no reason to believe that LINA’s initial decision to
deny Cohen benefits was malicious or unscrupulous; indeed, LINA acted relatively promptly to
settle this lawsuit and to reinstate Cohen’s benefits. And as for ERISA’s remedial purposes, “the
Court follows the example of others in this District, concluding that because of low interest rates
in recent years, ‘applying a 9 percent rate would provide a windfall to [Cohen] and would serve
to punish [LINA], in contravention of the compensatory goal of ERISA.’” Levy v. Young Adult
Inst., Inc., No. 13 Civ. 2861, 2017 WL 1929505, at *4 (S.D.N.Y. May 9, 2017) (quoting Barrett,
2012 WL 6929143, at *2). The Court therefore applies a prejudgment interest rate of 5%, which
reflects the federal prime interest rate as of the date the parties settled this case.
It therefore remains only for the Court to apply the 5% rate to arrive at the total amount
that LINA owes Cohen in prejudgment interest. In arriving at his initially requested total of
$9,357.53, Cohen took the approach adopted in Taaffe v. Life Ins. Co. of N. Am., 769 F. Supp. 2d

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530 (S.D.N.Y. 2011), of calculating prejudgment interest with reference to a date midway
through the insurer’s delinquency period, see id. at 538–39. (Dkt. No. 25 at 14; see also Dkt.
No. 24-3.) LINA has raised no objection to this method of calculation, and the Court therefore
adopts it. Adhering to Cohen’s proposed methodology, but replacing his preferred 9% interest
rate with the 5% interest rate that this Court has now deemed applicable, the Court concludes
that Cohen is entitled to an award of prejudgment interest in the amount of $5,198.63.
IV.

Conclusion
For the foregoing reasons, Cohen’s motion for attorney’s fees, costs, and prejudgment

interest is GRANTED in part and DENIED in part.
The Clerk of Court is directed to close the motion at Docket Number 21 and to enter an
award for Cohen in the amount of $710.49 in costs, $46,146.25 in attorney’s fees, and $5,198.63
in prejudgment interest, for a total of $52,055.37.
SO ORDERED.
Dated: April 24, 2019
New York, New York
____________________________________
J. PAUL OETKEN
United States District Judge

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