Rhea v. Alan Ritchey, Inc. et al
Filing
67
REPORT AND RECOMMENDATIONS re 62 Order Adopting Report and Recommendations, 57 Report and Recommendations. Within fourteen (14) days after service of the magistrate judges report, any party may serveand file written objections to the findings and recommendations of the magistrate judge. 28U.S.C.A. § 636(b)(1)(C). Signed by Magistrate Judge Don D. Bush on 8/12/15. (cm, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION
DONNA RHEA,
§
§
§
§
§
§
§
§
§
§
§
Plaintiff,
v.
ALAN RITCHEY, INC.
WELFARE BENEFIT PLAN and
ALAN RITCHEY, INC.
Defendants.
Civil Action No. 4:13-cv-00506
REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
On March 30, 2015, the Court adopted the findings and conclusions of the U.S. Magistrate
Judge and found that Plaintiff should take nothing by her claims, directing Plaintiff to turn over
$71,644.77 to Alan Ritchey, Inc. and awarding Defendants their attorney’s fees and costs herein (see
Dkt. 62). In the report and recommendation adopted by the District Judge, the Court found that there
was no fact issue that the Summary Plan Description at issue in this case (“SPD”) allowed the Alan
Ritchey Inc. Welfare Benefit Plan (“the Plan”) recovery of its attorney’s fees, citing to the following
provision in the SPD:
If the Plan incurs attorneys’ fees and costs in order to collect third party settlement
funds held by you or your representative, the Plan has the right to recover those
fees and costs from you.
See Dkt. 57 (citing Dkt. 37-6 at 6).
1
The Court directed Defendants to submit separate briefing as to the amount of attorney’s fees
requested, if any, and, Defendants thus submitted their Supplemental Briefing on Attorney Fees (see
Dkt. 60). The Court addresses the requested fees and costs below.
Defendants ask the Court to award $29,412.00 in attorney fees (which consists of 196.5 hours
at $150.00/hour), or an amount considered by the Court to be equitable, and $2,003.50 in taxable
court costs and attach a supporting affidavit and invoices. Plaintiff opposes, arguing that no fees
should be awarded because Defendants only sought an award of statutory attorney’s fees under
ERISA in their counterclaim and not an award of fees pursuant to the SPD. Defendants further argue
that, in any event, no discretionary fee award is warranted under ERISA. As noted by Defendants,
Plaintiff does not challenge the amount, necessity, or reasonableness of the fees requested. Thus,
the Court focuses on Plaintiff’s argument that no fee award is warranted here.
Plaintiff argues that Defendants cannot be awarded attorney’s fees under the SPD because
Defendants’ fee request in their counterclaim was not based on the terms of the SPD but instead on
ERISA. First, the Court notes that the contractual attorney’s fees provision relied upon by this Court
in its recommendation was cited verbatim in Defendants’ answer and counterclaim (see Dkt. 12 at
7). In finding that there was no fact issue that the SPD was the plan and applying its provisions
accordingly, the Court thus found that the SPD permitted Defendants to recover their attorney’s fees.
See Dkt. 57 at 15. In her objections to that report and recommendation, Plaintiff only objected that
the Court’s recommended relief in favor of Defendant regarding reimbursement was not equitable
because it would “force her to pay their attorney’s fees in this case because she dared to point out
2
that their documentation was sloppy and did not comply with ERISA.” Dkt. 58 at 3. Plaintiff did
not specifically object to the award of fees. Nor did Plaintiff argue that the fees should not be
awarded under the SPD because Defendants’ fee request was limited to a statutory fee request, as
she argues now. Plaintiff’s objections regarding the fee award were not specific objections as Rule
72(b) requires, and Plaintiff has not now demonstrated clear error in the Court’s decision to award
Defendants’ their fees under the SPD. See FED. R. CIV. P. 72; 1983 Advisory Committee Notes to
Federal Rule Civil Procedure 72 at ¶6. Indeed, Plaintiff has provided no response to Defendants’
argument that, by failing to timely object to the recommendation that fees be awarded under the
SPD, Plaintiff has waived any challenge to the award of fees pursuant to the SPD. Noting that no
objection was made prior to the District Judge’s adoption of the undersigned’s report and
recommendation, the Court finds that the pleadings sufficiently state an award of attorney’s fees
under the SPD and Plaintiff’s objections to the award should be overruled.
Further, even if Defendants were precluded from recovering fees under the SPD as Plaintiff
argues, the Court finds that the Bowen factors she cites (assuming the Court would exercise its
discretion to apply them here) also weigh in favor of the award. Iron Workers Local # 272 v. Bowen,
624 F.2d 1255 (5th Cir. 1980). See also Lincoln Fin. Co. v. Metro. Life Ins. Co., 428 Fed. App’x
394, 395 (5th Cir. 2011) (“Once a district court determines that a party is eligible for a fee award
under § 1132(g)(1), a district court may consider whether fees are appropriate under the factors
outlined in” Bowen); see also LifeCare Mgmt. Servs., LLC v. Ins. Mgmt. Adm’rs Inc., 703 F.3d 835,
846 (5th Cir. 2013) (while not required, court may consider Bowen factors). In addition to fees under
3
the SPD, Defendants’ counterclaim seeks statutory attorney’s fees as authorized under ERISA. Dkt.
12 at ¶ 35 and Prayer (e).1 As provided by Bowen:
In deciding whether to award attorneys’ fees to a party under section 502(g),
therefore, a court should consider such factors as the following: (1) the degree of
the opposing parties’ culpability or bad faith; (2) the ability of the opposing
parties to satisfy an award of attorneys’ fees; (3) whether an award of attorneys’
fees against the opposing parties would deter other persons acting under similar
circumstances; (4) whether the parties requesting attorneys’ fees sought to benefit
all participants and beneficiaries of an ERISA plan or to resolve a significant legal
question regarding ERISA itself; and (5) the relative merits of the parties’
positions. No one of these factors is necessarily decisive, and some may not be
apropos in a given case, but together they are the nuclei of concerns that a court
should address in applying section 502(g).
Bowen, 624 F.2d at 1266 (internal citations omitted). Contrary to Plaintiff’s contentions, the Court
finds that these factors do not weigh in her favor.
As to the degree of Plaintiff’s culpability or bad faith, the undersigned’s summary judgment
analysis clearly noted that Plaintiff’s position in seeking to obtain the benefit of a plan as a covered
person, but not complying with her obligations under it as a covered person would result in an
unwarranted windfall to her. And, as to her ability to satisfy the award of attorney fees, Plaintiff has
not offered any argument or evidence to show that she is not able to pay for the attorney’s fees.
These factors are neutral at best and most certainly do not weigh in favor of Plaintiff.
1
The Court notes that Defendants request a fee award under “Section 503(a)(16),” which
they have since conceded is a non-existent section. See Dkt. 65 at 2. Defendants further state
that citation to this specific subsection was a typographical error. Id. The Court finds the request
for statutory attorney’s fees is sufficiently pleaded in the counterclaim, and, to the extent not
already waived, any objection by Plaintiff regarding this typographical error is overruled.
4
As to deterrence, the intent to benefit all participants or beneficiaries or to resolve significant
legal questions regarding ERISA, and relative merits, Plaintiff argues that the Fifth Circuit has not
yet decided the specific question presented by this case. Specifically, Plaintiff argues that it was not
unreasonable or frivolous for her to ask this Court to resolve the significant legal question of
whether, in the wake of CIGNA Corporation v. Amara, __U.S. __, __, 131 S. Ct. 1866, 179 L. Ed.2d
843 (2011), an ERISA plan can, after the fact, designate its SPD as its actual plan document.
Plaintiff further argues that the Supreme Court may need to address the scope of its Amara decision
and that she is prepared to seek such relief should it prove necessary to vindicate the rights of
personal injury victims like her.
Although Plaintiff is correct in her assertion that the Fifth Circuit has not reached the specific
issue raised in this case, in its detailed analysis of Plaintiff’s claims in this case, this Court found that
current authorities were far more settled and persuasive than Plaintiff claimed. Indeed, the
undersigned’s report and recommendation noted the significant authority construing the holding in
Amara to be limited to situations where a summary plan document conflicts with a master plan
document and supporting a finding that Amara does not address situations where a summary
document is the only plan document. And while the Court found that Defendants’ construction of
its written ERISA instrument was indeed sloppy and noted that Defendants subsequently revised
their plan documents to avoid such issues in the future, the Court declines to now find that Plaintiff’s
suit had a far-reaching deterrent effect. Again, the Court notes that Plaintiff received the benefits
of the Plan and her position that she should not also be required to comply with its reimbursement
5
requirements was not tenable. Even if her lawsuit resulted in Defendants “cleaning up” their
paperwork (something the Court has not specifically found here), the Court declines to find that
Plaintiff’s suit had a far-reaching deterrent effect.
Plaintiff’s general opposition to the award of attorney’s fees is thus without merit. Turning
to the amount of attorney’s fees, as noted above, Plaintiff has not made any argument to show why
the fees requested are not reasonable given the facts of the case. Defendants ask the Court to award
$29,412.00 in attorney fees which consists of 196.5 hours at $150.00/hour. Given the record before
it and the nature of the parties’ dispute, and without any challenges by Plaintiff as to the
reasonableness of the amount requested, the Court finds that the amount requested is reasonable.
The Court further finds that $2,003.50 in taxable court costs is sufficiently supported by the record.
Therefore, the Court finds that Defendants are entitled to attorney’s fees and costs in the
amount requested.
RECOMMENDATION
Having considered Defendants’ Supplemental Briefing on Attorney Fees, supporting
documentation and the related briefing, and in accordance with its findings regarding the parties’
summary judgment motions (see Dkt. 57 & 62), it is therefore recommended that, in addition to the
turnover of the $71,644.77 previously ordered, Plaintiff Donna Rhea should pay to Defendants Alan
Ritchey, Inc. and Alan Ritchey, Inc., Welfare Benefit Plan the sum of $31,415.50 for reasonable
attorney’s fees and costs within 30 days of the entry of final judgment herein.
6
Within fourteen (14) days after service of the magistrate judge’s report, any party may serve
and file written objections to the findings and recommendations of the magistrate judge. 28
U.S.C.A. § 636(b)(1)(C).
A party is entitled to a de novo review by the district court of the findings and conclusions
contained in this report only if specific objections are made, and failure to timely file written
objections to any proposed findings, conclusions, and recommendations contained in this report shall
bar an aggrieved party from appellate review of those factual findings and legal conclusions accepted
by the district court, except on grounds of plain error, provided that the party has been served with
.
notice that such consequences will result from a failure to object. Id.; Thomas v. Arn, 474 U.S. 140,
148 (1985); Douglass v. United Servs. Auto Ass’n, 79 F.3d 1415, 1417 (5th Cir. 1996) (en banc),
superseded by statute on other grounds, 28 U.S.C. § 636(b)(1) (extending the time to file objections
from ten to fourteen days).
SIGNED this 12th day of August, 2015.
.
____________________________________
DON D. BUSH
UNITED STATES MAGISTRATE JUDGE
7
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?