Transamerica Annuity Service Corporation v. Symetra Life Insurance Company et al

Filing 33

OPINION AND ORDER granting in part and denying in part 21 Motion for Attorney Fees; granting 22 Motion to Correct.(Signed by Judge Melinda Harmon) Parties notified.(jdav, 4)

United States District Court
Southern District of Texas

ENTERED
August 10, 2017

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
§
§
§
Plaintiff,
§
§
VS.
§
§
SYMETRA LIFE INSURANCE COMPANY,§
A.M.Y. PROPERTY & CASUALTY
§
INSURANCE COMPANY, FINSERV
§
CASUALTY CORP., AND LIQUIDATING§
MARKETING, LTD. F/K/A RAPID
§
SETTLEMENTS, LTD.,
§
§
§
Defendants.
§

David J. Bradley, Clerk

TRANSAMERICA ANNUITY SERVICE
CORPORATION,

Civ. A. H-16-1426

OPINION AND ORDER
Pending

before

the

Court

in

the

above

referenced,

complex, statutory interpleader action1 under 28 U.S.C. §§ 1335 and
2361, to interplead annuity payments originally payable to non-

1

“‘Statutory interpleader is proper when a (1)
stakeholder has a single fund worth at least $500; (2) where two
or more adverse claimants with diverse citizenship are competing
for that fund; and (3) the stakeholder has deposited the fund in
the Court’s registry.’” Jackson National Life Insurance Company
v. Dobins, iv. A. No. 3:16-CV-0854-D, 2016 WL 4268770, at *1 (N.D.
Tex. Aug. 15, 2016), quoting Fresh Am. Corp. v. Wal-Mart Stores,
Inc., 393 F. Supp. 2d 411, 414 (N.D. Tex. 2005). There are two
stages to an interpleader: in the first stage the court determines
whether these requirements have been met; if the first step is
met, in the second, in which a discharged stakeholder has no role,
the court determines the rights of the claimants. Id. at *2.
Regarding the diversity requirement, the claimants in
interpleader need only be “minimally diverse” pursuant to 28
U.S.C. § 1335, i.e., a phrase “universally construed to require
only . . . diversity between two or more claimants, without regard
to the circumstance that other rival claimants may be cocitizens.” State Farm Fire & Cas. Co. v. Tashire, 336 U.S. 523,
530 (1967).
-1-

party Harrison Chung (“Chung Annuity Payments”),2 are, inter alia,
the following motions:
Plaintiff

(1) discharged, disinterested stakeholder

Transamerica

(“Transamerica’s”)
(instrument

#21)

interpleader;

and

Annuity

application

for

Service
attorneys’

for

services

rendered

(2)

Transamerica’s

in

motion

Corporations’s
fees

and

prosecuting
to

correct

costs
this
(#22)

clerical error in Opinion and Order of February 3, 2017 (#20), to
which no responses have been filed.

2

Symetra summarizes the early procedural history as
follows (#25 at p.2): The annuity funds were
originally payable by Transmerica to nonparty Harrison Chung, but
subsequently
transferred to Rapid Settlements LTD (“RSL”)
in 2007 by a court order out of the Snohomish
County, Washington court.
To satisfy a
judgment of nearly $1 million obtained in
this Court against RSL, Symetra domesticated
the judgment in Washington and properly
levied on the Chung Payments in a Sheriff’s
sale in Snohomish County.
2.
While the Sheriff’s sale was
pending, A.M.Y. Property & Casualty Insurance
Company (“A.M.Y.”) and FinServ Casualty Corp.
(“FinServ”), parties related to RSL, entered
into an alleged U.C.C. foreclosure sale of
the Chung Payments and claimed ownership to
them.
Symetra and FinServ/A.M.Y. each
demanded
payment
from
Transamerica.
Transamerica made no response to Symetra’s
demand, and Symetra filed a motion in the
Snohomish County Court to enforce the
Sheriff’s levy against Transamerica.
3. On May 20, 2016, Transamerica filed
this interpleader action.
Symetra waived
service
of
process.
None
of
the
Defendants/Claimants contested the deposit of
the
proceeds
or
the
filing
of
the
interpleader. . . .
-2-

The Court hereby incorporates by reference its previous
Opinion and Order (#20), providing background facts and applying
relevant law.
I.

Transamerica’s Motion to Correct Clerical Error (#22)
The Court first addresses Transamerica’s Federal Rule of

Civil Procedure 60(a) motion to correct clerical error in its
February 2, 2017 Opinion and Order (#20) granting Transamerica’s
motion for partial summary judgment.

Transmerica identifies the

error in that document as the inconsistency between the statement
on

page

25,

“The

Court

agrees

with

Transamerica

that,

as

a

disinterested stakeholder, making no claim to the Chung Annuity
Payments, it is entitled to a permanent injunction with prejudice
[emphasis added],” and the statement on page 26, “Accordingly the
Court concludes that Transamerica’s motion for partial summary
judgment should be granted, i.e., Transamerica should recover
reasonable

fees

and

costs

and

should

be

dismissed

without

prejudice.”
A.

Standard of Review–-Rule 60(a)

Rule 60(a) (“Corrections Based on Clerical Mistakes;
Oversights and Omissions”), provides,
The court may correct a clerical mistake or a
mistake arising from oversight or omission
whenever one is found in a judgment, order, or
other part of the record. The court may do so
on motion or on its own, with or without
notice. But after an appeal has been docketed
in the appellate court and while it is
pending, such a mistake may be corrected only
with the appellate court’s leave.
Rule 60(a) is restricted to “fixing clerical errors ‘of the sort
that a clerk or amanuensis might commit, mechanical in nature.”
-3-

Campbell Harrison & Dagley, Civ. A. No. 3:12-CV-4599-L, 2015 WL
4587567, at *5 (N.D. Tex. July 30, 2015), citing In re Transtexas
Gas Corp., 303 F.3d 571, 581 (5th Cir. 2002). “‘A Rule 60(a) motion
‘can only be used to make the judgment or record speak the truth
and cannot be used to make it say something other than what
originally was pronounced.’”

Rivera v. PNS Stores, Inc., 647 F.3d

188, 194 & n.15 (5th Cir. 2011)(citing In re Galiardi, 745 F. 2d
335, 337 (5th Cir. 1984), quoting 11 Charles Alan Wright & Arthur
R. Miller, Federal Practice and Procedure § 2854 (2d ed. 1977)),
cert. denied, 565 U.S. 1259 (2012).

For example, Rule 60(a) would

allow the court to correct a judgment to modify a jury’s damages
award when the jury made a mathematic error in computing damages,
but not to change the judgment, for instance to award specific
performance along with monetary relief.
In

Rivera

“[i]nadvertently

the

Fifth

designating

a

Id. at 194.

Circuit

dismissal

as

concluded
being

that

‘without

prejudice’ instead of ‘with prejudice’ is the type of rote,
typographical error of transcript that could be committed by a law
clerk or a judicial assistant.”

Rivera, 647 F.3d at 193-94

not an error of judgment or legal reasoning . . . .”

It is

Id. at 194.

It opined, “Our precedent lends strong support to the conclusion
that Rule 60(a) allows a judgment’s ‘with prejudice’ or ‘without
prejudice’ denomination to be changed when the change comports with
the intent conveyed by the substance of the district court’s
adjudication.”

Id.

In Rivera, the court specifically determined

that the dismissal was a clerical mistake, and without evidence to
the

contrary,

there

was

no

basis
-4-

to

discredit

the

court’s

statement.

Id. at 196-97.

Rule

is

60(a)

also

“A district court’s authority under

limited

to

making

corrections

that

are

consistent with the court’s intent at the time it entered the
[order]. . . . We ascertain the district court’s intent . . . by
reviewing

other

relevant

documents

that

were

produced

contemporaneously with the [order], such as a memorandum opinion or
order, findings of act and conclusions of law, the transcript of a
hearing, or a signed stipulation of the parties.”

Id. at 195.

When “[t]he reasoning of the memorandum order indicates that a
correction is substantive, not clerical,” the modification is not
authorized by Rule 60(a).
B.

Id.

Application of the Law

In its previous Opinion and Order (#20) this Court
intended to dismiss the stakeholder with prejudice and finds that
the contradiction in the two statements raised by Transamerica was
a clerical error.

In its previous Opinion and Order, the Court

found that the interpleader action was appropriate, given the
conflicting

claims

to

the

res

and

that

the

stakeholder

disinterested (i.e., it had no interest in the annuity funds).

was
A

dismissal with prejudice is logically consistent with the Court’s
rationale in discharging the stakeholder here.

The whole point of

a interpleader is “to protect a stakeholder from the burden of
dealing with multiple claims against the same fund and to relieve
the stakeholder from the necessity (and the risk) of identifying
which claims are meritorious.”

Metropolitan Life Ins. Co. v.

Bell, No. 6:14-cv-473-Orl-22TBS, 2014 WL 8021562, at *3 (M.D. Fla.
Oct. 9, 2014)(citing Perlman v. Fidelity Brokerage Services, LLC,
-5-

932 F. Supp. 2d 397, 415 2013).3

Moreover the dismissal of the

stakeholder from liability and, in a statutory interpleader, the
entry of a permanent injunction under 28 U.S.C. § 2361, enjoining
the claimants in this action “from instituting or prosecuting any
proceeding in any State or United States court affecting the
property . . . involved in the interpleader action” against the
stakeholder, are to protect the stakeholder from the burden of
unnecessary current and future litigation and/or risk of loss, once
the stakeholder has established the interpleader and deposited the
disputed funds in the registry of the Court, from further suit
brought by the same competing claimants to the fund based on the

3

As explained in Equitable Life Assurance Soc’y v.
Jones, 679 F.2d 356, 358 n.2 (4th Cir. 1982), citations omitted,
The principle of interpleader is that where
two persons are engaged in a dispute, and
that which is to be the fruit of the dispute
is in the hands of a third party, who is
willing to give it up according to the result
of the dispute, then . . . that third person
. . . is not to be obliged to be at the
expense and risk of defending an action; but
on giving up the thing . . ., he is to be
relieved, and the Court directs that the
persons between whom the dispute really
exists shall fight it out at their own
expense.
“The appropriate resolution of the interpleader action is to
absolve the stakeholder from the threat of multiple liability by
determining which of the claimants is entitled to the stake.”
Id., citing 7 Wright and Miller, Federal Practice and Procedure §
1702, p. 362 (1972). At this stage in the instant interpleader,
following the discharge of the stakeholder, the dispute over the
interpleader fund is between Defendant Symetra Live Insurance Co.
(“Symetra”) and Defendants (a/k/a “Interpleader Claimants”) A.M.Y.
Property & Casualty Company (“A.M.Y.”), FinServ Casualty Corp.
(“FinServ”), and Liquidation Marketing Ltd.(“LM”)(f/k/a Rapid
Settlements, Ltd.)(“Rapid”).
-6-

same facts that are in this interpleader action.4

Here, as the

Court has noted previously, the situation here is much more
complicated and much riskier for the stakeholder because the
interpleader serves to protect Transamerica from contradictory
decisions from other courts and from having to fight multiple
claimants on multiple fronts.

Furthermore “[i]mposing a temporary

injunction merely for the ‘duration of the interpleader action is
inconsistent with the interpleader’s purpose of ‘enabling the
plaintiff-stakeholder to avoid the burden of unnecessary litigation
or the risk of loss by the establishment of multiple liability,”
while

the

interpleader

action

determines

the

claimant(s)

who

actually is (are) entitled to the Chung Annuity Payments in dispute
here.

The same inconsistency would be true if the Court had

discharged the stakeholder without prejudice.

A dismissal with

prejudice protects Transamerica permanently.
Thus

the

Court,

pursuant

to

Rule

60(a),

grants

Transamerica’s motion to correct clerical error in order (#22) and
clarifies that its decision to discharge stakeholder Transamerica
was intended to be and was and is with prejudice.
II.

Transamerica’s Application for Fees and Costs (#21)
On

February

3,

2017,

the

Court,

in

granting

Transamerica’s motion for partial summary judgment, found that
Transamerica was a disinterested stakeholder entitled to recover
reasonable fees and costs, and ordered Transamerica to file an
appropriate application with supporting evidence.
4

As opined by this Court in its previous Opinion and

Order.
-7-

A.

Applicable Law

In a successful5 interpleader the district court has the
authority to and may, in its sound discretion, award reasonable
costs, including attorney’s fees, to a disinterested stakeholder
that is not in substantial controversy with one of the claimants,
whenever it is fair and equitable to do so.

Rhoades v. Casey, 196

F.3d 592, 603 (5th Cir. 1999), citing Corrigan Dispatch Co., 696
F.2d 359, 364 (5th Cir. 1983).

In interpleader actions, the only

requirement for such an award is that it be reasonable. James
Talcott, Inc. v. Allahabad Bank, Ltd., 444 F.2d 451, 468 (5th Cir.
1971); Noeller v. Metropolitan Life Ins. Co., 190
(E.D. Tex. 1999).

F.R.D. 202, 207

Therefore commentators, including Wright and

Miller and James Wm. Moore, have identified five factors to
consider in making such an award:

“(1) Whether the case is simple

or involved; (2) Whether the stakeholder performed any unique
services

for

the

claimants

or

the

court;

(3)

Whether

the

stakeholder acted in good faith and with diligence; (4) Whether the
services rendered benefitted the stakeholder; and (5) Whether the
claimants improperly protracted the proceedings.”

See, e.g., id.;

Noeller, 190 F.R.D. at 207; 7 Charles Alan Wright, Arthur R.
Miller, & Mary Kay Kane, Federal Practice and Procedure § 1719 (2d
ed. 1986); 4 James Wm. Moore, et al., Moore’s Federal Practice §

5

An interpleader action is “successful” and fees and
costs may be awarded “only when the party initiating the
interpleader is acting as a mere stakeholder, which means that he
has admitted liability, has deposited the fund in court, and has
asked to be relieved of any further liability.” 7 Wright & Miller,
Federal Practice and Procedure § 1719 (2d ed. 1986).
-8-

22.96 (3d ed. 1990).6

Because all that is required is preparation

of a petition, the deposit of the fund in the court or the posting
of a bond, service on potential claimants, and preparation of an
order discharging the stakeholder, the amount of the fee is usually
moderate.

Charles Alan Wright, Arthur R. Miller, & Mary Kay Kane,

Federal Practice and Procedure § 1719 (3d ed. 2001).
Courts in this Circuit have also applied the lodestar
method used in civil rights cases to determine whether requested
attorney’s fees are reasonable and equitable in interpleaders.
See, e.g., Coface North America Insurance Company v. Woodlands
Export, LLC, Civ. A. No. 4:15-CV-621, 2016 WL 4361362 (S.D. Tex.
Aug. 15, 2016); Metropolitan Life Ins. Co. v. Linnear, Civ. A. No.
14-0047, 2014 WL 4678713 (W.D. La. Sept. 18, 2014);

Village

Contractors, Inc. v. Trading Fair IV, Inc., Civ. A. No. H-09-2701,
2011 WL 2693386 (S.D. Tex. July 11, 2011); Eterna Benefits, LLC v.
Hartford Life and Accident Insurance Company, No. Civ. A. 3:96-CV3065-D, 1999 WL 202592 (N.D. Tex. Apr. 5, 1999).
“The initial estimate of a reasonable attorney’s fee is
properly calculated by multiplying the number of hours reasonably
expended on the litigation times a reasonable hourly rate,” a sum
commonly called the “lodestar.” Blum v. Stenson, 465 U.S. 886, 888
(1984).

“[T]he fee applicant bears the burden of establishing

entitlement to an award and documenting the appropriate hours
expended and hourly rates.

The applicant . . . should maintain

6

Symetra cites the same test in New York Life Ins. &
Annuity Corp. v. Cannatella, 550 Fed. Appx. 211, 217 (5th Cir. Dec.
23, 2013)
-9-

billing time records in a manner that will enable a reviewing court
to identify distinct claims.”
437 (1983).
reasonable

Hensley v. Eckerhart, 461 U.S. 424,

There is a strong presumption that the lodestar is a
fee,

and

the

fee

applicant

bears

the

burden

of

demonstrating that an upward adjustment by application of the
Johnson factors7 is necessary to calculate a reasonable fee.
Walker v. Dept. of HUD, 99 F.3d 761, 771 (5th Cir. 1996); Louisiana
Power & Light Co. v. Kellstrom, 50 F.3d 319, 324 (5th Cir. 1995),
cert denied, 516 U.S. 862 (1995).
A reasonable hourly rate is that rate in the community
for such legal services rendered by attorneys of comparable skill,
experience, and reputation.

Alberti v. Klevenhagen, 896 F.2d 927,

936, vacated in part on other grounds, 903 F.2d 352 (5th Cir. 1990);
Heidtman v. County of El Paso, 171 F.3d 1039, 1043 (5th Cir. 1999).
A reasonable hourly rate should be in accord with rates “prevailing
in the community for similar services by lawyers of reasonably
comparable skill, experience and reputation.” Blum v. Stenson, 465
U.S. 886, 895-96 n.11 (1984).

“While the hourly rate must be

‘adequate to attract competent counsel,’ the ‘measure is not the
rates which lions at the bar may command.’”
Independent

School

1999)(Table)(available

District,
on

202

Westlaw),

F.3d
citing

Coleman v. Houston
264
Leroy

(5th
v.

Cir.

City

of

Houston, 906 F.2d 1068, 1079 (5th Cir. 1990); Hopwood v. Texas, 236
F.3d 256, 281 (5th Cir. 2000).

Furthermore, the relevant legal

7

Johnson v. Georgia Highway Express, Inc., 488 F.2d 714
(5 Cir. 1974), abrogated on other grounds, Blanchard v. Bergeron,
489 U.S. 87 (1989).
th

-10-

community is the one in which the district court sits, no matter
how much of the work is done elsewhere.
Tulane

Educational

Fund,

284

F.3d

Green v. Administrators of

642,

(5th

662

Cir.

2002),

abrogated on other grounds, Burlington N. & Santa Fe Ry. Co. v.
White, 548 U.S. 53 (2006).

The fee applicant bears the burden of

producing evidence that the requested rate is appropriate within
the relevant community.

Condon v. Hunting Energy Services, L.P.,

Civ. A. No. H-04-3411, 2006 WL 2882857, at *2 (S.D. Tex. Oct. 4,
2006).

Usually the fee applicant establishes the community’s

reasonable rate through the affidavits of other attorneys of
similar caliber practicing there.
F.3d 357, 368 (5th Cir. 2002);

Tollett v. City of Kemah, 285

Watkins v. Fordice, 7 F.3d 453, 458

(5th Cir. 1993).
In addition to the community rate, the district court
must also consider the attorneys’ regular rates.
& Light Co., 50 F.3d at 328.

Louisiana Power

Generally when an attorney’s

requested hourly rate is his customary rate, when it is within the
range

of

prevailing

market

rates,

and

when

the

contested, it is viewed as prima facie reasonable.
329.

rate

is

not

Id., 50 F.3d at

To establish the reasonableness of his requested rate, the

fee applicant should produce satisfactory evidence beyond his own
affidavit

“that

the

requested

rates

are

in

line

with

those

prevailing in the community for similar services by lawyers of
reasonably comparable skill, experience, and reputation.”
465 U.S. at 896 n.11.

Blum,

Furthermore, the court may exercise its own

expertise and judgment in making an independent valuation of

-11-

appropriate attorney fees.

Davis v. Bd. of Sch. Comm’rs of Mobil

County, 526 F.2d 865, 868 (5th Cir. 1976).
The court must determine whether the hours expended by
the prevailing party’s counsel were “reasonably expended,” both as
to the total number of hours claimed and the specific hours
claimed.

Condon, 2006 WL 2882857, at *2, citing Louisiana Power &

Light Co., 50 F.3d at 329.

The fee applicant bears the burden of

showing that the hours claimed were reasonably expended.
461

U.S.

at

437.

Compensable

hours,

reasonably

Hensley,

spent,

are

determined from the attorney’s contemporaneous time or billing
records or other documentation which the district court must
examine and discern which hours are compensable and which are not.
Hensley, 461 U.S. at 434; Louisiana Power & Light, 50 F.3d at 324.
The fee applicant should exercise “billing judgment” and
keep billing time records in a way that enables the reviewing court
to “identify distinct claims.” Hensley, 461 U.S. at 437.

See also

Gagnon v. United Technisource, Inc., 607 F.3d 1036, 1044 (5th Cir.
2010)(An

applicant

for

fees

must

submit

documentation,

e.g.,

contemporaneous billing records or detailed invoices or affidavits,
to permit the court to identify noncompensable hours and to
determine an appropriate amount of fees.).
from

a

fee

request

hours

that

otherwise unnecessary . . . .”
Concrete

Products

Company,

are
Id.

448

Counsel must “exclude

excessive,

redundant,

or

See also Saizan v. Delta

F.3d

795,

799

(5th

Cir.

2006)(“[P]laintiffs seeking attorney’s fees are charged with the
burden of showing the reasonableness of the hours billed and,
therefore, are also charged with proving that they exercised
-12-

billing judgment.

Billing judgment requires documentation of the

hours charged and of the hours written off as unproductive,
excessive, or redundant.

The proper remedy for omitting evidence

of billing judgment does not include a denial of fees but, rather,
a reduction of the award by a percentage intended to substitute for
the exercise of billing judgment. [footnotes omitted]”).

See also

Louisiana Power, 50 F.3d at 324-25 (“[T]he documentation must be
sufficient for the court to verify that the applicant has met its
burden. . . . [A] district court may reduce the number of

hours

awarded if the documentation is vague or incomplete. . . . Failing
to provide contemporaneous billing statements does not preclude an
award of fees per se as long as the evidence produced is adequate
to determine reasonable hours.”); Saizan, 488 F.3d at 799, 800
(billing judgment requires documentation of the hours charged and
of the hours written off as duplicative, unproductive or excessive;
finding the district court did not commit clear error in finding a
failure to produce evidence of billing judgment nor abuse its
discretion by imposing a ten percent reduction in the lodestar
because of that failure).

“Litigants take their chances when

submitting fee applications” without adequate information for the
court to determine the reasonableness of the hours expended or with
vaguely

described

tasks

such

“correspondence,” or documents.

as

“review

pleadings,”

Louisiana Power, 50 F.3d at 327.

The “‘contemporaneously created time records [should] specify, for
each attorney, the date, the hours expended, and the nature of the
work done.’”

Hilton v. Executive Self Storage Associates, Civ. A.

No. H-06-2744, 2009 WL 1750121 at *10 (S.D. Tex. June 18, 2009),
-13-

quoting Kirsch v. Fleet St., Ltd., 148 F.3d 149, 173 (2d Cir.
1998).

When

there

is

no

evidence

of

billing

judgment,

the

appropriate remedy is to reduce the hours awarded by a percentage
intended to replace the exercise of billing judgment.

Walker v.

U.S. Dep’t of Housing and Urban Development, 99 F.3d 761, 770 (5th
Cir. 1996), citing Leroy v. City of Houston, 831 F.2d 576, 586 (5th
Cir. 1987)(reducing award by 13%).

See also Saizan, 448 F.3d at

799-800 & n.25 (affirming district court’s 10% reduction for lack
of evidence of billing judgment); Hopwood, 236 F.3d at 279 (25%
reduction for lack of billing judgment and vague and duplicative
work); Johnson-Richardson v. Tangipahoa Parish School Bd., Civ. A.
No. 12-0140, 2013 WL 5671165, at *4 (E.D. La. Oct. 15, 2013)(30%
reduction for block billing8), citing Verizon Business Global LLC
v. Hagan, No. 07-0415, 2010 WL 5056021, at *5 (E.D. La. Oct. 22,
2010)(citing

cases

showing

that

reductions

for

block

billing

between 15% and 35% have been found reasonable), vacated on other

8

“‘Block billing’ is a ‘time-keeping method by which
each lawyer and legal assistant enters the total daily time
working on a case, rather than itemizing the time expended on
specific tasks.” Fralick v. Plumbers and Pipefitters Nat. Pension
Fund, 2011 WL 487754, at *4 (N.D. Feb. 11. 2011), quoting Glass v.
U.S., 335 F. Supp. 2d 736, 739 (N.D. Tex. 2004). See also Humphrey
v. United Way of Texas Gulf Coast, 802 F. Supp. 2d 847, 864-65
(S.D. Tex. 2011)(A block-billed entry “lists the tasks performed
during that period, giving some detail about the kinds of work
performed on a particular day, but does not itemize the amount of
time spent on each.”). Block billing can make “it impossible to
determine the reasonableness of hours spent on each task.” Hi-Tech
Electric, Inc. ov Delaware, Inc, v. T&B Construction and
Electrical Services, Inc., Civ. A. No. 15-3034, 2016 WL 3952089,
at *3 (E.D. La. July 22, 2016); Miller v. Raytheon Co., 2013 WL
6838302, at *10 (N.D. Tex. Dec. 27, 2013)(and cases cited
therein). A reduction for block billing is not automatic. Id.;
id.
-14-

grounds, 467 Fed. Appx. 312, 2012 WL 1414448 (5th Cir. Apr. 24,
2012).
In

determining

what

is

a

reasonable

fee,

after

calculating the lodestar, the courts in the Fifth Circuit must
consider whether to modify the amount, up or down, by applying the
twelve factors set out in Johnson v. Georgia Highway Express, Inc.,
488 F.2d 714 (5th Cir. 1974), abrogated on other grounds, Blanchard
v. Bergeron, 489 U.S. 87 (1989)(holding that a fee award under §
1988 should not be capped by a contingent fee agreement between the
attorney and his client).

See also Abrams v. Baylor College of

Medicine, 805 F.2d 528, 536 (5th Cir. 1986)(“The Johnson factors
govern the determination of reasonableness itself; they are not
merely factors to be considered in adjusting the award once the
lodestar

is

calculated.”),

Express, 488 F.2d at 717.

citing

Johnson

v.

Georgia

Highway

The twelve Johnson factors are (1) the

time and labor required; (2) the novelty and difficulty of the
issues; (3) the skill required to perform the legal service
adequately; (4) the preclusion of other employment by the attorney
because he accepted this case; (5) the customary fee for similar
work in the community; (6) whether the fee is fixed or contingent;
(7) time limitations imposed by the client or the circumstances;
(8)

the

amount

involved

and

the

results

obtained;

(9)

the

experience, reputation, and ability of the attorneys; (10) the
undesirability of the case; (11) the nature and length of the
professional relationship with the client; and (12) awards in
similar cases.

Johnson, 488 F.2d at 717-19.

As noted, based on

one or more Johnson factors, the court may apply a multiplier to
-15-

adjust the lodestar up or down if that factor or those factors are
not already taken into account by the lodestar, itself.
137 F.3d at 850.

Strong,

An adjustment may only be made if the Johnson

factor has not already been accounted for in the lodestar.

In re

Fender, 12 F.3d 480, 487 (5th Cir.), cert. denied, 511 U.S. 1143
(1994);

Shipes

v.

Trinity

Indus.,

987

F.2d

311,

320

(5th

Cir.)(“[T]he district court must be careful . . . not to double
count a Johnson factor already considered in calculating the
lodestar when it determines the necessary adjustments.”), cert.
denied, 510 U.S. 991 (1993).
Four of the Johnson factors are presumably included in
the lodestar calculation:

the novelty and complexity of the

issues, the special skill and experience of counsel, the quality of
representation, and the results obtained from the litigation. Blum
v. Stenson, 465 U.S. 886, 898-99 (1984); Shipes, 987 F.2d at 320.9
9

For example, in Shipes, the Fifth Circuit reviewed a
district court’s enhancement of the “lodestar amount based on the
novelty and difficulty of the case because it found that there
were over three hundred plaintiffs, an entire spectrum of
employment decisions was being challenged, the case was complex
and highly technical, and Trinity’s obstinate conduct caused
additional difficulties.” 987 F.2d at 321. The panel opined,
These factors-–not so uncommon in much
present-day litigation--simply do not render
a case “rare” or “exceptional” for purposes
of enhancing the lodestar amount.
All
counsel competent to handle a case such as
this one are expected to be able to deal with
complex and technical matters; this expertise
is reflected in their regular hourly rate,
based on fees for counsel of similar
experience and ability. Still further, the
difficulty in the handling of the case is
adequately reflected in the number of hours
billed-–hours for which the attorney is
compensated
in
the
lodestar
amount.
-16-

“Although upward adjustments of the lodestar figure based on these
factors are still permissible, such modifications are proper only
in

certain

rare

and

exceptional

cases

supported

by

specific

evidence on the record and detailed findings by the lower courts.”
Id.;

see

also

Walker,

99

F.3d

at

771,

citing

Alberti

v.

Klevenhagen, 896 F.2d 927, 936 (citing Pennsylvania v. Delaware
Valley Citizens’ Council for Clean Air (“Delaware Valley I”), 478
U.S. 546, 564-65 (1986))(quoting Blum v. Stenson, 465 U.S. 886,
898-900 (1984)); Dehoyos v. Allstate Corp., 240 F.R.D. 269, 323-24
(W.D. Tex. 2007).
factors,

time

The Fifth Circuit has also held that two other

limitations

imposed

by

the

client

or

the

circumstances and preclusion of other employment, are generally
subsumed in the lodestar calculation, too.

Shipes, 987 F.3d at

321-22; Heidtman v. City of El Paso, 171 F.3d 1038, 1043 (5th Cir.
1999).

Increasing the fee award based on the eighth factor (the

amount involved and the results obtained) is only proper when the
applicant shows that “it is customary in the area for attorneys to
charge

an

additional

fee

exceptional result . . . .”

above

their

hourly

rates

Shipes, 987 F.2d at 322.

for

an

The Shipes

panel did state that “enhancement due to the results obtained may
be warranted.”

Id. at 321.

To enhance a lodestar, the court “‘must explain with a
reasonable degree of specificity the findings and reasons upon
Similarly, obstinate conduct by opposite
counsel is compensated by the additional
number of hours that are required to prevail
over such obstinacy.
Id.
-17-

which the award is based, including an indication of how each of
the Johnson factors was applied.’”
at 320.

Id., quoting Shipes, 987 F.2d

“[O]f the Johnson factors, the court should give special

heed to the time and labor involved, the customary fee, the amount
involved and the result obtained, and the experience, reputation
and ability of counsel.”

Migis v. Pearle Vision, 135 F.3d 1041,

1047 (5th Cir. 1998), citing Von Clark v. Butler, 916 F.2d 255, 258
(5th Cir. 1990); Saizan v. Delta Concrete Products Co., 448 F.3d at
799.
In 7B Federal Practice & Procedure Civ. 3d § 1803.1
(Database current through 2008), in discussing what factors may be
taken into account to adjust a lodestar, Charles Alan Wright also
identified as the most significant one the benefit (monetary or
otherwise) conferred.

Wright further observed,

In addition to the benefit conferred, the
district court should make a qualitative
appraisal
of
the
petitioning
lawyer’s
professional services under each of the
categories of work reflected in the time
records.
This might include the following
series of inquiries. First, to what extent do
the petitioning attorney’s credentials and
legal experience mark the attorney as someone
above the qualitative medium of those of
comparable age practicing in the community?
Second, what was the quality of the work the
attorney actually performed in the case?
Third, how efficient was the petitioning
attorney in processing the lawsuit?
This
factor can only be considered by a careful
examination of the novelty of the issues
presented by the matter and the lawsuit’s
overall complexity. . . . Fourth, what
responsibility did the petitioning attorney
assume in the development and management of
the case? . . . . All of these factors should
help the court in evaluating the quality of
the representation.

-18-

Id.
Furthermore, “[i]f more than one attorney is involved,
the possibility of duplication of effort along with the proper
utilization of time should be scrutinized.

The time of two or

three lawyers in a courtroom or conference when one would do may be
obviously discounted.”

Abrams, 805 F.2d at 535.

“[H]ours . . .

spent in the passive role of an observer while other attorneys
perform” are usually not billable. Flowers v. Wiley, 675 F.2d 704,
705 (5th Cir. 1982), quoted in Coleman, 202 F.3d at 264 (Table;
available on Westlaw).
The hourly rate for attorneys should not be applied to
clerical, secretarial or administrative work, since these are part
of office overhead.

Reyes v. Spur Discount Store No. 4, Civ. A.

No. 07-2717, 2007 WL 2571905, *3 & nn.19-20 (E.D. La. Aug. 31,
2007); Abrams, 805 F.2d at 536 (court should consider whether the
work performed was “‘legal work in the strict sense,’ or was merely
clerical work that happened to be performed by a lawyer.”), quoting
Johnson

v.

Georgia

“[I]nvestigation,

Highway

clerical

Express,

work,

488

compilation

F.2d
of

at

717.

facts

and

statistics and other work which can often be accomplished by nonlawyers, but which a lawyer may do because he has no other help
available . . . may command a lesser rate.
enhanced just because a lawyer does it.”

Its dollar value is not
Id. at 535.

Work by

paralegals may only be recovered to the extent that it is similar
to that typically performed by attorneys; otherwise it is an
unrecoverable overhead expense.

-19-

Coleman, 202 F.3d 264, citing

Allen v. United States Steel Corp., 665 F.2d 689, 697 (5th Cir. Unit
B 1982).
B.

Facts

In the instant interpleader, three individuals worked on
behalf of Transamerica: lead counsel David L. Pybus, a shareholder
in the firm of Preis PLC, working in its Houston office, who was
graduated from the University of Texas School of Law in 1986, has
been licensed ever since to practice law in Texas, and practices in
the

areas

of

commercial

disputes,

contractual

disputes,

and

transfer of structured settlement payment rights; his associate,
Caroline T. Webb, who graduated cum laude from South Texas College
of Law in 2005, has practiced law in Texas since then, with
practice areas in commercial disputes and insurance; and paralegal
Amanda Reid, who had no formal paralegal education, but was
mentored by attorneys and self-taught on the job, has 17 years of
experience, has been in the Houston Office of Preis PLC since 2009,
where she is the lead paralegal.

#21-1, Pybus Affidavit.

Pybus

claims that she “performs tasks traditionally performed by an
attorney,” but without providing any examples.

#21-1 R P. 2.

The

hourly rates of the three are as follows: Pybus, $325; Webb, $250;
and Reid, $105.00.

#21 at p.6.

Pybus avers that these fees are

those customarily charged in Houston for the same or similar
services by attorneys and paralegals with similar experience,
reputation, and ability as the attorneys and paralegal in this
matter, considering the nature of the controversy, the time limits
imposed, the results obtained compared with results in similar

-20-

cases, and the nature and length of [Pybus’] relationship with
Transamerica.
C.

Transamerica’s Request (#21)

Transamerica seeks an order awarding it reasonable and
necessary

fees

and

costs

in

the

total

amount

of

$54,365.04

($53,597.00 in attorneys’ fees and $768.04 in costs) to come from
the interpleader funds.

Its request is supported by billing

records, by a Bill of Costs for $768.04 (#21, Ex. A-2), by invoices
(reflecting time and expense with description of services rendered
and costs expended) (Ex. A-1), and by an affidavit from David L.
Pybus

(Exhibit

A),

Transamerica’s

lead

counsel

in

this

interpleader, verifying the facts stated in the Application and
supporting a finding that the requested amounts are reasonable and
necessary.

The Bill of Costs “reflects those costs paid, or

obligation to pay incurred, by Transamerica in this matter except
for costs relating to access to federal records via PACER, for
which Transamerica does not seek recovery.”10

#2-1, ¶ 15.

Pybus explains that Transamerica’s requested amount for
fees through December 31, 2016 is based on 135.40 hours of work at
$325.00 per hour by Pybus, amounting to $44,004.00; 6.90 hours of
work by Webb at $250.00 per hour, for a total of $1,725.00; and
12.40 hours of work by Reid at $105.00 per hour, for a total of
$1,302.00.

10

The Court notes that this statement is the only
example of billing judgment in the record.
Nevertheless the
amount at most is trivial, since parties receive one free access
when they are notified of a filing in the case and the document
can be downloaded for free.
-21-

The requested amount includes an estimated additional 25
hours ($6,565.00 in fees) for work not yet billed, including time
preparing

Transmerica’s

Application,

with

its

accompanying

affidavit and evidence, and its preparation of Transamerica’s Rule
60 motion to correct error. That estimate is for ten hours of work
by Pybus, 12 hours of work by Webb, and three hours of work by
Reid.
Transamerica applies the five-factor test listed above.
1.

Is the case simple or involved?

Transamerica argues that this interpleader is not only
atypical, but extremely complex, as is evidenced by the twelve-year
procedural history discussed and findings made in the Court’s
previous Opinion and Order (#20), which Transamerica also fully
incorporates by reference into its Application and this Court into
this Opinion and Order.11
claimants

In addition to confronting multiple

with multiple positions for payment of the funds in the

Chung Annuity Payment streams, Transamerica also had to contest a
case in Snohomish County, Washington, where Symetra filed a motion
seeking an order to redirect the Chung Annuity Payments to Symetra.

11

As noted in the Court’s previous opinion and order,
“Transamerica is a financial institution that files interpleader
actions as a regular event in its ordinary course of business” and
as a matter of self interest “benefits from interpleader actions
to avoid multiple liability.” A number of courts have concluded
that fees should not be awarded in such a case if it is easy to
resolve, thus implicating the first factor. Here, however, the
Court agrees with Transamerica that the procedural history
reflects substantial hurdles in getting this interpleader
establish given the numerous suits filed in various courts in
Texas and Washington, different court orders, and the difficulties
in getting all necessary parties together in one action.
-22-

The claimants each sought to have Transamerica intervene in their
various

matters,

feasibility

of

requiring

each

of

it

those

to

evaluate

requests,

the

propriety

including

and

researching

necessary parties and evaluating whether each proceeding had even
remained open.

It had to research finding the correct parties and

the citizenship of each, two of which are incorporated under the
laws of Anguilla in the British West Indies.
interpleaders

are

about

sums

already

due

While standard
and

owing,

here

Transamerica had to research how to interplead sums not yet due,
specifically $2,750 per month with payment increases of 3% per
annum, to be paid for the duration of Mr. Chung’s lifetime or until
2024, whichever occurs first.

(Transamerica currently deposits

$6,823.72 into the Court’s registry every month, and total future
payments will amount to approximately $780,000.00.)

Transamerica

also had to research and find precedent for interpleading future
amounts

and

discharge

of

interpleading future payments.

the

stakeholder

in

advance

of

The Court acknowledged the rarity

of precedent on these issues in #20.12

Another issue requiring

12

An unusual feature of this interpleader is that
Transamerica has deposited all past annuity payments in the
Court’s Registry, but will continue to deposit all future annuity
payments only as they become due. In a case where the stakeholder
was an insurance company, the Fifth Circuit opined,
Although the deposit requirement is a
jurisdictional prerequisite to suit under the
interpleader statute, 28 U.S.C. § 1335,
payment of the face amount of the policy
proceeds into the court has long been held to
be sufficient.
E.G. Ross v. International
Life Insurance Co., 24 F.2d 345 (6th Cir.
11928). Thus, “[t]he preferred practice is
to require only that the stakeholder deposit
all of the disputed property he has in his
-23-

research and analysis is whether a “single” fund exists when
multiple future payments are made over years. Transamerica claims
that

Claimants

opposed

Transamerica

on

every

matter,

thus

complicating proceedings, delaying the Court’s final determination,
and driving up Transamrica’s fees and costs.
In #20, this Court concluded that this interpleader is
“not a routine dispute” but a “complicated and unforeseeable
contest” involving a number of different courts and a complicated
dispute over entitlement to the Chung Annuity Payment streams. #20
at p.22.
2.

Stakeholder’s Unique Services?

Transamerica

points

out

that

it

managed

to

reduce

multiple proceedings into one singular action with all necessary
parties participating.

It also persuaded Symetra to wait for this

Court’s decision, rather than pushing on in the Washington case,
which lacked necessary parties.
3.

Stakeholder Acted in Good faith and with Diligence?
In #20 this Court found that Transamerica “acted in good

faith in filing the proper and appropriate interpleader action.”
#20 at p. 26.
Chung

Annuity

Observing that many other actions involving the
Payments

existed

and

lacked

necessary

parties,

possession, even though it might be less than
is claimed by one or more of the defendants.”
C. Wright & A. Miller, Federal Practice and
Procedure § 1716 at 459 (1972).
This
“preferred” practice is the rule in this
Circuit. Austin v. Texas-Ohio Gas. Co., 218
F.2d 739, 744-45 (5th Cir. 1955).
By analogy the same rule would apply to financial institution
Transamerica with regard to the Chung Annuity Payments here.
-24-

Transamerica worked hard to find the best, singular legal action to
handle the competing claims–-seeking the correct and necessary
parties, evaluating venue, determining jurisdictional questions,
including citizenship, and finally, against fierce opposition,
seeking to be discharged with prejudice, in addition with an award
of fees and costs.

It found precedent to support its arguments

through diligent research and to convince the Court to discharge it
from further liability and to award it fees.

It acted in good

faith and with diligence to resolve efficiently all the issues
relating to claimants’ claims.
4.

The Services Rendered Benefitted Stakeholder?
Transamerica maintains that it has not benefitted by the

fees expended here except for its discharge in advance of making
future payments and the fact that it will not be subject to further
protracted litigation in multiple different courts relating to
these same issues, i.e, only natural consequences of prevailing in
this action.
5.

Claimants Improperly Protracted Proceedings?

In #20 the Court found that claimants “protracted this
litigation beyond the already excessively protracted twelve years
these parties have been fighting in court” even though the purpose
of

this

interpleader

was

“to

protect

Transamerica

from

contradictory decisions and/or having to fight multiple claimants
on multiple fronts.”

#20 at pp. 20 and 26.

As a result the time

was unnecessarily extended and the expense compounded by their
opposition.
III.

Defendant Symetra Life Insurance Company’s Response (#23)
-25-

Symetra

maintains

that

no

concurrent

litigation

protracted these interpleader proceeds because the interpleader was
only initiated in May 2016 and with regard to Transmerica, is near
its end.
Symetra objects that Transamerica has failed to show that
its requested fees and costs are reasonable and asks that they be
reduced for several reasons:

(1) excessive and duplicative fees13;

(2) undocumented and/or block billed fees; (3) paralegal fees
charged for purely administrative, clerical14 and/or secretarial
work; (4) paralegal fees for services of any paralegal whose
prevailing market rate cannot be determined; and (5) exercise of
billing judgment.
Examining the billing records, Symetra claims that “15
collective hours were billed by [Pybus and Webb] for research,
review and/or analysis of general procedural and substantive issues
regarding interpleader actions.” Another 4.3 hours were billed for
review and analysis of citizenship of the parties and service of

13

See #23, Ex. A at 2, Example 2. Fifteen collective
hours were billed by both attorneys for research, review and/or
analysis of general procedural and substantive issues regarding
interpleaders.
Another 4.3 hours were billed for review and
analysis of the citizenship of the parties and service of process
issues.
Id. at 3, Example 3.
1.8 hours were billed for
preparation of Transamerica’s Certificate of Interested Parties
(#4). Ex. A at 3, Example 4. In addition, Pybus’s clerical work
was billed at his hourly rate as a shareholder of $325.00 per
hour. Id. at 4, Example 5.
14

See Broyles v. State of Texas, Civ. A. No. H-08-02320,
2009 WL 2215781, at *11 (S.D. Tex. July 23. 2009)(“Attorneys’ fees
may not be awarded for clerical work.”), citing Vela v, City of
Houston, 276 F.3d 659, 681 (5th Dir. 2001)(“Paralegal work can only
be recovered as attorney’s fees if the work is legal rather than
clerical.”).
-26-

process issues, while an additional 1.8 hours were billed for the
preparation of Transamerica’s Certificate of Interested Parties
(34).

Moreover time was billed for clerical work by Pybus at his

hourly rate as a shareholder of $325.00 per hour.
“‘Compensable hours, reasonably spent are determined from
the attorney’s time records.’ Courts generally require the movant
‘to provide contemporaneous time or billing records or other
documentation which the district court must examine and discern
which hours are compensable and which are not.’”

Prospect Energy

Corp. v. Dallas Gas Partners, LP., Civ. A. No. H-10-1396, 2011 WL
5864292, at *2 (S.D. Tex. Nov. 22, 2011)(citing In re Enron Sec.,
Derivative & ERISA Litig., 586 F. Supp. 2d 732, 755 (S.D. Tex.
2008)), aff’d, 733 F.3d 148 (5th Cir. 2013). Symetra objects to the
block billing in the billing records, making it impossible to
determine the reasonableness of the time expended, specifically in
Transamerica’s request for $6,565.00 in estimated fees for an
estimated 25 hours for the preparation of its Application and
supporting affidavit and its Rule 60 motion, supported by Pybus’s
affidavit,

which

described

the

work

as

“time

preparing

this

Application with affidavit and documentary evidence and necessary
Motion under Rule 60.”

#21 at 7, ¶ 9; id. at 4, ¶ 12.

There is

also no evidence offered of the separate task involved in preparing
the two instruments.

Symetra also points to block billing in

Pybus’s May 16, 2016 entry of 2.4 hours for “Review and analysis of
Symetra’s motion to redirect payments and documents regarding
pending

claims

in

federal

court

and

various

foreclosure

sales/transfers involving Rapid Settlements.” #21-2 at 3. Symetra
-27-

asks the Court to reject any block-billed fees from attorney’s fees
that Transamerica may be awarded.
“A party seeking a fee award has the duty to segregate
fees for claims for which fees are recoverable, from fees for
claims for which they are not.”
at *4.

Prospect Energy, 2011 WL 5864292,

Fees for paralegal work may be recovered if the paralegal

is doing work traditionally performed by an attorney.
Symetra

complains

of

the

award

of

Id. at *3.

paralegal

fees

for

administrative, clerical, ministerial and/or secretarial tasks
and

asks

the

ministerial

Court

tasks

to
from

reduce

the

fees

for

Transamerica.

such

requested

Furthermore,

while

Transamerica asks for fees for 12.4 hours of paralegal services by
Reid, the invoices it submitted identify only 4.4 hours.
A, at 5, Example 7.

#21, Ex.

Transamerica also asked for eight hours of

paralegal fees for work performed by unidentified “PL.”

#21 and

21-1 PL’s training and experience are not discussed, so there is
insufficient evidence to determine if the request is reasonable or
charged at the prevailing market rate for similar services by
similarly trained and experienced paralegals in the community.
Thus Transamerica requests that at minimum the Court reduce the
requested $840.00 award for PL’s services.

See Jones v. Armstrong

Cork Co., 630 F.2d 324, 325-26 (5th Cir. 1980)(affirming rejection
of compensation for work performed by one called a paralegal, but
without evidence of any paralegal training).
If a party seeking an award of fees does not show that it
exercised billing judgment, the court “should reduce the award by
a percentage to substitute for the exercise of billing judgment and
-28-

eliminate hours that were not reasonably expended.”

Symetra

complains that Transamerica does not produce any documents showing
that it wrote off any excessive, duplicative or unproductive time
to support its requested award of $54,365.04. Instead the invoices
demonstrate a lack of billing judgment because work was performed
by

a

partner

paralegals.

that

should

have

been

done

by

associates

or

When overqualified attorneys perform work and bill it

at their regular rates, there is a lack of billing judgment.
Preston Exploration Co., LP v. GTSP, LLC, Civ. A. No. H-08-3341,
2013 WL 3229678, at *6-7 (S.D. Tex. June 25, 2013); Humphrey v.
United Way or Texas Gulf Coast, Civ. A. No. H-05-758, 2008
5070057, at *3 (S.D. Tex. Nov. 20, 2008).

WL

Thus the requested fees

should be reduced by a percentage that the Court determines is
equitable.
Finally Symetra argues that a reasonable attorney fee and
cost award for Transamerica should be paid by A.M.Y., FinServ, and
Rapid because this action was necessitated by them, and not by
Symetra. “Attorneys’ fees and costs ‘are generally awarded against
the interpleader fund, but may in the discretion of the court, be
taxed against one of the parties when their conduct justifies it.’”
Westlake Styrene, LLC v. U.S., Civ. A. No. H-10-2631, 2011 WL
643265, at 8 (S.D. Tex. Feb. 16, 2011), citing Septembertide Pub.,
B.V. v. Stein and Day, Inc., 884 F.2d 675, 683 (2d. Cir. 1989),
citing Prudential Ins. Co. of Am. v. Boyd, 781 F.2d 1494, 1497-98
(11th Cir. 1986).

Symetra’s claim to the stake arose out of a 2015

judgment awarding Symetra fees and costs in the sum of $901,297.63,
which despite the court order Rapid refused to pay by December 3,
-29-

2015.

Symetra Life Ins. Co. v. Rapid Settlements, Ltd., Civ. A.

No. 4:05-cv-03167 (S.D. Tex., Doc. 409 at 17, ¶ VI).

Rapid’s

refusal to comply with the Court’s order, through no fault of
Symetra, caused the subsequent litigation, including the instant
case.

While litigating Symetra learned that Rapid was involved in

a larger scheme to avoid numerous judgments against it and to
defraud its judgment creditors, including Symetra, so Symetra filed
Civil

Action

H-16-cv-791,

Symetra

Life

Ins.

Co.

and

Symetra

Assigned Benefit Services Co. v. RSL-3B-IL, Ltd., RSL-2012-1, LP,
Liquidating

Marketing,

Ltd.

(f/k/a

Rapid

Settlements,

Ltd.),

Steward Feldman, Marla Matz Feldman, and IberiaBank, N.A. in the
Southern District of Texas (“Fraudulent Transfer Litigation”),
alleging that Rapid and its affiliated companies fraudulently
transferred

annuity

rights

Transfer Litigation #56.

totaling

$60

million.

Fraudulent

The claims of A.M.Y. and FinServ to the

stake arise from security interests that they purportedly obtained
from Rapid.

#10 at 21-54.

Furthermore, Transamerica’s filing of this interpleader
was influenced by Transamerica’s prior dealings and litigation with
Rapid. In 2013, RSL Funding, Inc. (“RSL”), Rapid’s predecessor and
a “closely related” company,15 sued Jerry M. Green (“Green”) in
Civil Action H-13-2058 in the Southern District of Texas (“RSL
Suit”) to confirm two arbitration awards involving the transfer of
Green’s structured settlement annuity payments.
2.

RSL Suit, #83 at

Symetra claims that their efforts to transfer violated public

15

See #23, pp. 18-19 n.8.
-30-

policy

because

they

circumvented

state

structured

settlement

protection act (“SSPA”) laws mandating that a court, not an
arbitrator, must approve the transfers.
Transamerica intervened in the RSL Suit because the
arbitration

awards

allegedly

bound

Transamerica

and

required

Transamerica to deposit the Green annuity payments despite a
contrary order from a Florida court they be filed in that court, in
a lawsuit filed before the RSL Suit.
Transamerica moved for sanctions under Federal Rule of
Civil Procedure 11 against RSL on the grounds that RSL would “stop
at nothing in an attempt to punish Transamerica for ‘interfering
with RSL’s methods of securing payment rights”and that RSL and
Stewart Feldman “used the court as a weapon against Jerry Green and
Transamerica.”
Symetra

surmises

that

Transamerica’s

own

problems

motivated it to interplead the Chung Annuity Payments.

Symetra

summarizes that fairness and equity require A.M.Y., FinServ, and
Rapid, not Symetra, to pay

Transamerica’s fees and costs.

If the Court determines that Symetra should pay for any
part of the fees and costs awarded to Transamerica, Symetra asks
that it be paid from the interpleaded funds.
IV.

Defendants A.M.Y. Property & Casualty Insurance Company
(“AMY”), FinServ Casualty Corp. (“FinServ”), and

Liquidating Marketing, Ltd.’s (“LM’s16”) Opposition (#24)

16

Formerly known as Rapid Settlements, Ltd.
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A.M.Y. , FinServ, and LM (f/k/a Rapid Settlements, Ltd.)
argue that the Court should reduce the amount of the requested fees
by at least 30%, to an award of no more than $37,517.90 because (1)
Transamerica provided no evidence demonstrating that it exercised
billing

judgment

to

eliminate

redundant, or inadequately

any

excessive,

unproductive,

documented fees, empower the Court to

reduce the fees17; (2) Transamerica’s lead counsel performed most
of the work on file, charged at a Transamerica partner’s rate,
rather than delegating suitable jobs to an associate or paralegal
who bills at a lower rate; and (3) Transamerica was to recover for
legal services that produced no tangible benefit because the Court
denied Transamerica’s requested relief (discharge) as premature at
the time.
Last of all, they assert that Symetra should bear most of
the

fees

and

costs

awarded

to

Transamerica

because

Symetra

multiplied and complicated the procedures giving rise to this suit.
They request that Symetra pay at least 75% of the fees and costs,
while holding A.M.Y., FinServ, and LM/Rapid responsible for 25% at
most.

Symetra continues to forum shop by commencing a new suit in

a Washington state court that violates the Court’s permanent
injunction.

17

Defendants claim that in the Fifth Circuit,
“segregation [of recoverable from nonrecoverable fees] is an
essential component of reasonableness that a party must show in a
request for attorney’s fees.” Am. Home Assurance C. v. United
Space Alliance, LLC, 378 F.3d 472, 494 (5th Cir. 2004).

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What evidence Transamerica submits is its attorney’s
affidavit, which does not mention billing judgment or explain why
Transmerica’s lead attorney could not have delegated tasks to an
associate attorney with twelve years of experience in commercial
litigation

experience

in

commercial

disputes, and his billing records.

litigation

#21-1.

and

insurance

That evidence reveals

that, unlike normal case staffing, a partner billed 88% of the
total number of hours, without any testimony that would show this
was sound billing judgment.
Defendants urge the Court to deny Transamerica all of the
fees

it

incurred

in

prematurely

seeking

a

discharge

before

jurisdiction attached to this interpleader and before Symetra
appeared as a party.

#2, 7, and 13.

They also argue that

Transamerica should not be allowed to recover fees for projects on
which it did not prevail, such as the Court’s initial denial of
Transamerica’s

first

request

for

discharge

without

prejudice

because Symetra “has not yet been served nor appeared and might
object to the discharge and/or the interpleader.” #13. Defendants
estimate the time spent on seeking prematurely the remedy of
discharge was approximately eight hours on 5/13/16 and 5/17-165/20/16.

At that time Transamerica sought a discharge before

jurisdiction even attached via court approval for the deposit of
funds,

which

discharge.
Cir.

would

give

Transamerica

the

power

to

order

a

Murphy v. Travelers Ins. Co., 534 F.2d 1155, 1159 (5th

1976(While

“the

deposit

requirement

is

a

jurisdictional

prerequisite,” the rule in this Circuit and “[t]he preferred
practice is to require only that the stakeholder deposit all of the
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disputed property he has in his possession even though it might be
less than is claimed by one or more of the defendants.”).
Defendants further contend that Transamerica’s counsel
impermissibly charged his hourly fee for clerical tasks, including
the following: “Check conflicts check for Symetra case” (0.20 hr.);
“Check

conflicts

regarding

ongoing

Symetra

case”

(0.30

hr.);

“Review and analysis of court docket in Symetra v. Rapid (Judge
Rosenthal case) to determine status of case” (0.50 hr.); “Review
file assemble information for interpleader” (1.50 hr.; “Review
federal court records for related cases involving Symetra and Rapid
entities” (0.50); “Review Washington Court records to determine
status of Symetra suit” (0.30 hr.); “Review and analysis of issues
regarding

initial

deadlines

set

by

court”

(0.30);

“Final

preparation of correspondence to court with Courtesy copy of Motion
for Partial Summary Judgment” (0.50); “Further preparation of
correspondence to Court with courtesy copy of Motion for Partial
Summary Judgment and response deadline (0.20 hr.); “Review file to
determine

status

of

deadlines

(0.10

hr.);

“Preparation

of

correspondence to District Clerk with check to comply with Court
Order

regarding

interpleader

of

annuity

funds”

(0.20

hr.);

“Preparation of correspondence to Court Clerk with check to comply
with Court Order” (0.20); “Review and analysis of Scheduling Order
and

issues

regarding

missing

deadlines”

0.30);

and

“Exchange

correspondence with Andy Martin regarding Scheduling Order and next
steps going forward” (0.40).

For this lack of business judgment,

Defendants ask the Court to reduce the fees by an additional 10%.
Defendants maintain that the court may properly deduct a
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percentage of fees to address each category of deficiency, e.g.,
lack of billing judgment, redundant time entries, and unproductive
billing.

See, e.g., Fralick v. Plumbers & Pipefitters Nat’l

Pension Fund, Action No. 3:09-CV-0752-D, 2011 WL 487754, at &4-6,
10-13 & n.17 (N.D. Tex. Feb. 11, 2011); Carroll v. Sanderson Farms,
Inc., Civ. Action No. H-10-3108, 2014 WL 549380 (S.D. Tex. Feb. 11,
2014).

The Fifth Circuit agrees with aggregating percentage

reductions of fees after assigning a percentage reduction to each
category that

represents a billing deficiency.

See Hopwood v.

State of Texas, 236 F.3d 256, 279 (5th Cir. 2000), cert. denied, 533
U.S. 929 (2001); Chaparral Tex., LP v. W. Dale Morris, Inc., Civ.
A. No. H-06-2468, Civ. A. No. H-06-2468, 2009 WL 13809, at *30, 3337, 53-58 (S.D. Feb. 23, 2009).

Thus Defendants conclude that a

cumulative reduction totaling 30% of

the fees should result.

Furthermore, although the Court seems to blame Defendants
for extending and complicating ths case, Defendants contend that
Symetra should pay at least 75% of any fee award.

The record

reflects that the Court observed that “Symetra forced Transamerica
to file this interpleader by filing its motion in the Snohomish
County, Washington case to order Transamerica to redirect the Chung
Annuity Payments to Symetra.”

#20 at 20.

The Court mainly

objected to Defendants’ filing actions “without necessary parties
in an attempt to gain control of the Chung Annuity Payments as well
as over other funds and delay resolution to the parties’ disputes.”
Id. at 26.

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In sum, the Interpleader Claimants urge the Court to use
its discretion to reduce the fee requested by Transamerica by an
appropriate percentage, award Transamerica all of the costs it
seeks, and order that Symetra pay at least 75% of any award of fees
and costs, and the Interpleader Claimants at most 25% of any award
of fees and costs.
IV.

Court’s Decision

After careful review of the record and the applicable
law, the Court in its discretion finds that some reduction of the
requested fee award is appropriate because Transamerica has not
provided the evidence the Court needs to determine whether the
requested hourly fees are reasonable.

For this deficiency the

Court will deduct 10% from the requested amount.

On the other

hand, the Court has found some evidence that will allow it to make
a decision.
The

only

affidavit

supporting

the

fee

request

from

Transamerican is that of its own counsel, hardly disinterested; no
other attorneys from the community have offered their opinions.
See Blum, 465 U.S. at 896 n.11 (“[T]he burden is on the fee
applicant to produce satisfactory evidence–-in addition to the
attorney’s own affidavits–-that the requested rates are in line
with those prevailing in the community for similar services by
lawyers

of

reasonably

comparable

skill,

experience

and

reputation.”); Tollett, 285 F. 3d at 368 (Usually the fee applicant
establishes the community’s reasonable rate through the affidavits
of other attorneys of similar caliber practicing there); Rangel v.
Gonzalez Moscorro, 274 F.R.D. 585, 596 (S.D. Tex. 2011)(same; “Such
-36-

affidavits should contain direct or opinion evidence as to what
local attorneys would charge under similar circumstances.”).

Here

such are lacking.
Nevertheless, the Court finds that Pybus’s requested
hourly rate of $325 per hour appears to be slightly above the
medium hourly rates found by State Bar of Texas Department of
Research and Analysis 2015 Hourly Fact Sheet (published in 2016),
which for full time male attorneys is $275, for attorneys with over
25 years of experience, $300, and for those who practice area of
commercial litigation in Houston, $295.

Based on the 2015 Hourly

Fact Sheet, the Court finds that Pybus’s hourly rate is reasonable
for a shareholder in the firm of Preis PLC.
Webb has 11 years of legal experience.

Webb’s requested

hourly rate of $250 is generally around or a little below the top
number of the State Bar’s median rate for attorneys with 11 to 15
years of experience (#258), hourly rate by age ($250), hourly rate
for Houston ($275) and hourly rate in Houston for commercial
litigation ($295) and insurance ($200).

Thus her request is not

out of line with the community’s standard.
Nevertheless

the

Court

agrees

with

Defendants

certain factors warrant reduction of the requested fees.

that

There is

no evidence of billing judgment being employed in the evidence the
attorneys present.

For this deficiency the Court reduces the fee

award by 10%.
There also appear to be redundancies in research between
the two attorneys and research of very basic information about
interpleaders which an attorney with their experience should know
-37-

and for which they should not charge their most recent clients.
The Court also agrees that Pybus and Webb are overqualified for
some of the clerical and administrative work for which they charge
their regular fees, as pointed out particularly by the Interpleader
Defendants.

For these deficiencies, the Court reduces the

requested fees by another 10%.
With regard to Reid and the absence of information about
the specific services she performed generally and specifically on
this

case

prevent

the

Court

from

making

determination of an appropriate fee award.

even

a

reasonable

Thus the Court denies

her request for fees.
The Court finds that any adjustment by applying the
Johnson factors is unnecessary as the present analysis adequately
addresses relevant matters.
Thus the Court grants an award of attorneys’ fees to
Pybus and Webb in the amount of $36,583.20.

In addition, because

there is no opposition and because the requested award of costs is
supported by the record, the Court awards costs in the amount of
$768.04.
Court’s Order
For the reasons stated above, the Court
ORDERS that Transamerica’s motion to correct clerical
error in order (#22) is GRANTED and the Court CLARIFIES that its
decision to discharge stakeholder Transamerica was intended to be
and is with prejudice.
In addition, Transamerica’s application for attorneys’
fees (#21) for services rendered in prosecuting this interpleader
-38-

is GRANTED in part and DENIED in part, and Transamerica is entitled
to an award of fees in the amount of $36,583.20.

Transamerica’s

request for an award of costs in the amount of $768.04 is GRANTED.
Both these sums shall be paid out of the interpleader fund.
SIGNED at Houston, Texas, this 9th

day of August, 2017.

_______________________
MELINDA HARMON
UNITED STATES DISTRICT JUDGE

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