American General Life Insurance v. Pasalano et al
Filing
53
MEMORANDUM DECISION and Order-denying 41 Motion for Attorney Fees. See Order for details. Signed by Judge Clark Waddoups on 6/17/16. (jmr)
IN THE UNITED STATES DISTRICT COURT
DISTRICT OF UTAH, NORTHERN DIVISION
AMERICAN GENERAL LIFE
INSURANCE,
Interpleader Plaintiff,
v.
DONNA PASALANO, GEORGE A.
PASALANO, and JESSICA MULVIHILL,
Interpleader Defendants.
MEMORANDUM DECISION AND
ORDER DENYING MOTION FOR
ATTORNEY FEES
Case No. 1:15-cv-00026
Judge Clark Waddoups
This matter is before the court on Interpleader Defendant Donna Pasalano’s motion for
attorney fees (Dkt. No. 41). Interpleader Defendants George Pasalano and Jessica Mulvihill
(collectively, Defendants) have opposed the motion. (Dkt. No. 45). For the reasons explained
more fully below, the court finds that an award of attorney fees is not appropriate in this case.
Ms. Pasalano identifies three provisions that she claims provide a legal basis for an award
of fees: Utah Code Annotated § 78B-5-825, Federal Rule of Civil Procedure 56(h), and the
court’s inherent authority to sanction bad faith conduct. All three permit an award of fees only
where the court finds that Defendants acted in bad faith. See Nikols v. Chesnoff, 435 F. App’x
766, 773 (10th Cir. 2011) (recognizing that § 78B–5–825 requires a showing of bad faith);1 Fed.
R. Civ. P. 56(h) (permitting an award of attorney fees if an affidavit or declaration is submitted in
bad faith or solely for delay); Chambers, 501 U.S. 32, 45–46 (1991) (holding that under the
1
The court pauses to note that award of fees under § 78B-5-825 is required only if there is a finding of bad
faith. If the court finds bad faith, it is required to award fees unless an affidavit of impecuniosity is filed or the court
enters on the record the reason for not awarding fees. See Utah Code Ann. § 78-5-825.
court’s inherent authority, “a court may assess attorney’s fees when a party has acted in bad faith,
vexatiously, wantonly, or for oppressive reasons.” (internal quotation marks omitted)).2
Here, Ms. Pasalano contends that Defendants acted in bad faith in contesting that she was
entitled to the death benefits proceeds of her ex-husband’s life insurance policy. Specifically,
Ms. Pasalano argues that Defendants’ opposition to summary judgment lacked merit, which
would have been apparent had Defendants completed the necessary discovery. Relatedly,
Ms. Pasalano argues that Defendants improperly requested additional time to complete discovery
under Rule 56(d). Finally, Ms. Pasalano claims that Ms. Mulvihill submitted a false supplemental
declaration in attempting to create an issue of fact. (Dkt. No. 45). The court finds these arguments
unpersuasive.
True, Defendants’ arguments in opposition to Plaintiff’s motion for summary judgment
were unconvincing. But the fact that an argument or defense lacks merit does not show bad faith
as a matter of law. Still Standing Stable, LLC v. Allen, 122 P.3d 556, 560 (“The trial court’s
finding that the action was frivolous is insufficient to establish bad faith,” “because lack of legal
merit is insufficient” to show bad faith); Chambers v. NASCO, Inc., 501 U.S. 32, 47 (1991)
(recognizing that conduct “which merely fails to meet a reasonableness standard” is not
sanctionable under the court’s inherent authority to sanction bad-faith conduct). Although the
court is not unsympathetic to the fact that Ms. Pasalano was required to expend funds litigating
her entitlement to the death benefits, her entitlement was not so apparent that Defendants should
be penalized for contesting it, albeit unsuccessfully.
Likewise, to the extent Defendants requested additional time for discovery under Rule
56(d), that request was unsuccessful. Nothing suggests that the request for additional time was
2
Because all three require a finding of bad faith, the court finds it unnecessary to determine whether it is
bound by state or federal law in assessing the attorney fees issue.
2
intended to unfairly hinder Ms. Pasalano’s summary judgment efforts. To the contrary,
Ms. Pasalano prevailed on her motion, in large part, from Defendants’ failure to discover or
marshal the evidence necessary to survive summary judgment. Thus, any delay in pursuing
discovery sooner evidences, at worst, a failure of advocacy rather than intentional bad faith. See
BAD FAITH, Black’s Law Dictionary (10th ed. 2014) (defining bad faith as “Dishonesty of
belief, purpose, or motive”); Still Standing, 122 P.3d at 560 (defining bad faith under Utah law as
lacking “an honest belief in the propriety of the activities in question,” intending “to take
unconscionable advantage of others,” or intending to act with “knowledge of the fact that the
activities in question will hinder, delay, or defraud others”).
Relatedly, there is not sufficient evidence to show that Ms. Mulvihill’s supplemental
declaration was false, made solely for delay, or otherwise made in bad faith such that sanctions
under Rule 12(h) are appropriate. Although the declaration contained conclusory statements that
were insufficient to create a genuine dispute of fact necessary survive summary judgment, there is
no evidence indicating that Ms. Mulvihill’s motivations for submitting it were improper.
Certainly, even if there were evidence that the declaration was submitted in bad faith, it would not
extend to the full amount of attorney fees. See Fed. R. Civ. P. 56(h) (permitting attorney fees
incurred as a result of a false affidavit). Ms. Pasalano makes no effort to identify those fees
specifically incurred as a result of the supplemental declaration, and it appears that the vast
majority of the attorney fees were incurred prior to its submission.3 This fact further counsels
against an award of fees under Rule 12(h).
For all these reasons, the motion for attorney fees (Dkt. No. 41) is DENIED.
3
The court notes that less than ten hours of the total time billed was billed after the supplemental declaration
was filed. (Dkt. No. 42, pp. 5–6). It is impossible on this record to determine how much, if any, of this time was
incurred as a result of the supplemental declaration.
3
DATED this 17th day of June, 2016.
BY THE COURT:
______________________________
Clark Waddoups
United States District Court Judge
4
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