Mowery, Lisa v. Metropolitan Life Insurance Company et al

Filing 45

OPINION & ORDER granting in part and denying in part 34 motion for attorney fees; granting 38 plaintiff's bill of costs. Plaintiff is awarded fees and costs in the total amount of $63,594.91. Signed by District Judge James D. Peterson on 8/18/17. (jat)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN

LISA MOWERY,
Plaintiff,
v.

OPINION & ORDER

METROPOLITAN LIFE INSURANCE
COMPANY and DIGNITY HEALTH’S HEALTH
AND WELFARE PLAN,

16-cv-516-jdp

Defendants.
Plaintiff Lisa Mowery brought this action to recover long-term disability benefits under
defendant Dignity Health’s Health and Welfare Plan, administered by defendant Metropolitan
Life Insurance Company. She claimed that defendants’ decision denying her claim for longterm disability benefits violated her rights under the Employee Retirement Income Security
Act (ERISA), 29 U.S.C. § 1132(a)(1)(B). The court granted Mowery’s motion for summary
judgment, concluding that defendants acted arbitrarily and capriciously in denying Mowery
benefits and remanding the case to defendants for further administrative proceedings. Dkt. 32.
Now Mowery moves for reasonable attorney fees and interest. Dkt. 34.

ANALYSIS
A. Reasonable attorney fees
Mowery requests her reasonable attorney fees under 29 U.S.C. § 1132(g)(1). This
statute allows “a court ‘in its discretion’ [to] award fees and costs ‘to either party,’ as long as
the fee claimant has achieved ‘some degree of success on the merits.’” Hardt v. Reliance Standard
Life Ins. Co., 560 U.S. 242, 245 (2010) (citation omitted) (quoting Ruckelshaus v. Sierra Club,

463 U.S. 680, 694 (1983)). By virtue of the court’s decision to grant summary judgment in
her favor, Mowery has satisfied this threshold requirement.
The next question is whether the court should award fees. The Seventh Circuit uses two
alternative tests for deciding this question in in ERISA cases, the first of which involves
consideration of five factors: (1) the degree of the offending party’s culpability or bad faith; (2)
the ability of the offending party to satisfy personally an award of attorney fees; (3) whether
an award of attorney fees against the offending party would deter other persons acting under
similar circumstances; (4) the amount of benefit conferred on members of the plan as a whole;
and (5) the relative merits of the parties’ positions. Raybourne v. Cigna Life Ins. Co., 700 F.3d
1076, 1089-90 (7th Cir. 2012). The second test focuses on whether the losing party’s position
was “substantially justified.” Id. at 1090. “[T]he two tests essentially pose the same question:
was the losing party’s position substantially justified and taken in good faith, or was that party
simply out to harass its opponent?” Id. The court will use the five-factor test as it “more
accurately articulates the various equitable factors appropriate to consider in determining
whether attorney fees are appropriate, although the result would be the same under the second
test as well for much the same reasons.” Univ. of Wis. Hosp. & Clinics, Inc. v. Aetna Life Ins. Co.,
24 F. Supp. 3d 808, 817 (W.D. Wis. 2014) (quoting Freeland v. Unum Life Ins. Co. of Am., No.
11-cv-503, 2013 WL 4482995, at *17 (W.D. Wis. Aug. 19, 2013)).
Starting with the first factor, the court concludes that MetLife’s denial was especially
ill-founded in this case. MetLife blindly followed the opinion of its independent physician
consultant, Dr. Robert Lin, despite his multiple material errors and omissions. And MetLife
failed to analyze how Mowery’s well-documented and serious allergic reactions affected her
ability to perform the important tasks of her job with reasonable continuity; such an analysis

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was required under the Plan. This was not the first time MetLife made such errors, as the
Seventh Circuit pointed out these same kinds of errors in MetLife’s denial of another claimant’s
disability benefits in Majeski v. Metropolitan Life Insurance Co. eight years ago. 590 F.3d 478,
483-84 (7th Cir. 2009). Rather than learning from its mistakes, it appears that MetLife
continued to make them. MetLife provided multiple reviews of Mowery’s claim before making
its final benefits determination, but the number of reviews doesn’t matter if the process of
review depends ultimately on the flawed analysis of a MetLife consultant.
Defendants argue that their litigation of this case was not in bad faith because they
offered Mowery several extensions, “cited case law and facts in support of their position,” and
did not take any position in an attempt to harass Mowery. Dkt. 39, at 4. The court has no
criticism of counsel for MetLife; the problem is with MetLife’s underlying decision, not
counsel’s defense of it. The first factor weighs in favor of awarding Mowery her attorney fees.
The remaining factors also weigh in favor of awarding Mowery fees. MetLife, a large
insurance company, has ample resources to satisfy an award of attorney fees. (MetLife insures
the Plan, so payment of fees will not deplete the Plan assets.) An award of attorney fees here
may deter MetLife from similar errors in the future. That deterrence will confer a benefit on
plan participants. The court will award fees.
Next, the court must determine the amount of fees. The court uses a lodestar method
to determine a reasonable fee, “multiplying the ‘number of hours reasonably expended on the
litigation . . . by a reasonable hourly rate.’” Pickett v. Sheridan Health Care Ctr., 664 F.3d 632,
639 (7th Cir. 2011) (quoting Hensley v. Eckerhart, 461 U.S. 424, 433 (1983)). Mowery seeks a
total of $81,078 in attorney fees for the 279 hours that her attorneys spent working on this

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case. The two attorneys who performed work ordinarily charge $280 per hour and $450 per
hour. Mowery also seeks $302.72 in online legal research fees.1
First, the court must determine whether the hourly rates are reasonable. The Seventh
Circuit “define[s] a reasonable hourly rate as one that is ‘derived from the market rate for the
services rendered’ [and] presume[s] that an attorney’s actual billing rate for similar litigation
is appropriate to use as the market rate.” Id. at 640 (quoting Denius v. Dunlap, 330 F.3d 919,
930 (7th Cir. 2003)). As evidence of reasonableness, Mowery has submitted affidavits from
her attorneys, who indicate that their proffered rates are their “market rates.” Dkt. 36, ¶ 9 and
Dkt. 37, ¶ 7. This is specious. The real question is what are the hourly rates that Mowery’s
attorneys’ actually charge and get paid? Their actual billing rates would be presumptively
reasonable. Pickett, 664 F.3d at 640. But their conclusory assertions about their own “market
rates” are not helpful.
It’s apparent here that Mowery’s attorneys are working on contingency, so they may
not have actual hourly billing rates, which is perfectly fine. So the court looks then for the
“next best evidence” of the market rate. Id. Preferably, this is third-party evidence of the hourly
rates charged by attorneys of similar experience doing similar work. But also acceptable are fee
awards that the attorney has received in similar cases. Id. Mowery’s attorneys have supplied
this information in the form of affidavits from other attorneys who believe that the rates that
Mowery’s attorneys charged are reasonable. Dkt. 37-3, ¶ 10 and Dkt. 37-4, ¶ 9.

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As Mowery recognizes, costs for online legal research are recoverable only as part of an award
of attorney fees, not as costs. See Haroco, Inc. v. Am. Nat’l Bank & Tr. Co., 38 F.3d 1429, 144041 (7th Cir. 1994).

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Defendants argue that Mowery fails to prove a reasonable rate because she does not
provide a fee agreement. The fee agreement might support the reasonableness of the fees, but
it is not a requirement. Defendants also argue that Mowery’s attorneys’ rates are not reasonable
because defendants’ attorneys charge lower rates. But the evidence of what MetLife is paying
its counsel is only one data point; it’s not enough to set the market rate for ERISA work.2 The
rates that Mowery’s attorneys propose for this case are reasonable.
The closer issue is the reasonableness of the hours that Mowery’s attorneys billed. The
court must determine “the number of hours ‘reasonably expended,’” Spegon v. Catholic Bishop of
Chi., 175 F.3d 544, 553 (7th Cir. 1999), which does not include hours that were “excessive,
duplicative, or unnecessary” or hours than an attorney would not normally bill to a paying
client. Stark v. PPM Am., Inc., 354 F.3d 666, 674 (7th Cir. 2004). Defendants argue that a
downward adjustment is necessary because of “the time and labor required,” “the novelty and
difficulty of the questions,” and “the skill requisite to perform the legal service properly.”
Hensley, 461 U.S. at 430 n.3. Specifically, they complain about the 36.5 hours that Mowery’s
attorneys spent drafting the complaint, the 182 hours spent briefing the parties’ cross-motions
for summary judgment, and the 29.5 hours spent drafting Mowery’s motion for fees.
(Presumably, defendants would also complain about the 15.9 hours Mowery’s attorneys spent
drafting the reply brief in support of the motion for fees if they had the chance, although they
have not requested leave to do so.)

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Experience is one of the factors a court considers in determining the reasonable market rate.
But the court notes that MetLife is paying both defense counsel the same rate, despite the
considerably greater experience of Ms. Skilton Verhoff. And big clients with lots of litigation
often get good deals from their law firms. So the court does not consider the defense rates to
accurately reflect the market.

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These hours are on the very high end of those awarded—or even asked for—in similar
ERISA cases.3 The factual issue that drove the case—the impact of a difficult-to-diagnose
medical condition on Mowery’s ability to perform her job—was complex and the relevant facts
were buried in over 1500 pages of medical records. But the legal issues were fairly
straightforward, and Mowery has not shown why the factual complexity of the case required
approximately twice as much work as the typical ERISA case. The billing records of Mowery’s
attorneys don’t help; many entries are vague and redundant, offering little insight into why
they spent so much time on certain tasks. See, e.g., Dkt. 37, ¶ 8 (listing three entries for
reviewing the old administrative record and drafting the complaint, followed by four entries
for reviewing the updated administrative record and drafting the complaint). So the court will
exercise its discretion to reduce the hours billed in the three objected-to categories by one
quarter. This results in a reduction of $17,963.50.
Defendants also complain about miscellaneous billing entries for tasks that they argue
are “administrative or routine.” Dkt. 39, at 13. “[T]ime spent on clerical tasks [such as filing
briefs] should not be compensated,” and although routine tasks may be compensated, the time

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See, e.g., Kaiser v. United of Omaha Life Ins. Co., No. 14-cv-762, 2016 WL 6581355, at *2
(W.D. Wis. Nov. 4, 2016) (approving 19 hours drafting a complaint and 92 hours briefing
summary judgment motions as reasonable); Boxell v. Plan for Grp. Ins. of Verizon Comm’ns, Inc.,
No. 13-cv-89, 2015 WL 4464147, at *7 (N.D. Ind. July 21, 2015) (approving 19.2 hours for
“preliminary work,” 91.9 hours briefing summary judgment motions, and 33.6 hours briefing
cross-motions for attorney fees as reasonable); Holoubek v. Unum Life Ins. Co., No. 06-cv-121,
2007 WL 5595900, at *3 (W.D. Wis. Jan. 26, 2007) (approving 17.4 hours drafting a
complaint as reasonable but concluding that 113.1 hours briefing summary judgment were
excessive); Hannon v. Unum Life Ins. Co., No. 12-cv-992, 2014 WL 4653058, at *3 (S.D. Ind.
Aug. 6, 2014) (concluding that 21.7 hours briefing a seven-page, boilerplate fees motion were
excessive); Hartman v. Dana Holding Corp., No. 12-cv-445, 2013 WL 6800112, at *5 (N.D.
Ind. Dec. 20, 2013) (concluding that 27.2 hours drafting a complaint, 113.5 hours briefing
summary judgment, and 47.6 hours briefing a fees motion were excessive).

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spent on them should reflect their routine nature. Hannon, 2014 WL 4653058, at *2-3. The
court sees no purely administrative tasks that should not have been billed. The routine tasks
amount to less than an hour’s work. The court will not further reduce time for this reason.
The court will cut the $302.72 in online legal research fees, too, even though defendants
do not object to this amount. Because the pricing of online legal research is often subject to
discounts, many firms follow the better practice of treating the expense of online legal research
as an aspect of overhead that is not billed to clients. So, for many firms, the hourly rate already
reflects the expense of online research. And although Mowery has been billed for legal research,
it appears that Mowery has only paid some those invoices, and the unpaid balance is not carried
forward. See Dkt. 36-1, at 4-6. Because it does not appear that Mowery’s counsel is consistently
charging them to Mowery, the court will not shift these fees to MetLife.
Defendants make several more generalized arguments for a downward adjustment,
focusing on the amount involved and the results obtained, the experience, reputation, and
ability of the attorneys, and awards in similar cases. But the reduction of hours adequately
addresses these factors; no additional downward adjustment is appropriate. So the court will
award Mowery $63,114.50 in attorney fees.
B. Prejudgment and postjudgment interest
Mowery also seeks an award of prejudgment and postjudgment interest, in amounts to
be determined after MetLife’s administrative review is complete. Defendants argue that
Mowery’s request is premature, as she has not yet been awarded any money. The court agrees.
Any interest awarded at this point would be purely speculative, as MetLife may still deny
Mowery’s application for benefits on remand. If Mowery eventually obtains an award of
benefits, she may file suit seeking prejudgment and postjudgment interest on that award. See

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Cerentano v. United Maine Workers of Am. 1974 Pension Plan, No. 15-cv-874, 2016 WL 7117150,
at *2-3 (S.D. Ill. Dec. 7, 2016) (awarding prejudgment interest in a stand-alone suit when
benefits were awarded by the plan after remand by the Seventh Circuit). Mowery has not
pointed to any authority indicating that this is not the proper procedure for obtaining interest
on an award of benefits. So the court declines to consider interest at this point, nor will it hold
the issue in abeyance, as Mowery suggests. See Dkt. 42, at 23 n.6.
C. Costs
Finally, Mowery seeks reimbursement of $480.41 in costs. Dkt. 38. Defendants did not
object, and the court finds that the costs were reasonably incurred in litigating this matter. The
clerk will award Mowery the full amount.

ORDER
IT IS ORDERED that:
1. Plaintiff Lisa Mowery’s motion for attorney fees, costs, and interests, Dkt. 34, is
GRANTED in part and DENIED in part, as explained above.
2. Plaintiff’s bill of costs, Dkt. 38, is GRANTED.
3. Plaintiff is awarded fees and costs in the total amount of $63,594.91.
4. The clerk of court is directed to enter judgment to reflect the award of attorney fees
and costs.
Entered August 18, 2017.
BY THE COURT:
/s/
________________________________________
JAMES D. PETERSON
District Judge

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