United States District Court, Southern District of New York
April 14, 2003
CLIFF CONNERS, PLAINTIFF
CONNECTICUT GENERAL LIFE INSURANCE COMPANY, DEFENDANT
The opinion of the court was delivered by: John S. Martin, Jr., District Judge
MEMORANDUM OPINION AND ORDER
The parties in this action reached settlement after the Second Circuit remanded the case for reconsideration of the Court's opinion affirming Connecticut General Life Insurance's ("CGLIC") denial of Plaintiff's disability claim. Plaintiff has now moved for attorneys' fees and costs under ERISA.
An application for attorneys' fees in an ERISA case is governed by 29 U.S.C. § 1132(g)(1), which allows the Court to award fees at its discretion. The Second Circuit has held that "attorney's fees may be awarded to the prevailing party under ERISA in the absence of some particular justification for not doing so." Birmingham v. SoGen-Swiss Int'l Corp. Ret. Plan, 718 F.2d 515, 523 (2d Cir. 1983). Even though Plaintiff prevailed through settlement, as long as Plaintiff "demonstrate[s] a change in the legal relationship" with Defendant, as a result of the lawsuit, Plaintiff is considered a prevailing party for the purposes of attorneys' fees. Koster v. Perales, 903 F.2d 131, 134 (2d Cir. 1990); see Cefali v. Buffalo Brass Co., Inc., 748 F. Supp. 1011, 1017-1018 (W.D.N.Y. 1990).*fn1 As the Supreme Court has stated in Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933 (1983), a finding that Plaintiff prevails brings him to the threshold, entitling him to fees, but it remains for the Court to determine what fee is reasonable. Hensley, 461 U.S. at 433, 103 S.Ct. at 1939.
The Second Circuit has adopted the lodestar method for determining reasonable fees. Cefali, 748 F. Supp. at 1018 (W.D.N.Y. 1990)(citing Chambless v. Masters, Mates & Pilots Pension Plan, 885 F.2d 1053, 1057-59 (2d Cir. 1989)). Under this approach, a baseline fee award is determined by the number of hours reasonably expended, multiplied by a reasonable hourly rate for attorneys and paralegals.
Counsel for Plaintiff requests attorneys' fees for 580 hours (prior to the filing of the fee application) calculated at varying hourly rates totaling $153,325. The hourly rates charged by counsel are reasonable for attorneys of their experience. The breakdown of attorney hours and rates are as follows:
Evan Schwartz 155.5 $325 $50,537.50
Richard Quadrino 14.5 325 4,712.50
Eve-Lynn Gisonni 308.75 250 77,187.50
Steven M. Connolly 83.25 225 18,731.25
Michail Z. Hack 2.5 195 487.50
Brian C. Koenig .25 195 48.75
Christine J. Lee 1.00 195 195.00
Barbara Cannova 14.25 100 195.00 (paralegal)
Plaintiff's attorneys request additional fees of $9,956.25 for 39 hours spent preparing the fee application. Defendant makes no objections to the hours spent by Plaintiff's counsel litigating this case.
Defendants do argue that counsel's fee application should be adjusted to account for the limited success Plaintiff's counsel had on two issues. The Court has the authority to make an upward or downward adjustment of a fee award based on the result obtained by the prevailing party. Hensley, 461 U.S. at 433, 103 S.Ct. at 1939; Grant v. Martinez, 973 F.3d 96, 101 (2d Cir. 1992); Cefali 748 F. Supp. at 1018.
The Supreme Court has established an analytic framework for determining whether the lodestar should be reduced to reflect partial success. Hensley, 461 U.S. at 434-37, 103 S.Ct. 1939-41. The first step of the analysis is to determine whether the Plaintiff failed on claims wholly unrelated to the claims on which Plaintiff succeeded. Grant, 973 F.3d at 101. An unrelated claim is one based on "different claims for relief that are based on different facts and legal theories." Hensley, 461 U.S. at 434, 103 S.Ct. at 1940. If the claim for relief involves "a common core of facts" or is "based on related legal theories," the Court "should focus on the significance of the overall relief obtained by the plaintiff." Hensley, 461 U.S. at 435, 103 S.Ct. at 1940.
Defendant claims that Plaintiff failed on his claims that Connor's policy was not covered by ERISA and that CGLIC was unjustly enriched when it deducted workers' compensation benefits from his monthly disability benefits. Both claims involve the common core of facts central to the underlying action and are not unrelated claims. When a claim is not wholly unrelated, the second step of the Hensley analysis is to determine whether the Plaintiff's level of success warrants a fee reduction. Hensley, 461 U.S. at 436, 103 S.Ct. at 1941. "The amount of fees awarded should be reasonable in relation to the results obtained." Cefali, 748 F. Supp. at 1019. Under step two, this Courtmust determine whether failure to attain relief on the ERISA and workmen's compensation claims resulted in "limited success." Grant, 973 F.2d at 101.
Plaintiff attained a significant victory through this litigation. He was denied disability benefits under his insurance policy and as a result of the settlement reached in this litigation he has been reinstated under the policy and will receive monthly disability benefits for as long as he is disabled or until he is 65, more than 20 years from now. Because Plaintiff succeeded in his attempt to receive past and future disability benefits, his loss with respect to the claim for recovering the deducted worker's compensation was not significant enough to justify a downward adjustment to the fee award.
Plaintiff's attorneys also request $6,595.72 in costs. For the reasons stated above, the attorneys' fees and costs are granted in the amount of $169,876.97.
Plaintiff's attorneys are being compensated for this case through a contingency-fee agreement reached with their client. Accordingly, the statutory fee must be used to offset fees owing under the contractual contingency fee to ensure that Plaintiff's attorneys are not doubly compensated for their work. See Venegas v. Mitchell, 495 U.S. 82, 89, 110 S.Ct. 1679, 1684 (1990); O'Neal v. Ferguson Constr. Co., 35 F. Supp. 832, 839-40 (D.N.M. 1999).