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Laforest v. Honeywell International

December 1, 2006

JAMES LAFOREST, HENRIETTA LAFRINERE, ROBERT LINTZ, RALPH MINER, LAVERNE SPENCER AND IRENE WESOLOWSKI, INDIVIDUALLY AND ON BEHALF OF A CLASS OF PERSONS SIMILARLY SITUATED, PLAINTIFFS/THIRD-PARTY PLAINTIFFS,
v.
HONEYWELL INTERNATIONAL, INC., A DELAWARE CORPORATION, DEFENDANT/THIRD-PARTY PLAINTIFF,
v.
MOTOR COMPONENTS LLC, BAM ENTERPRISES, INC., MARK IV INDUSTRIES, INC., AND ARVINMERITOR, INC., THIRD-PARTY DEFENDANTS.



The opinion of the court was delivered by: Michael A. Telesca United States District Judge

DECISION and ORDER

INTRODUCTION

Plaintiffs, a group of retirees formerly employed by Bendix Corporation ("Bendix") in Michigan and Elmira, New York, brought this action seeking payment of retirement benefits guaranteed to them by Bendix in a 1976 Guaranty agreement ("Guaranty").*fn1 For determination is the plaintiffs' pending motion for an award of attorneys' fees pursuant to the provisions of ERISA, 29 U.S.C. § 1132(g)(1). By Decision and Order dated December 11, 2003, this Court granted summary judgment in favor of the plaintiffs holding that they have a cognizable ERISA claim against Honeywell. Subsequently, the parties reached a settlement agreement except for costs and attorneys fees. Plaintiffs now move for an award of $932,878 in attorneys' fees and $38,038.01 in costs.*fn2 Honeywell argues that $391,536 more accurately reflects an appropriate fee award. For the reasons discussed below, I find that $712,554.25 in attorneys' fees and $38,038.01. in costs is a reasonable award.

BACKGROUND

Due to the extensive activity in this case and the numerous decisions issued by this Court, it is presumed that the parties are familiar with the procedural and factual history of this case.

Plaintiffs initially commenced this action on August 28, 2002 in the U.S. District Court for the Eastern District of Michigan and was transferred to the Western District of New York on May 15, 2003. On December 11, 2003, this Court granted summary judgment in favor of plaintiff concerning their ERISA claim ("ERISA Decision"). On January 4, 2006, plaintiffs filed a motion for attorneys' fees and costs pursuant to 29 U.S.C. §1132(g)(1).*fn3 Honeywell appealed the judgment of this Court on January 20, 2006 to the Second Circuit Court of Appeals. The Second Circuit subsequently dismissed the appeal for lack of appellate jurisdiction.

Plaintiffs argue that they are entitled to an award of attorneys' fees under 29 U.S.C. § 1132(g)(1) because they attained the relief they sought which required Honeywell to honor the commitment to the plaintiff retirees which assured them of lifetime medical and life insurance coverage which was a cognizable claim under ERISA. Honeywell still insists that this Court should reconsider its ERISA decision in that plaintiffs' claim is not cognizable under ERISA. Alternatively, Honeywell argues that this Court should reduce plaintiffs' requested fees and costs for reasons stated in its response papers.

DISCUSSION

I. This Court Will Not Revisit its ERISA Decision granting Summary Judgment in Favor of Plaintiffs on their ERISA Claims

Honeywell devotes much time in arguing that the Guaranty, which was drafted by Bendix and executed April 1, 1976 is not an ERISA Plan and thus, this Court should "reconsider" its ERISA Decision. See Honeywell's Opp. Mem. at pp. 4-10; Honeywell's 10/25/06 Response Mem. at pp. 1-2. The parties have previously fully briefed the issue whether the Guaranty at issue in this case qualifies as a cognizable claim under ERISA. This Court is not persuaded to alter or change in any way its previous decision that this is an ERISA case. I therefore decline Honeywell's invitation to reconsider this Court's earlier decision holding that plaintiffs have a cognizable claim under ERISA.

II. Award of Attorneys' Fees and Costs

ERISA provides for an award of attorneys' fees in the court's discretion. 29 U.S.C. § 1132(g)(1). The statute provides that "[i]n any action under this subchapter...by a participant, beneficiary, or fiduciary, the court in its discretion may allow a reasonable attorney's fee and costs of the action to either party." Id. By its plain language, the statute does not require the party seeking fees to be a "prevailing party" (as is generally required in employment law fee-shifting statutes). In fact, the Second Circuit has specifically held that §1132(g)(1) "contains no requirement that the party awarded fees be the prevailing party." Miller v. United Welfare Fund, 72 F.3d 1066 (2nd Cir. 1995).

Although the court has broad discretion in awarding fees and costs, that discretion is guided by five factors: (1) the degree of the offending party's culpability or bad faith; (2) the ability of the offending party to satisfy an award of attorney's fees; (3) whether an award of fees would deter other persons from acting similarly under like circumstances; (4) the relative merits of the parties' positions; and (5) whether the action conferred a common benefit on a group of pension plan participants. Chambless v. Masters, Mates & Pilots Pension Plan, 815 F.2d 869, 871 (2nd Cir. 1987).

Plaintiffs contend that they have met all five factors. Honeywell asserts that two of these factors, namely culpability and deterrence, weigh against a full award for attorneys' fees and costs*fn4 and as such this Court should award an amount that is substantially less than that requested by plaintiffs.

A. Degree of Culpability or Bad Faith

Honeywell argues that it did not act with culpability or bad faith. While there was no specific finding of bad faith or culpable conduct on the part of Honeywell in the Court's prior decisions, Honeywell reluctantly complied with the Court's directives. Indeed, plaintiffs had to move for and obtain injunctive relief compelling Honeywell to comply. Moreover, Honeywell continued to economize on its obligations by refusing to provide a drug card so that retirees would not be required to pay up front for their prescriptions. This required plaintiffs to move for an order of this Court finding Honeywell in contempt in order to obtain compliance ...


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