Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Klimbach v. Spherion Corp.

December 15, 2006

ROSE MARIE KLIMBACH, PLAINTIFF,
v.
SPHERION CORP. AND AETNA HEALTH INC. (FORMERLY U.S. HEALTHCARE, INC.), DEFENDANTS.



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

DECISION and ORDER

INTRODUCTION

Plaintiff, Rose Marie Klimbach ("plaintiff") brought this action pursuant to the Employee Retirement Income Security Act ("ERISA"), alleging that defendants Spherion Corporation ("Spherion") and Aetna Life Insurance Company ("Aetna") improperly calculated her husband's life insurance benefits.*fn1 For determination is the plaintiff's 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 August 19, 2005, this Court granted summary judgment and dismissed all of plaintiff's five counts in favor of the defendants. Specifically, this Court dismissed Count I, plaintiff's ERISA § 502(a)(1)(B) claim for failure to pay benefit. Subsequently, plaintiff appealed this Court's grant of summary judgment on Counts I and V to the Second Circuit Court of Appeals.

By Summary Order the Second Circuit reversed this Court's grant of summary judgment to Spherion and decided in favor of plaintiff on her ERISA § 502(a)(1)(B) claim, finding that Spherion's interpretation of the Plan was arbitrary and capricious. Pursuant to the Second Circuit's Summary Order, this case was remanded to the District Court for determination of plaintiff's claims for attorneys' fees and award of pre-judgment interest.

Plaintiff now moves for an award of $119,531.50 in attorneys' fees and $3,178.05 in costs.*fn2 Spherion argues that plaintiff is not entitled to attorneys' fees. Moreover, even if plaintiff is entitled to an award of attorneys' fees, the fees should be reduced and that $20,271.86 more accurately reflects an appropriate fee award. Finally, Spherion contends that plaintiff is not entitled to pre-judgment interest. For the reasons discussed below, I find that plaintiff is entitled to an award of attorneys' fees and costs and that $101,909.60 in attorneys' fees and $3,178.05 in costs is a reasonable award. I also find that plaintiff is entitled to prejudgment interest in the amount of $14,798.58. Thus, the total award for attorneys' fees, costs and pre-judgment interest is $119,886.23.

BACKGROUND

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

Plaintiffs initially commenced this action on March 13, 2003 against defendants pursuant to ERISA. Following extensive pretrial discovery, including depositions and numerous document requests, plaintiff moved for summary judgment against defendants. Both defendants cross-moved for summary judgment. On August 19, 2005, this Court denied plaintiff's summary judgment motion and granted summary judgment in favor of the defendants, dismissing plaintiff's complaint. Plaintiff appealed the judgment of this Court to the Second Circuit on September 16, 2005. The Second Circuit subsequently reversed this Court's ruling by Summary Order dated April 3, 2006.

Plaintiff's counsel argue that they are entitled to an award of attorneys' fees under 29 U.S.C. § 1132(g)(1) because they attained the relief plaintiff sought, which required defendants, specifically Spherion to honor the commitment to the plaintiff of the payment of benefits in the amount of $132,000. Spherion argues that plaintiff is not entitled to an award of attorneys' fees. Alternatively, Spherion contends that even if plaintiff is entitled to attorneys' fees, this Court should reduce plaintiff's requested fees for reasons stated in its response papers. Further, Spherion argues that plaintiff is not entitled to pre-judgment interest.

DISCUSSION

I. 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. 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 attorneys' 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 plan members. Chambless v. Masters, Mates & Pilots Pension Plan, 815 F.2d 869, 871 (2d Cir. 1987). Each of these factors must be weighed, but it is not necessary for a party to prevail on each in order for an award to be granted. See Ford v. NY Central Teamsters Pension Fund, 506 F.Supp. 180 (W.D.N.Y. 1980).

Plaintiff contends that she has met all five factors. Spherion asserts that, except for the ability to satisfy the award factor, the four remaining factors, namely bad faith, deterrence, relative merits of the parties positions and whether the action conferred a common benefit, weigh against a full award for attorneys' fees and costs*fn3 and as such this Court should deny the award of attorneys fees or alternatively award an amount that is substantially less than that requested by plaintiff.

A. Degree of Culpability or Bad Faith

Spherion argues that it did not act with bad faith in handling plaintiff's claim because it denied Mrs. Klimbach's claim only after careful consideration of the claim as further evidence by this Court's grant of summary judgment in Spherion's favor. Spherion further contends that even though the Second Circuit ultimately disagreed with this Court's decision and Spherion's interpretation of the Plan, at no point did it find that Spherion acted in bad faith. While there was no specific finding of bad faith on the part of Spherion in the Second Circuit's Summary Order, the transcript from the oral argument illustrates that the Second Circuit believed, and its decision in plaintiff's favor shows that Spherion acted in bad faith in assessing plaintiff's claim. See Algie v. RCA Global Communications, Inc., et al., 891 F.Supp. 875 (S.D.N.Y. 1994), aff'd, 60 F.3d 956 (2d Cir.1995) (Court held that bad faith conduct normally involves "something more than simple negligence ... It implies that the act or conduct spoken of is reprehensible or wrong, but not that it involves malice or a guilty purpose.")

Spherion resisted plaintiff every step of the way in her attempt to obtain Mr. Klimbach's life insurance benefits. Initially, Spherion informally denied plaintiff's claim for re-evaluation of Mr. Klimbach's benefits and then formally denying her administrative appeal for reconsideration. Thereafter, plaintiff was forced to engage counsel and file a complaint in federal court and represent her all the way to the Second Circuit. Moreover, Spherion's culpability and bad faith is further supported by its refusal to consider settlement of this action before plaintiff's commencement of this action.*fn4 Further, the Second Circuit found that plaintiff's ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.